Document:

Exhibit
10.1

 

BY HAND

 

December 7, 2009

 

Mr. Michael Schozer

[address]

 

Dear Mike:

 

This will confirm our
discussion about your separation  from
employment as President of Assured Guaranty Corp. (“AGC” or the “Company”) on
mutually agreeable terms as set forth below. 
You and AGC agree that this Agreement represents the full and complete
agreement concerning your separation from employment with AGC and any and all
of its affiliated companies.

 

1.             Last Day of Employment: 
You will remain on the Company’s payroll at your present level of salary
($400,000 annually) through December 31, 2009, which shall be your
effective date of separation (“Termination Date”).  On or prior to December 30, 2009, you
must resign in writing from all of your positions and offices with AGC and any
and all of its affiliated companies and/or the respective Board of Directors
thereof, and as an SEC Named Executive Officer of Assured Guaranty Ltd.,  by executing the letter annexed hereto as Exhibit A.
Between the date of this Agreement and your Termination Date (i) you will
not be required to report to the office on a daily basis but shall be available
to consult with the Company regarding matters related to AGC business, and (ii) you
will be allowed to interview and seek other employment pursuant to the terms of
this Agreement, subject to paragraph 12 of this Agreement. You acknowledge and
agree that after your Termination Date you shall not accrue any additional
vacation, sick days, personal days or any other benefit or, except as otherwise
provided in this Agreement, accrue any further benefits in any benefit plan
sponsored by AGC or any of its affiliated companies, and by signing below you
expressly waive any such further accruals.

 

2.             Consideration: Provided that you sign, return and do not revoke this
Agreement and/or the attached Supplemental Release, and subject to the
provisions of paragraph 20(c) of this Agreement, AGC will provide you with
the following consideration:

 

(a)           Separation Benefits:

 

(i)            You will be paid total severance benefits
equal to $800,000 (i.e., two times
your current salary of $400,000 per year), during calendar years 2010 and 2011
(“Severance Benefits”). The payments of Severance Benefits under this paragraph
(i) shall be made at the same times such amounts would be paid as salary;
provided that, to satisfy tax code section 409A, payment of the Severance 

 

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Benefits will not commence earlier than July 1,
2010, at which time you will be paid the first six months of installments, with
the remaining installments to continue to be paid through December 31,
2011.

 

(ii)           You will be paid a lump sum of $510,000 in 2010, on
the first pay period after the first date on which you have signed this
Agreement and the attached Supplemental Release and the period during which you
are permitted to revoke such signatures has expired.

 

(iii)          You will be paid a lump sum of $490,000 in January 2011.

 

(b)           Retirement Benefits:

 

(i)            You will not accrue any
benefits for any period after December 31, 2009  under  the qualified
Employee Retirement Plan,  and  your benefits under the qualified Employee Retirement Plan will be
determined based on your employment through your Termination Date.

 

(ii)           Your benefits under the non-qualified Supplemental Employee
Retirement Plan (“Supplemental Plan”) will be paid in a lump sum.  To satisfy tax code section 409A, the
Supplemental Plan lump sum will be paid during July 2010.  Your lump sum benefit under the Supplemental
Plan will be the sum of (i) the balance as of December 31, 2009
adjusted in accordance with the Supplemental Plan to reflect investment returns
(positive or negative) until distribution, and (ii) the amount of $96,000.

 

(c)           Options:  Your stock options under the Assured
Guaranty Ltd. Long-Term Incentive Plan (“LTIP”) will continue to vest as though
you remained employed by the Company through December 31, 2011.  Options that were not vested immediately
prior to your Termination Date will become exercisable in accordance with the
vesting schedule set forth in the applicable option award agreement determined
as though you continued to be employed through December 31, 2011, provided
that no options will be exercisable after December 31, 2011. (See Schedule
attached hereto as Exhibit B)

 

(d)           Restricted Stock Awards:  As of the
Termination Date, or, if later, as soon as practicable after the first date on
which you have signed this Agreement and the attached Supplemental Release and
the period during which you are permitted to revoke such signatures has
expired, you will be vested in the restricted stock awards under the LTIP that
would have vested if you had remained employed until December 31, 2011.
(See Schedule attached hereto as Exhibit B)

 

(e)           Restricted Stock Units:  As of the
Termination Date, you will be vested in the restricted stock units under the
LTIP that would have vested if you had remained employed until December 31,
2011, and distribution of shares with respect to such units will occur on the
respective dates such shares would have been distributed under the applicable
award agreement determined as though you had remained employed until December 31,
2011. (See Schedule attached hereto as Exhibit B)

 

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(f)            Performance Retention Awards: You will be entitled to distributions with respect to
performance retention plan awards for performance periods that end before January 1,
2010 ($250,000.00 original plan value), in accordance with the terms of those
awards.  You will forfeit all performance
retention plan awards for performance periods that end after December 31,
2009.

 

(g)           Employee Benefits: 
Medical and dental insurance coverage, coverage under the Executive
Health Plan, life insurance coverage, matching gift program participation, and
short-term and long-term disability coverage will be continued until the
earlier of (i) 24 months after the Termination Date, or (ii) the date
on which you commence employment with another employer and receive comparable
benefits, or you otherwise obtain alternate coverage for such benefits.  To the extent that the Company is unable to
provide medical coverage, life insurance coverage, and/or disability coverage
under the Company’s benefit plans for the required period, the Company will
reimburse you for reasonable premiums to obtain these coverages on an
individual basis.

 

(h)           Death Benefits:    In the event
that you die before payments or benefits become due under this Agreement, your
estate or other legal representative shall be entitled to receive all unpaid
payments and any and all other amounts and benefits otherwise due to you under
paragraph 2 of this Agreement, except as otherwise provided by law or by the
terms of any applicable plans.

 

3.             Withholding on Payments: 
Taxes, applicable withholding and authorized or required deductions will
be deducted from all payments to you and with respect to the benefits set forth
in this Agreement.

 

4.             Vacation:  You will be paid for any accrued but unused vacation.
You understand that you are entitled to your accrued but unused vacation days
whether or not you sign this Agreement.

 

5.             Reimbursement of Business
Expenses:  You agree to promptly submit appropriate
documentation of all authorized business expenses incurred in connection with
your performance of duties for AGC, and AGC will reimburse you in accordance
with AGC policy.  You can submit such
documentation to Ivana Grillo.

 

6.             Unemployment Insurance: 
While AGC will not oppose a claim by you for unemployment insurance
benefits, you must understand that the New York State Department of Labor (“DOL”),
not AGC, determines whether you are eligible to receive benefits and that you
cannot raise any claim against AGC because of information that is provided to
the DOL.

 

7.             Transition:

 

(a)           Until your Termination Date, you agree to continue to
perform your duties in a professional manner and to cooperate in the orderly
and smooth transition of your job responsibilities.

 

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(b)           After your Termination Date you agree that you shall
be available, upon reasonable advance notice, to respond to questions and
provide assistance to AGC regarding any unfinished business and to provide full
and complete cooperation to AGC in connection with any litigation or other
disputes for which AGC may need your assistance.  Such assistance may include, but is not
limited to (i) meeting with employees and/or representatives of AGC as
needed, (ii) providing full and complete disclosure of facts relevant to
the litigation or dispute, and/or (iii) with reasonable advance notice,
being available for depositions and preparation meetings.  AGC will reimburse you for any reasonable
out-of-pocket expenses you incur as a result of any such post-employment  cooperation.  AGC will also
continue to indemnify you with respect to services that you provided as an
employee of AGC in accordance with AGC’s Articles of Incorporation and AGC’s
By-laws.

 

(c)           Simultaneously with signing this Agreement, you shall
complete the AGC Code of Conduct Annual Affirmation Statement annexed hereto as
Exhibit C and shall cooperate with AGC in any follow-up inquiry thereto.

 

8.             Acknowledgement: 
You understand and agree that absent this Agreement, you would not
otherwise be entitled to the payments and benefits specified in this Agreement.
Further, by signing this Agreement, you agree that you are not entitled to any
payments and/or benefits that are not specifically listed in this Agreement for
any past, present or future year, including but not limited to benefits under
the Employment Agreement between you and Assured Guaranty Corp. dated April 28,
2004 and all amendments thereto, including but not limited to the restatement
of such Employment Agreement as executed by you and the Company on December 23,
2008; benefits under the Assured Guaranty Corp. Employee Severance Plan and/or
any other severance plan; benefits under the Assured Guaranty Ltd. Performance
Retention  Plan; benefits under any  performance incentive plan; benefits under
the ACE Group Short-Term and/or Long-Term Incentive Programs; benefits under
any bonus plan (including but not limited to plans relating to years 2009, 2010
and/or 2011); benefits related to 2009, 2010 and/or 2011 under any non-qualified
profit-sharing plan; stock
option grants, restricted stock grants and/or performance retention plan awards
under the LTIP and/or any other long-term incentive plan; except for those
qualified  retirement benefits in which
you have vested rights, in each case pursuant to the terms of the applicable
plans and applicable law. You further expressly acknowledge that all
performance retention plan awards under the LTIP  for
performance periods that end after your Termination Date, and all stock option
grants and restricted stock grants under the LTIP that are not vested as of December 31,
2011, are properly forfeited.  You further agree
and acknowledge that upon the Company’s providing to you the consideration set
forth in this Agreement, the Company has paid you in full any and all monies
owed to you in connection with your employment with the Company and separation
from employment, including but not limited to payment for all services
performed on behalf of the Company, except as otherwise specifically stated in
this Agreement.

 

9.             General Release of All
Claims:  In exchange for AGC’s payments, benefits and
other consideration under this Agreement, you release AGC, Assured Guaranty
Ltd., Assured Guaranty Re Ltd.,  Assured
Guaranty U.K. Ltd., ACE Limited, Financial 

 

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Security Assurance Holdings
Ltd., Financial Security Assurance Inc., now known as Assured Guaranty
Municipal Corp., and Dexia S.A. (hereinafter collectively referred to as the “Corporations”),
and its and/or their past, present and/or future parents, subsidiaries,
affiliates, predecessors, successors, assigns, officers, directors, employees
and agents (hereinafter collectively referred to as “Releasees”), from any and
all claims you may have which may legally be waived by private agreement, known
or unknown, including but not limited to those related to your employment, your
separation from employment or otherwise, from the beginning of time through the
date that you sign this Agreement, except as otherwise specifically stated in
this Agreement.

 

You understand and agree
that you are releasing Releasees from any and all claims which may legally be waived by private
agreement, including but not limited to any and all claims for breach of
contract, personal injury, wages, benefits, defamation and wrongful discharge,
and any and all claims based on any oral or written agreements or promises,
whether arising under statute (including but not limited to, claims arising
under the  Employee Retirement Income
Security Act of 1974, the Sarbanes-Oxley Act, the Family and Medical Leave Act,
the New York Labor Law, the New York Whistleblower Statute, and any other
federal, state, local, or foreign laws or regulations), contract (express or
implied), tort, constitutional provision, common law, public policy or
otherwise, from the beginning of time through the date that you sign this
Agreement.

 

You understand and agree
that you are releasing Releasees from any and all claims which may legally be waived by private
agreement, including but not limited to any and all claims for
discrimination or harassment in employment, or retaliation, on the basis of
race, color, creed, religion, age, national origin, alienage or citizenship,
gender, sexual orientation, disability, marital status, genetic information,
veteran’s status, and any other protected grounds including, but not limited
to, any and all rights and claims you may have arising under Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, the Age
Discrimination in Employment Act of 1967, the Equal Pay Act, the New York State
Human Rights Law, the New York City Human Rights Law, and any other federal,
state, local, or foreign laws or regulations, from the beginning of time
through the date that you sign this Agreement.

 

10.          No Claims Filed:  Except as
otherwise stated below, you agree and covenant not to file any suit, complaint,
claim, grievance or demand for arbitration against Releasees in any court,
administrative agency, or other forum with regard to any claim, demand,
liability or obligation arising out of your employment with the Company or
separation from employment. You further represent that no claims, complaints or
other proceedings are pending in any court, administrative agency, or other
forum relating directly or indirectly to your employment with the Company.  You understand that nothing in this Agreement
shall be construed to prohibit you from filing a charge with, or participating
in any investigation or proceeding conducted by, the Equal Employment
Opportunity Commission, National Labor Relations Board and/or any federal,
state or local agency. Notwithstanding the foregoing, you hereby waive any and
all rights to recover monetary damages in any charge, complaint or lawsuit
filed by you or by anyone else on your behalf. 
You understand that your release of claims as contained in this
Agreement does not extend to any rights you may have under the Fair Labor
Standards Act and/or any 

 

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applicable state law
governing wage payments, or under any laws governing the filing of claims for
unemployment and/or workers’ compensation benefits.  You further understand that nothing herein
shall be construed to prohibit you from challenging: (a) the Company’s
failure to comply with its promises to make payment and provide benefits under
this Agreement; (b) your right to any vested benefits to which you are
entitled; or (c) the knowing and voluntary nature of your release of
claims under the Age Discrimination in Employment Act of 1967.

 

11.           Confidential Information:

 

(a)           You acknowledge that the Corporations and their
affiliated companies have, through the expenditure of considerable time and
expense over a period of years, developed extensive confidential and
proprietary information and trade secrets regarding their business affairs
(financial or otherwise), clients and prospective clients, including, without
limitation: (i) information relating to the identities, points of contact,
affairs, operations, habits and patterns of clients and prospective clients; (ii) information
relating to internal business, legal, human resources and financial policies
and practices, plans, strategies, methodologies, operations, services,
projects, status, training, advertising, marketing, and other non-publicly
disclosed information; and (iii) information relating to their employees’
identities, skills, abilities, evaluations, work histories, and
compensation.  You further acknowledge
that during your employment with AGC you were exposed to confidential and
proprietary information and/or trade secrets that were designated by the
Company as confidential or that the Company indicated through its policies,
practices, procedures or other instructions should not be disclosed to anyone
outside the Company except through controlled means.  “Confidential and proprietary information”
includes, but is not limited to, customer identities, customer records,
compilations of customer names, addresses and/or telephone numbers, customer
contact information, information on customer habits or preferences, pricing
information, financial information, personnel and compensation information,
policies, marketing data or information, new product information or plans,
sales data or history, earnings data or projections, business information, and
other information not easily accessible or commonly known. A “trade secret” is
any formula, pattern, method, device or compilation of information of special
value, not generally known to the public or competitors, that the Company uses
in its business and has taken steps to maintain as secret from persons other
than those selected by the Company (the information referred to in this
paragraph 11 (a) will hereinafter be referred to collectively as “Confidential
Information”).

 

(b)           You acknowledge that such Confidential Information is
proprietary, not available to the public or the Corporations’ competitors, and
provides the Corporations with a unique and valuable competitive advantage, and
that its use or disclosure in violation of this Agreement would cause the
Corporations immediate and serious irreparable injury.  You further acknowledge that the controlled
disclosure of confidential and proprietary information to customers or vendors
for legitimate business purposes and 

 

6

 

the availability of such
information to others outside the Company through independent investigation and
effort will not remove it from protected status.

 

(c)           You acknowledge that you were employed in a
professional, confidential and fiduciary relationship with AGC, that you
performed certain duties with regard to AGC, and that you were entrusted with
Confidential Information in connection with the performance of those duties.

 

(d)           Accordingly, you promise and agree that the
Confidential Information shall remain the exclusive property of the Company,
that you shall preserve the confidentiality of the Confidential Information,
and that you shall not directly or indirectly use, disclose, reproduce, sell,
retain, remove from the premises, make available to any other person, firm,
corporation or other entity outside the Company for any purpose other than for
a purpose directly related to the business of the Company, or use for your own
or for any other person or entity’s benefit, any portion of the Confidential
Information.   You also promise that you
shall not use any such Confidential Information to damage the Corporations or
its and/or their interests, customers and/or any other person or entity with
whom AGC does business.

 

(e)           In the event that you are required by legal process to
disclose any Confidential Information, you shall, within two (2) business
days after actual receipt of such legal process, provide the Company’s General
Counsel with written notice of such legal obligation and shall fully cooperate
with any efforts by the Company to oppose or limit such disclosure.

 

(f)            By signing below, you agree that you (i) have
returned to AGC any and all Confidential Information and all other materials,
documents or property belonging to the Corporations, including without limitation
documents, files, lists, records, manuals, reports, software and hardware,
computers, cell phone, keys, equipment, identification card, access card,
credit cards, mailing lists, rolodexes, computer print-outs, computer programs,
and computer disks and tapes; (ii) have not retained any copies of any
Confidential Information and/or any other materials, documents or property
belonging to the Corporations, with the exception of your contacts list and
your Company-provided blackberry and laptop, which the Company is expressly
allowing you to retain provided that the Company’s IT Department has removed
all Confidential Information from such equipment; and (iii) have
permanently deleted all Confidential Information from your home and/or personal
computer drives and from any other personal electronic, digital or magnetic
storage devices.

 

12.           Restrictive Covenants:

 

Solely for the purposes of this paragraph 12, the
Restricted Period shall end December 31, 2011.

 

(a)           Solicitation of Clients:

 

(i)            During the Restricted Period, you shall not, directly
or indirectly, for your own account or as proprietor, shareholder, member,
partner, principal, 

 

7

 

director, officer, employee, consultant, trustee,
fiduciary, representative, agent, distributor, stockholder (except as a less
than one percent stockholder of a publicly traded company or a less than five
percent stockholder of a privately held company), or otherwise, for or on
behalf of any person, business, firm, corporation, partnership and/or other
entity, contact or solicit any business from any person, corporation or other
entity which is a customer of the Company and/or its affiliates as of your
Termination Date for the purpose of assisting, facilitating or encouraging, in
any way, any such customer to transfer any existing  business from the Company and/or its
affiliates, whether by termination, non-renewal or otherwise.  For purposes of this Agreement, “customers”
of the Company and/or its affiliates mean and include (A) any and all
persons, businesses, corporations, partnerships, and/or other entities which
have done business with the Company and/or its affiliates as a customer as of
your Termination Date; and (B) all persons, businesses, corporations,
partnerships and/or other entities which control any such customer.

 

(ii)           During the Restricted Period, you shall not, directly
or indirectly, for your own account or as proprietor, shareholder, member,
partner, principal, director, officer, employee, consultant, trustee,
fiduciary, representative, agent, distributor, stockholder (except as a less
than one percent stockholder of a publicly traded company or a less than five
percent stockholder of a privately held company), or otherwise, for or on
behalf of any person, business, firm, corporation, partnership and/or other
entity, sell, offer to sell, or contact or solicit any reinsurance and/or risk
transfer business from MBIA, Inc., AMBAC Financial Group Inc., Financial
Guaranty Insurance Company, Municipal Infrastructure Assurance Corp., CIFG
and/or Syncora, and/or any of its and/or their affiliates.

 

(b)           Solicitation of Employees: 
During the Restricted Period you shall not, directly or indirectly, for
your own account or as proprietor, shareholder, member, partner, principal,
director, officer, employee, consultant, trustee, fiduciary, representative,
agent, distributor, stockholder (except as a less than one percent stockholder
of a publicly traded company or a less than five percent stockholder of a
privately held company), or otherwise, for or on behalf of any person,
business, firm, corporation, partnership and/or other entity, (i) hire any
employee, or any person who was during the one-year period prior to your
Termination Date an employee, of the Company and/or any present or former
affiliated companies, or (ii) induce, encourage or solicit any employee or
officer of AGC and/or any affiliated companies to leave the employ of AGC
and/or any affiliated companies of AGC or assist any person, company or entity
to engage in such conduct.  Nothing in
this paragraph 12(b) shall prohibit you from hiring any person whose
employment was terminated by the Company, whether due to a reduction in force
or otherwise, at any time after six (6) months following such person’s
termination from employment, provided that this provision shall not apply in
any situation where such former employee of the Company deliberately engaged in
activities designed to lead to his/her termination from employment by the
Company.

 

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(c)           Non-Competitive
Activities:  During the
Restricted Period you shall not, directly or indirectly, for your own account
or as proprietor, shareholder, member, partner, principal, director, officer,
employee, consultant, trustee, fiduciary, representative, agent, distributor,
stockholder (except as a less than one percent stockholder of a publicly traded
company or a less than five percent stockholder of a privately held company),
or otherwise, for or on behalf of any person, business, firm, corporation, partnership
and/or other entity, render services of
a business, professional and/or commercial nature, whether for compensation or
otherwise, to any other person, business, firm, corporation, partnership
and/or other entity in the financial
guaranty insurance and/or reinsurance industry, which shall include financial
guaranty insurance executed through credit default swaps or other derivative
instruments, or otherwise engage in any business activities adverse to the
business or welfare of AGC or Financial Security Assurance Inc. and/or its
and/or their affiliates, or directly competitive with any business of AGC or
Financial Security Assurance Inc. and/or its and/or their affiliates conducted
in the one (1) year period prior to your Termination Date.  Nothing in this paragraph 12(c) shall
prohibit you from working on behalf of public finance or asset-backed bond
advisors, arrangers, underwriters, investors, investment or fund managers,
hedge funds and/or issuers.  During the
Restricted Period, you shall provide AGC with at least thirty (30) days prior
written notice of any new employment, with a description of your new employer
and your anticipated duties.

 

13.          Confidentiality of Agreement: 
You agree that the terms of this Agreement are confidential, except that
the parties understand and consent that this Agreement will be filed with the
SEC.  You agree not to tell anyone about
this Agreement and not to disclose any information contained in this Agreement
to anyone, other than your lawyer, financial advisor, immediate family members
or as required by process of law.  If you
do tell your lawyer, financial advisor or immediate family members about this
Agreement or its contents, you must immediately tell them that they must keep
it confidential as well.

 

14.          No Negative Statements: 
You agree not to make, directly or indirectly, to any person or entity,
including but not limited to employees, Board members, affiliates or staff of
the Corporations, and/or the press, any negative or disparaging oral or written
statements about, or do anything which damages, any of the Releasees, or its or
their services, good will, reputation, or financial status, or which damages it
or them in any of its or their business relationships.   AGC will instruct its senior officers not to
make, directly or indirectly, to any person or entity, including but not
limited to AGC’s employees, AGC’s Board members, AGC’s affiliates or staff
thereof, and/or the press, any negative or disparaging oral or written
statements about, or do anything which damages, you or your services, good
will, reputation, or financial status, or which damages you in any of your
business relationships.

 

15.          Non-admission of Wrongdoing: 
By entering into this Agreement, neither you nor AGC or any of AGC’s
parents, subsidiaries, affiliates, officers, directors, employees or agents
admit any wrongdoing or violation of law.

 

9

 

16.          Applicable Law: 
This
Agreement shall be interpreted, enforced and governed under the laws of the
State of New York, without reference to the principles of conflict of laws of
any jurisdiction.

 

17.          Severability:  You agree
that in the event any provision of this Agreement is judicially declared to
be invalid or unenforceable for any reason, in whole or in part, only such
provision or provisions shall be invalid or unenforceable without invalidating,
rendering unenforceable or otherwise affecting the remaining provisions hereof,
which shall remain in full force and effect to the fullest extent permitted by
law.

 

18.          Changes to the Agreement: 
This Agreement may not be changed unless the changes are in writing and
signed by you and either the Chief Executive Officer, or the General Counsel,
of  AGC.

 

19.          Supplemental Release:  On or after, but not before, December 31, 2009, you must sign the
attached Supplemental Release and return it to Ivana Grillo, Director, Human
Resources, Assured Guaranty Corp., 31 West 52nd Street, NY, NY 10019.

 

20.          Arbitration of Disputes:

 

(a)   Without in any way
affecting the terms of paragraph 9, you and AGC agree that any of the following
types of disagreements, disputes or claims shall be resolved exclusively by
arbitration in New York, New York in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association, and judgment
upon the award rendered by the Arbitrator may be entered in any court having
jurisdiction over the matter:

 

(i)   those arising out of
or relating to the validity of this Agreement, how it is interpreted or
implemented, and/or any alleged breach of this Agreement, provided that the
resolution of any disagreement related to your eligibility for  fringe benefits shall be subject to the terms
of the benefit plans and the substantive provisions of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”); and

 

(ii)   those involving in
any way, or related to, your employment with AGC and/or the termination of that
employment, if for any reason your release and waiver under paragraph 9 is
found to be unenforceable or inapplicable.

 

(b)           In the event of such
a dispute, the prevailing party shall be entitled to an award of all costs and
expenses reasonably incurred including reasonable legal fees.

 

(c)           The foregoing
provisions of this paragraph 20 shall not be construed to limit the Company’s
right to obtain relief under the following provisions of this paragraph
relating to equitable remedies with respect to any matter or controversy
subject to paragraphs 11, 12, 13 and/or 14 and, pending a final determination
by the arbitrator with respect to any such matter or controversy, the Company
shall 

 

10

 

be entitled to obtain any such relief by direct application to state,
federal, or other applicable court, without being required to first arbitrate
such matter or controversy.

 

(i)  You acknowledge that the Company would be irreparably injured
by your violation of paragraphs 11, 12, 13 and/or 14, and that damages at law
are an insufficient remedy for the Company. 
Accordingly, you agree that in the event of such breach or threatened
breach,  in addition to any other
remedies available to the Company, (A) the Company shall be entitled to a
preliminary injunction, temporary restraining order, and/or other equivalent
relief to the extent permitted by law, restraining you from any actual or
threatened breach of paragraphs 11, 12, 13 and/or 14, (B) the Company
shall be entitled to such other relief from a court necessary to specifically
enforce your obligations under paragraphs 11, 12, 13 and/or 14, (C) you
shall forfeit payment of the unpaid portion of the Severance Benefits and any
and all other amounts and benefits otherwise payable and/or due under paragraph
2 of this Agreement; you shall be required to repay all Severance Benefits and
any and all other amounts and benefits previously paid and/or provided pursuant
to paragraph 2 of this Agreement; and any and all other obligations of the
Company with regard to making payments, vesting of stock awards, providing
benefits, and/or otherwise arising under paragraph 2 of this Agreement shall be
null, void and of no effect, and (D) the Company shall be entitled to
recover attorneys’ fees and other costs incurred by the Company in obtaining
such relief.

 

(ii)   If any court or other
tribunal refuses to enforce any of the covenants contained in paragraphs 11,
12, 13 and/or 14  because such covenants cover too
extensive a geographic area, cover too long a period of time, or otherwise, any
such covenant shall be deemed amended to the extent (but only to the extent)
required by law to permit its enforceability hereunder.

 

(iii)  If a bond is required to be posted in order for the Company
to secure an injunction or other equitable remedy, the parties agree that said
bond need not be more than a nominal sum.

 

21.          Entire Agreement:  This
Agreement contains the entire agreement between you and AGC, and replaces and
supercedes any and all prior agreements or understandings between you and AGC
and any and all of AGC’s affiliated companies, whether written or oral, (i) including
but not limited to your offer letter dated December 2, 2003  and the Employment Agreement between you and Assured
Guaranty Corp. dated April 28, 2004 and all amendments thereto, including
but not limited to the restatement of such Employment Agreement as executed by
you and the Company on December 23, 2008, which offer letter and
Employment Agreement shall be null and void, and (ii) with the exception
of the Assured Guaranty Ltd. Executive Officer Recoupment Policy, a copy
of which is annexed hereto as Exhibit D and shall be deemed to be part of
this Agreement.

 

11

 

22.          Waiver:  By signing
this Agreement, you acknowledge that:

 

(a)           You have carefully read, and
understand, this Agreement.

 

(b)           You have been given up to forty-five
(45)  days to consider your rights and
obligations under this Agreement and to consult with an attorney and/or any
other advisors of your choice, and agree that changes to this
Agreement, whether material or immaterial, do not restart the running of the forty-five (45)  day period.

 

(c)           AGC advised you to consult with an
attorney and/or any other advisors of your choice before signing this
Agreement.

 

(d)           You consulted with Keith Markel of
the firm Dickstein Shapiro LLP, the attorney of your choice, before signing
this Agreement.

 

(e)           The Company provided you with
information that it was legally obligated to provide, as set forth in the
Appendix to this Agreement.

 

(f)            You understand this Agreement is
legally binding and by signing it you give up certain rights.

 

(g)           You have voluntarily chosen to enter
into this Agreement and have not been forced or pressured in any way to sign
it.

 

(h)           You have not relied upon any
representation, statement or omission made by any of the Company’s agents,
attorneys or representatives with regard to the subject matter, basis or effect
of this Agreement or otherwise, other than those expressly stated in this Agreement.

 

(i)            You knowingly and voluntarily
release Releasees from any and all claims you may have, known or unknown, in
exchange for the benefits you have obtained by signing this Agreement, and you
acknowledge that these benefits are in addition to any benefits that you would
have otherwise received if you did not sign this Agreement.

 

(j)            This Agreement does not waive any
rights or claims that may arise after this Agreement is signed.

 

23.          Return of Signed Agreement: 
You should return the signed Agreement to Ivana Grillo, Director, Human
Resources, Assured Guaranty Corp., 31 West 52nd Street, New York, NY 10019  no
later than  January 6, 2010.  If you do not return the signed Agreement to Ms. Grillo
by this date, this Agreement shall be deemed revoked, null, void and of no
effect.

 

24.          Effective Date:  You have
seven (7) days from the date you sign this Agreement  to change your mind and revoke this
Agreement.  If you do not advise the
Company within seven (7) days that you have revoked this Agreement, this
Agreement shall be effective, enforceable and binding on all parties.  If you change your mind and revoke this
Agreement, you must send written notice of your decision to Ivana Grillo,
Director of 

 

12

 

Human Resources, Assured
Guaranty Corp., 31 West 52nd Street, New York, NY 10019 so that Ms. Grillo
receives your revocation no later than the eight (8th)
day after you originally signed this Agreement. 
You should understand that AGC will not be required to make payments or
provide the benefits herein unless this Agreement becomes effective.

 

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/  James
  M. Michener

  
	
   

  	
   

  	
  James Michener

  
	
   

  	
   

  	
  General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Read, Accepted and
  Agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/  Michael
  Schozer

  	
   

  	
  12/7/09

  
	
  Michael Schozer

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  State of New York)

  	
   

  	
   

  
	
                                           ss.:

  	
   

  	
   

  
	
  County of New York)

  	
   

  	
   

  

 

On the 7th day of December,
2009 before me personally came Michael Schozer, to me known and known to me to
be the individual described in and who executed the foregoing instrument, and
duly acknowledged to me that he
executed the same.

 

	
  /s/  Steven
  J. Cohen

  	
   

  	
   

  
	
  Notary Public

  	
   

  	
   

  

 

13

 

SUPPLEMENTAL RELEASE

 

In
exchange for the payments and benefits described in the Agreement dated December 7,
2009 (“Agreement”), I release  Assured Guaranty Corp. (“AGC” or the “Company”), Assured Guaranty Ltd., Assured Guaranty
Re Ltd.,  Assured Guaranty U.K. Ltd., ACE
Limited, Financial Security Assurance Holdings Ltd., Financial Security
Assurance Inc., now known as Assured Guaranty Municipal Corp., and Dexia S.A.
(hereinafter collectively referred to as the “Corporations”), and its and/or
their past, present and/or future parents, subsidiaries, affiliates,
predecessors, successors, assigns, officers, directors, employees and agents
(hereinafter collectively referred to as “Releasees”), from any and
all claims  I may have, known or unknown,
including but not limited to those related to my employment, my separation from
employment or otherwise,  from the
beginning of time through the date that I sign this Supplemental Release.

 

I also understand and agree
that I am releasing Releasees from any and all claims which may legally be waived by private
agreement, including but not limited to any and all claims for breach of
contract, personal injury, wages, benefits, defamation and wrongful discharge,
and any and all claims based on any oral or written agreements or promises,
whether arising under statute (including but not limited to, claims arising
under the  Employee Retirement Income
Security Act of 1974, the Sarbanes-Oxley Act, the Family and Medical Leave Act,
the New York Labor Law, the New York Whistleblower Statute, and any other
federal, state, local, or foreign laws or regulations), contract (express or
implied), tort, constitutional provision, common law, public policy or
otherwise, from the beginning of time through the date that I sign this
Supplemental Release.

 

Further, I understand and
agree that I am also releasing Releasees from any and all claims which may legally be waived by private
agreement, including but not limited to any and all claims for
discrimination or harassment in employment, or retaliation, on the basis of
race, color, creed, religion, age, national origin, alienage or citizenship,
gender, sexual orientation, disability, marital status, genetic information,
veteran’s status, and any other protected grounds including, but not limited
to, any and all rights and claims I may have arising under Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, the Age
Discrimination in Employment Act of 1967, the Equal Pay Act, the New York State
Human Rights Law, the New York City Human Rights Law, and any other federal,
state, local, or foreign laws or regulations, from the beginning of time
through the date that I sign this Supplemental Release.

 

Except as otherwise stated below, I agree and covenant
not to file any suit, complaint, claim, grievance or demand for arbitration
against Releasees in any court, administrative agency, or other forum with
regard to any claim, demand, liability or obligation arising out of my
employment with the Company or separation from employment. I further represent
that no claims, complaints or other proceedings are pending in any court,
administrative agency, or other forum relating directly or indirectly to my
employment with the Company.  I
understand that nothing in the Agreement shall be construed to prohibit me from
filing a charge with, or participating in any investigation or proceeding conducted
by, the Equal Employment Opportunity Commission, National Labor 

 

14

 

Relations Board and/or any federal, state or local
agency.  Notwithstanding the foregoing, I
hereby waive any and all rights to recover monetary damages in any charge, complaint
or lawsuit filed by me or by anyone else on my behalf.  I understand that my release of claims as
contained in the Agreement does not extend to any rights I may have under the
Fair Labor Standards Act and/or any applicable state law governing wage payments,
or under any laws governing the filing of claims for unemployment and/or
workers’ compensation benefits.  I
further understand that nothing herein shall be construed to prohibit me from
challenging: (a) the Company’s failure to comply with its promises to make
payment and provide benefits under the Agreement; (b) my right to any
vested benefits to which I am entitled; or (c) the knowing and voluntary
nature of my release of claims under the Age Discrimination in Employment Act
of 1967.

 

I
understand that I have seven (7) days from the date I sign this
Supplemental Release to change my mind and revoke this Supplemental Release. I
understand that if I
do not advise the Company within seven (7) days that I have revoked this Supplemental
Release,  the Agreement and this Supplemental
Release shall be
effective, enforceable and binding on all parties.  If I change my mind and revoke this Supplemental Release, I must send
written notice of my decision to Ivana Grillo, Director, Human Resources, Assured Guaranty Corp., 31
West 52nd Street, New York, NY 10019  so that she
receives  my revocation no later than the eighth
day after I originally signed this Supplemental Release.  I understand that AGC will not be required to
make payments or provide the benefits set forth in the Agreement unless the
Agreement becomes effective.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Michael
  Schozer

  
	
  Dated:
                                ,
  200  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE
  OF                              )

  	
   

  	
   

  
	
                                                  :
  ss.:

  	
   

  	
   

  
	
  COUNTY
  OF                          )

  	
   

  	
   

  

 

On
the            day of
                    ,
200   before me personally came Michael Schozer, to me known and
known to me to be the individual described in, and who executed, this
Supplemental Release, and duly acknowledged to me that he executed the same.

 

 

	
   

  	
   

  	
   

  
	
  Notary Public

  	
   

  	
   

  

 

15Exhibit
10.1

	
   

  	
   

  

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of December 7, 2009

 

by and among

 

U-STORE-IT, L.P.,

	
   

  	
  as
  Borrower,

  

 

U-STORE-IT TRUST,

	
   

  	
  as
  Parent,

  

 

WELLS FARGO SECURITIES, LLC,

and

BANC OF AMERICA SECURITIES LLC,

	
   

  	
  as
  Joint Lead Arrangers

  
	
   

  	
    and

  
	
   

  	
  Joint
  Bookrunners

  

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

	
   

  	
  as
  Administrative Agent,

  

 

BANK OF AMERICA, N.A.,

	
   

  	
  as
  Syndication Agent,

  

 

REGIONS BANK,

and

SUNTRUST BANK

	
   

  	
  as
  Co-Documentation Agents,

  

 

and

 

THE FINANCIAL INSTITUTIONS INITIALLY SIGNATORY HERETO

AND THEIR ASSIGNEES PURSUANT TO SECTION 13.5.,

	
   

  	
  as
  Lenders

  
	
   

  	
   

  
			

 

 

TABLE OF CONTENTS

 

	
  Article I.
  Definitions

  	
  1

  
	
   

  	
   

  
	
  Section 1.1. Definitions

  	
  1

  
	
  Section 1.2. General; References to Times

  	
  28

  
	
  Section 1.3. Financial Attributes of Non-Wholly Owned
  Subsidiaries

  	
  29

  
	
   

  	
   

  
	
  Article II.
  Credit Facilities

  	
  29

  
	
   

  	
   

  
	
  Section 2.1. Revolving Loans

  	
  29

  
	
  Section 2.2. Term Loans

  	
  30

  
	
  Section 2.3. Swingline Loans

  	
  31

  
	
  Section 2.4. Letters of Credit

  	
  33

  
	
  Section 2.5. Rates and Payment of Interest on Loans

  	
  38

  
	
  Section 2.6. Number of Interest Periods

  	
  39

  
	
  Section 2.7. Repayment of Loans

  	
  39

  
	
  Section 2.8. Prepayments

  	
  39

  
	
  Section 2.9. [Intentionally Omitted.]

  	
  40

  
	
  Section 2.10. Continuation

  	
  40

  
	
  Section 2.11. Conversion

  	
  40

  
	
  Section 2.12. Notes

  	
  41

  
	
  Section 2.13. Voluntary Reductions of the Revolving
  Commitments

  	
  41

  
	
  Section 2.14. Expiration or Maturity Date of Letters
  of Credit Past Termination Date

  	
  42

  
	
  Section 2.15. Amount Limitations

  	
  42

  
	
  Section 2.16. Funds Transfer Disbursements

  	
  42

  
	
   

  	
   

  
	
  Article III.
  Payments, Fees and Other General Provisions

  	
  43

  
	
   

  	
   

  
	
  Section 3.1. Payments

  	
  43

  
	
  Section 3.2. Pro Rata Treatment

  	
  44

  
	
  Section 3.3. Sharing of Payments, Etc.

  	
  45

  
	
  Section 3.4. Several Obligations

  	
  45

  
	
  Section 3.5. Minimum Amounts

  	
  45

  
	
  Section 3.6. Fees

  	
  46

  
	
  Section 3.7. Computations

  	
  47

  
	
  Section 3.8. Usury

  	
  47

  
	
  Section 3.9. Agreement Regarding Interest and Charges

  	
  47

  
	
  Section 3.10. Statements of Account

  	
  48

  
	
  Section 3.11. Defaulting Lenders

  	
  48

  
	
  Section 3.12. Taxes

  	
  50

  
	
   

  	
   

  
	
  Article IV.
  Borrowing Base Properties

  	
  52

  
	
   

  	
   

  
	
  Section 4.1. Eligibility of Properties

  	
  52

  
	
  Section 4.2. Conditions Precedent to a Property
  Becoming a Borrowing Base Property

  	
  54

  
	
  Section 4.3. Release of Borrowing Base Properties

  	
  58

  

 

 

	
  Section 4.4. Frequency of Calculations of Borrowing
  Base; Calculation Methodology

  	
  59

  
	
  Section 4.5. Frequency of Appraisals

  	
  59

  
	
  Section 4.6. Additional Appraisals Required under
  Applicable Law

  	
  60

  
	
   

  	
   

  
	
  Article V.
  Yield Protection, Etc.

  	
  60

  
	
   

  	
   

  
	
  Section 5.1. Additional Costs; Capital Adequacy

  	
  60

  
	
  Section 5.2. Suspension of LIBOR Loans

  	
  62

  
	
  Section 5.3. Illegality

  	
  62

  
	
  Section 5.4. Compensation

  	
  63

  
	
  Section 5.5. Affected Lenders

  	
  63

  
	
  Section 5.6. Treatment of Affected Loans

  	
  64

  
	
  Section 5.7. Change of Lending Office

  	
  64

  
	
  Section 5.8. Assumptions Concerning Funding of LIBOR
  Loans

  	
  65

  
	
   

  	
   

  
	
  Article VI.
  Conditions Precedent

  	
  65

  
	
   

  	
   

  
	
  Section 6.1. Initial Conditions Precedent

  	
  65

  
	
  Section 6.2. Conditions Precedent to All Loans and
  Letters of Credit

  	
  68

  
	
   

  	
   

  
	
  Article VII.
  Representations and Warranties

  	
  68

  
	
   

  	
   

  
	
  Section 7.1. Representations and Warranties

  	
  68

  
	
  Section 7.2. Survival of Representations and
  Warranties, Etc.

  	
  75

  
	
   

  	
   

  
	
  Article VIII.
  Affirmative Covenants

  	
  76

  
	
   

  	
   

  
	
  Section 8.1. Preservation of Existence and Similar
  Matters

  	
  76

  
	
  Section 8.2. Compliance with Applicable Law and
  Material Contracts

  	
  76

  
	
  Section 8.3. Maintenance of Property

  	
  76

  
	
  Section 8.4. Conduct of Business

  	
  76

  
	
  Section 8.5. Insurance

  	
  77

  
	
  Section 8.6. Payment of Taxes and Claims

  	
  78

  
	
  Section 8.7. Visits and Inspections

  	
  78

  
	
  Section 8.8. Use of Proceeds; Letters of Credit

  	
  79

  
	
  Section 8.9. Environmental Matters

  	
  79

  
	
  Section 8.10. Books and Records

  	
  79

  
	
  Section 8.11. Further Assurances

  	
  80

  
	
  Section 8.12. New Subsidiaries; Guarantors; Release of
  Guarantors and Pledgors

  	
  80

  
	
  Section 8.13. REIT Status

  	
  81

  
	
  Section 8.14. Exchange Listing

  	
  81

  
	
   

  	
   

  
	
  Article IX.
  Information

  	
  81

  
	
   

  	
   

  
	
  Section 9.1. Quarterly Financial Statements

  	
  81

  
	
  Section 9.2. Year-End Statements

  	
  82

  
	
  Section 9.3. Compliance Certificate; Borrowing Base
  Certificate

  	
  82

  
	
  Section 9.4. Other Information

  	
  83

  
	
  Section 9.5. Delivery of Documents

  	
  85

  
	
  Section 9.6. Public/Private Information

  	
  86

  

 

ii

 

	
  Section 9.7. USA Patriot Act Notice; Compliance

  	
  86

  
	
   

  	
   

  
	
  Article X.
  Negative Covenants

  	
  86

  
	
   

  	
   

  
	
  Section 10.1. Financial Covenants

  	
  86

  
	
  Section 10.2. Restricted Payments

  	
  87

  
	
  Section 10.3. Indebtedness

  	
  88

  
	
  Section 10.4. Certain Permitted Investments

  	
  88

  
	
  Section 10.5. Investments Generally

  	
  89

  
	
  Section 10.6. Liens; Negative Pledges; Other Matters

  	
  89

  
	
  Section 10.7. Merger, Consolidation, Sales of Assets
  and Other Arrangements

  	
  90

  
	
  Section 10.8. Fiscal Year

  	
  91

  
	
  Section 10.9. Modifications to Material Contracts

  	
  92

  
	
  Section 10.10. Modifications of Organizational
  Documents

  	
  92

  
	
  Section 10.11. Transactions with Affiliates

  	
  92

  
	
  Section 10.12. ERISA Exemptions

  	
  92

  
	
  Section 10.13. Derivatives Contracts

  	
  92

  
	
   

  	
   

  
	
  Article XI.
  Default

  	
  93

  
	
   

  	
   

  
	
  Section 11.1. Events of Default

  	
  93

  
	
  Section 11.2. Remedies Upon Event of Default

  	
  96

  
	
  Section 11.3. Remedies Upon Default

  	
  98

  
	
  Section 11.4. Marshaling; Payments Set Aside

  	
  98

  
	
  Section 11.5. Allocation of Proceeds

  	
  98

  
	
  Section 11.6. Collateral Account

  	
  99

  
	
  Section 11.7. Performance by Agent

  	
  100

  
	
  Section 11.8. Rights Cumulative

  	
  100

  
	
   

  	
   

  
	
  Article XII.
  The Agent

  	
  101

  
	
   

  	
   

  
	
  Section 12.1. Authorization and Action

  	
  101

  
	
  Section 12.2. Agent’s Reliance, Etc.

  	
  102

  
	
  Section 12.3. Notice of Defaults

  	
  102

  
	
  Section 12.4. Agent as Lender

  	
  103

  
	
  Section 12.5. Collateral Matters; Protective Advances

  	
  103

  
	
  Section 12.6. Post-Foreclosure Plans

  	
  104

  
	
  Section 12.7. Approvals of Lenders

  	
  105

  
	
  Section 12.8. Lender Credit Decision, Etc.

  	
  106

  
	
  Section 12.9. Indemnification of Agent

  	
  107

  
	
  Section 12.10. Successor Agent

  	
  107

  
	
  Section 12.11. Titled Agents

  	
  108

  
	
   

  	
   

  
	
  Article XIII.
  Miscellaneous

  	
  108

  
	
   

  	
   

  
	
  Section 13.1. Notices

  	
  108

  
	
  Section 13.2. Expenses

  	
  110

  
	
  Section 13.3. Setoff

  	
  111

  
	
  Section 13.4. Litigation; Jurisdiction; Other Matters;
  Waivers

  	
  111

  
	
  Section 13.5. Successors and Assigns

  	
  112

  

 

iii

 

	
  Section 13.6. Amendments

  	
  115

  
	
  Section 13.7. Nonliability of Agent and Lenders

  	
  117

  
	
  Section 13.8. Confidentiality

  	
  118

  
	
  Section 13.9. Indemnification

  	
  118

  
	
  Section 13.10. Termination; Survival

  	
  121

  
	
  Section 13.11. Severability of Provisions

  	
  121

  
	
  Section 13.12. GOVERNING LAW

  	
  121

  
	
  Section 13.13. Counterparts

  	
  121

  
	
  Section 13.14. Obligations with Respect to Loan
  Parties

  	
  122

  
	
  Section 13.15. Limitation of Liability

  	
  122

  
	
  Section 13.16. Entire Agreement

  	
  122

  
	
  Section 13.17. Construction

  	
  122

  
	
  Section 13.18. Tax Service

  	
  122

  
	
  Section 13.19. No
  Novation; Effect of Amendment and Restatement

  	
  123

  
	
  Section 13.20. Specified
  Derivatives Contracts

  	
  123

  

 

	
  SCHEDULE
  1.1.(A)

  	
  List
  of Loan Parties

  
	
  SCHEDULE
  1.1.(B)

  	
  Lender
  Commitments

  
	
  SCHEDULE
  4.1.

  	
  Initial
  Borrowing Base Properties

  
	
  SCHEDULE
  7.1.(b)

  	
  Ownership
  Structure

  
	
  SCHEDULE
  7.1.(f)

  	
  Title
  to Properties; Liens

  
	
  SCHEDULE
  7.1.(g)

  	
  Existing
  Indebtedness

  
	
  SCHEDULE
  7.1.(h)

  	
  Material
  Contracts

  
	
  SCHEDULE
  7.1.(i)

  	
  Litigation

  
	
  SCHEDULE 10.6.

  	
  Existing
  Negative Pledges

  
	
   

  	
   

  
	
  EXHIBIT
  A

  	
  Form of
  Assignment and Acceptance Agreement

  
	
  EXHIBIT
  B

  	
  Form of
  Environmental Indemnity Agreement

  
	
  EXHIBIT
  C

  	
  Form of
  Guaranty

  
	
  EXHIBIT
  D

  	
  Form of
  Form of Notice of Borrowing

  
	
  EXHIBIT
  E

  	
  Form of
  Notice of Continuation

  
	
  EXHIBIT
  F

  	
  Form of
  Notice of Conversion

  
	
  EXHIBIT
  G

  	
  Form of
  Notice of Swingline Borrowing

  
	
  EXHIBIT
  H

  	
  Form of
  Pledge Agreement

  
	
  EXHIBIT
  I

  	
  Form of
  Property Management Contract Assignment

  
	
  EXHIBIT
  J

  	
  Form of
  Security Instrument

  
	
  EXHIBIT
  K

  	
  Form of
  Swingline Note

  
	
  EXHIBIT
  L

  	
  Form of
  Revolving Note

  
	
  EXHIBIT
  M

  	
  Form of
  Term Note

  
	
  EXHIBIT
  N

  	
  Form of
  Opinion of Counsel

  
	
  EXHIBIT
  O

  	
  Form of
  Compliance Certificate

  
	
  EXHIBIT
  P

  	
  Form of
  Borrowing Base Certificate

  
	
  EXHIBIT
  Q

  	
  Form of
  Rent Roll Certificate

  
	
  EXHIBIT
  R

  	
  Form of
  Transfer Authorizer Designation

  
	
  EXHIBIT
  S

  	
  Form of
  Marketing Agreement Assignment

  

 

iv

 

THIS
AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of December 7, 2009 by and among U-STORE-IT,
L.P., a limited partnership formed under the laws of the State of Delaware (the
“Borrower”), U-STORE-IT TRUST, a real estate investment trust formed under the
laws of the State of Maryland (the “Parent”), WELLS FARGO SECURITIES, LLC and
BANC OF AMERICA SECURITIES LLC, as Joint Lead Arrangers (each a “Joint Lead
Arranger”) and Joint Bookrunners (each a “Joint Bookrunner”), WACHOVIA BANK,
NATIONAL ASSOCIATION, as Agent, BANK OF AMERICA, N.A., as Syndication Agent
(the “Syndication Agent”), REGIONS BANK, as Co-Documentation Agent and SUNTRUST
BANK, as Co-Documentation Agent (each a “Documentation Agent”), and each of the
financial institutions initially a signatory hereto together with their
assignees pursuant to Section 13.5.(b).

 

WHEREAS,
certain of the Lenders and other financial institutions (who were “Lenders”
under the Existing Credit Agreement) have made available to Borrower a
revolving credit facility in the amount of $250,000,000, including a
$40,000,000 letter of credit subfacility and a $20,000,000 swingline
subfacility and a term loan facility in the amount of $200,000,000, on the
terms and conditions contained in that certain Credit Agreement dated as of November 21,
2006 (as amended and in effect immediately prior to the date hereof, the “Existing
Credit Agreement”) by and among the Borrower, the Parent, such Lenders, certain
other financial institutions (who were “Lenders” under the Existing Credit
Agreement), the Agent and the other parties thereto; and

 

WHEREAS, the Agent and
the Lenders desire to amend and restate the terms of the Existing Credit
Agreement to make available to the Borrower (i) a
$250,000,000 revolving credit facility, which will include a $15,000,000 letter of credit subfacility and a
$20,000,000 swingline subfacility, and (ii) a term loan facility in the amount of $200,000,000, all on the
terms and conditions contained herein.

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties hereto, each intending to be legally bound,
agree that the Existing Credit Agreement is amended and restated in its
entirety as follows:

 

ARTICLE I. DEFINITIONS

 

Section 1.1.  Definitions.

 

In
addition to terms defined elsewhere herein, the following terms shall have the
following meanings for the purposes of this Agreement:

 

“Accession Agreement” means an Accession Agreement
substantially in the form of Annex I to the Guaranty.

 

“Acquisition Price” means, with respect to any 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.

 

 

“Additional Costs” has the meaning given that term in Section 5.1.(b).

 

“Adjusted Asset Value” means, on any date of determination,
with respect to any Storage Property owned in fee simple or leased by the
Borrower or any of its Subsidiaries an amount equal to (a) the Net
Operating Income of such Storage Property for the four full fiscal quarters of
the Parent most recently ended for which financial statements are available divided
by (b) the Capitalization Rate.

 

“Adjusted EBITDA” means, for any given period, (a) Consolidated EBITDA
for such period minus (b) Reserves for Capital Expenditures for all
Storage Properties for such period.

 

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

 

“Administrative
Questionnaire” means the Administrative Questionnaire completed by
each Lender and delivered to the Agent in a form supplied by the Agent to the
Lenders from time to time.

 

“Affiliate”
means, when used with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.  As used in this definition, the term “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.  In no event shall the Agent or any Lender be
deemed to be an Affiliate of the Borrower.

 

“Agent” means Wachovia Bank, National Association, as
contractual representative for the Lenders and the Specified Derivatives
Providers under the terms of this Agreement, and any of its successors.

 

“Agreement” has the meaning set forth in the introductory
paragraph hereof.

 

“Agreement Date” means the date as of which this Agreement is
dated.

 

“Applicable
Law” means all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes,
executive orders, and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority.

 

2

 

“Applicable
Margin” means the percentage set forth below corresponding to the
ratio of Consolidated Total Indebtedness to Consolidated Adjusted Asset Value
as determined in accordance with Section 10.1. in effect at such time:

 

	
  Level

  	
   

  	
  Consolidated
  Total Indebtedness to

  Consolidated Adjusted Asset Value

  	
   

  	
  Applicable
  Margin for 

  Loans

  	
   

  
	
  1

  	
   

  	
  < 0.45 to 1.00

  	
   

  	
  3.25

  	
  %

  
	
  2

  	
   

  	
  > 0.45 to 1.00 and <
  0.55 to 1.00

  	
   

  	
  3.50

  	
  %

  
	
  3

  	
   

  	
  > 0.55 to 1.00 and <
  0.60 to 1.00

  	
   

  	
  3.75

  	
  %

  
	
  4

  	
   

  	
  > 0.60 to 1.00

  	
   

  	
  4.00

  	
  %

  

 

The
Applicable Margin shall be determined by the Agent from time to time, based on
the ratio of Consolidated Total Indebtedness to Consolidated Adjusted Asset
Value as set forth in the Compliance Certificate most recently delivered by the
Borrower pursuant to Section 9.3. 
Any adjustment to the Applicable Margin shall be effective as of the
first day of the calendar month immediately following the month during which
the Borrower delivers to the Agent the applicable Compliance Certificate
pursuant to Section 9.3.  If the
Borrower fails to deliver a Compliance Certificate pursuant to Section 9.3.,
the Applicable Margin shall equal the percentages corresponding to Level 4
until the date of the delivery of the required Compliance Certificate.  As of the Agreement Date, and thereafter
until changed as provided above, the Applicable Margin is determined based on
Level 2.  The provisions of this
definition are subject to Section 2.5.(c).

 

“Applicable
Mortgage Constant” means the mortgage constant for a 25-year loan
bearing interest at a per annum rate equal to the greater of (a) the yield
on a 10-year United States Treasury Note plus 3.00% and (b) 8.00%.

 

“Appraisal” means, in respect of any
Property, an M.A.I. appraisal commissioned by and addressed to the Agent
(reasonably acceptable to the Agent as to form, substance and appraisal date),
prepared by a professional appraiser acceptable to the Agent, having at least
the minimum qualifications required under Applicable Law governing the Agent
and the Lenders, including FIRREA, and determining the “as is” market value of
such Property as between a willing buyer and a willing seller.

 

“Appraised Value” means, with respect to any
Property, the “as is” market value of such Property as reflected in the most
recent Appraisal of such Property as the same may have been reasonably adjusted
by the Agent based upon its internal review of such Appraisal which is based on
criteria and factors then generally used and considered by the Agent in
determining the value of similar properties, which review shall be conducted
prior to acceptance of such Appraisal by the Agent.

 

“Approved Fund” means any Fund that is
administered, managed or underwritten by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

3

 

“Approved Title Insurance Company” means any of (a) Fidelity
National Title Insurance Company, (b) Chicago Title Insurance Company, (c) First
American Title Insurance Company or (d) any other title insurance company
reasonably acceptable to the Agent.

 

“Assignee” has the meaning given that term in Section 13.5.(b).

 

“Assignment
and Acceptance Agreement” means an Assignment and Acceptance
Agreement entered into by a Lender and an Eligible Assignee (with the consent
of any party whose consent is required by Section 13.5.), and accepted by the Agent, substantially in the form of Exhibit A
or any other form approved by the Agent.

 

“Base Rate” means the LIBOR Market Index Rate; provided,
however, that if the LIBOR Market Index Rate is unavailable, Base Rate shall
mean the per annum rate of interest equal to the Federal Funds Rate plus one
and one-half of one percent (1.50%). Any change in the Base Rate resulting from
a change in the LIBOR Market Index Rate or the Federal Funds Rate shall become
effective as of 12:01 a.m. on the Business Day on which each such change
occurs.  The Base Rate is a reference
rate used by the Lender acting as the Agent in determining interest rates on
certain loans and is not intended to be the lowest rate of interest charged by
the Lender acting as the Agent or any other Lender on any extension of credit
to any debtor.

 

“Base Rate Loan” means a Loan bearing interest at a rate
based on the Base Rate.

 

“Benefit
Arrangement” means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.

 

“Borrower” has the meaning set forth in the introductory
paragraph hereof and shall include the Borrower’s successors and permitted
assigns.

 

“Borrowing
Base” means, as of any date of determination, the lesser of (a) an
amount equal to 60.0% of the aggregate Appraised Values of all Properties
constituting Borrowing Base Properties on such date and (b) an amount
which, if deemed to be the denominator of Debt Yield, would produce a Debt
Yield equal to 14.0%.

 

“Borrowing Base Certificate” has the meaning
given such term in Section 9.3.(b).

 

“Borrowing
Base NOI” means, as of any date of determination, the aggregate Net
Operating Income of all Properties constituting Borrowing Base Properties on
such date for the period of four consecutive fiscal quarters of the Borrower
most recently ended and for which reporting information is available.  For purposes of determining Borrowing Base
NOI, if a Borrowing Base Property has been owned or leased by the Borrower or a
Subsidiary for a period of at least two full consecutive fiscal quarters but
less than four consecutive fiscal quarters, then the Net Operating Income for
such Borrowing Base Property shall be annualized in a manner reasonably
acceptable to the Agent.

 

4

 

“Borrowing Base Property” means a Property
which the Agent and the Requisite Lenders have agreed to include in
calculations of the Borrowing Base pursuant to Section 4.1.  and for which all of the
conditions set forth in Section 4.2.
have been satisfied.  Notwithstanding the foregoing, a
Borrowing Base Property shall cease to be included in calculations of the
Borrowing Base if (a) at any time such Property shall cease to be an
Eligible Property, (b) the Agent shall cease to hold a valid and perfected
first priority Lien in such Borrowing Base Property, in all outstanding Equity
Interests of the Property Owner of such Property and in any other Collateral
related to such Property, or (c) there shall have occurred and be
continuing an “Event of Default” under and as defined in the Security
Instrument or an event of default under any other Security Document relating to
such Borrowing Base Property.

 

“Business Day” means (a) any day other than a Saturday,
Sunday or other day on which banks in Charlotte, North Carolina are authorized
or required to close and (b) with reference to a LIBOR Loan any such day
that is also a day on which dealings in deposits of Dollars are carried out in
the London interbank market.

 

“Capital Lease Obligations” means, 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 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.

 

“Capitalization Rate” means 9.00%.

 

“Cash Equivalents” means: 
(a) securities issued, guaranteed or insured by the United States
of America or any of its agencies with maturities of not more than one year
from the date acquired; (b) certificates of deposit with maturities of not
more than one year from the date issued by a United States federal or state
chartered commercial bank of recognized standing, or a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, acting through a branch or agency, which bank
has capital and unimpaired surplus in excess of $500,000,000 and which bank or
its holding company has a short-term commercial paper rating of at least A-2 or
the equivalent by S&P or at least P-2 or the equivalent by Moody’s; (c) reverse
repurchase agreements with terms of not more than seven days from the date
acquired, for securities of the type described in clause (a) above
and entered into only with commercial banks having the qualifications described
in clause (b) above; (d) commercial paper issued by any Person
incorporated under the laws of the United States of America or any State
thereof and rated at least A-2 or the equivalent thereof by S&P or at least
P-2 or the equivalent thereof by Moody’s, in each case with maturities of not
more than one year from the date acquired; and (e) investments in money
market funds registered under the Investment Company Act of 1940, as amended,
which have net assets of at least $500,000,000 and at least 85% of whose assets
consist of securities and other obligations of the type described in
clauses (a) through (d) above.

 

5

 

“Collateral”
means any real or personal property securing any of the Obligations or any
other obligation of a Person under or in respect of any Loan Document or
Specified Derivatives Contract to which it is a party, and includes, without
limitation, all “Collateral” under and as defined in any Security Instrument,
all “Management Agreements” under and as defined in any Property Management
Contract Assignment, all “Pledged Collateral” under and as defined in the
Pledge Agreement, and all other property subject to a Lien created by a
Security Document.

 

“Collateral Account” means a special non-interest bearing
deposit account or securities account maintained by, or on behalf of, the Agent
and under its sole dominion and control.

 

“Commitment” means, as to any Lender, such Lender’s Revolving
Commitment or such Lender’s Term Commitment.

 

“Commitment Percentage” means, as to each Lender, the ratio,
expressed as a percentage, of (a) the amount of such Lender’s Revolving
Commitment to (b) the aggregate amount of the Revolving Commitments of all
Lenders; provided, however, that if at the time of determination the Revolving
Commitments have terminated or been reduced to zero, the “Commitment Percentage”
of each Lender shall be the Commitment Percentage of such Lender in effect
immediately prior to such termination or reduction.

 

“Compliance Certificate” has the meaning given that term in Section 9.3.(a).

 

“Consolidated Adjusted Asset Value” means, on any date of
determination, the sum (without duplication) of (a) the aggregate Adjusted
Asset Value of all Storage Properties of the Borrower and its Subsidiaries on
such date plus (b) the undepreciated book value (determined in
accordance with GAAP) of all Development Properties plus (c) the
Acquisition Price of all Properties owned in fee simple or leased by a Loan
Party for less than 2 fiscal quarters as of such date of determination plus
(d) the book value (determined in accordance with GAAP) of all other
tangible assets of the Parent and its Subsidiaries as of such date, provided
that, (x) the portion of the Consolidated Adjusted Asset Value
attributable to clause (d) above shall not exceed 5.0% of the Consolidated
Adjusted Asset Value and (y) the portion of the Consolidated Adjusted
Asset Value attributable to Development Properties shall not exceed 15% of the
Consolidated Adjusted Asset Value.  The
Borrower’s pro rata share of assets held by Unconsolidated Affiliates will be
included in Consolidated Adjusted Asset Value calculations consistent with the
above described treatment for wholly owned assets.

 

“Consolidated EBITDA” means, for any period, Consolidated Net
Income of the Parent and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of
Consolidated Net Income for such period, the sum of (a) income tax
expense, (b) interest expense, amortization or write-off 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, amortization and/or impairment
charges with respect 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

 

6

 

(f) any
other non-cash charges (including non-cash charges under Financial Accounting
Standards Board Statement No. 123R), and minus, to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of (i) interest income (except to the extent deducted in determining
such Consolidated Net Income), (ii) 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), (iii) any other non-cash income and (iv) 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 Charges” means, 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 Parent or any of its Subsidiaries,
other than balloon, bullet or similar principal payments which repay in full
such Indebtedness, (c) Preferred Dividends accumulated (whether or not
declared or payable) by the Parent or any of its Subsidiaries during such
period and (d) the Parent’s and its Subsidiaries’ pro-rata share of all
expenses and payments referred to in the preceding clauses (a) and (b) of
any Unconsolidated Affiliate of the Parent or any of its Subsidiaries.

 

“Consolidated Interest Expense” means, for any period, the
total interest expense of Parent 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 Parent and its
Subsidiaries (including, without limitation, all commissions, discounts and
other fees and charges owed by the Parent and its Subsidiaries with respect to
letters of credit, bankers’ acceptance financing and net costs of Parent and
its Subsidiaries under Derivatives Contracts in respect of interest rates to
the extent such net costs are allocable to such period in accordance with
GAAP), plus the Parent’s and its Subsidiaries’ pro-rata share of all
such expenses of any Unconsolidated Affiliates of the Parent or any Subsidiary.

 

“Consolidated Net Income” means, 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
Parent 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 Parent or is merged into or consolidated with
Parent or any of its Subsidiaries, (b) the income (or deficit) of any
Person (other than a Subsidiary of the Borrower) in which Parent or any of its
Subsidiaries has an ownership interest, except to the extent that any such income
is actually received by Parent or such Subsidiary in the form of dividends or
similar distributions and (c) the undistributed earnings of any Subsidiary
of Parent 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 Applicable
Law applicable to such Subsidiary.

 

7

 

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

 

“Construction Budget” means the
fully-budgeted costs for the acquisition and construction of a given parcel of
real property (including, without limitation, the cost of acquiring such parcel
of real property, reserves for construction interest and operating deficits,
tenant improvements, leasing commissions, and infrastructure costs) as
reasonably determined by the Parent in good faith.

 

“Continue”, “Continuation”
and “Continued” each refers to the
continuation of a LIBOR Loan from one Interest Period to another Interest
Period pursuant to Section 2.10.

 

“Contractual Obligation” means, 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.

 

“Convert”, “Conversion” and
“Converted” each refers to the
conversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.11.

 

“Credit Event” means any of the following:  (a) the making (or deemed making) of any
Loan, (b) the Continuation of a LIBOR Loan, (c) the Conversion of a Base
Rate Loan into a LIBOR Loan, and (d) the issuance of a Letter of Credit.

 

“Credit Rating” means the rating assigned by a rating agency
to the senior unsecured long term Indebtedness of a Person.

 

“Debt Yield”
means, as of any date of determination, the ratio (expressed as a percentage)
of (a) Borrowing Base NOI to (b) the aggregate principal amount of
all Loans, together with the aggregate amount of all Letter of Credit
Liabilities.

 

“Default” means any of the events specified in Section 11.1.,
whether or not there has been satisfied any requirement for the giving of
notice, the lapse of time, or both.

 

“Defaulting
Lender” means any Lender, as determined by the Agent in good faith
or, in the event that the Lender then acting as Agent is a Defaulting Lender,
the Requisite Lenders in good faith, that (a) has failed to fund (or has
failed, within three Business Days after request by the Agent, to confirm that
it will comply with the terms of this Agreement relating to its obligations to
fund) any portion of a Loan, participations in Letter of Credit Liabilities
under Section 2.4.(j) or participations in Swingline Loans under Section 2.3.(e), in each case required to be funded
by it hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay to the Agent or any other
Lender any other amount required to be paid by it hereunder within one Business
Day of the date when due, unless such amount is the subject of a good faith
dispute, (c) has notified the Borrower, the Agent or any other Lender in
writing that, or has made a public statement to the effect that, it does not
intend to comply with any of its funding obligations under this Agreement, or (d) has
become or is

 

8

 

(i) insolvent or (ii) the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment.

 

“Defaulting
Lender Excess” means, with respect to any Defaulting Lender, the
excess, if any, of such Defaulting Lender’s Commitment Percentage of the
aggregate outstanding principal amount of Revolving Loans and Term Loans of all
Lenders (calculated as if all Defaulting Lenders other than such Defaulting
Lender had funded all of their respective Revolving Loans and Term Loans) over
the aggregate outstanding principal amount of all Revolving Loans and the Term Loan
of such Defaulting Lender.

 

“Derivatives Contract” means (a) any transaction
(including any master agreement, confirmation or other agreement with respect
to any such transaction) now existing or hereafter entered into by the Borrower
or any of its Subsidiaries (i) which is a rate swap transaction, swap
option, basis swap, forward rate transaction, commodity swap, commodity option,
equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, credit protection transaction, credit swap,
credit default swap, credit default option, total return swap, credit spread
transaction, repurchase transaction, reverse repurchase transaction,
buy/sell-back transaction, securities lending transaction, weather index
transaction or forward purchase or sale of a security, commodity or other
financial instrument or interest (including any option with respect to any of
these transactions) or (ii) which is a type of transaction that is similar
to any transaction referred to in clause (i) above that is currently, or
in the future becomes, commonly entered into in the financial markets
(including terms and conditions incorporated by reference in such agreement)
and which is a forward, swap, future, option or other derivative on one or more
rates, currencies, commodities, equity securities or other equity instruments,
debt securities or other debt instruments, economic indices or measures of
economic risk or value, or other benchmarks against which payments or
deliveries are to be made, and (b) any combination of these transactions.

 

“Derivatives Termination Value” means, in respect of any one
or more Derivatives Contracts, after taking into account the effect of any
legally enforceable netting agreement or provision relating thereto, (a) for
any date on or after the date such Derivatives Contracts have been terminated
or closed out, the termination amount or value determined in accordance
therewith, and (b) for any date prior to the date such Derivatives
Contracts have been terminated or closed out, the then-current mark-to-market
value for such Derivatives Contracts, determined based upon one or more
mid-market quotations or estimates provided by any recognized dealer in
Derivatives Contracts (which may include the Agent, any Lender, any Specified
Derivatives Provider or any Affiliate of any thereof).

 

“Development Property” means a Property currently under
development as a Storage Property that does not have an Occupancy Rate of 50%
or more or, subject to the last sentence of this definition, on which the
improvements (other than tenant improvements on unoccupied space) related to
the development have not been completed. 
The term “Development
Property” shall include, but shall not be limited to, real property of the type
described in the immediately

 

9

 

preceding sentence to be
acquired by the Borrower, any Subsidiary or any Unconsolidated Affiliate
pursuant to an executed purchase agreement, such acquisition to be consummated
upon completion of construction pursuant to a contract in which the seller of
such real property is required to develop or renovate prior to, and as a
condition precedent to, such acquisition. 
A Development Property on which all improvements (other than tenant
improvements on unoccupied space) related to the development of such Property
have been completed for at least 36 months shall cease to constitute a
Development Property notwithstanding the fact that such Property does not have
an Occupancy Rate of at least 50%.

 

“Dollars” or “$” means the
lawful currency of the United States of America.

 

“Effective Date” means the later of:  (a) the Agreement Date; and (b) the
date on which all of the conditions precedent set forth in Section 6.1.
shall have been fulfilled or waived in writing by the Requisite Lenders.

 

“Eligible
Assignee” means (a) a Lender, (b) an Affiliate of a
Lender, (c) an Approved Fund, and (d) any other Person (other than a
natural person) approved by (i) the Agent and (ii) unless a Default
or Event of Default shall exist, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
“Eligible Assignee” shall not include the Borrower or any of the Borrower’s
Affiliates or Subsidiaries.

 

“Eligible Property” means a Property which satisfies all of
the following requirements:  (a) such
Property is owned, or leased under a Ground Lease, by the Borrower or a Wholly
Owned Subsidiary that is a Guarantor; (b) such Property is a Storage
Property; (c) such Property is located in one of the 48 contiguous states
of the United States of America or in the District of Columbia; (d) neither
such Property, nor any interest of the Borrower or any Subsidiary thereof
therein, is subject to any Lien (other than Permitted Liens described in
clauses (a) through (e), (g) and (i) of the definition thereof
or other Liens only if such other Liens are terminated or released to the
satisfaction of the Agent in its sole discretion prior to the inclusion of such
Property in the Borrowing Base) or any Negative Pledge; (e) if such
Property is owned or leased by a Subsidiary that is a Guarantor, (i) none
of the Borrower’s or the Parent’s direct or indirect ownership interest in such
Subsidiary is subject to any Lien (other than Permitted Liens described in
clauses (a) through (e), (g) and (i) of the definition thereof)
or any Negative Pledge and (ii) the Borrower directly, or indirectly
through a Subsidiary, has the right to take the following actions without the
need to obtain the consent of any Person: 
(A) to create Liens on such Property as security for Indebtedness
of the Parent, the Borrower or such Subsidiary, and (B) to sell, transfer
or otherwise dispose of such Property; and (f) such Property is free of
all structural defects or major architectural deficiencies, title defects,
environmental conditions or other adverse matters except for defects,
deficiencies, conditions or other matters individually or collectively which
are not material to the profitable operation of such Property.

 

“Environmental Indemnity Agreement” means an
Environmental Indemnity Agreement executed by a Loan Party in favor of the
Agent for the benefit of the Secured Parties and substantially in the form of Exhibit B.

 

10

 

“Environmental Laws” means any Applicable Law relating to
environmental protection or the manufacture, storage, remediation, disposal or
clean-up of Hazardous Materials including, without limitation, the
following:  Clean Air Act, 42 U.S.C.
§ 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251
et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.;
National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; regulations
of the Environmental Protection Agency and any applicable rule of common
law and any judicial interpretation thereof relating primarily to the
environment or Hazardous Materials.

 

“Equity Interest” means, with respect to any Person, any
share of capital stock of (or other ownership or profit interests in) such
Person, any warrant, option or other right for the purchase or other
acquisition from such Person of any share of capital stock of (or other
ownership or profit interests in) such Person, any security convertible into or
exchangeable for any share of capital stock of (or other ownership or profit
interests in) such Person or warrant, right or option for the purchase or other
acquisition from such Person of such shares (or such other interests), and any
other ownership or profit interest in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such share, warrant, option, right or other
interest is authorized or otherwise existing on any date of determination.

 

“Equity Issuance” means any issuance by a Person of any
Equity Interest in such Person and shall in any event include the issuance of
any Equity Interest upon the conversion or exchange of any security
constituting Indebtedness that is convertible or exchangeable, or is being
converted or exchanged, for Equity Interests.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as in effect from
time to time.

 

“ERISA Group” means the Parent, the Borrower, the other
Subsidiaries and all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.

 

“Event of Default” means any of the events specified in Section 11.1.,
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.

 

“Excluded Subsidiary” means any Subsidiary (a) holding
title to assets which are or are to become collateral for any Secured
Indebtedness of such Subsidiary (or whose sole asset is an Equity Interest in
such a Subsidiary) and (b) which is prohibited from Guarantying the
Indebtedness of any other Person pursuant to (i) any document, instrument
or agreement evidencing such Secured Indebtedness or (ii) a provision of
such Subsidiary’s organizational documents which provision was included in such
Subsidiary’s organizational documents as a condition to the extension of such
Secured Indebtedness.

 

“Existing
Credit Agreement” has the meaning given such term in the recitals
hereto.

 

11

 

“Fair Market Value”
means, with respect to (a) a security listed on a national securities
exchange or the NASDAQ National Market, the last sale price of such security as
reported on such exchange or market by any widely recognized reporting method
customarily relied upon by financial institutions and (b) with respect to
any other property, the price which could be negotiated in an arm’s-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of which is under pressure or compulsion to complete the transaction.

 

“Federal Funds Rate” means, for any day, the rate per annum
(rounded upward to the nearest 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent by federal funds dealers selected by the Agent
on such day on such transaction as determined by the Agent.

 

“Fees” means the fees and commissions provided for or
referred to in Section 3.6. and any other fees payable by the Borrower
hereunder or under any other Loan Document.

 

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

 

“Fitch” means Fitch, Inc., and its successors.

 

“Floating Rate Indebtedness”  means
any Indebtedness of a Person which bears interest at a variable rate during the
scheduled life of such Indebtedness to the extent that such Person has not
entered into an interest rate swap agreement, interest rate “cap” or “collar”
agreement or other similar Derivatives Contract with a Person not an Affiliate
of such Person and which, as of the date of determination, effectively limits
such interest rate exposure in respect of such Indebtedness to a fixed rate
less than or equal to (a) the rate (as determined by the Agent) borne by
United States 10-year Treasury Notes at the time the applicable Derivatives
Contract became effective plus (b) 1.50%.

 

“Foreign
Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax
purposes.  For purposes of this definition,
the United States of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.

 

“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

 

“Funds From Operations” means, for any period, with respect
to the Parent and its Subsidiaries, (a) Consolidated Net Income of the
Parent and its Subsidiaries for such period, plus

 

12

 

(b) real
estate depreciation and amortization (excluding amortization of financing
costs), plus (c) amortization associated with the purchase of
property management companies, plus (d) 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), (e) gains (or losses) from debt restructuring and
sales of property, and after adjustments for Unconsolidated Affiliates (with
adjustments for Unconsolidated Affiliates 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 Affiliates and
the payment of Preferred Dividends, as interpreted by the National Association
of Real Estate Investment Trusts in its May, 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
Financial Accounting Standards No. 150 of the Financial Accounting
Standards Board as interpreted under GAAP.

 

“GAAP” means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.

 

“Governmental Approvals” means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.

 

“Governmental Authority” means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau, commission, board, department
or other entity (including, without limitation, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency or the Federal Reserve Board, any
central bank or any comparable authority) or any arbitrator with authority to
bind a party at law.

 

“Ground Lease”  means a ground
lease containing the following terms and conditions:  (a) a remaining term (exclusive of any
unexercised extension options) of 30 years or more from the Agreement Date (or
such shorter period as the Requisite Lenders may agree); (b) the right of
the lessee to mortgage and encumber its interest in the leased property without
the consent of the lessor; (c) the obligation of the lessor to give the
holder of any mortgage Lien on such leased property written notice of any
defaults on the part of the lessee and agreement of such lessor that such lease
will not be terminated until such holder has had a reasonable opportunity to
cure or complete foreclosures, and fails to do so; (d) reasonable
transferability of the lessee’s interest under such lease, including without
limitation, the ability to sublease; and (e) such other rights customarily
required by mortgagees making a loan secured by the interest of the holder of
the leasehold estate demised pursuant to a ground lease.

 

13

 

“Guarantor” means any Person that is a party to the Guaranty
as a “Guarantor” and in any event shall include the Parent, each Material
Subsidiary, each Pledgor and each Property Owner.

 

“Guaranty”, “Guaranteed”, “Guarantying” or to “Guarantee”
as applied to any obligation means and includes:  (a) a guaranty (other than by
endorsement of negotiable instruments for collection or deposit in the ordinary
course of business), directly or indirectly, in any manner, of any part or all
of such obligation, or (b) an agreement, direct or indirect, contingent or
otherwise, and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages in the
event of nonperformance) of any part or all of such obligation whether by: (i) the
purchase of securities or obligations, (ii) the purchase, sale or lease
(as lessee or lessor) of property or the purchase or sale of services primarily
for the purpose of enabling the obligor with respect to such obligation to make
any payment or performance (or payment of damages in the event of
nonperformance) of or on account of any part or all of such obligation, or to
assure the owner of such obligation against loss, (iii) the supplying of
funds to or in any other manner investing in the obligor with respect to such
obligation, (iv) repayment of amounts drawn down by beneficiaries of
letters of credit (including Letters of Credit), or (v) the supplying of
funds to or investing in a Person on account of all or any part of such Person’s
obligation under a Guaranty of any obligation or indemnifying or holding
harmless, in any way, such Person against any part or all of such
obligation.  As the context requires, “Guaranty”
shall also mean the Amended and Restated Guaranty to which the Guarantors are
parties substantially in the form of Exhibit C.

 

“Hazardous Materials” means all or any of the following:  (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable Environmental
Laws as “hazardous substances”, “hazardous materials”, “hazardous wastes”, “toxic
substances” or any other formulation intended to define, list or classify
substances by reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, reproductive toxicity, “TCLP” toxicity or “EP
toxicity”; (b) oil, petroleum or petroleum derived substances, natural
gas, natural gas liquids or synthetic gas and drilling fluids, produced waters
and other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (c) any flammable
substances or explosives or any radioactive materials; (d) asbestos in any
form; (e) toxic mold; and (f) electrical equipment which contains any
oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million.

 

“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 (including trade payables incurred in
the ordinary course of such Person’s business but excluding accrued expenses); (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

 

14

 

otherwise
acquire for value any Equity Interests of such Person; (h) all Off-Balance
Sheet Obligations of such Person; (i) all obligations of such Person in
respect of Guaranties of obligations of the kind referred to in clauses (a) through
(h) above; (j) all obligations of the kind referred to in clauses (a) through
(i) 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 (k) net obligations of such Person under any
Derivatives Contract not entered into as a hedge against existing Indebtedness,
in an amount equal to the Derivatives Termination Value thereof.  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 therefore 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 therefore, provided that, Indebtedness
shall include such person’s pro-rata share of Indebtedness of any joint venture
in which such person is a partner, regardless if such person is liable
therefor.  Any calculation of
Indebtedness hereunder shall be made in a manner consistent with the last
sentence of Section 1.2.

 

“Indemnified Costs” has the meaning given that term in Section 13.9.(a).

 

“Indemnified Party” has the meaning given that term in Section 13.9.(a).

 

“Indemnity Proceeding” has the meaning given that term in Section 13.9.(a).

 

“Intellectual Property” has the meaning given that term in Section 7.1.(t).

 

“Interest Period” means with respect to any LIBOR Loan, each
period commencing on the date such LIBOR Loan is made, or in the case of the
Continuation of a LIBOR Loan the last day of the preceding Interest Period for
such Loan, and ending 1, 3 or 6 months thereafter, as the Borrower may select
in a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as
the case may be, except that each Interest Period that commences on the last
Business Day of a calendar month, or on a day for which there is no
corresponding day in the appropriate subsequent calendar month, shall end on
the last Business Day of the appropriate subsequent calendar month.  Notwithstanding the foregoing:  (i) if any Interest Period would
otherwise end after the Termination Date, such Interest Period shall end on the
Termination Date; and (ii) each Interest Period that would otherwise end
on a day which is not a Business Day shall end on the immediately following
Business Day (or, if such immediately following Business Day falls in the next
calendar month, on the immediately preceding Business Day).

 

“Internal Revenue Code” means the Internal Revenue Code of
1986, as amended.

 

“Investment” means, with respect to any Person, any
acquisition or investment (whether or not of a controlling interest) by such
Person, by means of any of the following: 
(a) the purchase or other acquisition of any Equity Interest in
another Person, (b) a loan, advance or extension of credit to, capital
contribution to, Guaranty of Indebtedness of, or purchase or other acquisition
of any Indebtedness of, another Person, including any partnership or joint
venture

 

15

 

interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute the business or a division or operating unit of another Person.  Any binding commitment to make an Investment
in any other Person, as well as any option of another Person to require an
Investment in such Person, shall constitute an Investment.  Except as expressly provided otherwise, for
purposes of determining compliance with any covenant contained in a Loan
Document, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“L/C Commitment Amount” equals $15,000,000.

 

“Lender” means each financial institution from time to time
party hereto as a “Lender”, together with its respective successors and
permitted assigns, and as the context requires, includes the Swingline Lender;
provided, however, except as otherwise expressly provided herein, the term “Lender”
shall not include any Lender or any of its Affiliates in such Person’s capacity
as a Specified Derivatives Provider.

 

“Lending Office” means, for each Lender and for each Type of
Loan, the office of such Lender specified in such Lender’s Administrative
Questionnaire, or such other office of such Lender of which such Lender may notify
the Agent in writing from time to time.

 

“Letter of Credit” has the meaning given that term in Section 2.4.(a).

 

“Letter of Credit Documents” means, with respect to any
Letter of Credit, collectively, any application therefor, any certificate or
other document presented in connection with a drawing under such Letter of
Credit and any other agreement, instrument or other document governing or
providing for (a) the rights and obligations of the parties concerned or
at risk with respect to such Letter of Credit or (b) any collateral
security for any of such obligations.

 

“Letter of Credit Liabilities” means, without duplication, at
any time and in respect of any Letter of Credit, the sum of (a) the Stated
Amount of such Letter of Credit plus (b) the aggregate unpaid principal
amount of all Reimbursement Obligations of the Borrower at such time due and
payable in respect of all drawings made under such Letter of Credit.  For purposes of this Agreement, a Lender
(other than the Lender acting as the Agent) shall be deemed to hold a Letter of
Credit Liability in an amount equal to its participation interest in the
related Letter of Credit under Section 2.4.(i), and the Lender acting as
the Agent shall be deemed to hold a Letter of Credit Liability in an amount equal
to its retained interest in the related Letter of Credit after giving effect to
the acquisition by the Lenders other than the Lender acting as the Agent of
their participation interests under such Section.

 

“Level” shall be the “Level” column as set
forth in the definition of the term “Applicable Margin.”

 

“LIBOR”
means, for any LIBOR Loan for any Interest Period therefor, the greater of (a) the
rate of interest, rounded up to the nearest whole multiple of one-hundredth of
one percent (.01%), obtained by dividing (i) the rate of interest, rounded
upward to the nearest whole

 

16

 

multiple of one-sixteenth
of one percent (0.0625%), referred to as the BBA (British Bankers’ Association)
LIBOR rate as set forth by any service selected by the Agent that has been
nominated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rate for deposits in U.S. Dollars at
approximately 9:00 a.m. Pacific time, 2 Business Days prior to the
date of commencement of such Interest Period for purposes of calculating
effective rates of interest for loans or obligations making reference thereto,
for an amount approximately equal to the applicable LIBOR Loan and for a period
of time approximately equal to such Interest Period by (ii) a
percentage equal to 1 minus the stated maximum rate (stated as a
decimal) of all reserves, if any, required to be maintained with respect to
Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) as
specified in Regulation D of the Board of Governors of the Federal Reserve
System (or against any other category of liabilities which includes deposits by
reference to which the interest rate on LIBOR Loans is determined or any
applicable category of extensions of credit or other assets which includes
loans by an office of any Lender outside of the United States of America) and (b) the
LIBOR Floor.  Any change in such maximum
rate shall result in a change in LIBOR on the date on which such change in such
maximum rate becomes effective.

