Document:

<PAGE>
                                                                   EXHIBIT 10.15

                             FORM OF LOAN AGREEMENT

                         Dated as of October ____, 2004

                                     Between

                     [YSI I LLC] [YSI II LLC] [YSI III LLC],
                                   as Borrower

                                       and

                  [LEHMAN BROTHERS BANK, FSB] [FOR METRO POOL]
       [LEHMAN BROTHERS HOLDINGS INC. D/B/A LEHMAN CAPITAL, A DIVISION OF
              LEHMAN BROTHERS HOLDINGS INC.] [FOR OTHER TWO POOLS],
                                    as Lender

================================================================================
<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
I.   DEFINITIONS; PRINCIPLES OF CONSTRUCTION......................................................................1
     Section 1.1         Definitions..............................................................................1
     Section 1.2         Principles of Construction..............................................................20

II.  GENERAL TERMS...............................................................................................20
     Section 2.1         Loan Commitment; Disbursement to Borrower...............................................20
               2.1.1     The Loan................................................................................20
               2.1.2     Disbursement to Borrower................................................................20
               2.1.3     The Note, Security Instruments and Loan Documents.......................................20
               2.1.4     Use of Proceeds.........................................................................20
     Section 2.2         Interest; Loan Payments; Late Payment Charge............................................20
               2.2.1     Interest Generally......................................................................20
               2.2.2     Interest Calculation....................................................................21
               2.2.3     Payments................................................................................21
               2.2.4     Intentionally Deleted...................................................................21
               2.2.5     Payment on Maturity Date................................................................21
               2.2.6     Payments after Default..................................................................21
               2.2.7.    Late Payment Charge.....................................................................21
               2.2.8     Usury Savings...........................................................................22
               2.2.9     Making of Payments......................................................................22
               2.2.10    Indemnified Taxes.......................................................................22
     Section 2.3         Prepayments.............................................................................23
               2.3.1     Voluntary Prepayments...................................................................23
               2.3.2     Mandatory Prepayments...................................................................23
               2.3.3     Prepayments After Default...............................................................24
     Section 2.4         Defeasance..............................................................................24
               2.4.1     Voluntary Defeasance....................................................................24
               2.4.2     Successor Borrower......................................................................26
     Section 2.5         Release of Property.....................................................................26
               2.5.1     Release of all Properties...............................................................26
               2.5.2     Release of Individual Property..........................................................27
               2.5.3     Release on Payment in Full..............................................................28
     Section 2.6         Manner of Making Payments; Cash Management..............................................28
               2.6.1     Deposits into Lockbox Account...........................................................28
               2.6.2     Payments Received in the Lockbox Account................................................28
               2.6.3     No Deductions, etc......................................................................29
     Section 2.7         Substitute Property.....................................................................29

III. CONDITIONS PRECEDENT........................................................................................36
     Section 3.1         Conditions Precedent to Closing.........................................................36
</Table>

                                       i
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<Table>
<S>                                                                                                             <C>
               3.1.1     Representations and Warranties; Compliance with Conditions..............................36
               3.1.2     Loan Agreement and Note.................................................................36
               3.1.3     Delivery of Loan Documents; Title Insurance; Reports; Leases............................36
               3.1.4     Related Documents.......................................................................37
               3.1.5     Delivery of Organizational Documents....................................................38
               3.1.6     Opinions of Borrower's Counsel..........................................................38
               3.1.7     Budgets.................................................................................38
               3.1.8     Basic Carrying Costs....................................................................38
               3.1.9     Completion of Proceedings...............................................................38
               3.1.10    Payments................................................................................38
               3.1.11    Tenant Estoppels........................................................................38
               3.1.12    Transaction Costs.......................................................................38
               3.1.13    Material Adverse Effect.................................................................38
               3.1.14    Leases and Rent Roll....................................................................39
               3.1.15    Tax Lot.................................................................................39
               3.1.16    Physical Conditions Reports.............................................................39
               3.1.17    Management Agreement....................................................................39
               3.1.18    Appraisal...............................................................................39
               3.1.19    Financial Statements....................................................................39
               3.1.20    Further Documents.......................................................................39

IV.  REPRESENTATIONS AND WARRANTIES..............................................................................39
     Section 4.1         Borrower Representations................................................................39
               4.1.1     Organization............................................................................39
               4.1.2     Proceedings.............................................................................40
               4.1.3     No Conflicts............................................................................40
               4.1.4     Litigation..............................................................................40
               4.1.5     Agreements..............................................................................40
               4.1.6     Title...................................................................................41
               4.1.7     Solvency / No Bankruptcy Filing.........................................................41
               4.1.8     Full and Accurate Disclosure............................................................41
               4.1.9     No Plan Assets..........................................................................42
               4.1.10    Compliance..............................................................................42
               4.1.11    Financial Information...................................................................42
               4.1.12    Condemnation............................................................................42
               4.1.13    Federal Reserve Regulations.............................................................42
               4.1.14    Utilities and Public Access.............................................................43
               4.1.15    Not a Foreign Person....................................................................43
               4.1.16    Separate Lots...........................................................................43
               4.1.17    Assessments.............................................................................43
               4.1.18    Enforceability..........................................................................43
               4.1.19    No Prior Assignment.....................................................................43
               4.1.20    Insurance...............................................................................43
               4.1.21    Use of Property.........................................................................43
               4.1.22    Certificate of Occupancy; Licenses......................................................43
               4.1.23    Flood Zone..............................................................................44
</Table>

                                       ii
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<Table>
<S>                                                                                                             <C>
               4.1.24    Physical Condition......................................................................44
               4.1.25    Boundaries..............................................................................44
               4.1.26    Leases..................................................................................44
               4.1.27    Survey..................................................................................45
               4.1.28    Loan to Value...........................................................................45
               4.1.29    Filing and Recording Taxes..............................................................45
               4.1.30    Single Purpose Entity/Separateness......................................................45
               4.1.31    Management Agreement....................................................................49
               4.1.32    Illegal Activity........................................................................49
               4.1.33    No Change in Facts or Circumstances; Disclosure.........................................49
               4.1.34    Intellectual Property...................................................................49
               4.1.35    Investment Company Act..................................................................49
               4.1.36    Principal Place of Business; State of Organization......................................50
               4.1.37    Business Purposes.......................................................................50
               4.1.38    Taxes...................................................................................50
               4.1.39    Forfeiture..............................................................................50
               4.1.40    Environmental Representations and Warranties............................................50
               4.1.41    Taxpayer Identification Number..........................................................51
               4.1.42    OFAC....................................................................................51
               4.1.43    Ground Lease Representations............................................................51
               4.1.44    Embargoed Person........................................................................52
     Section 4.2         Survival of Representations.............................................................53

V.   BORROWER COVENANTS..........................................................................................53
     Section 5.1         Affirmative Covenants...................................................................53
               5.1.1     Existence; Compliance with Legal Requirements; Insurance................................53
               5.1.2     Taxes and Other Charges.................................................................54
               5.1.3     Litigation..............................................................................55
               5.1.4     Access to Properties....................................................................55
               5.1.5     Notice of Default.......................................................................55
               5.1.6     Cooperate in Legal Proceedings..........................................................55
               5.1.7     Perform Loan Documents..................................................................55
               5.1.8     Awards or Insurance Benefits............................................................55
               5.1.9     Further Assurances......................................................................55
               5.1.10    Supplemental Security Instrument Affidavits.............................................56
               5.1.11    Financial Reporting.....................................................................56
               5.1.12    Business and Operations.................................................................58
               5.1.13    Title to the Properties.................................................................58
               5.1.14    Costs of Enforcement....................................................................58
               5.1.15    Estoppel Statement......................................................................58
               5.1.16    Loan Proceeds...........................................................................59
               5.1.17    Performance by Borrower.................................................................59
               5.1.18    Confirmation of Representations.........................................................59
               5.1.19    No Joint Assessment.....................................................................59
               5.1.20    Leasing Matters.........................................................................59
               5.1.21    Alterations.............................................................................60
</Table>

                                      iii

<PAGE>

<Table>
<S>                                                                                                             <C>
               5.1.22    Environmental Covenants.................................................................61
               5.1.23    OFAC....................................................................................62
               5.1.24    O&M Program.............................................................................62
               5.1.25    The Ground Leases.......................................................................62
     Section 5.2         Negative Covenants......................................................................64
               5.2.1     Operation of Property...................................................................64
               5.2.2     Liens...................................................................................64
               5.2.3     Dissolution.............................................................................64
               5.2.4     Change In Business......................................................................65
               5.2.5     Debt Cancellation.......................................................................65
               5.2.6     Affiliate Transactions..................................................................65
               5.2.7     Zoning..................................................................................65
               5.2.8     Assets..................................................................................65
               5.2.9     Debt....................................................................................65
               5.2.10    No Joint Assessment.....................................................................65
               5.2.11    Principal Place of Business.............................................................65
               5.2.12    ERISA...................................................................................65
               5.2.13    Transfers...............................................................................66
     Section 5.3         Traded Shares...........................................................................69

VI.  INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS.........................................................69
     Section 6.1         Insurance...............................................................................69
     Section 6.2         Casualty................................................................................73
     Section 6.3         Condemnation............................................................................73
     Section 6.4         Restoration.............................................................................73

VII. RESERVE FUNDS...............................................................................................78
     Section 7.1         Required Repair Funds...................................................................78
               7.1.1     Deposits................................................................................78
               7.1.2     Release of Required Repair Funds........................................................78
     Section 7.2         Tax and Insurance Escrow Fund...........................................................79
     Section 7.3         Replacements and Replacement Reserve....................................................80
               7.3.1     Replacement Reserve Fund................................................................80
               7.3.2     Disbursements from Replacement Reserve Account..........................................80
               7.3.3     Performance of Replacements.............................................................82
               7.3.4     Failure to Make Replacements............................................................84
               7.3.5     Balance in the Replacement Reserve Account..............................................84
     Section 7.4         Ground Lease Escrow Fund................................................................85
     Section 7.5         Leasing Reserve Fund....................................................................85
               7.5.1     Deposits to Leasing Reserve Fund........................................................85
               7.5.2     Withdrawals of Leasing Reserve Funds....................................................85
     Section 7.6         Reserve Funds, Generally................................................................85

VIII.    DEFAULTS................................................................................................86
     Section 8.1         Event of Default........................................................................86
     Section 8.2         Remedies................................................................................90
</Table>

                                        iv
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<Table>
<S>                                                                                                             <C>
     Section 8.3         Remedies Cumulative; Waivers............................................................91

IX.  SPECIAL PROVISIONS..........................................................................................91
     Section 9.1         Sale of Notes and Securitization........................................................91
     Section 9.2         Securitization Indemnification..........................................................93
     Section 9.3         Intentionally Deleted...................................................................95
     Section 9.4         Exculpation.............................................................................95
     Section 9.5         Management Agreement....................................................................97
     Section 9.6         Servicer................................................................................98
     Section 9.7         Restructuring of Mortgage and/or Mezzanine Loan.........................................99

X.   MISCELLANEOUS..............................................................................................101
     Section 10.1        Survival...............................................................................101
     Section 10.2        Lender's Discretion....................................................................101
     Section 10.3        Governing Law..........................................................................101
     Section 10.4        Modification, Waiver in Writing........................................................102
     Section 10.5        Delay Not a Waiver.....................................................................103
     Section 10.6        Notices................................................................................103
     Section 10.7        Trial by Jury..........................................................................104
     Section 10.8        Headings...............................................................................104
     Section 10.9        Severability...........................................................................105
     Section 10.10       Preferences............................................................................105
     Section 10.11       Waiver of Notice.......................................................................105
     Section 10.12       Remedies of Borrower...................................................................105
     Section 10.13       Expenses; Indemnity....................................................................105
     Section 10.14       Schedules Incorporated.................................................................107
     Section 10.15       Offsets, Counterclaims and Defenses....................................................107
     Section 10.16       No Joint Venture or Partnership; No Third Party Beneficiaries..........................107
     Section 10.17       Publicity..............................................................................108
     Section 10.18       Cross-Default; Cross-Collateralization; Waiver of Marshalling of Assets................108
     Section 10.19       Waiver of Counterclaim.................................................................109
     Section 10.20       Conflict; Construction of Documents; Reliance..........................................109
     Section 10.21       Brokers and Financial Advisors.........................................................109
     Section 10.22       Prior Agreements.......................................................................109
</Table>

                                       v
<PAGE>

                                    SCHEDULES

<Table>
<S>               <C>      <C>
Schedule I        -        Properties - Allocated Loan Amounts
Schedule II       -        Ground Leases
Schedule III      -        O&M Program Properties
Schedule 4.1.1    -        Organizational Chart
Schedule 4.1.4    -        Litigation
Schedule 4.1.5    -        Material Agreements
Schedule 4.1.26   -        Major Leases
Schedule 4.1.30   -        Non-Consolidation Opinion
Schedule 4.1.31   -        Properties Not Operated as a U-Store-It Facility
Schedule 7.1.1    -        Required Repairs
Schedule 7.3.2    -        Replacement Reserves
</Table>

                                       vi
<PAGE>

                                 LOAN AGREEMENT

                  THIS LOAN AGREEMENT, dated as of October ____, 2004 (as
amended, restated, replaced, supplemented or otherwise modified from time to
time, this "AGREEMENT"), between [LEHMAN BROTHERS BANK, FSB, A FEDERAL STOCK
SAVINGS BANK, HAVING AN ADDRESS AT 1000 WEST STREET, SUITE 200, WILMINGTON,
DELAWARE 19801] [FOR METRO POOL] [LEHMAN BROTHERS HOLDINGS INC. D/B/A LEHMAN
CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., A DELAWARE CORPORATION,
HAVING AN ADDRESS AT 399 PARK AVENUE, NEW YORK, NEW YORK 10022] [FOR OTHER TWO
POOLS] ("LENDER") and [YSI I LLC] [YSI II LLC] [YSI III LLC], a Delaware limited
liability company, having an address at 6745 Engle Road, Suite 300, Middleburg
Heights, Ohio 44130 ("BORROWER").

                                   WITNESSETH:

                  WHEREAS, Borrower desires to obtain the Loan (as hereinafter
defined) from Lender; and

                  WHEREAS, Lender is willing to make the Loan to Borrower,
subject to and in accordance with the terms of this Agreement and the other Loan
Documents (as hereinafter defined).

                  NOW, THEREFORE, in consideration of the making of the Loan by
Lender and the covenants, agreements, representations and warranties set forth
in this Agreement, the parties hereto hereby covenant, agree, represent and
warrant as follows:

         I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION

         SECTION 1.1 DEFINITIONS.

                  For all purposes of this Agreement, except as otherwise
expressly required or unless the context clearly indicates a contrary intent:

                  "ACCEPTABLE ACCOUNTANT" shall mean a "Big Four" accounting
firm or other independent certified public accountant acceptable to Lender.

                  "ACCOUNTS" shall have the meaning set forth in the Cash
Management Agreement.

                  "AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person or of
an Affiliate of such Person.

                  "AGENT" shall have the meaning set forth in the Cash
Management Agreement.

                  "ALLOCATED LOAN AMOUNT" shall mean, for an Individual
Property, the amount set forth on Schedule I attached hereto.

<PAGE>

                  "ALTA" shall mean American Land Title Association or any
successor thereto.

                  "ANNUAL BUDGET" shall mean the operating budget, including all
planned capital expenditures, for the Properties prepared by Borrower for the
applicable Fiscal Year or other period.

                  "APPLICABLE INTEREST RATE" shall mean [POOL 1: 5.190% PER
ANNUM] [POOL 2: 5.325% PER ANNUM] [POOL 3: 5.085% PER ANNUM].

                  "APPROVED APPRAISAL" shall mean, with respect to an Individual
Property, an appraisal of such Individual Property (i) executed and delivered to
Lender by a qualified MAI appraiser having no direct or indirect interest in
such Individual Property or any loan secured in whole or in part thereby and
whose compensation is not affected by the approval or disapproval of such
appraisal by Lender; (ii) addressed to Lender and its successors and assigns;
(iii) satisfying the requirements of the Federal National Mortgage Association
or the Federal Home Loan Mortgage Corporation and Title XI of the Federal
Institutions Reform, Recovery and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date of such calculation, with
respect to such appraisal and the appraiser making such appraisal and (iv)
otherwise satisfactory to Lender in all respects in Lender's sole discretion.

                  "ASSIGNMENT OF LEASES" shall mean, with respect to each
Individual Property, that certain first priority Assignment of Leases and Rents,
dated as of the date hereof, from Borrower, as assignor, to Lender, as assignee,
assigning to Lender all of Borrower's interest in and to the Leases and Rents of
such Individual Property as security for the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

                  "ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean that certain
Assignment of Management Agreement and Subordination of Management Fees dated as
of the date hereof among Lender, Borrower and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

                  "AWARD" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of any
Individual Property.

                  "BANKRUPTCY CODE" shall mean Title 11 U.S.C. Section 101 et
seq., and the regulations adopted and promulgated pursuant thereto (as the same
may be amended from time to time).

                  "BASIC CARRYING COSTS" shall mean, with respect to each
Individual Property, the sum of the following costs associated with such
Individual Property for the relevant Fiscal Year or payment period: (i) Taxes,
(ii) Insurance Premiums, and (iii) if applicable, Ground Rent.

                  "BORROWER" shall mean [YSI I LLC] [YSI II LLC] [YSI III LLC],
a Delaware limited liability company, together with its successors and permitted
assigns.

                  "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any other day on which national banks in New York, New York are not
open for business.

                                       2
<PAGE>

                  "CAPITAL EXPENDITURES" shall mean, for any period, the amount
expended for items capitalized under GAAP (including expenditures for building
improvements or major repairs, leasing commissions and tenant improvements).

                  "CASH MANAGEMENT AGREEMENT" shall mean that certain Cash
Management Agreement by and among Borrower, Manager, Agent and Lender dated the
date hereof, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

                  "CASUALTY" shall have the meaning specified in Section 6.2
hereof.

                  "CASUALTY CONSULTANT" shall have the meaning set forth in
Section 6.4(b)(iii) hereof.

                  "CASUALTY RETAINAGE" shall have the meaning set forth in
Section 6.4(b)(iv) hereof.

                  "CLOSING DATE" shall mean the date of the funding of the Loan.

                  "CODE" shall mean the Internal Revenue Code of 1986, as
amended, as it may be further amended from time to time, and any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.

                  "CONDEMNATION" shall mean a temporary or permanent taking by
any Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of
any Individual Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting such
Individual Property or any part thereof.

                  "CONDEMNATION PROCEEDS" shall have the meaning set forth in
Section 6.4(b).

                  "CREDITORS RIGHTS LAWS" shall mean with respect to any Person,
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to its debts or debtors.

                  "DEBT" shall mean the outstanding principal amount set forth
in, and evidenced by, this Agreement and the Note together with all interest
accrued and unpaid thereon and all other sums (including the Yield Maintenance
Premium) due to Lender in respect of the Loan under the Note, this Agreement,
the Security Instruments or any other Loan Document.

                  "DEBT SERVICE" shall mean, with respect to any particular
period of time, all principal and/or interest payments under the Note.

                  "DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the
applicable period in which:

                                       3
<PAGE>

                  (a)      the numerator is the Net Operating Income (excluding
                           interest on credit accounts) for such period as set
                           forth in the statements required hereunder, without
                           deduction for (i) actual management fees incurred in
                           connection with the operation of the Properties, or
                           (ii) amounts paid to the Reserve Funds, less (A)
                           management fees equal to the greater of (1) assumed
                           management fees of three percent (3%) of Gross Income
                           from Operations or (2) the actual management fees
                           incurred, and (B) actual Replacement Reserve Fund
                           contributions equal to an annual amount of $0.15 per
                           square foot of gross leaseable area at the
                           Properties; and

                  (b)      the denominator is the aggregate amount of principal
                           and interest due and payable on the Note or, in the
                           event a Defeasance Event has occurred, the Undefeased
                           Note, for such period.

                  "DEFAULT" shall mean the occurrence of any event hereunder or
under any other Loan Document which, but for the giving of notice or passage of
time, or both, would be an Event of Default.

                  "DEFAULT RATE" shall mean, with respect to the Loan, a rate
per annum equal to the lesser of (a) the Maximum Legal Rate or (b) three percent
(3%) above the Applicable Interest Rate.

                  "DEFEASANCE DATE" shall have the meaning set forth in Section
2.4.1(a)(i) hereof.

                  "DEFEASANCE DEPOSIT" shall mean an amount equal to the
remaining principal amount of the Note or the Defeased Note, as applicable, the
Yield Maintenance Premium, any costs and expenses incurred or to be incurred in
the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance
Payments and any revenue, documentary stamp or intangible taxes or any other tax
or charge due in connection with the transfer of the Note or the Defeased Note,
as applicable, the creation of the Defeased Note and the Undefeased Note, if
applicable, or otherwise required to accomplish the agreements of Sections 2.3
and 2.4 hereof.

                  "DEFEASANCE EVENT" shall have the meaning set forth in Section
2.4.1(a) hereof.

                  "DEFEASED NOTE" shall have the meaning set forth in Section
2.4.1(a)(v) hereof.

                  "DISCLOSURE DOCUMENT" shall have the meaning set forth in
Section 9.2(a) hereof.

                  "EAST HANOVER PROPERTY" shall mean the Individual Property
located at 307 E. Hanover Avenue, Morris Township, New Jersey. [POOL 2 ONLY]

                  "ELIGIBLE ACCOUNT" shall mean a separate and identifiable
account from all other funds held by the holding institution that is either (a)
an account or accounts maintained with a Federal or State-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (b) a segregated trust account or accounts maintained with a
Federal or State-chartered depository institution or trust company acting in its
fiduciary capacity which, in the case of a State-chartered depository
institution or trust company, is subject to regulations substantially similar to
12 C.F.R. Section 9.10(b), having in either case a combined capital

                                       4
<PAGE>

and surplus of at least $50,000,000 and subject to supervision or examination by
Federal and State authority. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.

                  "ELIGIBLE INSTITUTION" shall mean a depository institution or
trust company insured by the Federal Deposit Insurance Corporation, the short
term unsecured debt obligations or commercial paper of which are rated at least
A-1 by S&P, P-1 by Moody's and F-1+ by Fitch in the case of accounts in which
funds are held for 30 days or less (or, in the case of accounts in which funds
are held for more than 30 days, the long term unsecured debt obligations of
which are rated at least "AA" by Fitch and S&P and "Aa2" by Moody's).

                  "EMBARGOED PERSON" shall have the meaning set forth in Section
4.1.44 hereof.

                  "ENVIRONMENTAL INDEMNITY" shall mean that certain
Environmental and Hazardous Substance Indemnification Agreement executed by
Borrower in connection with the Loan for the benefit of Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.

                  "ENVIRONMENTAL LAWS" shall have the meaning set forth in the
Environmental Indemnity.

                  "ENVIRONMENTAL LIENS" shall have the meaning set forth in
Section 5.1.22 hereof.

                  "ENVIRONMENTAL REPORT" shall have the meaning set forth in
Section 4.1.40 hereof.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                  "EVENT OF DEFAULT" shall have the meaning set forth in Section
8.1(a) hereof.

                  "EXCHANGE ACT" shall have the meaning set forth in Section
9.2(a) hereof.

                  "FEE ESTATE" shall mean, with respect to any Ground Lease, the
fee interest of the lessor under such Ground Lease in the Land and the
Improvements demised under such Ground Lease.

                  "FEE OWNER" shall mean, with respect to any Ground Lease, the
owner of the lessor's interest in such Ground Lease and the related Fee Estate.

                  "FISCAL YEAR" shall mean each twelve (12) month period
commencing on January 1 and ending on December 31 during each year of the term
of the Loan.