 

“LIBOR Floor” means one and one-half percent (1.50%).

 

“LIBOR Loan” means a Revolving Loan or a Term Loan bearing interest at a rate
based on LIBOR.

 

“LIBOR Market Index Rate”
means, for any day, LIBOR as of that day that would be applicable for a LIBOR
Loan having a one-month Interest Period determined at approximately 9:00 a.m.
Pacific time for such day (or if such day is not a Business Day, the
immediately preceding Business Day).  The
LIBOR Market Index Rate shall be determined on a daily basis and in no event
shall be less than the LIBOR Floor.

 

“Lien” as applied to the property of any Person means:  (a) any security interest, encumbrance,
mortgage, deed to secure debt, deed of trust, assignment of leases and rents,
pledge, lien, charge or lease constituting a Capital Lease Obligation,
conditional sale or other title retention agreement, or other security title or
encumbrance of any kind in respect of any property of such Person, or upon the
income, rents or profits therefrom; (b) any arrangement, express or
implied, under which any property of such Person is transferred, sequestered or
otherwise identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the payment
of the general, unsecured creditors of such Person; (c) the filing of any
financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction, other than any precautionary filing not otherwise constituting or
giving rise to a Lien, including a financing statement filed (i) in
respect of a lease not constituting a Capital Lease Obligation pursuant to Section 9-505
(or a successor provision) of the Uniform Commercial Code or its equivalent as
in effect in an applicable jurisdiction or (ii) in connection with a sale
or other disposition of accounts or other assets not prohibited by this
Agreement in a transaction not otherwise constituting or giving rise to a Lien;
and (d) any agreement by such Person to grant, give or otherwise convey
any of the foregoing.

 

“Loan” means a Revolving Loan, a Term Loan or a Swingline Loan.

 

17

 

“Loan Document” means this Agreement, each Note, each
Security Document, each Letter of Credit Document, the Guaranty and each other
document or instrument now or hereafter executed and delivered by a Loan Party
in connection with, pursuant to or relating to this Agreement (other than any
Specified Derivatives Contract).

 

“Loan Party” means each of the Parent, the Borrower, each
Guarantor and each other Person who guarantees all or a portion of the
Obligations and/or who pledges any collateral security to secure all or a
portion of the Obligations. 
Schedule 1.1.(A) sets forth the Loan Parties in addition to
the Parent and the Borrower as of the Agreement Date.

 

“Major Lease” shall mean, as to any Property, any lease with
respect to a Property (other than a lease for storage space at such Property) which (i) accounts
for twenty percent (20%) or more of such Property’s total rental income, or (ii) covers
more than twenty percent (20%) of the gross leasable area of the Property.

 

“Marketing Agreement” means, collectively, all agreements
entered into by a Loan Party pursuant to which such Loan Party engages a Person
to provide certain services to such Loan Party’s customers and to provide
certain information to such Loan Party’s tenants.

 

“Marketing Agreement Assignment” means an Assignment of
Marketing and Ancillary Services Agreement and Subordination of Marketing Fees
executed by a Loan Party in favor of the Agent for the benefit of the Secured
Parties substantially in the form of Exhibit S or otherwise in form and
substance reasonably satisfactory to the Agent.

 

“Material Adverse Effect” means a materially adverse effect
on (a) the business, assets, liabilities, condition (financial or
otherwise), or results of operations of the Parent and its Subsidiaries taken
as a whole, (b) the ability of the Parent, the Borrower or any other Loan
Party to perform its obligations under any Loan Document to which it is a
party, (c) the validity or enforceability of any of the Loan Documents, or
(d) the rights and remedies of the Lenders and the Agent under any of the
Loan Documents.

 

“Material Contract” means any contract or other arrangement
(other than Loan Documents and Specified Derivatives Contracts), whether
written or oral, to which the Parent, the Borrower, any other Subsidiary or any
other Loan Party is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a Material Adverse Effect.

 

“Material Indebtedness” has the meaning given that term in Section 11.1.(e)(i).

 

“Material Subsidiary” means (a) any Subsidiary of the Parent
that owns, or otherwise has any interest in, any Borrowing Base Property or any
other property or asset which is taken into account when calculating the
Borrowing Base; (b) any Subsidiary (other than an Excluded Subsidiary)
that has total assets greater than or equal to 5.0% 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) any Subsidiary (other than an

 

18

 

Excluded
Subsidiary) that has total revenues greater than or equal to 5.0% 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 (other than Excluded Subsidiaries) of the Borrower,
which, together with the Borrower, account for 90.0% 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 the “Material Subsidiaries” shall be specified by
the Borrower.

 

“Moody’s” means Moody’s Investors Service, Inc., and its
successors.

 

“Mortgage Receivables” means a promissory note secured by a
Lien in an interest in real property of which the Parent, the Borrower or
another Subsidiary is the holder and retains the right of collection of all
payments thereunder.

 

“Multiemployer
Plan” means at any time a multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of the ERISA Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years
made contributions, including for these purposes any Person which ceased to be
a member of the ERISA Group during such five year period.

 

“Negative Pledge” means, with respect to a given asset, any
provision of a document, instrument or agreement (other than any Loan Document or
Specified Derivatives Contract) which prohibits or purports to
prohibit the creation or assumption of any Lien on such asset as security for
Indebtedness of the Person owning such asset or any other Person; provided,
however, that an agreement that conditions a Person’s ability to encumber its
assets upon the maintenance of one or more specified ratios that limit such
Person’s ability to encumber its assets but that do not generally prohibit the
encumbrance of its assets, or the encumbrance of specific assets, shall not
constitute a Negative Pledge.

 

“Net Operating Income” or “NOI” means, for any
Storage Property and for a given period, the sum of the following (without
duplication and determined on a consistent basis with prior periods):  (a) rents and other revenues received in
the ordinary course of business from operating such Property (including
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 rent) during such period minus (b) all expenses
paid or accrued related to the ownership, operation or maintenance of such
Property (other than those expenses normally covered by a management fee and
other than Capital Expenditures), 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) the Reserves for Capital Expenditures
for such Property for such period minus (d) the greater of (i) the actual
property management fee paid during such period with respect to such Property
and (ii) an imputed management fee in the amount of five
percent (5.0%) of the gross revenues for such Property for such period.

 

19

 

“Net Proceeds” means with respect to any Equity Issuance by a
Person, the aggregate amount of all cash and the Fair Market Value of all other
property (other than securities of such Person being converted or exchanged in
connection with such Equity Issuance) received by such Person in respect of
such Equity Issuance net of investment banking fees, legal fees, accountants’
fees, underwriting discounts and commissions, listing fees, financial printing
costs and other customary fees and expenses actually incurred by such Person in
connection with such Equity Issuance.

 

“Nonrecourse Indebtedness” means, with respect to a Person,
Indebtedness for borrowed money in respect of which recourse for payment
(except for exceptions for fraud,
misapplication of funds, environmental indemnities, bankruptcy, transfer of collateral
in violation of the applicable loan documents, failure to obtain consent for
subordinate financing in violation of the applicable loan documents and other
exceptions to nonrecourse liability which are customary for nonrecourse
financings at the time as determined by the Agent) is contractually
limited to specific assets of such Person encumbered by a Lien securing such
Indebtedness.  Liability of a Person
under a completion guarantee, to the extent relating to the Nonrecourse
Indebtedness of another Person, shall not, in and of itself, prevent such
liability from being characterized as Nonrecourse Indebtedness.

 

“Note” means a Revolving Note, a Term Note or a Swingline Note.

 

“Notice of Borrowing” means a notice in the form of Exhibit D
to be delivered to the Agent pursuant to Section 2.1.(b) evidencing
the Borrower’s request for a borrowing of Revolving Loans.

 

“Notice of Continuation” means a notice in the form of Exhibit E
to be delivered to the Agent pursuant to Section 2.10. evidencing the Borrower’s
request for the Continuation of a LIBOR Loan.

 

“Notice of Conversion” means a notice in the form of Exhibit F
to be delivered to the Agent pursuant to Section 2.11. evidencing the
Borrower’s request for the Conversion of a Loan from one Type to another Type.

 

“Notice of Swingline Borrowing” means a notice in the form of
Exhibit G to be delivered to the Agent pursuant to Section 2.3.
evidencing the Borrower’s request for a Swingline Loan.

 

“Obligations”
means, individually and collectively:  (a) the
aggregate principal balance of, and all accrued and unpaid interest on, all
Loans; (b) all Reimbursement Obligations and all other Letter of Credit
Liabilities; and (c) all other indebtedness, liabilities, obligations,
covenants and duties of the Borrower and the other Loan Parties owing to the
Agent or any Lender of every kind, nature and description, under or in respect
of this Agreement or any of the other Loan Documents, including without
limitation, the Fees and indemnification obligations, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any promissory
note.  The term “Obligations” does not
include Specified Derivatives Obligations.

 

20

 

“Occupancy Rate” means, with respect to a Property at any
time, the ratio, expressed as a percentage, of (a) aggregate leasable
square footage of all completed space of such Property actually occupied by
non-Affiliate tenants 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 60 days to (b) the aggregate leasable square footage of all
completed space of such Property.

 

“OFAC” means U.S. Department of the Treasury’s Office of
Foreign Assets Control and any successor Governmental Authority.

 

“Off-Balance Sheet Obligations” means liabilities and obligations of the Parent, the Borrower, any
other Subsidiary or any other Person in respect of “off-balance sheet
arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K
promulgated under the Securities Act) which the Parent would be required to
disclose in the “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” section of the Parent’s report on Form 10-Q or Form 10-K
(or their equivalents) which the Parent is required to file with the Securities
and Exchange Commission (or any Governmental Authority substituted therefor).

 

“Parent” has the meaning set forth in the introductory paragraph
hereof and shall include the Parent’s successors and permitted assigns.

 

“Participant” has the meaning given that term in Section 13.5.(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation and any
successor agency.

 

“Permitted Liens” means:  (a) Liens securing taxes, assessments
and other charges or levies imposed by any Governmental Authority (excluding
any Lien imposed pursuant to any of the provisions of ERISA or pursuant to any
Environmental Laws) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, which are not at the time required to be paid
or discharged under Section 8.6.;
(b) Liens consisting of deposits or pledges made, in the ordinary course
of business, in connection with, or to secure payment of, obligations under
workers’ compensation, unemployment insurance or similar Applicable Laws; (c) Liens
consisting of encumbrances in the nature of zoning restrictions, easements, and
rights or restrictions of record on the use of real property, which do not
materially detract from the value of such property or materially and adversely
impair the intended use thereof in the business of such Person; (d) the
rights of tenants under leases or subleases not interfering with the ordinary
conduct of business of such Person; (e) Liens in favor of the Agent for
the benefit of the Secured Parties; (f) Liens in existence as of the
Agreement Date and set forth in Part II of Schedule 7.1.(f); (g) in the case of any
Collateral encumbered by a Security Document, other Liens expressly permitted
by such Security Document; (h) in the case of any Excluded Subsidiary,
Liens on the assets of such Excluded Subsidiary securing the Indebtedness of
such Excluded Subsidiary that caused such Subsidiary to be an Excluded
Subsidiary; (i) Liens with respect to which an Approved Title Insurance
Company has insured the Agent and the Lenders against pursuant to an ALTA 2006 Form Mortgagee’s
Policy of Title Insurance or other form reasonably acceptable to the Agent in
favor of the Agent for the benefit of the Lenders and (j) any Lien
consisting of a purchase money

 

21

 

security interest that
secures purchase money Indebtedness permitted by Section 10.3. and incurred in the ordinary course of
business in connection with the purchase of “Equipment” (as such term is
defined in the UCC), provided such Lien is limited to the Equipment purchased.

 

“Person” means an individual, corporation, partnership,
limited liability company, association, trust or unincorporated organization,
or a government or any agency or political subdivision thereof.

 

“Plan”
means an employee pension benefit plan (other than a Multiemployer Plan) which
is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (a) is
maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (b) has at any time within the
preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.

 

“Pledge
Agreement” means the Pledge Agreement executed by the Borrower and
the Pledgors in favor of the Agent for the benefit of the Secured Parties and
substantially in the form of Exhibit H.

 

“Pledgor”
means the Borrower or any Subsidiary, in either case, that owns, directly or indirectly,
any Equity Interests of a Property Owner.

 

“Post-Default Rate” means a rate per annum equal to the Base
Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans plus four percent (4.0%).

 

“Potential Defaulting Lender” means any Lender, as reasonably
determined by the Agent in good faith or, in the event that the Lender then
acting as Agent is a Defaulting Lender, the Requisite Lenders in good faith,
that: (a) has failed to comply with, or has made a public statement to the
effect that it does not intend to comply with, its funding obligations under
one or more syndicated credit facilities or other agreements in which it
commits or is obligated to extend credit (other than this Agreement); (b) 
has a parent corporation or other Affiliate that is subject to any condition or
event described in the immediately preceding clause (a); or (c) has,
or whose parent corporation has, a Credit Rating of less than BBB-/Baa3 (or
equivalent) from either S&P or Moody’s. 
As used in this definition, the term “parent corporation” means, with
respect to a Lender, any Person Controlling such Lender, including without
limitation, the bank holding company (as defined in Regulation Y of the
Board of Governors of the Federal Reserve System), if any, of such Lender.

 

“Preferred Dividends” means, for any period and without duplication, all Restricted Payments
paid during such period on Preferred Equity Interests issued by the Parent or
any of its Subsidiaries.  Preferred
Dividends shall not include dividends or distributions (a) to the extent
paid or payable to the Parent or any of its Subsidiaries, or (b) constituting
or resulting in the redemption of Preferred Equity Interests, other than
scheduled redemptions not constituting balloon, bullet or similar redemptions
in full.

 

22

 

“Preferred Equity Interests” means, with respect to any
Person, Equity Interests in such Person which are entitled to preference or
priority over any other Equity Interest in such Person in respect of the
payment of dividends or distribution of assets upon liquidation or both.

 

“Principal Office” means the office of the Agent located at
One Wachovia Center, Charlotte, North Carolina, or such other office of the
Agent as the Agent may designate from time to time.

 

“Property” means any parcel of real property owned or leased
(in whole or in part) or operated by the Parent, the Borrower, any Subsidiary
or any Unconsolidated Affiliate of the Borrower.

 

“Property
Management Agreement” means, collectively, all agreements entered
into by a Loan Party pursuant to which such Loan Party engages a Person to
advise it with respect to the management of a Borrowing Base Property.

 

“Property
Management Contract Assignment” means an Assignment of Management
Agreement and Subordination of Management Fees executed by a Loan Party in
favor of the Agent for the benefit of the Secured Parties substantially in the
form of Exhibit I or otherwise in form and substance reasonably
satisfactory to the Agent.

 

“Property
Owner” means a direct or indirect Wholly Owned Subsidiary of the
Borrower which owns or leases a Borrowing Base Property.

 

“Protective
Advance” means all sums expended as determined by the Agent to be
necessary or appropriate after any Loan Party fails to do so when required: (a) to
protect the validity, enforceability, perfection or priority of the Liens in
any of the Collateral and the instruments evidencing the Obligations; (b) to
prevent the value of any Collateral from being materially diminished (assuming
the lack of such a payment within the necessary time frame could potentially
cause such Collateral to lose value); or (c) to protect any of the
Collateral from being materially damaged, impaired, mismanaged or taken,
including, without limitation, any amounts expended in connection therewith in
accordance with Section 13.2.

 

“Register” has the meaning given that term in Section 13.5.(c).

 

“Regulatory Change” means, with respect to any Lender, any
change (including without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) effective after the Agreement Date in
Applicable Law or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks, including such Lender, of or
under any Applicable Law (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) by any Governmental
Authority or monetary authority charged with the interpretation or
administration thereof or compliance by any Lender with any request or
directive regarding capital adequacy.

 

23

 

“Reimbursement Obligation” means the absolute, unconditional
and irrevocable obligation of the Borrower to reimburse the Agent for any
drawing honored by the Agent under a Letter of Credit.

 

“REIT” means a “real estate investment trust” under the
Internal Revenue Code.

 

“Release” has the meaning given that term in Section 4.3.

 

“Requisite Lenders” means, as of any date, Lenders having at
least 66-2/3% of the aggregate amount of the Commitments (not held by
Defaulting Lenders who are not entitled to vote), or, if all of the Commitments
have been terminated or reduced to zero, Lenders holding at least 66-2/3% of
the principal amount of the aggregate outstanding Loans and Letter of Credit
Liabilities (not held by Defaulting Lenders who are not entitled to vote).  Commitments, Loans and Letter of Credit
Liabilities held by Defaulting Lenders shall be disregarded when determining
the Requisite Lenders.  For purposes of
this definition, a Lender (other than the Swingline Lender) shall be deemed to
hold a Swingline Loan or a Letter of Credit Liability to the extent such Lender
has acquired a participation therein under the terms of this Agreement and has
not failed to perform its obligations in respect of such participation.

 

“Reserves for Capital Expenditures” means, with respect to
any Storage Property for any period, an amount equal to (a) the aggregate
leasable square footage of all completed space of such Property multiplied
by (b) $0.15 per square foot multiplied by (c) the number of
days actually elapsed during such period divided by (d) 365.

 

“Responsible Officer”
means with respect to the Parent, the Borrower or any Subsidiary, the chief
executive officer, president and chief financial officer of the Parent, the
Borrower or the corresponding officer of each such Subsidiary or, if any of the
foregoing is a partnership, such officer of its general partner.

 

“Restricted Payment” means: 
(a) any dividend or other distribution, direct or indirect, on
account of any Equity Interest of the Parent, the Borrower or any other
Subsidiary now or hereafter outstanding, except a dividend payable solely in
Equity Interests of an identical or
junior class to the holders of that class; (b) any redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Equity Interest of the
Parent, the Borrower or any other Subsidiary now or hereafter outstanding; and (c) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any Equity Interests of the
Parent, the Borrower or any other Subsidiary now or hereafter outstanding.

 

“Revolving
Commitment” means, as to each Lender (other than the Swingline
Lender), such Lender’s obligation (a) to make Revolving Loans pursuant to Section 2.1., (b) to issue (in the case of the
Lender then acting as the Agent) or participate in (in the case of the other
Lenders) Letters of Credit pursuant to Section 2.4.(a) and 2.4.(i), respectively (but in the case of the
Lender acting as the Agent excluding the aggregate amount of participations in
the Letters of Credit held by the other Lenders) and (c) to participate in
Swingline Loans pursuant to Section 2.3.(e), in each case, in an amount up to,
but not exceeding, the amount set forth for such

 

24

 

Lender on Schedule 1.1.(B) as such Lender’s “Revolving
Commitment Amount” or as set forth in the applicable Assignment and Acceptance
Agreement, as the same may be reduced from time to time pursuant to Section 2.13. or as appropriate to reflect any
assignments to or by such Lender effected in accordance with Section 13.5.

 

“Revolving Loan” means a loan made by a Lender to the
Borrower pursuant to Section 2.1.(a).

 

“Revolving Note” has the meaning given that term in Section 2.12.(a).

 

“Sanctioned Entity” means (a) an agency of the
government of, (b) an organization directly or indirectly controlled by,
or (c) a Person resident in, in each case, a country that is subject to a
sanctions program identified on the list maintained by the OFAC and published
from time to time, as such program may be applicable to such agency,
organization or Person.

 

“Sanctioned Person” means a Person named on the list of
Specially Designated Nationals or Blocked Persons maintained by the OFAC as
published from time to time.

 

“Secured Indebtedness” means, with respect to a Person as of
any given date, the aggregate principal amount of all Indebtedness of such
Person outstanding at such date and that is secured in any manner by any Lien,
and in the case of the Parent and any of its Subsidiaries, shall include
(without duplication) the Parent’s and its Subsidiaries’ pro rata shares of the
Secured Indebtedness of their Unconsolidated Affiliates.

 

“Secured Party” means the Agent, each Lender and each
Specified Derivatives Provider.

 

“Securities Act” means the Securities Act of 1933, as amended
from time to time, together with all rules and regulations issued
thereunder.

 

“Security Document” means any Security
Instrument, any Property Management Contract Assignment, any Marketing
Agreement Assignment, the Pledge Agreement, the Environmental Indemnity
Agreement and any financing statement, or other document, instrument or
agreement creating, evidencing or perfecting the Agent’s Liens in any of the
Collateral.

 

“Security Filing” has the meaning given that term in Section 9.4.(b).

 

“Security Instrument” means a mortgage, deed
of trust, deed to secure debt or other similar security instrument executed by
the Borrower or a Subsidiary of the Borrower in favor of the Agent for the
benefit of the Secured Parties, substantially in the form of Exhibit J.

 

“Significant Subsidiary” means any Subsidiary to which 5.0%
or more of Consolidated Adjusted Asset Value is attributable.

 

“Solvent” means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any Affiliate of such

 

25

 

Person)
are each in excess of the fair valuation of its total liabilities (including
all contingent liabilities computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that could
reasonably be expected to become an actual and matured liability); (b) such
Person is able to pay its debts or other obligations in the ordinary course as
they mature; and (c) such Person has capital not unreasonably small to
carry on its business and all business in which it proposes to be engaged.

 

“Specified Derivatives Contract” means any Derivatives
Contract relating to a Loan that is made or entered into at any time, or in
effect at any time now or hereafter, whether as a result of an assignment or
transfer or otherwise, between the Parent, the Borrower or any other Loan Party
and any Specified Derivatives Provider.

 

“Specified Derivatives Obligations” means all indebtedness,
liabilities, obligations, covenants and duties of the Parent, the Borrower or
any other Loan Party, as applicable, under or in respect of any Specified
Derivatives Contract, whether direct or indirect, absolute or contingent, due
or not due, liquidated or unliquidated, and whether or not evidenced by any
written confirmation.

 

“Specified Derivatives Provider” means any Lender, or any
Affiliate of a Lender, that is a party to a Derivatives Contract at the time
the Derivatives Contract is entered into.

 

“S&P” means Standard & Poor’s Rating Services, a
division of The McGraw-Hill Companies, Inc., and its successors.

 

“Stated Amount” means the amount available to be drawn by a
beneficiary under a Letter of Credit from time to time, as such amount may be
increased or reduced from time to time in accordance with the terms of such
Letter of Credit.

 

“Storage Property” means a Property primarily operated as a
self-storage facility.

 

“Subsidiary” means, for any Person, any corporation,
partnership, limited liability company or other entity of which at least a
majority of the Equity Interests having by the terms thereof ordinary voting
power to elect a majority of the board of directors or other individuals
performing similar functions of such corporation, partnership or other entity
(without regard to the occurrence of any contingency) is at the time directly
or indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accounts
of which are consolidated with those of such Person pursuant to GAAP.

 

“Supermajority
Lenders” means, as of any date, Lenders having at least
75% of the aggregate amount of the Commitments (not held by Defaulting Lenders
who are not entitled to vote), or if all the Commitments have been terminated or reduced to zero,
Lenders holding at least 75% of the principal amount of the aggregate
outstanding Loans and Letter of Credit Liabilities (not held by Defaulting
Lenders who are not entitled to vote). 
Commitments, Loans and Letter of Credit Liabilities held by Defaulting
Lenders shall be disregarded when determining the Supermajority Lenders.  For purposes of this definition, a Lender
(other than the 

 

26

 

Swingline Lender) shall
be deemed to hold a Swingline Loan or a Letter of Credit Liability to the
extent such Lender has acquired a participation therein under the terms of this
Agreement and has not failed to perform its obligations in respect of such
participation.

 

“Swingline Commitment” means the Swingline Lender’s
obligation to make Swingline Loans pursuant to Section 2.3. in an amount
up to, but not exceeding, $20,000,000, as such amount may be reduced from time
to time in accordance with the terms hereof.

 

“Swingline Lender” means Wachovia Bank, National Association,
together with its respective successors and assigns.

 

“Swingline Loan” means a loan made by the Swingline Lender to
the Borrower pursuant to Section 2.3.(a).

 

“Swingline Note” means the promissory note of the Borrower
payable to the order of the Swingline Lender in a principal amount equal to the
amount of the Swingline Commitment as originally in effect and otherwise duly
completed, substantially in the form of Exhibit K.

 

“Swingline Termination Date” means the date
which is 7 Business Days
prior to the Termination Date.

 

“Tangible Net Worth” means, for any Person on any date of determination, (a) such
Person’s total stockholders’ equity determined on a consolidated basis, plus
(b) accumulated depreciation and amortization, minus (c) the
following (to the extent reflected in determining stockholders’ equity of such
Person):  (i) the amount of any
write-up in the book value of any assets contained in any balance sheet
resulting from revaluation thereof or any write-up in excess of the cost of
such assets acquired, and (ii) the aggregate of all amounts appearing on
the assets side of any such balance sheet for assets which would be classified
as intangible assets under GAAP, all determined on a consolidated basis.

 

“Taxes” has the meaning given that term in Section 3.12.

 

“Term Commitment” means, as to a Lender,
such Lender’s obligation to make a Term Loan pursuant to Section 2.2.(a) in
an amount up to, but not exceeding, the amount set forth for such Lender on Schedule 1.1.(B) as
such Lender’s “Term
Commitment Amount”.

 

“Term Loan” means a loan made by a
Lender to the Borrower pursuant to Section 2.2.(a).

 

“Term Note” has the meaning given that term
in Section 2.12.(b).

 

“Termination Date” means December 7, 2012.

 

“Tie-In Jurisdiction” means a jurisdiction
in which a “tie-in” endorsement may be obtained for a title insurance policy
covering property located in such jurisdiction which

 

27

 

endorsement effectively
ties coverage to other title insurance policies covering properties located
within such jurisdiction and/or properties located in other jurisdictions, as
applicable.

 

“Titled Agents” means each of the Joint Lead Arrangers, the
Joint Bookrunners, the Syndication Agent, and the Documentation Agent and their
respective successors and permitted assigns.

 

“Transfer Authorizer Designation Form” means a form
substantially in the form of Exhibit R to be delivered to the Agent
pursuant to Section 2.16., as the same may be amended, restated or
modified from time to time with the prior written approval of the Agent.

 

“Type” with respect to any Revolving Loan or Term Loan, refers to whether such
Loan is a LIBOR Loan or Base Rate Loan.

 

“UCC” means the Uniform Commercial Code as in effect in any
applicable jurisdiction.

 

“Unconsolidated Affiliate” means, with respect to any Person,
any other Person in which such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting and whose financial results would not be consolidated under GAAP
with the financial results of such Person on the consolidated financial
statements of such Person.

 

“Unfunded Liabilities” means, with respect to any Plan at any
time, the amount (if any) by which (a) the value of all benefit
liabilities under such Plan, determined on a plan termination basis using the
assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA,
exceeds (b) the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent that such excess represents a potential
liability of a member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.

 

“Unsecured Indebtedness” means Indebtedness which is not Secured Indebtedness.

 

“Wachovia” means Wachovia Bank, National Association,
together with its successors and assigns.

 

“Wholly Owned Subsidiary” means any Subsidiary of a Person in
respect of which all of the equity securities or other ownership interests
(other than, in the case of a corporation, directors’ qualifying shares) are at
the time directly or indirectly owned or controlled by such Person or one or
more other Subsidiaries of such Person or by such Person and one or more other
Subsidiaries of such Person.

 

Section 1.2.  General; References to Times.

 

Unless
otherwise indicated, all accounting terms, ratios and measurements shall be
interpreted or determined in accordance with GAAP; provided that, if at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan

 

28

 

Document,
and either the Borrower or the Requisite Lenders shall so request, the Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Requisite Lenders); provided further
that, until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.  References in this Agreement to “Sections”, “Articles”,
“Exhibits” and “Schedules” are to sections, articles, exhibits and schedules
herein and hereto unless otherwise indicated. 
References in this Agreement to any document, instrument or agreement (a) shall
include all exhibits, schedules and other attachments thereto, (b) shall
include all documents, instruments or agreements issued or executed in
replacement thereof, to the extent permitted hereby and (c) shall mean
such document, instrument or agreement, or replacement or predecessor thereto,
as amended, supplemented, restated or otherwise modified as of the date of this
Agreement and from time to time thereafter to the extent not prohibited hereby
and in effect at any given time. 
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. 
Unless explicitly set forth to the contrary, a reference to “Subsidiary”
means a Subsidiary of the Parent or a Subsidiary of such Subsidiary and a
reference to an “Affiliate” means a reference to an Affiliate of the
Borrower.  Titles and captions of
Articles, Sections, subsections and clauses in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement.  Unless otherwise indicated,
all references to time are references to Eastern time.  Notwithstanding any other provision contained herein,
all terms of an accounting or financial nature used herein shall be construed,
and all computations of amounts and ratios referred to herein shall be made,
without giving effect to any election under Statement of Financial Accounting
Standards 159 (or any other financial accounting standard promulgated by the
Financial Accounting Standards Board having a similar result or effect) to
value any Indebtedness or other liabilities of the Parent, the Borrower or any
Subsidiary at “fair value”, as defined therein.

 

Section 1.3.  Financial Attributes of Non-Wholly Owned
Subsidiaries.

 

When
determining compliance by the Borrower or the Parent with any financial
covenant contained in any of the Loan Documents, only the pro rata share of the
Borrower or the Parent, as applicable, of the revenues, expenses, assets,
liabilities and other financial statement items of a Subsidiary that is not a
Wholly Owned Subsidiary shall be included; provided, however, for purposes of
determining the Parent’s compliance with any such financial covenant the
Borrower shall be considered to be a Wholly Owned Subsidiary of the Parent.

 

ARTICLE II. CREDIT FACILITIES

 

Section 2.1.  Revolving Loans.

 

(a)           Generally.  Subject to the terms and conditions hereof,
including without limitation Section 2.15., during the period from the
Effective Date to but excluding the

 

29

 

Termination
Date, each Lender severally and not jointly agrees to make Revolving Loans to
the Borrower in an aggregate principal amount at any one time outstanding up
to, but not exceeding, the amount of such Lender’s Revolving Commitment.  Subject to the terms and conditions of this
Agreement, during the period from the Effective Date to but excluding the
Termination Date, the Borrower may borrow, repay and reborrow Revolving Loans
hereunder.

 

(b)           Requesting Revolving Loans.  The Borrower shall give the Agent notice
pursuant to a Notice of Borrowing or telephonic notice of each borrowing of
Revolving Loans.  Each Notice of
Borrowing shall be delivered to the Agent before 11:00 a.m. (i) in
the case of LIBOR Loans, on the date three Business Days prior to the proposed
date of such borrowing and (ii) in the case of Base Rate Loans, on the
date one Business Day prior to the proposed date of such borrowing.  Any such telephonic notice shall include all
information to be specified in a written Notice of Borrowing and shall be
promptly confirmed in writing by the Borrower pursuant to a Notice of Borrowing
sent to the Agent by telecopy on the same day of the giving of such telephonic
notice.  The Agent will transmit by
telecopy the Notice of Borrowing (or the information contained in such Notice
of Borrowing) to each Lender promptly upon receipt by the Agent (but in any
event no later than 2:00 p.m. on the date of receipt by the Agent).  Each Notice of Borrowing or telephonic notice
of each borrowing shall be irrevocable once given and binding on the Borrower.

 

(c)           Disbursements of Revolving Loan
Proceeds.  No later than 1:00 p.m.
on the date specified in the Notice of Borrowing, each Lender will make
available for the account of its applicable Lending Office to the Agent at the
Principal Office, in immediately available funds, the proceeds of the Revolving
Loan to be made by such Lender.  Subject
to satisfaction of the applicable conditions set forth in Article VI. for
such borrowing, the Agent will make the proceeds of such borrowing available to
the Borrower no later than 2:00 p.m. on the date and at the account
specified by the Borrower in such Notice of Borrowing.  With respect to Revolving Loans to be made
after the Effective Date, unless the Agent shall have been notified by any
Lender prior to the specified date of borrowing that such Lender does not
intend to make available to the Agent the Revolving Loan to be made by such
Lender on such date, the Agent may assume that such Lender will make the
proceeds of such Revolving Loan available to the Agent on the date of the
requested borrowing as set forth in the Notice of Borrowing and the Agent may
(but shall not be obligated to), in reliance upon such assumption, make
available to the Borrower no later than 11:00 a.m. on the date requested
by the Borrower the amount of such Revolving Loan to be provided by each such
Lender.

 

(d)           [Intentionally Omitted.]

 

Section 2.2.  Term Loans.

 

(a)           Term Loans.  Subject to the terms and conditions hereof,
including without limitation, Section 2.15., each Lender severally and not jointly
agrees to make a Term Loan to the Borrower on the Effective Date in an
aggregate principal amount of up to, but not exceeding, the amount of such
Lender’s Term Commitment.  Upon funding
of the Term Loans, the Term Commitments shall terminate.  Once repaid, the principal amount of any Term
Loan may not be reborrowed.

 

30

 

 

 

(b)           Requesting Term Loans.  The Borrower shall give the Agent notice
(which notice must be received by the Agent no later than 11:00 a.m. on
the date that is one Business Day prior to the anticipated Effective Date)
requesting that the Lenders make the Term Loans on the Effective Date and
specifying the amount of Term Loans to be borrowed.  Upon receipt of such notice the Agent shall
promptly notify each Lender.  The Notice
of Borrowing provided by the Borrower in the preceding sentence shall be
irrevocable once given and binding on the Borrower.

 

(c)           Disbursements of Term Loan
Proceeds.  No later than 1:00 p.m.
on the Effective Date, each Lender will make available for the account of its
applicable Lending Office to the Agent at the Principal Office, in immediately
available funds, the proceeds of the Term Loan to be made by such Lender.  Subject to satisfaction of the applicable
conditions set forth in Article VI. for such borrowing, the Agent will
make the proceeds of such borrowing available to the Borrower no later than
2:00 p.m. on the Effective Date.

 

(d)           Repayment of Term Loans
Outstanding under Existing Credit Agreement.  The Borrower and the Lenders agree that on
the Effective Date all “Term Loans” (as defined in the Existing Credit
Agreement) outstanding under the Existing Credit Agreement shall be repaid with
the proceeds of the Term Loans to be made by the Lenders hereunder on the
Effective Date.

 

Section 2.3.  Swingline Loans.

 

(a)           Swingline Loans.  Subject to the terms and conditions hereof,
including without limitation, Section 2.15., during the period from the
Effective Date to but excluding the Swingline Termination Date, the Swingline
Lender agrees to make Swingline Loans to the Borrower in an aggregate principal
amount at any one time outstanding up to, but not exceeding, the amount of the
Swingline Commitment.  If at any time the
aggregate principal amount of the Swingline Loans outstanding at such time
exceeds the Swingline Commitment in effect at such time, the Borrower shall
immediately pay the Agent for the account of the Swingline Lender the amount of
such excess.  Subject to the terms and
conditions of this Agreement, the Borrower may borrow, repay and reborrow
Swingline Loans hereunder.

 

(b)           Procedure for Borrowing Swingline
Loans.  The Borrower shall give the
Agent and the Swingline Lender notice pursuant to a Notice of Swingline
Borrowing or telephonic notice of each borrowing of a Swingline Loan.  Each Notice of Swingline Borrowing shall be
delivered to the Swingline Lender no later than 3:00 p.m. on the proposed
date of such borrowing.  Any such notice
given telephonically shall include all information to be specified in a written
Notice of Swingline Borrowing and shall be promptly confirmed in writing by the
Borrower pursuant to a Notice of Swingline Borrowing sent to the Swingline
Lender by telecopy on the same day of the giving of such telephonic
notice.  On the date of the requested
Swingline Loan and subject to satisfaction of the applicable conditions set
forth in Article VI. for such borrowing, the Swingline Lender will make
the proceeds of such Swingline Loan available to the Borrower in Dollars, in
immediately available funds, at the account specified by the Borrower in the
Notice of Swingline Borrowing not later than 4:00 p.m. on such date (or
12:00 noon if the Borrower delivered the applicable Notice of Swingline
Borrowing to the Swingline Lender before 10:00 a.m. on the proposed date
of such borrowing).

 

31

 

(c)           Interest.  Swingline Loans shall bear interest at a per
annum rate equal to the Base Rate plus the Applicable Margin for Base
Rate Loans.  Interest payable on
Swingline Loans is solely for the account of the Swingline Lender.  All accrued and unpaid interest on Swingline
Loans shall be payable on the dates and in the manner provided in Section 2.5.
with respect to interest on Base Rate Loans (except as the Swingline Lender and
the Borrower may otherwise agree in writing in connection with any particular
Swingline Loan).

 

(d)           Swingline Loan Amounts, Etc.  Each Swingline Loan shall be in the minimum
amount of $100,000 and integral multiples of $100,000 or such other minimum
amounts agreed to by the Swingline Lender and the Borrower.  Any voluntary prepayment of a Swingline Loan
must be in integral multiples of $50,000 or the aggregate principal amount of
all outstanding Swingline Loans (or such other minimum amounts upon which the
Swingline Lender and the Borrower may agree) and in connection with any such
prepayment, the Borrower must give the Swingline Lender prior written notice
thereof no later than 2:00 p.m. on the day prior to the date of such
prepayment.  The Swingline Loans shall,
in addition to this Agreement, be evidenced by the Swingline Note.

 

(e)           Repayment and Participations of
Swingline Loans.  The Borrower agrees
to repay each Swingline Loan within one Business Day of demand therefor by the
Swingline Lender and in any event, within 7 Business Days after the date such
Swingline Loan was made; provided, that the proceeds of a Swingline Loan may
not be used to repay a Swingline Loan. 
Notwithstanding the foregoing, the Borrower shall repay the entire
outstanding principal amount of, and all accrued but unpaid interest on, the
Swingline Loans on the Swingline Termination Date (or such earlier date as the
Swingline Lender and the Borrower may agree in writing).  In lieu of demanding repayment of any
outstanding Swingline Loan from the Borrower, the Swingline Lender may, on behalf
of the Borrower (which hereby irrevocably directs the Swingline Lender to act
on its behalf for such purpose), request a borrowing of Revolving Loans that
are Base Rate Loans from the Lenders in an amount equal to the principal
balance of such Swingline Loan.  The
amount limitations of Section 3.5.(a) shall not apply to any
borrowing of Revolving Loans that are Base Rate Loans made pursuant to this
subsection.  The Swingline Lender shall
give notice to the Agent of any such borrowing of Revolving Loans not later than
12:00 noon on the proposed date of such borrowing and the Agent shall give
prompt notice of such borrowing to the Lenders. 
No later than 2:00 p.m. on such date, each Lender will make
available to the Agent at the Principal Office for the account of the Swingline
Lender, in immediately available funds, the proceeds of the Revolving Loan to
be made by such Lender and, to the extent of such Revolving Loan, such Lender’s
participation in the Swingline Loan so repaid shall be deemed to be funded by
such Revolving Loan.  The Agent shall pay
the proceeds of such Revolving Loans to the Swingline Lender, which shall apply
such proceeds to repay such Swingline Loan. 
At the time each Swingline Loan is made, each Lender shall automatically
(and without any further notice or action) be deemed to have purchased from the
Swingline Lender, without recourse or warranty, an undivided interest and
participation to the extent of such Lender’s Commitment Percentage in such
Swingline Loan.  If the Lenders are
prohibited from making Revolving Loans required to be made under this
subsection for any reason, including without limitation, the occurrence of any
Default or Event of Default described in Section 11.1.(f) or
11.1.(g), upon notice from the Agent or the Swingline Lender, each Lender
severally agrees to pay to the Agent for the account of the Swingline Lender in
respect of such

 

32

 

participation
the amount of such Lender’s Commitment Percentage of each outstanding Swingline
Loan.  If such amount is not in fact made
available to the Agent by any Lender, the Swingline Lender shall be entitled to
recover such amount on demand from such Lender, together with accrued interest
thereon for each day from the date of demand thereof, at the Federal Funds
Rate.  If such Lender does not pay such
amount forthwith upon demand therefor by the Agent or the Swingline Lender, and
until such time as such Lender makes the required payment, the Swingline Lender
shall be deemed to continue to have outstanding Swingline Loans in the amount
of such unpaid participation obligation for all purposes of the Loan Documents
(other than those provisions requiring the other Lenders to purchase a
participation therein).  Further, such
Lender shall be deemed to have assigned any and all payments made of principal
and interest on its Loans, and any other amounts due such Lender hereunder, to
the Swingline Lender to fund Swingline Loans in the amount of the participation
in Swingline Loans that such Lender failed to purchase pursuant to this Section until
such amount has been purchased (as a result of such assignment or
otherwise).  A Lender’s obligation to
make payments in respect of a participation in a Swingline Loan shall be
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including without limitation, (i) any claim of setoff,
counterclaim, recoupment, defense or other right which such Lender or any other
Person may have or claim against the Agent, the Swingline Lender or any other
Person whatsoever, (ii) the occurrence or continuation of a Default or
Event of Default (including without limitation, any of the Defaults or Events
of Default described in Section 11.1.(f) or 11.1.(g)) or the
termination of the Commitments of any Lender, (iii) the existence (or
alleged existence) of an event or condition which has had or could have a
Material Adverse Effect, (iv) any breach of any Loan Document by the
Agent, any Lender or the Borrower or (v) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.

 

(f)            Defaulting Lenders.  Upon demand by the Swingline Lender at any
time while a Lender is a Defaulting Lender or a Potential Defaulting Lender,
the Borrower shall deliver to the Agent for the benefit of the Swingline Lender
within one Business Day of such demand, cash collateral or other credit support
satisfactory to the Swingline Lender in its sole discretion in an amount equal
to such Defaulting Lender’s or Potential Defaulting Lender’s Commitment
Percentage of the aggregate principal amount of the Swingline Loans then
outstanding; provided, however, that the amount of cash collateral required to
be provided by the Borrower pursuant to this subsection (f) will be
reduced by the amount of cash collateral then held by the Agent pursuant to Section 3.11.(b) for the purpose of cash
collateralizing such Defaulting Lender’s Commitment Percentage of the aggregate
principal amount of Swingline Loans then outstanding.

 

Section 2.4.  Letters of Credit.

 

(a)           Letters of Credit.  Subject to the terms and conditions of this
Agreement, including without limitation, Section 2.15., the Agent, on
behalf of the Lenders, agrees to issue for the account of the Borrower during
the period from and including the Effective Date to, but excluding, the date 30
days prior to the Termination Date one or more letters of credit (each a “Letter
of Credit”) up to a maximum aggregate Stated Amount at any one time outstanding
not to exceed the L/C Commitment Amount.

 

33

 

(b)           Terms of Letters of Credit.  At the time of issuance, the amount, form,
terms and conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Agent and the Borrower.  Notwithstanding the foregoing, in no event
may the expiration date of any Letter of Credit extend beyond the earlier of (i) the
date one year from its date of issuance or (ii) the Termination Date;
provided, however, a Letter of Credit may contain a provision providing for the
automatic extension of the expiration date in the absence of a notice of
non-renewal from the Agent but in no event shall any such provision permit the
extension of the expiration date of such Letter of Credit beyond the
Termination Date.

 

(c)           Requests for Issuance of Letters
of Credit.  The Borrower shall give
the Agent written notice at least 5 Business Days (or such shorter period as may be acceptable to the
Agent in its sole discretion) prior to the requested date
of issuance of a Letter of Credit, such notice to describe in reasonable detail
the proposed terms of such Letter of Credit and the nature of the transactions
or obligations proposed to be supported by such Letter of Credit, and in any
event shall set forth with respect to such Letter of Credit the proposed (i) Stated
Amount, (ii) beneficiary, and (iii) expiration date.  The Borrower shall also execute and deliver
such customary letter of credit application forms and other forms and
agreements as reasonably requested from time to time by the Agent.  Provided the Borrower has given the notice
prescribed by the first sentence of this subsection and delivered such forms
and agreements referred to in the preceding sentence, subject to the other
terms and conditions of this Agreement, including the satisfaction of any
applicable conditions precedent set forth in Article VI., the Agent shall
issue the requested Letter of Credit on the requested date of issuance for the
benefit of the stipulated beneficiary but in no event prior to the date 5
Business Days (or
such shorter period as may be acceptable to the Agent in its sole discretion) following the
date after which the Agent has received all of the items required to be
delivered to it under this subsection. 
The Agent shall not at any time be obligated to issue any Letter of
Credit if such issuance would conflict with, or cause the Agent or any Lender
to exceed any limits imposed by, any Applicable Law.  References herein to “issue” and derivations
thereof with respect to Letters of Credit shall also include extensions or
modifications of any outstanding Letters of Credit, unless the context
otherwise requires.  Upon the written
request of the Borrower, the Agent shall deliver to the Borrower a copy of each
issued Letter of Credit within a reasonable time after the date of issuance
thereof.  To the extent any term of a
Letter of Credit Document is inconsistent with a term of any Loan Document, the
term of such Loan Document shall control.

 

(d)           Reimbursement Obligations.  Upon receipt by the Agent from the
beneficiary of a Letter of Credit of any demand for payment under such Letter
of Credit, the Agent shall promptly notify the Borrower of the amount to be
paid by the Agent as a result of such demand and the date on which payment is
to be made by the Agent to such beneficiary in respect of such demand;
provided, however, the Agent’s failure to give, or delay in giving, such notice
shall not discharge the Borrower in any respect from the applicable
Reimbursement Obligation.  The Borrower
hereby absolutely, unconditionally and irrevocably agrees to pay and reimburse
the Agent for the amount of each demand for payment under such Letter of Credit
on or prior to the date on which payment is to be made by the Agent to the
beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind (other than notice as provided in this
subsection).  Upon receipt by the Agent
of any payment in respect of any Reimbursement Obligation, the Agent shall
promptly pay to each Lender that has acquired a participation therein

 

34

 

under
the second sentence of Section 2.4.(i) such Lender’s Commitment
Percentage of such payment.

 

(e)           Manner of Reimbursement.  Upon its receipt of a notice referred to in
the immediately preceding subsection (d), the Borrower shall advise the
Agent whether or not the Borrower intends to borrow hereunder to finance its
obligation to reimburse the Agent for the amount of the related demand for
payment and, if it does, the Borrower shall submit a timely request for such
borrowing as provided in the applicable provisions of this Agreement.  If the Borrower fails to so advise the Agent,
or if the Borrower fails to reimburse the Agent for a demand for payment under
a Letter of Credit by the date of such payment, then (i) if the applicable
conditions contained in Article VI. would permit the making of Revolving
Loans, the Borrower shall be deemed to have requested a borrowing of Revolving
Loans (which shall be Base Rate Loans) in an amount equal to the unpaid
Reimbursement Obligation and the Agent shall give each Lender prompt notice of
the amount of the Revolving Loan to be made available to the Agent not later
than 1:00 p.m. and (ii) if such conditions would not permit the
making of Revolving Loans, the provisions of subsection (j) of this Section shall
apply.  The limitations of Section 3.5.(a) shall
not apply to any borrowing of Revolving Loans under this subsection.

 

(f)            Effect of Letters of Credit on
Commitments.  Upon the issuance by
the Agent of any Letter of Credit and until such Letter of Credit shall have
expired or been terminated, the Revolving Commitment of each Lender shall be
deemed to be utilized for all purposes of this Agreement in an amount equal to
the product of (i) such Lender’s Commitment Percentage and (ii) the
sum of (A) the Stated Amount of such Letter of Credit plus (B) any
related Reimbursement Obligations then outstanding.

 

(g)           Agent’s Duties Regarding Letters
of Credit; Unconditional Nature of Reimbursement Obligations.  In examining documents presented in
connection with drawings under Letters of Credit and making payments under
Letters of Credit against such documents, the Agent shall only be required to
use the same standard of care as it uses in connection with examining documents
presented in connection with drawings under letters of credit in which it has
not sold participations and making payments under such letters of credit.  The Borrower assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. 
In furtherance and not in limitation of the foregoing, neither the Agent
nor any of the Lenders shall be responsible for, and the Borrower’s obligations
in respect of the Letters of Credit shall not be affected in any manner by, any
of the following except to the extent resulting from the gross negligence or
willful misconduct of the Agent or a Lender, as applicable, as determined by a
court of competent jurisdiction in a final, non-appealable judgment: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effects of any
document submitted by any party in connection with the application for and
issuance of or any drawing honored under any Letter of Credit even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit, or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; (iii) failure
of the beneficiary of any Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any

 

35

 

messages,
by mail, cable, facsimile, electronic mail, telecopy or otherwise, whether or
not they be in cipher; (v) errors in interpretation of technical terms; (vi) any
loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit, or of the proceeds thereof;
(vii) the misapplication by the beneficiary of the proceeds of any drawing
under any Letter of Credit; or (viii) any consequences arising from causes
beyond the control of the Agent or the Lenders. 
None of the above shall affect, impair or prevent the vesting of any of
the Agent’s or any Lender’s rights or powers hereunder.  Any action taken or omitted to be taken by
the Agent under or in connection with any Letter of Credit, if taken or omitted
in the absence of gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final, non-appealable judgment), shall not
create against the Agent or any Lender any liability to the Borrower or any
Lender.  In this regard, the obligation
of the Borrower to reimburse the Agent for any drawing made under any Letter of
Credit, and to repay any Revolving Loan made pursuant to the second sentence of
the preceding subsection (e), shall be absolute, unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement and any other applicable Letter of Credit Document under all
circumstances whatsoever, including without limitation, the following
circumstances:  (A) any lack of
validity or enforceability of any Letter of Credit Document or any term or
provisions therein; (B) any amendment or waiver of or any consent to
departure from all or any of the Letter of Credit Documents; (C) the
existence of any claim, setoff, defense or other right which the Borrower may
have at any time against the Agent, any Lender, any beneficiary of a Letter of
Credit or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or in the Letter of Credit Documents or any
unrelated transaction; (D) any breach of contract or dispute between the
Borrower, the Agent, any Lender or any other Person; (E) any demand,
statement or any other document presented under a Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein or made in connection therewith being untrue or inaccurate in any
respect whatsoever; (F) any non-application or misapplication by the
beneficiary of a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; (G) payment by the Agent under any Letter of Credit
against presentation of a draft or certificate which does not strictly comply
with the terms of such Letter of Credit; and (H) any other act, omission
to act, delay or circumstance whatsoever that might, but for the provisions of
this Section, constitute a legal or equitable defense to or discharge of the
Borrower’s Reimbursement Obligations. 
Notwithstanding anything to the contrary contained in this Section or
Section 13.9., but not in limitation of the Borrower’s unconditional
obligation to reimburse the Agent for any drawing made under a Letter of Credit
as provided in this Section and to repay any Revolving Loan made pursuant
to the second sentence of the preceding subsection (e), the Borrower shall
have no obligation to indemnify the Agent or any Lender in respect of any
liability incurred by the Agent or such Lender arising solely out of the gross
negligence or willful misconduct of the Agent or such Lender in respect of a
Letter of Credit as determined by a court of competent jurisdiction in a final,
non-appealable judgment.  Except as
otherwise provided in this Section, nothing in this Section shall affect
any rights the Borrower may have with respect to the gross negligence or
willful misconduct of the Agent or any Lender with respect to any Letter of
Credit.

 

(h)           Amendments, Etc.  The issuance by the Agent of any amendment,
supplement or other modification to any Letter of Credit shall be subject to
the same conditions applicable under this Agreement to the issuance of new
Letters of Credit (including, without limitation, that

 

36

 

the
request therefor be made through the Agent), and no such amendment, supplement
or other modification shall be issued unless either (i) the respective
Letter of Credit affected thereby would have complied with such conditions had
it originally been issued hereunder in such amended, supplemented or modified
form or (ii) the Requisite Lenders (or all of the Lenders if required by Section 13.6.)
shall have consented thereto.  In
connection with any such amendment, supplement or other modification, the
Borrower shall pay the Fees, if any, payable under the last sentence of Section 3.6.(b).

 

(i)            Lenders’ Participation in Letters
of Credit.  Immediately upon the
issuance by the Agent of any Letter of Credit each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender’s Commitment Percentage of the liability of the Agent
with respect to such Letter of Credit, and each Lender thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and shall be unconditionally obligated to the Agent to pay and
discharge when due, such Lender’s Commitment Percentage of the Agent’s
liability under such Letter of Credit. 
In addition, upon the making of each payment by a Lender to the Agent in
respect of any Letter of Credit pursuant to the immediately following
subsection (j), such Lender shall, automatically and without any further
action on the part of the Agent or such Lender, acquire (i) a
participation in an amount equal to such payment in the Reimbursement
Obligation owing to the Agent by the Borrower in respect of such Letter of
Credit and (ii) a participation in a percentage equal to such Lender’s
Commitment Percentage in any interest or other amounts payable by the Borrower
in respect of such Reimbursement Obligation (other than the Fees payable to the
Agent pursuant to the third and last sentences of Section 3.6.(b)).

 

(j)            Payment Obligation of Lenders.  Each Lender severally agrees to pay to the
Agent on demand in immediately available funds in Dollars the amount of such
Lender’s Commitment Percentage of each drawing paid by the Agent under each
Letter of Credit to the extent such amount is not reimbursed by the Borrower
pursuant to Section 2.4.(d); provided, however, that in respect of any
drawing under any Letter of Credit, the maximum amount that any Lender shall be
required to fund, whether as a Revolving Loan or as a participation, shall not
exceed such Lender’s Commitment Percentage of such drawing.  If the notice referenced in the second
sentence of Section 2.4.(e) is received by a Lender not later than
11:00 a.m., then such Lender shall make such payment available to the
Agent not later than 2:00 p.m. on the date of demand therefor; otherwise,
such payment shall be made available to the Agent not later than 1:00 p.m.
on the next succeeding Business Day. 
Each Lender’s obligation to make such payments to the Agent under this
subsection, and the Agent’s right to receive the same, shall be absolute,
irrevocable and unconditional and shall not be affected in any way by any
circumstance whatsoever, including without limitation, (i) the failure of
any other Lender to make its payment under this subsection, (ii) the
financial condition of the Borrower or any other Loan Party, (iii) the
existence of any Default or Event of Default, including any Event of Default
described in Section 11.1.(f) or 11.1.(g) or (iv) the
termination of the Commitments.  Each
such payment to the Agent shall be made without any offset, abatement,
withholding or deduction whatsoever.

 

(k)           Information to Lenders. The
Agent shall periodically deliver to the Lenders information setting forth the
Stated Amount of all outstanding Letters of Credit.  Other than as

 

37

 

set
forth in this subsection, the Agent shall have no duty to notify the Lenders
regarding the issuance or other matters regarding Letters of Credit issued
hereunder.  The failure of the Agent to
perform its requirements under this subsection shall not relieve any Lender
from its obligations under Section 2.4.(j).

 

(l)            Defaulting Lenders.  Upon demand by the Agent at any time while a
Lender is a Defaulting Lender or a Potential Defaulting Lender, the Borrower
shall deliver to the Agent within one Business Day of such demand, cash
collateral or other credit support satisfactory to the Agent in its sole
discretion in an amount equal to such Defaulting Lender’s Commitment Percentage
of the Letter of Credit Liabilities then outstanding; provided, however, that
the amount of cash collateral required to be provided by the Borrower pursuant
to this subsection (l) will be reduced by the amount of cash collateral
then held by the Agent pursuant to Section 3.11.(b) for the purpose of cash
collateralizing such Defaulting Lender’s Commitment Percentage of the Letter of
Credit Liabilities then outstanding.

 

Section 2.5.  Rates and Payment of Interest on Loans.

 

(a)           Rates.  The Borrower promises to pay to the Agent for
the account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender for the period from and including the date of the making of
such Loan to but excluding the date such Loan shall be paid in full, at the
following per annum rates:

 

(i)            during such periods
as such Loan is a Base Rate Loan, at the Base Rate (as in effect from time to
time) plus the Applicable Margin; and

 

(ii)           during such periods
as such Loan is a LIBOR Loan, at LIBOR for such Loan for the Interest Period
therefor plus the Applicable Margin.

 

Notwithstanding
the foregoing, while an Event of Default exists, the Borrower shall pay to the
Agent for the account of each Lender interest at the Post-Default Rate on the
outstanding principal amount of any Loan made by such Lender, on all
Reimbursement Obligations and on any other amount payable by the Borrower
hereunder or under the Notes held by such Lender to or for the account of such Lender
(including without limitation, accrued but unpaid interest to the extent
permitted under Applicable Law).

 

(b)           Payment of Interest.  Accrued and unpaid interest on each Loan
shall be payable (i) monthly in arrears on the first day of each calendar
month, commencing with the first full calendar month occurring after the
Effective Date and (ii) on any date on which the principal balance of such
Loan is due and payable in full (whether at maturity, due to acceleration or
otherwise).  Interest payable at the
Post-Default Rate shall be payable from time to time on demand.  Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall give
notice thereof to the Lenders to which such interest is payable and to the
Borrower.  All determinations by the
Agent of an interest rate hereunder shall be conclusive and binding on the
Lenders and the Borrower for all purposes, absent manifest error.

 

(c)           Inaccurate Financial Statements or
Compliance Certificates.  If any
financial statement or Compliance Certificate delivered pursuant to Section 9.3. is shown to be inaccurate

 

38

 

as a result of any action
or inaction on the part of the Borrower, and not as a result of any adjustments
or modifications in GAAP or any other applicable accounting rules made
subsequent to the delivery of any such financial statement or Compliance
Certificate having a retroactive effect (regardless of whether this Agreement
or the Commitments are in effect when such inaccuracy is discovered), and such
inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin for any period (an “Applicable Period”) than the Applicable
Margin applied for such Applicable Period, then (i) the Borrower shall
immediately deliver to the Agent a correct Compliance Certificate for such
Applicable Period and (ii) the Borrower shall immediately pay to the Agent
for the account of the Lenders the additional accrued additional interest owing
calculated based on such higher Applicable Margin for such Applicable Period,
which payment shall be promptly applied by the Agent in accordance with Section 3.2. This subsection shall not in any way
limit the rights of the Agent and Lenders (x) with respect to the last
sentence of the immediately preceding subsection (a) or (y) under
Article XI.  The Borrower
shall not be required to reimburse the Agent or the Lenders in relation to any
recalculation of interest or fees required by this provision at any time after
the first anniversary of the Termination Date.

 

Section 2.6.  Number of Interest Periods.

 

There
may be no more than (a) 8 different Interest Periods for LIBOR Loans that
are Revolving Loans and (b) 4 different Interest Periods for Term Loans, in each case,
outstanding at the same time.

 

Section 2.7.  Repayment of Loans.

 

The
Borrower shall repay the entire outstanding principal amount of, and all
accrued but unpaid interest on, the Revolving Loans and the Term Loans on the
Termination Date.

 

Section 2.8.  Prepayments.

 

(a)           Optional.  Subject to Section 5.4., the Borrower
may prepay any Loan at
any time without premium or penalty.  The
Borrower shall give the Agent at least one Business Day’s prior written notice
of the prepayment of any Revolving Loan or Term Loan.

 

(b)           Mandatory.  If at any time:

 

(i)            the aggregate principal amount of
all outstanding Loans, together with the aggregate amount of all Letter of
Credit Liabilities, exceeds the Borrowing Base at such time, or

 

(ii)           the aggregate principal amount of all
outstanding Revolving Loans and Swingline Loans, together with the aggregate
amount of all Letter of Credit Liabilities, exceeds the aggregate Revolving
Commitments at such time,

 

the Borrower shall,
within 3 calendar days after the occurrence of such excess, pay to the Agent
for the accounts of the Lenders the amount of such excess.

 

39

 

 

 

(c)           Application of Prepayments.  Amounts paid under the preceding subsection (b)
shall be applied to pay all amounts of principal outstanding on the Loans and
any Reimbursement Obligations pro rata in accordance with Section 3.2. and if
any Letters of Credit are outstanding at such time, the remainder, if any,
shall be deposited into the Collateral Account for application to any
Reimbursement Obligations.  If the
Borrower is required to pay any outstanding LIBOR Loans by reason of this Section
prior to the end of the applicable Interest Period therefor, the Borrower shall
pay all amounts due under Section 5.4.

 

(d)           Derivatives Contracts.  No repayment
or prepayment pursuant to this Section shall affect any of the Borrower’s
obligations under any Derivatives Contract between the Borrower and any Lender
(or any Affiliate of any Lender).

 

Section
2.9.  [Intentionally Omitted.]

 

Section
2.10.  Continuation.

 

So
long as no Default or Event of Default shall exist, the Borrower may on any
Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan
or any portion thereof as a LIBOR Loan by selecting a new Interest Period for
such LIBOR Loan.  Each new Interest
Period selected under this Section shall commence on the last day of the
immediately preceding Interest Period. 
Each selection of a new Interest Period shall be made by the Borrower
giving to the Agent a Notice of Continuation not later than 11:00 a.m. on the
third Business Day prior to the date of any such Continuation.  Such notice by the Borrower of a Continuation
shall be by telephone or telecopy, confirmed immediately in writing if by
telephone, in the form of a Notice of Continuation, specifying (a) the proposed
date of such Continuation, (b) the LIBOR Loans and portions thereof subject to
such Continuation and (c) the duration of the selected Interest Period, all of
which shall be specified in such manner as is necessary to comply with all
limitations on Loans outstanding hereunder. 
Each Notice of Continuation shall be irrevocable by and binding on the
Borrower once given.  Promptly after
receipt of a Notice of Continuation, the Agent shall notify each Lender of the
proposed Continuation.  If the Borrower
shall fail to select in a timely manner a new Interest Period for any LIBOR
Loan in accordance with this Section, or if a Default or Event of Default shall
exist, such Loan will automatically, on the last day of the current Interest
Period therefor, Convert into a Base Rate Loan notwithstanding the first
sentence of Section 2.11. or the Borrower’s failure to comply with any of the
terms of such Section.

 

Section
2.11.  Conversion.

 

The Borrower may on any Business Day, upon
the Borrower’s giving of a Notice of Conversion to the Agent, Convert all or a
portion of a Revolving Loan or a Term Loan (including a Base Rate Loan made
pursuant to Section 2.3.(e)) of one Type into a Loan of another Type; provided,
however, a Base Rate Loan may not be Converted to a LIBOR Loan if a Default or
Event of Default shall exist.  Any
Conversion of a LIBOR Loan into a Base Rate Loan shall be made on, and only on,
the last day of an Interest Period for such LIBOR Loan and, upon Conversion of
a Base Rate Loan into a LIBOR Loan, the Borrower shall pay accrued interest to
the date of Conversion on the principal amount so Converted.  Each such Notice of Conversion shall be given
not later than 11:00 a.m. on the Business Day prior to the date of any proposed
Conversion into Base Rate Loans and on the third Business Day prior to the date
of any

 

40

 

proposed Conversion into LIBOR Loans. 
Promptly after receipt of a Notice of Conversion, the Agent shall notify
each Lender of the proposed Conversion. 
Subject to the restrictions specified above, each Notice of Conversion
shall be by telephone (confirmed immediately in writing) or telecopy in the
form of a Notice of Conversion specifying (a) the requested date of such
Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type
of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into
and (e) if such Conversion is into a LIBOR Loan, the requested duration of the
Interest Period of such Loan.  Each
Notice of Conversion shall be irrevocable by and binding on the Borrower once
given.

 

Section
2.12.  Notes.

 

(a)           Revolving Notes.  The Revolving Loans made by each Lender
shall, in addition to this Agreement, also be evidenced by a promissory note of
the Borrower substantially in the form of Exhibit L (each a “Revolving Note”),
payable to the order of such Lender in a principal amount equal to the amount
of its Revolving Commitment as originally in effect and otherwise duly
completed.

 

(b)           Term Notes.  The Term
Loans made by each Lender shall, in addition to this Agreement, also be
evidenced by a promissory note of the Borrower substantially in the form of Exhibit
M (each a “Term Note”), payable
to the order of such Lender in a principal amount equal to the amount of
its Term Commitment as originally in effect and otherwise duly completed.

 

(c)           Records.  The date, amount, interest rate, Type and
duration of Interest Periods (if applicable) of each Loan made by each Lender
to the Borrower, and each payment made on account of the principal thereof,
shall be recorded by such Lender on its books and such entries shall be binding
on the Borrower, absent manifest error; provided, however, that the failure of
a Lender to make any such record shall not affect the obligations of the
Borrower under any of the Loan Documents.

 

(d)           Lost, Stolen, Destroyed or
Mutilated Notes. Upon receipt by the Borrower of (i) written notice
from a Lender that a Note of such Lender has been lost, stolen, destroyed or
mutilated, and (ii) (A) in the case of loss, theft or destruction, an unsecured
agreement of indemnity from such Lender in form reasonably satisfactory to the
Borrower, or (B) in the case of mutilation, upon surrender and cancellation of
such Note, the Borrower shall execute and deliver to such Lender a new Note
dated the date of such lost, stolen, destroyed or mutilated Note.

 

Section
2.13.  Voluntary Reductions of the
Revolving Commitments.

 

The
Borrower shall have the right to terminate or reduce the aggregate unused
amount of the Revolving Commitments (for which purpose use of the Revolving
Commitments shall be deemed to include the aggregate amount of Letter of Credit
Liabilities and the aggregate principal amount of all outstanding Swingline
Loans) at any time and from time to time without penalty or premium upon not
less than 3 Business Days prior written notice to the Agent of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction and shall be irrevocable once given and
effective only upon receipt by the Agent; provided, however, if the Borrower
seeks to reduce the aggregate amount of the

 

41

 

Revolving
Commitments below $100,000,000, then the Revolving Commitments shall all
automatically and permanently be reduced to zero.  The Agent will promptly transmit such notice
to each Lender.  The Revolving
Commitments, once terminated or reduced may not be increased or reinstated.

 

Section
2.14.  Expiration or Maturity Date of
Letters of Credit Past Termination Date.

 

If
on the date the Revolving Commitments are terminated or reduced to zero
(whether voluntarily, by reason of the occurrence of an Event of Default or
otherwise), there are any Letters of Credit outstanding hereunder, the Borrower
shall, on such date, pay to the Agent, for the benefit of the Agent and the
Lenders, an amount of money equal to the Stated Amount of such Letter(s) of
Credit for deposit into the Collateral Account.

 

Section
2.15.  Amount Limitations.

 

Notwithstanding any other term of this
Agreement or any other Loan Document, no Lender shall be required to make a
Loan, the Agent shall not be required to issue a Letter of Credit and no
reduction of the Revolving Commitments pursuant to Section 2.13. shall take
effect, if immediately after the making of such Loan, the issuance of such
Letter of Credit or such reduction in the Revolving Commitments:

 

(a)           the aggregate principal amount of all outstanding Revolving Loans,
together with the aggregate principal amount of all outstanding Swingline Loans
and the aggregate amount of all Letter of Credit Liabilities, would exceed the
aggregate amount of the Revolving Commitment at such time; or

 

(b)           the aggregate principal amount of all outstanding
Loans, together with the aggregate amount of all Letter of Credit Liabilities,
would exceed the Borrowing Base at such time.

 

Section
2.16.  Funds Transfer Disbursements.

 

(a)           Generally.  The Borrower
hereby authorizes the Agent to disburse the proceeds of any Loan made by the
Lenders or any of their Affiliates pursuant to the Loan Documents as requested
by an authorized representative of the Borrower to any of the accounts
designated in the Transfer Authorizer Designation Form.  The Borrower agrees to be bound by any
transfer request: (i) authorized or transmitted by the Borrower; or, (ii) made
in the Borrower’s name and accepted by the Agent in good faith and in
compliance with these transfer instructions, even if not properly authorized by
the Borrower.  The Borrower further
agrees and acknowledges that the Agent may rely solely on any bank routing
number or identifying bank account number or name provided by the Borrower to
effect a wire of funds transfer even if the information provided by the
Borrower identifies a different bank or account holder than named by the
Borrower.  The Agent is not obligated or
required in any way to take any actions to detect errors in information
provided by the Borrower.  If the Agent
takes any actions in an attempt to detect errors in the transmission or content
of transfer or requests or takes any actions in an attempt to detect
unauthorized funds transfer requests, the Borrower agrees that no matter how
many times the Agent takes these actions the Agent will not in any situation be
liable for failing to take or

 

42

 

correctly perform these
actions in the future and such actions shall not become any part of the
transfer disbursement procedures authorized under this provision, the Loan
Documents, or any agreement between the Agent and the Borrower.  The Borrower agrees to notify the Agent of
any errors in the transfer of any funds or of any unauthorized or improperly
authorized transfer requests within fourteen (14) days after the Agent’s
confirmation to the Borrower of such transfer.

 

(b)           Funds Transfer.  The Agent will,
in its sole discretion, determine the funds transfer system and the means by
which each transfer will be made.  The
Agent may delay or refuse to accept a funds transfer request if the transfer
would: (i) violate the terms of this authorization; (ii) require the use of a
bank unacceptable to the Agent or any Lender or prohibited by any Governmental
Authority; (iii) cause the Agent or any Lender, in their reasonable judgment,
to violate any regulatory risk control program or guideline promulgated by the
Board of Governors of the Federal Reserve System or any other similar program
or guideline; or (iv) otherwise cause the Agent or any Lender to violate any
Applicable Law.

 

(c)           Limitation of Liability.  Neither the
Agent nor any Lender shall be liable to the Borrower or any other parties for (i)
errors, acts or failures to act of others, including other entities, banks,
communications carriers or clearinghouses, through which the Borrower’s
transfers may be made or information received or transmitted, and no such
entity shall be deemed an agent of the Agent or any Lender, (ii) any loss,
liability or delay caused by fires, earthquakes, wars, civil disturbances,
power surges or failures, acts of government, labor disputes, failures in
communications networks, legal constraints or other events beyond Agent’s or
any Lender’s control, or (iii) any special, consequential, indirect or punitive
damages, whether or not (x) any claim for these damages is based on tort or
contract or (y) the Agent, any Lender or the Borrower knew or should have known
the likelihood of these damages in any situation; provided,
however, that, the Agent and the Lenders shall be liable to the
extent any of the above were the result of the Agent’s or Lenders’ gross
negligence or willful misconduct as determined by a court of
competent jurisdiction in a final, non-appealable judgment. 
Neither the Agent nor any Lender makes any representations or warranties
other than those expressly made in this Agreement.

 

ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL
PROVISIONS

 

Section
3.1.  Payments.

 

(a)           Payments by the Borrower. Except to the
extent otherwise provided herein, all payments of principal, interest and other
amounts to be made by the Borrower under this Agreement or any other Loan
Document shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim, to the Agent at its Principal Office, not
later than 2:00 p.m. on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day). 
Subject to Section 11.5., the Borrower shall, at the time of making each
payment under this Agreement or any other Loan Document, specify to the Agent
the amounts payable by the Borrower hereunder to which such payment is to be
applied.  Each payment received by the Agent for the account of
a Lender under this Agreement or any other Loan Document shall be paid to such
Lender by wire transfer of immediately available funds in accordance with the

 

43

 

wiring instructions
provided by such Lender to the Agent from time to time, for the account of such
Lender at the applicable Lending Office of such Lender.  If the Agent fails to pay such amounts to
such Lender, within one Business Day of receipt of such amounts, the Agent
shall pay interest on such amount at a rate per annum equal to the Federal
Funds Rate from time to time in effect.  If the due date
of any payment under this Agreement or any other Loan Document would otherwise
fall on a day which is not a Business Day such date shall be extended to the
next succeeding Business Day and interest shall be payable for the period of
such extension.

 

(b)           Presumptions Regarding Payments by Borrower. 
Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Agent for the account of the
Lenders hereunder that the Borrower will not make such payment, the Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may (but shall not be obligated to), in reliance upon such
assumption, distribute to the Lenders the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders severally agrees to repay to
the Agent on demand that amount so distributed to such Lender, with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Agent, at the greater of the
Federal Funds Rate and a rate determined by the Agent in accordance with
banking industry rules on interbank compensation.

 

Section
3.2.  Pro Rata Treatment.

 

Except
to the extent otherwise provided herein: 
(a) each borrowing from the Lenders under Section 2.1.(a), 2.3.(d) and
2.4.(e) shall be made from the Lenders, each payment of the Fees under Section 3.6.(a)
and under the first sentence of Section 3.6.(b) shall be made for the account
of the Lenders, and each termination or reduction of the amount of the
Revolving Commitments under Section 2.13. shall be applied to the respective
Revolving Commitments of the Lenders, pro rata according to the amounts of
their respective Revolving Commitments; (b) each payment or prepayment of
principal of Revolving Loans by the Borrower shall be made for the account of
the Lenders pro rata in accordance with the respective unpaid principal amounts
of the Revolving Loans held by them; (c) each payment of interest on Revolving
Loans by the Borrower shall be made for the account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders; (d) the making of Term Loans under Section 2.2.(a) shall be made from the
applicable Lenders, pro rata according to the amounts of their respective Term Commitments; (e) each payment or
prepayment of principal of Term Loans by the Borrower shall be made for the
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Term Loans held by them; (f) each payment of interest
on Term Loans by the Borrower shall be made for the account of the Lenders pro
rata in accordance with the amounts of interest on the Term Loans then due and
payable to the respective applicable Lenders; (g) the Conversion and
Continuation of Revolving Loans or Term Loans of a particular Type (other than
Conversions provided for by Section 5.6.) shall be made pro rata among the
Lenders according to the amounts of their respective Revolving Loans or Term
Loans, as applicable, and the then current Interest Period for each Lender’s
portion of each such Loan of such Type shall be coterminous; (h) the Lenders’
participation in, and payment obligations in respect of, Letters of Credit
under Section 2.4., shall be pro rata in accordance with their respective
Revolving Commitments; and (i) the Lenders’

 

44

 

participation
in, and payment obligations in respect of, Swingline Loans under Section 2.3.,
shall be pro rata in accordance with their respective Revolving
Commitments.  All payments of principal,
interest, fees and other amounts in respect of the Swingline Loans shall be for
the account of the Swingline Lender only (except to the extent any Lender shall
have acquired and funded a participating interest in any such Swingline Loan
pursuant to Section 2.3.(e), in which case such payments shall be pro rata in
accordance with such participating interests).

 

Section
3.3.  Sharing of Payments, Etc.

 

If
a Lender shall obtain payment of any principal of, or interest on, any Loan
made by it to the Borrower under this Agreement, or shall obtain payment on any
other Obligation owing by the Borrower or any other Loan Party through the
exercise of any right of set-off, banker’s lien or counterclaim or similar
right or otherwise or through voluntary prepayments directly to a Lender or
other payments made by the Borrower or any other Loan Party to a Lender (other
than any payment in respect of Specified Derivatives Obligations) not in
accordance with the terms of this Agreement and such payment should be
distributed to the Lenders pro rata in accordance with Section 3.2. or Section 11.5.,
as applicable, such Lender shall promptly purchase from the other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans made by the other Lenders or other Obligations owed to
such other Lenders in such amounts, and make such other adjustments from time
to time as shall be equitable, to the end that all the Lenders shall, subject
to Section 3.11. if applicable, share the benefit of such payment (net of any
reasonable expenses which may be incurred by such Lender in obtaining or
preserving such benefit) pro rata in accordance with Section 3.2. or Section 11.5.,
as applicable.  To such end, all the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.  The Borrower
agrees that any Lender so purchasing a participation (or direct interest) in
the Loans or other Obligations owed to such other Lenders may exercise all
rights of set-off, banker’s lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender were a direct holder of Loans
in the amount of such participation. 
Nothing contained herein shall require any Lender to exercise any such
right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness
or obligation of the Borrower.

 

Section
3.4.  Several Obligations.

 

No
Lender shall be responsible for the failure of any other Lender to make a Loan
or to perform any other obligation to be made or performed by such other Lender
hereunder, and the failure of any Lender to make a Loan or to perform any other
obligation to be made or performed by it hereunder shall not relieve the
obligation of any other Lender to make any Loan or to perform any other
obligation to be made or performed by such other Lender.

 

Section
3.5.  Minimum Amounts.

 

(a)           Borrowings and Conversions.  Except as otherwise provided in Sections 2.3.(d)
and 2.4.(e), each borrowing of Base Rate Loans shall be in an aggregate minimum
amount of $500,000 and integral multiples of $500,000 in excess thereof.  Each borrowing, Conversion and

 

45

 

Continuation
of LIBOR Loans shall be in an aggregate minimum amount of $500,000 and integral
multiples of $500,000 in excess of that amount.

 

(b)           Prepayments.  Each voluntary prepayment of Revolving Loans
shall be in an aggregate minimum amount of $500,000 and integral multiples of
$100,000 in excess thereof (or, if less, the aggregate principal amount of
Revolving Loans then outstanding).  Each voluntary prepayment of Term Loans
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess thereof (or, if less, the aggregate principal amount of Term
Loans then outstanding).

 

(c)           Reductions of Revolving
Commitments.  Each
reduction of the Revolving Commitments under Section 2.13. shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of $2,000,000 in
excess thereof.

 

(d)           Letters of Credit.  The initial Stated Amount of each Letter of
Credit shall be at least $100,000.

 

Section
3.6.  Fees.

 

(a)           Unused Fee. During the
period from the Effective Date to but excluding the Termination Date, the
Borrower agrees to pay to the Agent for the account of the Lenders an unused facility
fee with respect to the average daily difference between the (i) aggregate
amount of the Revolving Commitments and (ii) the aggregate principal amount of
all outstanding Revolving Loans plus the aggregate amount of all Letter of
Credit Liabilities (the “Unused Amount”). 
Such fee shall be computed by multiplying the Unused Amount with respect
to such quarter by the corresponding per annum rate set forth below:

 

	
  Unused Amount

  	
   

  	
  Unused
  Fee

  	
   

  
	
  > 50% of the aggregate amount of Revolving
  Commitments

  	
   

  	
  0.50

  	
  %

  
	
  < 50% of the aggregate amount of Revolving Commitments

  	
   

  	
  0.40

  	
  %

  

 

Such
fee shall be payable quarterly in arrears on the last day of each March, June, September
or December of each calendar year.  Any
such accrued and unpaid fee shall also be payable on the Termination Date or
any earlier date of termination of the Revolving Commitments or reduction of
the Revolving Commitments to zero.

 

(b)           Letter of Credit Fees.  The Borrower agrees to pay to the Agent for
the account of each Lender a letter of credit fee at a rate per annum equal to
the Applicable Margin for LIBOR Loans (or while an Event of Default exists, at
a per annum rate equal to 4.0%) times the daily average Stated Amount of each
Letter of Credit for the period from and including the date of issuance of such
Letter of Credit (x) through and including the date such Letter of Credit
expires or is terminated or (y) to but excluding the date such Letter of Credit
is drawn in full and is not subject to reinstatement, as the case may be.  The fees provided for in the immediately
preceding sentence shall be nonrefundable and payable in arrears on (i) the
last day of March, June, September and December in each year, (ii) the
Termination Date, (iii) the date the Revolving Commitments are terminated or
reduced to zero and (iv) thereafter from time to time on demand 

 

46

 

of
the Agent.  In addition, the Borrower
shall pay to the Agent for its own account and not the account of any Lender,
an issuance fee in respect of each Letter of Credit equal to the greater of (i)
$500 or (ii) one-eighth of one percent (0.125%) per annum on the initial Stated
Amount of such Letter of Credit payable (A) for the period from and including
the date of issuance of such Letter of Credit through and including the
expiration date of such Letter of Credit and (B) if the expiration date of any
Letter of Credit is extended (whether as a result of the operation of an
automatic extension clause or otherwise), for the period from but excluding the
previous expiration date to and including the extended expiration date.  The fees provided for in the immediately
preceding sentence shall be nonrefundable and payable upon issuance (or in the
case of an extension of the expiration date, on the previous expiration
date).  The Borrower shall pay directly
to the Agent from time to time on demand all commissions, charges, costs and
expenses in the amounts customarily charged by the Agent from time to time in
like circumstances with respect to the issuance of each Letter of Credit,
drawings, amendments and other transactions relating thereto.

 

(c)           Administrative and Other
Fees.  The Borrower agrees to pay the
administrative and other fees of the Agent as may be agreed to in writing by
the Borrower and the Agent from time to time.

 

(d)           Extension Fee Under Existing
Credit Agreement.  For the
avoidance of doubt, the extension fee referenced in Section 3.6.(d) of the
Existing Credit Agreement shall not be payable under this Agreement.

 

Section
3.7.  Computations.

 

Unless
otherwise expressly set forth herein, any accrued interest on any Loan, any
Fees or any other Obligations due hereunder shall be computed on the basis of a
year of 360 days and the actual number of days elapsed; provided, however,
interest on Base Rate Loans shall be computed on the basis of a year of 365 or
366 days, as applicable, and the actual number of days elapsed.

 

Section
3.8.  Usury.

 

In
no event shall the amount of interest due or payable on the Loans or other
Obligations exceed the maximum rate of interest allowed by Applicable Law and,
if any such payment is paid by the Borrower or any other Loan Party or received
by any Lender, then such excess sum shall be credited as a payment of
principal, unless the Borrower shall notify the respective Lender in writing
that the Borrower elects to have such excess sum returned to it forthwith.  It is the express intent of the parties
hereto that the Borrower not pay and the Lenders not receive, directly or indirectly,
in any manner whatsoever, interest in excess of that which may be lawfully paid
by the Borrower under Applicable Law.

 

Section
3.9.  Agreement Regarding Interest and
Charges.

 

The
parties hereto hereby agree and stipulate that the only charge imposed upon the
Borrower for the use of money in connection with this Agreement is and shall be
the interest specifically described in Sections 2.5.(a)(i) and (ii) and in Section
2.3.(c).  Notwithstanding the

 

47

 

foregoing,
the parties hereto further agree and stipulate that all agency fees,
syndication fees, unused fees, closing fees, letter of credit fees,
underwriting fees, default charges, funding or “breakage” charges, increased
cost charges, attorneys’ fees and reimbursement for costs and expenses paid by
the Agent or any Lender to third parties or for damages incurred by the Agent
or any Lender, in each case in connection with the transactions contemplated by
this Agreement and the other Loan Documents, are charges made to compensate the
Agent or any such Lender for underwriting or administrative services and costs
or losses performed or incurred, and to be performed or incurred, by the Agent
and the Lenders in connection with this Agreement and shall under no
circumstances be deemed to be charges for the use of money.  All charges other than charges for the use of
money shall be fully earned and nonrefundable when due.

 

Section
3.10.  Statements of Account.

 

The
Agent will account to the Borrower monthly with a statement of Loans, Letters
of Credit, accrued interest and Fees, charges and payments made pursuant to
this Agreement and the other Loan Documents, and such account rendered by the
Agent shall be deemed conclusive upon the Borrower absent manifest error.  The failure of the Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrower from any of
its obligations hereunder.

 

Section
3.11.  Defaulting Lenders.

 

(a)           Generally.  If any Lender
shall become a Defaulting Lender, then such Defaulting Lender’s right to participate
in the administration of the Loans, this Agreement and the other Loan
Documents, including without limitation, any right to vote in respect of any
amendment, consent or waiver of the terms of this Agreement or any other Loan
Document, or to direct any action or inaction of the Agent or to be taken into
account in the calculation of the Requisite Lenders or the Supermajority
Lenders, shall be suspended while such Lender remains a Defaulting Lender;
provided, however, that the foregoing shall not permit an increase in such
Lender’s Commitment or an extension of the maturity date of such Lender’s Loans
or other Obligations owing to such Lender, in each case, without such Lender’s
consent.  If a Lender is a Defaulting
Lender because it has failed to make timely payment to the Agent of any amount
required to be paid to the Agent hereunder (without giving effect to any notice
or cure periods), then the Agent shall be entitled (i) to collect interest from
such Defaulting Lender on such delinquent payment for the period from the date
on which the payment was due until the date on which the payment is made at the
Federal Funds Rate, (ii) to withhold or setoff and to apply in satisfaction of
the defaulted payment and any related interest, any amounts otherwise payable
to such Defaulting Lender under this Agreement or any other Loan Document and (iii)
to bring an action or suit against such Defaulting Lender in a court of
competent jurisdiction to recover the defaulted amount and any related
interest.  No Commitment of any Lender
shall be increased or otherwise affected, and except as otherwise expressly
provided in this Section, performance by the Borrower of its obligations
hereunder and the other Loan Documents shall not be excused or otherwise
modified, as a result of the operation of this Section. The rights and remedies
of the Borrower, the Agent and the Lenders against a Defaulting Lender under
this Section are in addition to any other rights and remedies the Borrower, the
Agent and the Lenders may have against such Defaulting Lender under this
Agreement, any of the other Loan Documents, Applicable Law or otherwise.