                  "FITCH" shall mean Fitch IBCA, Inc.

                  "GAAP" shall mean generally accepted accounting principles in
the United States of America as of the date of the applicable financial report
consistently applied.

                                       5
<PAGE>

                  "GOVERNMENTAL AUTHORITY" shall mean any court, board, agency,
commission, office or other authority of any nature whatsoever for any
governmental unit (Federal, State, county, district, municipal, city or
otherwise) whether now or hereafter in existence.

                  "GROSS INCOME FROM OPERATIONS" shall mean all income, computed
in accordance with GAAP, derived from the ownership and operation of the
Properties from whatever source, including, but not limited to, Rents, utility
charges, escalations, forfeited security deposits, interest on credit accounts,
service fees or charges, license fees, parking fees, rent concessions or
credits, and other required pass-throughs but excluding sales, use and occupancy
or other taxes on receipts required to be accounted for by Borrower to any
Governmental Authority, refunds and uncollectible accounts, sales of furniture,
fixtures and equipment, Insurance Proceeds (other than business interruption or
other loss of income insurance), Awards, unforfeited security deposits, utility
and other similar deposits and any disbursements to Borrower from the Reserve
Funds, all as approved by Lender. Gross income shall not be diminished as a
result of the Security Instrument or the creation of any intervening estate or
interest in the Properties or any part thereof.

                  "GROUND LEASE" shall mean, individually and collectively, as
the context may require, each ground lease described on Schedule II attached
hereto and made a part hereof as such Schedule may be amended from time to time
upon the release and/or substitution of an Individual Property.

                  "GROUND LEASE ESCROW FUND" shall have the meaning set forth in
Section 7.4 hereof.

                  "GROUND LEASE ESTOPPEL" shall mean that certain estoppel
certificate and agreement given by Fee Owner for the benefit of Lender and
containing certain statements and agreements relating to the Ground Lease.

                  "GROUND RENT" shall mean the amount of monthly rent and other
charges due and payable by Borrower under the Ground Lease.

                  "GUARANTOR" shall mean U-Store-It, L.P., a Delaware limited
partnership.

                  "GUARANTY" shall mean that certain Guaranty executed by
Guarantor, dated the date hereof, as the same may be amended, restated,
replaced, supplemented, or otherwise modified from time to time.

                  "HAZARDOUS SUBSTANCES" shall have the meaning set forth in the
Environmental Indemnity.

                  "IMPROVEMENTS" shall have the meaning set forth in the
granting clause of the related Security Instrument with respect to each
Individual Property.

                  "INDEBTEDNESS" of a Person, at a particular date, means the
sum (without duplication) at such date of (a) indebtedness or liability for
borrowed money; (b) obligations evidenced by bonds, debentures, notes, or other
similar instruments; (c) obligations for the deferred purchase price of property
or services (including trade obligations); (d) obligations

                                       6
<PAGE>

under letters of credit; (e) obligations under acceptance facilities; (f) all
guaranties, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds, to invest in any Person or entity, or
otherwise to assure a creditor against loss; and (g) obligations secured by any
Liens, whether or not the obligations have been assumed.

                  "INDEMNIFIED PARTIES" shall mean Lender, any Person who is or
will have been involved in the origination of the Loan, 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 and entities who may hold or acquire or will have held a full
or partial interest in the Loan (including, but not limited to, Investors or
prospective Investors in the Securities, 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 Properties, 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 Indemnitee's assets and
business).

                  "INDEMNIFIED TAXES" shall mean any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority.

                  "INDEPENDENT DIRECTOR" shall have the meaning set forth in
Section 4.1.30(p) hereof.

                  "INDIVIDUAL LTV RATIO" shall mean, with respect to an
Individual Property, the ratio of (a) the Allocated Loan Amount for such
Individual Property to (b) fair market value of such Individual Property set
forth in an Approved Appraisal.

                  "INDIVIDUAL PROPERTY" shall mean each parcel of real property,
the Improvements thereon and all personal property owned by Borrower and
encumbered by a Security Instrument, together with all rights pertaining to such
property and Improvements, as more particularly described in the granting
clauses of each Security Instrument and referred to therein as the "Property"; a
list of all Individual Properties on the date hereof appears on Schedule I
attached hereto.

                  "INSOLVENCY OPINION" shall mean that certain opinion letter
dated the date hereof delivered by Hogan & Hartson L.L.P. in connection with the
Loan.

                  "INSURANCE PREMIUMS" shall have the meaning set forth in
Section 6.1(b) hereof.

                  "INSURANCE PROCEEDS" shall have the meaning set forth in
Section 6.4(b) hereof.

                  "INTELLECTUAL PROPERTY" shall mean patents, licenses,
franchises, trademarks, trademark rights, trade names, trade name rights, trade
secrets and copyrights.

                                       7
<PAGE>

                  "INTEREST ONLY PAYMENT AMOUNT" shall have the meaning set
forth in Section 2.2.3 hereof.

                  "INTEREST PERIOD" shall mean, with respect to the application
of the Interest Only Payment Amount and the Monthly Debt Service Payment Amount
paid by Borrower on a Payment Date, the period commencing on the eleventh (11th)
day of the prior calendar month to and including the tenth (10th) day of the
calendar month in which such Payment Date occurs.

                  "INVESTOR" shall mean each purchaser, transferee, assignee,
servicer, participant or investor in such Securities or any credit rating agency
rating such Securities.

                  "LAKE WORTH PROPERTY" shall mean the Individual Property
located at 6680 Lantana Road, Lake Worth, Florida. [POOL 1 ONLY]

                  "LAUREL PROPERTY" shall mean the Individual Property located
at 8704 Cherry Lane, Laurel, Maryland. [POOL 1 ONLY]

                  "LEASE" shall mean any lease, sublease or subsublease,
letting, license, concession or other agreement (whether written or oral and
whether now or hereafter in effect) pursuant to which any Person is granted a
possessory interest in, or right to use or occupy all or any portion of any
space in any Individual Property and every modification, amendment or other
agreement relating to such lease, sublease, subsublease, or other agreement
entered into in connection with such lease, sublease, subsublease, or other
agreement and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the other
party thereto.

                  "LEASING RESERVE ACCOUNT" shall have the meaning set forth in
the Cash Management Agreement.

                  "LEASING RESERVE FUND" shall have the meaning set forth in
Section 7.5.1 hereof.

                  "LEASE TERMINATION PAYMENTS" shall mean all payments made to
Borrower in connection with any termination, cancellation, surrender, sale or
other disposition of any Lease.

                  "LEGAL REQUIREMENTS" shall mean, with respect to each
Individual Property, all Federal, State, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting such Individual
Property or any part thereof, or the construction, use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force, and
all permits, licenses and authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to Borrower, at any time in force
affecting such Individual Property or any part thereof, including, without
limitation, any which may (a) require repairs, modifications or alterations in
or to such Individual Property or any part thereof, or (b) in any way limit the
use and enjoyment thereof.

                  "LEHMAN" shall have the meaning set forth in Section 9.2(b)
hereof.

                                       8
<PAGE>

                  "LEHMAN GROUP" shall have the meaning set forth in Section
9.2(b) hereof.

                  "LENDER" shall mean [LEHMAN BROTHERS BANK, FSB, A FEDERAL
STOCK SAVINGS BANK] [FOR METRO POOL] [LEHMAN BROTHERS HOLDINGS INC. D/B/A LEHMAN
CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., A DELAWARE CORPORATION]
[FOR OTHER TWO POOLS], together with its successors and assigns.

                  "LIABILITIES" shall have the meaning set forth in Section
9.2(b) hereof.

                  "LICENSES" shall have the meaning set forth in Section 4.1.22
hereof.

                  "LIEN" shall mean, with respect to an Individual Property, any
mortgage, deed of trust, lien, pledge, hypothecation, assignment, security
interest, or any other encumbrance (but excluding any easements permitted by
Section 5.2.13 hereof), charge or transfer of, on or affecting Borrower, the
related Individual Property, any portion thereof or any interest therein,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, the filing of any financing statement, and mechanic's,
materialmen's and other similar liens and encumbrances.

                  "LOAN" shall mean the loan made by Lender to Borrower pursuant
to this Agreement.

                  "LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Note, the Security Instrument, the Assignment of Leases, the Environmental
Indemnity, the Assignment of Management Agreement, the Cash Management Agreement
and all other documents executed and/or delivered in connection with the Loan.

                  "LOAN TO VALUE RATIO" shall mean, as of the date of its
calculation, the ratio of (i) the sum of the outstanding principal amount of the
Loan as of the date of such calculation to (ii) the most recent appraised value
of the Properties (according to the most recent Approved Appraisal available to
Lender).

                  "LOCKBOX ACCOUNT" shall mean the account, if any, specified in
the Cash Management Agreement for deposit of Rents and other receipts from the
Properties.

                  "MAJOR LEASE" shall mean any Lease which together with all
other Leases to the same tenant and to all Affiliates of such tenant, (i)
provides for rental income representing ten percent (10%) or more of the total
rental income for the applicable Individual Property; or (ii) covers (A) ten
percent (10%) or more, or (B) 4,000 square feet or more, of the total leaseable
area of the related Individual Property.

                  "MANAGEMENT AGREEMENT" shall mean, with respect to any
Individual Property, the management agreement entered into by and between
Borrower and the Manager, pursuant to which the Manager is to provide management
and other services with respect to such Individual Property.

                                       9
<PAGE>

                  "MANAGER" shall mean YSI Management LLC, a Delaware limited
liability company, or, if the context requires, a Qualifying Manager who is
managing the Properties or any Individual Property in accordance with the terms
and provisions of this Agreement.

                  "MATERIAL ADVERSE EFFECT" shall mean any condition which
causes or continues the occurrence of an Event of Default or has a material
adverse effect upon (i) the business, operations, properties, assets, prospects,
corporate structure or condition (financial or otherwise) of Borrower or any
Guarantor, individually or taken as a whole, (ii) the ability of Borrower or any
Guarantor to perform, or of Lender to enforce, any of their obligations under
the Loan Documents or (iii) the value of the Properties, individually or taken
as a whole.

                  "MATURITY DATE" shall mean [POOL 1: MAY 11, 2010] [POOL 2:
JANUARY 11, 2011] [POOL 3: NOVEMBER 11, 2009], or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

                  "MAXIMUM LEGAL RATE" shall mean the maximum nonusurious
interest rate, if any, that at any time or from time to time may be contracted
for, taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws of
such State or States whose laws are held by any court of competent jurisdiction
to govern the interest rate provisions of the Loan.

                  "MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean a constant
monthly payment of [POOL 1: $516,947.29] [POOL 2: $524,264.10] [POOL 3:
$511,291.27].

                  "MONTHLY GROUND RENT DEPOSIT" shall have the meaning set forth
in Section 7.4 hereof.

                  "MOODY'S" shall mean Moody's Investors Service, Inc.

                  "NET CASH FLOW" for any period shall mean the amount obtained
by subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.

                  "NET CASH FLOW AFTER DEBT SERVICE" for any period shall mean
the amount obtained by subtracting Debt Service for such period from Net Cash
Flow for such period.

                  "NET CASH FLOW SCHEDULE" shall have the meaning set forth in
Section 5.1.11(b) hereof.

                  "NET OPERATING INCOME" shall mean the amount obtained by
subtracting Operating Expenses from Gross Income from Operations.

                  "NET PROCEEDS" shall have the meaning set forth in Section
6.4(b) hereof.

                  "NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 6.4(b)(vi) hereof.

                                       10
<PAGE>

                  "NONDISQUALIFICATION OPINION" shall mean an opinion of tax
counsel, which shall be independent outside counsel, to the effect that a
contemplated action would not materially adversely affect the Federal income tax
status as a REMIC, trust or other vehicle of any REMIC, trust or other vehicle
in which the Loan may be included at the time such opinion is required.

                  "NON-U.S. ENTITY" shall have the meaning set forth in Section
2.2.10(b) hereof.

                  "NOTE" shall mean that certain note of even date herewith in
the principal amount of NINETY MILLION AND 00/100 DOLLARS ($90,000,000.00), made
by Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, including any Defeased
Note and Undefeased Note that may exist from time to time.

                  "O&M PROGRAM" shall mean, with respect to each Individual
Property listed on Schedule III attached hereto, the asbestos operations and
maintenance program developed by Borrower and approved by Lender, as the same
may be amended, replaced, supplemented or otherwise modified from time to time.

                  "OFFICER'S CERTIFICATE" shall mean a certificate delivered to
Lender by Borrower which is signed by an authorized senior officer of the
general partner of the sole member Borrower.

                  "OPERATING EXPENSES" shall mean the total of all expenditures,
computed in accordance with GAAP, of whatever kind relating to the operation,
maintenance and management of the Properties that are incurred on a regular
monthly or other periodic basis, including without limitation, utilities,
ordinary repairs and maintenance, insurance, license fees, property taxes and
assessments, advertising expenses, management fees, payroll and related taxes,
computer processing charges, operational equipment or other lease payments, all
as approved by Lender, and other similar costs, but excluding depreciation, Debt
Service, Capital Expenditures and contributions to the Reserve Funds.

                  "OTHER CHARGES" shall mean all Ground Rents, maintenance
charges, impositions other than Taxes, and any other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining any Individual Property, now or hereafter levied or
assessed or imposed against such Individual Property or any part thereof.

                  "PAYMENT DATE" shall mean the eleventh (11th) day of each
calendar month during the term of the Loan or, if such day is not a Business
Day, the immediately succeeding Business Day.

                  "PERMITTED ENCUMBRANCES" shall mean, with respect to an
Individual Property, collectively, (a) the Liens and security interests created
by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed
in the Title Insurance Policies relating to such Individual Property or any part
thereof, (c) Liens, if any, for Taxes imposed by any Governmental Authority not
yet due or delinquent, and (d) such other title and survey exceptions as Lender
has approved or may approve in writing in Lender's sole discretion, which
Permitted

                                       11
<PAGE>

Encumbrances in the aggregate do not materially adversely affect the value or
use of such Individual Property or Borrower's ability to repay the Loan.

                  "PERMITTED INVESTMENTS" shall mean any one or more of the
following obligations or securities acquired at a purchase price of not greater
than par, including those issued by Servicer, the trustee under any
Securitization or any of their respective Affiliates, payable on demand or
having a maturity date not later than the Business Day immediately prior to the
first Monthly Payment Date following the date of acquiring such investment and
meeting one of the appropriate standards set forth below:

                           (i) obligations of, or obligations fully guaranteed
as to payment of principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full faith
and credit of the United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully guaranteed obligations),
the Farmers Home Administration (certificates of beneficial ownership), the
General Services Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

                           (ii) Federal Housing Administration debentures;

                           (iii) obligations of the following United States
government sponsored agencies: Federal Home Loan Mortgage Corp. (debt
obligations), the Farm Credit System (consolidated systemwide bonds and notes),
the Federal Home Loan Banks (consolidated debt obligations), the Federal
National Mortgage Association (debt obligations), the Student Loan Marketing
Association (debt obligations), the Financing Corp. (debt obligations), and the
Resolution Funding Corp. (debt obligations); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

                           (iv) Federal funds, unsecured certificates of
deposit, time deposits, bankers' acceptances and repurchase agreements with
maturities of not more than 365 days of any bank, the short term obligations of
which at all times are rated in the highest short term rating category by each
Rating Agency (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency in the highest short term rating category and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself,

                                       12
<PAGE>

result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

                           (v) fully Federal Deposit Insurance
Corporation-insured demand and time deposits in, or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one Rating Agency in the
highest short term rating category and otherwise acceptable to each other Rating
Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

                           (vi) debt obligations with maturities of not more
than 365 days and at all times rated by each Rating Agency (or, if not rated by
all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities) in its highest long-term unsecured rating category; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;

                           (vii) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) with maturities of not more than 365 days and that at all
times is rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities) in its highest
short-term unsecured debt rating; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an "r" highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single

                                       13
<PAGE>

interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject to liquidation
prior to their maturity;

                           (viii) units of taxable money market funds or mutual
funds, which funds are regulated investment companies, seek to maintain a
constant net asset value per share and invest solely in obligations backed by
the full faith and credit of the United States, which funds have the highest
rating available from each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to each
other Rating Agency, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities) for
money market funds or mutual funds; and

                           (ix) any other security, obligation or investment
which has been approved as a Permitted Investment in writing by (a) Lender and
(b) each Rating Agency, as evidenced by a written confirmation that the
designation of such security, obligation or investment as a Permitted Investment
will not, in and of itself, result in a downgrade, qualification or withdrawal
of the initial, or, if higher, then current ratings assigned to the Securities
by such Rating Agency;

                  provided, however, that no obligation or security shall be a
Permitted Investment if (A) such obligation or security evidences a right to
receive only interest payments or (B) the right to receive principal and
interest payments on such obligation or security are derived from an underlying
investment that provides a yield to maturity in excess of 120% of the yield to
maturity at par of such underlying investment.

                  "PERMITTED OWNER" shall mean a Person who satisfies (i), (ii)
or (iii) below:

                  (i) a Qualified Transferee;

                  (ii) a Sponsor; or

                  (iii) any Person, prior to a Securitization, approved by
Lender (such approval not to be unreasonably withheld) or, regarding which,
after a Securitization, Lender has received confirmation from the Rating
Agencies that such transfer shall not result in a downgrade, qualification or
withdrawal of the then-current ratings assigned to the Securities.

                  "PERMITTED PREPAYMENT DATE" shall have the meaning set forth
in Section 2.3.1 hereof.

                  "PERMITTED RELEASE DATE" shall mean the date that is the
earlier of (a) three (3) years from the Closing Date or (b) two (2) years from
the "startup day" within the meaning of Section 860G(a)(9) of the Code of the
REMIC Trust.

                  "PERSON" shall mean any individual, corporation, partnership,
joint venture, limited liability company, estate, trust, unincorporated
association, any Federal, State, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.

                                       14
<PAGE>

                  "PERSONAL PROPERTY" shall have the meaning set forth in the
granting clause of the Security Instrument with respect to each Individual
Property.

                  "PHYSICAL CONDITIONS REPORT" shall mean, with respect to each
Individual Property, a report prepared by a company satisfactory to Lender
regarding the physical condition of such Individual Property, satisfactory in
form and substance to Lender in its sole discretion, which report shall, among
other things, (a) confirm that such Individual Property and its use complies, in
all material respects, with all applicable Legal Requirements (including,
without limitation, zoning, subdivision and building laws) and (b) to the extent
available, include a copy of a final certificate of occupancy with respect to
all Improvements on such Individual Property.

                  "PLAN" shall mean an employee benefit plan (as defined in
section 3(3) of ERISA) whether or not subject to ERISA or a plan or other
arrangement within the meaning of Section 4975 of the Code.

                  "PLAN ASSETS" shall mean assets of a Plan within the meaning
of section 29 C.F.R. Section 2510.3-101 or similar law.

                  "POLICIES" shall have the meaning specified in Section 6.1(b)
hereof.

                  "PROHIBITED PERSON" shall mean any Person:

                  (a) listed in the Annex to, or otherwise subject to the
provisions of, the Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(the "EXECUTIVE ORDER");

                  (b) that is owned or controlled by, or acting for or on behalf
of, any person or entity that is listed to the Annex to, or is otherwise subject
to the provisions of, the Executive Order;

                  (c) with whom Lender is prohibited from dealing or otherwise
engaging in any transaction by any terrorism or money laundering law, including
the Executive Order;

                  (d) who commits, threatens or conspires to commit or supports
"terrorism" as defined in the Executive Order;

                  (e) that is named as a "specially designated national and
blocked person" on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control at its official website,
http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or other
replacement official publication of such list; or

                  (f) who is an Affiliate of or affiliated with a Person listed
above.

                  "PROPERTIES" shall mean, collectively, each and every
Individual Property which is subject to the terms of this Agreement.

                                       15
<PAGE>

                  "PROVIDED INFORMATION" shall have the meaning set forth in
Section 9.1(a) hereof.

                  "QUALIFIED TRANSFEREE" shall mean any one of the following
Persons:

                  (i)      a pension fund, pension trust or pension account that
                           (a) has total real estate assets of at least $1
                           Billion and (b) is managed by a Person who controls
                           at least $1 Billion of real estate equity assets; or

                  (ii)     a pension fund advisor who (a) immediately prior to
                           such transfer, controls at least $1 Billion of real
                           estate equity assets and (b) is acting on behalf of
                           one or more pension funds that, in the aggregate,
                           satisfy the requirements of clause (i) of this
                           definition; or

                  (iii)    an insurance company which is subject to supervision
                           by the insurance commissioner, or a similar official
                           or agency, of a State or territory of the United
                           States (including the District of Columbia) (a) with
                           a net worth, as of a date no more than six (6) months
                           prior to the date of the transfer of at least $500
                           Million and (b) who, immediately prior to such
                           transfer, controls real estate equity assets of at
                           least $1 Billion; or

                  (iv)     a corporation organized under the banking laws of the
                           United States or any State or territory of the United
                           States (including the District of Columbia) (a) with
                           a combined capital and surplus of at least $500
                           Million and (b) who, immediately prior to such
                           transfer, controls real estate equity assets of at
                           least $1 Billion; or

                  (v)      any Person (a) with a long-term unsecured debt rating
                           from each of the Rating Agencies of at least
                           investment grade or (b) who (i) owns or operates at
                           least one hundred (100) self-service storage
                           facilities totaling at least 5 million square feet of
                           gross leasable area, (ii) has a net worth, as of a
                           date no more than six (6) months prior to the date of
                           such transfer, of at least $500 Million and (iii)
                           immediately prior to such transfer, controls real
                           estate equity assets of at least $1 Billion .

                  "QUALIFYING MANAGER" shall mean (i) YSI Management LLC, a
Delaware limited liability company or (ii) a reputable and experienced
management organization possessing experience in managing properties similar in
size, scope and value to the Property, provided that (a) prior to a
Securitization, Borrower shall have obtained the prior written consent of Lender
for such entity which consent shall not be unreasonably withheld and (b) after a
Securitization, Borrower shall have obtained prior written confirmation from the
Rating Agencies that management of the Property by such entity will not, in and
of itself, cause a downgrade, withdrawal or qualification of the then current
ratings of the Securities issued pursuant to the Securitization.

                  "RATING AGENCIES" shall mean each of S&P, Moody's and Fitch,
or any other nationally-recognized statistical rating agency which has been
approved by Lender.

                                       16
<PAGE>

                  "REGISTRATION STATEMENT" shall have the meaning set forth in
Section 9.2(b) hereof.

                  "RELEASE" shall have the meaning set forth in the
Environmental Indemnity.

                  "RELEASE AMOUNT" shall mean, for an Individual Property, the
product of the Allocated Loan Amount for such Individual Property and one
hundred twenty-five percent (125%).

                  "RELEASED INDIVIDUAL PROPERTY" shall have the meaning set
forth in Section 2.5.2 hereof.

                  "REMIC TRUST" shall mean a "real estate mortgage investment
conduit" within the meaning of Section 860D of the Code that holds the Note.

                  "RENTS" shall mean, with respect to each Individual Property,
all rents, rent equivalents, moneys payable as damages or in lieu of rent or
rent equivalents, royalties (including, without limitation, all oil and gas or
other mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including, without limitation, forfeited security deposits, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or paid
to or for the account of or benefit of Borrower or its agents or employees from
any and all sources arising from or attributable to the Individual Property, and
proceeds, if any, from business interruption or other loss of income insurance.

                  "REPLACED PROPERTY" shall have the meaning set forth in
Section 2.7(a) hereof.