 

48

 

(b)           Treatment of Payments.  Until the
Defaulting Lender Excess of a Defaulting Lender has been reduced to zero, any
payment of the principal of the Revolving Loans or Term Loans shall, unless the
Requisite Lenders agree otherwise, be applied to the outstanding principal
balance of the Revolving Loans and Term Loans of the applicable Lenders that
are not Defaulting Lenders. 
Notwithstanding the terms of Section 3.3., no Defaulting Lender shall be entitled
to any share in any payment obtained by any of the other Lenders on any
Obligation owing by the Borrower or any Loan Party.  Any amount paid by the Borrower, whether through the
exercise of any Lender’s right of set-off, banker’s lien or counterclaim or
similar right or otherwise or through voluntary prepayments, for the account of a Defaulting Lender
under this Agreement or any other Loan Document will not be paid or distributed
to such Defaulting Lender, but will instead be retained by the Agent in a
segregated non-interest bearing account until such Defaulting Lender has ceased
to be a Defaulting Lender in accordance with subsection (f) below, and, subject
to any applicable requirements of law, such amount may be applied at such time
or times as may be determined by the Agent in its sole discretion, first,
to the payment of any amounts owing by such Defaulting Lender to the
Administrative Agent or the Swingline Lender under this Agreement, second,
if determined by the Agent or requested by the Swingline Lender, held in such
account as cash collateral for such Defaulting Lender’s Commitment Percentage
of the Letter of Credit Liabilities then outstanding and for such Defaulting
Lender’s Commitment Percentage of the aggregate principal amount of the
Swingline Loans then outstanding, third, to the funding of any Loan in
respect of which the such Defaulting Lender has failed to fund its portion
thereof as required by this Agreement, as determined by the Agent, fourth,
if so determined by the Agent and the Borrower, held in such account as cash
collateral for future funding obligations of the Defaulting Lender in respect
of any Loans under this Agreement.  If
such Lender is still a Defaulting Lender and any amounts remain in such account
on the date that the Commitments are terminated and all Obligations of the
Borrower hereunder and under the other Loan Documents are paid in full, at
which time such amounts will be applied by the Agent to the making of payments
from time to time in the following order of priority:  first, to the payment of any amounts
owing by such Defaulting Lender to the Agent and the Swingline Lender under
this Agreement; second, to the payment of interest then due and payable
to the Lenders hereunder other than Defaulting Lenders, ratably among them in
accordance with the amounts of such interest then due and payable to them; third,
to the payment of Fees then due and payable to the Lenders other than
Defaulting Lenders, ratably among them in accordance with the amounts of such
Fees then due and payable to them; fourth, to pay principal of all
Loans, Reimbursement Obligations and other Letter of Credit Liabilities then
due and payable to the Lenders other than Defaulting Lenders hereunder ratably
in accordance with the amounts thereof then due and payable to them; fifth,
to the ratable payment of all other Obligations then due and payable to the
Lenders other than Defaulting Lenders; and sixth, after the termination
of the Commitments and payment in full of all obligations of the Borrower
hereunder, to pay amounts owing under this Agreement to such Defaulting Lender
or as a court of competent jurisdiction may otherwise direct.

 

(c)           Fees.  During any
period that a Lender is a Defaulting Lender, such Defaulting Lender’s
Commitment and outstanding Loans shall be excluded for purposes of calculating
any Fee payable to the Lenders under Sections 3.6.(a) and (b), and during such period the
Borrower shall not be required to pay, and such Defaulting Lender shall not be
entitled to receive, any such Fees otherwise payable to such Defaulting Lender
under such Sections.

 

49

 

(d)                                 Borrowing Requests. 
While any Lender is a Defaulting Lender or a Potential Defaulting
Lender, the Borrower authorizes each of the Agent and the Swingline Lender
(which authorization is irrevocable and coupled with an interest) to give, in
such Person’s discretion, Notices of Borrowing pursuant to Section 2.1. in such amounts and at such times as may
be required to (i) reimburse any Reimbursement Obligation that has become
due and payable, (ii) repay an outstanding Swingline Loan or (iii) cash
collateralize the Obligations of the Borrower in respect of outstanding Letters
of Credit in an amount equal to the aggregate amount of the obligations
(contingent or otherwise) of such Defaulting Lender or Potential Defaulting
Lender in respect of such Letters of Credit.

 

(e)                                  Purchase of Defaulting Lender’s
Commitment.  During any period that a Lender is a
Defaulting Lender, the Borrower may, by giving written notice thereof to the
Agent, such Defaulting Lender and the other Lenders, demand that such
Defaulting Lender assign its Revolving Commitment and Term Loan to an Eligible
Assignee subject to and in accordance with the provisions of Section 13.5.(b).  No party hereto shall have any obligation
whatsoever to initiate any such replacement or to assist in finding an Eligible
Assignee.  In addition, any Lender who is
not a Defaulting Lender may, but shall not be obligated, in its sole
discretion, to acquire the face amount of all or a portion of such Defaulting
Lender’s Revolving Commitment and Term Loan via an assignment subject to and in
accordance with the provisions of Section 13.5.(b).  In connection
with any assignment initiated by the Borrower or any Lender who is not a
Defaulting Lender, such Defaulting Lender shall promptly execute all documents
reasonably requested to effect such assignment, including an appropriate
Assignment and Acceptance and, notwithstanding Section 13.5.(b), shall pay to the Agent an
assignment fee in the amount of $10,000.

 

(f)                                    Cure.  If the
Borrower, the Agent and the Swingline Lender agree in writing in their
discretion that a Lender that is a Defaulting Lender or a Potential Defaulting
Lender should no longer be deemed to be a Defaulting Lender or Potential
Defaulting Lender, as the case may be, the Agent will so notify the Lenders, whereupon
as of the effective date specified in such notice and subject to any conditions
set forth therein, such Lender will, to the extent applicable, purchase such
portion of outstanding Loans of the other Lenders and make such other
adjustments as the Agent may determine to be necessary to cause the interest of
the Lenders in the Loans and Letter of Credit Liabilities to be on a pro rata
basis in accordance with their respective Commitment Percentages, whereupon
such Lender will cease to be a Defaulting Lender or Potential Defaulting
Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of the Borrower while
such Lender was a Defaulting Lender; and provided, further, that except
to the extent otherwise expressly agreed by the affected parties, no cure by a
Lender under this subsection of its status as a Defaulting Lender or Potential
Defaulting Lender will constitute a waiver or release of any claim of any party
hereunder arising from such Lender’s having been a Defaulting Lender or
Potential Defaulting Lender.

 

Section 3.12.  Taxes.

 

(a)                                  Taxes Generally.  All payments by the Borrower of principal of,
and interest on, the Loans and all other Obligations shall be made free and
clear of and without deduction for any

 

50

 

present
or future excise, stamp or other taxes, fees, duties, levies, imposts, charges,
deductions, withholdings or other charges of any nature whatsoever imposed by
any taxing authority, but excluding (i) franchise taxes, (ii) any
taxes imposed on or measured by any Lender’s assets, net income, receipts or
branch profits, (iii) any taxes (other than withholding taxes) with
respect to the Agent or a Lender that would not be imposed but for a connection
between the Agent or such Lender and the jurisdiction imposing such taxes
(other than a connection arising solely by virtue of the activities of the
Agent or such Lender pursuant to or in respect of this Agreement or any other
Loan Document), and (iv) any taxes, fees, duties, levies, imposts, charges,
deductions, withholdings or other charges to the extent imposed as a result of
the failure of the Agent or a Lender, as applicable, to provide and keep
current (to the extent legally able) any certificates, documents or other
evidence required to qualify for an exemption from, or reduced rate of, any
such taxes fees, duties, levies, imposts, charges, deductions, withholdings or
other charges or required by the immediately following subsection (c) to
be furnished by the Agent or such Lender, as applicable (such
non-excluded items being collectively called “Taxes”).  If any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any Applicable Law, then the Borrower will:

 

(i)                                     pay directly to
the relevant Governmental Authority the full amount required to be so withheld
or deducted;

 

(ii)                                  promptly
forward to the Agent an official receipt or other documentation satisfactory to
the Agent evidencing such payment to such Governmental Authority; and

 

(iii)                               pay to the
Agent for its account or the account of the applicable Lender, as the case may
be, such additional amount or amounts as is necessary to ensure that the net
amount actually received by the Agent or such Lender will equal the full amount
that the Agent or such Lender would have received had no such withholding or
deduction been required.

 

(b)                                 Tax
Indemnification.  If the
Borrower fails to pay any Taxes when due to the appropriate Governmental
Authority or fails to remit to the Agent, for its account or the account of the
respective Lender, as the case may be, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders
for any incremental Taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure.  For purposes of this Section, a distribution
hereunder by the Agent or any Lender to or for the account of any Lender shall
be deemed a payment by the Borrower.

 

(c)                                  Tax Forms.  Prior to the date that any Foreign Lender
becomes a party hereto, such Foreign Lender shall deliver to the Borrower and
the Agent such certificates, documents or other evidence, as required by the
Internal Revenue Code or Treasury Regulations issued pursuant thereto
(including Internal Revenue Service Forms W-8ECI
and W-8BEN, as applicable, or appropriate successor forms), properly
completed, currently effective and duly executed by such Foreign Lender
establishing that payments to it hereunder and under the Notes are (i) not
subject to United States Federal backup withholding tax and (ii) not
subject to United States Federal withholding tax imposed under the Internal
Revenue Code.  Each such Foreign Lender
shall, to the extent it may lawfully do so, (x) deliver further copies of
such forms or other

 

51

 

appropriate
certifications on or before the date that any such forms expire or become obsolete
and after the occurrence of any event requiring a change in the most recent
form delivered to the Borrower or the Agent and (y) obtain such extensions
of the time for filing, and renew such forms and certifications thereof, as may
be reasonably requested by the Borrower or the Agent.  The Borrower shall not be required to pay any
amount pursuant to the last sentence of subsection (a) above to any
Foreign Lender or the Agent, if it is organized under the laws of a
jurisdiction outside of the United States of America, if such Foreign Lender or
the Agent, as applicable, fails to comply with the requirements of this
subsection.  If any such Foreign Lender,
to the extent it may lawfully do so, fails to deliver the above forms or other
documentation, then the Agent may withhold from any payments to be made to such
Foreign Lender under any of the Loan Documents such amounts as are required by
the Internal Revenue Code.  If any
Governmental Authority asserts that the Agent did not properly withhold or
backup withhold, as the case may be, any tax or other amount from payments made
to or for the account of any Lender, such Lender shall indemnify the Agent
therefor, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, and costs
and expenses (including all reasonable fees and disbursements of any law firm
or other external counsel and the allocated cost of internal legal services and
all disbursements of internal counsel) of the Agent.  The obligation of the Lenders under this Section shall
survive the termination of the Commitments, repayment of all Obligations and
the resignation or replacement of the Agent.

 

(d)                                 USA Patriot Act Notice; Compliance. 
In order for the Agent to comply with the USA Patriot Act of 2001
(Public Law 107-56), prior to any Person that would be a Foreign Lender
becoming a party hereto, the Agent may request, and such Person shall provide
to the Agent, its name, address, tax identification number and/or such other identification
information as shall be necessary for the Agent to comply with Applicable Law.

 

ARTICLE
IV. BORROWING BASE PROPERTIES

 

Section 4.1.  Eligibility of Properties.

 

(a)                                  Initial Borrowing Base Properties. 
As of the Agreement Date, the Lenders have approved for inclusion in
calculations of the Borrowing Base the
Properties identified on Schedule 4.1. 
Upon satisfaction of the conditions set forth in Section 4.2., such
Properties shall become Borrowing Base Properties.

 

(b)                                 Additional Borrowing Base Properties. 
If, after the Effective Date, the Borrower desires that any additional
Eligible Property be included in calculations of the Borrowing Base, the
Borrower shall so notify the Agent in writing, such notification to include a
certification by the Borrower that such Property is an Eligible Property;
provided, however, that (x) if any portion of a Property is leased under a
ground lease that would qualify as a Ground Lease but for the
failure to satisfy clause (a) of the definition of “Ground Lease”, or (y) if
such Property is not primarily operated as a self-storage facility, and as a
result of either condition set forth in the foregoing clauses (x) or (y),
a Property would not qualify as an Eligible Property, then in such case, the
Borrower may nevertheless submit such Property for inclusion in the Borrowing
Base subject to the approval of the Requisite Lenders. 
No Property will be evaluated for inclusion as a Borrowing Base Property
unless it is an Eligible Property, subject to the immediately preceding 

 

52

 

sentence, and unless and
until the Borrower delivers to the Agent each of the following, in form and
substance reasonably satisfactory to the Agent:

 

(i)                                     A description of such Property, such
description to include the age, location and size of such Property;

 

(ii)                                  An operating statement for such Property
audited or certified by a representative of the Borrower as being true and
correct in all material respects and prepared in accordance with GAAP for the
previous three fiscal years, provided that, with respect to any period such
Property was not owned by the Borrower or a Subsidiary, such information shall
only be required to be delivered to the extent reasonably available to the
Borrower and such certification may be based upon the best of the Borrower’s
knowledge;

 

(iii)                               A current rent roll in substantially the
form attached hereto as Exhibit Q and a one-year occupancy history of such
Property each certified by a representative of the Borrower to be true and
correct, provided that, with respect to any period such Property was not owned
by the Borrower or a Subsidiary, the occupancy history shall only be required
to be delivered to the extent reasonably available to the Borrower and such
certification may be based upon the best of the Borrower’s knowledge;

 

(iv)                              Such projections and other information
concerning the anticipated operation of such Property as the Agent may
reasonably request;

 

(v)                                 Budgets with respect to any capital
expenditures to be made with respect to such Property within the next twelve
months; and

 

(vi)                              Such other information the Agent may
reasonably request in order to evaluate the Property which information is
readily available to the Borrower or can be obtained by the Borrower without
unreasonable expense.

 

(c)                                  Approval by Agent and Lenders; Appraisals. 
Upon receipt of all of the above items, the Agent shall order an
Appraisal of such Property in order to determine the Appraised Value
thereof.  If, after receipt and review of
all of the above items (other than the Appraisal), the Agent is prepared to
proceed with acceptance of such Property as a Borrowing Base Property, the
Agent will so notify the Borrower and each Lender within 10 Business Days after
receipt of all of the above items (other than the Appraisal) and will submit
all such items to the Lenders.  After
obtaining the Appraisal of such Property, the Agent will promptly submit the
Appraisal and the Appraised Value to the Lenders, for approval by the Requisite
Lenders and each Lender shall notify the Agent whether it approves of the
designation of such Property as a Borrowing Base Property within 10 Business
Days of the submission by the Agent of the Appraisal and the Appraised Value
for such Property.  If a Lender shall fail
to so notify the Agent within the 10 Business Day Period set forth in the
immediately preceding sentence, then such Lender shall be deemed to have
approved of such Property.  Upon approval
of such Property by the Requisite Lenders, and upon execution and delivery of
all of the documents

 

53

 

required to be provided under Section 4.2., such Property shall
become a Borrowing Base Property.

 

(d)                                 Tax Mitigation. 
In the case of any Property located in a jurisdiction imposing a
mortgage recording tax, the Agent and the Lenders agree to take such actions as
the Borrower may reasonably request to achieve any available and permissible
mortgage recording tax savings, in each case consistent with local practice and
Applicable Law, so long as taking such actions will not, in the Agent’s
reasonable discretion, impair the Agent’s Lien on such Property.

 

Section 4.2.  Conditions Precedent to a Property Becoming a
Borrowing Base Property.

 

No Property shall become
a Borrowing Base Property until the Borrower shall have caused to be executed
and delivered to the Agent and the Lenders all documents and instruments
required to be so executed and delivered under Section 4.1., the Requisite
Lenders shall have approved of, or shall have been deemed to have approved of,
such Property as provided in such Section, and the Borrower shall have caused
to be executed and delivered to the Agent the following instruments, documents
and agreements in respect of such Property, each to be in form and substance
reasonably satisfactory to the Agent:

 

(a)                                  A Security Instrument executed by each
Loan Party owning (or leasing) such Property, the form of such Security
Instrument to be modified as appropriate (i) to conform to the Applicable
Laws of the jurisdiction in which such Property is located and (ii) to
implement the provisions of Section 4.1.(d), if applicable;

 

(b)                                 An Environmental Indemnity Agreement
executed by the Parent, each such Loan Party, and if not the Borrower, the
Borrower;

 

(c)                                  [Intentionally Omitted];

 

(d)                                 A “Phase I” environmental assessment of
such Property, and a “Phase II” environmental assessment of such Property if
warranted by such “Phase I” environmental assessment, in each case, not
more than 12 months old prepared by Partner Engineering and Science, Inc.
or such other environmental engineering firm reasonably acceptable to the Agent
and upon which the Agent and the Lenders are expressly permitted to rely
pursuant to a reliance letter addressed to the Agent and the Lenders in form
and substance reasonably satisfactory to the Agent, and any additional
environmental studies or assessments available to the Borrower performed with
respect to such Property;

 

(e)                                  Copies of all engineering, mechanical,
structural and maintenance studies performed with respect to such Property not
more than twelve months old upon which the Agent and the Lenders are expressly
permitted to rely pursuant to a reliance letter addressed to the Agent and the
Lenders in form and substance reasonably satisfactory to the Agent;

 

(f)                                    Evidence that all insurance required for
such Property under the applicable Loan Documents is currently in effect;

 

54

 

(g)                                 [Intentionally omitted];

 

(h)                                 Copies of any applicable ground leases
and estoppels from ground lessors relating to such Property if such estoppels
are required to be provided by such ground lessor pursuant to such ground
leases and if such estoppels are not so required, if requested by the Agent,
the Borrower shall use its commercially reasonable efforts to obtain such
estoppels;

 

(i)                                     Copies of (x) all Major Leases,
Property Management Agreements, Marketing Agreements, franchise or license
agreements, any reciprocal easement agreements and all other material contracts,
licenses or permits, if any, which relate to the use, occupancy, operation,
maintenance, enjoyment or ownership of such Property, and (y) if such
Property is not yet owned by the Borrower or a Subsidiary, the purchase
agreement pursuant to which the Borrower or a Subsidiary is to acquire such
Property;

 

(j)                                     If requested by the Agent, a Property Management Contract
Assignment and/or a Marketing Agreement Assignment executed by each such Loan
Party and the applicable property manager or marketing services provider,
respectively;

 

(k)                                  If requested by the Agent, a reciprocal
easement agreement estoppel with respect to any reciprocal easement agreements
for such Property;

 

(l)                                     [Intentionally omitted];

 

(m)                               If requested by the Agent, collateral
assignments of the other material contracts, operating permits and licenses,
franchise or license agreements and any other rights or benefits of such
Property, relating to the use, occupancy, operation, maintenance, enjoyment or
ownership of such Property;

 

(n)                                 If requested by the Agent, estoppel
certificates and subordination, non-disturbance and attornment agreements, from
any tenant leasing any of such Property pursuant to a Major Lease (other than
any tenant only leasing storage space at such Property);

 

(o)                                 An ALTA 2006 Form mortgagee’s Policy
of Title Insurance (without any creditor’s rights exclusion) or other form
acceptable to the Agent in favor of the Agent for the benefit of the Secured
Parties with respect to such Property, including endorsements with respect to
such items of coverage as the Agent may reasonably request (which endorsements
may include, without limitation, applicable zoning endorsements with respect to
additional Properties submitted after the Effective Date) and which
endorsements are available, in the amount of coverage required in the following
sentence, issued by an Approved Title Insurance Company and with reinsurance
(with direct access agreements) with title insurance companies reasonably
acceptable to the Agent, showing the fee simple title (or a leasehold estate if
leased under a Ground Lease) to the land and improvements described in the
applicable Security Instrument as vested in the Borrower or a Subsidiary, and
insuring that the Lien granted by such Security Instrument is a valid Lien against
said property, subject only to such restrictions, encumbrances, easements and
reservations as are reasonably acceptable to the Agent.  The amount of coverage under such policy must
equal (i) 100% of the Appraised Value (based on the “stabilized value”)

 

55

 

of such Property (excluding the value of any personal property located
at such Property and subject to increase without material cost through the use
of “tie-in” endorsements or other provisions) or (ii) to the extent that a
“tie-in” endorsement is not available, 125% of the Appraised Value (based on
the “stabilized value”) of such Property (excluding the value of any personal
property located at such Property);

 

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

 

(q)                                 If such Property is located in a Tie-In
Jurisdiction and a “tie-in” endorsement is available, endorsements to all other
existing title insurance policies issued to the Agent with respect to all other
Properties located in that Tie-In Jurisdiction and/or other Tie-In
Jurisdictions, as applicable, reflecting an increase in the aggregate insured
amount under the “tie-in” endorsements to an amount equal to the aggregate
amount of the Appraised Values of all such Properties (including the Property
to be included as a Borrowing Base Property but excluding the value of any
personal property located at such Property) but in no event in an amount in
excess of the aggregate amount of the Revolving Commitments and the outstanding
principal balance of the Term Loans;

 

(r)                                    A current or currently certified survey
of such Property certified to the Agent and the Lenders 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;

 

(s)                                  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, or, if it is,
evidence of flood insurance;

 

(t)                                    A zoning report prepared by Massey
Consulting Group or such other firm reasonably acceptable to the Agent with
respect to such Property evidencing compliance with applicable zoning and land
use laws and building ordinances or codes (including, without limitation,
copies of final certificates of occupancy relating to such Property or such other
evidence reasonably acceptable to the Agent that occupancy permits have been
issued for the Property) or that such Property is the subject of a legal
non-conforming use;

 

(u)                                 [Intentionally Omitted];

 

(v)                                 The Pledge Agreement, or if the Pledge
Agreement is already in effect, a supplement to the Pledge Agreement, executed
by each Person that owns, directly or indirectly, any Equity Interests of the
Property Owner of such Property, subjecting all such Equity Interests to the
Lien of the Pledge Agreement;

 

(w)                               All certificates, if any, representing
any such Equity Interests, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer or agent of the Loan
Party with rights in any such Equity Interests, together with an

 

56

 

Acknowledgment and Consent, substantially in the form
of Schedule 2 to the Pledge Agreement, duly executed by the issuer of such
Equity Interest;

 

(x)                                   The results of a recent UCC, tax,
judgment, bankruptcy and lien search in each of the jurisdictions in which UCC
financing statements or other filings or recordations should be made to
evidence or perfect Liens in such Property, such Equity Interests and all other
Collateral related to such Property;

 

(y)                                 Each document (including, without
limitation, any UCC financing statement) required by any Security Document or
under Applicable Law or reasonably deemed necessary or appropriate by the Agent
to be entered into, filed, registered or recorded in order to create in favor
of the Agent, for the benefit of the Lenders, a perfected first-priority Lien
in such Property and all other Collateral relating to such Property, shall have
been entered into, filed, registered or recorded or shall have been delivered
to the Agent and be in proper form for filing, registration or recordation, as
appropriate;

 

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

 

(aa)                            An opinion of counsel qualified to render
legal opinions regarding the law of the jurisdiction in which the Borrower is
formed (or if the Property is owned or leased by a Subsidiary, in the
jurisdiction where such Subsidiary is formed) reasonably acceptable to the
Agent, addressed to the Agent, each Lender and each other Secured Party 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 applicable Security Documents and other documents for consummating the
transactions contemplated hereby as the Agent may reasonably request;

 

(bb)                          If the Property Owner of such Property or
any Subsidiary that owns, directly or indirectly, any Equity Interests of such
Property Owner is not already a Guarantor, an Accession Agreement executed by each
such Person and all of the items that would have been required to be delivered
to the Agent under Section 6.1.(a)(v) through (a)(ix) and
(a)(xvi) had such Subsidiary been a Loan Party on the Effective Date;

 

(cc)                            A Borrowing Base Certificate calculated
after giving pro forma effect to the inclusion of such Property as a Borrowing
Base Property; and

 

(dd)                          Such other due diligence materials
(including, without limitation, inspection reports prepared by an architect or
engineer reasonably acceptable to the Agent and addressed to the Agent for the
benefit of the Lenders with respect to any Property that the Borrower has
submitted to become a Borrowing Base Property), instruments, documents,
consents, agreements, financing statements, certificates, opinions and other
Security Documents consistent with the existing terms and conditions of the
Loan Documents as the Agent may reasonably request.

 

57

 

Section 4.3.  Release of Borrowing Base Properties.

 

(a)                                  Subject to clause (b) below, from
time to time the Borrower may request, upon not less than 5 Business Days prior
written notice to the Agent, that a Borrowing Base Property and related
Collateral be released from the Liens created by the Security Documents applicable
thereto, which release (the “Release”) shall be effected by the Agent if all of
the following conditions are satisfied as of the date of such Release:

 

(i)                                     no Default or Event of Default exists or
would exist immediately after giving effect to such Release;

 

(ii)                                  the representations and warranties made
or deemed made by the Parent, the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, are true and correct in all
material respects immediately prior to and after giving effect to such Release
with the same force and effect as if made on and as of such date except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date) and
except for changes in factual circumstances not prohibited under the Loan
Documents;

 

(iii)                               the Borrower shall have delivered to the
Agent a certificate from the Borrower’s chief executive officer or chief
financial officer certifying the matters referred to in the immediately
preceding clauses (a) and (b);

 

(iv)                              the Borrower shall have delivered to the
Agent all documents and instruments reasonably requested by the Agent in
connection with such Release including, without limitation, the following:

 

(A)                              all documents being requested by the
Borrower to effect such Release, including releases of applicable Security
Documents; and

 

(B)                                a certificate of a Responsible Officer of
the Borrower certifying that the Release is required in connection with the
sale of the Borrowing Base Property to be released or in connection with the
Borrower or its applicable Subsidiary obtaining secured financing that will be
secured by such Borrowing Base Property;

 

(v)                                 the
Borrower shall have delivered a Compliance Certificate showing pro forma
compliance with the covenants set forth in Section 10.1. after giving effect to such Release; and

 

(vi)                              the Borrower shall have delivered to the
Agent a Borrowing Base Certificate reflecting the Borrowing Base after giving
effect to such Release and indicating that the outstanding principal balance of
the Loans, together with the aggregate principal amount of all Letter of Credit
Liabilities and the Derivatives Termination Value of all Specified Derivatives
Contracts, will not
exceed the Borrowing Base after giving

 

58

 

effect to such Release
and any prepayment of Obligations to be made concurrently with such Release.

 

(b)                                 In the event that a Property is no longer
deemed to be a Borrowing Base Property because an “Event of Default” under and
as defined in the Security Instrument or an event of default under any other
Security Document relating to such Borrowing Base Property has occurred and is
continuing, the Borrower may request, upon not less than 5 Business Days prior
written notice to the Agent, that a Borrowing Base Property and related
Collateral be released from the Liens created by the Security Documents applicable
thereto, which Release shall be effected by the Agent if no Default or Event of
Default exists as of the date of Release or would exist immediately after
giving effect to such Release.

 

Section 4.4.  Frequency of Calculations of Borrowing Base;
Calculation Methodology.

 

Initially, the Borrowing
Base shall be the amount set forth as such in the Borrowing Base Certificate
delivered by the Borrower, and accepted by the Agent, under Section 6.1. 
Thereafter, the Borrowing Base shall be the amount set forth as such in
a Borrowing Base Certificate delivered by the Borrower, and accepted by the
Agent, from time to time under Section 4.2.(cc), 4.3.(a)(vi) or 9.3.(b). 
Any increase in the amount of the Borrowing Base shall become effective
as of the next determination of the Borrowing Base as provided in this Section,
provided that (a) the applicable Borrowing Base Certificate substantiates
such increase and (b) if the increase in the Borrowing Base is
attributable in whole or in part to an increase in the Appraised Value of a
Borrowing Base Property, the Borrower delivers to the Agent prior to the
effectiveness of such increase, and at the Borrower’s sole cost and expense,
the following: (i) with respect to any such Borrowing Base Property not
located in a Tie-In Jurisdiction, an endorsement to the title insurance policy
in favor of the Agent with respect to such Property increasing the coverage
amount thereof as related to such Property to not less than 100% of the
Appraised Value of such Property and (ii) with respect to any such
Borrowing Base Property located in a Tie-In Jurisdiction, an endorsement to the
title insurance policy in favor of the Agent with respect to such Property
increasing the coverage amount thereof as related to such Property to not less
than the Appraised Value of such Property, as well as endorsements to all other
existing title insurance policies issued to the 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 Appraised Values of all such Properties but in no
event in an amount in excess of the aggregate amount of the Commitments.

 

Section 4.5.  Frequency
of Appraisals.

 

The Appraised Value of a
Borrowing Base Property shall be determined or redetermined, as applicable,
under each of the following circumstances:

 

(a)                                  In connection with the acceptance of a
Property as a Borrowing Base Property, the Agent shall determine the Appraised
Value thereof as provided in Section 4.1.; or

 

59

 

(b)                                 Upon the Borrower’s written request for a
redetermination of the Appraised Value of a Property, the Agent shall
redetermine the Appraised Value of such Property (based on a new Appraisal of
such Property obtained by the Agent), all at the Borrower’s expense; or

 

(c)                                  At any time on or before June 7,
2012, but no more than once during the term of this Agreement, the Agent may
redetermine the Appraised Value of a Borrowing Base Property (based on a new
Appraisal obtained by the Agent), all at the Borrower’s expense; or

 

(d)                                 At any time while a Default or an Event
of Default exists, the Agent may redetermine the Appraised Value of a Borrowing
Base Property (based on a new Appraisal obtained by the Agent), all at the
Borrower’s expense.

 

Section 4.6.  Additional Appraisals Required under
Applicable Law.

 

If under FIRREA
or any other  Applicable Law, a Lender is
required to obtain an Appraisal of
any Borrowing Base Property in addition to any other Appraisal previously
obtained with respect to such Property pursuant to this Agreement, the Agent shall have
the right to cause such an Appraisal to be prepared at the Borrower’s cost and
expense.  The Borrowing Base shall be
redetermined as a result of delivery of any such new Appraisal if Applicable
Law requires such redetermination, in which case the Borrowing Base  shall be redetermined in the manner required
under such Applicable Law.

 

ARTICLE V. YIELD PROTECTION, ETC.

 

Section 5.1.  Additional Costs; Capital Adequacy.

 

(a)                                  Capital
Adequacy.  If any
Lender or any Participant in the Loan determines that compliance with any law
or regulation or with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by
such Lender or such Participant, or any corporation controlling such Lender or
such Participant, as a consequence of, or with reference to, such Lender’s or
such Participant’s or such corporation’s Commitments or its making or
maintaining Loans below the rate which such Lender or such Participant or such
corporation controlling such Lender or such Participant could have achieved but
for such compliance (taking into account the policies of such Lender or such
Participant or such corporation with regard to capital), then the Borrower
shall, from time to time, within thirty (30) calendar days after written demand
by such Lender or such Participant, pay to such Lender or such Participant
additional amounts sufficient to compensate such Lender or such Participant or
such corporation controlling such Lender or such Participant to the extent that
such Lender or such Participant determines such increase in capital is
allocable to such Lender’s or such Participant’s obligations hereunder.  Any Participant’s right to receive
compensation pursuant to this subsection (a) is limited by the terms of Section 13.5.(d) and
(e).

 

(b)                                 Additional
Costs.  In addition to, and not in
limitation of the immediately preceding clause (a), the Borrower shall
promptly pay to the Agent for the account of each

 

60

 

affected
Lender from time to time such amounts as such Lender may determine to be
necessary to compensate such Lender for any costs incurred by such Lender that
it determines are attributable to its making or maintaining of any LIBOR Loans
or its obligation to make any LIBOR Loans hereunder, any reduction in any
amount receivable by such Lender under this Agreement or any of the other Loan
Documents in respect of any of such Loans or such obligation or the maintenance
by such Lender of capital in respect of its Loans or its Commitments (such
increases in costs and reductions in amounts receivable being herein called “Additional
Costs”), to the extent resulting from any Regulatory Change that:  (i) changes the basis of taxation of any
amounts payable to such Lender under this Agreement or any of the other Loan
Documents in respect of any of such Loans or its Commitments (other than taxes,
fees, duties, levies, imposts, charges, deductions, withholdings or other
charges which are excluded from the definition of Taxes pursuant to the first
sentence of Section 3.12.(a)); or (ii) imposes or modifies any
reserve, special deposit or similar requirements (other than Regulation D of
the Board of Governors of the Federal Reserve System or other reserve
requirement to the extent utilized in the determination of LIBOR for such Loan)
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender, or any commitment of such Lender (including,
without limitation, the Commitments of such Lender hereunder); or (iii) has
or would have the effect of reducing the rate of return on capital of such
Lender to a level below that which such Lender could have achieved but for such
Regulatory Change (taking into consideration such Lender’s policies with
respect to capital adequacy).

 

(c)                                  Lender’s
Suspension of LIBOR Loans. 
Without limiting the effect of the provisions of the immediately
preceding subsections (a) and (b), if, by reason of any Regulatory
Change, any Lender either (i) incurs Additional Costs based on or measured
by the excess above a specified level of the amount of a category of deposits
or other liabilities of such Lender that includes deposits by reference to
which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets that it may hold, then, if
such Lender so elects by notice to the Borrower (with a copy to the Agent), the
obligation of such Lender to make or Continue, or to Convert any other Type of Loans
into, LIBOR Loans hereunder shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.6. shall
apply).

 

(d)                                 Additional
Costs in Respect of Letters of Credit.  Without limiting the obligations of the
Borrower under the preceding subsections of this Section (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any
Governmental Authority there shall be imposed, modified or deemed applicable
any tax, reserve, special deposit, capital adequacy or similar requirement
against or with respect to or measured by reference to Letters of Credit and
the result shall be to increase the cost to the Agent of issuing (or any Lender
of purchasing participations in) or maintaining its obligation hereunder to
issue (or purchase participations in) any Letter of Credit or reduce any amount
receivable by the Agent or any Lender hereunder in respect of any Letter of Credit,
then, upon demand by the Agent or such Lender, the Borrower shall pay promptly,
and in any event within 3 Business Days of demand, to the Agent for its account
or the account of such Lender, as applicable, from time to time as specified by
the Agent or a Lender, such

 

61

 

additional
amounts as shall be sufficient to compensate the Agent or such Lender for such
increased costs or reductions in amount.

 

(e)                                  Notification
and Determination of Additional Costs.  Each of the Agent and each Lender and each
Participant, as the case may be, agrees to notify the Borrower of any event
occurring after the Agreement Date entitling the Agent or such Lender or such
Participant to compensation under any of the preceding subsections of this Section as
promptly as practicable; provided, however, the failure of the Agent or any
Lender or any Participant to give such notice shall not release the Borrower
from any of its obligations hereunder. 
The Agent or such Lender or such Participant agrees to furnish to the
Borrower (and in the case of a Lender or a Participant, to the Agent) a
certificate setting forth in reasonable detail the basis and amount of each
request by the Agent or such Lender for compensation under this Section.  Absent manifest error, determinations by the
Agent or any Lender or any Participant of the effect of any Regulatory Change
shall be conclusive, provided that such determinations are made on a reasonable
basis and in good faith.

 

Section 5.2.  Suspension of LIBOR Loans.

 

Anything herein to the contrary
notwithstanding, if, on or prior to the determination of LIBOR for any Interest
Period:

 

(a)                                  the Agent
reasonably determines (which determination shall be conclusive) that by reason
of circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining LIBOR for such Interest Period, or

 

(b)                                 the Agent reasonably determines (which
determination shall be conclusive) that the relevant rates of interest referred
to in the definition of LIBOR upon the basis of which the rate of interest for
LIBOR Loans for an Interest Period is to be determined are not likely to
adequately cover the cost to any Lender of making or maintaining such LIBOR
Loans;

 

then
the Agent shall give the Borrower and each Lender prompt notice thereof and, so
long as such condition remains in effect, the Lenders shall be under no
obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans
or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of
each current Interest Period for each outstanding LIBOR Loan, either repay such
Loan or Convert such Loan into a Base Rate Loan.

 

Section 5.3.  Illegality.

 

Notwithstanding
any other provision of this Agreement, if any Lender shall reasonably determine
(which determination shall be conclusive and binding) that it has become
unlawful for such Lender to honor its obligation to make or maintain LIBOR
Loans hereunder, then such Lender shall promptly notify the Borrower thereof
(with a copy to the Agent) and such Lender’s obligation to make or Continue, or
to Convert Loans of any other Type into, LIBOR Loans shall be suspended until
such time as such Lender may again make and maintain LIBOR Loans (in which case
the provisions of Section 5.6. shall be applicable).

 

62

 

Section 5.4.  Compensation.

 

The
Borrower shall pay to the Agent for the account of each Lender, upon the
request of such Lender through the Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender) to compensate it for any
loss, cost or expense that such Lender reasonably determines is attributable
to:

 

(a)                                  any payment or
prepayment (whether mandatory or optional) of a LIBOR Loan or Conversion of a
LIBOR Loan, made by such Lender for any reason (including, without limitation,
acceleration) on a date other than the last day of the Interest Period for such
Loan; or

 

(b)                                 any failure by
the Borrower for any reason (including, without limitation, the failure of any
of the applicable conditions precedent specified in Article VI. to be
satisfied) to borrow a LIBOR Loan from such Lender on the requested date for
such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or Continue a
LIBOR Loan on the requested date of such Conversion or Continuation.

 

Not in limitation of the
foregoing, such compensation shall include, without limitation, an amount equal
to the then present value of (a) the amount of interest that would have
accrued on such LIBOR Loan for the remainder of the applicable Interest Period
at the rate applicable to such LIBOR Loan, less (b) the amount of interest
that would accrue on the same LIBOR Loan or for the same period if LIBOR were
set on the date on which such LIBOR Loan was repaid, prepaid or Converted or
the date on which the Borrower failed to borrow, Convert or Continue such LIBOR
Loan, calculating present value by using as a discount rate LIBOR quoted on
such date.  Upon the Borrower’s request,
any Lender requesting compensation under this Section shall provide the
Borrower with a statement setting forth in reasonable detail the basis for
requesting such compensation and the method for determining the amount
thereof.  Absent manifest error,
determinations by any Lender in any such statement shall be conclusive,
provided that such determinations are made on a reasonable basis and in good
faith.

 

Section 5.5.  Affected Lenders.

 

If
(a) a Lender requests compensation pursuant to Section 3.12. or 5.1.,
and the Requisite Lenders are not also doing the same, or (b) the
obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base
Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 5.1.(c) or
5.3. but the obligation of the Requisite Lenders shall not have been suspended
under such Sections, then, so long as there does not then exist any Default or
Event of Default, the Borrower may demand that such Lender (the “Affected
Lender”), and upon such demand the Affected Lender shall promptly, assign its Revolving Commitment and Term Loan to an Eligible
Assignee subject to and in accordance with the provisions of Section 13.5.(b) for
a purchase price equal to the aggregate principal balance of all Loans then
owing to the Affected Lender plus any accrued but unpaid interest thereon and
accrued but unpaid fees owing to the Affected Lender, or any other amount as
may be mutually agreed upon by such Affected Lender and Eligible Assignee.  Each of the Agent and the Affected Lender
shall reasonably cooperate in effectuating the replacement of such Affected
Lender under this Section, but at no time shall the Agent, such Affected Lender
nor any other Lender be obligated in any way whatsoever to initiate

 

63

 

any
such replacement or to assist in finding an Eligible Assignee.  The exercise by the Borrower of its rights
under this Section shall be at the Borrower’s sole cost and expense and at
no cost or expense to the Agent, the Affected Lender or any of the other
Lenders.  The terms of this Section shall
not in any way limit the Borrower’s obligation to pay to any Affected Lender
compensation owing to such Affected Lender pursuant to Section 3.12. or
5.1. with respect to periods up to the date of replacement.

 

Section 5.6.  Treatment of Affected Loans.

 

If
the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert
Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 5.1.(c) or
5.3., then such Lender’s LIBOR Loans shall be automatically Converted into Base
Rate Loans on the last day(s) of the then current Interest Period(s) for
LIBOR Loans (or, in the case of a Conversion required by Section 5.1.(c) or
5.3., on such earlier date as such Lender may specify to the Borrower with a
copy to the Agent) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 5.1. or 5.3. that gave
rise to such Conversion no longer exist:

 

(a)                                  to the extent
that such Lender’s LIBOR Loans have been so Converted, all payments and
prepayments of principal that would otherwise be applied to such Lender’s LIBOR
Loans shall be applied instead to its Base Rate Loans; and

 

(b)                                 all Loans that
would otherwise be made or Continued by such Lender as LIBOR Loans shall be made
or Continued instead as Base Rate Loans, and all Base Rate Loans of such Lender
that would otherwise be Converted into LIBOR Loans shall remain as Base Rate
Loans.

 

If
such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1. or 5.3. that gave rise to the
Conversion of such Lender’s LIBOR Loans pursuant to this Section no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when LIBOR Loans made by other Lenders are outstanding,
then such Lender’s Base Rate Loans shall be automatically Converted, on the
first day(s) of the next succeeding Interest Period(s) for such
outstanding LIBOR Loans, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding LIBOR Loans and by such Lender
are held pro rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Revolving Commitments.

 

Section 5.7.  Change of Lending Office.

 

Each
Lender agrees that it will use reasonable efforts (consistent with legal and
regulatory restrictions) to designate an alternate Lending Office with respect
to any of its Loans affected by the matters or circumstances described in Section 3.12.,
5.1. or 5.3. to reduce the liability of the Borrower or avoid the results
provided thereunder, so long as such designation is not disadvantageous to such
Lender as determined by such Lender in its sole discretion, except that such
Lender shall have no obligation to designate a Lending Office located in the
United States of America.

 

64

 

Section 5.8.  Assumptions Concerning Funding of LIBOR
Loans.

 

Calculation
of all amounts payable to a Lender under this Article V. shall be made as
though such Lender had actually funded LIBOR Loans through the purchase of
deposits in the relevant market bearing interest at the rate applicable to such
LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be used only for calculation of amounts payable
under this Article V.

 

ARTICLE VI. CONDITIONS PRECEDENT

 

Section 6.1.  Initial Conditions Precedent.

 

The
obligation of the Lenders to effect or permit the occurrence of the first
Credit Event hereunder, whether as the making of a Loan or the issuance of a
Letter of Credit, is subject to the following conditions precedent:

 

(a)                                  The Agent shall
have received each of the following, in form and substance reasonably
satisfactory to the Agent:

 

(i)                                     Counterparts of
this Agreement executed by each of the parties hereto;

 

(ii)                                  Revolving Notes and Term Notes executed by the Borrower,
payable to each Lender and complying with the applicable provisions of Section 2.12.,
and the Swingline Note executed by the Borrower;

 

(iii)                               The Guaranty
executed by the Parent and each other Guarantor existing as of the Effective
Date;

 

(iv)                              A Transfer Authorizer
Designation Form effective as of the Agreement Date;

 

(v)                                 An opinion of counsel to the
Loan Parties, addressed to the Agent and, the Lenders, addressing the matters
set forth in Exhibit N;

 

(vi)                              The articles of
incorporation, articles of organization, certificate of limited partnership,
declaration of trust or other comparable organizational instrument (if any) of
the Borrower and each other Loan Party certified as of a recent date by the
Secretary of State (or comparable official) of the state of formation of such
Loan Party;

 

(vii)                           A certificate
of good standing or certificate of similar meaning with respect to each Loan
Party issued as of a recent date by the Secretary of State (or comparable
official) of the state of formation of each such Loan Party and certificates of
qualification to transact business or other comparable certificates issued by
each Secretary of State (or comparable official and any state department of
taxation, as applicable) of each state in which such Loan Party is required to
be so qualified and

 

65

 

where
the failure to be so qualified could reasonably be expected to have a Material
Adverse Effect;

 

(viii)                        A certificate
of incumbency signed by the Secretary or Assistant Secretary (or other
individual performing similar functions) of each Loan Party with respect to
each of the officers of such Loan Party authorized to execute and deliver the
Loan Documents to which such Loan Party is a party, and in the case of the
Borrower, and the officers of the Borrower then authorized to deliver Notices
of Borrowing, Notices of Swingline Borrowings, Notices of Continuation and
Notices of Conversion and to request the issuance of Letters of Credit;

 

(ix)                                Copies certified by the
Secretary or Assistant Secretary (or other individual performing similar
functions) of each Loan Party of (x) the by-laws of such Loan Party, if a
corporation, the operating agreement of such Loan Party, if a limited liability
company, the partnership agreement of such Loan Party, if a limited or general
partnership, or other comparable document in the case of any other form of
legal entity and (y) all corporate, partnership, member or other necessary
action taken by such Loan Party to authorize the execution, delivery and
performance of the Loan Documents to which it is a party;

 

(x)                                   Certificates of insurance evidencing the
existence of all insurance required to be maintained by Loan Parties pursuant
to the Agreement, and the Agent shall be reasonably satisfied with the type and
extent of such coverage;

 

(xi)                                The Fees then
due and payable under Section 3.6., and any other Fees payable to the
Agent, the Titled Agents and the Lenders on or prior to the Effective Date;

 

(xii)                             A Borrowing Base Certificate calculated
as of the Effective Date;

 

(xiii)                          A Compliance Certificate calculated as of
September 30, 2009 (giving pro forma effect to the financing contemplated
by this Agreement and the use of the proceeds of the Loans to be funded on the
Effective Date);

 

(xiv)                         A certificate of the chief financial
officer of the Borrower, including reasonably detailed supporting calculations,
certifying that the aggregate principal amount of all Loans made on the
Effective Date, together with the aggregate amount of all Letter of Credit
Liabilities as of the Effective Date, does not exceed the lesser of:

 

(A)                              an amount equal to 60.0% of the Appraised
Value of all Properties constituting Borrowing Base Properties as of the
Effective Date;

 

(B)                                an amount equal to (x) the Borrowing
Base NOI of all Properties constituting Borrowing Base Properties as of the
Effective Date divided by (y)(A) the Applicable Mortgage Constant times (B) 1.5;
and

 

66

 

(C)                                an amount which, if deemed to be the
denominator of Debt Yield, would produce a Debt Yield equal to 14.0%.

 

(xv)                            All of the items required to be delivered
under Sections 4.1. and 4.2. with respect to each Property
identified on Schedule 4.1.;
and

 

(xvi)                         Such other documents, agreements and
instruments as the Agent on behalf of the Lenders may reasonably request; and

 

(b)                                 In the good
faith judgment of the Agent  and
the Lenders:

 

(i)                                     There shall not
have occurred or become known to the Agent  or
any of the Lenders any event, condition, situation or status since the date of
the information contained in the financial and business projections, budgets,
pro forma data and forecasts concerning the Parent, the Borrower and the other
Subsidiaries delivered to the Agent and the Lenders prior to the Agreement Date
that has had or could reasonably be expected to result in a Material Adverse
Effect;

 

(ii)                                  No litigation,
action, suit, investigation or other arbitral, administrative or judicial
proceeding shall be pending or threatened which could reasonably be expected to
(1) result in a Material Adverse Effect or (2) restrain or enjoin,
impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of the Parent, the Borrower or any other Loan
Party to fulfill its obligations under the Loan Documents to which it is a
party;

 

(iii)                               The Parent, the
Borrower and the other Subsidiaries shall have received all approvals, consents
and waivers, and shall have made or given all necessary filings and notices, as
shall be required to consummate the transactions contemplated hereby without
the occurrence of any default under, conflict with or violation of (1) any
Applicable Law or (2) any agreement, document or instrument to which the
Borrower or any other Loan Party is a party or by which any of them or their
respective properties is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which would not reasonably
be likely to (A) have a Material Adverse Effect, or (B) restrain or
enjoin, impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of the Parent, the Borrower or any other Loan
Party to fulfill its obligations under the Loan Documents to which it is a
party; and

 

(iv)                              There shall not
have occurred or exist any other material adverse change or material disruption
in the loan syndication, financial, banking or capital markets that, in the
reasonable judgment of the Joint Lead Arrangers, has impaired or could reasonably
be expected to impair, the syndication of the Loans, either (i) occurring
on or after August 6, 2009, or (ii) occurring prior to August 6,
2009 but becoming known to the Joint Lead Arrangers after August 6, 2009.

 

67

 

Section 6.2.  Conditions Precedent to All Loans and Letters
of Credit.

 

The
obligations of the Lenders to make any Loans, and of the Agent to issue Letters
of Credit, are all subject to the further condition precedent that: (a) no
Default or Event of Default shall exist as of the date of the making of such
Loan or date of issuance of such Letter of Credit or would exist immediately
after giving effect thereto; (b) the representations and warranties made
or deemed made by the Parent, the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct in
all material respects on and as of the date of the making of such Loan or date
of issuance of such Letter of Credit with the same force and effect as if made
on and as of such date except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date) and except for changes in factual
circumstances not prohibited under the Loan Documents and (c) in the case of the issuance of a Letter
of Credit or the making of a Swingline Loan, no Lender shall be a Defaulting
Lender or Potential Defaulting Lender; provided, however, in the case of the
issuance of a Letter of Credit, the Agent may, in its sole and absolute
discretion, waive this condition precedent on behalf of itself and all Lenders.  Each Credit Event shall constitute a certification
by the Borrower to the effect set forth in clauses (a) and (b) of the
preceding sentence (both as of the date of the giving of notice relating to
such Credit Event and, unless the Borrower otherwise notifies the Agent prior
to the date of such Credit Event, as of the date of the occurrence of such
Credit Event).  In addition, if such
Credit Event is the making of a Loan or the issuance of a Letter of Credit, the
Borrower shall be deemed to have represented to the Agent and the Lenders at
the time such Loan is made or Letter of Credit issued that all conditions to
the occurrence of such Credit Event contained in this Article VI. have
been satisfied.

 

ARTICLE VII. REPRESENTATIONS AND WARRANTIES

 

Section 7.1.  Representations and Warranties.

 

In
order to induce the Agent and each Lender to enter into this Agreement and to
make Loans and issue Letters of Credit, each of the Parent and the Borrower
represents and warrants to the Agent and each Lender as follows:

 

(a)                                  Organization;
Power; Qualification.  Each of the
Parent, the Borrower, the other Loan Parties, and each other Subsidiary is a
corporation, partnership, trust or other legal entity, duly organized or
formed, validly existing and in good standing under the jurisdiction of its
incorporation or formation, has the power and authority to own or lease its
respective properties and to carry on its respective business as now being and
hereafter proposed to be conducted and is duly qualified and is in good
standing as a foreign corporation, partnership, trust or other legal entity,
and authorized to do business, in each jurisdiction in which the character of
its properties or the nature of its business requires such qualification or
authorization and where the failure to be so qualified or authorized could
reasonably be expected to have, in each instance, a Material Adverse Effect.

 

(b)                                 Ownership
Structure.  As of the
Agreement Date, Part I of Schedule 7.1.(b) is a complete and
correct list of all Subsidiaries of the Parent setting forth for each such Subsidiary,

 

68

 

(i) the
jurisdiction of organization of such Subsidiary, (ii) each Person holding
any Equity Interests in such Subsidiary, (iii) the nature of the Equity
Interests held by each such Person, (iv) the percentage of ownership of
such Subsidiary represented by such Equity Interests and (v) whether such
Subsidiary is a Material Subsidiary and/or an Excluded Subsidiary. Except as
disclosed in such Schedule, as of the Agreement Date (i) each of the Borrower
and its Subsidiaries owns, free and clear of all Liens (other than Permitted
Liens), and has the unencumbered right to vote, all outstanding Equity
Interests in each Person shown to be held by it on such Schedule, (ii) all
of the issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (iii) there
are no outstanding subscriptions, options, warrants, commitments, preemptive
rights or agreements of any kind (including, without limitation, any
stockholders’ or voting trust agreements) for the issuance, sale, registration
or voting of, or outstanding securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, any such Person.  As of the
Agreement Date, Part II of Schedule 7.1.(b) correctly sets forth
all Unconsolidated Affiliates of the Parent, including the correct legal name
of such Person, the type of legal entity which each such Person is, and all
Equity Interests in such Person held directly or indirectly by the Parent.

 

(c)                                  Authorization
of Agreement, Etc.  The
Borrower has the right and power, and has taken all necessary action to
authorize it, to borrow and obtain other extensions of credit hereunder.  The Parent, the Borrower and each other Loan
Party has the right and power, and has taken all necessary action to authorize
it, to execute, deliver and perform each of the Loan Documents to which it is a
party in accordance with their respective terms and to consummate the
transactions contemplated hereby and thereby. 
The Loan Documents to which the Parent, the Borrower or any other Loan
Party is a party have been duly executed and delivered by the duly authorized
officers of such Person and each is a legal, valid and binding obligation of
such Person enforceable against such Person in accordance with its respective
terms except as the same may be limited by bankruptcy, insolvency, and other
similar laws affecting the rights of creditors generally and the availability
of equitable remedies for the enforcement of certain obligations (other than
the payment of principal) contained herein or therein and as may be limited by
equitable principles generally.

 

(d)                                 Compliance of
Loan Documents with Laws, Etc.  The execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents to which the Parent, the
Borrower or any other Loan Party is a party in accordance with their respective
terms and the borrowings and other extensions of credit hereunder do not and
will not, by the passage of time, the giving of notice, or both: (i) require
any Governmental Approval or violate any Applicable Law (including all
Environmental Laws) relating to the Parent, the Borrower or any other Loan
Party; (ii) conflict with, result in a breach of or constitute a default
under the organizational documents of the Parent, the Borrower or any other
Loan Party, or any indenture, agreement or other instrument to which the
Parent, the Borrower or any other Loan Party is a party or by which it or any
of its respective properties may be bound; or (iii) result in or require
the creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by the Parent, the Borrower or any other Loan Party
other than Liens created under the Loan Documents.

 

69

 

(e)           Compliance with Law; Governmental
Approvals.  Each of the Parent, the
Borrower, each other Loan Party and each other Subsidiary is in compliance with
each Governmental Approval applicable to it and in compliance with all other
Applicable Laws (including without limitation, Environmental Laws) relating to
the Parent, the Borrower, such other Loan Party or such other Subsidiary except
for noncompliances which, and Governmental Approvals the failure to possess
which, could not, individually or in the aggregate, reasonably be expected to
cause a Default or Event of Default or have a Material Adverse Effect.

 

(f)            Title to Properties; Liens.  As of the Agreement Date, Part I of
Schedule 7.1.(f) is a complete and correct listing of all of the real
property owned or leased by the Parent, the Borrower, each other Loan Party and
each other Subsidiary.  Each such Person
has good, marketable and legal title to, or a valid leasehold interest in, its
respective assets.  As of the Agreement
Date, there are no Liens against any assets of the Parent, the Borrower, any
other Loan Party or any other Subsidiary except for Permitted Liens.

 

(g)           Existing Indebtedness.  Schedule 7.1.(g) is, as of the
Agreement Date, a complete and correct listing of all Indebtedness of the Parent,
the Borrower and the other Subsidiaries, including without limitation,
Guarantees of the Parent, the Borrower and the other Subsidiaries, and
indicating whether such Indebtedness is Secured Indebtedness (and if so whether
such Indebtedness is Nonrecourse Indebtedness) or Unsecured Indebtedness.

 

(h)           Material
Contracts.  Schedule 7.1.(h) is,
as of the Agreement Date, a true, correct and complete listing of all Material
Contracts.  Each of the Parent, the
Borrower, the other Loan Parties and the other Subsidiaries that is a party to
any Material Contract has performed and is in compliance with all of the terms
of such Material Contract, the noncompliance with which would give any other
party thereto the right to terminate such Material Contract, and no default or
event of default, or event or condition which with the giving of notice, the
lapse of time, or both, would constitute such a default or event of default,
exists with respect to any such Material Contract.

 

(i)            Litigation.  Except as set forth on Schedule 7.1.(i),
there are no actions, suits, investigations or proceedings pending (nor, to the
knowledge of the Parent, are there any actions, suits or proceedings
threatened) against or in any other way relating adversely to or affecting the
Parent, the Borrower, any other Loan Party, any other Subsidiary or any of
their respective properties in any court or before any arbitrator of any kind
or before or by any other Governmental Authority which could reasonably be
expected to have a Material Adverse Effect. 
There are no strikes, slow downs, work stoppages or walkouts or
other labor disputes in progress or threatened relating to the Parent, the
Borrower, any other Loan Party or any other Subsidiary which could reasonably
be expected to have a Material Adverse Effect.

 

(j)            Taxes.  All federal, state and other tax returns of
the Parent, the Borrower, any other Loan Party or any other Subsidiary required
by Applicable Law to be filed have been duly filed, and all federal, state and
other taxes, assessments and other governmental charges or levies upon the
Parent, the Borrower, each other Loan Party, each other Subsidiary and their
respective properties, income, profits and assets which are due and payable
have been paid, except any such nonpayment which is at the time permitted under
Section 8.6.  As of the Agreement
Date, none of the United States income tax returns of the Parent, the Borrower,
any other Loan Party or any

 

70

 

other
Subsidiary is under audit.  All charges,
accruals and reserves on the books of the Parent, the Borrower, each other Loan
Party and each other Subsidiary in respect of any taxes or other governmental
charges are in accordance with GAAP.

 

(k)           Financial Statements.  The Parent has furnished to each Lender
copies of (i) the audited consolidated balance sheet of the Parent and its
Subsidiaries for the fiscal year ending December 31, 2008, and the related
audited consolidated statements of operations, cash flows and shareholders’
equity for the fiscal year ending on such dates, with the audit report thereon
of Deloitte & Touche LLP and (ii) the unaudited consolidated
balance sheet of the Parent and its Subsidiaries as of June 30, 2009, and
the related unaudited consolidated statements of operations, cash flows and
shareholders’ equity of the Parent and its Subsidiaries for the period of three
fiscal quarters ending on such date. 
Such financial statements (including in each case related schedules and
notes) present fairly, in all material respects and in accordance with GAAP
consistently applied throughout the periods involved, the consolidated
financial position of the Parent and its Subsidiaries as at their respective
dates and the results of operations and the cash flow for such periods (subject,
as to interim statements, to changes resulting from normal year-end audit
adjustments).  Neither the Parent nor any
of its Subsidiaries has on the Agreement Date any material contingent
liabilities, liabilities, liabilities for taxes, unusual or long-term
commitments or unrealized or forward anticipated losses from any unfavorable
commitments that would be required to be set forth in its financial statements
or in the notes thereto, except as referred to or reflected or provided for in
said financial statements.

 

(l)            No Material Adverse Change;
Solvency.  Since December 31,
2008, there has been no material adverse change in the business, assets,
liabilities, financial condition, results of operations or business of the
Parent and its Subsidiaries taken as a whole. 
Each of the Loan Parties is Solvent. 
No Loan Party is entering into any of the transactions contemplated by the
Loan Documents with the actual intent to hinder, delay, or defraud any
creditor.  Each Loan Party has received
reasonably equivalent value in exchange for the obligations incurred by it
under the Loan Documents to which it is a party.

 

(m)          ERISA.  Each member of the ERISA Group is in
compliance with its obligations under the minimum funding standards of ERISA
and the Internal Revenue Code with respect to each Plan and is in compliance
with the presently applicable provisions of ERISA and the Internal Revenue Code
with respect to each Plan, except in each case for noncompliance which could
not reasonably be expected to have a Material Adverse Effect.  As of the Agreement Date, no member of the
ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412
of the Internal Revenue Code in respect of any Plan, (ii) failed to make
any contribution or payment to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security under ERISA or the Internal Revenue
Code or (iii) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.

 

(n)           Not Plan Assets; No Prohibited
Transaction.  None of the assets of
the Parent, Borrower, any other Loan Party or any other Subsidiary constitute “plan
assets” within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated

 

71

 

thereunder.  Assuming that no Lender funds any amount
payable by it hereunder with “plan assets,” as that term is defined in 29
C.F.R. 2510.3-101, the execution, delivery and performance of this Agreement
and the other Loan Documents, and the borrowing and repayment of amounts
hereunder, do not and will not constitute “prohibited transactions” under ERISA
or the Internal Revenue Code.

 

(o)           Absence of Defaults.  None of the Parent, the Borrower, any other
Loan Party or any other Subsidiary is in default under its articles of
incorporation, bylaws, partnership agreement or other similar organizational
documents, and no event has occurred, which has not been remedied, cured or
waived, which, in any such case:  (i) constitutes
a Default or an Event of Default; or (ii) constitutes, or which with the
passage of time, the giving of notice, or both, would constitute, a default or
event of default by the Parent, the Borrower, any other Loan Party or any other
Subsidiary under any agreement (other than this Agreement) or judgment, decree
or order to which the Parent, the Borrower, any other Loan Party or any other
Subsidiary is a party or by which the Parent, the Borrower, any other Loan
Party or any other Subsidiary or any of their respective properties may be
bound where such default or event of default could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

(p)           Environmental Laws.  Each of the Parent, the Borrower, the other
Loan Parties and the other Subsidiaries has obtained all Governmental Approvals
which are required under Environmental Laws and is in compliance with all terms
and conditions of such Governmental Approvals which the failure to obtain or to
comply with could reasonably be expected to have a Material Adverse
Effect.  Except for any of the following
matters that could not be reasonably expected to have a Material Adverse
Effect, (i) neither the Parent nor the Borrower has received notice of,
and neither is otherwise aware of, any past, present, or future events,
conditions, circumstances, activities, practices, incidents, actions, or plans
which, with respect to the Parent, the Borrower, any other Loan Party or any
other Subsidiary, may interfere with or prevent compliance or continued
compliance with Environmental Laws, or may give rise to any common-law or legal
liability, or otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study, or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling or the emission, discharge, release or threatened
release into the environment, of any Hazardous Material; and (ii) there is
no civil, criminal, or administrative action, suit, demand, claim, hearing,
notice, or demand letter, notice of violation, investigation, or proceeding
pending or, to the Parent’s or the Borrower’s knowledge after due inquiry,
threatened, against the Parent, the Borrower, any other Loan Party or any other
Subsidiary relating in any way to Environmental Laws. To the knowledge of the Parent and the
Borrower, no Hazardous Materials generated at or transported from any of the
Borrowing Base Properties is or has been transported to, or disposed of at, any
location that is listed or proposed for listing on the National Priority List,
40 C.F.R. Section 300 Appendix B, or any analogous state or local priority
list, or any other location that is or has been the subject of a clean-up,
removal or remedial action pursuant to any Environmental Law, except to the
extent that such transportation or disposal could not reasonably be expected to
have a Material Adverse Effect.

 

(q)           Investment Company; Etc.  None of the Parent, the Borrower, any other
Loan Party or any other Subsidiary is (i) an “investment company” or a
company “controlled” by an

 

72

 

“investment
company” within the meaning of the Investment Company Act of 1940, as amended
or (ii) subject to any other Applicable Law which purports to regulate or
restrict its ability to borrow money or to consummate the transactions
contemplated by this Agreement or to perform its obligations under any Loan
Document to which it is a party.

 

(r)            Margin Stock.  None of the Parent, the Borrower, any other
Loan Party or any other Subsidiary is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying “margin stock”
within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System.

 

(s)           Affiliate Transactions.  Except as permitted by Section 10.11.,
none of the Parent, the Borrower, any other Loan Party or any other Subsidiary
is a party to any transaction with an Affiliate.

 

(t)            Intellectual Property.  Each of the Parent, the Borrower, each other
Loan Party and each other Subsidiary owns or has the right to use, under valid
license agreements or otherwise, all material patents, licenses, franchises,
trademarks, trademark rights, service marks, service mark rights, trade names,
trade name rights, trade secrets and copyrights (collectively, “Intellectual
Property”) necessary to the conduct of its businesses as now conducted and as
contemplated by the Loan Documents, without known conflict with any patent,
license, franchise, trademark, trademark right, service mark, service mark
right, trade secret, trade name, copyright or other proprietary right of any
other Person.  The Parent, the Borrower,
each other Loan Party and each other Subsidiary have taken all such steps as
they deem reasonably necessary to protect their respective rights under and
with respect to such Intellectual Property. 
No material claim has been asserted by any Person with respect to the
use of any such Intellectual Property by the Parent, the Borrower, any other
Loan Party or any other Subsidiary, or challenging or questioning the validity
or effectiveness of any such Intellectual Property.  The use of such Intellectual Property by the
Parent, the Borrower, the other Loan Parties and the other Subsidiaries, does
not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liabilities on the
part of the Parent, the Borrower, any other Loan Party or any other Subsidiary
that could reasonably be expected to have a Material Adverse Effect.

 

(u)           Business.  As of the Agreement Date, the Parent, the
Borrower and the other Subsidiaries are substantially engaged in the business
of the ownership, operation, acquisition and development of self-storage facilities
in the United States of America, together with other business activities
incidental thereto.

 

(v)           Broker’s Fees.  No broker’s or finder’s fee, commission or
similar compensation will be payable with respect to the transactions
contemplated hereby.  No other similar
fees or commissions will be payable by any Loan Party for any other services
rendered to the Parent, the Borrower or any of the other Subsidiaries ancillary
to the transactions contemplated hereby.

 

(w)          Accuracy and Completeness of
Information.  No written information,
report or other papers or data (excluding financial projections and other
forward looking statements)

 

73

 

furnished
to the Agent or any Lender by, on behalf of, or at the direction of, the
Parent, the Borrower, any other Loan Party or any other Subsidiary in
connection with, pursuant to or relating in any way to this Agreement,
contained any untrue statement of a fact material to the creditworthiness of
the Parent, the Borrower, any other Loan Party or any other Subsidiary or
omitted to state a material fact necessary in order to make such statements
contained therein, in light of the circumstances under which they were made,
not misleading.  All financial statements
(including in each case all related schedules and notes) furnished to the Agent
or any Lender by, on behalf of, or at the direction of, the Parent, the
Borrower, any other Loan Party or any other Subsidiary in connection with,
pursuant to or relating in any way to this Agreement, present fairly in all
material respects, the financial position of the Persons involved as at the
date thereof and the results of operations for such periods and in accordance
with GAAP consistently applied throughout the periods involved (subject, as to
interim statements, to changes resulting from normal year-end audit
adjustments).  All financial projections
and other forward looking statements prepared by or on behalf of the Parent,
the Borrower, any other Loan Party or any other Subsidiary that have been or
may hereafter be made available to the Agent or any Lender were or will be
prepared in good faith based on reasonable assumptions.  As of the Effective Date, no fact is known to
the Parent or the Borrower which has had, or may in the future have (so far as
the Parent or the Borrower can reasonably foresee), a Material Adverse Effect
which has not been set forth in the financial statements referred to in Section 7.1.(k) or
in such information, reports or other papers or data or otherwise disclosed in
writing to the Agent and the Lenders.

 

(x)            REIT Status.  The Parent qualifies as a REIT and is in
compliance with all requirements and conditions imposed under the Internal
Revenue Code to allow the Parent to maintain its status as a REIT.

 

(y)           Borrowing Base Properties. 
Each of the Properties included in calculations of the Borrowing Base
satisfies all of the requirements contained in the definition of “Eligible
Property” (except to the extent such requirements were waived by the Requisite
Lenders at the time such Property was approved as a Borrowing Base Property)
and each Lien in the Collateral relating to each Borrowing Base Property
purported to be created under any Security Document is a valid and perfected
Lien on such Collateral having the priority required by the applicable Loan
Documents.

 

(z)            Border Zone Properties.  None of the Borrowing Base Properties has
been designated as a “border zone property” under the provisions of California
Health and Safety Code, Sections 25220 et  seq. and the
regulations adopted in accordance therewith, and, to the best of the Borrower’s
knowledge, there has been no occurrence or condition on any real property
adjoining or in the vicinity of any Borrowing Base Property that could cause
such Property or any part thereof to be designated as such a “border zone
property”.

 

(aa)         OFAC.  None of the Borrower, any of the other Loan
Parties, any of the other Subsidiaries, or any other Affiliate of the Borrower:
(i) is a person named on the list of Specially Designated Nationals or
Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml, or as otherwise
published from time to time; (ii) is (A) an agency of the government
of a country, (B) an organization controlled by a country, or (C) a
person resident in a country that is subject to a sanctions program

 

74

 

identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating
income from investments in or transactions with any such country, agency,
organization or person; and none of the proceeds of the Loans or Letters of
Credit will be used to finance any operations, investments or activities in, or
make any payments to, any such country, agency, organization, or person.

 

(bb)         Embargoed Person.  To the best of the knowledge of
the Parent and the Borrower: (i) none of the funds or other assets of the
Parent, the Borrower, any other Loan Party or any other Subsidiary constitute
property of, or are beneficially owned, directly or indirectly, by any person,
entity or government subject to trade restrictions under the laws of the United
States of America, including but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated
thereunder with the result that investment in the Parent, the Borrower, any
other Loan Party or any other Subsidiary, as applicable (whether directly or
indirectly), is prohibited by Applicable Law or the Loans and other financial
accommodations made by the Lender under the Loan Documents is in violation of
Applicable Law (any such any person, entity or government being an “Embargoed Person”); (ii) no
Embargoed Person has any interest of any nature whatsoever in the Parent, the
Borrower, any other Loan Party or any other Subsidiary, as applicable, with the
result that the investment in the Parent, the Borrower, any other Loan Party or
any other Subsidiary, as applicable (whether directly or indirectly), is
prohibited by Applicable Law or the Loan is in violation of Applicable Law; and
(c) none of the funds of the Parent, the Borrower, any other Loan Party or
any other Subsidiary, as applicable, have been derived from any unlawful
activity with the result that investment in the Parent, the Borrower, any other
Loan Party or any other Subsidiary, as applicable (whether directly or
indirectly), is prohibited by Applicable Law or the Loans and other financial
accommodations to be extended under the Loan Documents would be in violation of
Applicable Law.

 

Section 7.2.  Survival of Representations and Warranties,
Etc.

 

All
statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Parent, the Borrower, any other
Loan Party or any other Subsidiary to the Agent or any Lender pursuant to or in
connection with this Agreement or any of the other Loan Documents (including,
but not limited to, any such statement made in or in connection with any
amendment hereto or thereto or any statement contained in any certificate,
financial statement or other instrument delivered by or on behalf of the
Parent, the Borrower or any other Loan Party prior to the Agreement Date and
delivered to the Agent or any Lender in connection with the underwriting or
closing of the transactions contemplated hereby) shall constitute
representations and warranties made by the Parent and the Borrower to the Agent
and the Lenders under this Agreement. 
All representations and warranties made under this Agreement and the
other Loan Documents shall be deemed to be made at and as of the Agreement
Date, the Effective Date and the date of the occurrence of any Credit Event,
except to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall
have been true and correct in all material respects on and as of such earlier
date) and except for changes in factual circumstances not

 

75

 

prohibited
under the Loan Documents.  All such
representations and warranties shall survive the effectiveness of this
Agreement, the execution and delivery of the Loan Documents and the making of
the Loans and the issuance of the Letters of Credit.

 

ARTICLE VIII. AFFIRMATIVE COVENANTS

 

For
so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.6., all of the Lenders) shall otherwise
consent in the manner provided for in Section 13.6., each of the Parent
and the Borrower shall comply with the following covenants:

 

Section 8.1.  Preservation of Existence and Similar
Matters.

 

Except
as otherwise permitted under Section 10.7., the Parent and the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary to,
preserve and maintain its respective existence, rights, franchises, licenses
and privileges in the jurisdiction of its incorporation or formation and
qualify and remain qualified and authorized to do business in each jurisdiction
in which the character of its properties or the nature of its business requires
such qualification and authorization and where the failure to be so authorized
and qualified could reasonably be expected to have a Material Adverse Effect.

 

Section 8.2.  Compliance with Applicable Law and Material
Contracts.

 

The
Parent and the Borrower shall, and shall cause each other Loan Party and each
other Subsidiary to, comply with (a) all Applicable Laws, including the
obtaining of all Governmental Approvals, the failure with which to comply could
reasonably be expected to have a Material Adverse Effect, and (b) all
terms and conditions of all Material
Contracts to which it is a party, the noncompliance with which would give any other party thereto the right
to terminate such Material Contract.

 

Section 8.3.  Maintenance of Property.

 

In
addition to the requirements of any of the other Loan Documents, the Parent and
the Borrower shall, and shall cause each other Loan Party and each other
Subsidiary to, (a) protect and preserve all of its respective material
properties necessary in the conduct of its business, including, but not limited
to, all Intellectual Property, and maintain in good repair, working order and
condition all tangible properties, ordinary wear and tear excepted, and (b) make
or cause to be made all needed and appropriate repairs, renewals, replacements
and additions to such properties, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.

 

Section 8.4.  Conduct of Business.

 

The
Parent and the Borrower shall, and shall cause each other Loan Party and each
other Subsidiary to, carry on, their respective businesses as described in Section 7.1.(u).

 

76

 

Section 8.5.  Insurance.

 

In
addition to the requirements of any of the other Loan Documents, the Parent and
the Borrower shall, and shall cause each other Loan Party and each other
Subsidiary to, maintain insurance on a replacement cost basis with financially
sound and reputable insurance companies (in any event having a Credit Rating of
at least “A” from S&P or Fitch except with respect to the insurance company
currently providing automobile, earthquake and flood insurance (the “Exempt
Insurer”), in which case the Exempt Insurer shall maintain a Credit Rating from
S&P or Fitch equal to or better than the Credit Rating assigned to it by
S&P or Fitch as of the Closing Date and any insurance company (or
companies) replacing the Exempt Insurer with respect to automobile, earthquake
and/or flood insurance shall have a Credit Rating of at least “A” from S&P
or Fitch) against such risks and in such amounts as is customarily maintained
by Persons engaged in similar businesses or as may be required by Applicable
Law. The Borrower shall from time to time deliver to the Agent upon its request
a detailed list, together with copies of all policies of the insurance then in
effect, stating the names of the insurance companies, the amounts and rates of
the insurance, the dates of the expiration thereof and the properties and risks
covered thereby and insurance certificates, in form acceptable to the Agent,
providing that the insurance coverage required under this Section (including
without limitation, both property and liability insurance) is in full force and
effect and stating that coverage shall not be cancelable or materially changed
without ten (10) days prior written notice to the Agent of any
cancellation for nonpayment or premiums, and not less than 30 days’ prior
written notice to the Agent of any other cancellation or any modification
(including a reduction in coverage), together with appropriate evidence that
the Agent for the benefit of the Secured Parties, is named as lender’s loss
payee and additional insured, as appropriate, on all insurance policies that
the Borrower, any Loan Party or any other Subsidiary actually maintains with
respect to any Borrowing Base Property and improvements on such Borrowing Base
Property.  Such insurance shall include
all of the following:

 

(a)           Insurance against loss to such
Properties on an “all risk” policy form, covering insurance risks no less broad
than those covered under a Special Multi Peril (SMP) policy form, which
contains a Commercial ISO “Causes of Loss-Special Form,” in the then current
form, and such other risks as the Agent may reasonably require, in amounts
equal to the full replacement cost of the Borrowing Base Properties including
fixtures and equipment, interest in leasehold improvements, and the cost of debris
removal, with, if required by the Agent, an agreed amount endorsement, and with
deductibles of not more than $50,000, except that any deductibles for any
insurance covering damage by windstorm may be in amounts up to 5% of the value
of the Borrowing Base Property insured;

 

(b)           Business income insurance in amounts
sufficient to pay during any period in which a Borrowing Base Property may be
damaged or destroyed, for a period of at least 12 months; (i) at least
100% of all rents and (ii) all amounts (including, but not limited to, all
taxes, assessments, utility charges and insurance premiums) required to be paid
by tenants of the Borrowing Base Property;

 

(c)           During the making of any alterations
or improvements to a Borrowing Base Property, carry or cause to be carried
builder’s completed value risk insurance against “all risks of physical loss”
for the full replacement cost of the construction Properties;

 

77

 

(d)           Insurance against loss or damage by
flood or mud slide in compliance with the Flood Disaster Protection Act of
1973, as amended from time to time, if the Properties are now, or at any time
while the Obligations or any portion thereof remains unpaid shall be, situated
in any area which an appropriate Governmental Authority designates as a special
flood hazard area, in amounts equal to the full replacement value of all above
grade structures on the Properties, or as such lesser amounts as may be
available under Federal flood insurance programs;

 

(e)           Commercial general public liability
insurance, with the location of the Properties designated thereon, against
death, bodily injury and property damage arising on, about or in connection
with the Properties, with Borrower or the applicable Subsidiary listed as the
named insured, with such limits as Borrower or the applicable Subsidiary may
reasonably require (but in no event less than $5,000,000);

 

(f)            Terrorism coverage on each Borrowing
Base Property so long as the Terrorism Risk Insurance Act of 2002, as amended (“TRIA”),
is in effect and, if TRIA shall be repealed or shall expire, the Borrower shall
maintain at all times terrorism coverage on the Borrowing Base Properties in an
amount not less than 5% of the Appraised Value of the Borrowing Base Properties;
and

 

(g)           Such other insurance, including,
without limitation, earthquake and environmental coverages, relating to the
Properties and the uses and operation thereof as the Agent may, from time to
time, reasonably require.

 

Section 8.6.  Payment of Taxes and Claims.

 

The
Parent and the Borrower shall, and shall cause each other Loan Party and each
other Subsidiary to, pay and discharge when due (a) all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits or upon any properties belonging to it, and (b) all lawful claims
of materialmen, mechanics, carriers, warehousemen and landlords for labor,
materials, supplies and rentals which, if unpaid, might become a Lien on any
properties of such Person; provided, however, that this Section shall not
require the payment or discharge of any such tax, assessment, charge, levy or
claim which is being contested in good faith by appropriate proceedings which
operate to suspend the collection thereof and for which adequate reserves have
been established on the books of the Parent, the Borrower, such Subsidiary or
such other Loan Party, as applicable, in accordance with GAAP.

 

Section 8.7.  Visits and Inspections.

 

The
Parent and the Borrower shall, and shall cause each other Loan Party and each
other Subsidiary to, permit representatives or agents of the Agent and, if such
visit or inspection is arranged by the Agent, of any Lender, from time to time
after reasonable prior notice if no Event of Default shall be in existence, as often
as may be reasonably requested, but only during normal business hours and at
the expense of the Borrower, to:  (a) visit
and inspect all properties of the Parent, the Borrower, such other Loan Party
or such other Subsidiary to the extent any such right to visit or inspect is
within the control of such Person; (b) inspect and make extracts from
their respective books and records, including but not limited to management
letters prepared by

 

78

 

independent
accountants; and (c) discuss with its officers, and its independent
accountants, its business, properties, condition (financial or otherwise),
results of operations and performance; provided that, so long as no Event of
Default exists, the Borrower shall only be required to pay the expenses of the
Agent (and not the expenses of any other Lender), with respect to one such
visit and inspection per calendar year. 
If requested by the Agent, the Parent and the Borrower shall execute an
authorization letter addressed to its accountants authorizing the Agent or, if
the same has been arranged by the Agent, any Lender, to discuss the financial
affairs of the Parent, the Borrower, any other Loan Party and any other
Subsidiary with its accountants.

 

Section 8.8.  Use of Proceeds; Letters of Credit.

 

The
Borrower shall use the proceeds of the Loans to repay the Indebtedness existing
under the Existing Credit Agreement, and shall use the proceeds of the Loans
and the Letters of Credit for general corporate purposes only.  No part of the proceeds of any Loan or Letter
of Credit will be used (a) for the purpose of buying or carrying “margin
stock” within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or (b) to fund any operations
in, finance any investments or activities in, or make any payments to, a
Sanctioned Person or Sanctioned Entity.

 

Section 8.9.  Environmental Matters.

 

The
Parent and the Borrower shall, and shall cause all of the other Loan Parties
and the other Subsidiaries to, comply with all Environmental Laws the failure
with which to comply could reasonably be expected to have a Material Adverse
Effect.  If the Parent, the Borrower, any
other Loan Party or any other Subsidiary shall (a) receive notice that any
violation of any Environmental Law may have been committed or is about to be
committed by such Person, (b) receive notice that any administrative or
judicial complaint or order has been filed or is about to be filed against the
Parent, the Borrower, any other Loan Party or any other Subsidiary alleging
violations of any Environmental Law or requiring the Parent, the Borrower, any
other Loan Party or any other Subsidiary to take any action in connection with
the release of Hazardous Materials or (c) receive any notice from a
Governmental Authority or private party alleging that the Parent, the Borrower,
any other Loan Party or any other Subsidiary may be liable or responsible for
costs associated with a response to or cleanup of a release of Hazardous
Materials or any damages caused thereby, and the matters referred to in such
notices, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect, the Borrower shall provide the Agent with a copy of
such notice promptly, and in any event within 10 Business Days, after the
receipt thereof by the Parent, the Borrower, any other Loan Party or any other
Subsidiary.  The Parent and the Borrower
shall, and shall cause the other Loan Parties and the other Subsidiaries to,
take promptly all actions necessary to prevent the imposition of any Liens on
any of their respective properties arising out of or related to any
Environmental Laws.

 

Section 8.10.  Books and Records.

 

The
Parent and the Borrower shall, and shall cause each of the other Loan Parties
and the other Subsidiaries to, maintain books and records pertaining to its
respective business operations

 

79

 

in
such detail, form and scope as is consistent with good business practice and in
accordance with GAAP.

 

Section 8.11.  Further Assurances.

 

The
Parent and the Borrower shall, at their sole cost and expense and upon request
of the Agent, execute and deliver or cause to be executed and delivered, to the
Agent such further instruments, documents and certificates, and do and cause to
be done such further acts that may be reasonably necessary or advisable in the
reasonable opinion of the Agent to carry out more effectively the provisions
and purposes of this Agreement and the other Loan Documents.

 

Section 8.12.  New
Subsidiaries; Guarantors; Release of Guarantors and Pledgors.

 

(a)           Requirement to Become Guarantor.  Within 10 Business Days of any Person (other
than an Excluded Subsidiary) becoming a Material Subsidiary after the Effective
Date, the Borrower shall cause to be delivered to the Agent each of the
following items, each in form and substance satisfactory to the Agent:  (i) an Accession Agreement executed by
such Material Subsidiary and (ii) the items that would have been delivered
under Section 6.1.(a)(v) through (a)(ix) and
(a)(xvi) if such Material Subsidiary had been a Guarantor on the Effective Date;
provided, however, promptly (and in any event within 10 Business Days) upon any
Excluded Subsidiary ceasing to be subject to the restriction which prevented it
from becoming a Guarantor on the Effective Date or delivering an Accession
Agreement pursuant to this Section, as the case may be, such Subsidiary shall
comply with the provisions of this Section. 
The Borrower shall send to each Lender copies of each of the foregoing
items once the Agent has received all such items with respect to a Material
Subsidiary.

 

(b)           Other Guarantors.  The Borrower may, at its option, cause any
Subsidiary that is not already a Guarantor to become a Guarantor by executing
and delivering to the Agent the items required to be delivered under the
immediately preceding subsection (a).

 

(c)           Release of a Guarantor.  The Borrower may request in writing that the
Agent release, and upon receipt of such request the Agent shall release, a
Guarantor (other than the Parent) from the Guaranty so long as:  (i) such Guarantor (x) qualifies,
or will qualify simultaneously with its release from the Guaranty, as an
Excluded Subsidiary, or (y) in the case of a Material Subsidiary, has
ceased to be, or simultaneously with its release from the Guaranty will cease
to be, a Material Subsidiary or a Subsidiary; (ii) such Guarantor is not
otherwise required to be a party to the Guaranty under the immediately
preceding subsection (a); (iii) such Guarantor is not a Property
Owner and does not own,
directly or indirectly, any Equity Interests of a Property Owner, other than
Equity Interests in a Property Owner whose Borrowing Base Property is being
released under Section 4.3. (in which case the release under this Section shall
be effected simultaneously with the applicable Release under Section 4.3.);
(iv) no Default or Event of Default shall then be in existence or
would occur as a result of such release, including without limitation, a
Default or Event of Default resulting from a violation of any of the covenants
contained in Section 10.1.; (v) the representations and warranties
made or deemed made by the Parent, the Borrower and each other Loan Party in
the Loan Documents to which any of them is a party, shall be true and correct
in all material respects on and as of the date of such release with the same
force and effect as if made on and as of such date except to the extent

 

80

 

that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents; and (vi) the
Agent shall have received such written request at least 10 Business Days (or such shorter period as may be acceptable
to the Agent in its sole discretion) prior to the requested date
of release.  Delivery by the Borrower to
the Agent of any such request shall constitute a representation by the Borrower
that the matters set forth in the preceding sentence (both as of the date of
the giving of such request and as of the date of the effectiveness of such
request) are true and correct with respect to such request.