                  "REPLACEMENT MANAGEMENT AGREEMENT" shall mean, collectively,
(a) either (i) a management agreement with a Qualifying Manager substantially in
the same form and substance as the Management Agreement, or (ii) a management
agreement with a Qualifying Manager, which management agreement shall be
acceptable to Lender in form and substance, provided, with respect to this
subclause (ii), Lender, at its option, may require that Borrower obtain
confirmation from the applicable Rating Agencies that such management agreement
will not result in a downgrade, withdrawal or qualification of the initial, or
if higher, then current rating of the Securities or any class thereof; and (b) a
conditional assignment of management agreement substantially in the form of the
Assignment of Management Agreement (or such other form acceptable to Lender),
executed and delivered to Lender by Borrower and such Qualifying Manager at
Borrower's expense.

                  "REPLACEMENT RESERVE ACCOUNT" shall have the meaning set forth
in Section 7.3.1 hereof.

                  "REPLACEMENT RESERVE FUND" shall have the meaning set forth in
Section 7.3.1 hereof.

                  "REPLACEMENT RESERVE MONTHLY DEPOSIT" shall have the meaning
set forth in Section 7.3.1 hereof.

                                       17
<PAGE>

                  "REPLACEMENTS" shall have the meaning set forth in Section
7.3.1 hereof.

                  "REQUIRED REPAIR ACCOUNT" shall have the meaning set forth in
the Cash Management Agreement.

                  "REQUIRED REPAIR FUND" shall have the meaning set forth in
Section 7.1.1 hereof.

                  "REQUIRED REPAIRS" shall have the meaning set forth in Section
7.1.1 hereof.

                  "RESERVE FUNDS" shall mean the Required Repair Fund, Tax and
Insurance Escrow Fund, the Replacement Reserve Fund, the Ground Lease Escrow
Fund or any other escrow fund established or required by the Loan Documents.

                  "RESTORATION" shall have the meaning set forth in Section 6.2
hereof.

                  "SCHEDULED DEFEASANCE PAYMENTS" shall have the meaning set
forth in Section 2.4.1(b) hereof.

                  "SECURITIES" shall have the meaning set forth in Section 9.1
hereof.

                  "SECURITIES ACT" shall have the meaning set forth in Section
9.2(a) hereof.

                  "SECURITIZATION" shall have the meaning set forth in Section
9.1 hereof.

                  "SECURITY AGREEMENT" shall have the meaning set forth in
Section 2.4.1(a)(vi) hereof.

                  "SECURITY INSTRUMENT" shall mean, with respect to each
Individual Property, that certain first priority Mortgage (or Deed of Trust or
Deed to Secure Debt, as applicable) and Security Agreement, executed and
delivered by Borrower as security for the Loan and encumbering such Individual
Property, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

                  "SERVICER" shall have the meaning set forth in Section 9.6
hereof.

                  "SERVICING AGREEMENT" shall have the meaning set forth in
Section 9.6 hereof.

                  "SEVERED LOAN DOCUMENTS" shall have the meaning set forth in
Section 8.2(c) hereof.

                  "S&P" shall mean Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies.

                  "SPC PARTY" shall have the meaning set forth in Section
4.1.30(o) hereof.

                  "SPECIAL PURPOSE ENTITY" shall mean a Person which satisfies
the requirements of Section 4.1.30 hereof.

                                       18
<PAGE>

                  "SPONSOR" shall mean U-Store-It Trust, a Maryland real estate
investment trust.

                  "STATE" shall mean, with respect to an Individual Property,
the State or Commonwealth in which such Individual Property or any part thereof
is located.

                  "SUBSTITUTE PROPERTY" shall have the meaning set forth in
Section 2.7(a) hereof.

                  "SUBSTITUTE SECURITY INSTRUMENT" shall have the meaning set
forth in Section 2.7(a) hereof.

                  "SUBSTITUTION" shall have the meaning set forth in Section
2.7(a) hereof.

                  "SUBSTITUTION DATE" shall have the meaning set forth in
Section 2.7(c)(iv) hereof.

                  "SUCCESSOR BORROWER" shall have the meaning set forth in
Section 2.4.2 hereof.

                  "SURVEY" shall mean a survey of the Individual Property in
question delivered to Lender and which survey has been prepared by a surveyor
licensed in the State and satisfactory to Lender and the company or companies
issuing the Title Insurance Policies, and containing a certification of such
surveyor satisfactory to Lender.

                  "TAX AND INSURANCE ESCROW FUND" shall have the meaning set
forth in Section 7.2 hereof.

                  "TAXES" shall mean all real estate and personal property
taxes, assessments, water rates or sewer rents, now or hereafter levied or
assessed or imposed against any Individual Property or part thereof.

                  "TAX OPINION" shall mean an opinion of competent counsel to
the effect that a contemplated action (a) will not result in any deemed exchange
pursuant to Section 1001 of the Code of the Note; and (b) will not adversely
affect the Note status as indebtedness for Federal income tax purposes.

                  "TITLE INSURANCE POLICY" shall mean, with respect to each
Individual Property, an ALTA mortgagee title insurance policy in the form
(acceptable to Lender) (or, if an Individual Property is in a State which does
not permit the issuance of such ALTA policy, such form as shall be permitted in
such State and acceptable to Lender) issued with respect to such Individual
Property and insuring the lien of the Security Instrument encumbering such
Individual Property.

                  "TRADED ENTITY" shall have the meaning set forth in Section
5.2.13(g) hereof.

                  "UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as in effect in the applicable State in which an Individual
Property is located.

                  "UNDEFEASED NOTE" shall have the meaning set forth in Section
2.4.1(a)(v) hereof.

                  "UNDERWRITER GROUP" shall have the meaning set forth in
Section 9.2(b) hereof.

                                       19
<PAGE>

                  "U.S. OBLIGATIONS" shall mean direct non-callable obligations
of the United States of America.

                  "YIELD MAINTENANCE PREMIUM" shall mean the amount (if any)
which, when added to the remaining principal amount of the Note or the principal
amount of a Defeased Note, as applicable, will be sufficient to purchase U.S.
Obligations providing the required Scheduled Defeasance Payments.

         SECTION 1.2 PRINCIPLES OF CONSTRUCTION.

                  All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. All uses of the
word "including" shall mean "including, without limitation" unless the context
shall indicate otherwise. Unless otherwise specified, the words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise specified, all meanings attributed to defined
terms herein shall be equally applicable to both the singular and plural forms
of the terms so defined.

         II. GENERAL TERMS

         SECTION 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.

         2.1.1 THE LOAN. Subject to and upon the terms and conditions set forth
herein, Lender hereby agrees to make and Borrower hereby agrees to accept the
Loan on the Closing Date.

         2.1.2 DISBURSEMENT TO BORROWER. Borrower may request and receive only
one borrowing hereunder in respect of the Loan and any amount borrowed and
repaid hereunder in respect of the Loan may not be reborrowed.

         2.1.3 THE NOTE, SECURITY INSTRUMENTS AND LOAN DOCUMENTS. The Loan shall
be evidenced by the Note and secured by the Security Instrument, the Assignment
of Leases and the other Loan Documents.

         2.1.4 USE OF PROCEEDS. Borrower shall use the proceeds of the Loan to
(a) pay the cost of the acquisition of the Properties, (b) repay and discharge
any existing loans relating to the Properties, (c) pay all past-due Basic
Carrying Costs, if any, in respect of the Properties, (d) make deposits into the
Reserve Funds on the Closing Date in the amounts provided herein, (e) pay costs
and expenses incurred in connection with the Closing of the Loan, as approved by
Lender, (f) fund any working capital requirements of the Properties, and (g)
distribute the balance, if any, to Borrower.

         SECTION 2.2 INTEREST; LOAN PAYMENTS; LATE PAYMENT CHARGE.

         2.2.1 INTEREST GENERALLY. Interest on the outstanding principal balance
of the Loan shall accrue from the Closing Date to but excluding the Maturity
Date at the Applicable Interest Rate.

                                       20
<PAGE>

         2.2.2 INTEREST CALCULATION. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the period for which the calculation is being made by (b) a
daily rate based on a three hundred sixty (360) day year by (c) the outstanding
principal balance.

         2.2.3 PAYMENTS. Borrower shall pay to Lender (a) on the Closing Date,
an amount equal to interest only on the outstanding principal balance of the
Loan from the Closing Date up to but not including the eleventh day of the next
succeeding calendar month, (b) on December 11, 2004 and on each Payment Date
thereafter through and including the Payment Date occurring on November 11,
2005, interest only on the outstanding principal balance of the Loan (the
"INTEREST ONLY PAYMENT AMOUNT"), and (c) on each Payment Date commencing with
the Payment Date occurring on December 11, 2005 up to and including the Maturity
Date, an amount equal to the Monthly Debt Service Payment Amount, which payments
shall be applied first to accrued and unpaid interest on the Loan for the prior
Interest Period and the balance to the outstanding principal of the Loan.

         2.2.4 INTENTIONALLY DELETED.

         2.2.5 PAYMENT ON MATURITY DATE. Borrower shall pay to Lender on the
Maturity Date, the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Security Instruments and the other Loan Documents.

         2.2.6 PAYMENTS AFTER DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, (a) interest on the outstanding principal
balance of the Loan and, to the extent permitted by law, overdue interest and
other amounts due in respect of the Loan, shall accrue at the Default Rate,
calculated from the date such payment was due without regard to any grace or
cure periods contained herein and (b) Lender shall be entitled to receive and
Borrower shall pay to Lender on each Payment Date an amount equal to the Net
Cash Flow After Debt Service for the prior month, such amount to be applied by
Lender to the payment of the Debt in such order as Lender shall determine in its
sole discretion, including, without limitation, alternating applications thereof
between interest and principal. Interest at the Default Rate and Net Cash Flow
After Debt Service shall both be computed from the occurrence of the Event of
Default until the actual receipt and collection of the Debt (or that portion
thereof that is then due). To the extent permitted by applicable law, interest
at the Default Rate shall be added to the Debt, shall itself accrue interest at
the same rate as the Loan and shall be secured by the Security Instruments. This
paragraph shall not be construed as an agreement or privilege to extend the date
of the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Lender by reason of the occurrence of any Event of Default; the
acceptance of any payment of Net Cash Flow After Debt Service shall not be
deemed to cure or constitute a waiver of any Event of Default; and Lender
retains its rights under this Note to accelerate and to continue to demand
payment of the Debt upon the happening of any Event of Default, despite any
payment of Net Cash Flow After Debt Service.

         2.2.7 LATE PAYMENT CHARGE. If any principal, interest or any other sums
due under the Loan Documents is not paid by Borrower on or prior to the date on
which it is due, Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5%) of

                                       21
<PAGE>

such unpaid sum or the maximum amount permitted by applicable law in order to
defray the expense incurred by Lender in handling and processing such delinquent
payment and to compensate Lender for the loss of the use of such delinquent
payment. Any such amount shall be secured by the Security Instruments and the
other Loan Documents to the extent permitted by applicable law.

         2.2.8 USURY SAVINGS. This Agreement and the Note are subject to the
express condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of the Maximum Legal Rate,
the Applicable Interest Rate or the Default Rate, as the case may be, shall be
deemed to be immediately reduced to the Maximum Legal Rate and all previous
payments in excess of the Maximum Legal Rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.

         2.2.9 MAKING OF PAYMENTS. Each payment by Borrower hereunder or under
the Note shall be made in funds settled through the New York Clearing House
Interbank Payments System or other funds immediately available to Lender by
noon, New York City time, on the date such payment is due, to Lender by deposit
to such account as Lender may designate by written notice to Borrower. Whenever
any payment hereunder or under the Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the immediately preceding
Business Day.

         2.2.10 INDEMNIFIED TAXES.

         (a) All payments made by Borrower hereunder shall be made free and
clear of, and without reduction for or on account of, Indemnified Taxes,
excluding (i) Indemnified Taxes measured by Lender's net income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which Lender is
resident or organized, or any political subdivision thereof, (ii) taxes measured
by Lender's overall net income, and franchise taxes imposed on it, by the
jurisdiction of Lender's applicable lending office or any political subdivision
thereof or in which Lender is resident or engaged in business, and (iii)
withholding taxes imposed by the United States of America, any State,
commonwealth, protectorate territory or any political subdivision or taxing
authority thereof or therein as a result of the failure of Lender which is a
Non-U.S. Entity to comply with the terms of paragraph (b) below. If any non
excluded Indemnified Taxes are required to be withheld from any amounts payable
to Lender hereunder, the amounts so payable to Lender shall be increased to the
extent necessary to yield to Lender (after payment of all non excluded
Indemnified Taxes) interest or any such other amounts payable hereunder at the
rate or in the amounts specified hereunder. Whenever any non excluded
Indemnified Tax is payable pursuant to applicable law by Borrower, Borrower
shall send to Lender an original official

                                       22
<PAGE>

receipt showing payment of such non excluded Indemnified Tax or other evidence
of payment reasonably satisfactory to Lender. Borrower hereby indemnifies Lender
for any incremental taxes, interest or penalties that may become payable by
Lender which may result from any failure by Borrower to pay any such non
excluded Indemnified Tax when due to the appropriate taxing authority or any
failure by Borrower to remit to Lender ender the required receipts or other
required documentary evidence.

         (b) In the event that Lender or any successor and/or assign of Lender
is not incorporated under the laws of the United States of America or a State
thereof (a "NON-U.S. ENTITY") Lender agrees that, prior to the first date on
which any payment is due such entity hereunder, it will deliver to Borrower two
duly completed copies of United States Internal Revenue Service Form W-8BEN or
W-8ECI or successor applicable form, as the case may be, certifying in each case
that such entity is entitled to receive payments under the Note, without
deduction or withholding of any United States Federal income taxes. Each entity
required to deliver to Borrower a Form W-8BEN or W-8ECI pursuant to the
preceding sentence further undertakes to deliver to Borrower two further copies
of such forms, or successor applicable forms, or other manner of certification,
as the case may be, on or before the date that any such form expires (which, in
the case of the Form W-8ECI, is the last day of each U.S. taxable year of the
Non-U.S. Entity) or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to
Borrower, and such other extensions or renewals thereof as may reasonably be
requested by Borrower, certifying in the case of a Form W-8BEN or W-8ECI that
such entity is entitled to receive payments under the Note without deduction or
withholding of any United States Federal income taxes, unless in any such case
an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such entity from duly completing and delivering any such form with
respect to it and such entity advises Borrower that it is not capable of
receiving payments without any deduction or withholding of United States Federal
income tax.

         SECTION 2.3 PREPAYMENTS.

         2.3.1 VOLUNTARY PREPAYMENTS. Except as otherwise provided herein,
Borrower shall not have the right to prepay the Loan in whole or in part prior
to the Maturity Date. On [POOL 1: FEBRUARY 11, 2010] [POOL 2: OCTOBER 11, 2010]
[POOL 3: AUGUST 11, 2009] (the "PERMITTED PREPAYMENT DATE") or on any Payment
Date thereafter, Borrower may, at its option and upon thirty (30) days prior
written notice to Lender, prepay the Debt in whole or in part without payment of
the Yield Maintenance Premium, provided, Borrower pays to Lender all accrued and
unpaid interest on the amount of principal being prepaid through and including
the date of prepayment. Any partial prepayment shall be applied to the last
payments of principal due under the Loan.

         2.3.2 MANDATORY PREPAYMENTS. On each date on which Borrower actually
receives any Net Proceeds, if Lender is not obligated to make such Net Proceeds
available to Borrower for the restoration of any Individual Property, Borrower
shall prepay the outstanding principal balance of the Note in an amount equal to
one hundred percent (100%) of such Net Proceeds. No Yield Maintenance Premium
shall be due in connection with any prepayment made pursuant

                                       23
<PAGE>

to this Section 2.3.2. Any partial prepayment under this Section shall be
applied to the last payments of principal due under the Loan.

         2.3.3 PREPAYMENTS AFTER DEFAULT. If, following an Event of Default,
payment of all or any part of the Debt is tendered by Borrower or otherwise
recovered by Lender, such tender or recovery shall be deemed a voluntary
prepayment by Borrower in violation of the prohibition against prepayment set
forth in Section 2.3.1 hereof and, if such payment is made prior to the
Permitted Prepayment Date, Borrower shall pay, in addition to the Debt, (i) an
amount equal to the greater of (a) one percent (1%) of the outstanding principal
amount of the Loan to be prepaid or satisfied, or (b) the Yield Maintenance
Premium that would be required if a Defeasance Event had occurred in an amount
equal to the outstanding principal amount of the Loan to be satisfied or prepaid
and (ii) all accrued and unpaid interest on the amount of principal being
prepaid through and including the date of prepayment.

         SECTION 2.4 DEFEASANCE.

         2.4.1 VOLUNTARY DEFEASANCE. (a) Provided no Event of Default shall then
exist, Borrower shall have the right at any time after the Permitted Release
Date to voluntarily defease all or any portion of the Loan by and upon
satisfaction of the following conditions (such event being a "DEFEASANCE
EVENT"):

                  (i) Borrower shall provide not less than thirty (30) days
         prior written notice to Lender specifying the Payment Date (the
         "DEFEASANCE DATE") on which the Defeasance Event will occur and the
         principal amount of the Loan to be defeased;

                  (ii) Borrower shall pay to Lender all accrued and unpaid
         interest on the principal balance of the Note to and including the
         Defeasance Date;

                  (iii) Borrower shall pay to Lender all other sums, not
         including scheduled interest or principal payments, then due under the
         Note, this Agreement, the Security Instruments, and the other Loan
         Documents;

                  (iv) Borrower shall deliver to Lender the Defeasance Deposit
         applicable to the Defeasance Event;

                  (v) In the event only a portion of the Loan is the subject of
         the Defeasance Event, Borrower shall prepare all necessary documents to
         modify this Agreement and to amend and restate the Note and issue two
         substitute notes for the Note, one note having a principal balance
         equal to the defeased portion of the original Note and a maturity date
         equal to the Permitted Prepayment Date (the "DEFEASED NOTE") and the
         other note having a principal balance equal to the undefeased portion
         of the original Note and a maturity date equal to the Maturity Date
         (the "UNDEFEASED NOTE"). The Defeased Note and the Undefeased Note
         shall otherwise have terms identical to the original Note, except that
         a Defeased Note cannot be the subject of any further Defeasance Event.
         The Undefeased Note may be the subject of a further Defeasance Event in
         accordance with the terms and provisions of this Section 2.4 (the term
         "Note", as used in this clause (v) for such purpose, being deemed to
         refer to the Undefeased Note that is the subject of further

                                       24
<PAGE>

         defeasance), provided, however, that no such partial defeasance shall
         take place unless the conditions outlined in Section 2.5 are satisfied;

                  (vi) Borrower shall execute and deliver a security agreement,
         in a form and substance that would be reasonably satisfactory to a
         prudent institutional lender, creating a first priority lien on the
         Defeasance Deposit and the U.S. Obligations purchased with the
         Defeasance Deposit in accordance with the provisions of this Section
         2.4 (the "SECURITY AGREEMENT");

                  (vii) Borrower shall deliver an opinion of counsel for
         Borrower in a form and substance that would be reasonably satisfactory
         to a prudent institutional lender stating, among other things, that
         Borrower has legally and validly transferred and assigned the U.S.
         Obligations and all obligations, rights and duties under and to the
         Note or the Defeased Note (as applicable) to the Successor Borrower,
         that Lender has a perfected first priority security interest in the
         Defeasance Deposit and the U.S. Obligations delivered by Borrower and
         that any REMIC Trust formed pursuant to a Securitization will not fail
         to maintain its status as a "real estate mortgage investment conduit"
         within the meaning of Section 860D of the Code as a result of such
         Defeasance Event;

                  (viii) Borrower shall deliver confirmation in writing from the
         applicable Rating Agencies to the effect that such defeasance and
         release will not result in a downgrading, withdrawal or qualification
         of the respective ratings in effect immediately prior to such
         Defeasance Event for the Securities issued in connection with the
         Securitization which are then outstanding. If required by the
         applicable Rating Agencies, Borrower shall also deliver or cause to be
         delivered a non-consolidation opinion with respect to the Successor
         Borrower in form and substance satisfactory to Lender and the
         applicable Rating Agencies;

                  (ix) Borrower shall deliver an Officer's Certificate
         certifying that the requirements set forth in this Section 2.4.1(a)
         have been satisfied;

                  (x) Borrower shall deliver a certificate of an Acceptable
         Accountant certifying that the U.S. Obligations purchased with the
         Defeasance Deposit generate monthly amounts equal to or greater than
         the Scheduled Defeasance Payments;

                  (xi) Borrower shall deliver such other certificates, documents
         or instruments as Lender may reasonably request; and

                  (xii) Borrower shall pay all costs and expenses of Lender
         incurred in connection with the Defeasance Event, including, without
         limitation, (A) any costs and expenses associated with a release of the
         Lien of the related Security Instrument as provided in Section 2.5
         hereof, (B) Lender's reasonable attorneys' fees and expenses, (C) the
         costs and expenses of the Rating Agencies, (D) any revenue, documentary
         stamp or intangible taxes or any other tax or charge due in connection
         with the transfer of the Note, or otherwise required to accomplish the
         defeasance and (E) the reasonable costs and expenses actually incurred
         by Servicer and any trustee, including reasonable attorneys' fees.

                                       25
<PAGE>

                  (b) In connection with each Defeasance Event, Borrower hereby
appoints Lender as its agent and attorney-in-fact for the purpose of using the
Defeasance Deposit to purchase U.S. Obligations which provide payments on or
prior to, but as close as possible to, all successive scheduled payment dates
after the Defeasance Date upon which interest and principal payments are
required under the Note, in the case of a Defeasance Event for the entire
outstanding principal balance of the Loan, or the Defeased Note, in the case of
a Defeasance Event for only a portion of the outstanding principal balance of
the Loan, as applicable, and in amounts equal to the scheduled payments due on
such dates under this Agreement and the Note or the Defeased Note, as
applicable, (including without limitation scheduled payments of principal,
interest, servicing fees (if any), the Rating Surveillance Charge and any other
amounts due under the Loan Documents on such dates) and assuming such Note or
Defeased Note, as applicable, is prepaid in full on the Permitted Prepayment
Date (the "SCHEDULED DEFEASANCE PAYMENTS"). Borrower, pursuant to the Security
Agreement or other appropriate document, shall authorize and direct that the
payments received from the U.S. Obligations may be made directly to the Lockbox
Account (unless otherwise directed by Lender) and applied to satisfy the
obligations of Borrower under the Note or the Defeased Note, as applicable. Any
portion of the Defeasance Deposit in excess of the amount necessary to purchase
the U.S. Obligations required by this Section 2.4 and satisfy Borrower's other
obligations under this Section 2.4 and Section 2.5 hereof shall be remitted to
Borrower.

         2.4.2 SUCCESSOR BORROWER. In connection with any Defeasance Event,
Borrower shall establish or designate a successor entity (the "SUCCESSOR
BORROWER") which shall be a single purpose bankruptcy remote entity with one (1)
Independent Director approved by Lender (two (2) if required by any Rating
Agency), and Borrower shall transfer and assign all obligations, rights and
duties under and to the Note or the Defeased Note, as applicable, together with
the pledged U.S. Obligations to such Successor Borrower. Such Successor Borrower
shall assume the obligations under the Note or the Defeased Note, as applicable,
and the Security Agreement and Borrower shall be relieved of its obligations
under such documents and the other Loan Documents, except with respect to those
obligations which are expressly stated to survive. Borrower shall pay $1,000 to
any such Successor Borrower as consideration for assuming the obligations under
the Note or the Defeased Note, as applicable, and the Security Agreement.
Notwithstanding anything in this Agreement to the contrary, no other assumption
fee shall be payable upon a transfer of the Note or the Defeased Note, as
applicable, in accordance with this Section 2.4.2, but Borrower shall pay all
costs and expenses incurred by Lender, including Lender's attorneys' fees and
expenses, incurred in connection therewith.