 

(d)           Release of Pledge.  In connection with a Release of a Borrowing
Base Property under Section 4.3. and simultaneously with the effectiveness
of such Release, the Agent shall release from the Lien of the Pledge Agreement
the Equity Interests of (i) the Property Owner of such Borrowing Base
Property and (ii) the Equity Interests of any other Subsidiary indirectly
owning any Equity Interests of such Property Owner so long as such Subsidiary
does not own, directly or indirectly, any Equity Interests in any other
Property Owner.

 

Section 8.13.  REIT Status.

 

The
Parent shall at all times maintain its status as a REIT.

 

Section 8.14.  Exchange Listing.

 

The Parent shall maintain at least one class
of common shares of the Parent having trading privileges on the New York Stock
Exchange or the American Stock Exchange or which is the subject of price
quotations in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System.

 

ARTICLE IX. INFORMATION

 

For
so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.6., all of the Lenders) shall otherwise
consent in the manner set forth in Section 13.6., the Borrower shall cause
to be furnished to each Lender (or to the Agent if so provided below) at its
Lending Office:

 

Section 9.1.  Quarterly Financial Statements.

 

As soon as available and in any event within
10 days after the same is required to be filed with the Securities and Exchange
Commission (but in no event later than 45 days after the end of each of the
first, second and third fiscal quarters of the Parent), the unaudited
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such period and the related unaudited consolidated statements of income,
shareholders’ equity and cash flows of the Parent and its Subsidiaries for such
period, setting forth in each case in comparative form the figures as of the
end of and for the corresponding periods of the previous fiscal year, all of
which shall be certified by the chief financial officer or chief accounting
officer of the Parent, in his or her opinion, to present fairly, in accordance
with GAAP and in all material respects, the consolidated

 

81

 

financial position of the Parent and its Subsidiaries as at the date
thereof and the results of operations for such period (subject to normal
year-end audit adjustments).

 

Section 9.2.  Year-End Statements.

 

As
soon as available and in any event within 10 days after the same is required to
be filed with the Securities and Exchange Commission (but in no event later
than 90 days after the end of each fiscal year of the Parent) (including
without limitation, the fiscal year ending December 31, 2009), the audited
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal year and the related audited consolidated statements of income,
shareholders’ equity and cash flows of the Parent and its Subsidiaries for such
fiscal year, setting forth in comparative form the figures as at the end of and
for the previous fiscal year, all of which shall be (a) certified by the
chief financial officer, treasurer, or chief accounting officer of the Parent,
in his or her opinion, to present fairly, in accordance with GAAP and in all
material respects, the consolidated financial position of the Parent and its
Subsidiaries as at the date thereof and the results of operations for such
period and (b) accompanied by the audit report thereon of independent
certified public accountants of recognized national standing, whose report
shall be unqualified and in scope and substance satisfactory to the Requisite
Lenders and who shall have authorized the Parent to deliver such financial
statements and report to the Agent and the Lenders.

 

Section 9.3.  Compliance Certificate; Borrowing Base
Certificate.

 

(a)           At the time financial statements are
furnished pursuant to Sections 9.1. and 9.2., and within 5 Business Days
of the Agent’s request with respect to any other fiscal period, a certificate
substantially in the form of Exhibit O (a “Compliance Certificate”)
executed by the chief financial officer, treasurer, or chief accounting officer
of the Parent:  (a) setting forth in
reasonable detail as at the end of such quarterly accounting period, fiscal
year, or other fiscal period, as the case may be, the calculations required to
establish whether or not the Parent and the Borrower were in compliance with
the covenants contained in Sections 10.1., 10.2. and 10.4. and (b) stating
that, to the best of his or her knowledge, information and belief after due
inquiry, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default and its nature, when it occurred,
whether it is continuing and the steps being taken by the Borrower with respect
to such event, condition or failure.  Together
with each Compliance Certificate delivered in connection with quarterly or
annual financial statements, the Borrower and the Parent shall deliver a
report, in form and detail reasonably satisfactory to the Agent, setting forth
a Statement of Funds From Operations for the fiscal period then ending.

 

(b)           At the time financial
statements are furnished pursuant to Sections 9.1. and 9.2., in connection
with the addition of a Property to the Borrowing Base pursuant to Section 4.2.(cc), in connection with the
release of a Property from the Borrowing Base pursuant to Section 4.3.(a)(vi) in connection
with the redetermination of the Appraised Value of a Property under Section 4.5.(b) or (c) or
under Section 4.6., and at any other time
within 5 Business Days of the Agent’s reasonable request, a certificate
substantially in the form of Exhibit P (a “Borrowing Base Certificate”)
executed by the chief financial officer, treasurer, or chief accounting officer
of the Parent: (a) setting forth in reasonable detail the calculations
required to establish the Borrowing Base and (b) attaching a schedule
identifying the Borrowing Base Properties and setting forth the Appraised Value
of each Borrowing Base Property.

 

82

 

Section 9.4.  Other Information.

 

(a)           Management Reports.  Promptly upon receipt thereof, copies of all
management reports, if any, submitted to the Parent or its Board of Directors
by its independent public accountants;

 

(b)           Securities Filings.  Within 5 Business Days of the filing
thereof, copies of all registration statements (excluding the exhibits thereto
(unless requested by the Agent) and any registration statements on Form S-8
or its equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
and all other periodic reports which the Parent, the Borrower, any other Loan
Party or any other Subsidiary shall file with the Securities and Exchange
Commission (or any Governmental Authority substituted therefor) or any national
securities exchange (any such registration statement, report and other periodic
report referred to as a “Security Filing”);

 

(c)           Shareholder Information.  Promptly upon the mailing thereof to the
shareholders of the Parent generally, copies of all financial statements, reports
and proxy statements so mailed and promptly upon the issuance thereof copies of
all press releases issued by the Parent, the Borrower, any other Loan Party or
any other Subsidiary;

 

(d)           ERISA.  If and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any “reportable event” (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of
the minimum funding standard under Section 412 of the Internal Revenue
Code, a copy of such application; (v) gives notice of intent to terminate
any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement, and of which has resulted or
could reasonably be expected to result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the chief executive
officer or chief financial officer of the Parent setting forth details as to
such occurrence and the action, if any, which the Parent or applicable member
of the ERISA Group is required or proposes to take;

 

(e)           Litigation.  To the extent the Parent, the Borrower or any
other Subsidiary is aware of the same, prompt notice of the commencement of any
proceeding or investigation by or before any Governmental Authority and any
action or proceeding in any court or other tribunal or before any arbitrator
against or in any other way relating adversely to, or adversely affecting, the
Parent, the Borrower or any other Subsidiary or any of their respective
properties, assets or

 

83

 

businesses
which could reasonably be expected to have a Material Adverse Effect, and
prompt notice of the receipt of notice that any United States income tax
returns of the Parent, the Borrower or any other Subsidiary are being audited;

 

(f)            Modification of Organizational
Documents.  A copy of any amendment
to the articles of incorporation, bylaws, partnership agreement, operating
agreement or other similar organizational documents of the Parent, the Borrower
or any other Loan Party within 15 Business Days after the effectiveness
thereof;

 

(g)           Change of Management or Financial
Condition.  Prompt notice of any
change in the senior management of the Parent, the Borrower or any other Loan
Party and any change in the business, assets, liabilities, financial condition
or results of operations of the Parent, the Borrower, any other Loan Party or
any other Subsidiary which has had or could reasonably be expected to have a
Material Adverse Effect;

 

(h)           Default.  Notice of the occurrence of any of the
following promptly upon a Responsible Officer of the Parent or the Borrower
obtaining knowledge thereof:  (i) any
Default or Event of Default or (ii) any event which constitutes or which
with the passage of time, the giving of notice, or otherwise, would constitute
a default or event of default by the Parent, the Borrower, any other Loan Party
or any other Subsidiary under any Material Contract to which any such Person is
a party or by which any such Person or any of its respective properties may be
bound;

 

(i)            Judgments.  Prompt notice of any order, judgment or
decree in excess of $5,000,000 having been entered against the Parent, the
Borrower, any other Loan Party or any other Subsidiary or any of their
respective properties;

 

(j)            Notice of Violations of Law.  Prompt notice if the Parent, the Borrower,
any other Loan Party or any other Subsidiary shall receive any notification
from any Governmental Authority alleging a violation of any Applicable Law or
any inquiry which, in either case, could reasonably be expected to have a
Material Adverse Effect;

 

(k)           Budget.  As soon as available, and in any event no
later than 45 days after the end of each fiscal year of the Parent, a detailed
consolidated budget for the following fiscal year (including a projected
consolidated balance sheet of the Parent 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 of the Parent 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;

 

84

 

(l)            Material Asset Sales.  Prompt notice of the sale, transfer or other
disposition of any material assets of the Parent, the Borrower, any other Loan Party
or any other Subsidiary to any Person other than the Parent, the Borrower, any
other Loan Party or any other Subsidiary;

 

(m)          Material
Contracts and Specified Derivatives Contracts.  Promptly upon entering into any Material
Contract or Specified Derivatives Contract after the Agreement Date, a copy to
the Agent of such Material Contract or Specified Derivatives Contract;

 

(n)           Cash Flow Projections.  Concurrently with the delivery of the items
required pursuant to the immediately preceding subsection (k), and, if
requested by the Agent, concurrently with the delivery of the financial
statements required pursuant to Section 9.1., consolidated statements of projected
cash flow of the Parent, the Borrower and the other Subsidiaries for the
immediately following period of 4 consecutive fiscal quarters of the Parent;

 

(o)           Derivatives Termination Values.  Concurrently with the delivery of the
financial statements required pursuant to Section 9.1., and promptly upon the request of
the Agent (provided that the Agent may make such request no more frequently
than once each calendar month), the Derivatives Termination Value in respect of
any Specified Derivatives Contract from time to time outstanding;

 

(p)           [Intentionally Omitted]; and

 

(q)           Other
Information.  From time to time and
promptly upon each request, such data, certificates, reports, statements,
opinions of counsel, documents or further information regarding the business,
assets, liabilities, financial condition, results of operations or business
prospects of the Parent, the Borrower, any other Loan Party or any other
Subsidiary as the Agent or any Lender may reasonably request.

 

Section 9.5.  Delivery of Documents.

 

Documents required to be
delivered by the Borrower pursuant to Article IX. (to the extent any such documents are not otherwise included
in a Security Filing) may be delivered electronically, including, without
limitation, by posting such documents to the Borrower’s internet website
(www.u-store-it.com); provided, that (a) if such documents are posted to
the Borrower’s website, then such documents will only be deemed to have been
delivered on the date that the Borrower provides notice to the Agent of the
posting of such documents and only if such documents are publicly available
without charge on such website and (b) if such documents are delivered by
other electronic means, such documents shall be deemed to have been delivered
on the date on which such documents are received by the Agent for posting on
the Borrower’s behalf on an internet or intranet website, if any, to which each
Lender and the Agent has access (whether a commercial, third-party website
(such as Intralinks or SyndTrak) or a website sponsored by the Agent); provided
further that the Borrower shall deliver paper copies of such documents to the
Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the Agent
or such Lender.  Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the Compliance Certificate required by Section 9.3. to the Agent.  The Agent shall have no obligation to request
the delivery or to maintain copies of the documents

 

85

 

referred to above, and in
any event shall have no responsibility to monitor compliance by the Borrower
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.

 

Section 9.6.  Public/Private Information.

 

The Parent and the
Borrower shall cooperate with the Agent in connection with the publication of
certain materials and/or information provided by or on behalf of the Parent or
the Borrower.  Documents required to be
delivered pursuant to the Loan Documents shall be delivered by or on behalf of
the Parent or the Borrower to the Agent and the Lenders (collectively, “Information
Materials”) pursuant to this Article and shall designate Information
Materials (a) that are either available to the public or not material with
respect to the Parent, the Borrower and the other Subsidiaries or any of their
respective securities for purposes of United States federal and state
securities laws, as “Public Information” and (b) that are not Public
Information as “Private Information”.

 

Section 9.7.  USA Patriot Act Notice; Compliance.

 

The USA Patriot Act of
2001 (Public Law 107-56) and federal regulations issued with respect thereto
require all financial institutions to obtain, verify and record certain
information that identifies individuals or business entities which open an “account”
with such financial institution. 
Consequently, a Lender (for itself and/or as the Agent for all Lenders
hereunder) may from time-to-time request, and the Parent and the Borrower
shall, and shall cause the other Loan Parties, to provide to such Lender, such
Loan Party’s name, address, tax identification number and/or such other
identification information as shall be necessary for such Lender to comply with
federal law.  An “account” for this
purpose may include, without limitation, a deposit account, cash management
service, a transaction or asset account, a credit account, a loan or other
extension of credit, and/or other financial services product.

 

ARTICLE X. NEGATIVE COVENANTS

 

For
so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.6., all of the Lenders) shall otherwise
consent in the manner set forth in Section 13.6., each of the Parent and
the Borrower, as applicable, shall comply with the following covenants:

 

Section 10.1.  Financial Covenants.

 

The Parent shall not permit:

 

(a)           Maximum Consolidated Leverage
Ratio.  The ratio of (i) Consolidated
Total Indebtedness to (ii) Consolidated Adjusted Asset Value, to exceed (x) 0.675
to 1.00 at any time from the Effective Date through and including December 31,
2010, and (y) 0.65 to 1.00 at any time thereafter.

 

86

 

(b)           Minimum Consolidated Fixed Charge
Coverage Ratio.  The ratio of (i) Adjusted
EBITDA for the period of four consecutive fiscal quarters of the Parent most
recently ending to (ii) Consolidated Fixed Charges for such period, to be
less than 1.45 to 1.00 at any time.

 

(c)           Minimum Tangible Net Worth.  Tangible Net Worth at any time to be less
than (i) $827,029,000 plus (ii) 75% of the Net Proceeds of all
Equity Issuances by the Parent and its Subsidiaries after September 30, 2009
(other than Equity Issuances to the Parent, the Borrower or any other
Subsidiary).

 

(d)           Floating Rate Indebtedness.  The ratio of (i) Floating Rate
Indebtedness of the Parent and its Subsidiaries determined on a consolidated
basis to (ii) Consolidated Total Indebtedness, to exceed 0.35 to 1.00 at
any time.

 

(e)           Minimum Appraised Value.  The aggregate Appraised Values of all
Properties constituting Borrowing Base Properties to be less than $400,000,000
at any time.

 

Section 10.2.  Restricted Payments.

 

The
Parent shall not, and shall not permit the Borrower or any other Subsidiary to,
declare or make any Restricted Payment; provided, however, that the Parent, the
Borrower and the other Subsidiaries may declare and make the following
Restricted Payments so long as no Default or Event of Default would result therefrom:

 

(a)           the Borrower may declare or make cash
distributions to the Parent and other holders of partnership interests in the
Borrower during the period of four consecutive fiscal quarters most recently
ending to the extent necessary for the Parent to distribute, and the Parent may
so distribute, cash dividends to its shareholders in an aggregate amount not to
exceed the greater of (i) the amount required to be distributed for the
Parent to remain in compliance with Section 8.13. or (ii) 95.0% of
Funds From Operations;

 

(b)           the Borrower may make cash distributions of capital gains
to the Parent and other holders of partnership interests in the Borrower to the
extent necessary for the Parent to make, and the Parent may make, cash
distributions to its shareholders of capital gains resulting from gains from
certain asset sales to avoid payment of taxes on such asset sales imposed under
Sections 857(b)(3) and 4981 of the Internal Revenue Code;

 

(c)           the Parent, the Borrower and any
other Subsidiary may acquire the Equity Interests of a Subsidiary that is not a
Wholly Owned Subsidiary;

 

(d)           a Subsidiary that is not a Wholly
Owned Subsidiary may make cash distributions to holders of Equity Interests
issued by such Subsidiary; and

 

(e)           Subsidiaries may pay Restricted
Payments to the Parent, the Borrower or any other Subsidiary.

 

Notwithstanding
the foregoing, but subject to the following sentence, if a Default or Event of
Default exists, the Borrower may only declare and make cash distributions to
the Parent and 

 

87

 

other
holders of partnership interests in the Borrower with respect to any fiscal
year to the extent necessary for the Parent to distribute, and the Parent may
so distribute, an aggregate amount not to exceed the minimum amount necessary
for the Parent to remain in compliance with Section 8.13.  If a Default or Event of Default specified in
Section 11.1.(a), Section 11.1.(b), Section 11.1.(f) or Section 11.1.(g) shall
exist, or if as a result of the occurrence of any other Event of Default any of
the Obligations have been accelerated pursuant to Section 11.2.(a), the
Parent shall not, and shall not permit the Borrower or any other Subsidiary to,
make any Restricted Payments to any Person other than to the Parent, the
Borrower or any other Subsidiary.

 

Section 10.3.  Indebtedness.

 

The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary to, incur, assume, or otherwise become obligated in
respect of any Indebtedness after the Agreement Date if immediately prior to
the assumption, incurring or becoming obligated in respect thereof, or
immediately thereafter and after giving effect thereto, a Default or Event of
Default is or would be in existence, including without limitation, a Default or
Event of Default resulting from a violation of any of the covenants contained
in Section 10.1.

 

Section 10.4.  Certain Permitted Investments.

 

The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary to, make any Investment in or otherwise own the following
items which would cause the aggregate value of such holdings of the Parent, the
Borrower, the other Loan Parties and the other Subsidiaries to exceed the
applicable limits set forth below:

 

(a)           Investments in Unconsolidated
Affiliates and other Persons that are not Subsidiaries, such that the aggregate
value of such Investments (determined in a manner consistent with the
definition of Consolidated Adjusted Asset Value or, if not contemplated under
the definition of Consolidated Adjusted Asset Value, as determined in
accordance with GAAP) to exceed 15.0% of Consolidated Adjusted Asset Value at
any time;

 

(b)           raw land, such that the current book
value of all raw land as a percentage of Consolidated Adjusted Asset Value
exceeds (i) 1.0% at any time on or before March 31, 2011 or (ii) 5.0%
at any time thereafter;

 

(c)           real property under construction such
that the aggregate Construction Budget for all such real property as a
percentage of Consolidated Adjusted Asset Value exceeds (i) 5.0% at any
time on or before March 31, 2011 or (ii) 7.5% at any time thereafter;

 

(d)           Properties leased under ground leases
by the Parent or any of its Subsidiaries, as lessee, such that the value of
such Properties (determined in accordance with the applicable provisions of the
definition of Consolidated Adjusted Asset Value) exceeds 7.5% of Consolidated
Adjusted Asset Value at any time; and

 

88

 

(e)           Mortgage Receivables and Investments in Persons (other than
Investments in Subsidiaries and Unconsolidated Affiliates), such that the
aggregate value of such Mortgage Receivables and Investments exceeds 5.0% of Consolidated
Adjusted Asset Value at any time.

 

In
addition to the foregoing limitations, (i) the aggregate value of all of
the items subject to the limitations in the preceding clauses (a) through
(e) shall not exceed 25.0% of Consolidated Adjusted Asset Value at any
time and (ii) the aggregate value of all of the items subject to the
limitations in the preceding clauses (b) through (e) shall not exceed
15.0% of Consolidated Adjusted Asset Value at any time.

 

Section 10.5.  Investments Generally.

 

The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary to, directly or indirectly, acquire, make or purchase any
Investment, or permit any Investment of such Person to be outstanding on and
after the Agreement Date, other than the following:

 

(a)           Investments in Subsidiaries in
existence on the Agreement Date and disclosed on Part I of
Schedule 7.1.(b);

 

(b)           Investments to acquire Equity
Interests 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 and (ii) if such Subsidiary is (or
after giving effect to such Investment would become) a Material Subsidiary, and
is not an Excluded Subsidiary, the terms and conditions set forth in Section 8.12.
are satisfied;

 

(c)           Investments permitted under Section 10.4.;

 

(d)           Investments in Cash Equivalents;

 

(e)           intercompany Indebtedness among the
Borrower and its Wholly Owned Subsidiaries provided that such Indebtedness is
permitted by the terms of Section 10.3.;

 

(f)            loans and advances to officers and
employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business consistent with past practices; and

 

(g)           any other Investment so long as
immediately prior to making such Investment, and immediately thereafter and
after giving effect thereto, no Default or Event of Default is or would be in
existence.

 

Section 10.6.  Liens; Negative Pledges; Other Matters.

 

(a)           The Parent and the Borrower shall
not, and shall not permit any other Loan Party or any other Subsidiary to,
create, assume, or incur any Lien (other than Permitted Liens) upon any of
their respective properties, assets, income or profits of any character whether
now owned or hereafter acquired if immediately prior to the creation,
assumption or incurring of such Lien,

 

89

 

or
immediately thereafter, a Default or Event of Default is or would be in
existence, including without limitation, a Default or Event of Default
resulting from a violation of any of the covenants contained in Section 10.1.

 

(b)           The Parent and the Borrower shall
not, and shall not permit any other Loan Party or any other Subsidiary to,
enter into, assume or otherwise be bound by any Negative Pledge except for a
Negative Pledge contained in (i) an agreement (x) evidencing
Indebtedness which the Parent, the Borrower, such Loan Party or such Subsidiary
may create, incur, assume, or permit or suffer to exist under Section 10.3.,
(y) which Indebtedness is secured by a Lien permitted to exist under the
Loan Documents, and (z) which prohibits the creation of any other Lien on (A) only
the property securing such Indebtedness as of the date such agreement was
entered into and (B) if such property is owned by an Excluded Subsidiary,
the Equity Interests issued by such Excluded Subsidiary or any Excluded
Subsidiary that directly or indirectly owns Equity Interests in such Excluded
Subsidiary; (ii) in an agreement relating to the sale of a Subsidiary or
assets pending such sale, provided that in any such case the Negative Pledge
applies only to the Subsidiary or the assets that are the subject of such sale;
or (iii) Negative Pledges contained in the agreements described on
Schedule 10.6. to the extent such Negative Pledges apply to Equity
Interests issued by the Borrower or other Subsidiary of the Parent identified
on such Schedule.

 

(c)           The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary (other than an Excluded Subsidiary) to:  (i) pay dividends or make any other
distribution on any of such Subsidiary’s capital stock or other equity
interests owned by the Borrower or any other Subsidiary; (ii) pay any
Indebtedness owed to the Borrower or any other Subsidiary; (iii) make
loans or advances to the Borrower or any other Subsidiary; or (iv) transfer
any of its property or assets to the Borrower or any other Subsidiary.

 

Section 10.7.  Merger, Consolidation, Sales of Assets and
Other Arrangements.

 

The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary to:  (i) enter
into any transaction of merger or consolidation; (ii) liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution); or (iii) convey,
sell, lease, sublease, transfer or otherwise dispose of, in one transaction or
a series of transactions, all or substantially all of its business or assets,
whether now owned or hereafter acquired; provided, however, that:

 

(a)           any of the actions described in the
immediately preceding clauses (i) through (iii) may be taken
with respect to any Subsidiary or any other Loan Party (other than the Parent
and the Borrower) so long as immediately prior to the taking of such action,
and immediately thereafter and after giving effect thereto, no Default or Event
of Default is or would be in existence; notwithstanding the foregoing, any Loan
Party (other than the Parent and the Borrower) may enter into a transaction of
merger pursuant to which such Loan Party is not the survivor of such merger only
if (i) the Borrower shall have given the Agent and the Lenders at least 10
Business Days’ prior written notice of such merger, such notice to include a certification to the effect that immediately
after and after giving effect to such action, no Default or Event of Default is
or would be in existence; (ii) if the survivor entity is a Material
Subsidiary (and not an

 

90

 

Excluded
Subsidiary) within 10 Business Days of consummation of such merger, the
survivor entity (if not already a Guarantor) shall have executed and delivered
an assumption agreement in form and substance satisfactory to the Agent
pursuant to which such survivor entity shall expressly assume all of such Loan
Party’s Obligations under the Loan Documents to which it is a party; (iii) within
30 days of consummation of such merger, the survivor entity delivers to the
Agent the following:  (A) items of
the type referred to in Sections Section 6.1.(a)(v) through (a)(ix) and
(a)(xvi) with respect to the survivor entity as in effect after consummation of
such merger (if not previously delivered to the Agent and still in effect), (B) copies
of all documents entered into by such Loan Party or the survivor entity to
effectuate the consummation of such merger, including, but not limited to,
articles of merger and the plan of merger, (C) copies, certified by the
Secretary or Assistant Secretary (or other individual performing similar
functions) of such Loan Party or the survivor entity, of all corporate and shareholder
action authorizing such merger and (D) copies of any filings with the
Securities and Exchange Commission in connection with such merger; and (iv) such
Loan Party and the survivor entity each takes such other action and delivers
such other documents, instruments, opinions and agreements as the Agent may
reasonably request; provided, however, if such merger involves a Property Owner
or a Subsidiary owning, directly or indirectly, any Equity Interests of a
Property Owner, the Borrowing Base Property of any such Property Owner shall be
excluded from calculations of the Borrowing Base unless and until the Agent has
confirmed to its satisfaction that it has a valid, perfected and first-priority
Lien in the applicable Borrowing Base Property and any related Collateral;

 

(b)           the Parent, the Borrower, the other
Loan Parties and the other Subsidiaries may lease and sublease their respective
assets, as lessor or sublessor (as the case may be), in the ordinary course of
their business;

 

(c)           a Person may merge with and into the
Parent or the Borrower so long as (i) the Parent or the Borrower is the
survivor of such merger, (ii) immediately prior to such merger, and
immediately thereafter and after giving effect thereto, no Default or Event of
Default is or would be in existence, (iii) the Borrower shall have given
the Agent and the Lenders at least 10 Business Days’ prior written notice of
such merger, such notice to include a
certification as to the matters described in the immediately preceding
clause (ii) (except that such prior notice shall not be
required in the case of the merger of a Subsidiary with and into the Borrower
or a Subsidiary (other than the Borrower) with and into the Parent) and (iv) the
Agent has confirmed to its satisfaction that immediately after giving effect to
such merger it shall have a valid, perfected and first-priority Lien in the
Borrowing Base Properties and all other Collateral; and

 

(d)           the Parent, the Borrower, the other
Loan Parties and the other Subsidiaries may sell, transfer or dispose of assets
among themselves.

 

Section 10.8.  Fiscal Year.

 

The
Parent shall not change its fiscal year from that in effect as of the Agreement
Date.

 

91

 

Section 10.9.  Modifications to Material Contracts.

 

The Parent and the Borrower shall not, and shall not
permit any other Loan Party or any other Subsidiary to, enter into any amendment or modification
to any Material Contract which could reasonably be expected to have a Material
Adverse Effect.

 

Section 10.10.  Modifications of Organizational Documents.

 

The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary to, amend, supplement, restate or otherwise modify its
articles or certificate of incorporation, by-laws, operating agreement,
declaration of trust, partnership agreement or other applicable organizational
document if such amendment, supplement, restatement or other modification could
reasonably be expected to have a Material Adverse Effect.

 

Section 10.11.  Transactions with Affiliates.

 

The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary to, permit to exist or enter into, any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate (other than a Loan Party), except (a) transactions
in the ordinary course of and pursuant to the reasonable requirements of the
business of the Parent, the Borrower or any of its other Subsidiaries and upon
fair and reasonable terms which are no less favorable to the Parent, the
Borrower or such Subsidiary than would be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate and (b) transactions
among Loan Parties.

 

Section 10.12.  ERISA Exemptions.

 

The Parent and the
Borrower shall not, and shall not permit any other Loan Party or any other
Subsidiary to, permit any of its respective assets to become or be deemed to be
“plan assets” within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated thereunder.

 

Section 10.13.  Derivatives Contracts.

 

The
Parent and the Borrower shall not, and shall not permit any other Loan Party or
other Subsidiary to, enter into or become obligated in respect of, Derivatives
Contracts other than (a) Specified Derivatives Contracts and (b) other
Derivatives Contracts entered into by the Parent, the Borrower, any other Loan
Party or other Subsidiary in the ordinary course of business and which
establish an effective hedge in respect of liabilities, commitments or assets
held or reasonably anticipated by such Person.

 

92

 

ARTICLE XI. DEFAULT

 

Section 11.1.  Events of Default.

 

Each
of the following shall constitute an Event of Default, whatever the reason for
such event and whether it shall be voluntary or involuntary or be effected by
operation of Applicable Law or pursuant to any judgment or order of any
Governmental Authority:

 

(a)                                  Default in
Payment of Principal.  The
Borrower shall fail to pay when due (whether upon demand, at maturity, by
reason of acceleration or otherwise) the principal of any of the Loans, or any
Reimbursement Obligation.

 

(b)                                 Default in
Payment of Interest and Other Obligations.  The Borrower shall fail to pay when due any
interest on any of the Loans or any of the other payment Obligations owing by
the Borrower under this Agreement or any other Loan Document, or any other Loan
Party shall fail to pay when due any payment Obligation owing by such other
Loan Party under any Loan Document to which it is a party, and such failure
shall continue for a period of 5 Business Days.

 

(c)                                  Default in
Performance.  (i) The
Parent or the Borrower shall fail to perform or observe any term, covenant,
condition or agreement contained in Section 8.13., Section 9.4.(h) or
in Article X. or (ii) the Parent, the Borrower or any other Loan
Party shall fail to perform or observe any term, covenant, condition or
agreement contained in this Agreement or any other Loan Document (other than a
Security Document) to which it is a party and not otherwise mentioned in this Section and
in the case of this clause (ii) only such failure shall continue for
a period of 30 days after the date upon which the Parent or the Borrower
has received written notice of such failure from the Agent.

 

(d)                                 Misrepresentations.  Any written statement, representation or
warranty made or deemed made by or on behalf of the Parent, the Borrower or any
other Loan Party under this Agreement or under any other Loan Document (other
than a Security Document), or any amendment hereto or thereto, or in any other
writing or statement at any time furnished or made or deemed made by or on
behalf of the Parent, the Borrower or any other Loan Party to the Agent or any
Lender, shall at any time prove to have been incorrect or misleading, in light
of the circumstances in which made or deemed made, in any material respect when
furnished or made or deemed made.

 

(e)                                  Indebtedness
Cross-Default; Derivatives Contracts.

 

(i)                                     The Parent, the
Borrower, any other Loan Party or any other Subsidiary shall fail to pay when
due and payable, within any applicable grace or cure period (not to exceed 30
days), the principal of, or interest on, any Indebtedness (other than the Loans
and Reimbursement Obligations) having an aggregate outstanding principal amount
(or, in the case of any Derivatives Contract, having, without regard to the effect
of any close-out netting provision, a Derivatives Termination Value) of
$10,000,000 or more (or $25,000,000 or more in the case of Nonrecourse
Indebtedness) (all such Indebtedness being “Material Indebtedness”); or

 

93

 

(ii)                                  (x) the
maturity of any Material Indebtedness shall have been accelerated in accordance
with the provisions of any indenture, contract or instrument evidencing,
providing for the creation of or otherwise concerning such Material Indebtedness
or (y) any Material Indebtedness shall have been required to be prepaid or
repurchased prior to the stated maturity thereof;

 

(iii)                               any other event
shall have occurred and be continuing which permits any holder or holders of
Material Indebtedness, any trustee or agent acting on behalf of such holder or
holders or any other Person, to accelerate the maturity of any such Material
Indebtedness or require any such Material Indebtedness to be prepaid or
repurchased prior to its stated maturity; or

 

(iv)                              there occurs an
“Event of Default” under and as defined in any Specified Derivatives Contract
as to which the Parent, the Borrower or any other Loan Party is a “Defaulting
Party” (as defined therein), or there occurs an “Early Termination Date” (as
defined therein) in respect of any Specified Derivatives Contract as a result
of a “Termination Event” (as defined therein) as to which the Parent, the
Borrower or any other Loan Party is an “Affected Party” (as defined therein).

 

(f)                                    Voluntary
Bankruptcy Proceeding.  The
Parent, the Borrower, any other Loan Party, or any Excluded Subsidiary that is
a Significant Subsidiary shall:  (i) commence
a voluntary case under the Bankruptcy Code of 1978, as amended, or other
federal bankruptcy laws (as now or hereafter in effect); (ii) file a
petition seeking to take advantage of any other Applicable Laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; (iii) consent to, or fail to contest
in a timely and appropriate manner, any petition filed against it in an
involuntary case under such bankruptcy laws or other Applicable Laws or consent
to any proceeding or action described in the immediately following subsection; (iv) apply
for or consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign; (v) admit in writing its inability to pay its debts as they
become due; (vi) make a general assignment for the benefit of creditors; (vii) make
a conveyance fraudulent as to creditors under any Applicable Law; or (viii) take
any corporate or partnership action for the purpose of effecting any of the
foregoing.

 

(g)                                 Involuntary
Bankruptcy Proceeding.  A
case or other proceeding shall be commenced against the Parent, the Borrower,
any other Loan Party, or any Excluded Subsidiary that is a Significant
Subsidiary in any court of competent jurisdiction seeking:  (i) relief under the Bankruptcy Code of
1978, as amended, or other federal bankruptcy laws (as now or hereafter in
effect) or under any other Applicable Laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts; or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Person, or of all or any substantial
part of the assets, domestic or foreign, of such Person, and such case or
proceeding shall continue undismissed or unstayed for a period of
60 consecutive calendar days, or an order granting the remedy or other
relief requested in such case or proceeding against such

 

94

 

Person
(including, but not limited to, an order for relief under such Bankruptcy Code
or such other federal bankruptcy laws) shall be entered.

 

(h)                                 Litigation;
Enforceability.  The Parent,
the Borrower or any other Loan Party shall disavow, revoke or terminate (or
attempt to terminate) any Loan Document to which it is a party or shall
otherwise challenge or contest in any action, suit or proceeding in any court
or before any Governmental Authority the validity or enforceability of this
Agreement, or any other Loan Document or this Agreement or any other Loan
Document shall cease to be in full force and effect (except as a result of the
express terms thereof).

 

(i)                                     Judgment.  A judgment or order for the payment of money
or for an injunction shall be entered against the Parent, the Borrower, any
other Loan Party or any other Subsidiary, by any court or other tribunal and (i) such
judgment or order shall continue for a period of 30 days without being paid,
stayed or dismissed through appellate proceedings prosecuted by the Borrower in
good faith and (ii) either (A) the amount of such judgment or order
for which insurance has not been acknowledged in writing by the applicable
insurance carrier (or the amount as to which the insurer has denied liability)
exceeds, individually or together with all other such outstanding judgments or
orders entered against (X) the Parent, the Borrower and the other Loan
Parties, $10,000,000 or (Y)  other Subsidiaries, $50,000,000 or (B) in
the case of an injunction or other non-monetary judgment, such injunction or
judgment could reasonably be expected to have a Material Adverse Effect.

 

(j)                                     Attachment.  A warrant, writ of attachment, execution or
similar process shall be issued against any property of the Parent, the
Borrower, any other Loan Party or any other Subsidiary which exceeds,
individually or together with all other such warrants, writs, executions and
processes, (i) for the Parent, the Borrower and the other Loan Parties
$10,000,000 or (ii) for all other Subsidiaries $50,000,000, and such warrant,
writ, execution or process shall not be discharged, vacated, stayed or bonded
for a period of 30 days; provided, however, that if a bond has been issued in
favor of the claimant or other Person obtaining such warrant, writ, execution
or process, the issuer of such bond shall execute a waiver or subordination
agreement in form and substance satisfactory to the Agent pursuant to which the
issuer of such bond subordinates its right of reimbursement, contribution or
subrogation to the Obligations and waives or subordinates any Lien it may have
on the assets of any Loan Party.

 

(k)                                  ERISA. Any member of
the ERISA Group shall fail to pay when due an amount or amounts aggregating in
excess of $10,000,000 which it shall have become liable to pay under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000 shall be filed under Title IV of
ERISA by any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer, any Plan or Plans having aggregate Unfunded
Liabilities in excess of $10,000,000; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any such
Plan must be terminated; or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect

 

95

 

to,
one or more Multiemployer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of $10,000,000.

 

(l)                                     Loan Documents.  An Event of Default (as defined therein)
shall occur under any of the other Loan Documents (other than a Security
Document).

 

(m)                               Change of
Control/Change in Management.

 

(i)                                     Any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is or
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person will be deemed to have “beneficial
ownership” of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 30.0% of the total voting power of the
then outstanding voting stock of the Parent;

 

(ii)                                  During any
period of 12 consecutive months ending after the Agreement Date, individuals
who at the beginning of any such 12-month period constituted the Board of
Directors of the Parent (together with any new directors whose election by such
Board or whose nomination for election by the shareholders of the Parent was
approved by a vote of a at least two-thirds of the directors then still in
office who were either directors at the beginning of such period or whose election
or nomination for election was previously so approved but excluding any
director whose initial nomination for, or assumption of office as, a director
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the Board of Directors) cease for any reason to constitute a
majority of the Board of Directors of the Borrower then in office;

 

(iii)                               The Parent or a
Wholly Owned Subsidiary of the Parent shall cease to be the sole general
partner of the Borrower or shall cease to have the sole and exclusive power to
exercise all management and control over the Borrower; or

 

(iv)                              The Parent
shall cease to own and control, directly or indirectly, of record and
beneficially, at least 75% of the outstanding Equity Interests of the Borrower
free and clear of all Liens (other than Permitted Liens of the types referred
to in clauses (a), (b), (c) and (e) of the definition of Permitted
Lien).

 

(n)                                 Validity of
Material Loan Documents. 
Either this Agreement or the Guaranty shall cease to be in full force
and effect (other than in accordance with the terms thereof).

 

Section 11.2.  Remedies Upon Event of Default.

 

Upon
the occurrence of an Event of Default the following provisions shall apply:

 

96

 

(a)                                  Acceleration; Termination of
Facilities.

 

(i)                                     Automatic.  Upon the occurrence of an Event of Default
specified in Section 11.1.(f) or 11.1.(g), (A)(i) the principal
of, and all accrued interest on, the Loans and the Notes at the time
outstanding, (ii) an amount equal to the Stated Amount of all Letters of
Credit outstanding as of the date of the occurrence of such Event of Default
for deposit into the Collateral Account pursuant to Section 11.6. and (iii) all
of the other Obligations (other than obligations in respect of Derivatives
Contracts), including, but not limited to, the other amounts owed to the
Lenders, the Swingline Lender and the Agent under this Agreement, the Notes or
any of the other Loan Documents shall become immediately and automatically due
and payable without presentment, demand, protest, or other notice of any kind,
all of which are expressly waived by the Borrower and (B) all of the
Commitments, the obligation of the Lenders to make Loans, the Swingline
Commitment, the obligation of the Swingline Lender to make Swingline Loans, and
the obligation of the Agent to issue Letters of Credit hereunder, shall all
immediately and automatically terminate.

 

(ii)                                  Optional.  If any other Event of Default shall exist,
the Agent may, and at the direction of the Requisite Lenders shall:  (A) declare (1) the principal of,
and accrued interest on, the Loans and the Notes at the time outstanding, (2) an
amount equal to the Stated Amount of all Letters of Credit outstanding as of
the date of the occurrence of such other Event of Default for deposit into the
Collateral Account pursuant to Section 11.6. and (3) all of the other
Obligations (other than obligations in respect of Derivatives Contracts),
including, but not limited to, the other amounts owed to the Lenders and the
Agent under this Agreement, the Notes or any of the other Loan Documents to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all
of which are expressly waived by the Borrower and (B) terminate the
Commitments, the Swingline Commitment, the obligation of the Lenders to make
Loans hereunder and the obligation of the Agent to issue Letters of Credit
hereunder.

 

(b)                                 Loan Documents.  The Requisite Lenders may direct the Agent
to, and the Agent if so directed shall, exercise any and all of its rights
under any and all of the other Loan Documents.

 

(c)                                  Applicable Law.  The Requisite Lenders may direct the Agent
to, and the Agent if so directed shall, exercise all other rights and remedies
it may have under any Applicable Law.

 

(d)                                 Appointment of
Receiver.  To the
extent permitted by Applicable Law, the Agent and the Lenders shall be entitled
to the appointment of a receiver for the assets and properties of the Borrower
and its Subsidiaries, without notice of any kind whatsoever and without regard
to the adequacy of any security for the Obligations or the solvency of any
party bound for its payment, to take possession of all or any portion of the
business operations of the Borrower and its Subsidiaries and to exercise such
power as the court shall confer upon such receiver.

 

97

 

(e)                                  Specified
Derivatives Contract Remedies.  Notwithstanding any other provision of this
Agreement or other Loan Document, each Specified Derivatives Provider shall
have the right, with prompt notice to the Agent, but without the approval or
consent of or other action by the Agent or the Lenders, and without limitation
of other remedies available to such Specified Derivatives Provider under
contract or Applicable Law, to undertake any of the following: (i) to
declare an event of default, termination event or other similar event under any
Specified Derivatives Contract and to create an “Early Termination Date” (as
defined therein) in respect thereof, (ii) to determine net termination
amounts in respect of any and all Specified Derivatives Contracts in accordance
with the terms thereof, and to set off amounts among such contracts, and (iii) to
prosecute any legal action against the Parent, the Borrower or any other Loan
Party to enforce or collect net amounts owing to such Specified Derivatives
Provider by any such Person pursuant to any Specified Derivatives Contract.

 

Section 11.3.  Remedies Upon Default.

 

Upon
the occurrence of a Default specified in Section 11.1.(g), the Commitments
shall immediately and automatically terminate.

 

Section 11.4.  Marshaling; Payments Set Aside.

 

None
of the Agent, any Lender or any Specified Derivatives Provider shall be under
any obligation to marshal any assets in favor of any Loan Party or any other
party or against or in payment of any or all of the Obligations or the
Specified Derivatives Obligations.  To
the extent that any Loan Party makes a payment or payments to the Agent, any
Lender or any Specified Derivatives Provider, or the Agent, any Lender or any
Specified Derivatives Provider enforces any Lien or exercises any of its rights
of setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law or other Applicable Law, then to the
extent of such recovery, the Obligations or Specified Derivatives Obligations,
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as
if such payment had not been made or such enforcement or setoff had not
occurred.

 

Section 11.5.  Allocation of Proceeds.

 

If
an Event of Default shall exist and maturity of any of the Obligations has been
accelerated, or if an Event of Default specified in Section 11.1.(a) and/or
(b) shall exist, all payments received by the Agent under any of the Loan
Documents, in respect of any principal of or interest on the Obligations or any
other amounts payable by the Borrower hereunder or thereunder, shall be applied
in the following order and priority:

 

(a)                                  amounts due the
Agent in respect of fees and expenses due under Section 13.2.;

 

(b)                                 amounts due the
Lenders in respect of fees and expenses due under Section 13.2., pro rata
in the amount then due each Lender;

 

(c)                                  amounts due the
Agent and the Lenders in respect of Protective Advances;

 

98

 

(d)                                 payments of
interest on Swingline Loans;

 

(e)                                  payments of
interest on all other Loans and Reimbursement Obligations to be applied for the
ratable benefit of the Lenders, in such order as the Lenders may determine in
their sole discretion;

 

(f)                                    payments of
principal of Swingline Loans;

 

(g)                                 payments of
principal of all other Loans, Reimbursement Obligations and other Letter of
Credit Liabilities, to be applied for the ratable benefit of the Lenders, in
such order as the Lenders may determine in their sole discretion; provided,
however, to the extent that any amounts available for distribution pursuant to
this subsection are attributable to the issued but undrawn amount of an
outstanding Letter of Credit, such amounts shall be paid to the Agent for
deposit into the Collateral Account;

 

(h)                                 payments of
interest and payments of the Derivatives Termination Value, in each case in
respect of any and all Specified Derivatives Contracts, to be applied for the
ratable benefit of the Specified Derivatives Providers in such order as the
Specified Derivatives Providers may determine in their sole discretion;

 

(i)                                     amounts due the
Agent and the Lenders pursuant to Sections 12.9. and 13.9.;

 

(j)                                     payment of all
other Obligations and other amounts due and owing by the Borrower and the other
Loan Parties under any of the Loan Documents and Specified Derivatives
Contracts, if any, to be applied for the ratable benefit of the Lenders and the
applicable Specified Derivatives Providers; and

 

(k)                                  any amount
remaining after application as provided above, shall be paid to the Borrower or
whomever else may be legally entitled thereto.

 

Section 11.6.  Collateral Account.

 

(a)                                  As collateral
security for the prompt payment in full when due of all Letter of Credit
Liabilities and the other Obligations, the Borrower hereby pledges and grants
to the Agent, for the ratable benefit of the Agent and the Lenders as provided
herein, a security interest in all of its right, title and interest in and to
the Collateral Account and the balances from time to time in the Collateral
Account (including the investments and reinvestments therein provided for
below).  The balances from time to time
in the Collateral Account shall not constitute payment of any Letter of Credit
Liabilities until applied by the Agent as provided herein.  Anything in this Agreement to the contrary
notwithstanding, funds held in the Collateral Account shall be subject to
withdrawal only as provided in this Section.

 

(b)                                 Amounts on
deposit in the Collateral Account shall be invested and reinvested by the Agent
in such Cash Equivalents as the Agent shall determine in its sole
discretion.  All such investments and
reinvestments shall be held in the name of and be under the sole dominion and
control of the Agent for the ratable benefit of the Lenders.  The Agent shall exercise reasonable

 

99

 

care
in the custody and preservation of any funds held in the Collateral Account and
shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords other funds
deposited with the Agent, it being understood that the Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any funds held in the Collateral Account.

 

(c)                                  If a drawing
pursuant to any Letter of Credit occurs on or prior to the expiration date of
such Letter of Credit, the Borrower and the Lenders authorize the Agent to use
the monies deposited in the Collateral Account and proceeds thereof to make
payment to the beneficiary with respect to such drawing or the payee with
respect to such presentment.

 

(d)                                 If an Event of
Default exists, the Requisite Lenders may, in their discretion, at any time and
from time to time, instruct the Agent to liquidate any such investments and
reinvestments and apply proceeds thereof to the Obligations in accordance with Section 11.5.

 

(e)                                  So long as no
Default or Event of Default exists, and to the extent amounts on deposit in or
credited to the Collateral Account exceed the aggregate amount of the Letter of
Credit Liabilities then due and owing, the Agent shall, from time to time, at
the request of the Borrower, deliver to the Borrower within 10 Business Days
after the Agent’s receipt of such request from the Borrower, against receipt
but without any recourse, warranty or representation whatsoever, such amount of
the credit balances in the Collateral Account as exceeds the aggregate amount
of the Letter of Credit Liabilities at such time.

 

(f)                                    The Borrower
shall pay to the Agent from time to time such fees as the Agent normally
charges for similar services in connection with the Agent’s administration of
the Collateral Account and investments and reinvestments of funds therein.

 

Section 11.7.  Performance by Agent.

 

If
the Borrower shall fail to perform any covenant, duty or agreement contained in
any of the Loan Documents, the Agent may, after notice to the Borrower, perform
or attempt to perform such covenant, duty or agreement on behalf of the
Borrower after the expiration of any cure or grace periods set forth
herein.  In such event, the Borrower
shall, at the request of the Agent, promptly pay any amount reasonably expended
by the Agent in such performance or attempted performance to the Agent,
together with interest thereon at the applicable Post-Default Rate from the
date of such expenditure until paid. 
Notwithstanding the foregoing, neither the Agent nor any Lender shall
have any liability or responsibility whatsoever for the performance of any
obligation of the Borrower under this Agreement or any other Loan Document.

 

Section 11.8.  Rights Cumulative.

 

The
rights and remedies of the Agent and the other Secured Parties under this
Agreement, each of the other Loan Documents and each of the Specified
Derivatives Contracts shall be cumulative and not exclusive of any rights or
remedies which any of them may otherwise have under Applicable Law.  In exercising their respective rights and
remedies the Agent and the other Secured Parties may be selective and no
failure or delay by the Agent or any of the other Secured Parties in exercising
any right shall operate as a waiver of it, nor shall any single or partial

 

100

 

exercise
of any power or right preclude its other or further exercise or the exercise of
any other power or right.

 

ARTICLE XII. THE AGENT

 

Section 12.1.  Authorization and Action.

 

Each Lender hereby
appoints and authorizes the Agent to take such action as contractual
representative on such Lender’s behalf and to exercise such powers under this
Agreement and the other Loan Documents as are specifically delegated to the
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto.  Not in
limitation of the foregoing, each Lender authorizes and directs the Agent to
enter into the Loan Documents for the benefit of the Lenders.  Each Lender hereby agrees that, except as
otherwise set forth herein, any action taken by the Requisite Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Requisite Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. 
Nothing herein shall be construed to deem the Agent a trustee or
fiduciary for any Lender or to impose on the Agent duties or obligations other
than those expressly provided for herein. 
Without limiting the generality of the foregoing, the use of the terms “Agent”,
“Administrative Agent”, “agent” and similar terms in the Loan Documents with
reference to the Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
Applicable Law.  Instead, use of such
terms is merely a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.  At the request of a Lender, the Agent will
forward to such Lender copies or, where appropriate, originals of the documents
delivered to the Agent pursuant to this Agreement or the other Loan
Documents.  The Agent will also furnish
to any Lender, upon the request of such Lender, a copy of any certificate or
notice furnished to the Agent by the Borrower, any other Loan Party or any
other Affiliate of the Borrower, pursuant to this Agreement or any other Loan
Document not already delivered to such Lender pursuant to the terms of this Agreement
or any such other Loan Document.  As to
any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of any of the Obligations), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Requisite Lenders (or all of the Lenders if explicitly required under any other
provision of this Agreement), and such instructions shall be binding upon all
Lenders and all holders of any of the Obligations; provided, however, that,
notwithstanding anything in this Agreement to the contrary, the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or Applicable
Law.  Not in limitation of the foregoing,
the Agent may exercise any right or remedy it or the Lenders may have under any
Loan Document upon the occurrence of a Default or an Event of Default unless
the Requisite Lenders have directed the Agent otherwise.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of the Requisite Lenders, or
where applicable, all the Lenders.

 

101

 

Section 12.2.  Agent’s Reliance, Etc.

 

Notwithstanding
any other provisions of this Agreement or any other Loan Documents, neither the
Agent nor any of its directors, officers, agents, employees or counsel shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Loan Document, except for its or
their own gross negligence or willful misconduct as determined by a court of
competent jurisdiction in a final, non-appealable judgment.  Without limiting the generality of the
foregoing, the Agent:  (a) may treat
the payee of any Note as the holder thereof until the Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (b) may consult with legal counsel (including
its own counsel or counsel for the Borrower or any other Loan Party),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender or any other Person and shall not be
responsible to any Lender or any other Person for any statements, warranties or
representations made by any Person in or in connection with this Agreement or
any other Loan Document; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of any of this Agreement or any other Loan Document or the
satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrower or other Persons (except for the delivery
to it of any certificate or document specifically required to be delivered to it
pursuant to Section 6.1.) or inspect the property, books or records of the
Borrower or any other Person; (e) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document, any other
instrument or document furnished pursuant thereto or any collateral covered
thereby or the perfection or priority of any Lien in favor of the Agent on
behalf of the Secured Parties in any such collateral; and (f) shall incur
no liability under or in respect of this Agreement or any other Loan Document
by acting upon any notice, consent, certificate or other instrument or writing
(which may be by telephone, telecopy, or electronic mail) believed by it to be
genuine and signed, sent or given by the proper party or parties.  The Agent may execute any of its duties under
the Loan Documents by or through agents, employees or attorneys-in-fact.  Unless
set forth in writing to the contrary, the making of its initial Loan by a
Lender shall constitute a certification by such Lender to the Agent and the
other Lenders that the Borrower has satisfied the conditions precedent for
initial Loans set forth in Sections 6.1. and 6.2. that have not previously
been waived by the Requisite Lenders.

 

Section 12.3.  Notice of Defaults.

 

The
Agent shall not be deemed to have knowledge or notice of the occurrence of a
Default or Event of Default unless the Agent has received notice from a Lender
or the Borrower referring to this Agreement, describing with reasonable
specificity such Default or Event of Default and stating that such notice is a “notice
of default.”  If any Lender (excluding
the Lender which is also serving as the Agent) becomes aware of any Default or
Event of Default, it shall promptly send to the Agent such a “notice of
default.”  Further, if the Agent receives
such a “notice of default”, the Agent shall give prompt notice thereof to the
Lenders.

 

102

 

Section 12.4.  Agent as Lender.

 

The
Lender acting as Agent shall have the same rights and powers under this
Agreement and any other Loan Document as any other Lender and may exercise the
same as though it were not the Agent; and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated, include the Lender then acting as Agent
in each case in its individual capacity. 
Such Lender and its Affiliates may each accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, act as trustee under
indentures of, serve as financial advisor to, and generally engage in any kind
of business with, the Borrower, any other Loan Party or any other Affiliate
thereof as if it were any other bank and without any duty to account therefor
to the other Secured Parties.  Further,
such Lender and any Affiliate may accept fees and other consideration from the
Borrower for services in connection with this Agreement, any Specified
Derivatives Contract or otherwise without having to account for the same to the
other Secured Parties.  The Lenders
acknowledge that, pursuant to such activities, the Lender acting as Agent or
its Affiliates may receive information regarding the Borrower, other Loan
Parties, other Subsidiaries and other Affiliates (including information that
may be subject to confidentiality obligations in favor of such Person) and
acknowledge that the Agent shall be under no obligation to provide such
information to them.

 

Section 12.5.  Collateral Matters; Protective Advances.

 

(a)                                  Each Lender hereby authorizes the Agent,
without the necessity of any notice to or further consent from any Lender, from
time to time prior to an Event of Default, to take any action with respect to
any Collateral or Loan Documents which may be necessary to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to any of the Loan
Documents.

 

(b)                                 The Lenders hereby authorize the Agent,
at its option and in its discretion, to release any Lien granted to or held by
the Agent upon any Collateral (i) upon termination of the Commitments and
indefeasible payment and satisfaction in full of all of the Obligations and all
Specified Derivatives Contracts and (ii) as expressly permitted by, but
only in accordance with, the terms of the applicable Loan Document, including
without limitation, in accordance with Section 4.3.  Upon request by the
Agent at any time, the Lenders will confirm in writing the Agent’s authority to
release particular types or items of Collateral pursuant to this Section.

 

(c)                                  Upon any sale and transfer of Collateral
which is expressly permitted pursuant to the terms of this Agreement, and upon
at least five (5) Business Days’ prior written request by the Borrower,
the Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of the Liens
granted to the Agent for the benefit of the Secured Parties herein or pursuant
hereto upon the Collateral that was sold or transferred; provided, however,
that (i) the Agent shall not be required to execute any such document on
terms which, in the Agent’s opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or the Specified Derivatives
Obligations or any Liens upon (or obligations of the Borrower or any other Loan
Party in respect of) all interests retained by the Borrower or any other Loan
Party, including (without limitation) the proceeds of such sale or transfer,
all of which shall continue to constitute part of the Collateral.  In the event of any sale or transfer of
Collateral, or

 

103

 

any foreclosure with
respect to any of the Collateral, the Agent shall be authorized to deduct all
of the expenses reasonably incurred by the Agent from the proceeds of any such
sale, transfer or foreclosure.

 

(d)                                 The Agent shall have no obligation
whatsoever to the Secured Parties or to any other Person to assure that the
Collateral exists or is owned by the Borrower, any other Loan Party or any
other Subsidiary or is cared for, protected or insured or that the Liens
granted to the Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising
at all or in any manner or under any duty of care, disclosure or fidelity any
of the rights, authorities and powers granted or available to the Agent in this
Section or in any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related thereto,
the Agent may act in any manner it may deem appropriate, in its sole
discretion, and that the Agent shall have no duty or liability whatsoever to
the Lenders, except to the extent resulting from its gross negligence or
willful misconduct.

 

(e)                                  The Agent may make, and shall be
reimbursed by the Lenders (in accordance with their Commitment Percentages) to
the extent not reimbursed by the Borrower for, Protective Advances during any
one calendar year with respect to each Borrowing Base Property up to the sum
of: (i) amounts expended to pay real estate taxes, assessments and
governmental charges or levies imposed upon such Property; (ii) amounts
expended to pay insurance premiums for policies of insurance related to such
Property; and (iii) $250,000 for each Borrowing Base Property; provided,
however, the amount each Lender is required to reimburse the Agent under this
clause (e) shall not exceed the amount of such Lender’s Revolving
Commitment less its outstanding Revolving Loans and Letter of Credit Liabilities
as of any date of determination. 
Protective Advances in excess of said sum during any calendar year for
any Property that is Collateral shall require the consent of the Requisite
Lenders.  The Borrower agrees to pay on
demand all Protective Advances.

 

(f)                                    By their
acceptance of the benefits of the Security Documents, each Lender that is at
any time itself a Specified Derivatives Provider, or that has an Affiliate that
is a Specified Derivatives Provider, hereby, for itself, and on behalf of any
such Affiliate, in its capacity as a Specified Derivatives Provider,
irrevocably appoints and authorizes the Agent as its collateral agent, to take
such action as contractual representative on such Specified Derivative Provider’s
behalf and to exercise such powers under the Security Documents as are
specifically delegated to the Agent by the terms of this Section 12.5., Section 12.6.
and any Security Document, together with such powers as are reasonably
incidental thereto; provided, that this subsection (f) shall not affect
any of the terms of a Specified Derivatives Contract or restrict a Specified
Derivatives Provider from taking any action permitted by a Specified
Derivatives Contract.  For the avoidance
of doubt, all references in this Section 12.5. to “Lender” or “Lenders”
shall be deemed to include each Lender (and Affiliate thereof) in its capacity
as a Specified Derivatives Provider.

 

Section 12.6.  Post-Foreclosure Plans.

 

If all or any portion of
the Collateral is acquired by the Agent or its nominee as a result of a
foreclosure or the acceptance of a deed or assignment in lieu of foreclosure,
or is retained in satisfaction of all or any part of the Obligations or
Specified Derivatives Obligations, the title to

 

104

 

any such Collateral, or
any portion thereof, shall be held in the name of the Agent or a nominee or
Subsidiary of the Agent, as administrative agent, for the ratable benefit of
all Secured Parties.  The Agent shall prepare
a recommended course of action for such Collateral (a “Post-Foreclosure Plan”),
which shall be subject to the approval of the Supermajority Lenders.  In accordance with the approved
Post-Foreclosure Plan, the Agent shall manage, operate, repair, administer,
complete, construct, restore or otherwise deal with the Collateral acquired,
and shall administer all transactions relating thereto, including, without
limitation, employing a management agent, leasing agent and other agents,
contractors and employees, including agents for the sale of such Collateral,
and the collecting of rents and other sums from such Collateral and paying the
expenses of such Collateral.  Actions
taken by the Agent with respect to the Collateral, which are not specifically
provided for in the approved Post-Foreclosure Plan or reasonably incidental
thereto, shall require the written consent of the Supermajority Lenders by way
of supplement to such Post-Foreclosure Plan. 
Upon demand therefor from time to time, each Lender will contribute its
share (based on its Commitment Percentage) of all reasonable costs and expenses
incurred by the Agent pursuant to the approved Post-Foreclosure Plan in
connection with the construction, operation, management, maintenance, leasing
and sale of such Collateral.  In
addition, the Agent shall render or cause to be rendered to each Secured Party,
on a periodic basis (but in any event once per calendar quarter), an income and
expense statement for such Collateral, and each Lender shall promptly
contribute its Commitment Percentage of any operating loss for such Collateral,
and such other expenses and operating reserves as the Agent shall deem
reasonably necessary pursuant to and in accordance with the approved
Post-Foreclosure Plan.  To the extent
there is Net Operating Income from such Collateral, the Agent shall, in
accordance with the approved Post-Foreclosure Plan, determine the amount and
timing of distributions to the Secured Parties. 
All such distributions shall be made to the Lenders in accordance with
their respective Commitment Percentages. 
The Secured Parties acknowledge and agree that if title to any
Collateral is obtained by the Agent or its nominee, such Collateral will not be
held as a permanent investment but will be liquidated and the proceeds of such
liquidation will be distributed in accordance with Section 11.5. as soon as practicable.  The Agent shall undertake to sell such
Collateral, at such price and upon such terms and conditions as the Requisite
Lenders reasonably shall determine to be most advantageous to the Secured
Parties.  Any purchase money mortgage or
deed of trust taken in connection with the disposition of such Collateral in
accordance with the immediately preceding sentence shall name the Agent, as
Agent for the Lenders, as the beneficiary or mortgagee.  In such case, the Agent and the Lenders shall
enter into an agreement with respect to such purchase money mortgage or deed of
trust defining the rights of the Lenders in the same Commitment Percentages as
provided hereunder, which agreement shall be in all material respects similar
to this Article insofar as the same is appropriate or applicable.

 

Section 12.7.  Approvals of Lenders.

 

All
communications from the Agent to any Lender requesting such Lender’s
determination, consent, approval or disapproval (a) shall be given in the
form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where
information, if any, regarding such matter or issue may be inspected, or shall
otherwise describe the matter or issue to be resolved, (c) shall include,
if reasonably requested by such Lender and to the extent not previously
provided to such Lender, written materials and, as appropriate, a

 

105

 

brief
summary of all oral information provided to the Agent by the Borrower in
respect of the matter or issue to be resolved, and (d) shall include the
Agent’s recommended course of action or determination in respect thereof.  Each Lender shall reply promptly, but in any
event within 10 Business Days (or such lesser or greater period as may be
specifically required under the Loan Documents) of receipt of such
communication.  Except as otherwise
provided in this Agreement, unless a Lender shall give written notice to the
Agent that it specifically objects to the recommendation or determination of
the Agent (together with a written explanation of the reasons behind such
objection) within the applicable time period for reply, such Lender shall be
deemed to have conclusively approved of or consented to such recommendation or
determination.

 

Section 12.8.  Lender Credit Decision, Etc.

 

Each
Lender expressly acknowledges and agrees that neither the Agent nor any of its
officers, directors, employees, agents, counsel, attorneys-in-fact or other
Affiliates has made any representations or warranties as to the financial
condition, operations, creditworthiness, solvency or other information concerning
the business or affairs of the Borrower, any other Loan Party, any Subsidiary
or any other Person to such Lender and that no act by the Agent hereafter
taken, including any review of the affairs of the Borrower, any other Loan
Party or any other Subsidiary, shall be deemed to constitute any such
representation or warranty by the Agent to any Lender.  Each Lender acknowledges that it has made its
own credit and legal analysis and decision to enter into this Agreement and the
transactions contemplated hereby, independently and without reliance upon the
Agent, any other Lender or counsel to the Agent, or any of their respective
officers, directors, employees and agents, and based on the financial
statements of the Borrower, the Subsidiaries or any other Affiliate thereof,
and inquiries of such Persons, its independent due diligence of the business
and affairs of the Borrower, the other Loan Parties, the Subsidiaries and other
Persons, its review of the Loan Documents, the legal opinions required to be delivered
to it hereunder, the advice of its own counsel and such other documents and
information as it has deemed appropriate. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, any other Lender or counsel to the Agent or any of
their respective officers, directors, employees and agents, and based on such
review, advice, documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking action under
the Loan Documents.  The Agent shall not be required to keep
itself informed as to the performance or observance by the Borrower or any
other Loan Party of the Loan Documents or any other document referred to or
provided for therein or to inspect the properties or books of, or make any
other investigation of, the Borrower, any other Loan Party or any other Person.  Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent under this Agreement or any of the other Loan Documents, the Agent
shall have no duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower, any other Loan Party or
any other Affiliate thereof which may come into possession of the Agent, or any
of its officers, directors, employees, agents, attorneys-in-fact or other
Affiliates.  Each Lender acknowledges that
the Agent’s legal counsel in connection with the transactions contemplated by
this Agreement is only acting as counsel to the Agent and is not acting as
counsel to such Lender.

 

106

 

Section 12.9.  Indemnification of Agent.

 

Each
Lender agrees to indemnify the Agent (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so) pro rata
in accordance with such Lender’s respective Commitment Percentage, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, reasonable out-of-pocket costs and expenses, or
disbursements of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against the Agent (in its capacity as Agent but
not as a Lender) in any way relating to or arising out of the Loan Documents,
any transaction contemplated hereby or thereby or any action taken or omitted
by the Agent under the Loan Documents (collectively, “Indemnifiable Amounts”);
provided, however, that no Lender shall be liable for any portion of such
Indemnifiable Amounts to the extent resulting from the Agent’s gross negligence
or willful misconduct as determined by a court of competent jurisdiction in a
final, non-appealable judgment or if the Agent fails to follow the written
direction of the Requisite Lenders (or all of the Lenders if expressly required
hereunder) unless such failure results from the Agent following the advice of
counsel to the Agent of which advice the Lenders have received notice.  Without limiting the generality of the
foregoing but subject to the preceding proviso, each Lender agrees to reimburse
the Agent (to the extent not reimbursed by the Borrower and without limiting
the obligation of the Borrower to do so), promptly upon demand for its ratable
share of any out-of-pocket expenses (including counsel fees of the counsel(s) of
the Agent’s own choosing) incurred by the Agent in connection with the
preparation, negotiation, execution, administration, or enforcement of, or
legal advice with respect to the rights or responsibilities of the parties
under, the Loan Documents, any suit or action brought by the Agent to enforce
the terms of the Loan Documents and/or collect any Obligations, any “lender
liability” suit or claim brought against the Agent and/or the Lenders, and any
claim or suit brought against the Agent, and/or the Lenders arising under any
Environmental Laws.  Such out-of-pocket
expenses (including counsel fees) shall be advanced by the Lenders on the
request of the Agent notwithstanding any claim or assertion that the Agent is
not entitled to indemnification hereunder upon receipt of an undertaking by the
Agent that the Agent will reimburse the Lenders if it is actually and finally
determined by a court of competent jurisdiction that the Agent is not so
entitled to indemnification.  The
agreements in this Section shall survive the payment of the Loans and all
other amounts payable hereunder or under the other Loan Documents and the
termination of this Agreement.  If the
Borrower shall reimburse the Agent for any Indemnifiable Amount following
payment by any Lender to the Agent in respect of such Indemnifiable Amount
pursuant to this Section, the Agent shall share such reimbursement on a ratable
basis with each Lender making any such payment.

 

Section 12.10.  Successor Agent.

 

The Agent may (i) resign
as Agent under the Loan Documents at any time by giving written notice thereof
to the Lenders and the Borrower or (ii) be removed as Agent under the Loan
Documents if (x) the Agent is a Defaulting Lender or (y) for any acts
or omissions of the Agent that constitute gross negligence or willfull
misconduct of the Agent, in each case by the Requisite Lenders (other than the
Lender then acting as the Agent) upon not less than 30 days’ prior written
notice to the Agent.  Upon any such
resignation or removal, the Requisite Lenders (other than the Lender then
acting as the Agent in the case of the removal of the Agent under the
immediately preceding sentence) shall have the right to appoint a successor
Agent which

 

107

 

appointment shall,
provided no Default or Event of Default exists, be subject to the Borrower’s
approval, which approval shall not be unreasonably withheld or delayed (except
that the Borrower shall, in all events, be deemed to have approved each Lender
and any of its Affiliates as a successor Agent).  If no successor Agent shall have been so
appointed in accordance with the immediately preceding sentence, and shall have
accepted such appointment, within thirty (30) days after the resigning Agent’s
giving of notice of resignation or the Lenders’ removal of the resigning Agent,
then the resigning or removed Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a Lender, if any Lender shall be willing to
serve, and otherwise shall be an Eligible Assignee.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent, and the retiring or removed Agent shall be
discharged from its duties and obligations under the Loan Documents.  Such successor Agent shall issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or shall make other arrangements satisfactory to the
current Agent, in either case, to assume effectively the obligations of the
current Agent with respect to such Letters of Credit.  After any Agent’s resignation or removal
hereunder as Agent, the provisions of this Article XII. shall continue to inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under the Loan Documents.
 Notwithstanding anything contained
herein to the contrary, the Agent may assign its rights and duties under the
Loan Documents to any of its Affiliates by giving the Borrower and each Lender
prior written notice.

 

Section 12.11.  Titled Agents.

 

Each of the Titled Agents in each such
respective capacity, assumes no responsibility or obligation hereunder,
including, without limitation, for servicing, enforcement or collection of any
of the Loans, or for any duties as an agent hereunder for the Lenders.  The titles of “ Joint Lead Arranger”, “Joint
Bookrunner”, “Syndication Agent” and “Documentation Agent” are solely honorific
and imply no fiduciary responsibility on the part of the Titled Agents to the
Agent, the Borrower or any Lender and the use of such titles does not impose on
the Titled Agents any duties or obligations greater than those of any other
Lender or entitle the Titled Agents to any rights other than those to which any
other Lender is entitled.

 

ARTICLE XIII. MISCELLANEOUS

 

Section 13.1.  Notices.

 

Unless
otherwise provided herein, communications provided for hereunder shall be in
writing and shall be mailed, telecopied or delivered as follows:

 

If to the Borrower:

 

U-Store-It, L.P.

c/o
U-Store-It Trust

460
Swedesford Road, Suite 3000

Wayne,
Pennsylvania  19087

Attn: 
Chief Financial Officer

 

108

 

Telephone: 
(610) 293-5700

Telecopy:
(610) 293-5720

 

with
a copy to:

 

U-Store-It, L.P.

c/o
U-Store-It Trust

460
Swedesford Road, Suite 3000

Wayne,
Pennsylvania  19087

Attn:
Senior Vice President — Chief Legal Officer

Telephone:
(610) 293-5765

Telecopy: 
(610) 293-5720

 

If
to the Agent:

 

Wachovia Bank, National Association

c/o
Wells Fargo Real Estate Banking Group

200
Public Square - Suite 3200

Cleveland,
OH 44114

Attn:  Greg Ward

Telephone:
(216) 344-6945

Telecopy:
(216) 344-6939

 

with
a copy to:

 

Wachovia Bank, National Association

c/o
Wells Fargo Real Estate Banking Group

123
North Wacker - Suite 1900

Chicago,
IL 60606

Attn:
Pamela Probst

Loan Administration Manager

P
(312) 345-7664

F
(312) 782-0969

 

If to a Lender:

 

To
such Lender’s address or telecopy number, as applicable, set forth in its
Administrative Questionnaire;

 

or,
as to each party at such other address as shall be designated by such party in
a written notice to the other parties delivered in compliance with this
Section; provided, a Lender shall only be required to give notice of any such
other address to the Agent and the Borrower. 
All such notices and other communications shall be effective (i) if
mailed, when received; (ii) if telecopied, when transmitted; or (iii) if
hand delivered or sent by overnight courier, when delivered.  Notwithstanding the immediately preceding
sentence, all notices or communications 

 

109

 

to
the Agent or any Lender under Article II. shall be effective only when
actually received.  Neither the Agent nor
any Lender shall incur any liability to any Loan Party (nor shall the Agent
incur any liability to the Lenders) for acting upon any telephonic notice
referred to in this Agreement which the Agent or such Lender, as the case may
be, believes in good faith to have been given by a Person authorized to deliver
such notice or for otherwise acting in good faith hereunder. Failure of a
Person designated to get a copy of a notice to receive such copy shall not
affect the validity of notice properly given to any other Person.

 

Section 13.2.  Expenses.

 

The
Borrower agrees (a) to pay or reimburse the Agent for all of its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses
and travel expenses relating to closing), and the consummation of the
transactions contemplated thereby, including the reasonable and documented fees
and disbursements of outside counsel to the Agent and costs and expenses in
connection with the use of IntraLinks, Inc., SyndTrak or other similar
information transmission systems in connection with the Loan Documents, (b) to pay all reasonable
out-of-pocket costs and expenses of the Agent in connection with the review of
Properties for inclusion in calculations of the Borrowing Base and the Agent’s
other activities under Article IV., including the cost of all Appraisals
and the reasonable and documented fees and expenses of outside counsel to the
Agent relating to all such activities, (c) to pay or
reimburse the Agent and the Lenders for all their reasonable costs and expenses
incurred in connection with the enforcement or preservation of any rights under
the Loan Documents, including the reasonable and documented fees and
disbursements of their respective counsel and any payments in indemnification
or otherwise payable by the Lenders to the Agent pursuant to the Loan
Documents, (d) to pay, and indemnify and hold harmless the Agent and the
Lenders from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any failure to pay or delay in paying,
documentary, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of any of the Loan Documents, or consummation of any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
any Loan Document and (e) to the extent not already covered by any of the
preceding subsections, to pay the documented fees and disbursements of counsel
to the Agent and any Lender incurred in connection with the representation of
the Agent or such Lender in any matter relating to or arising out of any
bankruptcy or other proceeding of the type described in Sections 11.1.(f) or 11.1.(g), including, without
limitation (i) any motion for relief from any stay or similar order, (ii) the
negotiation, preparation, execution and delivery of any document relating to
the Obligations and (iii) the negotiation and preparation of any
debtor-in-possession financing or any plan of reorganization of the Borrower or
any other Loan Party, whether proposed by the Borrower, such Loan Party, the
Lenders or any other Person, and whether such fees and expenses are incurred
prior to, during or after the commencement of such proceeding or the confirmation
or conclusion of any such proceeding.  If the Borrower shall fail to pay any amounts
required to be paid by it pursuant to this Section, the Agent and/or the
Lenders may pay such amounts on behalf of the Borrower and either deem the same
to be Loans outstanding hereunder or otherwise Obligations owing hereunder.

 

110

 

Section 13.3.  Setoff.

 

Subject
to Section 3.3. and in addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, the
Borrower hereby authorizes the Agent, each Lender, and each Affiliate of the Agent
or any Lender, at any time while an Event of Default exists, without prior
notice to the Borrower or to any other Person, any such notice being hereby
expressly waived, but in the case of a Lender or an Affiliate of a Lender
subject to receipt of the prior written consent of the Agent exercised in its
sole discretion, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Agent, such Lender or any
such Affiliate of the Agent or such Lender, to or for the credit or the account
of the Borrower against and on account of any of the Obligations, irrespective
of whether or not any or all of the Loans and all other Obligations have been
declared to be, or have otherwise become, due and payable as permitted by Section 11.2.,
and although such Obligations shall be contingent or unmatured.

 

Section 13.4.  Litigation; Jurisdiction; Other Matters;
Waivers.

 

(a)                                  EACH PARTY
HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE
BORROWER, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND
COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE
PARTIES.  ACCORDINGLY, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE AGENT AND THE BORROWER
HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND
OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY
OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT, THE NOTES, OR ANY
OTHER LOAN DOCUMENT OR IN CONNECTION WITH ANY COLLATERAL OR BY REASON OF ANY
OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE
BORROWER, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY
OF THE LOAN DOCUMENTS.

 

(b)                                 EACH OF THE
BORROWER, THE AGENT AND EACH LENDER HEREBY AGREES THAT ANY FEDERAL DISTRICT
COURT AND ANY STATE COURT LOCATED IN CHARLOTTE, NORTH CAROLINA, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE
BORROWER, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO
THIS AGREEMENT, THE LOANS AND LETTERS OF CREDIT, THE NOTES OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM OR THE COLLATERAL.  THE BORROWER AND EACH OF THE LENDERS
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR
DISPUTES.  EACH PARTY FURTHER 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 FORUM, AND

 

111

 

EACH
AGREES NOT TO PLEAD OR CLAIM THE SAME. 
THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED
TO PRECLUDE THE BRINGING OF ANY ACTION BY ANY PARTY OR THE ENFORCEMENT BY ANY
PARTY OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE
JURISDICTION.

 

(c)                                  THE PROVISIONS
OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF
COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND
SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER
OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR EXPIRATION OF ALL LETTERS
OF CREDIT AND THE TERMINATION OF THIS AGREEMENT.

 

Section 13.5.  Successors and Assigns.

 

(a)                                  Successors and
Assigns Generally.  The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Agent and each Lender and no Lender may assign
or otherwise transfer any of its rights or obligations hereunder except (i) to
an Eligible Assignee in accordance with the provisions of the immediately
following subsection (b), (ii) by way of participation in accordance
with the provisions of the immediately following subsection (d) or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of the immediately following subsection (f) (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in the immediately following subsection (d) and,
to the extent expressly contemplated hereby, the Affiliates and the partners,
directors, officers, employees, agents and advisors of the Agent and the Lenders and of their
respective Affiliates) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

 

(b)                                 Assignments by
Lenders.  Any Lender may at any time assign to one or
more assignees (an “Assignee”) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Revolving Commitment and the Loans at the time
owing to it); provided that any such assignment shall be subject to the
following conditions:

 

(i)                                   Minimum Amounts.

 

(A)                              in the case of an assignment of the
entire remaining amount of the assigning Lender’s Revolving Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)                                in any case not described in the
immediately preceding subsection (A), the aggregate amount of the Revolving Commitment (which for

 

112

 

this purpose
includes Revolving Loans
outstanding thereunder) or, if the applicable Revolving Commitment is not then in effect, the
outstanding principal balance of the Revolving Loans of the assigning Lender subject to
each such assignment and the outstanding principal balance of the Term Loan of such Lender (in each case
determined as of the date the Assignment and Acceptance Agreement with respect
to such assignment is delivered to the Agent or, if “Trade Date” is specified
in the Assignment and Acceptance Agreement, as of the Trade Date) shall not be
less than $5,000,000 in the case of a Revolving Commitment, or $5,000,000 in
the case of a Term Loan, unless each of the Agent and, so long as no Default or
Event of Default shall exist, the Borrower otherwise consents (each such
consent not to be unreasonably withheld or delayed).

 

(ii)                                  Proportionate Amounts. 
Each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Term Loan, Revolving Loans and the Revolving Commitment assigned.

 

(iii)                               Required Consents.  No consent
shall be required for any assignment except to the extent required by
clause (i)(B) of this subsection (b) and, in addition:

 

(A)                              the consent of the Borrower (such consent
not to be unreasonably withheld or delayed) shall be required unless (x) a
Default or Event of Default shall exist at the time of such assignment or (y) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and

 

(B)                                the consent of the Agent (such consent
not to be unreasonably withheld or delayed) shall be required for assignments
in respect of a Revolving Commitment if such assignment is to a Person that is
not already a Lender, an Affiliate of a Lender or an Approved Fund.

 

(iv)                              Assignment and Acceptance. 
The parties to each assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$4,500 payable by Assignor for each assignment, and the assignee, if it is not
a Lender, shall deliver to the Agent an Administrative Questionnaire.

 

(v)                                 No Assignment to Borrower. 
No such assignment shall be made to the Borrower or any of the Borrower’s
Affiliates or Subsidiaries.

 

(vi)                              No Assignment to Natural Persons. 
No such assignment shall be made to a natural person.

 

(vii)                           Assignments by Specified Derivatives Provider.  If the
assigning Lender (or its Affiliate) is a Specified Derivatives Provider and if
after giving effect to such assignment such Lender will hold no further Loans or
Commitments under this Agreement, such Lender shall undertake such assignment
only contemporaneously with

 

113

 

an assignment by such Lender (or its Affiliate, as the case may be) of
all of its Specified Derivatives Contracts to the Assignee or another Lender
(or Affiliate thereof).

 

Subject to
acceptance and recording thereof by the Agent pursuant to the immediately
following subsection (c), from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 5.4., 13.2. and 13.9. and
the other provisions of this Agreement and the other Loan Documents as provided
in Section 13.10. with
respect to facts and circumstances occurring prior to the effective date of
such assignment.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with the immediately following subsection (d).

 

(c)                                  Register.  The Agent,
acting solely for this purpose as an agent of the Borrower, shall maintain at
the Principal Office a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

 

(d)                                 Participations. 
Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Agent, (other than as provided pursuant to Section 13.5.(e)) sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Revolving Commitment and/or the Loans owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrower, the Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.  Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to approve
any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to (i) increase such
Lender’s Commitment, (ii) extend the date fixed for the payment of
principal on the Loans or portions thereof owing to such Lender or (iii) reduce
the rate at which interest is payable thereon. 
Subject

 

114

 

to the immediately
following subsection (e), the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.12., 5.1., 5.4.  to
the same extent as if it were the Lender it purchased such participation from
and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.  To the extent permitted by
Applicable Law, each Participant also shall be entitled to the benefits of Section 13.3. as though it were a Lender,
provided such Participant agrees to be subject to Section 3.3. as though it were a Lender.  Upon request from the Agent, a Lender shall
notify the Agent and the Borrower of the sale of any participation hereunder.

 

(e)                                  Limitations upon Participant Rights. 
A Participant shall not be entitled to receive any greater payment under
Sections 3.12., 5.1. and 5.4.  than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. 
A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 3.12. unless the Borrower consents to the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower
and the Agent, to comply with Section 3.12.(c) as though it were a Lender.

 

(f)                                    Certain Pledges. 
Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g)                                 No Registration. 
Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in any manner
or under any circumstances that would require registration or qualification of,
or filings in respect of, any Loan or Note under the Securities Act or any
other securities laws of the United States of America or of any other
jurisdiction.

 

Section 13.6.  Amendments.

 

(a)                                  Except as
otherwise expressly provided in this Agreement, any consent or approval
required or permitted by this Agreement or any other Loan Document to be given
by the Lenders may be given, and any term of this Agreement or of any other
Loan Document may be amended, and the performance or observance by the Borrower
or any other Loan Party or any Subsidiary of any terms of this Agreement or
such other Loan Document or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Requisite Lenders (or the Agent at the written direction of the Requisite
Lenders) and, in the case of an amendment to any Loan Document, the written
consent of each Loan Party a party thereto; provided, however, any amendment of Sections 10.1. and 11.1.(m), or any amendment of any of the
definitions related to such Sections 10.1. and 11.1.(m), or the performance or observance by
the Borrower or any other Loan Party or any Subsidiary of the terms of such
Sections 10.1. and 11.1.(m), or the waiver of the continuance of
any Default or Event of Default resulting from a violation of Section 10.1. or a waiver of the continuance of any
Event of Default under

 

115

 

Section 11.1.(m), may be made with, but only with, the
written consent of the Supermajority Lenders (and, in the case of an amendment
of such Sections, the Borrower).

 

(b)                                 Notwithstanding
the foregoing, without the prior written consent of each Lender adversely
affected thereby, no amendment, waiver or consent shall do any of the
following:

 

(i)                                     increase the
Commitments of the Lenders or subject the Lenders to any additional
obligations;

 

(ii)                                  reduce the
principal of, or interest that has accrued or the rates of interest that will
be charged on the outstanding principal amount of, any Loans or other
Obligations;

 

(iii)                               reduce the
amount of any Fees payable to the Lenders hereunder or postpone any date fixed
for payment thereof;

 

(iv)                              modify the definition
of the term “Termination Date” or otherwise postpone any date fixed for any
payment of any principal of, or interest on, any Loans or any other Obligations
(including the waiver of any Default or Event of Default as a result of the
nonpayment of any such Obligations as and when due), or extend the expiration
date of any Letter of Credit beyond the Termination Date;

 

(v)                                 amend or
otherwise modify the provisions of Section 3.2. or the definition of the
term “Commitment Percentage”;

 

(vi)                              modify the definition
of the term “Requisite Lenders” or “Supermajority Lenders” or otherwise modify
in any other manner the number or percentage of the Lenders required to make
any determinations or waive any rights hereunder or to modify any provision
hereof, including without limitation, any modification of this Section 13.6.
if such modification would have such effect;

 

(vii)                           release any
Guarantor from its obligations under the Guaranty (except as otherwise
permitted under Section 8.12.(c));

 

(viii)                        release the
Lien of any Security Document except as permitted under Section 4.3. or Section 8.12.(d);

 

(ix)                                amend or
otherwise modify the provisions of Section 2.15.; or

 

(x)                                   increase the
number of Interest Periods permitted with respect to Loans under Section 2.6.

 

(c)                                  No amendment,
waiver or consent, unless in writing and signed by the Agent, in such capacity,
in addition to the Lenders required hereinabove to take such action, shall
affect the rights or duties of the Agent under this Agreement or any of the
other Loan Documents.  Any amendment,
waiver or consent relating to Section 2.3. or the obligations of the
Swingline Lender

 

116

 

under
this Agreement or any other Loan Document shall, in addition to the Lenders
required hereinabove to take such action, require the written consent of the
Swingline Lender.  Any amendment, waiver
or consent with respect to any Loan Document that (i) diminishes the
rights of a Specified Derivatives Provider in a manner or to an extent dissimilar
to that affecting the Lenders or (ii) increases the liabilities or
obligations of a Specified Derivatives Provider shall, in addition to the
Lenders required hereinabove to take such action, require the consent of the
Lender that is (or having an Affiliate that is) such Specified Derivatives
Provider.

 

(d)                                 No waiver shall
extend to or affect any obligation not expressly waived or impair any right
consequent thereon and any amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose set forth therein.  Except as otherwise provided in Section 12.7.,
no course of dealing or delay or omission on the part of the Agent or any
Lender in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto.  Any Event of Default occurring hereunder shall
continue to exist until such time as such Event of Default is waived in writing
in accordance with the terms of this Section, notwithstanding any attempted
cure or other action by the Borrower, any other Loan Party or any other Person
subsequent to the occurrence of such Event of Default.  Except as otherwise explicitly provided for
herein or in any other Loan Document, no notice to or demand upon the Borrower
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.

 

Section 13.7.  Nonliability of Agent and Lenders.

 

The
relationship between the Borrower, on the one hand, and the Lenders and the
Agent, on the other hand, shall be solely that of borrower and lender.  Neither the Agent nor any Lender shall have
any fiduciary responsibilities to the Borrower or any other Loan Party and no
provision in this Agreement or in any of the other Loan Documents, and no
course of dealing between or among any of the parties hereto, shall be deemed
to create any fiduciary duty owing by the Agent or any Lender to any Lender,
the Borrower, any Subsidiary or any other Loan Party.  Neither the Agent nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower’s business or
operations.  In connection with all
aspects of each transaction contemplated hereby, the Borrower and each other
Loan Party acknowledges and agrees, and acknowledges its Affiliates’
understanding, that (a) the credit facilities provided for hereunder and
any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document) are an arm’s-length commercial transaction between the
Borrower, each other Loan Party and their respective Affiliates, on the one
hand, and the Agent and the Lenders, on the other hand; (b) neither the
Agent nor any Lender has assumed or will assume any advisory, agency or
fiduciary responsibility in favor of the Borrower or any other Loan Party with
respect to any of the transactions contemplated hereby or the process leading
hereto (irrespective of whether the Agent, any Lender or any of their
respective Affiliates has advised or is currently advising the Borrower, any
other Loan Party or any of their respective Affiliates on other matters) and
neither the Agent nor any Lender has any obligation to the Borrower, any other
Loan Party or any of their respective Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (c) the Agent, the Lenders and
their respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Borrower, the other Loan
Parties and their respective Affiliates, and neither the

 

117

 

Agent
nor any Lender has any obligation to disclose any of such interests by virtue
of any advisory, agency or fiduciary relationship.

 

Section 13.8.  Confidentiality.

 

The Agent and each Lender shall use
reasonable efforts to assure that information about the Parent, the Borrower,
the other Loan Parties and other Subsidiaries, and the respective properties
thereof and their operations, affairs and financial condition, not generally
disclosed to the public, which is furnished to the Agent or any Lender pursuant
to the provisions of this Agreement or any other Loan Document, is used only
for the purposes of this Agreement and the other Loan Documents and shall not
be divulged to any Person other than the Agent, the Lenders, and their
respective agents who are actively and directly participating in the evaluation,
administration or enforcement of the Loan Documents and other transactions
between the Agent or such Lender, as applicable, and the Borrower, but in any
event the Agent and the Lenders may make disclosure:  (a) to any of their respective Affiliates
(provided they shall agree to keep such information confidential in accordance
with the terms of this Section 13.8.); (b) as reasonably requested by
any potential or actual Assignee, Participant or other transferee in connection
with the contemplated transfer of any Commitment or participations therein as
permitted hereunder (provided they shall agree to keep such information
confidential in accordance with the terms of this Section); (c) as
required or requested by any Governmental Authority or representative thereof
or pursuant to legal process or in connection with any legal proceedings or as
otherwise required by Applicable Law; provided, however, if the Agent or a
Lender receives a summons or subpoena to disclose any such confidential
information to any Person, the Agent or such Lender, as applicable, shall, if
legally permitted, endeavor to notify the Borrower thereof as soon as possible
after receipt of such request, summons or subpoena and the Borrower shall be
afforded an opportunity to seek protective orders, or such other confidential
treatment of such disclosed information, as the Borrower and the Agent or such
Lender, as applicable, may deem reasonable; (d) to the Agent’s or such
Lender’s independent auditors and other professional advisors (provided they
shall be notified of the confidential nature of the information); (e) after
the happening and during the continuance of an Event of Default, to any other
Person, in connection with the exercise by the Agent or the Lenders of rights
hereunder or under any of the other Loan Documents; (f) upon Borrower’s
prior consent (which consent shall not be unreasonably withheld), to any
contractual counter-parties to any swap or similar hedging agreement or to any
rating agency; and (g) to the extent such information (x) becomes
publicly available other than as a result of a breach of this Section actually
known to such Lender to be such a breach or (y) becomes available to the
Agent or any Lender on a nonconfidential basis from a source other than the
Borrower or any Affiliate. 
Notwithstanding the foregoing, the Agent and each Lender may disclose
any such confidential information, without notice to the Borrower or any other
Loan Party, to Governmental Authorities in connection with any regulatory
examination of the Agent or such Lender or in accordance with the regulatory
compliance policy of the Agent or such Lender.

 

Section 13.9.  Indemnification.

 

(a)                                  The Borrower
shall and hereby agrees to indemnify, defend and hold harmless the Agent, each
of the Lenders, any Affiliate of the Agent or any Lender, and their respective
directors, officers, shareholders, agents, employees and counsel (each referred
to herein as an

 

118

 

“Indemnified
Party”) from and against any and all of the following (collectively, the “Indemnified
Costs”):  losses, costs, claims, damages,
liabilities, deficiencies, judgments or reasonable expenses of every kind and
nature (including, without limitation, amounts paid in settlement, court costs
and the reasonable fees and disbursements of counsel incurred in connection
with any litigation, investigation, claim or proceeding or any advice rendered
in connection therewith, but excluding losses, costs, claims, damages,
liabilities, deficiencies, judgments or expenses indemnification in respect of
which is specifically covered by Section 3.12. or 5.1. or expressly
excluded from the coverage of such Section 3.12. or 5.1.) incurred by an
Indemnified Party in connection with, arising out of, or by reason of, any
suit, cause of action, claim, arbitration, investigation or settlement, consent
decree or other proceeding (the foregoing referred to herein as an “Indemnity
Proceeding”) which is in any way related directly or indirectly to:  (i) this Agreement or any other Loan
Document or the transactions contemplated thereby; (ii) the making of any
Loans or issuance of Letters of Credit hereunder; (iii) any actual or
proposed use by the Borrower of the proceeds of the Loans or Letters of Credit;
(iv) the Agent’s or any Lender’s entering into this Agreement; (v) the
fact that the Agent and the Lenders have established the credit facility
evidenced hereby in favor of the Borrower; (vi) the fact that the Agent
and the Lenders are creditors of the Borrower and have or are alleged to have
information regarding the financial condition, strategic plans or business
operations of the Borrower and the Subsidiaries; (vii) the fact that the
Agent and the Lenders are material creditors of the Borrower and are alleged to
influence directly or indirectly the business decisions or affairs of the
Borrower and the Subsidiaries or their financial condition; (viii) the
exercise of any right or remedy the Agent or the Lenders may have under this
Agreement or the other Loan Documents, including without limitation, the
foreclosure upon, or seizure of, any Collateral or the exercise of any other
rights of a secured party; (ix) any civil penalty or fine assessed by the
OFAC against, and all reasonable costs and expenses (including counsel fees and
disbursements) incurred in connection with defense thereof by, the Agent or any
Lender as a result of conduct of the Borrower, any other Loan Party or any
Subsidiary that violates a sanction enforced by the OFAC; or (x) any
violation or non-compliance by the Borrower or any Subsidiary of any Applicable
Law (including any Environmental Law) including, but not limited to, any
Indemnity Proceeding commenced by (A) the Internal Revenue Service or
state taxing authority or (B) any Governmental Authority or other Person
under any Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to
cause the Borrower or its Subsidiaries (or its respective properties) (or the
Agent and/or the Lenders as successors to the Borrower) to be in compliance
with such Environmental Laws; provided, however, that the Borrower shall not be
obligated to indemnify any Indemnified Party for (A) any acts or omissions
of such Indemnified Party in connection with matters described in this
subsection to the extent arising from the gross negligence or willful
misconduct of such Indemnified Party, as determined by a court of competent
jurisdiction in a final, non-appealable judgment or (B) Indemnified Costs
to the extent arising directly out of or resulting directly from claims of one
or more Indemnified Parties against another Indemnified Party.

 

(b)                                 The Borrower’s
indemnification obligations under this Section 13.9. shall apply to all
Indemnity Proceedings arising out of, or related to, the foregoing whether or
not an Indemnified Party is a named party in such Indemnity Proceeding.  In this regard, this indemnification shall
cover all Indemnified Costs of any Indemnified Party in connection with any deposition
of any Indemnified Party or compliance with any subpoena (including any

 

119

 

subpoena
requesting the production of documents). 
This indemnification shall, among other things, apply to any Indemnity Proceeding
commenced by other creditors of the Borrower or any Subsidiary, any shareholder
of the Borrower or any Subsidiary (whether such shareholder(s) are
prosecuting such Indemnity Proceeding in their individual capacity or
derivatively on behalf of the Borrower), any account debtor of the Borrower or
any Subsidiary or by any Governmental Authority. If indemnification is to be
sought hereunder by an Indemnified Party, then such Indemnified Party shall
notify the Borrower of the commencement of any Indemnity Proceeding; provided,
however, that the failure to so notify the Borrower shall not relieve the
Borrower from any liability that it may have to such Indemnified Party pursuant
to this Section 13.9.

 

(c)                                  This
indemnification shall apply to any Indemnity Proceeding arising during the
pendency of any bankruptcy proceeding filed by or against the Borrower and/or
any Subsidiary.

 

(d)                                 All
out-of-pocket fees and expenses of, and all amounts paid to third-persons by,
an Indemnified Party shall be advanced by the Borrower at the request of such
Indemnified Party notwithstanding any claim or assertion by the Borrower that
such Indemnified Party is not entitled to indemnification hereunder, upon
receipt of an undertaking by such Indemnified Party that such Indemnified Party
will reimburse the Borrower if it is actually and finally determined by a court
of competent jurisdiction that such Indemnified Party is not so entitled to
indemnification hereunder.

 

(e)                                  An Indemnified
Party may conduct its own investigation and defense of, and may formulate its
own strategy with respect to, any Indemnity Proceeding covered by this Section and,
as provided above, all Indemnified Costs incurred by such Indemnified Party
shall be reimbursed by the Borrower.  No
action taken by legal counsel chosen by an Indemnified Party in investigating
or defending against any such Indemnity Proceeding shall vitiate or in any way
impair the obligations and duties of the Borrower hereunder to indemnify and
hold harmless each such Indemnified Party; provided, however, that if (i) the
Borrower is required to indemnify an Indemnified Party pursuant hereto and (ii) the
Borrower has provided evidence reasonably satisfactory to such Indemnified
Party that the Borrower has the financial wherewithal to reimburse such
Indemnified Party for any amount paid by such Indemnified Party with respect to
such Indemnity Proceeding, such Indemnified Party shall not settle or
compromise any such Indemnity Proceeding without the prior written consent of
the Borrower (which consent shall not be unreasonably withheld or delayed).
Notwithstanding the foregoing, an Indemnified Party may settle or compromise
any such Indemnity Proceeding without the prior written consent of the Borrower
where (x) no monetary relief is sought against such Indemnified Party in
such Indemnity Proceeding or (y) there is an allegation of a violation of
law by such Indemnified Party.

 

(f)                                    If and to the
extent that the obligations of the Borrower under this Section are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law.

 

(g)                                 The Borrower’s
obligations under this Section shall survive any termination of this
Agreement and the other Loan Documents and the payment in full in cash of the

 

120

 

Obligations,
and are in addition to, and not in substitution of, any other of their
obligations set forth in this Agreement or any other Loan Document to which it
is a party.

 

(h)                                 References in
this Section to “Lender” or “Lenders” shall be deemed to include such
Persons (and their Affiliates) in their capacity as Specified Derivatives
Providers.

 

Section 13.10.  Termination; Survival.

 

At
such time as (a) all of the Commitments have been terminated, (b) all
Letters of Credit have terminated or expired (or the Borrower’s obligations in
respect of all outstanding Letters of Credit have been cash collateralized on
terms acceptable to the Agent and the Borrower has executed and delivered a
reimbursement agreement in form and substance acceptable to the Agent and such
other documents requested by the Agent evidencing the Borrower’s reimbursement
obligations in respect of such Letters of Credit), (c) none of the Lenders
is obligated any longer under this Agreement to make any Loans and (d) all
Obligations (other than obligations which survive as provided in the following
sentence) have been paid and satisfied in full, this Agreement shall terminate.  The indemnities to which the Agent, the
Lenders and the Swingline Lender are entitled under the provisions of
Sections 3.12., 5.1., 5.4., 12.9., 13.2. and 13.9. and any other provision
of this Agreement and the other Loan Documents, and the provisions of Section 13.4.,
shall continue in full force and effect and shall protect the Agent, the
Lenders and the Swingline Lender (i) notwithstanding any termination of
this Agreement, or of the other Loan Documents, against events arising after
such termination as well as before and (ii) at all times after any such
party ceases to be a party to this Agreement with respect to all matters and
events existing on or prior to the date such party ceased to be a party to this
Agreement.

 

Section 13.11.  Severability of Provisions.

 

Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

Section 13.12.  GOVERNING LAW.

 

THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

 

Section 13.13.  Counterparts.

 

This
Agreement and any amendments, waivers, consents or supplements may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which counterparts together shall constitute but one and
the same instrument.

 

121

 

Section 13.14.  Obligations with Respect to Loan Parties.

 

The
obligations of the Parent and the Borrower to direct or prohibit the taking of
certain actions by the other Loan Parties as specified herein shall be absolute
and not subject to any defense the Parent or the Borrower may have that the
Parent or the Borrower does not control such Loan Parties.

 

Section 13.15.  Limitation of Liability.

 

Neither
the Agent nor any Lender, nor any Affiliate, officer, director, employee,
attorney, or agent of the Agent or any Lender shall have any liability with
respect to, and the Borrower hereby waives, releases, and agrees not to sue any
of them upon, any claim for any special, indirect, incidental, or consequential
damages suffered or incurred by the Borrower in connection with, arising out
of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.  The Borrower
hereby waives, releases, and agrees not to sue the Agent or any Lender or any
of the Agent’s or any Lender’s Affiliates, officers, directors, employees,
attorneys, or agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Agreement or any of the
other Loan Documents, or any of the transactions contemplated by this Agreement
or financed hereby.

 

Section 13.16.  Entire Agreement.

 

This
Agreement, the Notes, and the other Loan Documents referred to herein embody
the final, entire agreement among the parties hereto and supersede any and all
prior commitments, agreements, representations, and understandings, whether
written or oral, relating to the subject matter hereof and thereof and may not
be contradicted or varied by evidence of prior, contemporaneous, or subsequent
oral agreements or discussions of the parties hereto.  There are no oral agreements among the
parties hereto.

 

Section 13.17.  Construction.

 

The Borrower, the Parent, each Lender and the
Agent acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review this Agreement and
the other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the Borrower,
the Parent, each Lender and the Agent.

 

Section 13.18.  Tax Service.

 

The Borrower authorizes
the Agent to secure, at the Borrower’s sole cost and expense, a tax service
contract requiring a one-time fee with a third party vendor which shall provide
tax information satisfactory to the Agent on each Property and any Improvements
thereto.

 

122

 

Section 13.19.  No Novation; Effect of
Amendment and Restatement.

 

THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT
SOLELY TO AMEND AND RESTATE THE TERMS OF THE EXISTING CREDIT AGREEMENT.  THE PARTIES DO NOT INTEND THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF
ANY OF THE OBLIGATIONS OWING BY THE BORROWER OR THE PARENT UNDER OR IN
CONNECTION WITH THE EXISTING CREDIT AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS (AS DEFINED IN THE EXISTING CREDIT AGREEMENT).  THE AMENDMENT AND RESTATEMENT OF THE EXISTING
CREDIT AGREEMENT EFFECTED BY THIS AGREEMENT SHALL BE EFFECTIVE AS OF THE
EFFECTIVE DATE AND SHALL HAVE PROSPECTIVE EFFECT ONLY.

 

Section 13.20.  Specified Derivatives
Contracts.

 

Each Lender agrees that,
if a Lender enters into a Specified Derivatives Contract (for purposes of this
Section, referred to as the “Specified Derivatives Lender”), it will provide
written notice to the Agent within one Business Day of entering into such
Specified Derivatives Contract, which such notice will set forth the terms
thereof.  Promptly upon receipt of such
notice, the Agent will submit such notice to the other Lenders.  Each other Lender desiring to participate in
such Specified Derivatives Contract will notify the Specified Derivatives Lender
of such desire within two Business Days of the Agent’s submission of such
notice.  Each Lender providing timely
notice to the Specified Derivatives Lender will be permitted to participate in
such Specified Derivatives Contract upon terms to be determined by the
Specified Derivatives Lender and each such Lender providing timely notice.

 

[Signatures on Following Pages]

 

123

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be executed by their authorized officers all as of the day
and year first above written.

 

	
   

  	
  U-STORE-IT, L.P.

  
	
   

  	
   

  
	
   

  	
  By: U-Store-It Trust, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U-STORE-IT TRUST

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							

 

 

[Signatures Continued on Next Page]

 

124

 

[Signature
Page to Amended and Restated Credit Agreement with U-Store-It, L.P.]

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent, as
  a Lender and as Swingline Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

[Signatures Continued on
Next Page]

 

125

 

[Signature
Page to Amended and Restated Credit Agreement with U-Store-It, L.P.]

 

 

	
   

  	
  [LENDER]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

126

 

SCHEDULE 1.1(B)

 

Lender Commitments

 

	
  Lender

  	
   

  	
  Revolving

  Commitment Amount

  	
   

  	
  Term Commitment

  Amount

  	
   

  	
  Aggregate

  Commitment

  	
   

  
	
  Wachovia
  Bank, National Association

  	
   

  	
  $

  	
  27,777,778

  	
   

  	
  $

  	
  22,222,222

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wells
  Fargo Bank, National Association

  	
   

  	
  $

  	
  33,222,222

  	
   

  	
  $

  	
  31,777,778

  	
   

  	
  $

  	
  65,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank
  of America, N.A.

  	
   

  	
  $

  	
  39,000,000

  	
   

  	
  $

  	
  26,000,000

  	
   

  	
  $

  	
  65,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Regions
  Bank

  	
   

  	
  $

  	
  33,333,333

  	
   

  	
  $

  	
  26,666,667

  	
   

  	
  $

  	
  60,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SunTrust
  Bank

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  20,000,000

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PNC
  Bank, National Association

  	
   

  	
  $

  	
  22,222,223

  	
   

  	
  $

  	
  17,777,777

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RBS
  Citizens, N.A. d/b/a Charter One

  	
   

  	
  $

  	
  22,222,223

  	
   

  	
  $

  	
  17,777,777

  	
   

  	
  $

  	
  40,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BMO
  Capital Markets Financing, Inc.

  	
   

  	
  $

  	
  19,444,444

  	
   

  	
  $

  	
  15,555,556

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US
  Bank National Association

  	
   

  	
  $

  	
  19,444,444

  	
   

  	
  $

  	
  15,555,556

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FirstMerit
  Bank, N.A.

  	
   

  	
  $

  	
  8,333,333

  	
   

  	
  $

  	
  6,666,667

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  250,000,000.00

  	
   

  	
  $

  	
  200,000,000.00

  	
   

  	
  $

  	
  450,000,000.00

  	
   

  

 

 

EXHIBIT A

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This
Assignment and Acceptance Agreement (the “Assignment and Acceptance Agreement”)
is dated as of the Effective Date set forth below and is entered into by and
between [the][each](1) Assignor identified in item 1 below ([the][each,
an] “Assignor”) and [the][each](2) Assignee identified in item 2 below
([the][each, an] “Assignee”).  [It is
understood and agreed that the rights and obligations of [the Assignors][the
Assignees](3) hereunder are several and not joint.](4)  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as amended, the “Credit Agreement”), receipt
of a copy of which is hereby acknowledged by [the][each] Assignee.  The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Acceptance Agreement as if set
forth herein in full.

 

For an agreed consideration,
[the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the
respective Assignees], and [the][each] Assignee hereby irrevocably purchases
and assumes from [the Assignor][the respective Assignors], subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Agent as contemplated below (i) all
of [the Assignor’s][the respective Assignors’] rights and obligations in [its
capacity as a Lender][their respective capacities as Lenders] under the Credit
Agreement and any other documents or instruments delivered pursuant thereto to
the extent related to the amount and percentage interest identified below of
all of such outstanding rights and obligations of [the Assignor][the respective
Assignors] under the respective facilities identified below (including without
limitation any letters of credit, guarantees, and swingline loans included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of [the
Assignor (in its capacity as a Lender)][the respective Assignors (in their
respective capacities as Lenders)] against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice
claims, statutory claims and all other claims at law or in equity related to
the rights and obligations sold and assigned pursuant to clause (i) above
(the rights and obligations sold and assigned by [the][any] Assignor to
[the][any] Assignee pursuant to clauses (i) and (ii) above being
referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without
recourse to [the][any] Assignor and, except as expressly

 

(1)                                 For bracketed language here and
elsewhere in this form relating to the Assignor(s), if the assignment is from a
single Assignor, choose the first bracketed language.  If the assignment is from multiple Assignors,
choose the second bracketed language.

 

(2)                                 For bracketed language here and
elsewhere in this form relating to the Assignee(s), if the assignment is to a
single Assignee, choose the first bracketed language.  If the assignment is to multiple Assignees,
choose the second bracketed language.

 

(3)                                 Select as appropriate.

 

(4)                                 Include bracketed language if
there are either multiple Assignors or multiple Assignees.

 

A-1

 

provided in this Assignment
and Acceptance Agreement, without representation or warranty by [the][any]
Assignor.

 

	
  1.

  	
   

  	
  Assignor[s]:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee[s]:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [for
  each Assignee, indicate [Affiliate][Approved Fund] of [identify
  Lender]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrower(s):

  	
   

  	
  U-Store-It,
  L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative
  Agent: Wachovia Bank, National Association, as the administrative agent under
  the Credit Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Credit
  Agreement:

  	
   

  	
  The
  Amended and Restated Credit Agreement dated as of December 7, 2009 among U-Store-It, L.P., the Lenders
  parties thereto, Wachovia Bank, National Association, as Administrative
  Agent, and the other agents parties thereto

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Assigned
  Interest[s]:

  	
   

  	
   

  
							

 

	
  Assignor[s](5)

  	
   

  	
  Assignee[s](6)

  	
   

  	
  Facility

  Assigned(7)

  	
   

  	
  Aggregate Amount

  of Commitment/

  Loans for all

  Lenders(8)

  	
   

  	
  Amount of

  Commitment/

  Loans Assigned

  	
   

  	
  Percentage Assigned

  of Commitment/

  Loans(9)

  	
   

  	
  CUSIP

  Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  

 

	
  [7.

  	
   

  	
  Trade
  Date:

  	
   

  	
                     ](10)

  

 

[Page break]

 

(5)                                 List
each Assignor, as appropriate.

 

(6)                                 List
each Assignee, as appropriate.

 

(7)                                 Fill in
the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Revolving Credit
Commitment,” etc.)

 

(8)                                 Amount
to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.

 

(9)                                 Set
forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all
Lenders thereunder.

 

(10)                          To be
completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.

 

A-2

 

Effective
Date:  
                          
      , 20      
[TO BE INSERTED BY AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION
OF TRANSFER IN THE REGISTER THEREFOR.]

 

The terms set forth in this Assignment and
Acceptance Agreement are hereby agreed to:

 

	
   

  	
  ASSIGNOR[S](11)

  
	
   

  	
   

  
	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE[S](12)

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

[Page Break]

 

(11)                          Add
additional signature blocks as needed.

 

(12)                          Add
additional signature blocks as needed.

 

A-3

 

	
  [Consented to and](13) Accepted:

  	
   

  
	
   

  	
   

  
	
  [NAME
  OF AGENT], as Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [Consented
  to:](14)

  	
   

  
	
   

  	
   

  
	
  [NAME
  OF RELEVANT PARTY]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

(13)                          To be added only if the consent
of the Agent is required by the terms of the Credit Agreement.

 

(14)                          To be added only if the consent
of the Borrower and/or other parties (e.g. Swingline Lender) is required by the
terms of the Credit Agreement.

 

A-4

 

ANNEX 1

 

[                               ](15)

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

1.  Representations and Warranties.

 

1.1  Assignor[s].  [The][Each] Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of [the][the
relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance Agreement and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of the Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of the Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

 

1.2.  Assignee[s].  [The][Each] Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Acceptance
Agreement and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it meets all the requirements to
be an assignee under Section 13.5.(b)(iii), (v) and (vi) of the
Credit Agreement (subject to such consents, if any, as may be required under Section 13.5.(b)(iii) of
the Credit Agreement), (iii) from and after the Effective Date specified
for this Assignment and Acceptance Agreement, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
[the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by the Assigned Interest and either it, or the
person exercising discretion in making its decision to acquire the Assigned
Interest, is experienced in acquiring assets of such type, (v) it has  received a copy of the Credit Agreement, and has received
or has been accorded the opportunity to receive copies of the most recent
financial statements delivered pursuant to Section 9.1. or 9.2., as
applicable, and such other documents and information as it deems appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance Agreement and to purchase [the][such] Assigned Interest, (vi) it
has, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Assignment and Acceptance
Agreement and to purchase [the][such] Assigned Interest, and (vii) if it
is a Foreign Lender, attached to the Assignment and Acceptance Agreement is any
documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by

 

(15)                          Describe Credit Agreement at
option of Agent.

 

A-5

 

[the][such]
Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Agent, [the][any] Assignor 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 decisions in taking or not taking action under
the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

2.  Payments.  From and after the Effective Date, the Agent
shall make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignee whether such amounts have accrued prior to, on or after the Effective Date specified for this Assignment and
Acceptance Agreement.  The Assignor[s]
and the Assignee[s] shall make all appropriate adjustments in payments by the
Agent for periods prior to such Effective Date or with respect to the making of
this assignment directly between themselves.

 

3.  General Provisions.  This Assignment and Acceptance Agreement
shall be binding upon, and inure to the benefit of, the parties hereto and
their respective successors and assigns. 
This Assignment and Acceptance Agreement may be executed in any number
of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Assignment and Acceptance Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance Agreement. 
This Assignment and Acceptance Agreement shall be governed by, and
construed in accordance with, the law of the State of North Carolina.

 

A-6

 

EXHIBIT B

 

FORM OF ENVIRONMENTAL INDEMNITY AGREEMENT

 

THIS ENVIRONMENTAL
INDEMNITY AGREEMENT (this “Agreement”) is made as of December 7,
2009, by U-Store-It, L.P., a
Delaware limited partnership (“Borrower”),  U-STORE-IT TRUST, a real estate
investment trust formed under the laws of the State of Maryland (“Parent”),
USI II,
LLC, a Delaware
limited liability company (“USI II”), and YSI XXIX LP,
a Delaware limited partnership (“YSI XXIX”), each having an address at
c/o U-Store-It Trust, 460 Swedesford Road, Suite 3000, Wayne, Pennsylvania
19087 (USI II and YSI XXIX, collectively, “Guarantor”, and collectively
with Borrower and Parent, “Indemnitor”) in favor of (a) WACHOVIA BANK, NATIONAL ASSOCIATION, in its
capacity as Agent (together with its successors and assigns, “Agent”)
for itself and for each Lender (as defined in the Credit Agreement (defined
herein)), (b) the Secured Parties (as defined in the Credit Agreement),
individually and collectively (together with Agent, collectively, “Indemnitees”)
and (c) the Indemnified Parties (defined below).

 

WHEREAS,
pursuant to that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Borrower,
the financial institutions from time to time party thereto as “Lenders”,
Agent and the other parties thereto, Lenders and Agent have agreed to make available to Borrower
certain financial accommodations in an aggregate principal amount not to exceed
$450,000,000 on the terms and
conditions set forth in the Credit Agreement;

 

WHEREAS, pursuant to the
terms of that certain Amended and Restated Guaranty dated as of December 7,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Guaranty”) made by Guarantor in favor of Agent
and the other Secured Parties, Guarantor has guaranteed Borrower’s obligations
to Agent and Lenders on the terms and conditions contained therein; and

 

WHEREAS, to induce
Lenders and Agent to make, and to continue to make, such financial
accommodations to Borrower under the Credit Agreement, each Indemnitor desires
to execute this Agreement in favor of Indemnitees and Indemnified Parties.

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Indemnitor, Indemnitor agrees as follows:

 

Section 1.                                            Definitions. 
All capitalized terms used in this Agreement not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit
Agreement.  For purposes hereof, the
following terms shall have the following meanings:

 

“Collateral”
means, individually and/or collectively, as the context may require, the
meaning given that term in each Security Instrument.

 

 

“Environmental Damages”
means all claims, judgments, damages (including, without limitation, punitive
damages), losses, penalties, fines, liabilities (including strict liability),
Liens, costs and expenses, of whatever kind or nature, contingent or otherwise,
matured or unmatured, foreseeable or unforeseeable, including, without
limitation, attorneys’ fees and disbursements and consultants’ fees, which are
incurred at any time as a result of the existence of any Hazardous Materials
in, upon, about or beneath the Collateral or migrating to or from the
Collateral, or the existence of a violation of Environmental Requirements
pertaining to the Collateral, and regardless of whether or not the existence of
such Hazardous Materials or the violation of such Environmental Requirements
arose prior to the present ownership or operation of the Collateral or as a
result of the acts or omissions of Indemnitor or any parties related to
Indemnitor, including, without limitation:

 

(i)                                     claims, judgments, damages, losses,
penalties, fines, liabilities, Liens, costs and expenses of any investigation
or defense of any claim, suit or administrative proceeding or investigation or
any directive of any governmental or quasi-governmental agency, department,
commission, board, bureau or instrumentality, whether or not such is ultimately
defeated, and of any settlement or judgment;

 

(ii)                                  damages for personal injury, or injury to
property or natural resources occurring in, upon, about or off of the
Collateral, foreseeable or unforeseeable, including, without limitation, lost
profits, consequential damages, the cost of demolition and rebuilding of any
improvements on real property, interest and penalties;

 

(iii)                               diminution in the value of the
Collateral, and damages for the loss of or restriction on the use of or adverse
impact on the marketing of the Collateral or any portion thereof;

 

(iv)                              any loss resulting from a loss of
priority of the Security Instrument due to the imposition of a Lien against the
Collateral; and

 

(v)                                 fees incurred for the services of attorneys,
consultants, engineers, contractors, experts, laboratories and all other costs
incurred in connection with the investigation, clean up or remediation of
Hazardous Materials or any violation of Environmental Requirements including,
but not limited to, the preparation of any feasibility studies or reports or
the performance of any cleanup, remediation, removal, abatement, containment,
closure, restoration or monitoring work required by any federal, state or local
governmental agency or political subdivision, or reasonably necessary to make
full economic use of the Collateral or any other property or otherwise expended
in connection with such conditions; and

 

(vi)                              liability to any Person to indemnify such
Person for costs expended in connection with the items referenced in this
definition.

 

“Environmental
Requirements” means any present and future Applicable Laws, orders,
approvals, plans, authorizations, guidelines, concessions, franchises and
similar items (whether now existing or hereafter enacted or promulgated), of
all governmental or quasi-governmental

 

B - 2

 

agencies, departments,
commissions, boards, bureaus or instrumentalities of the United States, states,
municipalities and political subdivisions of any of them and all applicable
judicial and administrative and regulatory decrees, judgments and orders
relating to the protection of human health or the environment, including
without limitation:

 

(i)                                     the following statutes, as amended, any
successor statute thereto, and any regulations promulgated pursuant thereto,
and any state or local statutes, ordinances, rules, regulations and the like
addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), Federal
Clean Air Act (42 U.S.C. Section 7401 et seq.), Federal Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.), Federal
Clean Water Act of 1977 (33 U.S.C. Section 1251 et seq.), Federal
Insecticide, Fungicide, and Rodenticide Act, Federal Pesticide Act of 1978 (7
U.S.C. Section 136 et seq.), Federal Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), Federal Safe Drinking Water Act (42 U.S.C. Section 300(f) et
seq.), and National Environmental Policy Act (42 U.S.C. Section 4321 et
seq.), the Comprehensive Environmental Response, Compensation and Liability
Act, the Emergency Planning and Community Right-to-Know Act, the Solid Waste
Disposal Act, the Mine Safety and Health Act, the Occupational Safety and
Health Act, the Federal Water Pollution Control Act, the Endangered Species
Act, the National Environmental Policy Act, and the River and Harbors
Appropriation Act;

 

(ii)                                  any and all other requirements relating
to Hazardous Materials, including, but not limited to, those pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous Materials,
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials or wastes whether solid, liquid or gaseous in nature, into the air,
surface water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, pollutants, contaminants or hazardous or toxic substances,
materials or wastes, whether solid, liquid or gaseous in nature and any present
and future federal, state and local laws, statutes ordinances, rules,
regulations and the like (as well as common law) conditioning transfer of
property upon a negative declaration or other approval of a Governmental
Authority of the environmental condition of the Collateral; requiring
notification or disclosure of Releases of Hazardous Materials or other
environmental condition of the Collateral to any Governmental Authority or
other Person, whether or not in connection with transfer of title to or
interest in property; imposing conditions or requirements in connection with
permits or other authorization for lawful activity; relating to nuisance,
trespass or other causes of action related to the Collateral; and relating to
wrongful death, personal injury, or property or other damage in connection with
any physical condition or use of the Collateral; and

 

(iii)                               all requirements pertaining to the
protection of the health and safety of employees or the public.

 

B - 3

 

“Hazardous Materials”
has the meaning given such term in the Credit Agreement and in any event
includes any substance:

 

(i)                                     the presence of which requires
notification, investigation or remediation under any
Environmental Requirement; or

 

(ii)                                  which is or
becomes defined as “hazardous”, “toxic”, 
“noxious”, “waste”, “substance”, “material”, “pollutant” or “contaminant”
or words of similar meaning or regulatory effect under any present or future
Environmental Requirements or requires remediation under any present or future
Environmental Requirement or amendments thereto; or

 

(iii)                               which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and is or becomes regulated by any
Governmental Authority, agency, department, commission, board, agency or
instrumentality of the United States, any state of the United States, or
municipality or any political subdivision of any of them; or

 

(iv)                              the presence of
which on the Collateral causes or threatens to cause a nuisance upon the Collateral
or to adjacent properties or poses or threatens to pose a hazard to the
Collateral or to the health or safety of Persons on or about the Collateral; or

 

(v)                                 which contains (a) asbestos;
(b) gasoline, diesel fuel or other petroleum hydrocarbons or volatile
organic compounds; (c) polychlorinated biphenyls (PCBs) or urea
formaldehyde foam insulation; (d) Microbial Matter; or (e) lead; or

 

(vi)                              which contains
or emits radioactive particles, waves or material, including radon gas.

 

“Improvements”
has the meaning given such term in the Security Instrument.

 

“Indemnified Parties” means Indemnitees,
any Person who is or will have been involved in the origination of the Loans,
any Person who is or will have been involved with the servicing of the Loan,
any Person in whose name the encumbrance created by the Security Instrument is
or will have been recorded, Persons who may hold or acquire or will have held a
full or partial interest in the Loan, (as well as custodians, trustees and
other fiduciaries who hold or have held a full or partial interest in the Loan
for the benefit of third parties) as well as the respective directors,
officers, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including but not limited to any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan or the Collateral, whether during the term
of the Loan or as a part of or following a foreclosure of the Loan and
including, but not limited to, any successors by merger, consolidation or
acquisition of all or a substantial portion of Indemnitees’ assets and
business).

 

B - 4

 

“Microbial Matter” means fungi or bacterial
matter which reproduces through the release of spores or the splitting of
cells, including, but not limited to, mold, mildew, and viruses, whether or not
such Microbial Matter is living.

 

“Obligations”
has the meaning given such term in the Security Instrument.

 

“Property”
means the real estate or interest therein described in Exhibit A
attached hereto and incorporated herein by this reference, and all rights,
titles and interests appurtenant thereto.

 

“Release”
means, with respect to any Hazardous Materials, any release of Hazardous
Materials, including, but is not limited to, any release, deposit, discharge,
emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous
Materials.

 

“Remediation” means any
remediation relating to Hazardous Materials, including, without limitation, any
response, remedial, removal, or corrective action; any activity to clean up,
detoxify, decontaminate, contain or otherwise remediate any Hazardous Material;
any actions to prevent, cure or mitigate any Release of any Hazardous Material;
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto; any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or evaluation
relating to any Hazardous Materials or to anything referred to herein.

 

“Security
Instrument” means, collectively, those certain mortgages, deeds of trust,
deeds to secure debt, and/or similar security instruments, each dated the date
hereof from Borrower and/or Guarantor as grantor thereunder, in favor of Agent
as beneficiary thereunder, covering the Collateral and other related collateral
more particularly described therein, and given as an security for the repayment
of the Obligations.

 

Section 2.                                            Hazardous
Materials at the Property. 
Indemnitor shall keep and maintain the Collateral in compliance with all,
and shall not cause or permit the Collateral to be in violation of,
Environmental Requirements relating to conditions on, under or about the
Collateral.  Indemnitor shall not use,
generate, manufacture, store, dispose of or permit to exist in, on, under or
about the Collateral any Hazardous Material; provided, however, that Indemnitor
may use and store janitorial and cleaning supplies used in the ordinary course
of maintaining the Collateral and tenants, if permitted by their respective
leases, are permitted to store and maintain Hazardous Materials in such
quantities and types as are customarily held by Persons engaged in the same or
similar lines of business, but all of the foregoing shall be done only in
compliance with all Environmental Requirements. 
Indemnitor shall keep the Collateral free and clear of all liens and
other encumbrances imposed pursuant to any Environmental Requirement, whether
due to any act or omission of Indemnitor or any other Person.

 

Section 3.                                            Audit,
Cooperation and Access.  Upon
reasonable notice to Indemnitor, if an Event of Default exists, or if no Event
of Default exists but Agent has a reasonable good faith belief that conditions
at the Collateral present an imminent and substantial endangerment to human
health or the environment, Agent shall have the right, but not the obligation,
to enter upon the Collateral at all reasonable times to assess any and all
aspects of the environmental condition

 

B - 5

 

of
the Collateral and its use, including, but not limited to, conducting any
environmental assessment or audit (the scope of which shall be determined in
the sole and absolute discretion of Agent) and taking samples of soil,
groundwater or other water, air, or building materials, and reasonably
conducting other invasive testing. 
Indemnitor shall cooperate with and provide Agent and any such Person
designated by the Agent with access to the Collateral.  Indemnitor shall reimburse Agent for the
costs of Agent’s activities under this Section. Indemnitor shall, at its sole
cost and expense, comply with all reasonable written requests of Agent to (i) effectuate
Remediation of any condition (including, but not limited to, a Release of a
Hazardous Material) in, on, under or from the Collateral, which such
Remediation is required under Environmental Requirements; (ii) comply with
any Environmental Requirement; (iii) comply with any directive from any
Governmental Authority; and (iv) take any other reasonable action
necessary or appropriate for protection of human health or the environment

 

Section 4.                                            Hazardous
Materials Claims.  Indemnitor
represents and warrants that, to the best of its knowledge, (a) no
enforcement, cleanup, removal or other governmental or regulatory actions have,
at any time, been instituted, contemplated or threatened against the
Collateral, or against Indemnitor with respect to the Collateral, pursuant to
any Environmental Requirements; (b) no violation or non-compliance with
Environmental Requirements has occurred with respect to the Collateral at any
time; (c) no claims have, at any time, been made or threatened by any
third party against the Collateral or against Indemnitor with respect to the
Collateral, relating to damage, contribution, cost recovery, compensation, loss
or injury resulting from any Hazardous Materials (the matters set forth in
clauses (a), (b) and (c) above are hereinafter referred to as “Hazardous
Materials Claims”).

 

Section 5.                                            Environmental
Representations and Warranties.  Except as otherwise disclosed by those
certain Phase I environmental reports (or Phase II environmental reports, if
required) in respect of the Collateral delivered to Agent (collectively
referred to below as the “Environmental Report”), copies of which have
been provided to Agent, Indemnitor represents and warrants that to the best of
its knowledge, (a) there are no Hazardous Materials or underground storage
tanks in, on, or under the Collateral, except those that are both (i) in
compliance with all Environmental Requirements and with permits issued pursuant
thereto and (ii) fully disclosed to Agent in writing pursuant to the
Environmental Report; (b) there are no past, present or threatened
Releases of Hazardous Materials in, on, under or from the Collateral which have
not been fully remediated in accordance with Environmental Requirements; (c) there
is no threat of any Release of Hazardous Materials migrating to the Collateral;
(d) Indemnitor has truthfully and fully provided to Agent, in writing, any
and all information relating to conditions in, on, under or from the Collateral
that is known to Indemnitor and that is contained in files and records of
Indemnitor, including but not limited to any reports relating to Hazardous
Materials in, on, under or from the Collateral and/or to the environmental
condition of the Collateral; (e) the Collateral currently displays no
evidence of water infiltration or water damage; (f) there are no prior or
current complaints by tenants at the Collateral regarding water infiltration or
water damage or leaks or odors related thereto; and (g) the Collateral
currently displays no conspicuous evidence of the growth of Microbial Matter.

 

Section 6.                                            Remediation
Activity.  Without
Agent’s prior written consent, Indemnitor shall not take any remedial action in
response to the presence of any Hazardous Materials on,

 

B - 6

 

under
or about the Collateral, nor enter into any settlement agreement, consent
decree, or other compromise in respect to any Hazardous Materials Claims, which
remedial action, settlement, consent or compromise might, in Agent’s reasonable
judgment, substantially impair the value of Indemnified Parties’ security
hereunder; provided, however, that Agent’s prior consent shall not be necessary
(a) with respect to any remedial action, to the extent such proposed
remedial action proposes remedies and controls that are no more stringent than
those remedies and controls consistent with the current use of the Collateral,
or (b) in the event that the presence of any Hazardous Material on, under,
or about the Collateral either poses an immediate threat to the health, safety
or welfare of any individual or is of such a nature that an immediate remedial
response is necessary and it is not possible to obtain such consent before
taking such action, provided that in such event Indemnitor shall notify Agent
as soon as practicable of any action so taken. 
Agent agrees not to withhold its consent, where such consent is required
hereunder, if either (i) a particular remedial action is ordered by a
court of competent jurisdiction, or (ii) Indemnitor establishes to the
reasonable satisfaction of Agent that there is no reasonable alternative to
such remedial action which would result in less impairment of Indemnified Parties’
security hereunder.

 

Section 7.                                            Participation.  Subject to Section 18 hereof,
Indemnified Parties shall have the right to join and participate in, as a party
if it so elects, any legal proceedings or actions initiated by any Person in
connection with any Hazardous Materials Claims.

 

Section 8.                                            Indemnification.  Not in limitation of any other obligations of
Indemnitor to indemnify Indemnified Parties contained in any of the other Loan
Documents, Indemnitor hereby unconditionally and irrevocably indemnifies and
agrees to reimburse, defend, exonerate, pay and hold harmless Indemnified
Parties and their respective directors, officers, shareholders, employees,
successors, assigns, agents, contractors, subcontractors, experts, licensees,
affiliates, lessees, trustees and invitees, from and against any and all
Environmental Damages arising from the presence of Hazardous Materials in,
upon, about or beneath the Collateral or migrating to or from the Collateral,
or arising in any manner whatsoever out of the violation of any Environmental
Requirements pertaining to the Collateral and the activities thereon, or the
breach of any warranty or covenant or the inaccuracy of any representation of
Indemnitor contained herein or in any of the other Loan Documents pertaining to
Hazardous Materials or other environmental matters, including, without
limitation, the covenants contained in Section 3.4 of the Security
Instrument;  provided, however, that
notwithstanding the foregoing, Indemnitor shall have no liability hereunder to
any Indemnified Parties with respect to any expense, damage or loss suffered by
any Indemnified Parties arising from Hazardous Materials in, upon, about or
beneath the Collateral or migrating to or from the Collateral to the extent
that such presence or migration of Hazardous Materials first occurs after the
date upon which title to the Collateral is transferred to Agent, its nominee,
any agent or receiver appointed on behalf of Agent or any third party
transferee of the Collateral in the event of foreclosure of the Security
Instrument or conveyance of the Collateral in lieu thereof, if such presence or
migration does not arise from the acts or omissions of Borrower, Guarantor, or
their respective affiliates.  The
obligations of Indemnitor under this Section shall include, but not be
limited to, the burden and expense of defending all claims, suits and
administrative proceedings or investigations or any directives of any
governmental or quasi-governmental agency, department, commission, board,
bureau or instrumentality even if such claims, suits or proceedings are
groundless, false or fraudulent and 

 

B - 7

 

conducting
all negotiations of any description, and paying and discharging, when and as
the same become due, any and all judgments, penalties or other sums due against
any Indemnified Parties.

 

Section 9.                                            Enforcement.  Indemnified Parties may enforce the
obligations of Indemnitor without first resorting to or exhausting any security
or collateral or without first having recourse to the Security Instrument, or
any other Loan Documents or any of the Collateral, through foreclosure
proceedings or otherwise, provided, however, that nothing herein shall inhibit
or prevent Indemnified Parties from suing on the Note, foreclosing, or
exercising any power of sale under the Security Instrument, or exercising any
other rights and remedies thereunder. 
This Agreement is not collateral or security for the debt of Indemnitor
pursuant to the Loan, unless Indemnitees expressly elect in writing to make
this Agreement additional collateral or security for the debt of Indemnitor
pursuant to the Loan, which Indemnitees are entitled to do in its sole and
absolute discretion.  It is not necessary
for a Credit Agreement Event of Default to have occurred pursuant to and as
defined in the Security Instrument for Indemnified Parties to exercise their
rights pursuant to this Agreement.

 

Section 10.                                      Survival.  The obligations of Indemnitor under this
Agreement shall survive (i) the repayment of all Obligations and other
sums due under the Credit Agreement and other Loan Documents; (ii) the
release of the Collateral or any portion thereof from the lien of the Security
Instrument; (iii) the reconveyance or foreclosure of the Collateral under
the Security Instrument (notwithstanding that all or a portion of the
obligations secured by the Security Instrument shall have been discharged
thereby); (iv) the acquisition of the Collateral by any Indemnitees or any
nominee or agent thereof; and/or (v) the transfer of all or any of any
Indemnitees’ rights in and to the Obligations and/or the Collateral; and shall
continue to be the personal liability, obligation and indemnification of
Indemnitor, binding upon Indemnitor, forever.

 

Section 11.                                      No Impairment
of Liability.  The
liability of Indemnitor under this Agreement shall in no way be limited or
impaired by (i) any extensions of time for performance required by any of
the Loan Documents, (ii) any sale, assignment, or foreclosure of the
Obligations or Security Instrument or any sale or transfer of all or part of
the Collateral, (iii) any exculpatory provision contained in any of the
Loan Documents limiting recourse to the Collateral or to any other security, or
limiting Indemnified Parties’ rights to a deficiency judgment against
Indemnitor, (iv) the accuracy or inaccuracy of the representations and
warranties made under any of the Loan Documents, (v) the release of
Indemnitor or any other Person from performance or observance of any of the
agreements, covenants, terms or conditions contained in any of the Loan
Documents by operation of Applicable Law, Indemnitees’ voluntary act, or
otherwise, (vi) the release or substitution in whole or in part of any
security for the Obligations or Loan Documents, or (vii) Agent’s failure
to record or file any Loan Document (or Agent’s improper recording or filing of
any such Loan Documents) or to otherwise perfect, protect, secure or insure any
Lien given as security for the Obligations; and, in any such case, whether with
or without notice to Indemnitor and with or without consideration.

 

Section 12.                                      Interest. 
Indemnitor shall pay Agent for the benefit of Secured Parties, on
demand, interest, at the applicable Post-Default Rate on any costs or expenses
incurred by Agent 

 

B - 8

 

in the enforcement of
this Agreement or on any sums Agent is obligated to pay in respect to the
matters with respect to which this Agreement is given, from the date of Agent’s demand.

 

Section 13.                                      No Effect.  The obligations of Indemnitor hereunder (i) shall
not be affected by any investigation by or on behalf of Indemnified Parties or
by any information which Indemnified Parties may have obtained with respect to
the matters indemnified against by the Indemnitor hereunder and (ii) are
separate and distinct from its obligations under the other Loan Documents.

 

Section 14.                                      Inconsistent
Provisions.  The
provisions of this Agreement shall govern and control over any inconsistent
provision of any other Loan Document, including, without limitation, any
exculpatory or non-recourse provisions contained in any of the Loan Documents,
it being expressly understood and agreed that any exculpatory or non-recourse
provisions contained in any Loan Document shall not apply to the obligations of
Indemnitor under this Agreement.

 

Section 15.                                      Counsel.  If at any time or times hereafter Indemnified
Parties employ counsel for advice or other representation (i) with respect
to the enforcement of the terms and provisions of this Agreement against
Indemnitor, (ii) to represent Indemnitees or any of them in any
litigation, contest, dispute, suit or proceeding (whether instituted by Agent,
Indemnitor, or any other party) in any way or respect relating to this
Agreement or the matters subject to this Agreement, or (iii) to enforce
Indemnitor’s obligations hereunder, then, in any of the foregoing events, all
of the attorneys’ fees and other expenses, costs and charges in any way or
respect arising in connection therewith or relating thereto shall be paid by
Indemnitor to Agent.

 

Section 16.                                      Indemnitor’s
Waivers.  (a) Indemnitor waives any
right or claim of right to cause a marshaling of Indemnitor’s assets or to
cause Indemnified Parties to proceed against any of the security for the
Obligations before proceeding under this Agreement against the Indemnitor;
Indemnitor agrees that any payments required to be made hereunder shall become
due immediately upon demand, and if such payment is not immediately made,
interest shall accrue on such amount at the Post-Default Rate until such
amount, plus interest, is paid in full. 
Indemnitor expressly waives and relinquishes all rights and remedies
accorded by Applicable Law to indemnitors or guarantors, except any rights of
subrogation which Indemnitor may have, provided that the indemnity provided for
hereunder shall neither be contingent upon the existence of any such rights of
subrogation nor subject to any claims or defenses whatsoever which may be
asserted in connection with the enforcement or attempted enforcement of such
subrogation rights including, without limitation, any claim that such
subrogation rights were abrogated by any acts of Indemnified Parties.  Indemnitor hereby agrees to postpone the
exercise of any and all rights of subrogation to the rights of Indemnified
Parties against the Indemnitor hereunder and any rights of subrogation to any
collateral securing the Obligations until the Obligations shall have been paid
in full.

 

(b)  INDEMNITOR
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR
OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOANS EVIDENCED BY THE NOTE,
THE

 

B - 9

 

APPLICATION FOR THE LOANS
EVIDENCED BY THE NOTE, THE SECURITY INSTRUMENT, THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN
CONNECTION THEREWITH.

 

Section 17.                                      Notice of Claims and Inquiries. 
Indemnitor shall promptly notify Agent upon receipt of any written
inquiry, notice, claim, charge, cause of action or demand or upon receipt of
any verbal inquiry, notice, claim, charge, cause of action or demand of any
Governmental Authority or quasi-governmental authority or any other type of
verbal inquiry, notice, claim, charge, cause of action or demand pertaining to
the matters indemnified hereunder and to Hazardous Claims, including, without
limitation, any notice of inspection, abatement or noncompliance, stating the
nature and basis of such inquiry or notification.  Indemnitor shall promptly deliver to Agent
any and all documentation or records as Agent may request in connection with
such notice or inquiry, and shall keep Agent advised of any subsequent
developments.

 

Section 18.                                      Indemnified Parties’ Participation.  Upon written
request by any Indemnified Parties, Indemnitor shall defend same (if requested
by Indemnified Parties, in the name of the Indemnified Parties) by attorneys
and other professionals approved by the Indemnified Parties.  Notwithstanding the foregoing, any
Indemnified Parties may, in their sole and absolute discretion, engage their
own attorneys and other professionals to defend or assist them, and, at the
option of Indemnified Parties, their attorneys shall control the resolution of
any claim or proceeding, providing that no compromise or settlement shall be
entered without Indemnitor’s consent, which consent shall not be unreasonably
withheld.  Upon demand, Indemnitor shall
pay or, in the sole and absolute discretion of the Indemnified Parties,
reimburse, the Indemnified Parties for the payment of reasonable fees and
disbursements of attorneys, engineers, environmental consultants, laboratories
and other professionals in connection therewith.

 

Section 19.                                      Subrogation. 
Indemnitor shall take any and all reasonable actions, including
institution of legal action against third parties, necessary or appropriate to
obtain reimbursement, payment or compensation from such Persons responsible for
the presence of any Hazardous Materials at, in, on, under or near the
Collateral or otherwise obligated by law to bear the cost.  Indemnified Parties shall be and hereby are
subrogated to all of Indemnitor’s rights now or hereafter in such claims.

 

Section 20.                                      No Discharge. 
No dissolution, liquidation, insolvency, bankruptcy or other matter with
respect to Indemnitor shall affect this Agreement or any of Indemnitor’s
obligations hereunder.

 

Section 21.                                      Event of Default and Remedies. 
Any breach of any covenant, representation or warranty of any Indemnitor
hereunder shall constitute an “Event of Default” hereunder, and shall entitle
Agent to exercise all remedies hereunder, at law or in equity, or as otherwise
provided in the Loan Documents.

 

B - 10

 

Section 22.             Indemnitor’s Representations and Warranties. 
Indemnitor represents and warrants that:

 

(a)     it has the full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement by
Indemnitor has been duly and validly authorized; and all requisite action has
been taken by Indemnitor to make this Agreement valid and binding upon
Indemnitor, enforceable in accordance with its terms;

 

(b)     its execution of, and compliance
with, this Agreement is in the ordinary course of business of Indemnitor and
will not result in the breach of any term or provision of the charter, by-laws,
partnership or trust agreement, or other governing instrument of Indemnitor or
result in the breach of any term or provision of, or conflict with or
constitute a default under, or result in the acceleration of any obligation
under, any agreement, indenture or loan or credit agreement or other instrument
to which Indemnitor or the Collateral is subject, or result in the violation of
any law, rule, regulation, order, judgment or decree to which Indemnitor or the
Collateral is subject;

 

(c)     to the best of Indemnitor’s
knowledge, there is no action, suit, proceeding or investigation pending or threatened
against it which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial condition,
properties or assets of Indemnitor, or in any material impairment of the right
or ability of Indemnitor to carry on its business substantially as now
conducted, or in any material liability on the part of Indemnitor, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of Indemnitor contemplated
herein, or which would be likely to impair materially the ability of Indemnitor
to perform under the terms of this Agreement;

 

(d)     it does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;

 

(e)     to the best of Indemnitor’s
knowledge, no approval, authorization, order, license or consent of, or
registration or filing with, any Governmental Authority or other person, and no
approval, authorization or consent of any other party is required in connection
with this Agreement; and

 

(f)      this Agreement constitutes a
valid, legal and binding obligation of Indemnitor, enforceable against it in
accordance with the terms hereof.

 

Section 23.             Loan Sales and Participations; Disclosure of Information. 
The provisions of Section 13.5 and 13.8 of the Credit Agreement are
hereby incorporated herein by reference as if the same were fully set forth
herein.

 

Section 24.             Severability.   This
Agreement is intended to be performed in accordance with, and only to the
extent permitted by, all Applicable Law. 
If any provision of any of this Agreement or the application thereof to
any Person or circumstance shall, for any reason and to any extent, be invalid
or unenforceable, then neither the remainder of the instrument in which

 

B - 11

 

such provision is
contained nor the application of such provision to other persons or
circumstances nor the other instruments referred to hereinabove shall be
affected thereby, but rather, shall be enforced to the greatest extent
permitted by Applicable Law.

 

Section 25.             Enforceability. Indemnitor hereby acknowledges that: (a) the
obligations undertaken by Indemnitor in this Agreement are complex in nature,
and (b) numerous possible defenses to the enforceability of these
obligations may presently exist and/or may arise hereafter, and (c) as
part of Agent and the other Secured Parties’ consideration for entering into
this transaction, Agent and the other Secured Parties have specifically
bargained for the waiver and relinquishment by Indemnitor of all such defenses,
and (d) Indemnitor has had the opportunity to seek and receive legal
advice from skilled legal counsel in the area of financial transactions of the
type contemplated herein.  Given all of
the above, Indemnitor does hereby represent and confirm to Agent and the other
Secured Parties that Indemnitor is fully informed regarding, and that Indemnitor
does thoroughly understand: (i) the nature of all such possible defenses,
and (ii) the circumstances under which such defenses may arise, and (iii) the
benefits which such defenses might confer upon Indemnitor, and (iv) the
legal consequences to Indemnitor of waiving such defenses.  Indemnitor acknowledges that Indemnitor makes
this Agreement with the intent that this Agreement and all of the informed
waivers herein shall each and all be fully enforceable by Agent for the benefit
of Secured Parties, and that Agent and the other Secured Parties are induced to
enter into this transaction in material reliance upon the presumed full
enforceability thereof.

 

Section 26.             Notice to Parties. Unless otherwise provided herein, communications
provided for hereunder shall be in writing and shall be given in accordance
with the applicable provisions of the Credit Agreement or the Guaranty, as
applicable.

 

Section 27.             Governing Law.  THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE.

 

Section 28.             Headings.   The Section and
Subsection entitlements hereof are inserted for convenience of reference only
and shall in no way alter, modify or define, or be used in construing, the text
of such Sections or Subsections.

 

Section 29.             Modification.  This
Agreement may only be amended, revised, waived or otherwise modified by a
written instrument or instruments as provided in Section 13.6. of the Credit Agreement.

 

Section 30.             Successors and Assigns. The covenants, agreements and obligations of
Indemnitor hereunder shall be binding upon Indemnitor and its respective legal
representatives, successors and assigns, and the rights, remedies and benefits
of Indemnified Parties hereunder shall inure to the benefit of Indemnified
Parties and their respective legal representatives, successors and assigns.
There are no parties who or which are intended to be a third party beneficiary
of any benefit conferred under this Agreement, except for the legal
representatives, successors and assigns of Indemnified Parties.

 

B - 12

 

Section 31.             Loan Document.  This
Agreement shall constitute a Loan Document for purposes of the Security
Instrument and the other Loan Documents, but this Agreement is not secured by
the Security Instrument.

 

Section 32.             Joint and Several Liability. 
If Indemnitor consists of more than one person or party, the obligations
and liabilities of each such person or party hereunder shall be joint and
several.

 

Section 33.             No Waiver.  No delay by
any Indemnified Party in exercising any right, power or privilege under this
Agreement shall operate as a waiver of any such privilege, power or right.

 

Section 34.             Time is of the Essence.  Time is of
the essence with respect to each and every covenant, agreement and obligation
of Indemnitor under this Agreement.

 

Section 35.             Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute but one instrument.

 

Section 36.             California State Specific Provisions.  (a) Inconsistencies.            In the event of any inconsistencies between the terms
and conditions of this Section 36 and the other Articles of this
Agreement, the terms and conditions of this Section 36 shall control and
be binding.

 

(b)           Waivers.  In connection
with the enforcement of Indemnitor’s obligations under this Agreement,
Indemnitor hereby waives:

 

(i)            an election of remedies by any
Indemnified Party, even though that election of remedies, such as a non
judicial foreclosure with respect to any security for the Loan (whether such
security is real property or personal property), for a guaranteed obligation,
has destroyed the guarantor’s rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the California Code of
Civil Procedure or otherwise,

 

(ii)           any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal, or

 

(iii)          without
limiting the generality of the foregoing, Indemnitor hereby expressly waives
any and all benefits which might otherwise be available to Indemnitor under
California Civil Code Sections 2809, 2810, 2819, 2839, 2845 through 2847, 2849,
2850, 2899 and 3433, and California Code of Civil Procedure Sections 580a,
580b, 580d and 726 in connection with the enforcement of Indemnitor’s
obligations under this Agreement.

 

(c)           Loan Amount No Limitation. 
The amount of Indemnitor’s liability under this Agreement is unrelated
to, and independent of, the amount of any loss that Indemnitees may 

 

B - 13

 

suffer by reason of the
failure of the Loan to be repaid in full, and shall not be determined by
reference to the amount of any Loan loss. 
No amount paid to any Indemnified Party pursuant to this Agreement shall
be considered to be paid on account of the Loan or any deficiency or loss
suffered by Indemnitees by reason of the failure of the Loan to be repaid in
full.  The enforcement of this Agreement
by any Indemnified Party shall not be construed as an indirect attempt to
recover any such Loan loss.  Indemnitor
acknowledges that Indemnitor may have liability under this Agreement even if
the Loan is repaid in full by reason of a full credit bid at any foreclosure
sale under the Security Instrument, and that the amount of Indemnitor’s
liability hereunder could exceed the entire amount paid by Indemnitor for the
Property.

 

(c)  Legal Effect of Agreement.  Indemnitor and Indemnitees agree that: (i) this
Agreement is intended as Indemnitees’ written request for information (and
Indemnitor’s response) concerning the environmental condition of the real
Property security as required by California Code of Civil Procedure Section 726.5;
and (ii) each provision in this Agreement (together with any indemnity
applicable to a breach of any such provision) with respect to the environmental
condition of the real Property security is intended by Indemnitees and
Indemnitor to be an “environmental provision” for purposes of California Code
of Civil Procedure Section 736, and as such it is expressly understood
that Indemnitor’s duty to indemnify Indemnitees hereunder shall survive: (i) any
judicial or non judicial foreclosure under the Security Instrument, or transfer
of the Property in lieu thereof; (ii) the release and reconveyance or
cancellation of the Security Instrument; and (iii) the satisfaction of all
of Indemnitor’s obligations under the Notes, the Security Instrument, the
Credit Agreement and the other Loan Documents.

 

(d)  Inspection Rights.  Indemnitees shall have the right to enter and
inspect the Property for any Hazardous Materials pursuant to California Civil
Code Section 2929.5, to obtain a court order to enforce that right, and to
have a receiver appointed pursuant to California Code of Civil Procedure Section 564
to enforce Indemnitees’ right to enter and inspect the Property.

 

(e)  Remedies.  Upon any breach of this Agreement (after the
expiration of any applicable notice and cure periods), Indemnitees shall have
the right to commence and maintain an action or actions in any court of
competent jurisdiction for breach of contract pursuant to California Code of
Civil Procedure Section 736, whether commenced prior to foreclosure of the
Property or after foreclosure of the Property, and to seek the recovery of any
and all costs, damages, expenses, fees, penalties, fines, judgments,
indemnification payments to third parties, and other out-of-pocket costs or
expenses actually incurred or advanced by Indemnitees (collectively, the “Environmental Costs”) relating to the
cleanup, remediation or other response action required by any Environmental
Requirements or which Indemnitees believe necessary to protect the Property.

 

Indemnitor acknowledges and agrees that
notwithstanding any term or provision contained herein or in the Notes, the
Security Instrument, the Credit Agreement or the other Loan Documents, the
Environmental Costs shall be exceptions to any non-recourse or exculpatory
provision and Indemnitor shall be fully and personally liable for the
Environmental Costs hereunder and such liability shall not be limited to the
original principal amount of the obligations secured by the Security
Instrument; provided, however, the aforementioned personal 

 

B - 14

 

liability of Indemnitor shall not be deemed to include
the owners of equity interests in Indemnitor or any employees or agents of
Indemnitor.

 

(f)  Remedies Upon Environmental Impairment.  If a Credit Agreement Event of Default (as
defined in the Security Instrument) exists, in addition to any other remedies
provided therein and applicable law, the Indemmitee shall have the right to
waive its lien against the Property or any portion thereof, whether fixtures or
personal property, to the extent such Property is found to be environmentally
impaired in accordance with California Code of Civil Procedure Section 726.5
and to exercise any and all rights and remedies of an unsecured creditor
against Indemnitor and all of Indemnitor’s assets and property for the recovery
of any deficiency, including, but not limited to, seeking an attachment order
pursuant to California Code of Civil Procedure Section 483.010. As between
Indemnitees and Indemnitor, for purposes of California Code of Civil Procedure Section 726.5,
Indemnitor shall have the burden of proving that Indemnitor or any related
party (or any affiliate or agent of Indemnitor or any related party) was not in
any way negligent in permitting the release or threatened release of the
Hazardous Materials. Indemnitor acknowledges and agrees that notwithstanding
any term or provision contained herein or in the Notes, the Security
Instrument, the Credit Agreement or the other Loan Documents, all judgments and
awards entered against Indemnitor under this Section and California Code
of Civil Procedure Section 726.5 shall be exceptions to any non-recourse
or exculpatory provisions of the Notes, Credit Agreement, and the other Loan
Documents and Indemnitor shall be fully and personally liable for all such
judgments and awards entered against Indemnitor.

 

(g)  California Code Sections.  This Agreement is intended to be cumulative
of any rights of Indemnitees under California Code of Civil Procedure Sections
564, 726.5 and 736 and under California Civil Code Section 2929.5.
Indemnitor hereby agrees that, to the extent permitted by applicable Legal
Requirements, its liability hereunder shall not be affected by any restrictions
or limitations which such statutes may contain.

 

(h)  Survival.  The indemnity in this Agreement is intended
to be operable under 42 U.S.C. 9607(e)(1), and any successor section thereof,
and shall survive the foreclosure, release or reconveyance of the Security
Instrument, whether by payment of the Loan or any deed-in-lieu of foreclosure
of the Property and shall thereafter only terminate as expressly and
specifically provided herein.

 

Section 37.             New Jersey State Specific Provisions.  (a) In
the event that any inconsistencies between the terms and conditions of this Section 37
and the other terms and conditions of this Agreement, the terms and conditions
of Section 37 shall control and be binding.

 

(b)           New Jersey Spill Act and ISRA.  (i) Indemnitor
represents and warrants, based upon the environmental report of the Property
delivered in connection with the Loan and information that Indemnitor knows,
that: (A) no portion of the Property has ever been used by Indemnitor or
any former owner, occupant or operator to generate, manufacture, refine,
produce, treat, store, handle, dispose of, transfer, process or transport
Hazardous Materials, whether or not any of those parties has received notice or
advice from any governmental agency or other source with respect thereto; (B) no
portion of the Property is now nor at any time that Indemnitor has 

 

B - 15

 

owned the Property, nor at any time prior to
Indemnitor acquiring title to the Property has ever been, used as a “Major
Facility,” as that term is defined in the Spill Compensation and Control Act,
N.J.S.A. 58:10-23.11 et seq. (said Spill Compensation and Control Act together
with any amendments or revisions thereof and any regulations promulgated
pursuant thereto being hereinafter collectively called the “Spill Act”), and
that Indemnitor has not used, and does not intend to use, any portion of the
Property for that purpose; (C) at any time that Indemnitor has owned the
Property and at any time prior to Indemnitor acquiring title to the Property,
Hazardous Materials have not been transported from the Property to another
location which is not in compliance with all Environmental Requirements;  (D) there are no environmental permits
required for current or anticipated uses of the Property; (E) no lien has
been attached to the Property under the Spill Act or any other Environmental
Requirements; and (F) Indemnitor has not in the past, and does not now
own, operate or control any “Major Facility” (as such term is defined in the
Spill Act) or any hazardous or solid waste disposal facility.

 

(ii)           If a lien is filed against the Property pursuant to
the Spill Act or any other Environmental Requirement, Indemnitor shall immediately
either: (A) pay the claim and remove the lien from the Property, or (B) furnish
(x) a bond reasonably satisfactory to Agent and the title insurance
company which insures the priority of the lien of the Security Instrument in
the amount of the claim out of which the lien arises, (y) a cash deposit
in the amount of the claim out of which the lien arises, or (z) other
security reasonably satisfactory to Agent in an amount sufficient to discharge
the claim out of which the lien arises. 
In addition to the foregoing, Indemnitor hereby agrees to defend,
indemnify and to save the Indemnified Parties harmless from and against all
loss, damage, liability and expense (including reasonable attorney’s fees and
expenses) which the Indemnified Parties may sustain by reason of any lien filed
against the Property pursuant to the Spill Act or any other federal, state or
local laws, ordinances, rules or regulations.

 

(iii)          All references herein to executives, departments,
funds, statutes, and acts of the State of New Jersey are not intended to be
exclusive and shall be deemed to apply to any successors, replacements,
amendments, thereof and any additional statutes, rules, regulations,
organizations and persons of a similar nature, whether of the State of New
Jersey or the United States of America.

 

(iv)          Indemnitor (A) hereby represents and warrants
that, to the best of Indemnitor’s knowledge, after due inquiry, no portion of
the Property constitutes an “industrial establishment” (as such term is defined
in the New Jersey Industrial Site Recovery Act, Senate No. 1070, N.J. Laws
1993, c. 139 (effective June 16, 1993), N.J.S.A. 13:1K-6 et. seq.
and N.J.A.C. 7:26B et. seq., and the regulations promulgated
pursuant thereto (said New Jersey Industrial Site Recovery Act together with
any amendments, supplements, modifications or revisions thereof and any
regulations promulgated pursuant thereto and any successor statutes, laws or
regulations and any guidelines and directives of the New Jersey Department of
Environmental Protection (“DEP”) issued pursuant to or implementing ISRA
hereinafter collectively called “ISRA”))
and is not otherwise subject to ISRA and (B) hereby covenants and agrees
that Indemnitor shall not, and shall not permit any Tenant to, engage in
operations at the 

 

B - 16

 

Property such that any portion of the Property would
be deemed an “industrial establishment” under ISRA or would otherwise be
subject to ISRA.

 

(v)           Without limitation of the foregoing, in the event that
any portion of the Property is determined to be an “industrial establishment”
or otherwise subject to ISRA, then, upon Agent and Secured Parties’ request,
and in all events no later than ten (10) days prior to “closing,
terminating or transferring operations” (as defined in ISRA) by Indemnitor
and/or any one or more Tenants, Indemnitor, at its sole cost and expense, shall
demonstrate compliance with ISRA by providing Agent and Secured Parties with
certified true copies of any and all of the following, as may be applicable
pursuant to ISRA, including but not limited to:

 

(A)          a General Information Notice (“GIN”),
preliminary assessment report (“PAR”), and/or site investigation report
(“SIR”) (as such terms are defined in ISRA) and all other environmental
reports, including, but not limited to, a Remedial Action Work Plan submitted
by or on behalf of Indemnitor to or prepared by a Licensed Site Remediation
Professional until it receives a Response Action Outcome (as such terms are
defined in ISRA);

 

(B)           a Negative Declaration Affidavit (as such term is
defined in ISRA) submitted by or on behalf of Indemnitor to the DEP and copies
of any Final Decision Documents (as such term is defined in the Spill Act) DEP
related thereto;

 

(C)           a De Minimis Quantity Exemption Affidavit (as
such term is defined in ISRA) submitted by or on behalf of Indemnitor to the
DEP and proof of approval of such Exemption by DEP;

 

(D)          a Remediation in Progress Waiver Application (as such
term is defined in ISRA) submitted by or on behalf of Indemnitor to the DEP and
proof of approval of such Waiver by DEP;

 

(E)           a Remediation Certification Application submitted to
the DEP by or on behalf of Indemnitor and the approved Remediation
Certification (as such term are defined in ISRA);

 

(F)           a No Further Action Letter (as such term is defined in
ISRA) issued by DEP related to any of the submittals described in this
sub-clause (v);

 

(G)           a Response Action Outcome (as such term is defined in
ISRA) submitted on behalf of Indemnitor to the DEP and the related Remedial
Action Permit issued by DEP;

 

(H)          a Regulated Storage Tank Waiver Application (as such
term is defined in ISRA) submitted by or on behalf of Indemnitor to the DEP and
proof of approval of such Waiver by DEP;

 

B - 17

 

(I)            proof of ISRA fees submitted to DEP as required in
connection with any of the submittals described in this sub-clause (v), as well
as proof Indemnitor or one or more of its Tenants posted the necessary
Remediation Funding Source (as such term is defined in ISRA), if required.

 

Nothing
in this sub-clause (v) shall be construed as limiting Indemnitor’s
obligation to otherwise comply with ISRA.

 

(vi)          In the event that Indemnitor or any of its Tenants are
required to perform Remediation, regardless of whether such Remediation is
required under ISRA or other Environmental Requirement, then Indemnitor shall
obtain and promptly and diligently implement and perform such activities
necessary to complete the Remediation as required by the Environmental
Requirements. Indemnitor shall establish and maintain, or cause Tenant to
establish and maintain, all appropriate financial assurances required under the
Environmental Requirements, including, but not limited to, any Remediation
Funding Source.  The Remediation shall be
implemented in accordance with the requirements of the approved Remedial Action
Workplan or Remediation Certification, as the case may be, or as may be
otherwise ordered or directed by DEP or a Licensed Site Remediation Professional,
as the case may be, until a Final Remediation Document (as such term is defined
in the Spill Act) has been issued or delivered. 
Indemnitor expressly understands and acknowledges that Indemnitor’s
compliance with the provisions of sub-clause (v) and this sub-clause (vi) may
require Indemnitor to expend funds or do acts after the expiration or
termination of the term of one or more Leases. 
Indemnitor shall expend such funds and do such acts and shall not be
excused therefrom even though the term of the applicable Lease shall have
previously expired or been terminated and notwithstanding any provisions in any
such Lease or in ISRA placing the burden of compliance on a tenant, and provide
an affidavit dated not more than ten (10) days nor less than five (5) days
prior to the closing, terminating or transferring of operations that it is in
full compliance with and has not received any notice that it has violated the
terms of the Remedial Action Workplan or the Remediation Certification, as the
case may be, including without limitation, the terms regarding the
establishment and maintenance of a Remediation Funding Source, such affidavit
is to be provided to Agent, for the benefit of Secured Parties within two (2) days
after its execution.

 

(vii)         The obligations and liabilities of Indemnitor under
this Section 33 shall fully survive indefinitely notwithstanding any
termination, satisfaction, assignment, entry of a judgment of foreclosure,
exercise of any power of sale, or delivery of a deed in lieu of foreclosure of
the Security Instrument.

 

(c)           Definition of Hazardous Materials. 
The following is hereby added to the Section 1 entitled “Definitions”,
the paragraph defining the term “Hazardous Materials”, immediately after the
words “under any present or future Environmental Requirement or amendment
thereto” in subparagraph (ii):

 

B - 18

 

“any substance that is a “hazardous substance” or “hazardous
waste” under the New Jersey Spill Compensation and Control Act, the New Jersey
Industrial Site Recovery Act or the New Jersey Solid Waste Management Act of
N.J.A.C. 7:26C-1.3;”

 

[Signatures on Next Page]

 

B - 19

 

IN WITNESS WHEREOF, this
Environmental Indemnity Agreement has been duly executed and delivered by
Indemnitor under seal as of the day and year first above written.

 

 

	
   

  	
  INDEMNITOR:

  
	
   

  	
   

  
	
   

  	
  U-STORE-IT, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    [U-Store-It
  Trust, its sole general partner]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [INSERT NAME OF
  PROPERTY OWNER]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [INSERT NAME OF
  PROPERTY OWNER]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [INSERT NAME OF
  PROPERTY OWNER]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

B-20

 

EXHIBIT A

 

THE
COLLATERAL

 

B-21

 

EXHIBIT C

 

FORM OF AMENDED AND RESTATED GUARANTY

 

THIS
AMENDED AND RESTATED GUARANTY dated as of December 7, 2009, executed and delivered by each of the
undersigned and the other Persons from time to time party hereto pursuant to
the execution and delivery of an Accession Agreement in the form of Annex I
hereto (all of the undersigned, together with such other Persons each a “Guarantor”
and collectively, the “Guarantors”) in favor of (a) WACHOVIA BANK,
NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”) for the Lenders
under that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), U-Store-It Trust (the “Parent”), the
financial institutions party thereto and their assignees under Section 13.5.
thereof (the “Lenders”), the Agent, and the other parties thereto, and (b) the
other Secured Parties.

 

WHEREAS,
pursuant to the Credit Agreement, the Agent and the Lenders have agreed to make
available to the Borrower certain financial accommodations on the terms and
conditions set forth in the Credit Agreement;

 

WHEREAS,
the Borrower and each of the Guarantors, though separate legal entities, are
mutually dependent on each other in the conduct of their respective businesses
as an integrated operation and have determined it to be in their mutual best
interests to obtain financing from the Agent and the Lenders through their
collective efforts;

 

WHEREAS,
each Guarantor acknowledges that it will receive direct and indirect benefits
from the Agent and the Lenders making such financial accommodations available
to the Borrower under the Credit Agreement and, accordingly, each Guarantor is
willing to guarantee the Borrower’s obligations to the Agent and the Lenders on
the terms and conditions contained herein; and

 

WHEREAS, the Parent
previously executed and delivered to the Agent that certain Guaranty dated as
of November 21, 2006 (as amended and in effect immediately prior to the
date hereof, the “Existing Guaranty”);

 

WHEREAS, the amendment
and restatement of the Existing Guaranty effected by each Guarantor’s execution
and delivery of this Guaranty is a condition to the Agent and the Lenders
making, and continuing to make, such financial accommodations to the Borrower.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each Guarantor, each Guarantor agrees as
follows:

 

Section 1.  Guaranty.  Each Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the “Guarantied 

 

C-1

 

Obligations”):  (a) all indebtedness, liabilities,
obligations, covenants and duties owing by the Borrower to any Lender or the
Agent under or in connection with the Credit Agreement and any other Loan
Document, including without limitation, the repayment of all principal of the Loans,
the Reimbursement Obligations and all other Letter of Credit Liabilities, and
the payment of all interest, Fees, charges, reasonable attorneys’ fees and
other amounts payable to any Lender or the Agent thereunder or in connection
therewith (including, to the extent permitted by Applicable Law, interest, Fees
and other amounts that would accrue and become due after the filing of a case
or other proceeding under the Bankruptcy Code (as defined below) or other
similar Applicable Law but for the commencement of such case or proceeding,
whether or not such amounts are allowed or allowable in whole or in part in
such case or proceeding); (b) any and all extensions, renewals,
modifications, amendments or substitutions of the foregoing; (c) all other
Obligations; (d) all expenses, including, without limitation, reasonable
attorneys’ fees and disbursements, that are incurred by any of the Lenders or
the Agent in the enforcement of any of the foregoing or any obligation of such
Guarantor hereunder; and (e) all Specified Derivatives Obligations of such
Guarantor.

 

Section 2.  Guaranty of Payment and Not of Collection.  This Guaranty is a guaranty of payment, and
not of collection, and a debt of each Guarantor for its own account.  Accordingly, none of the Agent or the other
Secured Parties shall be obligated or required before enforcing this Guaranty
against any Guarantor:  (a) to
pursue any right or remedy any of them may have against the Borrower, any other
Guarantor or any other Person or commence any suit or other proceeding against
the Borrower, any other Guarantor or any other Person in any court or other
tribunal; (b) to make any claim in a liquidation or bankruptcy of the
Borrower, any other Guarantor or any other Person; or (c) to make demand
of the Borrower, any other Guarantor or any other Person or to enforce or seek
to enforce or realize upon any collateral security held by the Agent or any
other Secured Party which may secure any of the Guarantied Obligations.

 

Section 3.  Guaranty Absolute.  Each Guarantor guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the documents
evidencing the same, regardless of any Applicable Law now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the other Secured Parties with respect thereto.  The liability of each Guarantor under this
Guaranty shall be absolute, irrevocable and unconditional in accordance with
its terms and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including without limitation,
the following (whether or not such Guarantor consents thereto or has notice
thereof):

 

(a)           (i) any change in the
amount, interest rate or due date or other term of any of the Guarantied
Obligations, (ii) any change in the time, place or manner of payment of
all or any portion of the Guarantied Obligations, (iii) any amendment or
waiver of, or consent to the departure from or other indulgence with respect
to, the Credit Agreement, any other Loan Document, or any other document or
instrument evidencing or relating to any Guarantied Obligations, or (iv) any
waiver, renewal, extension, addition, or supplement to, or deletion from, or
any other action or inaction under or in respect of, the Credit Agreement, any
of the other Loan Documents, or any other documents, instruments or agreements
relating to the Guarantied 

 

C-2

 

Obligations
or any other instrument or agreement referred to therein or evidencing any
Guarantied Obligations or any assignment or transfer of any of the foregoing;

 

(b)           any lack of validity or
enforceability of the Credit Agreement, any of the other Loan Documents, or any
other document, instrument or agreement referred to therein or evidencing any
Guarantied Obligations or any assignment or transfer of any of the foregoing;

 

(c)           any furnishing to the Agent
or the other Secured Parties of any security for the Guarantied Obligations, or
any sale, exchange, release or surrender of, or realization on, any collateral
securing any of the Obligations;

 

(d)           any settlement or compromise
of any of the Guarantied Obligations, any security therefor, or any liability
of any other party with respect to the Guarantied Obligations, or any
subordination of the payment of the Guarantied Obligations to the payment of
any other liability of the Borrower or any other Loan Party;

 

(e)           any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to such Guarantor, the Borrower, any other Loan Party or
any other Person, or any action taken with respect to this Guaranty by any
trustee or receiver, or by any court, in any such proceeding;

 

(f)            any act or failure to act by
the Borrower, any other Loan Party or any other Person which may adversely
affect such Guarantor’s subrogation rights, if any, against the Borrower to
recover payments made under this Guaranty;

 

(g)           any nonperfection or
impairment of any security interest or other Lien on any Collateral securing in
any way any of the Guarantied Obligations;

 

(h)           any application of sums paid
by the Borrower, any other Guarantor or any other Person with respect to the
liabilities of the Borrower to the Agent or the other Secured Parties,
regardless of what liabilities of the Borrower remain unpaid;

 

(i)            any defect, limitation or
insufficiency in the borrowing powers of the Borrower or in the exercise thereof;

 

(j)            any defense, set-off, claim
or counterclaim (other than indefeasible payment and performance in full) which
may at any time be available to or be asserted by the Borrower, any other Loan
Party or any other Person against the Agent or any of the other Secured
Parties;

 

(k)           any change in the corporate
existence, structure or ownership of the Borrower or any other Loan Party;

 

(l)            any statement,
representation or warranty made or deemed made by or on behalf of the Borrower,
any Guarantor or any other Loan Party under any Loan Document, or any amendment
hereto or thereto, proves to have been incorrect or misleading in any respect;
or

 

C-3

 

(m)          any other circumstance which
might otherwise constitute a defense available to, or a discharge of, a
Guarantor hereunder (other than indefeasible payment and performance in full).

 

Section 4.  Action with Respect to Guarantied
Obligations.  The Agent and the other
Secured Parties may, at any time and from time to time, without the consent of,
or notice to, any Guarantor, and without discharging any Guarantor from its
obligations hereunder, take any and all actions described in Section 3 and
may otherwise:  (a) amend, modify,
alter or supplement the terms of any of the Guarantied Obligations, including,
but not limited to, extending or shortening the time of payment of any of the
Guarantied Obligations or changing the interest rate that may accrue on any of
the Guarantied Obligations; (b) amend, modify, alter or supplement the
Credit Agreement or any other Loan Document; (c) sell, exchange, release
or otherwise deal with all, or any part, of any collateral securing any of the
Obligations; (d) release any other Loan Party or other Person liable in
any manner for the payment or collection of the Guarantied Obligations; (e) exercise,
or refrain from exercising, any rights against the Borrower, any other
Guarantor or any other Person; and (f) apply any sum, by whomsoever paid
or however realized, to the Guarantied Obligations in such order as the Secured
Parties shall elect.

 

Section 5.  Representations and Warranties.  Each Guarantor hereby makes to the Agent and
the other Secured Parties all of the representations and warranties made by the
Borrower with respect to or in any way relating to such Guarantor in the Credit
Agreement and the other Loan Documents, as if the same were set forth herein in
full.