         SECTION 2.5 RELEASE OF PROPERTY. Except as set forth in Section
2.4 hereof and this Section 2.5, no repayment, prepayment or defeasance of all
or any portion of the Note shall cause, give rise to a right to require, or
otherwise result in, the release of any Lien of any Security Instrument on any
Individual Property.

         2.5.1    RELEASE OF ALL PROPERTIES.

         (a) After the Permitted Release Date, if Borrower has elected to
defease the entire Loan and the applicable requirements of Section 2.4 hereof
and this Section 2.5 have been satisfied, all of the Properties shall be
released from the Liens of their respective Security

                                       26
<PAGE>

Instruments and the U.S. Obligations, pledged pursuant to the Security
Agreement, shall be the sole source of collateral securing the Note.

         (b) In connection with the release of the Security Instruments,
Borrower shall submit to Lender, not less than thirty (30) days prior to the
Defeasance Date, a release of Lien (and related Loan Documents) for each
Individual Property for execution by Lender. Such release shall be in a form
appropriate in each jurisdiction in which an Individual Property is located and
that would be satisfactory to a prudent institutional lender. In addition,
Borrower shall provide all other documentation Lender reasonably requires to be
delivered by Borrower in connection with such release, together with an
Officer's Certificate certifying that such documentation (i) is in compliance
with all applicable Legal Requirements, and (ii) will, following execution by
Lender and recordation thereof, effect such releases in accordance with the
terms of this Agreement.

         2.5.2 RELEASE OF INDIVIDUAL PROPERTY. After the Permitted Release Date,
if Borrower has elected to defease a portion of the Loan and the applicable
requirements of Section 2.4 hereof and this Section 2.5 have been satisfied,
Borrower may obtain the release of an Individual Property from the Lien of the
Security Instrument thereon (and related Loan Documents) and the release of
Borrower's obligations under the Loan Documents with respect to such Individual
Property (other than those expressly stated to survive), upon the satisfaction
of each of the following conditions:

         (a) The principal balance of the Defeased Note shall equal or exceed
the Release Amount for the applicable Individual Property; provided, however, if
the undefeased portion of the Loan at the time a release is requested is less
than the Release Amount, the Defeased Note shall equal the remaining undefeased
portion of the Loan at the time of release;

         (b) Borrower shall provide Lender with at least thirty (30) days but no
more than ninety (90) days prior written notice of its request to obtain a
release of the Individual Property;

         (c) Borrower shall defease the portion of the Note equal to the Release
Amount of the Individual Property being released (together with all accrued and
unpaid interest on the principal amount being defeased) in accordance with the
terms and conditions of Sections 2.4.1 and 2.4.2 hereof;

         (d) Borrower shall submit to Lender, not less than thirty (30) days
prior to the date of such release, a release of Lien (and related Loan
Documents) for such Individual Property for execution by Lender. Such release
shall be in a form appropriate in each jurisdiction in which the Individual
Property is located and that would be satisfactory to a prudent institutional
lender. In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such release,
together with an Officer's Certificate certifying that such documentation (i) is
in compliance with all applicable Legal Requirements, (ii) will, following
execution by Lender and recordation thereof, effect such release in accordance
with the terms of this Agreement, and (iii) will not impair or otherwise
adversely affect the Liens, security interests and other rights of Lender under
the Loan Documents not being released (or as to the parties to the Loan
Documents and Properties subject to the Loan Documents not being released);

                                       27
<PAGE>

         (e) After giving effect to such release, the Debt Service Coverage
Ratio for the Properties then remaining subject to the Lien of the Security
Instrument shall be at least equal to the Debt Service Coverage Ratio for all of
the Properties (including the Individual Property to be released) for the twelve
(12) full calendar months immediately preceding the release of such Individual
Property.

         (f) Intentionally Deleted;

         (g) Lender shall have received evidence that the Individual Property to
be released shall be conveyed to a Person other than Borrower or SPC Party;

         (h) Lender shall have received payment of all Lender's costs and
expenses, including due diligence review costs and reasonable counsel fees and
disbursements incurred in connection with the release of the Individual Property
from the lien of the related Security Instrument and the review and approval of
the documents and information required to be delivered in connection therewith;
and

         (i) Immediately following such release, the Allocated Loan Amount of
the Individual Property released (the "RELEASED INDIVIDUAL PROPERTY") shall be
reduced to zero and the Allocated Loan Amounts of the Individual Properties
remaining subject to the Lien of a Security Instrument immediately following
such release shall be reduced pro rata by the difference between the Release
Amount of the Released Individual Property and the original Allocated Loan
Amount of the Released Individual Property.

         2.5.3 RELEASE ON PAYMENT IN FULL. Lender shall, upon the written
request and at the expense of Borrower, upon payment in full of all principal
and interest on the Loan and all other amounts due and payable under the Loan
Documents in accordance with the terms and provisions of the Note and this
Agreement, release the Lien of the Security Instrument on each Individual
Property not theretofore released.

         SECTION 2.6 MANNER OF MAKING PAYMENTS; CASH MANAGEMENT.

         2.6.1 DEPOSITS INTO LOCKBOX ACCOUNT. Borrower shall cause all Rents
from the Properties to be deposited into the Lockbox Account in accordance with
the Cash Management Agreement. Without limitation of the foregoing, Borrower
shall, and shall cause Manager to, (a) cause or direct all tenants under Leases
to deliver all Rents payable thereunder either directly to the Lockbox Account
or to Manager for deposit into the Lockbox Account, and (b) deposit all amounts
received by Borrower or Manager constituting Rents or other revenue of any kind
from the Properties into the Lockbox Account within one (1) Business Day of
receipt thereof. Disbursements from the Lockbox Account will be made in
accordance with the terms and conditions of this Agreement and the Cash
Management Agreement. Lender shall have sole dominion and control over the
Lockbox Account and, except as set forth in the Cash Management Agreement,
Borrower shall have no rights to make withdrawals therefrom.

         2.6.2 PAYMENTS RECEIVED IN THE LOCKBOX ACCOUNT. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan Documents
and provided no Event of Default then exists, Borrower's obligations with
respect to the Interest Only Payment Amount, the Monthly Debt Service Payment
Amount and amounts due for the Reserve Funds shall be

                                       28
<PAGE>

deemed satisfied to the extent sufficient amounts are deposited in the Lockbox
Account to satisfy such obligations on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Lender.

         2.6.3 NO DEDUCTIONS, ETC. All payments made by Borrower hereunder or
under the Note or the other Loan Documents shall be made irrespective of, and
without any deduction for, any setoff, defense or counterclaims.

         SECTION 2.7 SUBSTITUTE PROPERTY.

         (a) Generally. Subject to the conditions in this Section 2.7, at any
time and from time to time, Borrower may substitute (each such act is hereafter
referred to as a "SUBSTITUTION") a property (a "SUBSTITUTE PROPERTY") for an
Individual Property (a "REPLACED PROPERTY"). From and after the substitution of
a Substitute Property in accordance herewith, such Substitute Property shall
thereafter be deemed an Individual Property under this Agreement and the
Security Instrument, and the Allocated Loan Amount of such Substitute Property
shall be the same as the Allocated Loan Amount of the Replaced Property, except
that in the event that two (2) or more Substitute Properties replace a single
Replaced Property, then in that event, the Allocated Loan Amount of the Replaced
Property shall be apportioned between or amongst the Substitute Properties as
Lender in its sole discretion decides. In the event of a substitution, the Note
shall remain in full force and effect and a new Security Instrument encumbering
the Substitute Property (the "SUBSTITUTE SECURITY INSTRUMENT") shall be executed
and delivered by Borrower to Lender to encumber the Substitute Property.
Concurrently with the completion of all steps necessary to substitute a
Substitute Property as provided herein, Lender shall execute or cause to be
executed all such documents as are necessary or appropriate (i) to release all
Liens granted to Lender and affecting the Replaced Property, and (ii) to cause
the Substitute Security Instrument to be cross-collateralized and
cross-defaulted with the Security Instrument. Notwithstanding anything to the
contrary hereinbefore contained, Borrower's right to substitute a Property as
herein provided shall be subject to the additional limitation that at any time
the Allocated Loan Amount of such Substitute Property, individually or when
aggregated with the Allocated Loan Amounts of all other Properties which are or
were a Substitute Property shall not constitute more than 33 1/3 % of the
original outstanding principal amount of the Loan.

         (b) Substitute Property Requirements. To qualify as a Substitute
Property, the property nominated to be a Substitute Property must, at the time
of substitution:

                  (i) be a property as to which Borrower will hold indefeasible
         fee title free and clear of any lien or other encumbrance except for
         Permitted Encumbrances;

                  (ii) be free and clear of Hazardous Substance except for
         nominal amounts of any such substances commonly incorporated in or used
         in the operation of properties similar to the Properties (in either
         case in compliance with all Environmental Laws), all as set forth in an
         environmental report delivered to Lender;

                  (iii) be in substantially the same repair and condition, which
         shall be certified by an Officer's Certificate of Borrower, as the
         Replaced Property was on the Closing Date or, in the event that the
         Replaced Property was itself a Substitute Property, on the

                                       29
<PAGE>

         date that such Property became a Property hereunder all as set forth in
         a Physical Conditions Report delivered to Lender;

                  (iv) be in compliance, in all material respects, with Legal
         Requirements which shall be certified in an Officer's Certificate;

                  (v) as evidenced by an Approved Appraisal performed at
         Borrower's expense and delivered to Lender, have a fair market value no
         less than the greater of (y) the fair market value of the Replaced
         Property on the Closing Date or (z) the fair market value of the
         Replaced Property immediately prior to the Substitution;

                  (vi) be used primarily for self-service storage and related
         uses; and

                  (vii) after giving effect to the Substitution, the Debt
         Service Coverage Ratio for all of the Properties (including the
         Substitute Property, but excluding the Replaced Property) shall be at
         least equal to the Debt Service Coverage Ratio for all of the
         Properties (including the Replaced Property) for the twelve (12) full
         calendar months immediately preceding the release and substitution of
         such Individual Property.