 

Section 6.  Covenants.  Each Guarantor will comply with all covenants
which the Borrower is to cause such Guarantor to comply with under the terms of
the Credit Agreement or any of the other Loan Documents.

 

Section 7.  Waiver.  Each Guarantor, to the fullest extent
permitted by Applicable Law, hereby waives notice of acceptance hereof or any
presentment, demand, protest or notice of any kind, and any other act or thing,
or omission or delay to do any other act or thing, which in any manner or to
any extent might vary the risk of such Guarantor or which otherwise might
operate to discharge such Guarantor from its obligations hereunder.

 

Section 8.  Inability to Accelerate Loan.  If the Agent and/or the other Secured Parties
are prevented under Applicable Law or otherwise from demanding or accelerating
payment of any of the Guarantied Obligations by reason of any automatic stay or
otherwise, the Agent and/or the other Secured Parties shall be entitled to
receive from each Guarantor, upon demand therefor, the sums which otherwise
would have been due had such demand or acceleration occurred.

 

Section 9.  Reinstatement of Guarantied Obligations.  If claim is ever made on the Agent or any of
the other Secured Parties for repayment or recovery of any amount or amounts
received in payment or on account of any of the Guarantied Obligations, and the
Agent or such other Secured Party repays all or part of said amount by reason
of (a) any judgment, decree or order of any court or administrative body
of competent jurisdiction, or (b) any settlement or compromise of any such
claim effected by the Agent or such other Secured Party with any such claimant
(including the Borrower or a trustee in bankruptcy for the Borrower), then and
in such event each 

 

C-4

 

Guarantor
agrees that any such judgment, decree, order, settlement or compromise shall be
binding on it, notwithstanding any revocation hereof or the cancellation of the
Credit Agreement, any of the other Loan Documents, or any other instrument
evidencing any liability of the Borrower, and such Guarantor shall be and
remain liable to the Agent or such other Secured Party for the amounts so
repaid or recovered to the same extent as if such amount had never originally
been paid to the Agent or such other Secured Party.

 

Section 10.  Subrogation.  Upon the making by any Guarantor of any
payment hereunder for the account of the Borrower, such Guarantor shall be
subrogated to the rights of the payee against the Borrower; provided, however,
that such Guarantor shall not enforce any right or receive any payment by way
of subrogation or otherwise take any action in respect of any other claim or
cause of action such Guarantor may have against the Borrower arising by reason
of any payment or performance by such Guarantor pursuant to this Guaranty,
unless and until all of the Guarantied Obligations have been indefeasibly paid
and performed in full.  If any amount
shall be paid to such Guarantor on account of or in respect of such subrogation
rights or other claims or causes of action, such Guarantor shall hold such
amount in trust for the benefit of the Agent and the other Secured Parties and
shall forthwith pay such amount to the Agent to be credited and applied against
the Guarantied Obligations, whether matured or unmatured, in accordance with
the terms of the Credit Agreement or to be held by the Agent as collateral
security for any Guarantied Obligations existing.

 

Section 11.  Payments Free and Clear.  All sums payable by each Guarantor hereunder,
whether of principal, interest, Fees, expenses, premiums or otherwise, shall be
paid in full, without set-off or counterclaim or any deduction or withholding
whatsoever (including any Taxes), and if any Guarantor is required by
Applicable Law or by a Governmental Authority to make any such deduction or
withholding, such Guarantor shall pay to the Agent and the other Secured
Parties such additional amount as will result in the receipt by the Agent and
the other Secured Parties of the full amount payable hereunder had such
deduction or withholding not occurred or been required.

 

Section 12.  Set-off.  In addition to any rights now or hereafter
granted under any of the other Loan Documents or Applicable Law and not by way
of limitation of any such rights, each Guarantor hereby authorizes the Agent,
each Lender and any of their respective Affiliates, at any time while an Event
of Default exists, without any prior notice to such Guarantor or to any other
Person, any such notice being hereby expressly waived, but in the case of a
Lender or an Affiliate of a Lender subject to receipt of the prior written
consent of the Agent exercised in its sole discretion, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by
the Agent, such Lender, or any Affiliate of the Agent or such Lender, to or for
the credit or the account of such Guarantor against and on account of any of
the Guarantied Obligations, although such obligations shall be contingent or
unmatured.

 

Section 13.  Subordination.  Each Guarantor hereby expressly covenants and
agrees for the benefit of the Agent and the other Secured Parties that all
obligations and liabilities of the Borrower to such Guarantor of whatever
description, including without limitation, all 

 

C-5

 

intercompany
receivables of such Guarantor from the Borrower (collectively, the “Junior
Claims”) shall be subordinate and junior in right of payment to all Guarantied
Obligations.  If an Event of Default
shall exist, then no Guarantor shall accept any direct or indirect payment (in
cash, property or securities, by setoff or otherwise) from the Borrower on
account of or in any manner in respect of any Junior Claim until all of the
Guarantied Obligations have been indefeasibly paid in full.

 

Section 14.  Avoidance Provisions.  It is the intent of each Guarantor, the Agent
and the other Secured Parties that in any Proceeding, such Guarantor’s maximum
obligation hereunder shall equal, but not exceed, the maximum amount which
would not otherwise cause the obligations of such Guarantor hereunder (or any
other obligations of such Guarantor to the Agent and the other Secured Parties)
to be avoidable or unenforceable against such Guarantor in such Proceeding as a
result of Applicable Law, including without limitation, (a) Section 548
of the Bankruptcy Code and (b) any state fraudulent transfer or fraudulent
conveyance act or statute applied in such Proceeding, whether by virtue of Section 544
of the Bankruptcy Code or otherwise.  The
Applicable Laws under which the possible avoidance or unenforceability of the
obligations of such Guarantor hereunder (or any other obligations of such
Guarantor to the Agent and the other Secured Parties) shall be determined in
any such Proceeding are referred to as the “Avoidance Provisions”.  Accordingly, to the extent that the
obligations of any Guarantor hereunder would otherwise be subject to avoidance
under the Avoidance Provisions, the maximum Guarantied Obligations for which
such Guarantor shall be liable hereunder shall be reduced to that amount which,
as of the time any of the Guarantied Obligations are deemed to have been
incurred under the Avoidance Provisions, would not cause the obligations of
such Guarantor hereunder (or any other obligations of such Guarantor to the
Agent and the other Secured Parties), to be subject to avoidance under the
Avoidance Provisions.  This Section is
intended solely to preserve the rights of the Agent and the other Secured
Parties hereunder to the maximum extent that would not cause the obligations of
any Guarantor hereunder to be subject to avoidance under the Avoidance
Provisions, and no Guarantor or any other Person shall have any right or claim
under this Section as against the Agent and the other Secured Parties that
would not otherwise be available to such Person under the Avoidance Provisions.

 

Section 15.  Information.  Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition of the Borrower
and the other Guarantors, and of all other circumstances bearing upon the risk
of nonpayment of any of the Guarantied Obligations and the nature, scope and
extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that neither the Agent nor any of the other Secured Parties shall have
any duty whatsoever to advise any Guarantor of information regarding such
circumstances or risks.

 

Section 16.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

C-6

 

SECTION 17.  WAIVER OF JURY TRIAL.

 

(a)           EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR
CONTROVERSY BETWEEN OR AMONG ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS
WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT
IN DELAY AND EXPENSE TO THE PARTIES. 
ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
LENDERS, THE AGENT AND EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL
IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING
OUT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER SUIT,
CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG ANY GUARANTOR, THE AGENT
OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.

 

(b)           EACH OF THE
GUARANTORS, THE AGENT AND EACH LENDER HEREBY AGREES THAT ANY FEDERAL DISTRICT
COURT AND ANY STATE COURT LOCATED IN CHARLOTTE, NORTH CAROLINA SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY
GUARANTOR, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY
TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM
OR THEREFROM.  EACH GUARANTOR AND EACH OF
THE LENDERS EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR PROCEEDING COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR
DISPUTES.  EACH PARTY FURTHER 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 FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE
SAME.  THE CHOICE OF FORUM SET FORTH IN
THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY
ANY PARTY OR THE ENFORCEMENT BY ANY PARTY OF ANY JUDGMENT OBTAINED IN SUCH
FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

 

(c)           THE
PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE
ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS GUARANTY.

 

Section 18.  Loan Accounts.  The Agent and
each Lender may maintain books and accounts setting forth the amounts of
principal, interest and other sums paid and payable with respect to the
Guarantied Obligations, and in the case of any dispute relating to any of the
outstanding amount, payment or receipt of any of the Guarantied Obligations or
otherwise, the entries in such books and accounts shall be deemed conclusive
evidence of the amounts and 

 

C-7

 

other matters set forth
herein, absent manifest error.  The failure
of the Agent or any Lender to maintain such books and accounts shall not in any
way relieve or discharge any Guarantor of any of its obligations hereunder.

 

Section 19.  Waiver of Remedies.  No delay or failure on the part of the Agent
or any of the other Secured Parties in the exercise of any right or remedy it
may have against any Guarantor hereunder or otherwise shall operate as a waiver
thereof, and no single or partial exercise by the Agent or any of the other
Secured Parties of any such right or remedy shall preclude any other or further
exercise thereof or the exercise of any other such right or remedy.

 

Section 20.  Termination.  This Guaranty shall remain in full force and
effect until indefeasible payment in full of the Guarantied Obligations and the
other Obligations and the termination or cancellation of the Credit Agreement
in accordance with its terms.

 

Section 21.  Successors and Assigns.  Each reference herein to the Agent or the
other Secured Parties shall be deemed to include such Person’s respective
successors and assigns (including, but not limited to, any holder of the
Guarantied Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to each Guarantor shall be deemed to
include such Guarantor’s successors and assigns, upon whom this Guaranty also
shall be binding.  The Lenders may, in
accordance with the applicable provisions of the Credit Agreement, assign,
transfer or sell any Guarantied Obligation, or grant or sell participations in
any Guarantied Obligations, to any Person without the consent of, or notice to,
any Guarantor and without releasing, discharging or modifying any Guarantor’s
obligations hereunder.  Subject to Section 13.8.
of the Credit Agreement, each Guarantor hereby consents to the delivery by the
Agent or any Lender to any Assignee or Participant (or any prospective Assignee
or Participant) of any financial or other information regarding the Borrower or
any Guarantor.  No Guarantor may assign
or transfer its rights or obligations hereunder to any Person without the prior
written consent of all Secured Parties and any such assignment or other
transfer to which all of the Secured Parties have not so consented shall be
null and void.

 

Section 22.  JOINT AND SEVERAL OBLIGATIONS.  THE OBLIGATIONS OF THE GUARANTORS HEREUNDER
SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS THAT IT IS
LIABLE FOR THE FULL AMOUNT OF THE “GUARANTIED OBLIGATIONS” AND ALL OF THE
OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER.

 

Section 23.  Amendments.  This Guaranty may not be amended except in a
writing signed by the Requisite Lenders (or all of the Lenders if required
under the terms of the Credit Agreement), the Agent and each Guarantor.

 

Section 24.  Payments.  All payments to be made by any Guarantor
pursuant to this Guaranty shall be made in Dollars, in immediately available
funds to the Agent at the Principal Office, not later than 2:00 p.m. on
the date of demand therefor.

 

Section 25.  Notices.  All notices, requests and other
communications hereunder shall be in writing (including facsimile transmission
or similar writing) and shall be given (a) to each 

 

C-8

 

Guarantor
at its address set forth below its signature hereto, (b) to the Agent or
any Lender at its respective address for notices provided for in the Credit
Agreement, or (c) as to each such party at such other address as such
party shall designate in a written notice to the other parties.  Each such notice, request or other
communication shall be effective (i) if mailed, when received; (ii) if
telecopied, when transmitted; or (iii) if hand delivered, when delivered;
provided, however, that any notice of a change of address for notices shall not
be effective until received.

 

Section 26.  Severability.  In case any provision of this Guaranty shall
be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

Section 27.  Headings.  Section headings used in this Guaranty
are for convenience only and shall not affect the construction of this
Guaranty.

 

Section 28.  Limitation of Liability.  Neither the Agent nor any of the other Secured
Parties, nor any Affiliate, officer, director, employee, attorney, or agent of
the Agent or any of the other Secured Parties, shall have any liability with
respect to, and each Guarantor hereby waives, releases, and agrees not to sue
any of them upon, any claim for any special, indirect, incidental, or
consequential damages suffered or incurred by a Guarantor in connection with,
arising out of, or in any way related to, this Guaranty or any of the other
Loan Documents, or any of the transactions contemplated by this Guaranty, the
Credit Agreement or any of the other Loan Documents.  Each Guarantor hereby waives, releases, and
agrees not to sue the Agent or any of the other Secured Parties or any of the
Agent’s or of any other Secured Parties’, officers, directors, employees,
attorneys, or agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Guaranty, the Credit
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by Credit Agreement or financed thereby.

 

Section 29.  Definitions.  (a) For the purposes of this Guaranty:

 

“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy”, as amended from
time to time, and any successor statute or statutes and all rules and
regulations from time to time promulgated thereunder, and any comparable
foreign laws relating to bankruptcy, insolvency or creditors’ rights.

 

“Proceeding”
means any of the following:  (i) a
voluntary or involuntary case concerning any Guarantor shall be commenced under
the Bankruptcy Code; (ii) a custodian (as defined in such Bankruptcy Code
or any other applicable bankruptcy laws) is appointed for, or takes charge of,
all or any substantial part of the property of any Guarantor; (iii) any
other proceeding under any Applicable Law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up or composition for
adjustment of debts, whether now or hereafter in effect, is commenced relating
to any Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt;
(v) any order of relief or other order approving any such case or
proceeding is entered by a court of competent jurisdiction; (vi) any
Guarantor makes a general assignment for the benefit of creditors; (vii) any
Guarantor shall fail to pay, or shall state that it is unable to pay, or shall
be unable to pay, its debts generally as they become due; (viii) any
Guarantor shall call a meeting of 

 

C-9

 

its
creditors with a view to arranging a composition or adjustment of its debts; (ix) any
Guarantor shall by any act or failure to act indicate its consent to, approval
of or acquiescence in any of the foregoing; or (x) any corporate action
shall be taken by any Guarantor for the purpose of effecting any of the
foregoing.

 

(b)           Terms not otherwise defined
herein are used herein with the respective meanings given them in the Credit
Agreement.

 

SECTION 30. 
NO NOVATION; Prospective Guaranty.

 

(a)           THE
PARTIES HERETO HAVE ENTERED INTO THIS GUARANTY SOLELY TO AMEND AND RESTATE THE
TERMS OF THE EXISTING GUARANTY.  THE
PARTIES DO NOT INTEND THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY TO
BE, AND THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED
TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY THE PARENT UNDER OR IN
CONNECTION WITH THE EXISTING GUARANTY.

 

(b)           The
guaranty of the Guarantied Obligations hereunder by the Guarantors (other than
the Parent) shall have prospective effect from the date hereof.

 

[Signature on Next Page]

 

C-10

 

IN WITNESS WHEREOF, each
Guarantor has duly executed and delivered this Guaranty as of the date and year
first written above.

 

	
   

  	
  [GUARANTORS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  c/o
  U-Store-It Trust

  
	
   

  	
  460
  Swedesford Road, Suite 3000

  
	
   

  	
  Wayne,
  Pennsylvania 19087

  
	
   

  	
  Attn:

  	
   

  
	
   

  	
  Telecopy
  Number:

  	
   

  
	
   

  	
  Telephone
  Number:

  	
   

  
						

 

C-11

 

ANNEX I

 

FORM OF ACCESSION AGREEMENT

 

THIS
ACCESSION AGREEMENT dated as of
                        ,
20    , executed and delivered by
                                            ,
a
                          
(the “New Guarantor”), in favor of (a) WACHOVIA BANK, NATIONAL ASSOCIATION,
in its capacity as Agent (the “Agent”) for the Lenders under that certain Amended
and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), U-Store-It Trust, the financial institutions
party thereto and their assignees under Section 13.5. thereof (the “Lenders”),
the Agent, and the other parties thereto, and (b) the other Secured
Parties.

 

WHEREAS,
pursuant to the Credit Agreement, the Agent and the Lenders have agreed to make
available to the Borrower certain financial accommodations on the terms and
conditions set forth in the Credit Agreement;

 

WHEREAS,
the Borrower, the New Guarantor, and the existing Guarantors, though separate
legal entities, are mutually dependent on each other in the conduct of their
respective businesses as an integrated operation and have determined it to be
in their mutual best interests to obtain financing from the Agent and the
Lenders through their collective efforts;

 

WHEREAS,
the New Guarantor acknowledges that it will receive direct and indirect
benefits from the Agent and the Lenders making such financial accommodations
available to the Borrower under the Credit Agreement and, accordingly, the New
Guarantor is willing to guarantee the Borrower’s obligations to the Agent and
the Lenders on the terms and conditions contained herein; and

 

WHEREAS,
the New Guarantor’s execution and delivery of this Agreement is a condition to
the Agent and the Lenders continuing to make such financial accommodations to
the Borrower.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the New Guarantor, the New Guarantor agrees as
follows:

 

Section 1.  Accession to Guaranty.  The New Guarantor hereby agrees that it is a “Guarantor”
under that certain Guaranty dated as of December 7, 2009 (as amended, supplemented, restated or otherwise modified
from time to time, the “Guaranty”), made by each Subsidiary of the Borrower a
party thereto in favor of the Agent and the other Secured Parties and assumes
all obligations of a “Guarantor” thereunder and agrees to be bound thereby, all
as if the New Guarantor had been an original signatory to the Guaranty.  Without limiting the generality of the
foregoing, the New Guarantor hereby:

 

C-12

 

(a)           irrevocably and
unconditionally guarantees the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all
Guarantied Obligations (as defined in the Guaranty);

 

(b)           makes to the Agent and the
other Secured Parties as of the date hereof each of the representations and
warranties contained in Section 5 of the Guaranty and agrees to be bound
by each of the covenants contained in Section 6 of the Guaranty; and

 

(c)           consents and agrees to each
provision set forth in the Guaranty.

 

SECTION 2.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.

 

Section 3.  Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings given
them in the Credit Agreement.

 

[Signatures on Next Page]

 

C-13

 

IN
WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be
duly executed and delivered under seal by its duly authorized officers as of
the date first written above.

 

	
   

  	
   

  	
  [NEW
  GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o
  U-Store-It Trust

  
	
   

  	
   

  	
  460
  Swedesford Road, Suite 3000

  
	
   

  	
   

  	
  Wayne,
  Pennsylvania 19087

  
	
   

  	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  	
  Telecopy
  Number:

  	
   

  
	
   

  	
   

  	
  Telephone
  Number:

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
									

 

C-14

 

EXHIBIT D

 

FORM OF NOTICE OF BORROWING

 

                   ,
20    

 

Wachovia
Bank, National Association, as Agent

c/o Wells Fargo Real Estate Banking Group

200 Public Square - Suite 3200

Cleveland, OH 44114

Attention:  Greg Ward

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), U-Store-It Trust, the financial institutions
party thereto and their assignees under Section 13.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “Agent”), and the other
parties thereto.  Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.

 

1.             Pursuant to Section 2.1.(b) of
the Credit Agreement, the Borrower hereby requests that the Lenders make
Revolving Loans to the Borrower in an aggregate principal amount equal to
$                                      .

 

2.             The Borrower
requests that such Revolving Loans be made available to the Borrower on
                        ,
20      .

 

3.             The Borrower
hereby requests that the requested Revolving Loans all be of the following
Type:

 

[Check one box only]

 

o  Base Rate Loans

o  LIBOR Loans, each with an
initial Interest Period for a duration of:

 

[Check one box only]

o    1
month

o    3
months

o    6
months

 

4.             The proceeds of
this borrowing of Revolving Loans will be used for purposes that are consistent
with the terms of Section 8.8. of the Credit Agreement.

 

D-1

 

5.             The Borrower
requests that the proceeds of this borrowing of Revolving Loans be made
available to the Borrower by
                                                        .

 

The Borrower hereby certifies to the Agent and the
Lenders that as of the date hereof and as of the date of the making of the
requested Revolving Loans and after giving effect thereto, (a) no Default
or Event of Default exists or shall exist, and (b) the representations and
warranties made or deemed made by the Parent, the Borrower and each other Loan
Party in the Loan Documents to which any of them is a party are and shall be
true and correct in all material respects, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date) and except for changes
in factual circumstances not prohibited under the Loan Documents. In addition,
the Borrower certifies to the Agent and the Lenders that all conditions to the
making of the requested Revolving Loans contained in Article VI. of the
Credit Agreement will have been satisfied (or waived in accordance with the
applicable provisions of the Loan Documents) at the time such Revolving Loans
are made.

 

If
notice of the requested borrowing of Revolving Loans was previously given by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.1.(b) of the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of
Borrowing as of the date first written above.

 

	
   

  	
  U-STORE-IT,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

D-2

 

EXHIBIT E

 

FORM OF NOTICE OF CONTINUATION

 

                   ,
20    

 

Wachovia
Bank, National Association, as Agent

c/o Wells Fargo Real Estate Banking Group

200 Public Square - Suite 3200

Cleveland, OH 44114

Attention:  Greg Ward

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), 
U-Store-It Trust, the financial institutions party thereto and their
assignees under Section 13.5. thereof (the “Lenders”), Wachovia Bank,
National Association, as Agent (the “Agent”), and the other parties
thereto.  Capitalized terms used herein,
and not otherwise defined herein, have their respective meanings given them in
the Credit Agreement.

 

Pursuant
to Section 2.10. of the Credit Agreement, the Borrower hereby requests a
Continuation of a borrowing of Loans under the Credit Agreement, and in that
connection sets forth below the information relating to such Continuation as
required by such Section of the Credit Agreement:

 

1.             The proposed
date of such Continuation is
                        ,
20      .

 

2.             The Loans to be Continued pursuant hereto are:

 

[Check
the relevant box]

 

o  Revolving
Loans

o  Term
Loans

 

3.             The aggregate
principal amount of Loans subject to the requested Continuation is
$                                                
and was originally borrowed by the Borrower on
                        ,
20      .

 

4.             The portion of
such principal amount subject to such Continuation is
$                                                    .

 

5.             The current
Interest Period for each of the Loans subject to such Continuation ends on
                                ,
20      .

 

E-1

 

6.             The duration of
the new Interest Period for each of such Loans or portion thereof subject to
such Continuation is:

 

[Check one box only]

o    1
month

o    3
months

o    6
months

 

The
Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof, as of the proposed date of the requested Continuation, and after giving
effect to such Continuation, no Default or Event of Default exists or will
exist.

 

If
notice of the requested Continuation was given previously by telephone, this
notice is to be considered the written confirmation of such telephone notice
required by Section 2.10. of the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of
Continuation as of the date first written above.

 

	
   

  	
  U-STORE-IT,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

E-2

 

EXHIBIT F

 

FORM OF NOTICE OF CONVERSION

 

                   ,
20    

 

Wachovia
Bank, National Association, as Agent

c/o Wells Fargo Real Estate Banking Group

200 Public Square - Suite 3200

Cleveland, OH 44114

Attention:  Greg Ward

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), U-Store-It Trust, the financial institutions
party thereto and their assignees under Section 13.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “Agent”), and the other
parties thereto.  Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.

 

Pursuant
to Section 2.11. of the Credit Agreement, the Borrower hereby requests a
Conversion of a borrowing of Loans of one Type into Loans of another Type under
the Credit Agreement, and in that connection sets forth below the information
relating to such Conversion as required by such Section of the Credit
Agreement:

 

1.             The proposed
date of such Conversion is
                            ,
20      .

 

2.             Loans to be Converted pursuant hereto are:

 

	
  [Check the relevant box]

  	
  o

  	
  Revolving Loans

  
	
   

  	
  o

  	
  Term Loans

  

 

3.             The Loans to be
Converted pursuant hereto are currently:

 

	
  [Check
  one box only]

  	
  o

  	
  Base
  Rate Loans

  
	
   

  	
  o

  	
  LIBOR
  Loans

  

 

4.             The aggregate
principal amount of Loans subject to the requested Conversion is
$                                          
and was originally borrowed by the Borrower on
                        ,
20      .

 

5.             The portion of
such principal amount subject to such Conversion is
$                                      .

 

F-1

 

6.             The amount of
such Loans to be so Converted is to be converted into Loans of the following
Type:

 

[Check one box only]

 

o  Base Rate Loans

o  LIBOR Loans, each with an
initial Interest Period for a duration of:

 

[Check one box only]

o    1
month

o    3
months

o    6
months

 

The Borrower hereby certifies to the Agent and the
Lenders that as of the date hereof and as of the date of the requested
Conversion and after giving effect thereto, (a) no Default or Event of
Default exists or will exist (provided the certification under this
clause (a) shall not be made in connection with the Conversion of a
Loan into a Base Rate Loan), and (b) the representations and warranties
made or deemed made by the Parent, the Borrower and each other Loan Party in
the Loan Documents to which any of them is a party are and shall be true and
correct in all material respects, except to the extent that such representations
and warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date) and except for changes in factual
circumstances not prohibited under the Loan Documents.

 

If
notice of the requested Conversion was given previously by telephone, this
notice is to be considered the written confirmation of such telephone notice
required by Section 2.11. of the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of
Conversion as of the date first written above.

 

	
   

  	
  U-STORE-IT,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

F-2

 

EXHIBIT G

 

FORM OF NOTICE OF SWINGLINE BORROWING

 

                ,
20   

 

Wachovia
Bank, National Association, as Agent

c/o Wells Fargo Real Estate Banking Group

200 Public Square - Suite 3200

Cleveland, OH 44114

Attention:  Greg Ward

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), U-Store-It Trust, the financial institutions
party thereto and their assignees under Section 13.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “Agent”), and the other
parties thereto.  Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.

 

1.             Pursuant to Section 2.3.(b) of
the Credit Agreement, the Borrower hereby requests that the Swingline Lender
make a Swingline Loan to the Borrower in an amount equal to
$                                      .

 

2.             The Borrower
requests that such Swingline Loan be made available to the Borrower on
                        ,
20      .

 

3.             The proceeds of
this Swingline Loan will be used for purposes that are consistent with the
terms of Section 8.8. of the Credit Agreement.

 

4.             The Borrower
requests that the proceeds of such Swingline Loan be made available to the
Borrower by
                                                            .

 

The
Borrower hereby certifies to the Agent, the Swingline Lender and the Lenders
that as of the date hereof, as of the date of the making of the requested
Swingline Loan, and after making such Swingline Loan, (a) no Default or
Event of Default exists or will exist, and (b) the representations and
warranties made or deemed made by the Parent, the Borrower and each other Loan
Party in the Loan Documents to which any of them is a party are and shall be
true and correct in all material respects, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date) and except for changes
in factual circumstances not prohibited under the Loan Documents.  In addition, the Borrower certifies to the
Agent and the Lenders that all conditions to the making of the requested

 

G-1

 

Swingline
Loan contained in Article VI. of the Credit Agreement will have been
satisfied at the time such Swingline Loan is made.

 

If
notice of the requested borrowing of this Swingline Loan was previously given
by telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.3.(b) of the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of
Swingline Borrowing as of the date first written above.

 

	
   

  	
  U-STORE-IT,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

G-2

 

EXHIBIT H

 

FORM OF PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT
dated as of December 7, 2009, executed and delivered by each of the
undersigned parties identified as “Pledgors” on the signature pages hereto
and the other Persons who may become Pledgors hereunder pursuant to the
execution and delivery of a Pledge Agreement Supplement substantially in the
form of Annex 1 hereto (each a “Pledgor” and collectively, the “Pledgors”)
in favor of (a) WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”)
for the Lenders under that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among U-Store-It,
L.P. (the “Borrower”), U-Store-It Trust, the financial institutions party thereto and their
assignees under Section 13.5. thereof (the “Lenders”), the Agent, and the other parties
thereto, and (b) the other Secured Parties.

 

WHEREAS, pursuant
to the Credit Agreement, the Lenders and the Agent have agreed to make
available to the Borrower certain financial accommodations on the terms and
conditions set forth in the Credit Agreement;

 

WHEREAS, the Borrower and
each of the other Pledgors, though separate legal entities, are mutually
dependent on each other in the conduct of their respective businesses as an
integrated operation and have determined it to be in their mutual best interests
to obtain financing from the Lenders and the Agent through their collective
efforts;

 

WHEREAS, each Pledgor
acknowledges that it will receive direct and indirect benefits from the Lenders
and the Agent making such financial accommodations available to the Borrower
under the Credit Agreement; and

 

WHEREAS, it is a
condition precedent to the extension of such financial accommodations under the
Credit Agreement that the Pledgors execute and deliver this Agreement, among
other things, to grant to the Agent for the benefit of the Secured Parties a
security interest in the Collateral as security for the Secured Obligations.

 

NOW, THEREFORE, in
consideration of the mutual agreements herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

Section 1.  Pledge.  As security for the prompt performance and
payment in full of the Secured Obligations, each Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto the Agent, for
its own benefit and for the benefit of the other Secured Parties, and grants to
the Agent, for its own benefit and for the benefit of the other Secured
Parties, a security interest in, all of such Pledgor’s right, title and
interest in, to and under the following (collectively, the “Pledged Collateral”):

 

H-1

 

(a)           the Pledged Interests;

 

(b)           all distributions, cash, securities, interest,
dividends, rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all thereof to which such Pledgor shall at any time be entitled in
respect of the Pledged Interests;

 

(c)           all other payments due or to become due to such
Pledgor in respect of any of the foregoing;

 

(d)           all of such Pledgor’s claims, rights, powers,
privileges, authority, puts, calls, options, security interests, liens and
remedies, if any, in respect of any of the foregoing;

 

(e)           all of such Pledgor’s rights to exercise and enforce
any and every right, power, remedy, authority, option and privilege of such
Pledgor relating to any of the foregoing including, without limitation, any
power to (i)  terminate, cancel or modify any agreement, (ii) execute
any instruments and to take any and all other action on behalf of and in the
name of such Pledgor in respect of any of the foregoing and the applicable
Issuer thereof, (iii) exercise voting rights or make determinations, (iv) exercise
any election (including, but not limited to, election of remedies), (v) exercise
any “put”, right of first offer or first refusal, or other option, (vi) exercise
any right of redemption or repurchase, (vii) give or receive any notice,
consent, amendment, waiver or approval, (viii) demand, receive, enforce,
collect or receipt for any of the foregoing, (ix) enforce or execute any
checks, or other instruments or orders, (x) file any claims and to take
any action in connection with any of the foregoing, or (xi) otherwise act
as if such Pledgor were the absolute owner of such Pledged Interests and all
rights associated therewith;

 

(f)            all certificates and instruments representing or
evidencing any of the foregoing;

 

(g)           all other property hereafter delivered in substitution
for or in addition to any of the foregoing;

 

(h)           all other rights, titles, interests, powers,
privileges and preferences pertaining to any of the foregoing; and

 

(i)            all Proceeds of any of the foregoing.

 

Section 2.  Representations and Warranties.  Each Pledgor hereby represents and warrants
to the Agent and the other Secured Parties as follows:

 

(a)           Title and Liens.  Such Pledgor is, and will at all times
continue to be, the legal and beneficial owner of the Pledged Collateral of
such Pledgor. None of the Pledged Collateral is subject to any adverse claim or
other Lien other than Permitted Liens of the types referred to in clauses (a),
(b), (c) and (e) of the definition of “Permitted Lien”.  No Person has control of any of the Pledged
Collateral other than the Agent.

 

H-2

 

(b)           Authorization.  Such Pledgor has the right and power, and has
taken all necessary action to authorize it, to execute, deliver and perform
this Agreement in accordance with its terms. 
The execution, delivery and performance of this Agreement in accordance
with its terms, including the granting of the security interest hereunder, do
not and will not, by the passage of time, the giving of notice, or both: (i) require
any governmental approval or violate any applicable law relating to such
Pledgor; (ii) conflict with, result in a breach of or constitute a default
under the organizational documents of such Pledgor, or any indenture, agreement
or other instrument to which such Pledgor is a party or by which it or any of
the Pledged Collateral of such Pledgor or its other property may be bound; or (iii) result
in or require the creation or imposition of any Lien upon or with respect to
any of the Pledged Collateral of such Pledgor or such Pledgor’s other property
whether now owned or hereafter acquired.

 

(c)           Validity and Perfection of
Security Interest.  This Agreement is effective to create in
favor of the Agent, for the benefit of the other Secured Parties, a legal,
valid and enforceable security interest in the Pledged Collateral.  Such security interest will be perfected (i) with
respect to any such Pledged Collateral that is a “security” (as such term is
defined in the UCC) and is evidenced by a certificate, when such Pledged
Collateral is delivered to the Agent with duly executed stock powers with
respect thereto, (ii) with respect to any such Pledged Collateral that is
a “security” (as such term is defined in the UCC) but is not evidenced by a
certificate, when UCC financing statements in appropriate form are filed in the
appropriate filing offices in the jurisdiction of organization of the Pledgors
or when control is established by the Agent over such interests in accordance
with the provision of Section 8-106 of the UCC, or any successor
provision, and (iii) with respect to any such Pledged Collateral that is
not a “security” (as such term is defined in the UCC), when UCC financing
statements in appropriate form are filed in the appropriate filing offices in
the jurisdiction of organization of the Pledgors.  Except as set forth in this subsection, no
action is necessary to perfect the security interest granted by any Pledgor
under this Agreement.

 

(d)           Pledged Equity Interests. 
The information set forth on Schedule 1 hereto with respect to the
Pledged Collateral of such Pledgor is true and correct.

 

(e)           Name, Organization, Etc.  Such Pledgor’s
exact legal name, type of legal entity, jurisdiction of formation,
organizational identification number and location of its chief executive office
are as set forth on Schedule 1. 
Except as set forth on such Schedule, since the date of such Pledgor’s
formation, such Pledgor has not changed its name or merged with or otherwise
combined its business with any other Person.

 

(f)            Validly Issued, etc.  All of the
Pledged Interests have been duly authorized, are duly authorized, validly
issued, fully paid and nonassessable and are not subject to preemptive rights
of any Person.

 

(e)           Interests in Partnerships and LLCs. 
None of the Pledged Collateral consisting of an interest in a
partnership or in a limited liability company (i) is dealt in or traded on
a securities exchange or in securities markets, (ii) by its terms
expressly provides that it is a security governed by Article 8 of the UCC,
(iii) is an investment company security, (iv) otherwise constitutes a
security or (v) constitutes a financial asset.

 

H-3

 

Section 3.  Covenants.  Each Pledgor hereby unconditionally covenants
and agrees as follows:

 

(a)           No Liens; No Sale of Pledged Collateral. 
Such Pledgor will not create, assume, incur or permit or suffer to exist
or to be created, assumed or incurred, any Lien on any of the Pledged
Collateral (or any interest therein), nor, without the prior written consent of
the Agent, sell, lease, assign, transfer or otherwise dispose of all or any
portion of the Pledged Collateral (or any interest therein).

 

(b)           Change of Name, Etc.  Without giving the Agent at least 30-days’
prior written notice and to the extent such action is not otherwise prohibited
by any of the Loan Documents, such Pledgor shall not: (i) change its name;
(ii) reorganize or otherwise become formed under the laws of another
jurisdiction or (iii) become bound by a security agreement of another
Person under Section 9-203(d) of the UCC.

 

(c)           Defense of Title.  Such Pledgor will warrant and defend its
title to and ownership of the Pledged Collateral of such Pledgor, at its sole
cost and expense, against the claims of all Persons.

 

(d)           Delivery of Certificates,
Etc.  If a Pledgor shall receive any certificate (including,
without limitation, any certificate representing a stock and/or liquidating
dividends, other distributions in property, return of capital or other
distributions made on or in respect of the Pledged Collateral, whether
resulting from a subdivision, combination or reclassification of outstanding
Equity Interests or received in exchange for Pledged Collateral or any part
thereof or as a result of any merger, consolidation, acquisition or other exchange
of assets or on the liquidation, whether voluntary or involuntary, or
otherwise), instrument, option or rights in respect of any Pledged Collateral,
whether in addition to, in substitution of, as a conversion of, or in exchange
for, any Pledged Collateral, or otherwise in respect thereof, such Pledgor
shall hold the same in trust for the Agent and the other Secured Parties and
promptly deliver the same to the Agent in the exact form received, duly
indorsed by such Pledgor to the Agent, if required, together with an undated
stock power covering such certificate (or other appropriate instrument of
transfer) duly executed in blank by such Pledgor and with, if the Agent so
requests, signature guaranteed, to be held by the Agent, subject to the terms of
this Agreement, as Pledged Collateral.

 

(e)           Uncertificated Securities.  With respect to any Pledged Collateral that
constitutes a security and is not represented or evidenced by a certificate or
instrument, such Pledgor shall cause the Issuer thereof either (i) to
register the Agent as the registered owner of such security or (ii) to
agree in writing with the Agent and such Pledgor that such Issuer will comply
with the instructions with respect to such security originated by the Agent
without further consent of such Pledgor.

 

(f)            Additional Shares.  Such Pledgor
shall not permit any Issuer to issue any additional Equity Interests unless
such Equity Interests are pledged hereunder as provided herein.  Further, such Pledgor shall not permit any
Issuer to amend or modify its articles or certificate of

 

H-4

 

incorporation, articles
of organization, certificate of limited partnership, by-laws, operating
agreement, partnership agreement or other comparable organizational instrument
in a manner which would materially adversely affect the voting, liquidation,
preference or other similar rights of any holder of the Equity Interests
pledged hereunder.

 

(g)           Issuer Acknowledgment.  Such Pledgor
shall, upon the Agent’s request therefor, cause each Issuer of Pledged
Collateral and which Issuer is not a Pledgor itself, to execute and deliver to
the Agent an Acknowledgment and Consent substantially in the form of
Schedule 2 attached hereto.

 

Section 4.  Registration in Nominee Name,
Denominations.  The Agent shall have
the right (in its sole and absolute discretion) to hold any Equity Interests
which are part of the Pledged Collateral in its own name as pledgee, the name
of its nominee (as Agent or as sub-agent) or the name of the Pledgor thereof,
endorsed or assigned in blank or in favor of the Agent.  Such Pledgor will promptly give to the Agent
copies of any notices or other communications received by it with respect to
any such Equity Interests constituting Pledged Collateral registered in the
name of such Pledgor.  The Agent shall at
all times have the right to request that each Issuer of any Pledged Collateral
issue certificates representing the Pledged Collateral and to exchange the certificates
representing such Pledged Collateral for certificates of smaller or larger
numbers of shares for any purpose consistent with this Agreement.

 

Section 5.  Voting Rights; Dividends, etc.

 

(a)           So long as no Event of Default exists:

 

(i)            each Pledgor shall be entitled to exercise any and all
voting and/or consensual rights and powers accruing to an owner of the Pledged
Collateral or any part thereof for any purpose not inconsistent with the terms
and conditions of any of the Loan Documents or any agreement giving rise to or
otherwise relating to any of the Secured Obligations; provided, however,
that no Pledgor shall exercise, or refrain from exercising, any such right or
power if any such action would have a material adverse effect on the value of
such Pledged Collateral in the reasonable judgment of the Agent; and

 

(ii)           each Pledgor shall be entitled to retain and use any
and all cash distributions paid on the Pledged Collateral, but any and all
equity and/or liquidating distributions, other distributions in property,
return of capital or other distributions made on or in respect of Pledged
Collateral, whether resulting from a subdivision, combination or
reclassification of outstanding Equity Interests which are pledged hereunder or
received in exchange for Pledged Collateral or any part thereof or as a result
of any merger, consolidation, acquisition or other exchange of assets or on the
liquidation, whether voluntary or involuntary, of any Issuer, or otherwise,
shall be and become part of the Pledged Collateral pledged hereunder and, if received
by such Pledgor, shall forthwith be delivered to the Agent to be held as
collateral subject to the terms and conditions of this Agreement.

 

H-5

 

The Agent agrees to
execute and deliver to each Pledgor, or cause to be executed and delivered to
such Pledgor, as appropriate, at the sole cost and expense of such Pledgor, all
such proxies, powers of attorney, dividend orders and other instruments as such
Pledgor may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and/or consensual rights and powers which such Pledgor is
entitled to exercise pursuant to clause (i) above and/or to receive the
distributions and other amounts which such Pledgor is authorized to retain
pursuant to clause (ii) above.

 

(b)           If an Event of Default exists, all rights of the
Pledgors to exercise the voting and/or consensual rights and powers which the
Pledgors are entitled to exercise pursuant to subsection (a)(i) above
and/or to receive the distributions and other amounts which the Pledgors are
authorized to receive and retain pursuant to subsection (a)(ii) above
shall cease, and all such rights thereupon shall become immediately vested in
the Agent, which shall have the sole and exclusive right and authority to
exercise such voting and/or consensual rights and powers which the Pledgors
shall otherwise be entitled to exercise pursuant to subsection (a)(i) above
and/or to receive and retain the distributions and other amounts which the
Pledgors shall otherwise be authorized to retain pursuant to subsection (a)(ii) above.  Any and all money and other property paid
over to or received by the Agent pursuant to the provisions of this subsection (b) shall
be retained by the Agent as additional collateral hereunder and shall be
applied in accordance with the provisions of Section 8.  If any Pledgor shall receive any
distributions or other property which it is not entitled to receive under this
Section, such Pledgor shall hold the same in trust for the Agent and the other
Secured Parties, without commingling the same with other funds or property of
or held by such Pledgor, and shall promptly deliver the same to the Agent in
the identical form received, together with any necessary endorsements.

 

Section 6.  Event of Default Defined.  For purposes of this Agreement, “Event of
Default” shall mean any of the following events, whatever the reason for such
event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any
order, rule or regulation of any governmental or nongovernmental body: (i) the
failure of any Pledgor to comply with any of the terms and provisions of this
Agreement; (ii) the occurrence of an “Event of Default” as such term is
defined in the Credit Agreement; or (iii) any action is taken by the
Issuer of any Pledged Interests or the members or trustees thereof to amend or
modify the Organizational Documents in a manner that would (A) materially
adversely affect the voting, liquidation, preference, redemption or other
similar rights of any holder of the Pledged Interests or, (B) adversely
affect the Agent’s or the other Secured Parties’ rights or remedies under this
Pledge Agreement.

 

Section 7.  Remedies upon Default.

 

(a)           In addition to any right or remedy that
the Agent or any of the other Secured Parties may have under the Credit
Agreement, any other Loan Document or any Specified Derivatives Contract or
otherwise under applicable law, if an Event of Default shall exist, the Agent
may exercise any and all the rights and remedies of a secured party under the
Uniform Commercial Code as in effect in any applicable jurisdiction and may
otherwise sell, assign, transfer, endorse and deliver the whole or, from time
to time, any part of the Pledged Collateral at a public or private sale or on
any securities exchange, for cash, upon credit or for other

 

H-6

 

property, for
immediate or future delivery, and for such price or prices and on such terms as
the Agent in its discretion shall deem appropriate.  The Agent shall be authorized at any sale (if
it deems it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing the
Pledged Collateral for their own account in compliance with the Securities Act
and upon consummation of any such sale the Agent shall have the right to
assign, transfer, endorse and deliver to the purchaser or purchasers thereof
the Pledged Collateral so sold.  Each
purchaser at any sale of Pledged Collateral shall take and hold the property
sold absolutely free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives (to the fullest extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which such Pledgor now has or
may at any time in the future have under any applicable law now existing or
hereafter enacted.  Each Pledgor agrees
that, to the extent notice of sale shall be required by applicable law, at
least 5 days’ prior written notice to such Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification, but notice given in any other reasonable
manner or at any other reasonable time shall also constitute reasonable
notification.  Such notice, in case of
public sale, shall state the time and place for such sale, and, in the case of
sale on a securities exchange, shall state the exchange on which such sale is
to be made and the day on which the Pledged Collateral, or portion thereof,
will first be offered for sale at such exchange.  Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Agent may fix and shall state in the notice or publication (if any) of such
sale.  At any such sale, the Pledged
Collateral, or portion thereof to be sold, may be sold in one lot as an
entirety or in separate parcels, as the Agent may determine in its sole and
absolute discretion.  Neither the Agent
nor any of the other Secured Parties shall be obligated to make any sale of the
Pledged Collateral if it shall determine not to do so regardless of the fact
that notice of sale of the Pledged Collateral may have been given.  The Agent or may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned.  In
case the sale of all or any part of the Pledged Collateral is made on credit or
for future delivery, the Pledged Collateral so sold may be retained by the
Agent until the sale price is paid by the purchaser or purchasers thereof, but
neither the Agent nor any of the other Secured Parties shall incur any
liability to any Pledgor in case any such purchaser or purchasers shall fail to
take up and pay for the Pledged Collateral so sold and, in case of any such failure,
such Pledged Collateral may be sold again upon like notice.  At any public sale made pursuant to this
Agreement, the Agent or any of the other Secured Parties and any other holder
of any of the Secured Obligations, to the extent permitted by applicable law,
may bid for or purchase, free from any right of redemption, stay and/or
appraisal on the part of any Pledgor (all said rights being also hereby waived
and released to the extent permitted by applicable law), any part of or all the
Pledged Collateral offered for sale and may make payment on account thereof by
using any claim then due and payable to the Agent or any of the other Secured
Parties from any Pledgor as a credit against the purchase price, and the Agent
and the Lenders may, upon compliance with the terms of sale and to the extent
permitted by applicable law, hold, retain and dispose of such property without
further accountability to any Pledgor therefor. 
For purposes hereof, a written agreement to purchase all or any part of
the Pledged Collateral shall be treated as a sale thereof; the Agent shall be
free to carry out such sale pursuant to such agreement and no Pledgor shall be
entitled to the return of any Pledged Collateral subject thereto,
notwithstanding the fact that after the Agent 

 

H-7

 

shall have entered
into such an agreement all Events of Default may have been remedied or the
Secured Obligations may have been paid in full as herein provided.  Each Pledgor hereby waives any right to require
any marshaling of assets and any similar right.

 

(b)           In addition to exercising the power of sale herein
conferred upon it, the Agent shall also have the option to proceed by suit or
suits at law or in equity to foreclose this Agreement and sell the Pledged
Collateral or any portion thereof pursuant to judgment or decree of a court or
courts having competent jurisdiction.

 

(c)           The rights and remedies of the Agent and the other
Secured Parties under this Agreement are cumulative and not exclusive of any
rights or remedies which they would otherwise have.

 

Section 8.  Application of Proceeds of Sale and Cash.  The proceeds of any sale of the whole or any
part of the Pledged Collateral, together with any other moneys held by the
Agent or any of the other Secured Parties under the provisions of this
Agreement, shall be applied in accordance with the Credit Agreement.  The Pledgor shall remain liable and will pay,
on demand, any deficiency remaining in respect of the Secured Obligations.

 

Section 9.  Agent Appointed Attorney-in-Fact.  Each Pledgor hereby constitutes and appoints
the Agent as the attorney-in-fact of such Pledgor with full power of
substitution either in the Agent’s name or in the name of such Pledgor to do
any of the following, during the existence of an Event of Default, provided
that the Agent may take any of the actions set forth in clause (c) below
regardless of whether an Event of Default exists: (a) to perform any
obligation of such Pledgor hereunder in such Pledgor’s name or otherwise; (b) to
ask for, demand, sue for, collect, receive, receipt and give acquittance for
any and all moneys due or to become due under and by virtue of any Pledged
Collateral; (c) to prepare, execute, file, record or deliver notices,
assignments, financing statements, continuation statements, applications for
registration or like papers to perfect, preserve or release the Agent’s
security interest in the Pledged Collateral or any of the documents,
instruments, certificates and agreements described in Section 12.(b); (d) to
verify facts concerning the Pledged Collateral in its own name or a fictitious
name; (e) to endorse checks, drafts, orders and other instruments for the
payment of money payable to such Pledgor, representing any interest or dividend
or other distribution payable in respect of the Pledged Collateral or any part
thereof or on account thereof and to give full discharge for the same; (f) to
exercise all rights, powers and remedies which such Pledgor would have, but for
this Agreement, under the Pledged Collateral; and (g) to carry out the
provisions of this Agreement and to take any action and execute any instrument
which the Agent may deem necessary or advisable to accomplish the purposes
hereof, and to do all acts and things and execute all documents in the name of
the Pledgor or otherwise, deemed by the Agent as necessary, proper and
convenient in connection with the preservation, perfection or enforcement of
its rights hereunder.  Nothing herein
contained shall be construed as requiring or obligating the Agent or the other
Secured Parties to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by it, or to present or file any claim
or notice, or to take any action with respect to the Pledged Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken by the Agent or of the other
Secured Parties or omitted to be taken with respect to the Pledged Collateral
or any part thereof

 

H-8

 

shall give rise to any
defense, counterclaim or offset in favor of any Pledgor or to any claim or
action against the Agent or any of the other Secured Parties.  The power of attorney granted herein is irrevocable
and coupled with an interest.

 

Section 10.  Agent’s Duty of Care.  Other than the exercise of reasonable care to ensure
that safe custody of the Pledged Collateral while being held by the Agent
hereunder, the Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that each Pledgor shall
responsible for preservation of all rights of such Pledgor in the Pledged
Collateral.  The Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it being
understood that the Agent shall not have responsibility for (a) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Pledged Collateral, whether or not the
Agent has or is deemed to have knowledge of such matters or (b) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.

 

Section 11.  Reimbursement of Agent.  Each Pledgor agrees to pay upon demand to the
Agent the amount of any and all reasonable expenses, including the reasonable
fees disbursements and other charges of its counsel and of any experts or
agents, and its fully allocated internal costs, that the Agent may incur in
connection with (a) the administration of this Agreement, (b) the
custody or preservation of, or any sale of, collection from, or other
realization upon, any of the Pledged Collateral, (c) the exercise or
enforcement of any of the rights of the Agent or the other Secured Parties
hereunder, or (d) the failure by such Pledgor to perform or observe any of
the provisions hereof.  Any such amounts
payable as provided hereunder shall be Secured Obligations.

 

Section 12.  Further Assurances.  Each Pledgor shall, at its sole cost and
expense, take all action that may be necessary or desirable in the Agent’s
reasonable discretion, so as at all times to maintain the validity, perfection,
enforceability and priority of the Agent’s security interest in the Pledged
Collateral, or to enable the Agent or the other Secured Parties to exercise or
enforce their respective rights hereunder, including without limitation (a) delivering
to the Agent, endorsed or accompanied by such instruments of assignment as the
Agent may specify, any and all chattel paper, instruments, letters of credit
and all other advices of guaranty and documents evidencing or forming a part of
the Pledged Collateral and (b) executing and delivering pledges,
designations, notices and assignments, in each case in form and substance
satisfactory to the Agent, relating to the creation, validity, perfection,
priority or continuation of the security interest granted hereunder.  Each Pledgor agrees to take, and authorizes
the Agent to take on such Pledgor’s behalf, any or all of the following actions
with respect to any Pledged Collateral as the Agent shall deem necessary to
perfect the security interest and pledge created hereby or to enable the Agent
to enforce their respective rights and remedies hereunder: (i) to register
in the name of the Agent any Pledged Collateral in certificated or
uncertificated form; (ii) to endorse in the name of the Agent any Pledged
Collateral issued in certificated form; and (iii) by book entry or
otherwise, identify as belonging to the Agent a quantity of securities or
partnership interests that constitutes all or part of the Pledged Collateral
registered in the name of the Agent. 
Notwithstanding the foregoing, each Pledgor agrees that Pledged
Collateral which is not in

 

H-9

 

certificated form or is
otherwise in book-entry form shall be held for the account of the Agent.  Each Pledgor hereby authorizes the Agent to
file in all necessary and appropriate jurisdictions (as determined by the Agent)
one or more financing or continuation statements (or any other document or
instrument referred to in the immediately preceding clause (b)) in the name of
such Pledgor.  To the extent permitted by
applicable law, a carbon, photographic, xerographic or other reproduction of
this Agreement or any financing statement is sufficient as a financing
statement.  Any property comprising part
of the Pledged Collateral required to be delivered to the Agent pursuant to
this Pledge Agreement shall be accompanied by proper instruments of assignment
duly executed by the Pledgors and by such other instruments or documents as the
Agent may reasonably request.

 

Section 13.  Securities Act.  In view of the position of any Pledgor in
relation to the Pledged Collateral, or because of other current or future circumstances,
a question may arise under the Securities Act or any similar applicable law
hereafter enacted analogous in purpose or effect (such Act and any such similar
applicable law as from time to time in effect being called the “Federal
Securities Laws”) with respect to any disposition of the Pledged Collateral
permitted hereunder.  Each Pledgor
understands that compliance with the Federal Securities Laws might very
strictly limit the course of conduct of the Agent if the Agent were to attempt
to dispose of all or any part of the Pledged Collateral in accordance with the
terms hereof, and might also limit the extent to which or the manner in which
any subsequent transferee of any Pledged Collateral could dispose of the same.  Similarly, there may be other legal
restrictions or limitations affecting the Agent in any attempt to dispose of
all or part of the Pledged Collateral in accordance with the terms hereof under
applicable Blue Sky or other state securities laws or similar applicable law
analogous in purpose or effect.  Each
Pledgor recognizes that in light of the foregoing restrictions and limitations
the Agent may, with respect to any sale of the Pledged Collateral, limit the
purchasers to those who will agree, among other things, to acquire such Pledged
Collateral for their own account, for investment, and not with a view to the
distribution or resale thereof.  Each
Pledgor acknowledges and agrees that in light of the foregoing restrictions and
limitations, the Agent, in its sole and absolute discretion, may, in accordance
with applicable law, (a) proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Collateral
or part thereof shall have been filed under the Federal Securities Laws and (b) approach
and negotiate with a single potential purchaser to effect such sale.  Each Pledgor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions.  In the event of any such sale, neither the
Agent nor any of the other Secured Parties shall incur any responsibility or
liability for selling all or any part of the Pledged Collateral in accordance
with the terms hereof at a price that the Agent, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid
or if more than a single purchaser were approached.  The provisions of this Section will
apply notwithstanding the existence of public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Agent sell.

 

Section 14.  Investment Property.  The Pledgor shall not, and shall not allow
any issuer of any Pledged Collateral, to the extent such issuer is a limited
liability company or a partnership,  to
elect that Pledged Interests, except as directed or requested by the Agent, be
securities

 

H-10

 

governed by Article 8
of the Uniform Commercial Code.  No
issuer of any Pledged Collateral has made such an election.

 

Section 15.  Security Interest Absolute.  All rights of the Agent hereunder, the grant
of a security interest in the Pledged Collateral and all obligations of the
Pledgor hereunder, shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of any Loan Document, any agreement with
respect to any of the Secured Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or
place of the payment of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any consent to any
departure from any of the documents, instruments or agreements evidencing any
of the Secured Obligations, (c) any exchange, release or nonperfection of
any other collateral, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Secured Obligations or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Secured Obligations or in respect
of this Agreement (other than the indefeasible payment in full of all the
Secured Obligations).

 

Section 16.  Continuing Security Interest.  This Agreement shall create a continuing
security interest in the Pledged Collateral and shall remain in full force and
effect until it terminates in accordance with its terms.  The Pledgors or the Agent hereby agree that
the security interest created by this Agreement in the Pledged Collateral shall
not terminate and shall continue and remain in full force and effect
notwithstanding the transfer to the Pledgors or any person designated by it of
all or any portion of the Pledged Collateral.

 

Section 17.  No Waiver.  Neither the failure on the part of the Agent
or any of the other Secured Parties to exercise, nor the delay on its part in
exercising any right, power or remedy hereunder, nor any course of dealing
between the Agent or any of the other Secured Parties and any Pledgor shall
operate as a waiver thereof, nor shall any single or partial exercise of any such
right, power, or remedy hereunder preclude any other or the further exercise
thereof or the exercise of any other right, power or remedy.

 

Section 18.  Notices.  All notices, requests and other
communications hereunder shall be in writing (including facsimile transmission
or similar writing) and shall be given (a) to a Pledgor at its address set
forth below its signature hereto, (b) to the Agent or any Lender at its
respective address for notices provided for in the Credit Agreement, or (c) as
to each such party at such other address as such party shall designate in a
written notice to the other parties. 
Each such notice, request or other communication shall be effective (i) if
mailed, when received or when receipt is refused; (ii) if telecopied, when
transmitted; or (iii) if hand delivered, when delivered; provided,
however, that any notice of a change of address for notices shall not be
effective until received.

 

SECTION 19.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

H-11

 

Section 20.  Amendments.  No amendment or waiver of any provision of
this Agreement nor consent to any departure by any Pledgor herefrom shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

Section 21.  Binding Agreement; Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, except that no Pledgor shall be permitted to assign this
Agreement or any interest herein or in the Pledged Collateral, or any part
thereof, or any cash or property held by the Agent or any of the other Secured
Parties as collateral under this Agreement, and any such assignment by a
Pledgor shall be null and void absent the prior written consent of the Agent.

 

Section 22.  Termination.  Upon indefeasible payment in full of all of
the Secured Obligations, this Agreement shall terminate.  Upon termination of this Agreement in
accordance with its terms the Agent agrees to take such actions as the Pledgors
may reasonably request, and at the sole cost and expense of the Pledgors to
evidence the termination of this Agreement.

 

Section 23.  Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provisions shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.

 

Section 24.  Headings.  Section headings used herein are for
convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.

 

Section 25.  Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
shall constitute but one agreement.

 

Section 26.  Definitions.

 

(a)           As used
herein, the following terms have the indicated meanings:

 

“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy”, as amended from
time to time, and any successor statute or statutes and all rules and
regulations from time to time promulgated thereunder, and any comparable
foreign laws relating to bankruptcy, insolvency or creditors’ rights.

 

“Equity Interests”
means all securities, shares, units, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company, or similar entity, whether
voting or nonvoting, certificated or uncertificated, including general partner
partnership interests, limited partner partnership interests, common stock,
preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1
of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).

 

H-12

 

“Event of Default”
has the meaning set forth in Section 6.

 

“Issuer” means a
Person which issued any Equity Interest that constitutes any part of the
Pledged Collateral.

 

“Organizational
Documents” means any declaration of trust, operating agreement, partnership
agreement, by-laws, articles or certificate of incorporation, articles of
organization, certificate of limited partnership, or other similar agreement or
document.

 

“Person” means an
individual, corporation, partnership, limited liability company, association,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.

 

“Pledged Interests”
means, with respect to each Pledgor,  such
Pledgor’s right, title and interest in the Equity Interests of the Issuers as
described on Schedule 1, whether now owned or hereafter acquired.

 

“Proceeds” means
all proceeds (including proceeds of proceeds) of any of the Pledged Collateral
including all: (a) rights, benefits, distributions, premiums, profits,
dividends, interest, cash, instruments, documents of title, accounts, contract
rights, inventory, equipment, general intangibles, payment intangibles, deposit
accounts, chattel paper, and other property from time to time received, receivable,
or otherwise distributed in respect of or in exchange for, or as a replacement
of or a substitution for, any of the Pledged Collateral, or proceeds thereof
(including any cash, Equity Interests, or other instruments issued after any
recapitalization, readjustment, reclassification, merger or consolidation with
respect to the Issuers and any security entitlements, as defined in Section 8-102(a)(17)
of the UCC, with respect thereto); (b) “proceeds,” as such term is defined
in Section 9-102(a)(64) of the UCC; (c) proceeds of any insurance,
indemnity, warranty, or guaranty (including guaranties of delivery) payable
from time to time with respect to any of the Pledged Collateral, or proceeds
thereof; and (d) payments (in any form whatsoever) made or due and payable
to a Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Pledged Collateral, or proceeds thereof.

 

“Secured Obligations”
means, collectively, (a) with respect to the Borrower, (i) the unpaid
principal of and interest on all Loans, all Reimbursement Obligations and all
other Letter of Credit Liabilities, (ii) all other indebtedness,
liabilities, obligations, covenants and duties of the Borrower owing to the Agent
or any Lender of any kind, nature or description, under or in respect of the
Credit Agreement or any other Loan Document to which the Borrower is a party,
whether direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and including all interest
(including, to the extent permitted by Applicable Law, interest, Fees and other
amounts that would accrue and become due after the filing of a case or other
proceeding under the Bankruptcy Code or other similar Applicable Law but for
the commencement of such case or proceeding, whether or not such amounts are
allowed or allowable in whole or in part in such case or proceeding), (iii) any
and all costs, fees (including attorneys’ fees), and expenses which the
Borrower is required to pay pursuant to any

 

H-13

 

of the foregoing, under
Applicable Law, or otherwise, (iv) all other Obligations of the Borrower
and (v) all Specified Derivatives Obligations of the Borrower and (b) with
respect to any other Pledgor, (i) all indebtedness, liabilities,
obligations, covenants and duties of such Pledgor owing to the Agent or any
Lender of any kind, nature or description, under or in respect of the Guaranty
or any other Loan Document to which such Pledgor is a party, whether direct or
indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated, and including all interest (including, to
the extent permitted by Applicable Law, interest, Fees and other amounts that
would accrue and become due after the filing of a case or other proceeding
under the Bankruptcy Code or other similar Applicable Law but for the
commencement of such case or proceeding, whether or not such amounts are
allowed or allowable in whole or in part in such case or proceeding), (ii) any
and all costs, fees (including attorneys fees), and expenses which such Pledgor
is required to pay or has guaranteed pursuant to any of the foregoing, under
Applicable Law, or otherwise and (iii) all Specified Derivatives
Obligations of such Pledgor.

 

(b)           Terms not otherwise defined herein are
used herein with the respective meanings given to them in the Credit
Agreement.  Terms which are defined in
the North Carolina Uniform Commercial Code have the meanings given such terms
therein.

 

Section 26.  Joint and Several Obligations of Pledgors.  THE OBLIGATIONS OF THE PLEDGORS HEREUNDER
SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH PLEDGOR CONFIRMS THAT IT IS
LIABLE FOR THE FULL AMOUNT OF THE “SECURED OBLIGATIONS” AND ALL OF THE
OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER PLEDGORS HEREUNDER.

 

[Signatures on
Next Page]

 

H-14

 

IN WITNESS WHEREOF, each Pledgor has executed and delivered this Pledge
Agreement under seal as of this the date first written above.

 

	
   

  	
  PLEDGORS:

  
	
   

  	
   

  
	
   

  	
  U-STORE-IT,
  L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Other Pledgors]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices for
  all Pledgors:

  
	
   

  	
   

  
	
   

  	
  c/o
  U-Store-It Trust

  
	
   

  	
  460
  Swedesford Road, Suite 3000

  
	
   

  	
  Wayne,
  Pennsylvania 19087

  
	
   

  	
  Attn:

  
	
   

  	
  Telecopy
  Number:

  
	
   

  	
  Telephone
  Number:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed to, accepted and
  acknowledged

  	
   

  
	
  as of the date first
  written above,

  	
   

  
	
   

  	
   

  
	
  AGENT:

  	
   

  
	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION, as Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  	
   

  

 

H-15

 

ANNEX 1 TO PLEDGE
AGREEMENT

 

FORM OF
PLEDGE AGREEMENT SUPPLEMENT

 

THIS PLEDGE AGREEMENT
SUPPLEMENT dated as of
                      ,
20     (this “Supplement”) executed and delivered by
                                            ,
a
                          
(the “New Pledgor”) in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, in its
capacity as Agent (the “Agent”).

 

WHEREAS, pursuant to that
certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as
amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among U-Store-It, L.P. (the “Borrower”), U-Store-It Trust,
the financial institutions party thereto and their assignees under Section 13.5.
thereof (the “Lenders”), the Agent, and the other parties thereto, the Lenders
and the Agent have agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, to secure
obligations owning by certain parties under the Credit Agreement and the other
Loan Documents, the Borrower and the other “Pledgors” thereunder have executed
and delivered that certain Pledge Agreement dated as of December 7, 2009 (as
amended, restated, supplemented or otherwise modified from time to time, the “Pledge
Agreement”) in favor of the Agent;

 

WHEREAS, it is a
condition precedent to the continued extension by the Lenders and the Agent of
such financial accommodations that the New Pledgor execute this Supplement to
become a party to the Pledge Agreement.

 

NOW, THEREFORE, in
consideration of the above premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the New Pledgor, the New Pledgor hereby agrees as follows:

 

Section 1.  Accession to Pledge Agreement; Grant of
Security Interest.  The New Pledgor
agrees that it is a “Pledgor” under the Pledge Agreement and assumes all
obligations of a “Pledgor” thereunder, all as if the New Pledgor had been an
original signatory to the Pledge Agreement. 
Without limiting the generality of the foregoing, the New Pledgor
hereby:

 

(a)           pledges to the Agent for the benefit of the Secured
Parties, and grants to the Agent for the benefit of the Secured Parties a
security interest in, all of the New Pledgor’s right, title and interest in, to
and under the Pledged Collateral, including the Equity Interests described on Exhibit I
attached hereto, as security for the Secured Obligations;

 

(b)           makes to the Agent and the other Secured Parties as of
the date hereof each of the representations and warranties contained in Section 2
of the Pledge Agreement and agrees to be bound by each of the covenants
contained in the Pledge Agreement, including without limitation, those
contained in Section 3 thereof; and

 

H-16

 

(c)           consents and agrees to each other provision set forth
in the Pledge Agreement.

 

SECTION 2.  GOVERNING LAW.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.

 

Section 3.  Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings given
them in the Pledge Agreement.

 

[Signatures on
Next Page]

 

H-17

 

IN WITNESS WHEREOF, the
New Pledgor has caused this Pledge Agreement Supplement to be duly executed and
delivered under seal by its duly authorized officers as of the date first
written above.

 

 

	
   

  	
   

  	
  [NEW PLEDGOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c/o U-Store-It Trust

  
	
   

  	
   

  	
  460 Swedesford Road,
  Suite 3000

  
	
   

  	
   

  	
  Wayne, Pennsylvania
  19087

  
	
   

  	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
  Telecopy:

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

H-18

 

SCHEDULE 1 TO
PLEDGE AGREEMENT

 

Pledged Equity Interests:

 

	
  Pledgor

  	
   

  	
  Issuer

  	
   

  	
  Jurisdiction of

  Formation of

  Issuer

  	
   

  	
  Class of Equity

  Interest

  	
   

  	
  Certificate

  Number (if any)

  	
   

  	
  Percentage of

  Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Pledgor Information:

 

	
  Pledgor

  	
   

  	
  Jurisdiction of

  Formation

  	
   

  	
  Organizational ID

  No.

  	
   

  	
  Location of Chief Executive Office

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

H-19

 

SCHEDULE 2 TO
PLEDGE AGREEMENT

 

Form of
Acknowledgement and Consent

 

The undersigned hereby
acknowledges receipt of a copy of the Pledge Agreement dated as of December 7, 2009 (the “Pledge Agreement”), made by U-Store-It,
L.P. and the other
Pledgors party thereto in favor of Wachovia Bank, National
Association, as
Agent. Terms not otherwise defined herein have the respective meanings given
them in the Pledge Agreement.

 

The undersigned agrees
for the benefit of the Agent and the Lenders as follows:

 

(a)           The undersigned will be bound by, and comply with, the
terms of the Pledge Agreement applicable to the undersigned, including without
limitation, Sections 3(e) and 3(f).

 

(b)           The undersigned will notify the Agent in writing
promptly of the occurrence of any of the events described in Section 3(d) of
the Pledge Agreement.

 

[(c)          The undersigned will not permit any of the Equity
Interests issued by it (i) to be dealt in or traded on a securities
exchange or in securities markets; or (ii) to provide by its terms that it
is a security governed by Article 8 of the UCC.](1)

 

IN WITNESS WHEREOF, the
undersigned has executed and delivered this Acknowledgement and Consent under
seal as of this the date first written above.

 

	
   

  	
  [ISSUER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

(1)           Include only if the Issuer is a
partnership or limited liability company.

 

H-20

 

EXHIBIT I

 

FORM OF
ASSIGNMENT OF MANAGEMENT AGREEMENT

AND SUBORDINATION
OF MANAGEMENT FEES

 

THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES (this “Assignment”)
is made as of
                        ,
2009, by [Insert Name
of Property Owner], [Insert Type of Entity and State of Formation] (“Grantor”),
having a mailing address of [c/o] U-STORE-IT, L.P., [Insert Notice Address], and [INSERT NAME OF
MANAGER] (“Manager”)
in favor of WACHOVIA BANK, NATIONAL
ASSOCIATION, in its capacity as Agent (together with its successors and
assigns, “Agent” or “Beneficiary”) for itself and for each other
Secured Party (as defined in the Credit Agreement (as defined herein)), Agent
having as its address for personal delivery c/o Wells Fargo Real Estate Banking
Group, 200 Public Square — Suite 3200, Cleveland, OH 44114.

 

[Option
#1 — Use if Grantor is Borrower]

 

WHEREAS,
pursuant to that certain Amended and Restated Credit Agreement dated as of                     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among Grantor, the financial
institutions from time to time party thereto as “Lenders”, Agent and the
other parties thereto, Lenders and Agent have agreed to make available to Grantor certain
financial accommodations in an aggregate principal amount not to exceed
$450,000,000 on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, pursuant to
that certain [Insert Name of Management Agreement] dated as of
                    ,
           (as amended,
restated, supplemented or otherwise modified from time to time, the “Management
Agreement”), by and between Grantor and Manager, Grantor has employed
Manager to operate and manage the Property; and

 

WHEREAS, to induce
Lenders and Agent to make, and to continue to make, such financial
accommodations to Grantor under the Credit Agreement, Grantor desires to assign
to Agent, for its individual benefit and the benefit of the other Secured
Parties, all of its right, title and interest in, to and under the Management
Agreement on the terms hereof to secure, among other things, Grantor’s
obligations under the Credit Agreement.

 

[End
of Option #1]

 

[Option
#2 — Use if Grantor is a Guarantor]

 

WHEREAS,
pursuant to that certain Amended and Restated Credit Agreement dated as of                     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among U-Store-It, L.P. (“Borrower”), the financial
institutions from time to time party thereto as “Lenders”, Agent and the
other parties thereto, Lenders and Agent have agreed to make available to Borrower certain
financial accommodations

 

I-1

 

in an aggregate principal
amount not to exceed $450,000,000 on the terms and conditions set forth in the
Credit Agreement;

 

WHEREAS, pursuant to the
terms of that certain Guaranty dated as of                     ,
2009 (as amended, restated, supplemented or otherwise
modified from time to time, the “Guaranty”) made by Grantor and each of the other Guarantors in
favor of Agent and the other Secured Parties, Grantor has guaranteed Borrower’s
obligations to Agent and the other Secured Parties on the terms and conditions
contained therein;

 

WHEREAS, pursuant to
that certain [Insert Name of Management Agreement] dated as of
                    ,
           (as amended,
restated, supplemented or otherwise modified from time to time, the “Management
Agreement”), by and between Grantor and Manager, Grantor has employed
Manager to operate and manage the Property; and

 

WHEREAS, to induce
Lenders and Agent to make, and to continue to make, such financial
accommodations to Borrower under the Credit Agreement, Grantor desires to
assign to Agent, for its individual benefit and the benefit of the other
Secured Parties, all of its right, title and interest in, to and under the
Management Agreements on the terms hereof to secure, among other things,
Grantor’s obligations under the Guaranty.

 

[End
of Option #2]

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Grantor, Grantor agrees as follows:

 

Section 1.               Definitions. Terms not otherwise defined herein have the
respective meanings given them in the Credit Agreement.  Terms defined in the Uniform Commercial Code
as in effect in the state in which the Property is located have the respective
meanings given such terms therein.  In
addition, as used in this Assignment, the following terms shall have the
following meanings:

 

“Assignment of Leases
and Rents” has the meaning given such term in the Security Instrument.

 

“Collateral” has
the meaning given such term in the Security Instrument.

 

“Event of Default”
means the occurrence of an “Event of Default” as defined in the Credit
Agreement, or as defined in the Security Instrument, or a default by Grantor in
the performance of any of the terms, covenants and conditions of this
Assignment.

 

[“Guaranty” has
the meaning given such term in the Recitals above.]

 

“Management
Agreement” has
the meaning given such term in the Recitals above.

 

“Management
Fees” means any and all fees payable by Grantor to Manager pursuant to the terms of the Management
Agreement.

 

I-2

 

“Manager” has the
meaning given such term in the Recitals above.

 

“Obligations” has
the meaning given that term in the Security Instrument.

 

“Property” means
the real estate or interest therein described in Exhibit A attached
hereto and incorporated herein by this reference, and all rights, titles and
interests appurtenant thereto.

 

“Security Instrument”
means that certain [Mortgage][Deed of
Trust][Deed to Secure Debt], Security Agreement, Assignment of
Leases and Rents and Fixture Filing of even date herewith from [Grantor] as grantor thereunder to Agent as beneficiary
thereunder, covering the Property and other related collateral more
particularly described therein, and given as security for the repayment of the
Obligations.

 

Section 2.               Assignment of Management
Agreement. As security for the payment and performance of the Obligations, Grantor
hereby assigns to Agent, for its individual benefit and the benefit of the
other Secured Parties, and grants to Agent, for its individual benefit and the
benefit of other Secured Parties, a security interest in all of Grantor’s
right, title and interest in, to and under the Management Agreement to (a) all
rights of Grantor to damages arising out of, or for, breach or default in
respect thereof and (b) all rights of Grantor to perform and exercise all
rights and remedies thereunder.  Said
transfer will automatically become a present, unconditional assignment,
exercised by written notice from Agent to Grantor and Manager, during an
existence of an Event of Default.

 

Section 3.               Subordination of Management
Agreement and Management Fees. Grantor and Agent hereby
agree that at all times prior to the termination of this Agreement, the
Management Agreement shall be subordinate, inferior and subject to this
Agreement, the Security Instrument and the other Loan Documents.  The Management Fees and all rights and
privileges of Manager to the Management Fees are hereby and shall at all times
continue to be subject and unconditionally subordinate in all respects to the
Lien and payment of the Security Instrument, the Obligations and the Loan
Documents and to any renewals, extensions, modifications, assignments,
replacements, or consolidations thereof and the rights, privileges, and powers
of Agent and the other Secured Parties thereunder.

 

Section 4.               Termination. At such time
as the Credit Agreement has terminated in accordance with its terms and the
Security Instrument is fully released or assigned of record, this Assignment
shall terminate.

 

Section 5.               Estoppel. Manager represents
and warrants that (a) the Management Agreement is in full force and effect
and has not been modified, amended or assigned with respect to the Property, (b) neither
Manager nor Grantor is in default under any of the terms, covenants or
provisions of the Management Agreement with respect to the Property and Manager
knows of no event which constitutes, or with the passage of time or the giving
of notice or both would constitute, an event of default under the Management
Agreement with respect to the Property, (c) neither Manager nor Grantor
has commenced any action or given or received any notice for the purpose of
terminating the Management Agreement with respect to the

 

I-3

 

Property,
(d) the Management Fees have been paid in full with respect to the
Property and (e) a true, correct and complete copy of the Management
Agreement is attached hereto as Exhibit A.

 

Section 6.               Grantor’s Covenants. Grantor
hereby covenants with Agent that during the term of this Assignment: (a) Grantor
shall not terminate or amend any of the material terms or provisions of the
Management Agreement without the prior written consent of Agent, which consent
shall not be unreasonably be withheld; and (b) Grantor shall, in the
manner provided for in this Assignment, give notice to Agent of any notice or
information that Grantor receives which indicates that Manager is terminating
the Management Agreement or that Manager is otherwise discontinuing its
management of the Property.  Grantor may
terminate the Management Agreement pursuant to the terms contained therein
provided that (i) Grantor enters into a replacement management agreement
with a property manager acceptable to Agent, in Agent’s reasonable discretion;
and (ii) such replacement property manager executes an assignment and
subordination agreement in the form of this Assignment or other form reasonably
acceptable to Agent.

 

Section 7.               Intentionally Omitted.

 

Section 8.               Agreement by Grantor and
Manager. Grantor and Manager hereby agree that while an Event of Default
exists, at the option of Agent exercised by written notice to Grantor and
Manager: (a) all rents, security deposits, issues, proceeds and profits of
the Property collected by Manager, after payment of all costs and expenses of
operating the Property (including, without limitation, operating expenses, real
estate taxes, insurance premiums and repairs and maintenance), shall be applied
in accordance with Agent’s written directions to Manager; (b) Manager
shall not collect or be entitled to any Management Fee; and/or (c) Agent
may exercise its rights under this Assignment and may immediately terminate the
Management Agreement and require Manager to transfer its responsibility for the
management of the Property to a management company selected by Agent in Agent’s
sole and absolute discretion.

 

Section 9.               Consent and Agreement by
Manager. Manager hereby acknowledges and consents to this Assignment and
agrees that Manager will act in conformity with the provisions of this Assignment
and the rights of Agent and the other Secured Parties hereunder or otherwise
related to the Management Agreement. If the responsibility for the management
of the Property is transferred from Manager in accordance with the provisions
hereof, Manager shall, and hereby agrees to, fully cooperate in transferring
its responsibility to a new management company and effectuate such transfer no
later than 30 days from the date the Management Agreement is terminated.
Further, Manager hereby agrees (a) not to contest or impede the exercise
by Agent and the other Secured Parties of any right they have under or in
connection with this Assignment and (b) that Manager shall give at least
30-days prior written notice to Agent of its intention to terminate the Management
Agreement or otherwise discontinue its management of the Property.

 

Section 10.             Agent’s Agreement. So long as no
Event of Default exists, any sums due to Grantor under the Management Agreement
may be paid directly to Grantor.

 

Section 11.             Agent and Secured Parties Not Obligated.  Notwithstanding any other provision of this Assignment
to the contrary, Grantor and Manager expressly acknowledge and

 

I-4

 

agree that Grantor and
Manager shall continue to observe and perform all of the conditions and
obligations contained in the Management Agreement to be observed and performed
by them, and that neither this Assignment, nor any action taken pursuant
hereto, shall cause Agent or the other Secured Parties to be under any
obligation or liability in any respect whatsoever to any party to any
Management Agreement or to any other Person for the observance or performance
of any of the representations, warranties, conditions, covenants, agreements or
terms therein contained.

 

Section 12.             Agent Appointed Attorney-in-Fact. 
Grantor hereby irrevocably appoints Agent as Grantor’s attorney-in-fact,
with full authority in the place and stead of Grantor and in the name of
Grantor or otherwise, from time to time in Agent’s discretion, to take any
action and to execute any instrument or document which Agent may deem necessary
or advisable to accomplish the purposes of this Assignment and to exercise any
rights and remedies Agent may have under this Assignment or Applicable Law.  The power-of-attorney granted hereby is
irrevocable and coupled with an interest.

 

Section 13.             APPLICABLE LAW. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND
TO BE FULLY PERFORMED, IN SUCH STATE.

 

Section 14.             Notice to Parties. Unless otherwise provided herein, communications
provided for hereunder shall be in given and shall become effective as provided
in the Credit Agreement:

 

	
  If to Grantor:

  	
   

  
	
  [IF GRANTOR IS BORROWER:]

  	
   

  
	
   

  	
   

  
	
  U-Store-It, L.P.

  	
   

  
	
  c/o
  U-Store-It Trust

  	
   

  
	
  460
  Swedesford Road, Suite 3000

  	
   

  
	
  Wayne,
  Pennsylvania 19087

  	
   

  
	
  Attn:
  [                                      ]

  	
   

  
	
  Telephone:

  	
  [                                ]

  	
   

  
	
  Telecopy:

  	
  [                              ]

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  
	
   

  	
   

  
	
  U-Store-It, L.P.

  	
   

  
	
  c/o
  U-Store-It Trust

  	
   

  
	
  460
  Swedesford Road, Suite 3000

  	
   

  
	
  Wayne,
  Pennsylvania 19087

  	
   

  
	
  Attn:
  [                                      ]

  	
   

  
	
  Telephone:

  	
  [                                ]

  	
   

  
	
  Telecopy:

  	
  [                              ]

  	
   

  

 

I-5

 

	
  [IF GRANTOR IS OWNER:]

  	
   

  
	
   

  	
   

  
	
  [Insert Name of Owner]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attn:

  	
   

  
	
  Telephone:

  	
  (      )

  	
   

  
	
  Telecopy:

  	
  (      )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the Agent:

  	
   

  
	
   

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  
	
  Telephone:

  	
  (      )

  	
   

  
	
  Telecopy:

  	
  (      )

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the Manager:

  	
   

  
	
   

  	
   

  
	
  [Insert Name of Manager]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  
	
  Telephone:

  	
  (      )

  	
   

  
	
  Telecopy:

  	
  (      )

  	
   

  
				

 

or, as to each party at
such other address as shall be designated by such party in a written notice to
the other parties delivered in compliance with this Section.  All such notices and other communications
shall be effective (i) if mailed, when received; (ii) if telecopied,
when transmitted; or (iii) if hand delivered, when delivered.  Any party by notice to the
others may designate additional or different addresses for subsequent notices
or communications.

 

Section 15.             Amendment. This
Assignment, and any provisions hereof, may only be amended, supplemented,
waived, or otherwise modified by an agreement in writing signed by the party
against whom enforcement thereof is sought.

 

Section 16.             Successors and Assigns.  Subject to Section 13.5 of the Credit Agreement, all of the
terms of this Assignment shall apply to, be binding upon and inure to the
benefit of the parties thereto, their successors, assigns, heirs and legal
representatives, and all other Persons claiming by, through or under them.

 

Section 17.             Severability.  This
Assignment is intended to be performed in accordance with, and only to the
extent permitted by, all applicable legal requirements.  If any provision of any of this Assignment or
the application thereof to any person or circumstance shall, for any

 

I-6

 

reason and to any extent,
be invalid or unenforceable, then neither the remainder of the instrument in
which such provision is contained nor the application of such provision to
other persons or circumstances nor the other instruments referred to
hereinabove shall be affected thereby, but rather, shall be enforced to the
greatest extent permitted by Applicable Law.

 

Section 18.             Headings.  The Section and
Subsection entitlements hereof are inserted for convenience of reference only
and shall in no way alter, modify or define, or be used in construing, the text
of such Section or Subsection.

 

Section 19.             Counterparts.  This
Assignment may be executed in any number of counterparts, each of which shall
be an original, but all of which together shall constitute but one instrument.  The failure of any party
hereto to execute this Assignment, or any counterpart hereof, shall not relieve
the other signatories from their obligations hereunder.

 

Section 20.             Number and Gender. Whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and
pronouns shall include the plural and vice versa.

 

[Signatures on Next Page]

 

I-7

 

IN
WITNESS WHEREOF the undersigned have executed this Assignment of Management Agreement and Subordination of Management Fees
as of the date and year first written above.

 

	
   

  	
   

  	
  GRANTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [INSERT NAME OF
  PROPERTY OWNER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MANAGER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [INSERT NAME OF
  MANAGER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

I-8

 

EXHIBIT A

 

MANAGEMENT AGREEMENT

 

I-9

 

EXHIBIT J

 

FORM OF SECURITY INSTRUMENT

 

[Subject
to conformance with local law and practice of state where property is located,
and for adjustment to reflect relationship of Property Owner to Borrower]

 

Alston & Bird
LLP

90 Park Avenue

New York, NY 10016

Attention: Meryl P.
Diamond, Esq.

 

[MORTGAGE][DEED OF TRUST],
SECURITY AGREEMENT AND

ASSIGNMENT OF LEASES AND RENTS

AND FIXTURE FILING

 

from

 

[INSERT NAME OF PROPERTY OWNER], as [mortgagor/grantor]

 

to

 

[[INSERT TRUSTEE], as Trustee, for the benefit of]

 

WACHOVIA
BANK, NATIONAL ASSOCIATION, as [mortgagee/beneficiary]

 

(As Agent for the
benefit of Secured Parties, and for its own account,

pursuant to the
Credit Agreement described herein)

 

dated as of
                      ,
2009

 

Property:  [Insert Name of Property], [Insert County]
County, [Insert State]

 

[ADD
ANY APPROPRIATE LOCAL LAW LEGENDS]

 

J - 1

 

THIS [MORTGAGE][DEED OF TRUST],
SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING (this “Security
Instrument”) is made and delivered as of
                    ,
200    , by [INSERT NAME OF PROPERTY OWNER], [Insert Type of Entity and
State of Formation] (“Owner”), having a mailing address of
c/o U-Store-It Trust, 460 Swedesford Road, Suite 3000, Wayne, Pennsylvania
19087, as [mortgagor/grantor]  [to [INSERT TRUSTEE] (“Trustee”), having a business address at
[Insert Trustee Address] as trustee], for the benefit of Wachovia
Bank, National Association as [mortgagee/beneficiary]
in its capacity as Agent (together with its successors and assigns, “Agent”)
for itself and each other Secured Party (as defined in the Credit Agreement (as
hereinafter defined)), Agent having as its address for personal delivery at [Insert Agent Address].

 

[Option
#1 — Use if Owner is Borrower]

 

WHEREAS,
pursuant to that certain Amended and Restated Credit Agreement dated as of
                          ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among Owner, the financial
institutions from time to time party thereto as “Lenders”, Agent, and
the other parties thereto, Lenders and Agent have agreed to make available to Owner certain
financial accommodations in an aggregate principal amount not to exceed
$450,000,000 on the terms and conditions set forth in the Credit Agreement; and

 

WHEREAS, Owner’s
execution and delivery of this Security Instrument to secure, among other
things, its obligations under the Credit Agreement, is a condition to Agent and
Lenders making, and continuing to make, such financial accommodations to Owner.

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Owner, Owner agrees as follows:

 

[Option
#2 — Use if Owner is a Guarantor]

 

WHEREAS,
pursuant to that certain Amended and Restated Credit Agreement dated as of
                      ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among U-Store-It, L.P. (“Borrower”), the financial
institutions from time to time party thereto as “Lenders”, Agent and the
other parties thereto, Lenders and Agent have agreed to make available to Borrower certain
financial accommodations in an aggregate principal amount not to exceed
$450,000,000 on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, pursuant to the
terms of that certain Amended and Restated Guaranty dated as of                       ,
2009 (as amended,
restated, supplemented or otherwise modified from time to time, the “Guaranty”) made by Owner and each of the other Guarantors in
favor of Agent and the other Secured Parties, Owner has guaranteed Owner’s
obligations to Agent and the other Secured Parties on the terms and conditions
contained therein; and

 

J - 2

 

WHEREAS, Owner’s
execution and delivery of this Security Instrument to secure, among other
things, its obligations under the Guaranty is a condition to Agent and Lenders
making, and continuing to make, such financial accommodations to Borrower.

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Owner, Owner agrees as follows:

 

ARTICLE I.  DEFINED TERMS

 

Terms not otherwise
defined herein have the respective meanings given them in the Credit
Agreement.  Terms defined in the Uniform
Commercial Code as in effect in the state the Property is located in have the
respective meanings given such terms therein. 
In addition, as used in this Security Instrument, the following terms
shall have the following meanings:

 

“Applicable Law” has the meaning
given that term in the Credit Agreement.

 

“Bankruptcy
Code” means Title 11 of the United States Code entitled “Bankruptcy”, as
amended from time to time, and any successor statute or statutes and all rules and
regulations from time to time promulgated thereunder, and any comparable
foreign laws relating to bankruptcy, insolvency or creditors’ rights.

 

“Borrower” “[INSERT IF OWNER IS BORROWER: [means Owner [and (insert names of other
Borrowers under the Credit Agreement, if any).]]] [INSERT IF OWNER IS
GUARANTOR: [has the meaning given that term in the Recitals above.]]”

 

“Collateral” means
the Property, Improvements, [Ground Lease, Ground Lease
Assignments and Modifications], Fixtures, and Personalty together
with:

 

(a)                                  all rights, privileges, easements,
rights-of-way or use, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and powers, air
rights and development rights, and all estates, rights, titles, interests,
liberties, servitudes, royalties, minerals, oil and gas rights, tenements,
hereditaments and appurtenances of any nature whatsoever, in any way now or
hereafter belonging, relating or pertaining to the Property and the
Improvements  [, including,
but not limited to, those arising under and by virtue of the Ground Lease], and
the reversions and remainders, and all land lying in the bed of any street,
road or avenue, opened or proposed, in front of or adjoining the Property, to
the center line thereof and all the estates, rights, titles, interests, rights
of dower, rights of curtesy, property, possession, claim and demand whatsoever,
both at law and in equity, of Owner of, in and to the Property and the
Improvements, [including, but not limited to, those arising
under and by virtue of the Ground Lease,] and every part and parcel
thereof, with the appurtenances thereto; and

 

(b)                                 all betterments, improvements, additions,
alterations, appurtenances, substitutions, replacements and revisions thereof
and thereto, and all reversions and remainders therein; and

 

J - 3

 

(c)                                  all of Owner’s right, title and interest
in and to any awards, remunerations, reimbursements, settlements or
compensation (including, but not limited to, condemnation awards and interest
thereon) heretofore made or hereafter to be made by any Governmental Authority
pertaining to the Property, Improvements, Fixtures or Personalty including, but
not limited to, those for any vacation of, or change of grade in, any streets
affecting the Property or the Improvements and those for municipal utility
district or other utility costs incurred or deposits made in connection with
the Property; and

 

(d)                                 all of Owner’s right, title and interest
in and to any proceeds of insurance required or maintained pursuant to the
terms of Section 3.15 hereof, including, without limitation, the right to
receive and apply the proceeds of any insurance, judgments, or settlements made
in lieu thereof, for damage to the Property; and

 

(e)                                  all of Owner’s right, title and interest
in, to and under any management or leasing agreement with respect to the
Property and Improvements, including without limitation, (a) all rights of
Owner to damages arising out of, or for, breach or default in respect thereof,
and (b) all rights of Owner to perform and exercise all rights and
remedies thereunder; and

 

(f)                                    subject to the provisions of Section 8.3
hereof, all of the Leases and Rents; and

 

(g)                                 any and all other security and
collateral, of any nature whatsoever, now or hereafter given for the repayment
or the performance and discharge of the Obligations; and

 

(h)                                 the right, in the name and on behalf of
Owner, to appear in and defend any action or proceeding brought with respect to
the Property and to commence any action or proceeding to protect the interest
of Agent, on behalf of Secured Parties, in the Property.

 

As used in this Security
Instrument, the term “Collateral” shall be expressly defined as meaning all or,
where the context permits or requires, any portion of the above, and all or,
where the context permits or requires, any interest therein.

 

“Credit Agreement”
has the meaning given that term in the Recitals above.

 

“Credit Agreement
Event of Default” means an “Event of Default”, as defined in the Credit
Agreement.

 

“Derivatives Contract”  has the
meaning given that term in the Credit Agreement.

 

“Environmental Indemnity” means
that certain Environmental Indemnity Agreement, dated as of the date hereof,
executed by Owner in connection with the Loans for the benefit of

 

J - 4

 

Agent
and the other Secured Parties, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“Event of Default”
means any failure, happening or occurrence described in Article V
hereinbelow.

 

“Fixtures” means
fixtures now or hereafter located on the Property and shall in any event
include all materials, supplies, equipment, apparatus and other items now owned
or hereafter acquired by Owner and now or hereafter attached to, installed in
or used in connection with any of the Improvements or the Property, including,
but not limited to, any and all building and construction materials and
supplies, furniture, furnishings, apparatus, machinery, equipment, motors,
elevators, escalators, fittings, radiators, ranges, refrigerators, awnings,
shades, screens, blinds, carpeting, office equipment and other furnishings, and
all plumbing, heating, lighting, cooking, laundry, ventilating, refrigerating,
incinerating, air conditioning and sprinkler equipment, telephone systems,
televisions and televisions systems, computer systems, and appurtenances
thereto, together with all accessions, replacements, betterments and
substitutions for any of the foregoing and the proceeds thereof (but excluding
in every event fixtures belonging to Tenants which do not become property of
the Owner upon expiration or earlier termination of the applicable Lease).

 

“Governmental
Authority” has the meaning given that term in the Credit Agreement.

 

[“Ground
Lease” means that certain
[                              ]
dated [                            ]
and recorded
[                            ]
in
[                                  ]
(the “Ground Lease”) and the leasehold estate created thereby (the “Leasehold
Estate”).]

 

[“Ground
Lease Assignments and Modifications”  means all assignments,
modifications, extensions and renewals of the Ground Lease and all credits,
deposits, options, privileges and rights of Owner as tenant under the Ground
Lease, including, but not limited to, rights of first refusal, if any, and the
right, if any, to renew or extend the Ground Lease for a succeeding term or terms,
and also including all the right, title, claim or demand whatsoever of Owner
either in law or in equity, in possession or expectancy, of, in and to Lender’s
right, as tenant under the Ground Lease, to elect under Section 365(h)(1) of
the Bankruptcy Code to terminate or treat the Ground Lease as terminated in the
event (i) of the bankruptcy, reorganization or insolvency of the landlord
under the Ground Lease (the “Ground Lessor”), and (ii) the
rejection of the Ground Lease by Ground Lessor, as debtor in possession, or by
a trustee for Ground Lessor, pursuant to Section 365 of the Bankruptcy
Code.]

 

[“Ground
Lessor” has the meaning given in the definition of “Ground Lease
Assignments and Modifications” above.]

 

[“Guaranty”
has the meaning given that term in the Recitals above.]

 

“Impositions”
means (i) all real estate and personal property taxes, charges,
assessments, excises and levies and any interest, costs or penalties with
respect thereto, general and special,

 

J - 5

 

ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature whatsoever,
which at any time prior to or after the execution hereof may be assessed,
levied or imposed upon the Collateral or the ownership, use, occupancy or
enjoyment thereof, or any portion thereof; (ii) any charges, fees, license
payments or other sums payable for any easement, license or agreement
maintained for the benefit of the Collateral; and (iii) water, gas, sewer,
electricity, telephone and other utility charges and fees related to the
Collateral.

 

“Improvements”
means any and all structures, buildings, improvements, additions, alterations,
betterments or appurtenances to the Property, whether now existing or at any
time hereafter situated, placed or constructed upon the Property, or any part
thereof.

 

“Internal Revenue Code”
has the meaning given that term in the Credit Agreement.

 

“Leases” means any
and all leases, subleases, licenses, concessions, rental agreements or other
agreements (written or oral, now or hereafter in effect) which grant rights to
use, enjoy and/or occupy all or any part of the Collateral or which grant a
possessory interest in and to, or the right to use, all or any part of the
Collateral, together with all security and other deposits made in connection
therewith and all guaranties thereof, together with and all extensions,
renewals, supplements, modifications or replacements of any of the foregoing.

 

[“Leasehold
Estate” has the meaning given in the definition of “Ground Lease” above.]

 

“Legal Requirements”
means (i) any and all judicial decisions, statutes, rulings, rules,
regulations, permits, certificates or ordinances of any Governmental Authority
in any way applicable to Owner, or applicable to, affecting or impacting in any
way the Collateral, including, without limiting the generality of the
foregoing, the ownership, use, occupancy, possession, operation, maintenance,
alteration, repair or reconstruction thereof; (ii) any and all covenants,
conditions and restrictions contained in any deed or other form of conveyance
or in any other instrument of any nature that relate in any way or are
applicable to the Collateral or the ownership, use or occupancy thereof; (iii) Owner’s
presently or subsequently effective bylaws and articles of incorporation,
partnership agreement, partnership certificate, joint venture agreement,
articles of organization, operating agreement, trust agreement or other form of
business association agreement; (iv) any and all Leases; and (v) any
and all other contracts (written or oral) of any nature that relate in any way
to the Collateral and to which Owner may be bound, including, without limiting
the generality of the foregoing, any lease or other contract pursuant to which
Owner is granted a possessory interest in the Property.

 

“Loan Document”
has the meaning given that term in the Credit Agreement.

 

“Loan Party” has
the meaning given that term in the Credit Agreement.

 

“Loans” shall
mean, collectively, all Revolving Loans, Term Loans and Swingline Loans.

 

J - 6

 

“Major Lease” shall mean, as to the Collateral, any
Space Lease which (i) accounts for twenty percent (20%) or more of the
Collateral’s total rental income, or (ii) covers more than twenty percent
(20%) of the gross leasable area at the Collateral.

 

“Notes” shall
mean, collectively, all Revolving Notes, all Term Notes and all Swingline
Notes, together with all amendments, replacements, modifications, supplements
and extensions thereof.

 

[Option
#1 — Use if Owner is Borrower]

 

“Obligations”
means, collectively, (a) the unpaid principal of and interest on all Loans
and all Letter of Credit Liabilities, (b) all other indebtedness,
liabilities, obligations, covenants and duties of Owner owing to Agent or any
other Secured Party of any kind, nature or description, under or in respect of
the Credit Agreement, any other Loan Document to which Owner is a party,
whether direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by a promissory note, and including all interest (including, to the
extent permitted by Applicable Law, interest, Fees and other amounts that would
accrue and become due after the filing of a case or other proceeding under the
Bankruptcy Code or other similar Applicable Law but for the commencement of
such case or proceeding, whether or not such amounts are allowed or allowable
in whole or in part in such case or proceeding), (c) any and all costs,
fees (including attorneys’ fees), and expenses which Owner is required to pay
pursuant to any of the foregoing, under Applicable Law, or otherwise, (d) all
other Obligations of Owner, and (e) all Specified Derivatives Obligations.

 

[Option #2 — Use if Owner is a Guarantor]

 

“Obligations”
means, collectively, (a) all indebtedness, liabilities, obligations,
covenants and duties of Owner owing to Agent or any other Secured Party of any
kind, nature or description, under or in respect of the Guaranty or any other
Loan Document to which Owner is a party, whether direct or indirect, absolute
or contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by a promissory note, and including
all interest (including, to the extent permitted by Applicable Law, interest,
Fees and other amounts that would accrue and become due after the filing of a
case or other proceeding under the Bankruptcy Code or other similar Applicable
Law but for the commencement of such case or proceeding, whether or not such
amounts are allowed or allowable in whole or in part in such case or
proceeding), (b) and any and all costs, fees (including attorneys’ fees),
and expenses which Owner is required to pay or has guaranteed pursuant to any
of the foregoing, under Applicable Law, or otherwise, and (c) all
Specified Derivatives Obligations.

 

[End
of Options.]

 

The stated maturity date
of the Obligations is [maturity date],
unless accelerated or extended pursuant to the terms of the Credit Agreement or
other Loan Documents (the “Termination Date”).

 

J - 7

 

“Other Security
Instruments” has the meaning given that term in Section 12(a) hereof.

 

“Permitted
Encumbrances” means “Permitted Liens” (as defined in the Credit Agreement),
provided however, Permitted Encumbrances shall not include Liens of the types
described in clause (f), except to the extent that such Liens have attached to
any Personalty of Owner, and clause (h) in the definition of the term “Permitted
Liens” in the Credit Agreement.

 

“Personalty” means
all of the Owner’s right, title and interest in, to and under all of the
personal property of the Owner, now owned or hereafter acquired, located on,
attached to or used in or about the Improvements and Property, including
without limitation, all of the following:

 

(a)                                  all equipment, including without
limitation, all machinery, vehicles, improvements, supplies and office
furniture located on, attached to or used in and about the Improvements and
Property;

 

(b)                                 all inventory now or hereafter relating
to the Property and Improvements, including without limitation, merchandise,
supplies, incidentals, packaging materials, labels, materials and any other
items used or usable in manufacturing, processing, packaging or shipping same,
and any of the foregoing which may be returned, rejected, reclaimed or
repossessed by [Trustee or] Agent from any of Owner’s customers;

 

(c)                                  all other goods now or hereafter relating
to the Property and Improvements;

 

(d)                                 all accessions to any of the foregoing,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto;

 

(e)                                  all accounts now or hereafter arising
from or by virtue of any transactions related to the Property or the Improvements,
including without limitation, (i) all rights to payment of any monetary
obligation, whether or not earned by performance, (x) for property that
has been or is to be sold, leased, licensed, assigned or otherwise disposed of
or (y) for services rendered or to be rendered, (ii) all rents, fees,
charges or other payments for the use or occupancy of all or any portion of the
Improvements or any of the other Collateral, and (iii) all rights to
payment of any interest or finance charges payable to Owner;

 

(f)                                    to the extent permitted to be assigned by
the terms thereof or by Applicable Law, all licenses, permits, rights, orders,
variances, franchises, or authorizations of or from any governmental authority
or agency now or hereafter relating to the Property or Improvements;

 

(g)                                 all general intangibles, including
without limitation, all payment intangibles, and all rights of Owner (including
Owner’s rights and privileges, if any, to modify, terminate, or waive
performance) under any and all contracts, agreements, guarantees, indemnities
and other assurances, deposits, prepayments, unpaid rents, credits in favor of
Owner, financing commitments from others, warranties on personal or real
property, trademarks, tradenames, logos, copyrights, goodwill, equipment
rentals, service marks, symbols, certificates, instruments, plans,
specifications, books and records, and other documents, now or hereafter used
in connection with the Property or the Improvements, and all rights therein and
thereto, respecting

 

J - 8

 

or pertaining to the use,
occupation, construction, management or operation of the Property and any part
thereof and any Improvements or any business or activity conducted on the
Property (including all rights to carry on business under such names, and all
rights as a developer or declarant relating to the Property or Improvements),
now or hereafter relating to the Property or Improvements, and any part thereof
and all right, title and interest of Owner therein and thereunder, including,
without limitation, the right, upon the happening of any Credit Agreement Event
of Default, to receive and collect any sums payable to Owner thereunder;

 

(h)                                 any Derivatives Contract, including, but
not limited to, all “accounts”, “chattel paper”, “general intangibles” and “investment
property” (as such terms are defined in the Uniform Commercial Code as from
time to time in effect) constituting or relating to the foregoing;

 

(i)                                     all chattel paper, instruments,
investment property, letter-of-credit rights, money, documents, supporting
obligations and deposit accounts now or hereafter arising from or by virtue of
any transactions related to the Property or the Improvements;

 

(j)                                     all insurance policies of any kind
maintained in effect by the Borrower or Owner of which the Borrower or Owner is
the beneficiary, now existing or hereafter acquired relating to the Property
and Improvements, under which any of the property referred to in any of the
preceding clauses above is insured, including without limitation, any proceeds
payable to the Borrower or Owner pursuant to such policies and any unearned
premiums thereon;

 

(k)                                  all proceeds, which in any event, shall
include, but not be limited to, (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Agent or the other Secured
Parties from time to time with respect to any of the Collateral, (ii) any
and all payments (in any form whatsoever) made or due and payable to Owner
(including interest thereon) from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any person acting
under color of Governmental Authority), (iii) any refunds, rebates or credits
in connection with reduction in real estate taxes and assessments charged
against the Property as a result of tax certiorari or any applications or
proceedings for reduction, and (iv) any and all other amounts from time to
time paid or payable under or in connection with any of the Collateral;

 

(l)                                     all soil test reports, certificates of
occupancy, termite bonds, payment and performance bonds, judgments, premium
rebates or adjustments, and surveys;

 

(m)                               all of Owner’s
right, title and interest under any lease which it may sign as lessee for any
furniture, fixtures or equipment to be located or installed within the
Property; and

 

(n)                                       all reserves, escrows, and deposit
accounts maintained by Owner with respect to the Property, including, without
limitation, all cash, checks, drafts, certificates, securities, investment
property, financial assets, instruments and other property held therein from
time to time and all proceeds, products, distributions or dividends or
substitutions thereon and thereof.

 

J - 9

 

“Property” means [, individually or collectively, as the context may require,]
the real estate or interest therein described in Exhibit A attached
hereto and incorporated herein by this reference, together with all of the
easements, rights, privileges, tenements, hereditaments and appurtenances now
or hereafter thereunto belonging or in any way appertaining thereto, and all of
the estate, right, title, interest, claim and demand whatsoever of Owner
therein or thereto, either at law or in equity, in possession or in expectancy,
now or hereafter acquired and all additional lands, estates and development
rights hereafter acquired by Owner for use in connection with the land and the
development of the land and all additional lands and estates therein which may,
from time to time, by supplemental mortgage or otherwise be expressly made
subject to the lien of this Security Instrument.

 

“Property
Material Adverse Effect”  means a material adverse effect on (i) the Collateral
or any portion thereof, (ii) the business, profits, prospects, management,
operations or condition (financial or otherwise) of Owner or the Collateral or
any portion thereof, (iii) the enforceability, validity, perfection or
priority of the lien of this Security Instrument or the other Loan Documents,
or (iv) the ability of Owner to perform its obligations under this
Security Instrument or the other Loan Documents.

 

“REA” means, individually and/or collectively
(as the context may require), each reciprocal easement, covenant, condition and
restriction agreement or similar agreement affecting the Property (or any
portion thereof) and any future reciprocal easement or similar agreement
affecting the Property (or any portion thereof) entered into in accordance with
the applicable terms and conditions hereof.

 

“Rents” means the
rents, income, receipts, revenues, issues and profits now due or which may
become due or to which Owner is now or hereafter may become entitled or which
Owner may demand or claim, arising or issuing from or out of the Leases, or
from or out of the Collateral or any part thereof, including, without limiting
the generality of the foregoing, minimum rents, additional rents, percentage
rents, parking maintenance charges or fees, tax and insurance contributions,
proceeds of sale of electricity, gas, chilled and heated water and other
utilities and services, deficiency rents, security deposits and other
liquidated damages following default, premiums payable by any Tenant upon the
exercise of a cancellation privilege provided for in any Lease and all proceeds
payable under any policy of insurance covering loss of rents resulting from
untenantability caused by destruction or damage to the Collateral, together
with any and all rights and claims of any kind which Owner may have against any
Tenant under any Lease or against any subtenants or occupants of the
Collateral.

 

“Security Document”
means this Security Instrument, any
Property Management Contract Assignments, and any security agreement, pledge
agreement, financing statement, or other document, instrument or agreement
creating, evidencing or perfecting the Agent’s Liens in any of the Collateral.

 

“Self-Storage Rental
Agreement” means any lease or rental agreement between Owner and any Person
in connection with the rental of self-storage space at the Property.

 

“Space Leases”
means any Lease other than a Self-Storage Rental Agreement.

 

J - 10

 

“Solvent” has the
meaning given that term in the Credit Agreement.

 

“Specified Derivatives
Contract” has the meaning given that term in the Credit Agreement.

 

“Specified Derivatives
Obligation” has the meaning given that term in the Credit Agreement.

 

“Tenant” means the
tenant or lessee under any Lease.

 

ARTICLE II.  GRANT AND CONVEYANCE

 

Section  2.1                                   Grant and Conveyance. 
For and in consideration of the sum of ONE DOLLAR ($1.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Owner does hereby (a) GRANT, BARGAIN, SELL, CONVEY, ASSIGN,
MORTGAGE, TRANSFER, PLEDGE and SET OVER unto [Trustee and
the Trustee’s successors and/or assigns for the benefit of Secured
Parties][Agent and Agent’s successors and/or assigns for the benefit of Secured
Parties], the Collateral, subject, however, to the Permitted
Encumbrances, TO HAVE AND TO HOLD the Collateral and all parts, rights, members
and appurtenances thereof, as security for the full and timely payment and performance
of Obligations, for the benefit of [Agent][Trustee]
and its successors and/or assigns for the benefit of Secured Parties, forever [IN TRUST, WITH THE POWER OF SALE, to secure payment to Agent and the
other Secured Parties of the Obligations at the time and in the manner provided
for its payment in the Notes and the Credit Agreement], and (b) GRANTS
to [Trustee and the Trustee’s successors and/or
assigns for the benefit of Secured Parties][Agent and Agent’s successors and/or
assigns for the benefit of Secured Parties] a security interest in
the Collateral, as further security for the full and timely payment and
performance of the Obligations.

 

Section 2.2                                      Cancellation. 
Should the Obligations be paid according to the tenor and effect of the
Credit Agreement when the same shall become due and payable, and should
Owner  and Borrower perform all
Obligations in a timely manner, or on the earlier release of the Collateral
pursuant to the terms of Section 4.3 of the Credit Agreement, then this
Security Instrument shall be canceled and surrendered.

 

Section 2.3                                      Revolving Loan Account. 
This Security Instrument secures, among other things, a “revolving loan
account”, and payment of all amounts outstanding under the Credit Agreement
from time to time shall not cancel or release this Security Instrument, and
re-advances shall be secured to the same extent as original obligations
hereunder.

 

ARTICLE III. 
COVENANTS, WARRANTIES AND REPRESENTATIONS

 

Owner hereby
unconditionally covenants, warrants and represents to Agent and the other
Secured Parties as follows (which covenants, warranties and representations
have been and will be relied upon by Agent and the other Secured Parties in
advancing funds to Borrower under the

 

J - 11

 

Loan Documents, and shall
be deemed to be continuing covenants, warranties and representations made on a
daily basis by Owner):

 

Section 3.1                                      Title to Collateral and Priority of this
Instrument.  Owner has good, marketable and indefeasible [fee simple][leasehold] title to the Property and
Improvements, and good and marketable title to the Fixtures, Personalty, free
and clear of any Liens, options (except as set forth in the Leases), leases
(other than the Leases), covenants and other rights, titles, interests or
estates of any nature whatsoever except the Permitted Encumbrances.  This Security Instrument, when properly
recorded in the appropriate records, (a) constitutes a valid and
enforceable first priority lien on the Property, Improvements and Fixtures; (b) creates
valid and enforceable first priority security interest in and to the Personalty
and, to the extent that the terms Leases and Rents include items covered by the
Uniform Commercial Code as adopted in the state where the Property is located,
in the Leases and Rents; and (c) constitutes a valid and enforceable first
priority assignment of the Leases and Rents not covered by such Uniform
Commercial Code, all in accordance with the terms hereof.  Owner shall forever warrant, defend and preserve
the title and the validity and priority of the lien of this Security Instrument
and shall forever warrant and defend the same to Agent against the claims of
all Persons whomsoever.

 

Section 3.2                                      Authority.  Owner has all
material approvals, governmental and otherwise, and full power and authority to
own, operate and lease the Property. 
Owner has full power, authority and legal right to mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer and convey the Property
pursuant to the terms hereof and to keep and observe all of the terms of this
Security Instrument and the other Loan Documents to which it is a party.

 

Section 3.3                                      Validity of Security Instrument.   
(a) The execution, delivery and performance of this Security
Instrument by Owner and the borrowing evidenced by the Notes and the Credit
Agreement (i) are within the power and authority of such parties; (ii) have
been authorized by all requisite organizational action of such parties; (iii) have
received all necessary approvals and consents, corporate, governmental or
otherwise; (iv) will not violate, conflict with, result in a breach of or
constitute (with notice or lapse of time, or both) a material default under any
provision of law, any order or judgment of any court or Governmental Authority,
any license, certificate or other approval required to operate the Property or any
portion thereof, Owner’s organizational documents, or any indenture, agreement
or other instrument to which Owner is a party or by which it or any of its
assets or the Property is or may be bound or affected; (v) will not result
in the creation or imposition of any lien, charge or encumbrance whatsoever
upon any of its assets, except the lien and security interest created hereby
and by the other Loan Documents; and (vi) will not require any
authorization or license from, or any filing with, any Governmental Authority
(except for the recording of this Security Instrument in appropriate land
records in the state where the Property is located and except for Uniform Commercial
Code Filings relating to the security interest created hereby), (b) this
Security Instrument has been duly executed and delivered by Owner through the
undersigned authorized representative of Owner and (c) this Security
Instrument constitutes the legal, valid and binding obligations of Owner.  The Loan Documents are not subject to any
right of rescission, set-off, counterclaim or defense by Owner, including the
defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable (except as such enforcement may be limited by bankruptcy, 

 

J - 12

 

insolvency,
reorganization, moratorium or other similar creditor’s rights laws, and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law)), and Owner has not asserted
any right of rescission, set-off, counterclaim or defense with respect thereto.

 

Section 3.4                                      Hazardous Materials. 
To the best of Owner’s knowledge, after due inquiry, the Collateral has
not been used to treat, store or dispose of any Hazardous Materials in
violation of Environmental Laws, and no such Hazardous Materials (including without
limitation, any materials containing asbestos), are located on, in or under the
Collateral or used or emitted in connection therewith, except (a) such
Hazardous Materials of kinds and in amounts ordinarily and customarily stored
and used in similar properties for the purposes of cleaning and other
maintenance or operations and otherwise in compliance with all Environmental
Laws, or (b) as disclosed in writing in any environmental assessment
reports delivered to Agent and upon which Agent and the other Secured Parties
are entitled to rely.  Owner has obtained
and shall maintain all licenses, permits and approvals required with respect to
Hazardous Materials, and is in full compliance with all of the terms, conditions
and requirements of such licenses, permits and approvals.  Owner shall promptly notify Agent of any
change in the nature or extent of any (a) Hazardous Materials, maintained
on, in or under the Collateral or used or emitted in connection therewith and (b) wetlands
located on the Property.  Owner has
provided representations, warranties and covenants regarding environmental
matters set forth in the Environmental Indemnity and Owner shall comply with
the aforesaid covenants regarding environmental matters.

 

Section 3.5                                      Separate Tract. The Property is not a part of a larger
tract of land owned by Owner or any of its Affiliates and is not otherwise
included under any unity of title or similar covenant with other lands not
encumbered by this Security Instrument.

 

Section 3.6                                      Leases.

 

(a)                                  Owner has all requisite right, power and
authority to assign the Leases and Rents, and no other Person has any right,
title or interest therein (other than the lessee’s interest therein held by a
Tenant thereunder).

 

(b)                                 Owner has duly and punctually performed
all of the material terms, covenants, conditions and warranties of the Leases
on Owner’s part to be performed.

 

(c)                                  Owner has delivered to Agent copies of
all Space Leases, including, without limitation, all amendments and
modifications thereof, that are all true, complete and correct in all material
respects.  All Space Leases are valid and
in full force and effect and are enforceable in accordance with their
respective terms, except as set forth on the rent roll delivered to Agent by
Owner contemporaneously herewith (the “Rent Roll”).  Owner has not sold, assigned, transferred,
encumbered, mortgaged or pledged the Leases or the Rents, whether now due or
hereafter to become due.

 

(d)                                 All Rents paid under Space Leases now
due, or to become due, for any periods subsequent to the date hereof have not
been collected more than one (1) month in advance, and

 

J - 13

 

payment thereof has not
been anticipated more than one (1) month in advance, or waived or
released, discounted, setoff or otherwise discharged or compromised.  Owner has not received any funds or deposits
from any Tenant for which credit has not already been made on account of
accrued Rents.

 

(e)                                  Except as set forth on the Rent Roll with
respect to all Space Leases and except as otherwise set forth on the Rent Roll:

 

(i)                                     The Tenants under the Space Leases have
no defenses, set-offs or counterclaims against Owner, and are not in default
under any of the terms or provisions of the respective Space Leases beyond any
applicable cure period;

 

(ii)                                  Each Tenant is in possession and paying
rent and other charges under their respective Space Leases on a current basis;

 

(iii)                               There are no occupancy rights (written or
oral), leases or other tenancies affecting any part of the Property other than
the Self-Storage Rental Agreements;

 

(iv)                              No Rents under any Space Leases have been
or will hereafter be anticipated, discounted, released, waived, compromised, or
otherwise discharged except as may be expressly permitted by the Leases;

 

(v)                                 All Improvements and the leased space
demised and let pursuant to each Space Lease have been completed as required
under the Space Leases except as otherwise disclosed in writing by Owner to
Agent;

 

(vi)                              There are no options to purchase all or
any portion of the Collateral contained in any Space Lease;

 

(vii)                           There are no rights to first refusal to
rent any additional space contained in any Space Lease; and

 

(viii)                        There are no options to renew by any
Tenant except as stated in the Space Leases.

 

(f)                                    Owner shall furnish to Agent, promptly
upon Agent’s request, true and complete copies of all Major Leases, and all
extensions, supplements, modifications and amendments thereof.

 

(g)                                 Owner shall observe, perform and
discharge all of its material obligations, covenants and warranties under the
Leases, and Owner shall give prompt notice to Agent of any failure on the part
of Owner to observe, perform or discharge any of the same.

 

(h)                                 Owner shall enforce or secure in the name
of Agent the performance of each and every material obligation, term, covenant,
condition and agreement in the Leases by any Tenant to be performed, and shall
appear in and defend any action or proceeding arising under,

 

J - 14

 

occurring out of or in
any manner connected with the Leases or the obligations, duties or liabilities
of the Owner and any Tenant, and, after the occurrence and during the
continuance of an Event of Default, upon request by Agent, Owner shall do so in
the name and on behalf of Agent, but at the sole cost and expense of Owner, and
Owner shall pay all costs and expenses of Agent, including reasonable attorneys’
fees and disbursements, in any action or proceeding in which Agent may appear.

 

(i)                                     So long as the Obligations remain unpaid
and undischarged, and unless Agent otherwise consents in writing, the fee and
the leasehold estates in and to the Collateral shall not merge, but shall
always remain separate and distinct, notwithstanding the union of such estates
(without implying Agent’s consent to such union) either in Owner, Agent or in
any Tenant or in any third party by purchase or otherwise.

 

(j)                                     From time to time upon Agent’s written
request, but no more than once within any twelve (12) month period unless there
exists a Credit Agreement Event of Default, Owner shall furnish to Agent a
current rent roll, in form and substance satisfactory to Agent, and an estoppel
certificate pursuant to Section 3.41(a) hereof.

 

Section 3.7                                      Covenants Regarding Leases. 
Owner covenants it will not, without the prior written consent of Agent,
which consent shall not be unreasonably withheld, conditioned or delayed,
obtained in each instance:

 

(a)                                  enter into any new or future Major Lease,
except on the best terms reasonably obtainable, under Major Leases which shall
in all respects be satisfactory to Agent as to the form and substance thereof
and the credit standing of the respective Tenant thereunder;

 

(b)                                 cancel, terminate or accept a surrender
or suffer or permit any cancellation, termination or surrender of any Major
Lease (except for a termination by Owner by reason of a material default by
Tenant);

 

(c)                                  modify or amend any Major Lease so as to
reduce materially the term thereof or the rent payable thereunder, or to change
any renewal provision contained therein or otherwise materially increase the
obligation of Owner thereunder or materially reduce the obligations of the
Tenant thereunder (provided that whether or not Agent’s consent is required
hereunder, Owner shall promptly provide a copy of such amendment or
modification to Agent);

 

(d)                                 commence any summary proceeding or other
action to recover possession of any space demised pursuant to any Major Lease,
other than a proceeding brought in good faith by reason of a material default
of any Tenant;

 

(e)                                  receive or collect or permit the receipt
or collection of any rental payments of more than one monthly installment of
rent under any Major Lease in advance of the due dates of such rental payments
(whether in cash or by evidence of indebtedness);

 

(f)                                    take any other action with respect to any
Lease which would impair the security of Agent or this Security Instrument;

 

J - 15

 

(g)                                 extend any present Space Lease other than
in the manner presently provided for therein;

 

(h)                                 except as expressly permitted by the
terms of the Credit Agreement, execute an agreement or create or permit a lien
which may be or become superior to any existing Space Lease affecting the
Property;

 

(i)                                     except as expressly permitted by the
terms of the Credit Agreement and except with respect to the Permitted
Encumbrances, sell, assign, transfer, mortgage, pledge or otherwise dispose of
or encumber, whether by operation of Applicable Law or otherwise, any Lease or
any rentals under any Lease or any current or future Rents;

 

(j)                                     alter, modify, or change the terms of any
guaranties of any Leases or consent to the release of any party thereunder, or
cancel or terminate such guaranties;

 

(k)                                  waive, excuse, condone, discount, setoff,
compromise or in any manner release or discharge any Tenant under a Major Lease
of and from any obligations, covenants, conditions and agreements to be kept,
observed and performed by such Tenant, including the obligation to pay Rents
thereunder, in the manner and at the time and place specified therein;

 

(l)                                     except as expressly permitted by the
terms of the Credit Agreement, consent to any assignment of any Space Lease or
any subletting of the premises demised under any Space Lease; or

 

(m)                               request, consent, or agree to or accept
the subordination of any Lease to any mortgage, deed to secure debt, deed of
trust or other lien now or hereafter affecting the Property.

 

Section 3.8                                      Use.  Owner shall
use the Collateral for commercial purposes only, including, if applicable, any
on-site residences for managers or caretaker’s quarters.  Owner shall not use, maintain, operate or
occupy, or allow the use, maintenance, operation or occupancy of, the
Collateral in any manner or for any purpose which (a) violates any Legal
Requirement, or (b) makes void, voidable or cancelable, or increases the
premium of, any insurance then in force with respect thereto.

 

Section 3.9                                      Alterations or Waste. 
Owner shall not commit or permit any waste of the Collateral or make any
change in the use of the Property which will in any way increase the risk of
fire or other hazard arising out of the operation of the Property, and shall
not, without the prior written consent of Agent, which consent shall not be
unreasonably withheld, conditioned or delayed, make or permit to be made any
alterations or additions to the Collateral of a material nature, except for
tenant improvement work under an existing Space Lease or any other Lease
approved by Agent.  Owner will not,
without the prior written consent of Agent, which consent shall not be
unreasonably withheld, conditioned or delayed, permit any drilling or
exploration for or extraction, removal, or production of any minerals from the
surface or the subsurface of the Property, regardless of the depth thereof or
the method of mining or extraction thereof.

 

J - 16

 

Section 3.10                                Compliance with Legal Requirements. 
Owner shall promptly and faithfully comply with, conform to and obey all
present and future Legal Requirements including, without limitation, the
Americans with Disabilities Act of 1990, as amended (42 USC § 12101, et  seq.),
the Federal Architectural Barriers Act, as amended (42 USC § 4151, et  seq.),
the Fair Housing Amendments Act of 1988, as amended (42 USC § 3601, et  seq.)
and The Rehabilitation Act of 1973, as amended (29 USC § 794) in all material
respects, whether or not same shall necessitate structural changes in,
improvements to, or interfere with the use or enjoyment of the Collateral.  Owner shall give prompt notice to Agent of
the receipt by Owner of any notice related to a violation of any Legal
Requirements and of the commencement of any proceedings or investigations which
relate to compliance with Legal Requirements.

 

Section 3.11                                Solvency.  Owner is
Solvent. Neither Owner nor any partner or principal shareholder or officer of
Owner is the subject of any bankruptcy, reorganization or insolvency
proceeding.  No tenant under any Space
Lease for a material portion of the Property, or any guarantor of such Space
Lease, is the subject of any bankruptcy, reorganization or insolvency
proceeding.

 

Section 3.12                                Prior Security Instrument Status. 
Owner shall protect the first priority status of the Lien of this
Security Instrument and shall not place, or permit to be placed, except for
Permitted Encumbrances, otherwise convey, mortgage, hypothecate or encumber the
Collateral with, any other Lien, regardless of whether same is allegedly or
expressly inferior to the title created by this Security Instrument.  If any such Lien is asserted against the
Collateral in violation of the first sentence of this Section 3.12, Owner
shall promptly, and at its sole cost and expense, (a) give Agent written
notice thereof within seven (7) days from Owner obtaining knowledge of
such Lien and (b) take such action so as to cause the same to be released,
bonded or stayed to Agent’s reasonable satisfaction, or so long as the property
subject to the lien of this Security Instrument is not impaired, contest the same
in accordance with the provisions of the Credit Agreement.  Such notice shall specify who is asserting
such Lien and shall detail the origin and nature of the underlying facts giving
rise to such asserted Lien.

 

Section 3.13                                Payment of Impositions.

 

(a)                                  Payment of Impositions. 
Owner shall duly pay and discharge, or cause to be paid and discharged,
the Impositions as provided in Section 8.6 of the Credit Agreement.

 

(b)                                 Change in Law. 
If after the date hereof (i) any change in Applicable Law governing
the taxation of deeds of trust, mortgages or security agreements, or
assignments of leases or debts secured thereby or the manner of collecting such
taxes shall occur or (ii) any interpretation, directive or request
applying to Agent or the other Secured Parties of or under such Applicable Law
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) shall be made or adopted, and in each such case
Agent reasonably determines that such change, adoption would adversely affect
Agent or the other Secured Parties, Owner shall promptly pay any tax resulting
from such adoption, change or making on or before the due date thereof, or
contest such tax, at Owner’s election (absent a Credit Agreement Event of
Default), in accordance with Section 8.6 of the Credit Agreement.

 

J - 17

 

Section 3.14                                Repair.  Owner shall
protect and preserve the Collateral and maintain all Collateral in good repair,
working order and condition, ordinary wear and tear excepted.

 

Section 3.15                                Insurance.

 

(a)                                  Types of Insurance. 
Owner shall procure for, deliver to, and maintain for the benefit of
Agent, or cause the Tenant(s) to procure for, deliver to and maintain for
the benefit of Agent, during the term of this Security Instrument certificates
evidencing paid up insurance policies (or, if there is blanket coverage, Agent
shall require a certificate, or, upon Agent’s request, a copy of the underlying
policy with the Collateral identified and specifically allocated amounts shown)
in such amounts, form and substance as are required under Section 8.5 of
the Credit Agreement.

 

(b)                                 Insurance Companies, Form of
Policies.  All insurance policies maintained pursuant to
this Section shall be in form and substance reasonably satisfactory to
Agent, provided that all policies of liability coverage shall require not less
than 30 days’ prior written notice to Agent of any cancellation, termination,
expiration or change in coverage. 
Without limiting the discretion of Agent with respect to reasonably
required endorsements to insurance policies, all such policies for loss of or
damage to the Collateral shall contain a standard mortgagee clause (without
contribution) naming Agent as mortgagee with loss proceeds payable to Agent
notwithstanding (i) any act, failure to act or negligence of or violation
of any warranty, declaration or condition contained in any such policy by any
named insured; (ii) the occupation or use of the Collateral for purposes
more hazardous than permitted by the terms of any such policy; (iii) any
foreclosure or other action by Agent under the Loan Documents; or (iv) any
change in title to or ownership of the Collateral or any portion thereof, such
proceeds to be held for application as provided in the Loan Documents.

 

(c)                                  Proof of Insurance. 
At least thirty (30) days prior to the expiration date of each policy
maintained pursuant to this Section, Owner shall deliver to Agent a certificate
of insurance evidencing a full paid renewal or replacement thereof reasonably
satisfactory to Agent.  Upon request by
Agent or upon a Credit Agreement Event of Default, Owner shall deliver a copy
of any insurance policies then in force with respect to the Collateral.  In the event of foreclosure of this Security
Instrument or any other transfer of title to the Collateral in extinguishment
of the Obligations, all right, title, and interest of Owner in and to all
insurance policies then in force with respect to the Collateral shall pass to
the purchaser or Agent.

 

(d)                                 Payment of Proceeds to Agent. 
While a Credit Agreement Event of Default exists beyond any notice and
cure period, Agent is hereby authorized and empowered, at its option, to adjust
or compromise any loss under any insurance policies maintained pursuant to this
Section and to collect and receive the proceeds from any such policy or
policies.  Owner hereby authorizes and
directs each insurance company to make payment for all losses directly to
Agent. If any insurance company fails to disburse directly and solely to Agent
but disburses instead either solely to Owner or to Owner and Agent jointly,
Owner agrees immediately to endorse and transfer such proceeds to Agent.  Upon the failure of Owner to endorse and
transfer such proceeds as aforesaid, Agent may execute such endorsements or
transfers for and in the name of

 

J - 18

 

Owner, and Owner hereby
irrevocably appoints Agent as Owner’s agent and attorney-in-fact to do so, such
appointment being coupled with an interest and being irrevocable.

 

(e)                                  Application of Proceeds. After deducting from the insurance
proceeds referred to in clause (d) above all of its expenses incurred in
the collection and administration of such sums, including reasonable attorneys’
fees actually incurred, Agent shall apply the net proceeds or any part thereof:

 

(i)                                     upon the written request of Owner,
towards the restoration of the Collateral provided  that the following conditions (the “Restoration
Conditions”) are met to the reasonable satisfaction of Agent:

 

(a)                                  in Agent’s judgment, the Collateral can
with diligent restoration, be returned to a condition at least equal to the
condition thereof that existed prior to the casualty within the earlier to
occur of (x) 365 days after the occurrence of the casualty or (y) 60
days prior to the Termination Date;

 

(b)                                 no Event of Default exists;

 

(c)                                  all necessary Governmental Approvals can
be obtained to allow the rebuilding and reoccupancy of the Collateral;

 

(d)                                 there are sufficient sums available (through
net proceeds and contributions by Owner, the full amount of which shall, at
Agent’s option, have been deposited with Agent) for restoration or repair; and

 

(e)                                  any tenant of any Space  Lease affected by such casualty has reaffirmed the Lease
and its obligations thereunder (subject to completion of the restoration); or

 

(ii)                                  if the Restoration Conditions are not
satisfied, to the payment of the Obligations, whether or not due and as
provided in Section 11.5 of the Credit Agreement or for any other purposes
or objects for which Agent is expressly entitled to advance or apply funds
under the Loan Documents;

 

all without affecting the
Lien of this Security Instrument, and any balance of such moneys then remaining
shall be paid to Owner or whomever may be legally entitled thereto.  Agent and the other Secured Parties shall not
be held responsible for any failure to collect any insurance proceeds due under
the terms of any policy regardless of the cause of such failure.

 

(f)                                    Notwithstanding anything herein to the
contrary, if (i) the Collateral can be restored to a condition at least
equal to the condition thereof that existed prior to the casualty within less
than 180 days after the occurrence of the casualty and at least six (6) months
prior to the Termination Date, (ii) the cost of restoration is less than
10% of the Appraised Value of the Collateral, and (iii) no Credit
Agreement Event of Default exists, then any applicable insurance proceeds shall
be paid directly to Owner.  At the option
of Owner, after providing notice to

 

J - 19

 

Agent, the applicable
insurance proceeds shall be applied to the restoration of the Collateral or to
payment of the Obligations.

 

Section 3.16                                Restoration Following Casualty. 
If any act or occurrence of any kind or nature, ordinary or
extraordinary, foreseen or unforeseen (including any casualty for which
insurance was not obtained or obtainable), shall result in damage to, or loss
or destruction of, the Collateral, Owner shall give notice thereof to Agent
immediately and, if so instructed by Agent and provided that Agent agrees to
apply the insurance proceeds (if any) to the restoration, repair or replacement
of the Collateral as set forth in Section 3.15(f), to the extent that adequate
insurance proceeds are made available, Owner shall commence and continue
diligently to completion to restore, repair, replace and rebuild the Collateral
in accordance with the requirements of Agent and with all Legal Requirements as
nearly as possible to its value, condition and character immediately prior to
such damage, loss or destruction.

 

Section 3.17                                Hold Harmless. 
Owner shall defend, at its own cost and expense, and hold Agent and the
other Secured Parties [and Trustee] harmless from any action, proceeding or
claim affecting the Collateral or the Loan Documents, and all costs and
expenses incurred by Agent and/or the other Secured Parties [and/or Trustee] in
protecting its interests hereunder in such an event (including all court costs
and attorneys’ fees) shall be borne by Owner and secured hereby, except to the
extent the same are caused by the gross negligence or willful misconduct, as
determined by a court of competent jurisdiction in a final, non-appealable
judgment, of Agent or any other Secured Party [or Trustee], as applicable.

 

Section 3.18                                Tax and Insurance Escrow. 
While a Credit Agreement Event of Default exists, at Agent’s option, in
order to implement the provisions of Sections 3.13(a) and 3.15
hereof, Owner shall pay to Agent monthly, annually, or as otherwise directed by
Agent, an amount (“Escrowed Sums”) equal to the sum of (a) the
annual Impositions (reasonably estimated by Agent, wherever necessary) to
become due for the tax year during which such payment is so directed and (b) the
insurance premiums for the same year for those insurance policies as are
required hereunder.  If Agent reasonably
determines that any amounts paid by Owner are insufficient for the payment in
full of such Impositions and insurance premiums, Agent shall notify Owner of
the increased amounts required to provide sufficient funds, whereupon Owner
shall pay to Agent within 15 days thereafter the additional amount as stated in
Agent’s notice.  The Escrowed Sums may be
held by Agent in non-interest bearing accounts and may be commingled with Agent’s
other funds.  Without limiting the
foregoing, while a Credit Agreement Event of Default exists, Agent shall have
the option of crediting the Escrowed Sums against the Obligations.

 

Section 3.19                                No Conflicts, Etc. 
The execution, delivery and performance of this Security Instrument and
the other Security Documents encumbering or relating to any of the Collateral,
in accordance with their respective terms do not and will not, by the passage
of time, the giving of notice, or both: (a) require any Governmental
Approval or violate any Applicable Law relating to Owner or any of the
Collateral; (b) conflict with, result in a breach of or constitute a
default under the organizational documents of Owner, or any indenture, agreement
or other instrument to which Owner is a party or by which it or any of the
Collateral may be

 

J - 20

 

bound; or (c) result
in or require the creation or imposition of any Lien upon or with respect to
any of the Collateral.

 

Section 3.20                                Not a Homestead.                                                 The Property forms no part of any
property owned, used or claimed by Owner as a residence or business homestead and
is not exempt from forced sale under the laws of the state in which the
Property is located.  The Owner hereby disclaims and renounces each and
every claim to all or any portion of the Property as a homestead.

 

Section 3.21                                No Joint Assessment.                           The Property is assessed for real estate tax purposes
as one or more wholly independent tax lot or lots, separate from any adjoining
land or improvements not constituting a part of such lot or lots, and no other
land or improvements is assessed and taxed together with such Property.  Owner shall
not suffer, permit or initiate the joint assessment of the Property with (a) any
other real property constituting a tax lot separate from the Property, or (b) any
portion of the Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.

 

Section 3.22                                REA Covenants.  Owner agrees that without the Agent’s prior written
consent, which consent shall not be unreasonably withheld, conditioned or
delayed, Owner will not enter into any new REA or execute modifications to any
existing REA if such new REA or such modifications will have a Property
Material Adverse Effect.  Owner shall
enforce, shall comply with, and shall use commercially reasonable efforts to
cause each of the parties to each REA to comply with all of the terms and
conditions contained in such REA. 
Notwithstanding the foregoing or anything herein to the contrary, in the
event any modification of an REA is entered into without Agent’s consent and the
same has a Property Material Adverse Effect, such event shall not be a Credit
Agreement Event of Default and shall only be an Event of Default under this
Security Instrument after the expiration of any applicable notice and cure
periods unless the same shall otherwise cause a Credit Agreement Event of
Default pursuant to the terms of the Credit Agreement.

 

Section 3.23                                Intentionally Omitted.

 

Section 3.24                                Litigation.     There is
no action, suit or proceeding, judicial, administrative or otherwise (including
any condemnation or similar proceeding), pending or, to the best of Owner’s
knowledge, threatened or contemplated against or affecting the Property or any
portion thereof that has not been disclosed to Agent by Owner in writing in
connection with the closing of the Loans, which, if determined adversely to
Owner, would have a Property Material Adverse Effect.  Notwithstanding
the foregoing or anything herein to the contrary, in the event that Owner has
failed to disclose to Agent that there is any litigation or governmental
proceedings pending or threatened in writing against Owner which might have a
Property Material Adverse Effect, such failure shall not be a Credit Agreement
Event of Default and shall only be an Event of Default under this Security Instrument
after the expiration of any applicable notice and cure periods unless the same
shall otherwise cause a Credit Agreement Event of Default pursuant to the terms
of the Credit Agreement.  Owner
shall give prompt written notice to Agent of any litigation or governmental
proceedings pending or threatened in writing against Owner which might have a
Property Material Adverse Effect.

 

J - 21

 

Section 3.25                                Illegal Activity/Forfeiture.      (a)                                  No portion of the
Property has been or will be purchased, improved, equipped or furnished with
proceeds of any illegal activity and to the best of Owner’s knowledge, there
are no illegal activities or activities relating to controlled substances at
the Property.

 

(b)                                 There has not been and
shall never be committed by Owner or any other Person in occupancy of or
involved with the operation or use of the Property any act or omission
affording the federal government or any state or local government the right of
forfeiture as against the Property or any part thereof or any monies paid in
performance of Owner’s obligations under this Security Instrument or any other
Loan Document.  Owner hereby covenants
and agrees not to commit, permit or suffer to exist any act or omission
affording such right of forfeiture.

 

Section 3.26                                Permitted Encumbrances.  None of the Permitted Encumbrances, individually or
in the aggregate, materially and adversely (a) interferes with the benefits
of the security intended to be provided by this Security Instrument or any
other Security Document, (b) affects the value or marketability of the
Property or any portion thereof, (c) impairs the use or the operation of
the Property, or (d) impairs Owner’s ability to pay its obligations in a
timely manner.

 

Section 3.27                                REA Representations.                          Each REA is in full
force and effect and neither Owner nor, to Owner’s knowledge, any other party
to any REA, is in default thereunder, and to the best of Owner’s knowledge,
there are no conditions which, with the passage of time or the giving of
notice, or both, would constitute a default thereunder.  Except as disclosed in the title insurance
policy delivered to Agent on the date hereof, to the best of Owner’s knowledge,
no REA has been modified, amended or supplemented.

 

Section 3.28                                Disclosure.  Owner has
disclosed to Agent all material facts and has not failed to disclose any
material fact that could cause any representation nor warranty made herein to
be materially misleading

 

Section 3.29                                Not a
Foreign Person. 
Owner is not a “foreign person” within the meaning of § 1445(f)(3) of
the Internal Revenue Code.

 

Section 3.30                                Intentionally
Omitted.

 

Section 3.31                                Intentionally
Omitted.

 

Section 3.32                                Compliance with Credit Agreement. 
Owner shall comply with all covenants set forth in the Credit Agreement
relating to acts or other further assurances to be made on the part of Owner in order to protect and
perfect the lien or security interest hereof upon, and in the interest of Agent
in the Property.

 

J - 22

 

Section 3.33                                Status of
Property.

 

(a)                            Owner has obtained all necessary
certificates, licenses and other approvals, governmental and otherwise,
necessary for the operation of the Property and the conduct of its business and
all required zoning, building code, land use, environmental and other similar
permits or approvals, all of which are in full force and effect as of the date
hereof and not subject to revocation, suspension, forfeiture or modification.

 

(b)                           The Property and the present and
contemplated use and occupancy thereof are in material compliance with all
applicable zoning ordinances, building codes, land use laws, environmental laws
and other similar Legal Requirements.

 

(c)                            The Property is served by all utilities
required for the current or contemplated use thereof.  All utility service is provided by public
utilities and the Property has accepted or is equipped to accept such utility service.

 

(d)                           The Property is served by public water
and sewer systems.

 

(e)                            All public roads and streets necessary
for service of and access to the Property are physically and legally open for
use by the public.  The Property has
either direct access to such public roads or streets or access to such public
roads or streets by virtue of a perpetual easement or similar agreement inuring
in favor of Owner and any subsequent owners of the Property.

 

(f)                              The Property is free from damage caused
by fire or other casualty.  The Property,
including, without limitation, all buildings, improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire
protection systems, electrical systems, equipment, elevators, exterior sidings
and doors, landscaping, irrigation systems and all structural components, are
in good condition, order and repair in all material respects; there exists no
structural or other material defects or damages in the Property, whether latent
or otherwise, and Owner has not received notice from any insurance company or
bonding company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination
or threatened termination of any policy of insurance or bond.

 

(g)                           All costs and expenses of any and all
labor, materials, supplies and equipment used in the construction of the
Improvements have been paid in full. 
There are no mechanics’ or similar liens or claims which have been filed
for work, labor or material (and no rights are outstanding that under
Applicable Law could give rise to any such liens) affecting the Property which
are or may be prior to or equal to the lien of this Security Instrument and
except for such liens that are Permitted Encumbrances or except as otherwise
expressly permitted by the Credit Agreement.

 

(h)                           Owner has paid in full for, and is the
owner of, all furnishings, fixtures and equipment (other than Tenants’
property) used in connection with the operation of the Property, free and clear
of any and all security interests, liens or encumbrances, except the lien and
security interest created by this Security Instrument and the other Loan
Documents and except 

 

J - 23

 

for such liens that are
Permitted Encumbrances or except as otherwise expressly permitted by the Credit
Agreement.

 

(i)                               All liquid and solid waste disposal,
septic and sewer systems located on the Property are in a good and safe
condition and repair and in compliance with all Legal Requirements.

 

(j)                               Except as otherwise shown on the final
surveys of the Property delivered to Agent on the date hereof, all the
Improvements lie within the boundaries of the Property and any building
restriction lines applicable to the Property.

 

(k)                            To Owner’s knowledge without independent
inquiry or investigation, there are no pending or proposed special or other
assessments for public improvements or otherwise affecting the Property, nor
are there any contemplated improvements to the Property that may result in such
special or other assessments.

 

(l)                               No portion of the Improvements is located
in an area identified by the Federal Emergency Management Agency or any
successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973
or the National Flood Reform Act of 1994, as each may be amended, or any
successor law or, if any portion of the Collateral is located within such area,
Owner has obtained and will maintain the insurance prescribed in Section 8.5(d) of
the Credit Agreement.  To the best of
Owner’s knowledge, no part of the Collateral consists of or is classified as
wetlands, tidelands or swamp and overflow lands.

 

Section 3.34                                Access to Property. 
Owner shall permit agents, representatives and employees of Agent to
inspect the Property or any part thereof at reasonable hours upon reasonable
advance notice or at any time upon a Credit Agreement Event of Default.

 

Section 3.35                                Notice of Default. 
Owner shall promptly advise Agent of any default or Event of Default of
which Owner has knowledge.

 

Section 3.36                                Cooperate in Legal Proceedings. 
During the existence of a Credit Agreement Event of Default, Owner shall
reasonably cooperate with Agent with respect to any proceedings before any
court, board or other Governmental Authority which may in any way materially
affect the rights of Agent hereunder or any rights obtained by Agent under any
of this Security Instrument or any of the other Loan Documents and, in
connection therewith, permit Agent, at its election, to participate in any such
proceedings.

 

Section 3.37                                Performance by Owner. 
Owner shall in a timely manner observe, perform and fulfill each and
every covenant, term and provision to be observed and performed by Owner under
this Security Instrument and the other Loan Documents and any other agreement
or instrument affecting or pertaining to the Property and any amendments,
modifications of changes thereto.

 

J - 24

 

Section 3.38                                Awards.  Owner shall
reasonably cooperate with Agent in obtaining for Agent the benefits of any
proceeds or awards lawfully or equitably payable in connection with the
occurrence of a casualty or any condemnation or other taking for public
property of the Collateral or any rights appurtenant thereto.

 

Section 3.39                                Agreements.  Owner is not
a party to any agreement or instrument or subject to any restriction which would
have a Property Material Adverse Effect. 
Owner is not in default in any material respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party or by which
Owner or the Property (or any portion thereof) is bound.  There is no agreement or instrument to which
Owner is a party or by which Owner is bound that would require the
subordination in right of payment of any of Owner’s obligations hereunder or
under the other Loan Documents to an obligation owed to another party.  Notwithstanding
the foregoing or anything herein to the contrary, in the event Owner is a party
to an agreement or instrument or subject to any restriction which would have a
Property Material Adverse Effect, such event shall not be a Credit Agreement
Event of Default and shall only be an Event of Default under this Security
Instrument after the expiration of any applicable notice and cure periods
unless the same shall otherwise cause a Credit Agreement Event of Default
pursuant to the terms of the Credit Agreement.

 

Section 3.40                                Payment of Claims.   
Owner shall, in Owner’s commercially reasonable judgment, either (i) duly
pay and discharge, or cause to be paid and discharged, or (ii) dispute and
contest in a timely manner, all lawful claims of materialmen, mechanics,
carriers, warehousemen and landlords for labor, materials, supplies and rentals
which, if unpaid, might become a Lien on the Property pursuant to Section 8.6 of the Credit
Agreement.

 

ARTICLE IV.  CONDEMNATION

 

Section 4.1                                      Condemnation.

 

(a)                                  Taking.  Subject to
Paragraph (d) below, if all or any portion of the Collateral is taken by
condemnation or eminent domain powers of any Governmental Authority (or any
transfer by private sale in lieu thereof), either temporarily or permanently,
then the award and other proceeds payable in connection therewith shall be paid
to Agent and applied to payment of the Obligations after deducting any costs
(including reasonable attorneys’ fees) incurred by Agent in connection
therewith, or otherwise applied as provided in Section 11.5 of the Credit
Agreement.  Notwithstanding the foregoing
or anything herein to the contrary, if the condemnation or eminent domain award
is less than twenty percent (20%) of the Appraised Value of the applicable
Property, then the award payable in connection therewith shall be paid to the
Owner.

 

(b)                                 Participation in Proceedings. 
Owner shall promptly notify Agent of any actual or threatened initiation
of any condemnation or eminent domain proceeding as to any material part of the
Collateral and, upon Agent’s request, shall promptly deliver to Agent copies of
any and all

 

J - 25

 

papers served or received
in connection with such proceedings. 
Agent shall have the right, at its option, to participate in such
proceedings at the sole cost and expense of Owner (including without limitation
the Agent’s attorneys’ fees).  Owner
shall execute such documents and take such other steps as required to permit
such participation.

 

(c)                                  Right to Settle Claims. Agent is hereby authorized to adjust,
compromise and collect any condemnation or eminent domain award or settle a
claim for damages and to apply the same to the Obligations in accordance with
the applicable provisions of the Loan Documents.

 

(d)                                 Use of Proceeds. 
Owner hereby assigns to Agent for the benefit of Secured Parties any
proceeds or awards which may become due by reason of any condemnation or other
taking for public use of the whole or any part of the Collateral or any rights
appurtenant thereto, and Agent is authorized, at its option, to collect and
receive all such compensation, awards or damages and to give proper receipts
and acquittances therefor without any obligation to question the amount of any
such compensation, awards or damages. 
Subject to Section 3.15(g), the proceeds of any such condemnation
award or proceeds or any part thereof shall be applied:

 

(i)                                     if the Restoration Conditions in Section 3.15(f) are
satisfied, towards restoration of the Collateral; or

 

(ii)                                  if the Restoration Conditions are not
satisfied, to the payment of the Obligations, whether or not due and as
provided in Section 11.5 of the Credit Agreement, or for any other
purposes or objects for which Agent is expressly entitled to advance or apply
funds under the Loan Documents.

 

(e)                                  Further Assignment. 
Owner agrees to execute such further assignments of any compensation,
awards, damages, claims, rights of action and proceeds as Agent may require.  If, prior to the receipt by Agent of such
award or proceeds, the Collateral shall have been bid on foreclosure of this
Security Instrument, Agent shall have the right to receive such award or
proceeds to the extent of any unpaid Obligations following such sale, with
legal interest thereon, whether or not a deficiency judgment on this Security
Instrument, the Obligations or the other Loan Documents shall have been sought
or recovered, and to the extent of attorneys’ fees, costs and disbursements
incurred by Agent in connection with the collection of such award or
proceeds.  If Owner fails to assign such
compensation, awards, damages, claims, rights of action, and proceeds as
aforesaid, Agent may execute such endorsements or transfers for and in the name
of Owner and Owner hereby appoints Agent as Owner’s agent and attorney-in-fact
so to do, such appointment being coupled with an interest and being
irrevocable.

 

ARTICLE V.  EVENTS OF DEFAULT

 

An “Event of Default,”
under this Security Instrument, shall mean the occurrence or happening, at any
time and from time to time, of any one or more of the following (and Owner
shall be entitled to no notice of default other than as provided for below):

 

Section 5.1                                      Credit Agreement. 
The occurrence of a Credit Agreement Event of Default.

 

J - 26

 

Section 5.2                                      Failure in Payment of Sums Due. 
The Owner shall fail to pay when due any amounts owing by the Owner
under this Security Instrument and such failure shall continue for a period of
5 Business Days after the earlier of (a) the date upon which Owner [or
Borrower] obtains knowledge of such failure or (b) the date upon which
Owner [or Borrower] has received written notice of such failure from Agent.

 

Section 5.3                                      Failure in Performance of Obligations. 
Except as provided in Sections 5.5, 5.6 and 5.7 below, the failure
of Owner to perform or observe any term, covenant, condition or agreement
contained in this Security Instrument and not otherwise mentioned in this Article V
and in the case of this Paragraph 5.3 only, if such failure shall continue for
a period of 30 days after the earlier of (x) the date upon which Owner [or
Borrower] obtains actual knowledge of such failure or (y) the date upon
which Owner [or Borrower] has received written notice of such failure from
Agent; provided that, if Owner has exercised reasonable diligence to cure such
failure and such failure cannot be cured within such thirty (30) day period
despite reasonable diligence, Owner shall not be in default so long as Owner
thereafter diligently and continuously prosecutes the cure to completion, but
no such extension shall be for a period in excess of ninety (90) days or such
longer period of time as may be determined by Agent in Agent’s reasonable
discretion.

 

Section 5.4                                      Misrepresentations. 
Any written statement, representation or warranty made or deemed made by
or on behalf of Owner under this Security Instrument or under any other
Security Document purporting to create Lien in any of the Collateral, or any
amendment hereto or thereto, or in any other writing or statement regarding any
of the Collateral at any time furnished or made or deemed made by or on behalf
of Owner or any other Loan Party to Agent or any other Secured Party, shall at
any time prove to have been incorrect or misleading, in light of the
circumstances in which made or deemed made, in any material respect when
furnished or made or deemed made.

 

Section 5.5                                      Foreclosure of Other Liens. 
If the holder of any Lien on any of the Collateral (other than Agent or
any of the other Secured Parties) institutes foreclosure or other proceedings
for the enforcement of its remedies thereunder or in respect thereof and such
proceedings are not contested by Owner in good faith as expressly permitted in
and pursuant to Section 8.6 of the Credit Agreement.

 

Section 5.6                                      Due on Sale/Encumbrance. 
If any of the representations or covenants in Section 9.1 hereof
are breached or violated.

 

Section 5.7                                      Further Encumbrances. 
Except as expressly permitted under the Credit Agreement or any other
Loan Document, and except for the Permitted Encumbrances, Owner creates, places
or permits to be created or placed, or through any act or failure to act,
acquiesces in the placing of, or allows to remain, any Lien on all or any
material part of the Collateral and allows such Lien to remain for more than 30
days (regardless of whether such Lien is expressly subordinate to the lien of
this Security Instrument or any other Security Document).

 

J - 27

 

Section 5.8                                      Event of Default under any other Security
Document.  If an Event of Default shall occur under and
as defined in any other Security Document purported to create a Lien on any of
the Collateral.

 

ARTICLE VI.  REMEDIES

 

6.1                                 Remedies.  If a Credit
Agreement Event of Default exists after the expiration of any applicable notice
and cure period, Agent may [or acting by or through
Trustee may], unless the Requisite Lenders have directed the Agent
otherwise, exercise any or all of the following rights, remedies and recourses:

 

(a)                                  Termination of License.

 

(i)                                     The License granted to Owner in Section 8.3
shall automatically terminate upon the occurrence of a Credit Agreement Event
of Default.  Thereafter, Agent may
exercise the rights, powers and privileges of landlord under the Leases, and
then and thereafter, with or without taking possession of the Collateral, in
Owner’s own name or in the name of Agent, demand, collect, receive, sue for,
attach and levy on the Rents (including demand for Rents collected for the
period in which the demand occurs) and give proper receipts, releases and
acquittances therefor.

 

(ii)                                  Deliver a written demand to any Tenant
for payment of Rents, which demand shall be sufficient evidence of each such
Tenant’s obligation and authority to make all future payments of Rents to Agent
without the necessity for further consent by the Owner. Owner, for itself and
its agents, covenants and agrees not to countermand any such written demand to
Tenants for payment of Rents.

 

(b)                                 Entry on Collateral.

 

(i)                                     Demand that Owner, and upon such demand
Owner shall, forthwith surrender to Agent the actual possession of the
Collateral, and to the extent not prohibited by Applicable Law, enter and take
possession of all of the Collateral without the appointment of a receiver, or
an application therefor, and exclude Owner and its agents and employees wholly
therefrom, and have joint access with Owner to the books, papers and accounts
of Owner.

 

(ii)                                  If Owner shall for any reason fail to
surrender or deliver the Collateral or any part thereof after such demand by
Agent, Agent may seek a judgment or decree conferring upon Agent the right to
immediate possession or requiring Owner to deliver immediate possession of the
Collateral to Agent, and Owner hereby specifically covenants and agrees that
Owner shall not oppose, contest or otherwise hinder or delay Agent in any
action or proceeding by Agent to obtain such judgment or decree.  Owner shall pay to Agent, upon demand, all
expenses of obtaining such judgment or decree, including reasonable
compensation to Agent, its attorneys and agents, and all such expenses and
compensation shall, until paid, become part of the Obligations and shall be
secured by this Security Instrument.

 

J - 28

 

(iii)                               Upon every such entering on or taking of
possession, Agent may hold, store, use, operate, manage and control the
Collateral and conduct the business thereof, and, from time to time, (A) make
all necessary and proper maintenance, repairs, renewals, replacements,
additions, betterments and improvements thereto and thereon and purchase or
otherwise acquire additional fixtures, personalty and other property, (B) insure
or keep the Collateral insured, (C) manage and operate the Collateral and
exercise all the rights and powers of Owner to the same extent as Owner could
in its own name or otherwise act with respect to the same, and (D) enter
into any and all agreements with respect to the exercise by others of any of
the powers herein granted to Agent, all as Agent from time to time may
determine to be in its best interest. 
Anything in this Security Instrument to the contrary notwithstanding,
neither Agent nor any other Secured Party shall be obligated to discharge or
perform the duties of the landlord to any Tenant or incur any liability as the
result of any exercise by Agent of its rights under this Security Instrument,
and Agent shall be liable to account only for the Rents actually received by
Agent.

 

(iv)                              Make, modify, enforce, cancel or accept
surrender of any Lease, remove and evict any Tenant, increase or decrease Rents
under any Lease, appear in and defend any action or proceeding purporting to
affect the Collateral, and perform and discharge each and every obligation,
covenant and agreement of Owner contained in any Lease, whether or not Agent
takes possession of the Collateral.

 

(v)                                 Neither the entering upon and taking
possession of the Collateral, nor the collection of any Rents and the
application thereof as aforesaid, shall cure or waive any Credit Agreement
Event of Default theretofore or thereafter occurring, or affect any notice of a
Credit Agreement Event of Default or invalidate any act done pursuant to any
such notice.  Neither Agent nor any other
Secured Party shall be liable to Owner, anyone claiming under or through Owner,
or anyone having an interest in the Collateral by reason of anything done or
left undone by Agent hereunder.  Nothing
contained in this subsection (b) shall require Agent to incur any
expense or do any act.  If the Rents are
not sufficient to meet the costs of taking control of and managing the
Collateral and/or collecting the Rents, any funds expended by Agent or the
other Secured Parties for such purposes shall become Obligations of Owner to
Agent or the other Secured Parties, as the case may be, secured by this
Security Instrument.  Such amounts,
together with interest at the Post-Default Rate, and attorneys’ fees, if
applicable, shall be immediately due and payable.  Notwithstanding Agent’s continuance in
possession or receipt and application of Rents, Agent shall be entitled to
exercise every right provided for in this Security Instrument or by Applicable
Law upon the existence of a Credit Agreement Event of Default.  Any of the actions referred to in this
subsection (b) may be taken by Agent at such time as Agent is so
entitled, without regard to the adequacy of any security for the Obligations
hereby secured.

 

(c)                                  Foreclosure and Sale. 
Agent may (i) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Security Instrument under any applicable provision
of law, in which case the Property or any interest therein may be sold for cash
or upon credit in one or

 

J - 29

 

more parcels or in
several interests or portions and in any order or manner; (ii) with or
without entry, to the extent permitted and pursuant to the procedures provided
by Applicable Law, institute proceedings for the partial foreclosure of this
Security Instrument for the portion of the Obligations then due and payable,
subject to the continuing lien and security interest of this Security
Instrument for the balance of the Obligations not then due, unimpaired and
without loss of priority; or (iii) sell for cash or upon credit the
Property or any part thereof and all estate, claim, demand, right, title and
interest of Owner therein and rights of redemption thereof, pursuant to power
of sale or otherwise, at one or more sales, as an entirety or in parcels, at
such time and place, upon such terms and after such notice thereof as may be
required or permitted by law.

 

(d)                                 Receiver.  Agent, to the
extent permitted by Applicable Law, upon application to a court of competent
jurisdiction, shall be entitled as a matter of strict right, without notice and
without regard to the adequacy or value of any security for the Obligations or
the solvency of any party bound for its payment, to the appointment of a
receiver to take possession of and to operate the Collateral and to collect and
apply the incomes, rents, issues, profits and revenues thereof.    The receiver shall have all of the rights
and powers permitted under the laws of the state where the Property is located.  Owner shall pay to Agent upon demand all
expenses, including receiver’s fees, reasonable attorneys’ fees, costs and
agent’s compensation, incurred pursuant to the provisions of this subsection,
and any such amounts paid by Agent shall be added to the Obligations and shall
be secured by this Security Instrument.

 

(e)                                  Performance by Agent. 
At Agent’s option and without any obligation to do so, pay, perform or
observe any term, covenant or condition of this Security Instrument not paid,
performed or observed by Owner, and all payments made or costs or expenses
incurred by Agent in connection therewith shall be secured hereby and shall be,
without demand, immediately repaid by Owner to Agent with interest thereon at
the Post-Default Rate.  Agent shall be
the sole judge of the necessity for any such actions and of the amounts to be
paid.  Agent is hereby empowered to enter
and to authorize others to enter upon the Collateral or any part thereof for
the purpose of performing or observing any such defaulted term, covenant or
condition without thereby becoming liable to Owner or any person in possession
holding under Owner.

 

(f)                                    Relief From Automatic Stay. 
If Owner is the subject of any insolvency, bankruptcy, receivership,
dissolution, reorganization, or similar proceeding, federal or state, voluntary
or involuntary, under any present or future Applicable Law, Agent shall be
entitled to relief from the automatic stay as to the enforcement of its
remedies under the Loan Documents against the Collateral, including
specifically, but not limited to, the stay imposed by 11 U.S.C. Section 362,
as amended, and Owner hereby consents to the immediate lifting of any such
automatic stay and will not contest any motion by Agent to lift such stay.

 

(g)                                 Other.  Agent may (i) institute
an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein or under the Loan Documents; (ii) recover
judgment on the Notes either before, during or after any proceedings for the
enforcement of this Security Instrument or the other Loan Documents; or (iii) exercise
any and all other rights, remedies and recourses granted under this Security
Instrument

 

J - 30

 

(including, without
limitation, those set forth in Articles VII, VIII and IX hereinbelow) or now or
hereafter existing in equity, at law, by virtue of statute or otherwise.

 

(h)                                 Cessation of Status as an Eligible
Property and as a Borrowing Base Property.  The
Collateral shall cease to be an Eligible Property and shall cease to be
included in calculations of the Borrowing Base automatically without any notice
from or action by Agent or Lenders.

 

Section 6.2                                      Separate Sales. 
With respect to sales hereunder, the Collateral may be sold in one or
more parcels and in such manner and order as Agent, in its sole discretion, may
elect [or direct Trustee to elect], it being expressly understood and agreed
that the right of sale arising out of any Credit Agreement Event of Default
shall not be exhausted by any one or more sales.

 

Section 6.3                                      Remedies Cumulative,
Concurrent and Non-Exclusive. 
Agent and the
other Secured Parties shall have all rights, remedies and recourses granted in
this Security Instrument and available under Applicable Law (including
specifically those granted by the Uniform Commercial Code in effect and
applicable to the Collateral or any portion thereof), and if such Event of
Default also constitutes a Credit Agreement Event of Default, all rights,
remedies and recourses granted in the Loan Documents and available under
Applicable Law.  All such rights and
remedies (a) shall be cumulative and concurrent, to the fullest extent
permitted by Applicable Law, (b) may be pursued separately, successively
or concurrently against Owner, Borrower or any other Loan Party or any other
Person, or against any of the Collateral (as defined in the Credit Agreement),
or against any one or more of them, at the sole discretion of Agent, all to the
fullest extent permitted by Applicable Law, (c) may be exercised as often
as occasion therefor shall arise, it being agreed by Owner that the exercise or
failure to exercise any of same shall in no event be construed as a waiver or
release thereof or of any other right, remedy or recourse, and (d) are
intended to be, and shall be, nonexclusive.

 

Section 6.4                                      No Conditions Precedent to Exercise of
Remedies.  Neither Borrower, Owner, or any other Person
obligated for payment of all or any part of, or fulfillment of all or any of,
the Obligations, shall be relieved of such obligation by reason of (a) the
failure of Agent or any other Secured Party to comply with any request of
Owner, any Loan Party or any other Person so obligated, to foreclose this
Security Instrument or to enforce any provisions of the other Loan Documents, (b) the
release, regardless of consideration, of any of the Collateral (as defined in
the Credit Agreement) or the addition of any other property to such Collateral,
(c) any agreement or stipulation between any subsequent owner of any of
such Collateral and Agent extending, renewing, rearranging or in any other way
modifying the terms of the Loan Documents without first having obtained the
consent of, given notice to or paid any consideration to Owner, such other Loan
Party or such other Person, and in such event, Owner, all such other Loan
Parties and all such other Persons shall continue to be liable to make payment
according to the terms of any such extension or modification agreement unless
expressly released and discharged, in writing, by Agent, or (d) by any
other act or occurrence, save and except the complete payment and the complete
fulfillment of all of the Obligations.

 

J - 31

 

Section 6.5             Release of and Resort to
Collateral.  Agent may release,
regardless of consideration, any part of the Collateral without, as to the
remainder of the Collateral, in any way impairing, affecting, subordinating or
releasing any of the Liens created or evidenced by any of the Loan Documents or
their position as a first and prior Lien in and to the Collateral (as defined
in the Credit Agreement).  For payment of
the Obligations, Agent may resort to any security therefor held by Agent in
such order and manner as Agent may elect.

 

Section 6.6             Waiver of Appraisement,
Valuation, etc.  Owner agrees, to the
full extent permitted by Applicable Law, that neither Owner nor anyone claiming
through or under Owner will set up, claim or seek to take advantage of any
moratorium, reinstatement, forbearance, appraisement, valuation, stay,
extension, homestead, exemption or redemption laws now or hereafter in force in
order to prevent or hinder the enforcement or foreclosure of this Security
Instrument or the absolute sale of the Collateral, the delivery of possession
thereof immediately after such sale to the purchaser at such sale, or the
exercise of any other right or remedy hereunder.  Owner, for itself and all who may at any time
claim through or under it, hereby waives to the full extent that it may
lawfully so do, the benefit of all such Applicable Laws, and any and all right
to have assets subject to the Lien of this Security Instrument marshaled upon
any foreclosure or sale under the power herein granted or a sale in inverse
order of alienation.

 

Section 6.7             Discontinuance of Proceedings.  In case Agent shall have proceeded to enforce
any right, power or remedy under this Security Instrument by foreclosure
[(through Trustee or otherwise)], entry or otherwise, or if Agent commences
advertising of the intended exercise of the sale under power provided hereunder
and such proceeding or advertisement shall have been withdrawn, discontinued or
abandoned for any reason, or shall have been determined adversely to Agent, then
in every such case (a) Owner and Agent shall be restored to their
respective former positions and rights, (b) all rights, powers and
remedies of Agent shall continue as if no such proceeding had been taken, (c) each
and every Credit Agreement Event of Default declared or occurring prior or
subsequent to such withdrawal, discontinuance or abandonment shall be and shall
be deemed to be a continuing Credit Agreement Event of Default and (d) neither
this Security Instrument, nor the Obligations, nor any other Loan Document,
shall be or shall be deemed to have been reinstated or otherwise affected by
such withdrawal, discontinuance or abandonment. 
Owner hereby expressly waives the benefit of any Applicable Law now provided,
or which may hereafter be provided, which would produce a result contrary to or
in conflict with the provisions of this Section.

 

Section 6.8             Application of Proceeds.  The proceeds of any sale of, and the Rents
and other amounts generated by the holding, leasing, operation or other use of,
the Collateral (including, without limitation, the Leases) shall be applied by
Agent (or the receiver, if one is appointed) as provided in Section 11.5
of the Credit Agreement.

 

Section 6.9             Leases.  If a Credit Agreement Event of Default exists
after any applicable notice and cure period, Agent, at its option, is
authorized to foreclose this Security Instrument subject to the rights of any
Tenants of the Collateral under any Leases, and the failure to make any Tenants
parties to any such foreclosure proceedings and to foreclose their rights shall
not be, nor be asserted to be by Owner, a defense to any proceedings instituted
by Agent to collect the Obligations.

 

J - 32

 

Section 6.10           Purchase by Agent or the other
Secured Parties.  Upon any
foreclosure sale or sales of all or any portion of the Collateral under the
power of sale herein granted, Agent and/or other Secured Parties may bid for
and purchase the Collateral and shall be entitled to apply all or any part of
the Obligations as a credit to the purchase price.

 

Section 6.11           Owner as Tenant Holding Over.  In the event of any such foreclosure sale or
sales under the power herein granted, Owner shall be deemed a tenant holding
over and shall forthwith deliver possession to the purchaser or purchasers at
such sale or be summarily dispossessed according to provisions of law
applicable to tenants holding over.

 

Section 6.12           Suits to Protect the Collateral.
Agent shall have the power to institute and maintain such suits and proceedings
as it may deem expedient (a) to prevent any impairment of the Collateral
by any acts which may be unlawful or constitute an Event of Default under this
Security Instrument, (b) to preserve or protect its interest in the
Collateral and in the Leases and Rents arising therefrom, and (c) to
restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or
otherwise invalid, if the enforcement of or compliance with such enactment, rule or
order would impair the security hereunder or be prejudicial to the interest of
Agent.

 

Section 6.13           Proofs of Claim.  In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Owner, its creditors or its property, Agent, to the
extent permitted by Applicable Law, shall be entitled to file such proofs of
claim and other documents as may be necessary or advisable in order to have the
claims of Agent allowed in such proceedings for the entire amount of the
Obligations at the date of the institution of such proceedings and for any
additional amount of the Obligations after such date.

 

Section 6.14           Occupancy After Foreclosure.  The purchaser at any foreclosure sale
pursuant to Section 6.1(c) shall become the legal owner of the
Collateral or the portion thereof foreclosed. 
All occupants (except those which have previously executed a prior
written agreement with purchaser) of the Collateral or any part thereof shall
become tenants at sufferance of the purchaser at the foreclosure sale and shall
deliver possession thereof immediately to the purchaser upon demand, subject to
the rights, if any, of Tenants.

 

Section 6.15           Other Rights.  (a)  The failure of Agent to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Security Instrument.  Owner
shall not be relieved of Owner’s obligations hereunder by reason of (i) the
failure of Agent to comply with any request of Owner or any guarantor or
indemnitor with respect to the Loans to take any action to foreclose this
Security Instrument or otherwise enforce any of the provisions hereof or of the
Notes or the other Loan Documents, (ii) the release, regardless of consideration,
of the whole or any part of the Property, or of any Person liable for the
Obligations or any portion thereof, or (iii) any agreement or stipulation
by Agent and/or Lenders extending the time of payment or otherwise modifying or
supplementing the terms of the Notes, this Security Instrument or the other
Loan Documents.

 

J - 33

 

(b)           It is agreed that the risk of loss or
damage to the Property is on Owner, and Agent and the other Secured Parties shall
have no liability whatsoever for decline in the value of the Property, for
failure to maintain the insurance policies required to be maintained pursuant
to the Credit Agreement, or for failure to determine whether insurance in force
is adequate as to the amount of risks insured. 
Possession by Agent shall not be deemed an election of judicial relief
if any such possession is requested or obtained with respect to any Property or
collateral not in Agent’s possession.

 

(c) Agent may resort
for the payment of the Obligations to any other security held by Agent in such
order and manner as set forth in the Credit Agreement or as otherwise
determined by Lenders.  Agent may take
action to recover the Obligations, or any portion thereof, or to enforce any
covenant hereof without prejudice to the right of Agent thereafter to foreclose
this Security Instrument.  The rights of
Agent under this Security Instrument shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others.  No act of Agent  shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision.  Agent shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.

 

Section 6.17           Bankruptcy.  Upon the existence of a Credit Agreement
Event of Default, Agent shall have the right to proceed in its own name or in
the name of Owner in respect of any claim, suit, action or proceeding relating
to the rejection of any Lease, including, without limitation, the right to file
and prosecute, to the exclusion of Owner, any proofs of claim, complaints,
motions, applications, notices and other documents, in any case in respect of
the lessee under such Lease under the Bankruptcy Code.

 

Section 6.18           Waiver of Counterclaim.  Owner hereby waives the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by Agent, any other Secured Party or any of their agents.

 

ARTICLE VII. 
SECURITY AGREEMENT

 

Section 7.1             Security Interest.  This Security Instrument shall also
constitute and serve as a security agreement on personal property within the
meaning of under the Uniform Commercial Code as enacted in the state where the
Property is located with respect to the Personalty, Fixtures, Leases and
Rents.  To this end, Owner has GRANTED,
BARGAINED, CONVEYED, ASSIGNED, TRANSFERRED and SET OVER, and by these presents,
does GRANT, BARGAIN, CONVEY, ASSIGN, TRANSFER and SET OVER, to [Trustee and the Trustee’s successors and/or assigns for the benefit of
Secured Parties][Agent and Agent’s successors and/or assigns for the benefit of
Secured Parties] a security interest and all of Owner’s right, title
and interest in, to, under and with respect to the Personalty, Fixtures, Leases
and Rents now owned or hereafter owned or acquired to secure the full and
timely payment, performance and discharge of the Obligations.  It is the intent of Owner, Agent and the
other Secured Parties that this Security Instrument encumber all Leases and
Rents, that all items contained in the definition of “Leases” and “Rents” which
are included within Article 9 of the

 

J - 34

 

Uniform Commercial Code
as adopted in the state where the Property is located be covered by the
security interest granted in this Article VII and that all items contained
in the definition of “Leases” and “Rents” which are excluded from Article 9
of the Uniform Commercial Code as adopted in the state where the Property is
located in be covered by the provisions of Article II and Article VIII
hereof.

 

Section 7.2             Financing Statements.  Owner hereby authorizes Agent to file such
Financing Statements and such further assurances as Agent may, from time to
time, reasonably consider necessary to create, perfect and preserve Agent’s
security interest herein granted, and Agent may cause such statements and
assurances to be recorded and filed, at such times and places as may be
required or permitted by law, to so create, perfect and preserve such security
interest.

 

Section 7.3             Uniform Commercial Code Remedies.  Agent shall have all the rights and remedies
with respect to the Personalty, Fixtures, Leases and Rents afforded to a “secured
party” by the Uniform Commercial Code as adopted in the state where the
Property is located as to property within the scope thereof, in addition to,
and not in limitation of, the other rights and remedies afforded by the Loan
Documents.

 

Section 7.4             Foreclosure of Security Interest.  If a Credit Agreement Event of Default
exists, Agent may elect, in addition to exercising any and all other rights and
remedies set forth in Article VI or referred to in Section 7.3 or Article VIII
hereof, to proceed in the manner set forth in Article 9 of the Uniform
Commercial Code as adopted in the state where the Property is located, relating
to the procedure to be followed when a Security Agreement covers both real and
personal property.

 

Section 7.5             No Obligation of Secured Party.  The assignment and security interest herein
granted shall not be deemed or construed to constitute Agent or any other
Secured Party as a trustee or mortgagee in possession of the Collateral, to
obligate Agent or any other Secured Party to lease the Collateral or attempt to
do same, or to take any action, incur any expense or perform or discharge any
obligation, duty or liability whatsoever under any of the Leases or otherwise.

 

Section 7.6             Information for Fixture Filing.  This Security Instrument is also being filed
as a fixture filing with respect to the portions of the Collateral that are or
are to become fixtures relating to the Property or Improvements.  Owner’s exact legal name, type of legal
entity and jurisdiction of formation are as set forth in the first paragraph of
this Security Instrument. Owner’s organizational identification number is
[                          ].  Owner hereby represents to Agent and the
other Secured Parties that since the date of Owner’s formation, Owner has not
changed its name or merged with or otherwise combined its business with any
Person, except as set forth in the organizational documents of Owner delivered
by Owner to Agent.  Without giving Agent
at least 30-days’ prior written notice and to the extent such action is not
otherwise prohibited by any of the Loan Documents, Owner shall not (a) change
its name; (b) reorganize or otherwise become formed under the laws of
another jurisdiction; or (c) become bound by a security agreement of another
Person under Section 9-203(d) of the Uniform Commercial Code as in
effect in any applicable jurisdiction. 
The information contained in this Section is provided

 

J - 35

 

in connection with the
requirements of the Uniform Commercial Code so that this Security Instrument
shall serve as a financing statement. 
The name of Owner shall be the “Debtor” and the name of the Agent shall
be the “Secured Party,” and a statement indicating the collateral covered hereby
is set forth in the definition of “Collateral” above.

 

ARTICLE VIII.  ASSIGNMENT OF LEASES AND RENTS

 

Section 8.1             Assignment.  For and in consideration of ONE DOLLAR
($1.00), and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to secure the full and timely
payment of the Obligations and the full and timely performance and discharge of
the Obligations, Owner has GRANTED, BARGAINED, SOLD, CONVEYED, ASSIGNED,
TRANSFERRED, SET OVER and DELIVERED, and by these presents does hereby GRANT,
BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER, SET OVER and DELIVER ABSOLUTELY and
UNCONDITIONALLY unto [Trustee and the Trustee’s
successors and/or assigns for the benefit of Secured Parties][Agent and Agent’s
successors and/or assigns for the benefit of Secured Parties] the
Leases (whether now existing or entered into after the date hereof) and the
Rents (it being intended by Owner that this assignment constitutes a present,
absolute assignment and not an assignment for additional security only),
subject only to the hereinafter described License, TO HAVE AND TO HOLD the
Leases and the Rents unto Agent [and Trustee],
its successors and assigns, for the benefit of Secured Parties forever, and
Owner does hereby bind itself, its successors and assigns to WARRANT and
FOREVER DEFEND the title to the Leases and the Rents unto Agent [and Trustee] against every Person whomsoever lawfully
claiming or to claim the same or any part thereof.  If a Credit Agreement Event of Default exists,
Agent shall have the right, power and privilege (but shall be under no duty) to
demand possession of the Rents, which demand shall, to the fullest extent
permitted by Applicable Law, be sufficient action by Agent to entitle Agent to
immediate and direct payment of the Rents (including delivery to Agent of Rents
collected for the period in which the demand occurs and for any subsequent
period), for application as provided herein, all without the necessity of any
further action by Agent, including, without limitation, any action to obtain
possession of the Improvements or the Property. 
Owner hereby authorizes and directs the Tenants under the Leases to pay
Rents to Agent upon written demand by Agent, without further consent of Owner,
without any obligation to determine whether a Credit Agreement Event of Default
has in fact occurred and regardless of whether Agent has taken possession of
any portion of the Property, and the Tenants may rely upon any written
statement delivered by Agent to the Tenants. 
Any such payment to Agent shall constitute payment to Owner under the
Leases, and Owner hereby appoints Agent as Owner’s lawful attorney-in-fact for
giving, and Agent is hereby empowered to give, acquittances to any Tenants for
such payments to Agent after a default.

 

Section 8.2             Continuation and Termination of
Assignment.  If Owner shall pay or
cause to be paid the Obligations as and when same shall become due and payable
and shall perform and discharge or cause to be performed and discharged the
Obligations on or before the date the same are to be performed and discharged
in accordance with the terms of the Credit Agreement, then this assignment
shall thereupon be terminated and of no further force and effect, and all
rights, titles and interests conveyed pursuant to this assignment shall become
revested in Owner without the necessity of any further act or requirement by
Owner or Agent; provided, however,

 

J - 36

 

an affidavit,
certificate, letter or statement of any officer of Agent stating that any part
of the Obligations remains unpaid and undischarged shall be and constitute
conclusive evidence of the validity, effectiveness or continuing force of the
within assignment, and any person, firm or corporation may, and is hereby
authorized to, rely thereon.

 

Section 8.3             Revocable License.  Provided that there exists no Credit
Agreement Event of Default, Owner shall have the right under a revocable
license granted hereby, and Agent hereby grants to Owner a revocable license
(the “License”), to (i) collect, but not prior to accrual, all of
the Rents arising from or out of the Leases, or any renewals or extensions
thereof, or from or out of the Collateral or any part thereof, and (ii) to
enforce the terms of the Leases.  Owner
shall receive such Rents, and Owner hereby covenants that Owner shall use and
apply all Rents first to the payment of the Obligations in accordance with the
terms thereof and of the Loan Documents, and then to the payment of all
Impositions and costs and expenses of management, operation, repair,
maintenance, preservation, reconstruction and restoration of the Collateral in
accordance with the requirements of this Security Instrument and the
obligations of Owner as the lessor under the Leases, and shall not use such
Rents for purposes unrelated to the Property unless and until all current
payments on the Obligations, Impositions, and such costs and expenses have been
paid or provided for.

 

Section 8.4             Owner’s Indemnities.  Owner hereby agrees to indemnify and hold
Agent and the other Secured Parties free and harmless from and against any and
all liability, loss, cost, damage or expense which Agent and/or the other
Secured Parties may incur under or by reason of this assignment, or for any
action taken by the Agent hereunder, or by reason or in defense of any and all
claims and demands whatsoever which may be asserted against Agent and/or the
other Secured Parties arising out of the Leases (except to the extent caused by
the gross negligence or willful misconduct, as determined by a court of
competent jurisdiction in a final, non-appealable judgment, of Agent or any
other Secured Party), including specifically, but without limitation, any claim
by any Tenant of credit for Rents paid to and received by Owner, but not
delivered to Agent, for any period under any Lease more than 1 month in advance
of the due date thereof.  If Agent or any
other Secured Party incurs any such liability, loss, cost, damage or expense, the
amount thereof, including reasonable attorneys’ fees, with interest thereon at
the Post-Default Rate, shall be payable by Owner to Agent immediately, without
demand, and shall be secured hereby and by all other Loan Documents.

 

Section 8.5             Appointment of Attorney-in-Fact.  Owner hereby further constitutes and appoints
Agent the true and lawful attorney-in-fact of the Owner, and, upon the
occurrence and during the continuance of an Event of Default, in the name,
place and stead of said Owner,  to
subject and subordinate at any time and from time to time any Lease or any part
thereof to the lien and security title and security interest of this Security
Instrument or any other mortgage, security deed, deed of trust or security
agreement on or to any ground lease of the Collateral, or to request or require
such subordination, where such reservation, option or authority was reserved to
the Owner under any such Lease, or in any case where the Owner otherwise would
have the right, power or privilege so to do. 
The foregoing appointment is irrevocable and continuing and coupled with
an interest, and such rights, powers and privileges shall be exclusive in Agent
and its successors and assigns so long as any part of the Obligations secured
hereby remains unpaid and undischarged. 
Owner hereby warrants that Owner has not at any time prior

 

J - 37

 

to the date hereof
exercised any such rights, and Owner hereby covenants not to exercise any such
right, to subordinate any such Lease to the lien of this Security Instrument or
to any other security deed, mortgage, deed of trust or security agreement or to
any ground lease.

 

Section 8.6             Exculpation of Agent.  The acceptance by Agent of this assignment of
the Leases and Rents, with all of the rights, powers, privileges and authority
created hereby shall not, prior to entry upon and taking possession of the
Collateral by Agent, be deemed or construed to constitute Agent a “mortgagee in
possession”, nor thereafter or at any time or in any event obligate the Agent
to appear in or defend any action or proceeding relating to the Leases, the
Rents or the Collateral or to take any action hereunder or to expend any money
or incur any expenses or perform or discharge any obligation, duty or liability
under any Lease or to assume any obligation or responsibility for any security
deposits or other deposits delivered to Owner by any Tenant and not assigned
and delivered to Agent, nor shall Agent be liable in any way for any injury or
damage to persons or property sustained by any person or persons, firm or
corporation in or about the Collateral, except, in each case, as a result of
Agent’s gross negligence and willful misconduct, as determined by a court of
competent jurisdiction in a final, non-appealable judgment.

 

Section 8.7             Agent as Creditor.
Notwithstanding the license granted in Section 8.3 above, Owner agrees
that Agent, and not Owner, shall be deemed to be the creditor of each Tenant in
respect of assignments for the benefit of creditors in bankruptcy,
reorganization, insolvency, dissolution, or receivership proceedings affecting
any Tenant (without obligation on the part of Agent, however, to file or make
timely filings of claims in such proceedings or otherwise to pursue creditor’s
rights therein), with an option to Agent to apply any money received by Agent
as such creditor in reduction of the Obligations.

 

Section 8.8             Right to Further Assignment.  Agent shall have the right to assign Owner’s
right, title, and interest in the Leases to any subsequent holder of this
Security Instrument and to any Person acquiring title to the Property through
foreclosure or otherwise.  The receipt by
Agent of any Rents pursuant to the assignment set forth in Section 8.1
hereof after the institution of foreclosure proceedings under this Security
Instrument shall not cure such default nor affect such proceedings or any sale
pursuant thereto.  After Owner shall have
been barred and foreclosed of all right, title and interest in the Property, no
Agent of Owner’s interest in the Leases shall be liable to account to Owner for
the Rents thereafter accruing.

 

Section 8.9             Cancellation Proceeds.  The Leases shall remain in full force and
effect irrespective of any merger of the interest of the lessor and Tenants
thereunder.  If any Lease permits
cancellation thereof on payment of consideration and said privilege of
cancellation is exercised, the payments made or to be made by reason thereof
are hereby assigned to Agent to be applied to the Obligations in accordance
with the applicable terms of the Loan Documents or to be held in trust by Agent
as further security, without interest, for the Obligations.

 

J - 38

 

ARTICLE IX.  MISCELLANEOUS

 

Section 9.1             Due on Sale/Encumbrance.  Except in accordance with the express terms
and conditions contained in the Credit Agreement or any other Loan Document,
Owner shall not cause or permit a sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or grant of any options with respect to, or
any other transfer or disposition (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
consideration or of record) of a legal or beneficial interest in the Property
or any part thereof, Owner, any constituent owner or other holder of a direct
or indirect equity interest in Owner, any indemnitor or other guarantor of the
Loans, any constituent owner or other holder of a direct or indirect equity
interest in such indemnitor or guarantor, any manager or operating lessee of
the Property that is affiliated with Owner or any constituent owner or other
holder of a direct or indirect equity interest in such manager or such
operating lessee.

 

Section 9.2             Specified Derivatives Contract
Breakage Costs.  Owner shall pay to
Agent, for the benefit of Secured Parties, any losses (including, without
limitation, loss of bargain), costs (including, without limitation, cost of
funding), and expenses that Agent or the other Secured Parties may incur as a
result of any default in performance of the obligations of Owner pursuant to
any Specified Derivatives Contract, or any termination of any Specified
Derivatives Contract, if any (the “Specified Derivatives Contract Breakage
Costs”). The Specified Derivatives Contract Breakage Costs shall be due and
payable by Owner pursuant to the terms of any Specified Derivatives
Contract.  The Specified Derivatives
Contract Breakage Costs shall be immediately due and payable upon demand by
Agent.

 

Section 9.3             Performance at Owner’s Expense.  Owner shall pay to Agent and Lenders
immediately upon demand all reasonable costs and expenses incurred by Agent and
Lenders in connection herewith as provided in Section 13.2 of the Credit
Agreement [(and Owner hereby agrees to pay the costs and expenses of Trustee in
connection herewith to the same extent as if Trustee was specifically included
with Agent in the provisions of such Section)], and the same shall be secured
hereby.   For all purposes of this
Security Instrument, Agent’s [(and Trustee’s)] costs and expenses shall
include, without limitation, all appraisal and re-appraisal fees, reasonable
attorneys’ fees (including, without limitation, fees for trial, appeal or other
proceedings), accounting fees, environmental consultant fees (if any), auditor
fees, and the cost to Agent of any documentary taxes, mortgage, mortgage
recording, stamp, intangible or other similar taxes, recording fees, brokerage
fees, title search fees, title insurance premiums and title surveys (including
any such title related fees and premiums incurred in connection with title
updates). In addition, Owner recognizes and agrees that formal written
appraisals of the Collateral by a licensed independent appraiser may be
required by federal regulatory reporting requirements on an annual or
specialized basis, which shall be at Owner’s expense.

 

Section 9.4             Survival of Obligations.  Each and all of the Obligations shall survive
the execution and delivery of the Loan Documents, and the consummation of the
transactions contemplated thereby, and shall continue in full force and effect
until the Obligations shall have been paid in full; provided however, that
nothing contained in this Section 9.4 shall limit the obligations of Owner
as set forth in Section 3.14 and 8.4 herein.

 

Section 9.5             Recording and Filing.  Owner shall cause this Security Instrument
and all amendments and supplements thereto and substitutions therefor to be
recorded, filed, re-recorded

 

J - 39

 

and refiled in such
manner and in such places as Agent shall reasonably request and shall pay all
such recording, filing, re-recording and refiling taxes, fees and other
charges.

 

Section 9.6             Notices.  All notices or other communications required
or permitted to be given pursuant to this Security Instrument shall be made and
delivered as provided in [If
Owner is Borrower — Section 13.1 of the Credit Agreement][If Owner is Guarantor
— the notice provisions of the Guaranty].

 

Section 9.7             No Waiver.  Any failure by Agent or the other Secured Parties
to insist, or any election by Agent or the other Secured Parties not to insist,
upon strict performance by Owner of any of the terms, provisions or conditions
of this Security Instrument shall not be deemed to be a waiver of same or of
any other term, provision or condition hereof, and Agent and the other Secured
Parties shall have the right at any time or times thereafter to insist upon
strict performance by Owner of any and all such terms, provisions and
conditions.  No delay or omission by
Agent or the other Secured Parties to exercise any right, power or remedy
accruing upon any breach or Credit Agreement Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to be a waiver of
any such breach or Credit Agreement Event of Default, or acquiescence therein,
and every right, power and remedy given by this Security Instrument to Agent or
the other Secured Parties may be exercised from time to time and as often as
may be deemed expedient by Agent or the other Secured Parties.  No consent or waiver, expressed or implied,
by Agent or the other Secured Parties to or of any breach or Credit Agreement
Event of Default by Owner in the performance of the Obligations of Owner or to
any other Credit Agreement Event of Default shall be deemed or construed to be
a consent or waiver to or of any other breach or Credit Agreement Event of
Default in the performance of the same or any other Obligations of Owner.  Failure on the part of Agent to complain of
any act or failure to act or to declare a Credit Agreement Event of Default,
irrespective of how long such failure continues, shall not constitute a waiver
of rights hereunder or impair any rights, powers, or remedies of Agent or the
other Secured Parties hereunder.

 

No act or omission by
Agent or the other Secured Parties shall release, discharge, modify, change or
otherwise affect the liability of Owner under this Security Instrument or any
of the other Loan Documents to which it is a party or in respect of any
Obligations of Owner or the liability of any subsequent purchaser of the
Collateral or any part thereof, or any maker, cosigner, endorser, surety or
guarantor, or preclude Agent or the other Secured Parties from exercising any
right, power or privilege herein granted or intended to be granted in the event
of any Credit Agreement Event of Default then made or by any subsequent Credit
Agreement Event of Default, or alter the Lien of this Security Instrument.  Without limiting the generality of the
foregoing, Agent and the other Secured Parties may:

 

(a)           grant forbearance or an extension of
time for the payment of all or any portion of the Obligations;

 

(b)           take other or additional security for
the payment of the Obligations;

 

(c)           waive or fail to exercise any right
granted hereunder or in the Credit Agreement or the other Loan Documents;

 

J - 40

 

(d)           change any of the terms, covenants,
conditions or agreements of the Credit Agreement, this Security Instrument, or
the other Loan Documents;

 

(e)           consent to the filing of any map,
plat or replat affecting the Collateral;

 

(f)            consent to the granting of any
easement or other right affecting the Collateral;

 

(g)           make or consent to any agreement
subordinating the security title, security interest or lien hereof; or

 

(h)           take or omit to take any action
whatsoever with respect to the Credit Agreement, this Security Instrument, the
Collateral or any document or instrument evidencing, securing or in any way
relating to the Obligations;

 

all without releasing,
discharging, modifying, changing or affecting any such liability, or precluding
Agent or the other Secured Parties from exercising any such right, power or
privilege, or affecting the Lien of this Security Instrument.  In the event of the sale or transfer by
operation of law or otherwise of all or any part of the Collateral, Agent,
without notice, is hereby authorized and empowered to deal with any such vendee
or transferee with reference to the Collateral or the Obligations, or with
reference to any of the terms, covenants, conditions or agreements hereof, as
fully and to the same extent as it might deal with the original parties hereto
and without in any way releasing or discharging any liabilities, Obligations or
undertakings.

 

Section 9.8             Agent’s Right to Perform the
Obligations.  If Owner shall fail,
refuse or neglect to make any payment or perform any act required by the Loan
Documents, upon the occurrence of and during the continuance of an Event of
Default, after the expiration of relevant notice and cure periods, then at any
time thereafter, and without notice to or demand upon Owner and without waiving
or releasing any other right, remedy or recourse Agent may have because of
same, Agent may (but shall not be obligated to) make such payment or perform
such act for the account of and at the expense of Owner, and shall have the
right to enter the Property and Improvements for such purpose and to take all
such action thereon and with respect to the Collateral as it may deem necessary
or appropriate.  If Agent shall elect to
pay any Imposition or other sums due with reference to the Collateral, Agent
may do so in reliance on any bill, statement or assessment procured from the
appropriate Governmental Authority or other issuer thereof without inquiring
into the accuracy or validity thereof. 
Similarly, in making any payments to protect the security intended to be
created by the Loan Documents, Agent shall not be bound to inquire into the
validity of any apparent or threatened adverse title, lien, encumbrance, claim
or charge before making an advance for the purpose of preventing or removing
the same.  Owner shall indemnify Agent
and the other Secured Parties for all losses, expenses, damages, claims and
causes of action, including reasonable attorneys’ fees, incurred or accruing by
reason of any acts performed by Agent pursuant to the provisions of this Section or
by reason of any other provision in the Loan Documents.  All sums paid by Agent or the other Secured
Parties pursuant to this Section, and all other sums expended by Agent or the
other Secured Parties to which they shall be entitled to be indemnified,
together with interest thereon at the Post-Default Rate from the date of such
payment or expenditure, shall constitute additions to

 

J - 41

 

the Obligations, shall be
secured by the Liens created by the Loan Documents and shall be paid by Owner
to Agent upon demand.

 

Section 9.9             Covenants Running with the Land.  All Obligations contained in the Loan
Documents are intended by the parties to be, and shall be construed as,
covenants running with the Property.

 

Section 9.10           Successors and Assigns.  Subject to Section 13.5 of the Credit
Agreement, all of the terms of this Security Instrument shall apply to, be
binding upon and inure to the benefit of the parties thereto, their successors,
assigns, heirs and legal representatives, and all other Persons claiming by,
through or under them.

 

Section 9.11           Severability.  This Security Instrument is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable Legal Requirements.  If any
provision of any of this Security Instrument or the application thereof to any
Person or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, then neither the remainder of the instrument in which such
provision is contained nor the application of such provision to other Persons
or circumstances nor the other instruments referred to hereinabove shall be
affected thereby, but rather, shall be enforced to the greatest extent
permitted by Applicable Law.

 

Section 9.12           Modification.  This Security Instrument may not be amended,
revised, waived, discharged, released or terminated orally, but only by a
written instrument or instruments as provided in Section 13.6 of the
Credit Agreement.

 

Section 9.13           Assignment.  This Security Instrument is assignable by
Agent and any assignment hereof by Agent shall operate to vest in the assignee
all rights and powers herein conferred upon and granted to Agent.

 

Section 9.14           Time is of the Essence.  Time is of the essence with respect to each
and every covenant, agreement and obligation of Owner under this Security
Instrument.

 

Section 9.15           Counterparts.  This Security Instrument may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute but one instrument.

 

Section 9.16           APPLICABLE LAW. THIS SECURITY
INSTRUMENT WAS NEGOTIATED IN THE STATE OF NORTH CAROLINA AND MADE BY OWNER AND
ACCEPTED BY AGENT, FOR THE BENEFIT OF SECURED PARTIES, IN THE STATE OF NORTH
CAROLINA, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. 
THIS SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
CAROLINA APPLICABLE TO CONTRACTS

 

J - 42

 

MADE AND PERFORMED IN
SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE
LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS
FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED
BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NORTH CAROLINA SHALL GOVERN
THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF THIS SECURITY INSTRUMENT AND
ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER.  TO THE FULLEST EXTENT PERMITTED BY LAW, OWNER
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS SECURITY INSTRUMENT AND THE NOTES, AND
THIS SECURITY INSTRUMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.

 

Section 9.17           Provisions Subject to Applicable
Law.  All rights, powers and remedies
provided in this Security Instrument may be exercised only to the extent that
the exercise thereof does not violate any Applicable Law and are intended to be
limited to the extent necessary so that they will not render this Security
Instrument invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of Applicable Law. 
If any term of this Security Instrument or any application thereof shall
be invalid or unenforceable, the remainder of this Security Instrument and any
other application of the term shall not be affected thereby.

 

Section 9.18           Subrogation.  If any or all of the proceeds of the
Obligations have been used to extinguish, extend or renew any Obligations
heretofore existing against the Collateral, then, to the extent of such funds
so used, the Obligations and this Security Instrument shall be subrogated to
all of the rights, claims, liens, titles and interests heretofore existing
against the Collateral to secure the indebtedness so extinguished, extended or
renewed, and the former rights, claims, liens, titles and interests, if any,
are not waived, but rather, are continued in full force and effect in favor of
Agent and are merged with the lien or security title and interest created
herein as cumulative security for the repayment and the satisfaction of the
Obligations.

 

Section 9.19           Headings.  Titles and captions of Articles, Sections,
subsections and clauses in this Security Instrument are for convenience only,
and neither limit nor amplify the provisions of this Security Instrument.

 

Section 9.20           Eligible Property.  It is acknowledged and agreed by Owner that
the standards and requirements for the Collateral constituting an Eligible
Property and being included in calculations of the Borrowing Base are as set
forth in the Credit Agreement, and that the Collateral subject hereto may cease
to be an Eligible Property and cease to be included in calculating the
Borrowing Base if the Collateral is not in compliance with such eligibility
requirements, notwithstanding that the Collateral may remain subject to this
Security Instrument.

 

J - 43

 

Section 9.21           Conflict.  Notwithstanding anything herein to the contrary,
in the event of a conflict between this Security Instrument and the Credit
Agreement, the Credit Agreement shall govern.

 

Section 9.22           Release of Collateral.  The Collateral shall be released upon payment
in full of the Obligations and Agent shall promptly execute a release in
recordable form evidencing the satisfaction of the Obligations.  Except upon payment in full of the
Obligations, Owner shall not be entitled to a release of any portion of the
Collateral from the lien of this Security Instrument except in accordance with
terms and conditions of the Credit Agreement.

 

Section 9.23           Waiver of Trial by Jury.  TO THE EXTENT PERMITTED BY LAW, OWNER AND
AGENT EACH HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS,
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL
BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY OWNER AND AGENT, AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. 
EACH OF OWNER AND AGENT IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY OWNER AND AGENT.

 

[ARTICLE X. DEED OF TRUST PROVISIONS][ARTICLE X.
INTENTIONALLY OMITTED]

 

Section 10.1         Concerning the Trustee. Trustee
shall be under no duty to take any action hereunder except as expressly
required hereunder or by law, or to perform any act which would involve Trustee
in any expense or liability or to institute or defend any suit in respect
hereof, unless properly indemnified to Trustee’s reasonable satisfaction.  Trustee, by acceptance of this Security
Instrument, covenants to perform and fulfill the trusts herein created, being
liable, however, only for gross negligence or willful misconduct, and hereby
waives any statutory fee and agrees to accept reasonable compensation, in lieu
thereof, for any services rendered by Trustee in accordance with the terms
hereof.  Trustee may resign at any time
upon giving thirty (30) days’ notice to Owner and to Agent.  Agent may remove Trustee at any time or from
time to time and select a successor trustee. 
In the event of the death, removal, resignation, refusal to act, or
inability to act of Trustee, or in its sole discretion for any reason
whatsoever Agent may, without notice and without specifying any reason therefor
and without applying to any court, select and appoint a successor trustee, by
an instrument recorded wherever this Security Instrument is recorded and all
powers, rights, duties and authority of Trustee, as aforesaid, shall thereupon
become vested in such successor.  Such substitute
trustee shall not be required to give bond for the faithful performance of the
duties of Trustee hereunder unless required by Agent.  The procedure provided for in this paragraph
for substitution of Trustee shall 

 

J - 44

 

be in addition to and not in
exclusion of any other provisions for substitution, by law or otherwise.

 

Section 10.2         Trustee’s Fees.  Owner shall pay all reasonable costs, fees
and expenses incurred by Trustee and Trustee’s agents and counsel in connection
with the performance by Trustee of Trustee’s duties hereunder and all such
costs, fees and expenses shall be secured by this Security Instrument.

 

Section 10.3         Certain Rights.  With the approval of Agent, Trustee shall
have the right to take any and all of the following actions:  (i) to select, employ, and advise with
counsel (who may be, but need not be, counsel for Agent) upon any matters
arising hereunder, including the preparation, execution, and interpretation of
this Security Instrument or the Loan Documents, and shall be fully protected in
relying as to legal matters on the advice of counsel, (ii) to execute any
of the trusts and powers hereof and to perform any duty hereunder either
directly or through his/her agents or attorneys, (iii) to select and
employ, in and about the execution of his/her duties hereunder, suitable
accountants, engineers and other experts, agents and attorneys-in-fact, either
corporate or individual, not regularly in the employ of Trustee, and Trustee shall
not be answerable for any act, default, negligence, or misconduct of any such
accountant, engineer or other expert, agent or attorney-in-fact, if selected
with reasonable care, or for any error of judgment or act done by Trustee in
good faith, or be otherwise responsible or accountable under any circumstances
whatsoever, except for Trustee’s gross negligence or bad faith, and (iv) any
and all other lawful action as Agent may instruct Trustee to take to protect or
enforce Agent’s rights hereunder.  Trustee
shall not be personally liable in case of entry by Trustee, or anyone entering
by virtue of the powers herein granted to Trustee, upon the Collateral for
debts contracted for or liability or damages incurred in the management or
operation of the Collateral.  Trustee
shall have the right to rely on any instrument, document, or signature
authorizing or supporting an action taken or proposed to be taken by Trustee
hereunder, believed by Trustee in good faith to be genuine.  Trustee shall be entitled to reimbursement
for actual expenses incurred by Trustee in the performance of Trustee’s duties
hereunder and to reasonable compensation for such of Trustee’s services
hereunder as shall be rendered.

 

Section 10.4         Retention of Money.  All moneys received by Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated in any manner from any other
moneys (except to the extent required by applicable law) and Trustee shall be
under no liability for interest on any moneys received by Trustee hereunder.

 

Section 10.5         Perfection of Appointment.  Should any deed, conveyance, or instrument of
any nature be required from Owner by any Trustee or substitute trustee to more
fully and certainly vest in and confirm to Trustee or substitute trustee such
estates rights, powers, and duties, then, upon request by Trustee or substitute
trustee, any and all such deeds, conveyances and instruments shall be made,
executed, acknowledged, and delivered and shall be caused to be recorded and/or
filed by Owner.

 

J - 45

 

Section 10.6         Succession Instruments.  Any substitute trustee appointed pursuant to
any of the provisions hereof shall, without any further act, deed, or
conveyance, become vested with all the estates, properties, rights, powers, and
trusts of its or his/her predecessor in the rights hereunder with like effect
as if originally named as Trustee herein; but nevertheless, upon the written
request of Agent or of the substitute trustee, Trustee ceasing to act shall
execute and deliver any instrument transferring to such substitute trustee,
upon the trusts herein expressed, all the estates, properties, rights, powers,
and trusts of Trustee so ceasing to act, and shall duly assign, transfer and
deliver any of the property and moneys held by such Trustee to the substitute
trustee so appointed in Trustee’s place.]

 

[ARTICLE
XI. GROUND LEASE PROVISIONS][ARTICLE XI. INTENTIONALLY OMITTED]

 

Section 11.1         No Merger of the Fee and Leasehold
Estates; Releases.  So long as any
portion of the Obligations shall remain unpaid, unless Agent shall otherwise
consent, the fee title to the Property and the Leasehold Estate shall not merge
but shall always be kept separate and distinct, notwithstanding the union of
such estates in Owner, Ground Lessor or in any other Person by purchase,
operation of law or otherwise.  Agent
reserves the right, at any time, to release portions of the Collateral,
including, but not limited to, the Leasehold Estate, with or without
consideration, at Agent’s election, without waiving or affecting any of its
rights hereunder or under the Notes or the other Loan Documents and any such
release shall not affect Agent’s rights in connection with the portion of the
Collateral not so released.

 

Section 11.2         Owner’s Acquisition of the Fee
Estate.  In the event that Owner, so
long as any portion of the Obligations remains unpaid, shall become the owner
and holder of Ground Lessor’s fee interest in the portion of the Property
demised pursuant to the Ground Lease, the lien of this Security Instrument
shall be spread to cover such interest and such interest shall be deemed to be
included in the Collateral.  Owner
agrees, at its sole cost and expense, including without limitation, Agent’s
reasonable attorney’s fees, to (i) execute any and all documents or
instruments necessary to subject the foregoing interest to the lien of this
Security Instrument; and (ii) provide a title insurance policy which shall
insure that the lien of this Security Instrument is a first lien on such
interest.  The foregoing shall not be
construed to permit Owner to acquire the aforesaid fee interest and Owner
rights to acquire additional property shall remain subject to the restrictions
relating thereto contained in the Credit Agreement and the other Loan
Documents.

 

Section 11.3         Rejection of the Ground Lease.        (a) If the Ground Lease is
terminated by Ground Lessor for any reason in the event of the rejection or
disaffirmance of the Ground Lease by Ground Lessor pursuant to the Bankruptcy
Code or any other law affecting creditor’s rights, (i) Owner, immediately
after obtaining notice thereof, shall give notice thereof to Agent, (ii) Owner,
without the prior written consent of Agent, shall not elect to treat the Ground
Lease as terminated pursuant to Section 365(h) of the Bankruptcy Code
or any comparable federal or state statute or law, and any election by Owner
made without such consent shall be void and (iii) this Security Instrument
and all the liens, terms,

 

J - 46

 

covenants and conditions of this
Security Instrument shall extend to and cover Owner’s possessory rights under Section 365(h) of
the Bankruptcy Code and to any claim for damages due to the rejection of the
Ground Lease or other termination of the Ground Lease.  In addition, Owner hereby assigns irrevocably
to Agent Owner’s rights to treat the Ground Lease as terminated pursuant to Section 365(h) of
the Bankruptcy Code and to offset rents under the Ground Lease in the event any
case, proceeding or other action is commenced by or against Ground Lessor under
the Bankruptcy Code or any comparable federal or state statute or law, provided
that Agent shall not exercise such rights and shall permit Owner to exercise
such rights with the prior written consent of Agent, not to be unreasonably
withheld or delayed, unless a Credit Agreement Event of Default exists.

 

(b) Owner
hereby assigns to Agent Owner’s right to reject the Ground Lease under Section 365
of the Bankruptcy Code or any comparable federal or state statute or law with
respect to any case, proceeding or other action commenced by or against Owner
under the Bankruptcy Code or comparable federal or state statute or law,
provided Agent shall not exercise such right, and shall permit Owner to
exercise such right with the prior written consent of Agent, not to be
unreasonably withheld or delayed, unless a Credit Agreement Event of Default
exists.  Further, if Owner shall desire
to so reject the Ground Lease, at Agent’s request, to the extent not prohibited
by the terms of the Ground Lease and applicable law, Owner shall assign its
interest in the Ground Lease to Agent in lieu of rejecting the Ground Lease as
described above, upon receipt by Owner of written notice from Agent of such
request together with Agent’s agreement to cure any existing defaults of Owner
under the Ground Lease and to provide adequate assurance of future performance
of Owner’s obligations thereunder.

 

(c) Owner
hereby assigns to Agent Owner’s right to seek an extension of the 60-day period
within which Owner must accept or reject the Ground Lease under Section 365
of the Bankruptcy Code or any comparable federal or state statute or law with
respect to any case, proceeding or other action commenced by or against Owner
under the Bankruptcy Code or comparable federal or state statute or law,
provided Agent shall not exercise such right, and shall permit Owner to
exercise such right with the prior written consent of Agent, not to be
unreasonably withheld or delayed, unless a Credit Agreement Event of Default
exists.  Further, if Owner shall desire
to so reject the Ground Lease, at Agent’s request, to the extent not prohibited
by the terms of the Ground Lease and applicable law, Owner shall assign its
interest in the Ground Lease to Agent in lieu of rejecting such Ground Lease as
described above, upon receipt by Owner of written notice from Agent of such
request together with Agent’s agreement to cure any existing defaults of Owner
under the Ground Lease and to provide adequate assurance of future performance
of the applicable Owner’s obligations thereunder.

 

(d) Owner
hereby agrees that if the Ground Lease is terminated for any reason in the
event of the rejection or disaffirmance of the Ground Lease pursuant to the
Bankruptcy Code or any other law affecting creditor’s rights, any Personalty of
Owner not removed from the Collateral by Owner as permitted or required by the
Ground Lease, shall at the option of Agent be deemed abandoned by Owner,
provided that Agent may remove any such Personalty required to be removed by
Owner pursuant to the Ground

 

J - 47

 

Lease and all reasonable
out-of-pocket costs and expenses associated with such removal shall be paid by
Owner within five (5) days of receipt by Owner of an invoice for such
removal costs and expenses.]

 

ARTICLE XII.
CROSS-COLLATERALIZATION

 

Section 12.1 Cross-Collateralization.  (a) Owner acknowledges
that Agent and Lenders have agreed to make the Loans and other financial
accommodations contemplated by the Credit Agreement to Borrower upon security
of the collective interest of Owner, Borrower and the other Loan Parties in,
among other things, the Borrowing Base Properties and in reliance upon the
aggregate of the Borrowing Base Properties taken together being of greater
value as collateral security than the sum of each individual Borrowing Base
Property taken separately.  Owner
acknowledges that its Obligations are secured by this Security Instrument
together with the obligations of the other Loan Parties under the other Loan
Documents (collectively, the “Other Loan Party Obligations”) being
secured by those Other Security Instruments (as defined below) given by Loan
Parties to Agent for the benefit of Secured Parties, together with their
respective Loan Documents securing or evidencing such Obligations, and
encumbering the other individual Borrowing Base Properties, all as more
specifically set forth in the Credit Agreement. 
Owner agrees that each of the Loan Documents (including, without
limitation, the Security Instruments) are and will be cross-collateralized and
cross-defaulted with each other so that (i) a Credit Agreement Event of
Default under this Security Instrument or any Other Security Instrument is a
Credit Agreement Event of Default under each of this Security Instrument and
the Other Security Instruments; (ii) a Credit Agreement Event of Default
under any of the Loan Documents shall constitute a Credit Agreement Event of
Default under each of the other Loan Documents; (iii) each Security
Instrument shall constitute security for the obligations of Loan Parties under
the Loan Documents to which they are parties as if a single blanket lien were
placed on all of the Borrowing Base Properties as security for all such
obligations; and (iv) such cross-collateralization shall in no event be
deemed to constitute a fraudulent conveyance and Owner waives any claims
related thereto.  Upon the occurrence of
a Credit Agreement Event of Default beyond any applicable notice and grace
period, Agent shall have the right to institute a proceeding or proceedings for
the total or partial foreclosure of this Security Instrument and any or all of
the Other Security Instruments whether by court action, power of sale or
otherwise, under any applicable provision of law, for all of the Obligations
and/or Other Loan Party Obligations or the portion of the Obligations and/or
Other Loan Party Obligations allocated to the Property in the Credit Agreement,
and the lien and the security interest created by the Other Security
Instruments shall continue in full force and effect without loss of priority as
a lien and security interest securing the payment of that portion of the
Obligations and/or Other Loan Party Obligations then due and payable but still
outstanding.  Owner acknowledges and
agrees that the Property and the other individual Borrowing Base Properties are
located in one or more cities and/or counties, and therefore Agent shall be
permitted to enforce payment of the Obligations and/or Other Loan Party
Obligations and the performance of any term, covenant or condition of the
Notes, the Credit Agreement, this Security Instrument, the other Loan Documents
or the Other Security Instruments and exercise any and all rights and remedies
under the Notes, the Credit Agreement, this Security Instrument, the other Loan
Documents or the Other Security Instruments, or as provided by law or at
equity, by one or more proceedings, whether contemporaneous, consecutive or
both, to be determined by Agent, in its sole discretion, in any

 

J - 48

 

one
or more of the cities or counties in which the Property or any other Individual
Property is located.  Neither the
acceptance of this Security Instrument, the Notes, the Credit Agreement, the
other Loan Documents or the Other Security Instruments nor the enforcement
thereof in any one city or county, whether by court action, foreclosure, power
of sale or otherwise, shall prejudice or an any way limit or preclude
enforcement by court action, foreclosure, power of sale or otherwise, of the
Notes, the Credit Agreement, this Security Instrument, the other Loan
Documents, or any Other Security Instruments through one or more additional
proceedings in that city or county or in any other city or county.  Any and all sums received by Agent or Lenders
under the Notes, the Credit Agreement, this Security Instrument, and the other
Loan Documents shall be applied to the Obligations and/or the Other Loan Party
Obligations in such order and priority as Agent shall determine, in its sole
discretion, without regard to the Appraised Value of the Property or any
individual Borrowing Base Property.  As
used herein, the term “Other Security Instruments” shall mean all other
Security Instruments (as defined in the Credit Agreement) securing any of the
Other Loan Party Obligations.

 

(b) To the fullest
extent permitted by law, Owner, for itself and its successors and assigns,
waives all rights to a marshalling of the assets of Owner, Owner’s partners and
others with interests in Owner, and of the Borrowing Base Properties, or to a
sale in inverse order of alienation in the event of foreclosure of all or any
of the Security Instruments, and agrees not to assert any right under any laws
pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or
any other matters whatsoever to defeat, reduce or affect the right of Agent, on
behalf of Secured Parties, under the Loan Documents to a sale of the Borrowing
Base Properties for the collection of the Obligations and/or the Other Loan
Party Obligations without any prior or different resort for collection or of
the right of Agent, on behalf of Secured Parties, to the payment of the
Obligations and/or the Other Loan Party Obligations out of the net proceeds of
the Borrowing Base Properties in preference to every other claimant
whatsoever.  In addition, Owner, for
itself and its successors and assigns, waives in the event of foreclosure of
any or all of the Security Instruments, any equitable right otherwise available
to Owner which would require the separate sale of the Borrowing Base Properties
or require the Secured Parties to exhaust their remedies against any individual
Borrowing Base Property or any combination of the Borrowing Base Properties
before proceeding against any other individual Borrowing Base Property or
combination of Borrowing Base Properties; and further in the event of such
foreclosure Owner does hereby expressly consent to and authorize, at the option
of Agent, pursuant to the terms hereof, the foreclosure and sale either
separately or together of any combination of the Borrowing Base Properties.

 

ARTICLE
XIII. STATE SPECIFIC PROVISIONS

 

Section 13.1           Principles of Construction.  In the event of any inconsistencies between
the terms and conditions of this Article 13 and the terms and conditions
of this Security Instrument, the terms and conditions of this Article 13 shall
control and be binding.

 

[INSERT
STATE SPECIFIC PROVISIONS]

 

J - 49

 

[Signatures on
Next Page]

 

[NO
FURTHER TEXT ON THIS PAGE]

 

J - 50

 

IN WITNESS WHEREOF, Owner
has executed this Security Instrument under seal, as of the day and year first
above written.

 

 

	
   

  	
  OWNER:

  
	
   

  	
   

  
	
   

  	
  [INSERT NAME OF
  PROPERTY OWNER]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

[Acknowledgement on Next Page]

 

J - 51

 

[INSERT STATE ACKNOWLEDGMENT FORM]

 

J - 52

 

EXHIBIT A
TO SECURITY INSTRUMENT

 

(Description of
the Property)

 

J - 53

 

EXHIBIT K

 

FORM OF SWINGLINE NOTE

 

	
  $20,000,000

  	
   

  	
  December 7, 2009   

  

 

FOR
VALUE RECEIVED, the undersigned, U-STORE-IT, L.P., a limited partnership formed
under the laws of the State of Delaware (the “Borrower”), hereby promises to
pay to WACHOVIA BANK, NATIONAL ASSOCIATION (the “Swingline Lender”) or its
registered assigns at its address at [                                                                                                                                     ],
or at such other address as may be specified in writing by the Swingline Lender
to the Borrower, the principal sum of TWENTY MILLION AND NO/100 DOLLARS
($20,000,000) (or such lesser amount as shall equal the aggregate unpaid
principal amount of Swingline Loans made by the Swingline Lender to the
Borrower under the Credit Agreement), on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the unpaid principal
amount owing hereunder, at the rates and on the dates provided in the Credit
Agreement.

 

The
date and amount of each Swingline Loan, and each payment made on account of the
principal thereof, shall be recorded by the Swingline Lender on its books and,
prior to any transfer of this Note, endorsed by the Swingline Lender on the
schedule attached hereto or any continuation thereof, provided that the failure
of the Swingline Lender to make any such recordation or endorsement shall not
affect the obligations of the Borrower to make a payment when due of any amount
owing under the Credit Agreement or hereunder.

 

This
Note is the Swingline Note referred to in the Amended and Restated Credit
Agreement dated as of December 7, 2009
(as amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”), by and among the Borrower, U-Store-It Trust, the
financial institutions party thereto and their assignees under Section 13.5.
thereof (the “Lenders”), Wachovia Bank, National Association, as Agent, and the
other parties thereto, and evidences Swingline Loans made to the Borrower
thereunder.  Terms used but not otherwise
defined in this Note have the respective meanings assigned to them in the
Credit Agreement.

 

The
Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Swingline Loans
upon the terms and conditions specified therein.

 

Except
as permitted by Section 13.5. of the Credit Agreement, this Note may not
be assigned by the Swingline Lender to any Person.

 

The proper amount of
Florida documentary stamp taxes and non-recurring intangible taxes in the
amounts of
$[                        ]
and $[                        ]
respectively, payable on the Swingline Loan and the other Obligations secured
by the Security Instruments have been paid upon the recordation of the Security
Instrument.

 

K-1

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

 

The
Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar
notices.

 

Time
is of the essence for this Note.

 

IN
WITNESS WHEREOF, the undersigned has executed and delivered this Swingline Note
under seal as of the date first written above.

 

 

	
   

  	
  U-STORE-IT, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

K-2

 

SCHEDULE OF SWINGLINE LOANS

 

This Note evidences Swingline Loans made under the
within-described Credit Agreement to the Borrower, on the dates and in the
principal amounts set forth below, subject to the payments and prepayments of
principal set forth below:

 

	
  Date
  of Loan

  	
   

  	
  Principal

  Amount of Loan

  	
   

  	
  Amount Paid

  or Prepaid

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Notation Made

  By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

K-3

 

EXHIBIT L

 

FORM OF REVOLVING NOTE

 

	
  $

  	
   

  	
   

  	
   

  	
  ,
  20

  

 

FOR VALUE RECEIVED, the undersigned, U-STORE-IT,
L.P., a limited partnership formed under the laws of the State of Delaware (the
“Borrower”), hereby promises to pay to
                                        
(the “Lender”) or its registered assigns, in care of Wachovia Bank, National
Association, as Agent (the “Agent”) at Wachovia Bank, National Association, [                                                                                         ],
or at such other address as may be specified in writing by the Agent to the
Borrower, the principal sum of
                                
AND         /100 DOLLARS
($                        )
(or such lesser amount as shall equal the aggregate unpaid principal amount of
Revolving Loans made by the Lender to the Borrower under the Credit Agreement
(as herein defined)), on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount owing
hereunder, at the rates and on the dates provided in the Credit Agreement.

 

The
date and amount of each Revolving Loan made by the Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Lender to make any such recordation or endorsement
shall not affect the obligations of the Borrower to make a payment when due of
any amount owing under the Credit Agreement or hereunder.

 

This
Note is one of the Revolving Notes referred to in the Amended and Restated
Credit Agreement dated as of December 7,
2009 (as amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), by and among the Borrower, U-Store-It Trust,
the financial institutions party thereto and their assignees under Section 13.5.
thereof (the “Lenders”), the Agent, and the other parties thereto.  Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given them in the
Credit Agreement.

 

The
Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Loans upon the
terms and conditions specified therein.

 

Except
as permitted by Section 13.5. of the Credit Agreement, this Note may not
be assigned by the Lender to any Person.

 

The proper amount of
Florida documentary stamp taxes and non-recurring intangible taxes in the
amounts of
$[                        ]
and
$[                        ]
respectively, payable on the Revolving Loan and the other Obligations secured
by the Security Instruments have been paid upon the recordation of the Security
Instrument.

 

L-1

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

 

The
Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar
notices.

 

Time
is of the essence for this Note.

 

IN
WITNESS WHEREOF, the undersigned has executed and delivered this Revolving Note
under seal as of the date first written above.

 

	
   

  	
  U-STORE-IT, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

L-2

 

SCHEDULE OF REVOLVING LOANS

 

This Note evidences Revolving Loans made under the within-described
Credit Agreement to the Borrower, on the dates and in the principal amounts set
forth below, subject to the payments and prepayments of principal set forth
below:

 

	
  Date
  of Loan

  	
   

  	
  Principal

  Amount of Loan

  	
   

  	
  Amount Paid

  or Prepaid

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Notation Made

  By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

L-3

 

EXHIBIT M

 

FORM OF TERM
NOTE

 

	
  $

  	
   

  	
   

  	
   

  	
  ,
  20

  

 

FOR
VALUE RECEIVED, the undersigned, U-STORE-IT, L.P., a limited partnership formed
under the laws of the State of Delaware (the “Borrower”), hereby promises to pay
to
                                        
(the “Lender”) or its registered assigns, in care of Wachovia
Bank, National Association, as Agent (the “Agent”) at Wachovia
Bank, National Association, [                                                                                         ], or at such other address as may be
specified in writing by the Agent to the Borrower, the principal sum of
                                
AND         /100 DOLLARS
($                        )
(or such lesser amount as shall equal the unpaid principal amount of the Term
Loans made by the Lender to the Borrower under the Credit Agreement (as herein
defined)), on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount owing hereunder,
at the rates and on the dates provided in the Credit Agreement.

 

The date, amount of the
Term Loans made by the Lender to the Borrower, and each payment made on account
of the principal thereof, shall be recorded by the Lender on its books and,
prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower to make a payment when due of any amount owing
under the Credit Agreement or hereunder in respect of the Term Loans made by
the Lender.

 

This Note is one of the
Notes referred to in the Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among the Borrower, the financial
institutions party thereto and their assignees under Section 13.5. thereof (the “Lenders”), the Agent, and
the other parties thereto.  Capitalized
terms used herein, and not otherwise defined herein, have their respective
meanings given them in the Credit Agreement.

 

The Credit Agreement provides
for the acceleration of the maturity of this Note upon the occurrence of
certain events and for prepayments of Loans upon the terms and conditions
specified therein.

 

Except as permitted by Section 13.5. of the Credit Agreement, this Note may
not be assigned by the Lender to any other Person.

 

The proper amount of
Florida documentary stamp taxes and non-recurring intangible taxes in the
amounts of
$[                        ]
and
$[                        ]
respectively, payable on the Term Loan and the other Obligations secured by the
Security Instruments have been paid upon the recordation of the Security
Instrument.

 

M-1

 

THIS NOTE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH
CAROLINA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.

 

The Borrower hereby
waives presentment for payment, demand, notice of demand, notice of
non-payment, protest, notice of protest and all other similar notices.

 

Time is of the essence
for this Note.

 

IN WITNESS WHEREOF, the
undersigned has executed and delivered this Term Note under seal as of the date
first written above.

 

	
   

  	
  U-STORE-IT, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

M-2

 

SCHEDULE TO NOTE

 

This
Note evidences the Term Loan made under the within-described Credit Agreement
to the Borrower, on the date, in the principal amount, bearing interest at the
rates and maturing on the dates set forth below, subject to the payments and
prepayments of principal set forth below:

 

	
  Date
  of Loan

  	
   

  	
  Principal

  Amount of

  Loan

  	
   

  	
  Amount

  Paid or

  Prepaid

  	
   

  	
  Unpaid

  Principal

  Amount

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

M-3

 

EXHIBIT N

 

FORM OF OPINION OF COUNSEL

 

[LETTERHEAD OF COUNSEL TO THE LOAN PARTIES]

 

December 7, 2009

 

Wachovia
Bank, National Association, as Agent

c/o Wells Fargo Real Estate Banking Group

200 Public Square - Suite 3200

Cleveland, OH 44114

 

The Lenders party to the Credit Agreement referred
to below

 

Ladies
and Gentlemen:

 

We
have acted as counsel to U-Store-It, L.P., a limited partnership formed under
the laws of the State of Delaware (the “Borrower”) and U-Store-It Trust, a real
estate investment trust formed under the laws of the State of Maryland (the “Parent”),
in connection with the negotiation, execution and delivery of that certain
Amended and Restated Credit Agreement dated as of December 7, 2009 (the “Credit Agreement”), by and among
the Borrower, the Parent, the financial institutions party thereto and their
assignees under Section 13.5. thereof (the “Lenders”), Wachovia Bank,
National Association, as Agent (the “Agent”), and the other parties
thereto.  We have also acted as counsel
to each of the Guarantors listed on Schedule 1 attached hereto (the “Guarantors”;
together with the Borrower and the Parent, the “Loan Parties”), in connection
with the Guaranty and the other Loan Documents identified below to which they
are party.  Capitalized terms not
otherwise defined herein have the respective meaning given them in the Credit
Agreement.

 

In
these capacities, we have reviewed executed copies of the following:

 

(a)           the Credit Agreement;

 

(b)           the Notes;

 

(c)           the Guaranty;

 

(d)           the Pledge Agreement;

 

(e)           the Environmental Indemnity Agreement;

 

N-1

 

(f)            the Property Management Contract Assignment;

 

(g)           the Security Instrument(s);

 

(h)           the Marketing Agreement
Assignment;

 

(i)            Title Escrow Instruction
Letter executed by Borrower and each Property Owner;

 

[list
other applicable Loan Documents]; and

 

(j)            the
UCC-1 financing statements naming each Loan Party a party to a Security
Instrument as “Debtor” and the Agent as “Secured Party” (the “Financing
Statements”).

 

The
documents and instruments set forth in items (a) through (i) above
are referred to herein as the “Loan Documents”.

 

In
addition to the foregoing, we have reviewed the [articles or certificate of
incorporation, by-laws, declaration of trust, partnership agreement and limited
liability company operating agreement, as applicable,] of each Loan Party and
certain resolutions of the board of trustees or directors, as applicable, of
each Loan Party (collectively, the “Organizational Documents”) and have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, and other instruments, and
made such other investigations of law and fact, as we have deemed necessary or
advisable for the purposes of rendering this opinion.  In our examination of documents, we assumed
the genuineness of all signatures on documents presented to us as originals
(other than the signatures of officers of the Loan Parties) and the conformity
to originals of documents presented to us as conformed or reproduced copies.

 

Based
upon the foregoing, and subject to all of the qualifications and assumptions
set forth herein, we are of the opinion that:

 

1.             The Borrower is a limited
partnership, duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has the power to execute and deliver, and to
perform its obligations under, the Loan Documents to which it is a party, to
own and use its assets, and to conduct its business as presently conducted.

 

2.             Each Guarantor is a
[corporation, trust, partnership or limited liability company, as applicable,]
duly organized or formed, validly existing and in good standing under the laws
of the State of its organization or formation and has the power to execute and
deliver, and to perform its obligations under, the Loan Documents to which it
is a party, to own and use its assets, and to conduct its business as presently
conducted.

 

3.             Each Loan Party has duly
authorized the execution and delivery of the Loan Documents to which it is a
party and the performance by such Loan Party of all of its obligations under
each such Loan Document.

 

N-2

 

4.             Each Loan Party has duly
executed and delivered the Loan Documents to which it is a party.

 

5.             Each Loan Document is a
valid and binding obligation of each Loan Party which is a party thereto,
enforceable against each such Loan Party in accordance with its terms, except
as such enforceability may be limited by: 
(a) applicable bankruptcy, insolvency, reorganization, moratorium,
arrangement or similar laws relating to or affecting the enforcement of
creditors’ rights generally and (b) the fact that equitable remedies or
relief (including, but not limited to, the remedy of specific performance) are
subject to the discretion of the court before which any such remedies or relief
may be sought.

 

6.             The execution and delivery
by each Loan Party of the Loan Documents to which it is a party do not, and if
each Loan Party were now to perform its obligations under such Loan Documents,
such performance would not, result in any:

 

(a)           violation of such Loan Party’s Organizational
Documents;

 

(b)           violation of any existing federal or state
constitution, statute, regulation, rule, order, or law to which such Loan Party
or its assets are subject;

 

(c)           breach or violation of or default under, any
agreement, instrument, indenture or other document evidencing any indebtedness
for money borrowed or to our knowledge any other material agreement to which
such Loan Party is bound or under which a Loan Party or its assets is subject;

 

(d)           creation or imposition of a lien or security
interest in, on or against the assets of such Loan Party under any agreement,
instrument, indenture or other document evidencing any indebtedness for money
borrowed or any other material agreement to which, to our knowledge, such Loan
Party is bound or under which a Loan Party or its assets is subject; or

 

(e)           violation of any judicial or administrative decree,
writ, judgment or order to which, to our knowledge, such Loan Party or its
assets are subject.

 

7.             The execution, delivery and
performance by each Loan Party of each Loan Document to which it is a party,
and the consummation of the transactions thereunder, do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any Governmental Authority of the United States of
America or the States of Delaware or
[                      ].

 

8.             To our knowledge, (a) there
are no judgments outstanding against any of the Loan Parties or affecting any
of their respective assets, nor is there any litigation or other proceeding
against any of the Loan Parties or its assets pending or overtly threatened,
could reasonably be expected to have a materially adverse effect on the
validity or enforceability of any of the Loan Documents, (b) no Loan Party
is subject to any bankruptcy or other insolvency proceedings or 

 

N-3

 

any
assignment for the benefit of creditors and (c) no Loan Party or Borrowing
Base Property is operating under or subject to any receiver, trustee or similar
entity for the benefit of creditors.

 

9.             None of the Loan Parties is,
or, after giving effect to any Loan will be, subject to regulation under the
Investment Company Act of 1940 or to any federal or state statute or regulation
limiting its ability to incur indebtedness for borrowed money.

 

10.           Assuming that Borrower
applies the proceeds of the Loans as provided in the Credit Agreement, the
transactions contemplated by the Loan Documents do not violate the provisions
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System of the United States of America.

 

11.           The consideration to be paid
to the Agent and the Lenders for the financial accommodations to be provided to
the Loan Parties pursuant to the Credit Agreement does not violate any law of
the States of North Carolina or
[                ]
relating to interest and usury.

 

12.           The Pledge Agreement creates a valid security interest
in favor of the Agent in all of the Pledged Collateral (as defined in the
Pledge Agreement) in which a security interest may be created under Article 9
of the UCC.

 

13.           [Upon filing the Financing
Statements in the Office of the Secretary of State of the State of
[                  ]
and the payment of all applicable filing fees, the security interest of the
Agent in the Pledged Collateral granted under the Pledge Agreement will be
perfected.] [Upon delivery to the Agent of the certificates representing the “Pledged
Interests” pledged pursuant to the Pledge Agreement (the “Pledged Equity
Interests”), together with stock powers endorsed in blank, the security
interest of the Agent in the Pledged Equity Interests will be perfected.]

 

14.           [The Security Instrument is in a form sufficient to
create a lien on all right and interest of each Loan Party a party to such
Security Instrument in the “Collateral” described therein and is in a form
sufficient to be deemed a “fixture filing” pursuant to the laws of the State of
[                    ].  Such Security Instrument creates in favor of
the Agent, as security for all obligations of each Loan Party a party to such
Security Instrument purported to be secured thereby, a perfected security
interest in such real and personal property and fixtures described therein as
collateral.

 

15.           Upon filing the Financing Statement in the [Recorder’s
Office of the County of
[                  ]
of the State of
[                ]
and the payment of all applicable filing fees, the security interest of the
Agent in the personal property and fixtures described in the [Security
Instrument] granted by the Borrower under such Security Instrument will be
perfected.

 

16.           No transfer, mortgage, intangible, documentary stamp
or similar taxes are payable by the Agent or the Lenders to the State of
[                    ]
or any political subdivision thereof in connection with (a) the execution
and delivery of the Loan Documents, (b) the creation of the Obligations
evidenced by any of the Loan Documents, (c) the perfection of the Lender’s
Lien in 

 

N-4

 

any of the Collateral, or
(d) the recording of the Security Instrument in the real property records
of [                    ]
County,
[                    ].](1)

 

This
opinion is limited to the laws of the States of
[                ]
and North Carolina and the federal laws of the United States of America, and we
express no opinions with respect to the law of any other jurisdiction.

 

[Other
Customary Qualifications/Assumptions/Limitations]

 

This
opinion is furnished to you solely for your benefit in connection with the
consummation of the transactions contemplated by the Credit Agreement and may
not be relied upon by any other Person, other than an Assignee of a Lender, or
for any other purpose without our express, prior written consent.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF LAW FIRM]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  A
  Partner

  

 

(1) Opinions 14, 15 and 16 to be
given by each local counsel with respect to each Security Instrument.

 

N-5

 

SCHEDULE 1

 

Guarantors

 

	
  Name

  	
   

  	
  Jurisdiction of Formation

  	
   

  	
  Jurisdictions of Foreign 

  Qualification

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

N-6

 

EXHIBIT O

 

FORM OF COMPLIANCE CERTIFICATE

 

                              ,
20

 

Wachovia
Bank, National Association, as Agent

c/o Wells Fargo Real Estate Banking Group

200 Public Square - Suite 3200

Cleveland, OH 44114

 

Each of the Lenders Party to the Credit Agreement
referred to below

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), U-Store-It Trust (the “Parent”) the
financial institutions party thereto and their assignees under Section 13.5.
thereof (the “Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”)
and the other parties thereto. 
Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.

 

Pursuant
to Section 9.3.(a) of the Credit Agreement, the undersigned hereby
certifies to the Agent and the Lenders as follows:

 

(1)           The undersigned is the
                                          
of the Parent.

 

(2)           The undersigned has examined
the books and records of the Parent and the Borrower and has conducted such
other examinations and investigations as are reasonably necessary to provide
this Compliance Certificate.

 

(3)           To the best of the
undersigned’s knowledge, information and belief after due inquiry, no Default
or Event of Default exists [if such is not the case,
specify such Default or Event of Default and its nature, when it occurred and
whether it is continuing and the steps being taken by the Parent and/or the
Borrower with respect to such event, condition or failure].

 

(4)           To the best of the
undersigned’s knowledge, information and belief after due inquiry, the
representations and warranties made or deemed made by the Parent, the Borrower
and the other Loan Parties in the Loan Documents to which any is a party, are
true and correct in all material respects on and as of the date hereof except
to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall
have been true and correct in all material respects on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Loan
Documents.

 

O-1

 

(5)           Attached hereto as
Schedule 1 are reasonably detailed calculations establishing whether or
not the Parent and its Subsidiaries were in compliance with the covenants
contained in Sections 10.1., 10.2. and 10.4. of the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned has executed this certificate as of the date
first above written.

 

	
   

  	
  U-STORE-IT,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

O-2

 

 

 

Schedule
1

 

[Calculations to be Attached]

 

O-3

 

EXHIBIT P

 

FORM OF
BORROWING BASE CERTIFICATE

 

Reference
is made to that certain Amended and Restated Credit Agreement dated as of December 7, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
U-Store-It, L.P. (the “Borrower”), U-Store-It Trust (the “Parent”) the
financial institutions party thereto and their assignees under Section 13.5.
thereof (the “Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”)
and the other parties thereto. 
Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.

 

Pursuant to Section 9.3.(b) of the Credit Agreement, the
undersigned hereby certifies to the Agent and the Lenders that:

 

1.             Schedule 1 attached hereto sets forth the
calculations required to establish the Borrowing Base as of
                        ,
20    .

 

2.             The aggregate principal amount of all outstanding Loans,
together with the aggregate amount of all Letter of Credit Liabilities, as of
the date hereof is
$                                  
and such amount does not exceed the Borrowing Base of
$                                  .

 

3.             Schedule 2 attached hereto sets forth a list identifying
each Borrowing Base Property as of the date hereof and the Appraised Value of
each Borrowing Base Property.

 

4.             The undersigned hereby certifies as
of the date hereof that clauses (a) and (b) of the first sentence of Section 6.2.
are true and correct.

 

IN WITNESS WHEREOF, the
undersigned has signed this Borrowing Base Certificate on and as of
                      ,
        .

 

	
   

  	
  U-STORE-IT,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

P-1

 

Schedule
1

 

[Spreadsheet to be
provided]

 

P-2

 

Schedule
2

 

[List of Borrowing
Base Properties and Appraised Values]

 

P-3

 

EXHIBIT Q

 

RENT ROLL CERTIFICATION

 

THIS RENT ROLL CERTIFICATION (this “Certificate”) is
made by [Insert Name of Property Owner], [Insert Type of Entity and State of
Formation] (“Owner”), in connection with that certain Amended and
Restated Credit Agreement dated as of                     ,
2009 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), by and among [Owner,][U-Store-It, L.P. (“Borrower”)], the
financial institutions party thereto and their assignees under Section 13.5 thereof (“Lenders”), Wachovia Bank, National Association, as Agent (“Agent”), and the other
parties thereto.  All capitalized terms used in this
Certificate and not otherwise defined herein shall have the meanings ascribed
to such terms in the Credit Agreement.

 

To induce Agent and Lenders to make, and
to continue to make, available to [Borrower][Owner]
certain financial accommodations on the terms and conditions set forth in the
Credit Agreement, Owner hereby certifies to
Agent and Lenders that Exhibit A is a true, correct and complete
copy of the rent roll for the Property; except that, with respect to any period
any of such Property was not owned by the Borrower or a Subsidiary, the
occupancy history is only certified to the best of Owner’s knowledge.

 

Agent and Lenders may rely on this Certificate in
making, and continuing to make, available to [Owner][Borrower]
the financial accommodations pursuant to the Credit Agreement.

 

[Signature
Appears on Following Page]

 

Q-1

 

Dated as of
                            ,
20

 

	
   

  	
  [OWNER]:

  
	
   

  	
   

  
	
   

  	
  [Insert Name of
  Property Owner], [Insert Type of Entity and State of Formation]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

Q-2

 

EXHIBIT A

 

RENT ROLL

 

Q-3

 

Loan Number:              

 

EXHIBIT
R

 

TRANSFER AUTHORIZER DESIGNATION

(For Disbursement of Loan Proceeds by Funds Transfer)

 

o  NEW  o  REPLACE PREVIOUS DESIGNATION   o  ADD   o   CHANGE    o  DELETE LINE NUMBER

 

The following representatives of U-Store-It, L.P. (“Borrower”) are
authorized to request the disbursement of the proceeds of Loans and initiate
funds transfers for Loan Number
[              ]
assigned to the secured revolving credit and term loan facility evidenced by
the Amended and Restated Credit Agreement dated December 7, 2009, among the Borrower, each of the financial institutions initially a
signatory thereto together with their assignees under Section 13.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as the Agent for the
Lenders (the “Agent”) and the other parties thereto.  The Agent is authorized to rely on this
Transfer Authorizer Designation until it has received a new Transfer Authorizer
Designation signed by Borrower, even in the event that any or all of the
foregoing information may have changed.

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Maximum

  Wire

  Amount(18)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

[Continued on next page]

 

(18) Maximum wire amount may not exceed the aggregate amount of the
Commitments.

 

R-1

 

Loan Number:              

 

Beneficiary Bank and Account Holder Information

 

1.

 

	
  Transfer
  Funds to (Receiving Party Account Name):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Receiving
  Party Account Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Receiving
  Bank Name, City and State:

  	
   

  	
  Receiving
  

  Bank 

  Routing 

  (ABA) 

  Number

  
	
   

  	
   

  	
   

  
	
  Maximum
  Transfer Amount:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Further
  Credit Information/Instructions:

  	
   

  	
   

  

 

2.

 

	
  Transfer
  Funds to (Receiving Party Account Name):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Receiving
  Party Account Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Receiving
  Bank Name, City and State:

  	
   

  	
  Receiving
  

  Bank 

  Routing 

  (ABA) Number

  
	
   

  	
   

  	
   

  
	
  Maximum
  Transfer Amount:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Further
  Credit Information/Instructions:

  	
   

  	
   

  

 

3.

 

	
  Transfer
  Funds to (Receiving Party Account Name):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Receiving
  Party Account Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Receiving
  Bank Name, City and State:

  	
   

  	
  Receiving
  

  Bank 

  Routing 

  (ABA) Number

  
	
   

  	
   

  	
   

  
	
  Maximum
  Transfer Amount:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Further
  Credit Information/Instructions:

  	
   

  	
   

  

 

R-2

 

Loan Number:              

 

	
  Date:
                        ,
  20

  	
   

  
	
   

  	
   

  
	
  “BORROWER”

  	
   

  
	
   

  	
   

  
	
  U-Store-It,
  L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  U-Store-It
  Trust, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

R-3

 

 

 

EXHIBIT S

 

FORM OF
ASSIGNMENT OF MARKETING AND ANCILLARY SERVICES AGREEMENT AND SUBORDINATION OF
MARKETING FEES

 

THIS ASSIGNMENT OF MARKETING AND ANCILLARY SERVICES AGREEMENT AND
SUBORDINATION OF MARKETING FEES (this “Assignment”)
is made as of                         ,
2009, by [Insert Name
of Property Owner], [Insert Type of Entity and State of Formation] (“Grantor”),
having a mailing address of [c/o] U-STORE-IT, L.P., [Insert Notice Address], and U-STORE-IT MINI
WAREHOUSES CO., an
Ohio corporation (“Service Provider”) in favor of WACHOVIA BANK, NATIONAL ASSOCIATION,
in its  capacity as Agent (together with
its successors and assigns, “Agent” or “Beneficiary”) for itself
and for each other Secured Party (as defined in the Credit Agreement (as
defined herein)), Agent having as its address for personal delivery
                                                                  .

 

[Option
#1 — Use if Grantor is Borrower]

 

WHEREAS,
pursuant to that certain Amended and Restated Credit Agreement dated as of                     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among Grantor, the financial
institutions from time to time party thereto as “Lenders”, Agent and the
other parties thereto, Lenders and Agent have agreed to make available to Grantor certain
financial accommodations in an aggregate principal amount not to exceed
$450,000,000 on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS, pursuant to
that certain Marketing and Ancillary Services Agreement dated as of
                    ,
           (as amended,
restated, supplemented or otherwise modified from time to time, the “Marketing
Agreement”), by and between Grantor and Service Provider, Grantor has
employed Service Provider to provide certain services to Grantor’s customers
and to provide certain information to Grantor’s tenants; and

 

WHEREAS, to induce
Lenders and Agent to make, and to continue to make, such financial
accommodations to Grantor under the Credit Agreement, Grantor desires to assign
to Agent, for its individual benefit and the benefit of the other Secured
Parties, all of its right, title and interest in, to and under the Marketing
Agreement on the terms hereof to secure, among other things, Grantor’s
obligations under the Credit Agreement.

 

[End
of Option #1]

 

[Option
#2 — Use if Grantor is a Guarantor]

 

WHEREAS,
pursuant to that certain Amended and Restated Credit Agreement dated as of                     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among U-Store-It, L.P. (“Borrower”), the financial
institutions from time to time party thereto as “Lenders”, Agent and the
other parties thereto,

 

 

Lenders
and Agent have agreed
to make available to Borrower certain financial accommodations in an aggregate
principal amount not to exceed $450,000,000 on the terms and conditions set
forth in the Credit Agreement;

 

WHEREAS, pursuant to the
terms of that certain Guaranty dated as of                     ,
2009 (as amended, restated, supplemented or otherwise
modified from time to time, the “Guaranty”) made by Grantor and each of the other Guarantors in
favor of Agent and the other Secured Parties, Grantor has guaranteed Borrower’s
obligations to Agent and the other Secured Parties on the terms and conditions
contained therein;

 

WHEREAS, pursuant to
that certain Marketing and Ancillary Services Agreement dated as of
                    ,
           (as amended,
restated, supplemented or otherwise modified from time to time, the “Marketing
Agreement”), by and between Grantor and Service Provider, Grantor has
employed Service Provider to provide certain services to Grantor’s customers
and to provide certain information to Grantor’s tenants; and

 

WHEREAS, to induce
Lenders and Agent to make, and to continue to make, such financial
accommodations to Borrower under the Credit Agreement, Grantor desires to
assign to Agent, for its individual benefit and the benefit of the other
Secured Parties, all of its right, title and interest in, to and under the
Marketing Agreements on the terms hereof to secure, among other things, Grantor’s
obligations under the Guaranty.

 

[End
of Option #2]

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Grantor, Grantor agrees as follows:

 

Section 1.                                            Definitions. Terms not otherwise defined herein have
the respective meanings given them in the Credit Agreement.  Terms defined in the Uniform Commercial Code
as in effect in the state in which the Property is located have the respective
meanings given such terms therein.  In
addition, as used in this Assignment, the following terms shall have the
following meanings:

 

“Assignment of Leases
and Rents” has the meaning given such term in the Security Instrument.

 

“Collateral” has
the meaning given such term in the Security Instrument.

 

“Event of Default”
means the occurrence of an “Event of Default” as defined in the Credit
Agreement, or as defined in the Security Instrument, or a default by Grantor in
the performance of any of the terms, covenants and conditions of this
Assignment.

 

[“Guaranty” has
the meaning given such term in the Recitals above.]

 

“Marketing
Agreement” has
the meaning given such term in the Recitals above.

 

D - 2

 

“Marketing
Fees” means any and all fees payable by Grantor to Service Provider pursuant to the terms of the Marketing
Agreement.

 

“Obligations” has
the meaning given that term in the Security Instrument.

 

“Property” means
the real estate or interest therein described in Exhibit A attached
hereto and incorporated herein by this reference, and all rights, titles and
interests appurtenant thereto.

 

“Security Instrument”
means that certain [Mortgage][Deed of
Trust][Deed to Secure Debt], Security Agreement, Assignment of
Leases and Rents and Fixture Filing of even date herewith from [Grantor] as grantor thereunder to Agent as beneficiary
thereunder, covering the Property and other related collateral more
particularly described therein, and given as security for the repayment of the
Obligations.

 

“Service Provider”
has the meaning given such term in the Recitals above.

 

Section 2.                                            Assignment of
Marketing Agreement. As security for the payment and performance of the Obligations, Grantor
hereby assigns to Agent, for its individual benefit and the benefit of the
other Secured Parties, and grants to Agent, for its individual benefit and the
benefit of other Secured Parties, a security interest in all of Grantor’s
right, title and interest in, to and under the Marketing Agreement to (a) all
rights of Grantor to damages arising out of, or for, breach or default in
respect thereof and (b) all rights of Grantor to perform and exercise all
rights and remedies thereunder.  Said
transfer will automatically become a present, unconditional assignment,
exercised by written notice from Agent to Grantor and Service Provider, during
the existence of an Event of Default.

 

Section 3.                                            Subordination
of Marketing Agreement and Marketing Fees. Grantor and Agent hereby
agree that at all times prior to the termination of this Assignment, the
Marketing Agreement shall be subordinate, inferior and subject to this
Assignment, the Security Instrument and the other Loan Documents.  The Marketing Fees and all rights and
privileges of Service Provider to the Marketing Fees are hereby and shall at
all times continue to be subject and unconditionally subordinate in all
respects to the Lien and payment of the Security Instrument, the Obligations
and the Loan Documents and to any renewals, extensions, modifications,
assignments, replacements, or consolidations thereof and the rights,
privileges, and powers of Agent and the other Secured Parties thereunder.

 

Section 4.                                            Termination. At such time
as the Credit Agreement has terminated in accordance with its terms and the
Security Instrument is fully released or assigned of record, this Assignment
shall terminate.

 

Section 5.                                            Estoppel. Servicer
Provider represents and warrants that (a) the Marketing Agreement is in
full force and effect and has not been modified, amended or assigned with
respect to the Property, (b) neither Service Provider nor Grantor is in
default under any of the terms, covenants or provisions of the Marketing
Agreement with respect to the Property and Service Provider knows of no event
which constitutes, or with the passage of time or the giving of notice or both
would constitute, an event of default under the Marketing Agreement with

 

D - 3

 

respect
to the Property, (c) neither Service Provider nor Grantor has commenced
any action or given or received any notice for the purpose of terminating the
Marketing Agreement with respect to the Property, (d) the Marketing Fees
have been paid in full with respect to the Property and (e) a true,
correct and complete copy of the Marketing Agreement is attached hereto as Exhibit A.

 

Section 6.                                            Grantor’s
Covenants. Grantor hereby covenants with Agent that during
the term of this Assignment: (a) Grantor shall not terminate or amend any of
the material terms or provisions of the Marketing Agreement without the prior
written consent of Agent, which consent shall not be unreasonably be withheld;
and (b) Grantor shall, in the manner provided for in this Assignment, give
notice to Agent of any notice or information that Grantor receives which
indicates that Service Provider is terminating the Marketing Agreement or that
Service Provider is otherwise discontinuing its services at the Property.  Grantor may terminate the Marketing Agreement
pursuant to the terms contained therein provided that (i) Grantor enters
into a replacement marketing agreement and ancillary services agreement with a
service provider acceptable to Agent, in Agent’s reasonable discretion; and (ii) such
replacement service provider executes an assignment and subordination agreement
in the form of this Assignment or other form reasonably acceptable to Agent.

 

Section 7.                                            Intentionally
Omitted.

 

Section 8.                                            Agreement by
Grantor and Service Provider. Grantor and Service
Provider hereby agree that while an Event of Default exists, at the option of
Agent exercised by written notice to Grantor and Service Provider: (a) all
proceeds and profits of the Property collected by Service Provider, after
payment of all costs and expenses of providing Service Provider’s services at
the Property (including, without limitation, operating expenses, real estate
taxes, insurance premiums and repairs and maintenance), shall be applied in
accordance with Agent’s written directions to Service Provider; (b) Service
Provider shall not collect or be entitled to any Marketing Fee; and/or (c) Agent
may exercise its rights under this Assignment and may immediately terminate the
Marketing Agreement and require Service Provider to transfer its responsibility
for providing its services at the Property to a marketing company selected by
Agent in Agent’s sole and absolute discretion.

 

Section 9.                                            Consent and
Agreement by Service Provider. Service Provider hereby
acknowledges and consents to this Assignment and agrees that Service Provider
will act in conformity with the provisions of this Assignment and the rights of
Agent and the other Secured Parties hereunder or otherwise related to the
Marketing Agreement. If the responsibility for providing services at the
Property is transferred from Service Provider in accordance with the provisions
hereof, Service Provider shall, and hereby agrees to, fully cooperate in
transferring its responsibility to a new marketing company and effectuate such
transfer no later than 30 days from the date the Marketing Agreement is
terminated. Further, Service Provider hereby agrees (a) not to contest or
impede the exercise by Agent and the other Secured Parties of any right they
have under or in connection with this Assignment and (b) that Service
Provider shall give at least 30-days prior written notice to Agent of its
intention to terminate the Marketing Agreement or otherwise discontinue
providing its services at the Property.

 

D - 4

 

Section 10.                                      Agent’s
Agreement. So long as no Event of Default exists, any sums
due to Grantor under the Marketing Agreement may be paid directly to Grantor.

 

Section 11.                                      Agent and Secured Parties Not Obligated. 
Notwithstanding any other provision of this Assignment to the contrary,
Grantor and Service Provider expressly acknowledge and agree that Grantor and
Service Provider shall continue to observe and perform all of the conditions
and obligations contained in the Marketing Agreement to be observed and
performed by them, and that neither this Assignment, nor any action taken
pursuant hereto, shall cause Agent or the other Secured Parties to be under any
obligation or liability in any respect whatsoever to any party to any Marketing
Agreement or to any other Person for the observance or performance of any of
the representations, warranties, conditions, covenants, agreements or terms
therein contained.

 

Section 12.                                      Agent Appointed Attorney-in-Fact. 
Grantor hereby irrevocably appoints Agent as Grantor’s attorney-in-fact,
with full authority in the place and stead of Grantor and in the name of
Grantor or otherwise, from time to time in Agent’s discretion, to take any
action and to execute any instrument or document which Agent may deem necessary
or advisable to accomplish the purposes of this Assignment and to exercise any
rights and remedies Agent may have under this Assignment or Applicable
Law.  The power-of-attorney granted hereby
is irrevocable and coupled with an interest.

 

SECTION 13.                          APPLICABLE LAW. THIS ASSIGNMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PROPERTY
IS LOCATED IN APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN
SUCH STATE.

 

Section 13.                                      Notice to Parties. Unless otherwise provided herein,
communications provided for hereunder shall be in given and shall become
effective as provided in the Credit Agreement:

 

If to Grantor:

[IF
GRANTOR IS BORROWER:]

 

U-Store-It, L.P.

c/o U-Store-It Trust

460 Swedesford Road, Suite 3000

Wayne, Pennsylvania 
19087

Attn:  Chief Financial
Officer

Telephone:  (610)
293-5700

Telecopy: (610) 293-5720

 

with a copy to:

 

U-Store-It, L.P.

c/o U-Store-It Trust

460 Swedesford Road, Suite 3000

 

D - 5

 

Wayne, Pennsylvania 
19087

Attn: Senior Vice President
– Chief Legal Officer

Telephone: (610) 293-5765

Telecopy:  (610)
293-5720

 

[IF
GRANTOR IS OWNER:]

 

[Insert Name of Owner]

 

 

Attn:

Telephone:        (      )

Telecopy:          (      )

 

 

If to the Agent:

 

Wachovia
Bank, National Association

c/o
Wells Fargo Real Estate Banking Group

200
Public Square - Suite 3200

Cleveland,
OH 44114

Attn:  Greg Ward

Telephone:
(216) 344-6945

Telecopy:
(216) 344-6939

 

with
a copy to:

 

Wachovia
Bank, National Association

c/o
Wells Fargo Real Estate Banking Group

123
North Wacker - Suite 1900

Chicago,
IL 60606

Attn:
Pamela Probst

Loan Administration Manager

P
(312) 345-7664

F
(312) 782-0969

 

If to the Service
Provider:

 

[Insert Name of Service Provider]

 

 

Attn:

Telephone:          (      )

Telecopy:            (      )

 

D - 6

 

or, as to each party at
such other address as shall be designated by such party in a written notice to
the other parties delivered in compliance with this Section.  All such notices and other communications
shall be effective (i) if mailed, when received; (ii) if telecopied,
when transmitted; or (iii) if hand delivered, when delivered.  Any party by notice to the
others may designate additional or different addresses for subsequent notices
or communications.

 

Section 14.                                      Amendment. This
Assignment, and any provisions hereof, may only be amended, supplemented,
waived, or otherwise modified by an agreement in writing signed by the party
against whom enforcement thereof is sought.

 

Section 15.                                      Successors and Assigns. 
Subject to Section 13.5 of the Credit Agreement, all of the
terms of this Assignment shall apply to, be binding upon and inure to the
benefit of the parties thereto, their successors, assigns, heirs and legal
representatives, and all other Persons claiming by, through or under them.

 

Section 16.                                      Severability. 
This Assignment is intended to be performed in accordance with, and only
to the extent permitted by, all applicable legal requirements.  If any provision of any of this Assignment or
the application thereof to any person or circumstance shall, for any reason and
to any extent, be invalid or unenforceable, then neither the remainder of the
instrument in which such provision is contained nor the application of such
provision to other persons or circumstances nor the other instruments referred
to hereinabove shall be affected thereby, but rather, shall be enforced to the
greatest extent permitted by Applicable Law.

 

Section 17.                                      Headings.  The Section and
Subsection entitlements hereof are inserted for convenience of reference only
and shall in no way alter, modify or define, or be used in construing, the text
of such Section or Subsection.

 

Section 18.                                      Counterparts. 
This Assignment may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute but one
instrument.  The failure of any party
hereto to execute this Assignment, or any counterpart hereof, shall not relieve
the other signatories from their obligations hereunder.

 

Section 19.                                      Number and
Gender. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.

 

[Signatures on Next Page]

 

D - 7

 

IN
WITNESS WHEREOF the undersigned have executed this Assignment of Marketing and Ancillary Services Agreement and Subordination
of Marketing Fees as of the date and year first written above.

 

	
   

  	
   

  	
  GRANTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [INSERT NAME OF
  PROPERTY OWNER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SERVICE
  PROVIDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [INSERT NAME OF SERVICE
  PROVIDER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

D - 8

 

EXHIBIT A

 

MARKETING AGREEMENT

 

D - 9

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