         (c) Conditions to Substitution. In addition to the requirements in
Section 2.7(b) above, substitution of any Property pursuant to this Section 2.7
shall be subject to the satisfaction of the following, all of which shall be
prepared or obtained at Borrower's expense:

                  (i) simultaneously with the Substitution, Borrower shall
         convey fee simple title to the Replaced Property to a Person other than
         Borrower;

                  (ii) Intentionally Deleted;

                  (iii) Intentionally Deleted;

                  (iv) receipt by Lender and the Rating Agencies of written
         notice thereof from Borrower at least thirty (30) days before the date
         of the proposed Substitution (the "SUBSTITUTION DATE"), together with
         (1) written evidence that the property proposed to be a Substitute
         Property complies with Section 2.7(b) above and (2) such other
         information, including financial information, as Lender or the Rating
         Agencies may request;

                  (v) Lender's receipt of written affirmation from the Rating
         Agencies that the ratings of the Securities immediately prior to such
         Substitution will not be qualified, downgraded or withdrawn as a result
         of such Substitution, which affirmation may be granted or withheld in
         the Rating Agencies' sole and absolute discretion;

                  (vi) delivery to Lender of an opinion of counsel opining as to
         the enforceability of the Substitute Security Instrument with respect
         to the Substitute Property in substantially the same form and substance
         as the opinion of counsel concerning enforceability originally
         delivered at the Closing Date in connection with the Replaced Property,
         with reasonable allowance for variations in applicable State law, and a
         Nondisqualification Opinion and a Tax Opinion;

                                       30
<PAGE>

                  (vii) no Event of Default shall have occurred and be
         continuing;

                  (viii) the representations and warranties set forth in this
         Agreement, in the Security Instrument and the Loan Documents applicable
         to the Replaced Property shall be true and correct (except as to title
         exceptions) as to the Substitute Property on the Substitution Date in
         all material respects;

                  (ix) delivery to Lender of a copy of the organizational
         documents of Borrower and all amendments thereto, certified as true,
         complete and correct as of the date of delivery by an Officer's
         Certificate; a certificate from the secretary of the State or other
         applicable State official or officer in Borrower's State of formation
         certifying that it is duly formed and in good standing (with tax
         clearance, if applicable), if available, and certificates from the
         Secretary of State of the State in which the Substitute Property is
         located (if such certificates are issued), certifying as to Borrower's
         good standing as a limited liability company in such State (with tax
         clearance, if applicable); delivery of an Officer's Certificate, dated
         the Substitution Date and signed on behalf of its Secretary or
         Assistant Secretary, certifying the names of the officers of the
         general partner of the sole member of Borrower authorized to execute
         and deliver, in the name and on behalf of Borrower, the Security
         Instrument, Assignment of Leases, UCC Financing Statements, and the
         other Loan Documents pertaining to such Substitute Property to which
         Borrower is a party, together with the original (not photocopied)
         signatures of such officers;

                  (x) delivery to Lender of an Officer's Certificate certifying
         to the veracity of the statements in Subsections 2.7(b)(ii),
         2.7(b)(iii), 2.7(b)(iv), 2.7(b)(vii), 2.7(c)(viii), and 2.7(c)(ix)
         hereof;

                  (xi) delivery to Lender of originals of the following:

                           (1)      Borrower shall have executed, acknowledged
                                    and delivered to Lender a Security
                                    Instrument, an Assignment of Leases and two
                                    UCC Financing Statements (to the extent
                                    execution and acknowledgment are required)
                                    with respect to the Substitute Property,
                                    together with a letter from Borrower
                                    countersigned by a title insurance company
                                    acknowledging receipt of such Security
                                    Instrument, Assignment of Leases and UCC-1
                                    Financing Statements and agreeing to record
                                    or file, as applicable, such Security
                                    Instrument, Assignment of Leases and Rents
                                    and, with regard to the UCC-1 Financing
                                    Statements, if recordation or a system of
                                    filing is accepted or established in the
                                    applicable jurisdiction, one of the UCC-1
                                    Financing Statements in the real estate
                                    records for the county in which the
                                    Substitute Property is located and, subject
                                    to local law, rule or custom, to file one of
                                    the UCC-1 Financing Statements in the office
                                    of the Secretary of State of the State in
                                    which Borrower has been formed, so as to
                                    effectively create upon such recording and
                                    filing valid and

                                       31
<PAGE>

                                    enforceable Liens upon the Substitute
                                    Property, of the requisite priority, in
                                    favor of Lender (or such other trustee as
                                    may be desired under local law), subject
                                    only to the Permitted Encumbrances and such
                                    other Liens as are permitted pursuant to the
                                    Loan Documents. The Security Instrument,
                                    Assignment of Leases and UCC-1 Financing
                                    Statements shall be the same in form and
                                    substance as the counterparts of such
                                    documents executed and delivered with
                                    respect to the related Replaced Property
                                    subject to modifications reflecting the
                                    Substitute Property as the Property that is
                                    the subject of such documents and such
                                    modifications reflecting the laws of the
                                    State in which the Substitute Property is
                                    located as shall be recommended by the
                                    counsel admitted to practice in such State
                                    and delivering the opinion of counsel as to
                                    the enforceability of such documents
                                    required pursuant to this Section. The
                                    Security Instrument encumbering the
                                    Substitute Property shall secure all amounts
                                    evidenced by the Note, provided that in the
                                    event that the jurisdiction in which the
                                    Substitute Property is located imposes a
                                    mortgage recording, intangibles or similar
                                    tax and does not permit the allocation of
                                    indebtedness for the purpose of determining
                                    the amount of such tax payable, the
                                    principal amount secured by such Security
                                    Instrument shall be equal to one hundred
                                    fifty percent (150%) of the amount of the
                                    Loan allocated to the Substitute Property;

                           (2)      Lender shall have received (A) any "tie-in"
                                    or similar endorsement to each Title
                                    Insurance Policy insuring the Lien of the
                                    Security Instrument as of the date of the
                                    substitution available with respect to the
                                    Title Insurance Policy insuring the Lien of
                                    the Security Instrument with respect to the
                                    Substitute Property and (B) a Title
                                    Insurance Policy (or a marked, signed and
                                    redated commitment to issue such Title
                                    Insurance Policy) insuring the Lien of the
                                    Security Instrument encumbering the
                                    Substitute Property, issued by the title
                                    company that issued the Title Insurance
                                    Policies insuring the Lien of the Security
                                    Instrument and dated as of the date of the
                                    substitution, with reinsurance and direct
                                    access agreements that replace such
                                    agreements issued in connection with the
                                    Title Insurance Policy insuring the Lien of
                                    the Security Instrument encumbering the
                                    Replaced Property. The Title Insurance
                                    Policy issued with respect to the Substitute
                                    Property shall (1) provide coverage in the
                                    amount of the Release Amount applicable to
                                    the Substitute Property if the "tie-in" or
                                    similar endorsement described above is
                                    available or, if such

                                       32
<PAGE>

                                    endorsement is not available, in an amount
                                    equal to one hundred fifty percent (150%) of
                                    the Release Amount applicable for the
                                    Substitute Property, (2) insure Lender that
                                    the relevant Security Instrument creates a
                                    valid first lien on the Substitute Property
                                    encumbered thereby, free and clear of all
                                    exceptions from coverage other than
                                    Permitted Encumbrances and standard
                                    exceptions and exclusions from coverage (as
                                    modified by the terms of any endorsements),
                                    (3) contain such legally available
                                    endorsements and affirmative coverages as
                                    are contained in the Title Insurance
                                    Policies insuring the Liens of the existing
                                    Security Instrument, and (4) name Lender as
                                    the insured. Lender also shall have received
                                    copies of paid receipts showing that all
                                    costs of or premiums for such endorsements
                                    and Title Insurance Policies have been paid;

                           (3)      a current as-built land title Survey and a
                                    certificate from a professional licensed
                                    land surveyor with respect to such
                                    Substitute Property, certified to the Title
                                    Company and Lender, and prepared in
                                    accordance with the 1999 Minimum Standard
                                    Detail Requirements for ALTA/ACSM Land Title
                                    Surveys meeting the classification of an
                                    "Urban Survey" and the following additional
                                    items from the list of "Optional Survey
                                    Responsibilities and Specifications" (Table
                                    A) shall be added to each survey 2, 3, 4, 6,
                                    8, 9, 10, 11(a) (as to utilities, surface
                                    matters only) and 13, and showing the
                                    location, dimensions and area of each parcel
                                    of the Substitute Property, including all
                                    existing buildings and improvements,
                                    utilities, parking areas and spaces,
                                    internal streets, if any, external streets,
                                    rights-of-way, as well as any easements,
                                    setback violations or encroachments on such
                                    Substitute Property and identifying each
                                    item with its corresponding exception, if
                                    any, in the title policy relating thereto.
                                    Each survey shall contain the original
                                    signature and seal of the surveyor and any
                                    additional matter required by the Title
                                    Company. In addition, Borrower shall provide
                                    with respect to each Substitute Property a
                                    certificate of a professional land surveyor
                                    to the effect that the Improvements located
                                    upon such Substitute Property are not
                                    located in a flood plain area, or, if such
                                    Substitute Property is in a flood plain
                                    area, Borrower shall deliver on the Closing
                                    Date evidence of flood insurance;

                           (4)      a certified copy of a deed conveying to
                                    Borrower all right, title and interest in
                                    and to the Replaced Property and a letter
                                    from a title insurance company acknowledging
                                    receipt of such deed and agreeing to record
                                    such deed in the

                                       33
<PAGE>

                                    real estate records for the county in which
                                    the Replaced Property is located;

                           (5)      insurance certificates issued by insurance
                                    companies evidencing the insurance coverage
                                    required under Section 6.1 hereof;

                           (6)      a Phase I environmental report issued by a
                                    qualified environmental consultant at
                                    Borrower's expense, and, if recommended by
                                    the Phase I environmental report, a Phase II
                                    environmental report, which conclude that
                                    the Substitute Property does not contain any
                                    Hazardous Substance except for nominal
                                    amounts of such substances commonly
                                    incorporated in or used in the operation of
                                    properties similar to the Substitute
                                    Property (in either case in compliance with
                                    all Environmental Laws). If any such report
                                    discloses the presence of any Hazardous
                                    Substance, such report shall include an
                                    estimate of the cost of any related
                                    remediation and Borrower shall deposit with
                                    Lender an amount equal to one hundred fifty
                                    percent (150%) of such estimated cost, which
                                    deposit shall constitute additional security
                                    for the Loan and shall be released to
                                    Borrower upon the delivery to Lender of (A)
                                    an update to such report indicating that
                                    there is no longer any Hazardous Substance
                                    on the Substitute Property except for
                                    nominal amounts of such substances commonly
                                    incorporated in or used in the operation of
                                    properties similar to the Substitute
                                    Property (in either case in compliance with
                                    all Environmental Laws) and (B) paid
                                    receipts indicating that the costs of all
                                    such remediation work have been paid;

                           (7)      payments of or reimbursement for all costs
                                    and expenses incurred by Lender (including,
                                    without limitation, reasonable attorneys'
                                    fees and disbursements) in connection with
                                    the substitution, and Borrower shall have
                                    paid all recording charges, filing fees,
                                    taxes or other expenses (including, without
                                    limitation, mortgage and intangibles taxes
                                    and documentary stamp taxes) payable in
                                    connection with the substitution. Borrower
                                    shall have paid all costs and expenses of
                                    the Rating Agencies incurred in connection
                                    with the substitution;

                           (8)      an endorsement to the Title Insurance Policy
                                    insuring the Lien of the Security Instrument
                                    encumbering the Substitute Property insuring
                                    that the Substitute Property constitutes a
                                    separate tax lot or, if such an endorsement
                                    is not available in the State in which the
                                    Substitute Property is located, a letter
                                    from the title insurance company issuing
                                    such Title Insurance Policy or of an opinion
                                    of competent counsel in

                                       34
<PAGE>

                                    the State where such Substitute Property is
                                    located, stating that the Substitute
                                    Property constitutes a separate tax lot or a
                                    letter from the appropriate authority
                                    stating that the Substitute Property
                                    constitutes a separate tax lot;

                           (9)      a Physical Conditions Report with respect to
                                    the Substitute Property stating that the
                                    Substitute Property and its use comply in
                                    all material respects with all applicable
                                    Legal Requirements (including, without
                                    limitation, zoning, subdivision and building
                                    laws) and that the Substitute Property is in
                                    good condition and repair and free of damage
                                    or waste. If compliance with any Legal
                                    Requirements are not addressed by the
                                    Physical Conditions Report, such compliance
                                    shall be confirmed by delivery to Lender of
                                    a certificate of an architect licensed in
                                    the State in which the Substitute Property
                                    is located, a letter from the municipality
                                    in which such Property is located, a
                                    certificate of a surveyor that is licensed
                                    in the State in which the Substitute
                                    Property is located (with respect to zoning
                                    and subdivision laws), an ALTA 3.1 zoning
                                    endorsement to the Title Insurance Policy
                                    delivered pursuant to clause (2) above (with
                                    respect to zoning laws) or a subdivision
                                    endorsement to the Title Insurance Policy
                                    delivered pursuant to clause (2) above (with
                                    respect to subdivision laws). If the
                                    Physical Conditions Report recommends that
                                    any repairs be made with respect to the
                                    Substitute Property, such Physical
                                    Conditions Report shall include an estimate
                                    of the cost of such recommended repairs and
                                    Borrower shall deposit with Lender an amount
                                    equal to one hundred twenty-five percent
                                    (125%) of such estimated cost, which deposit
                                    shall constitute additional security for the
                                    Loan and shall be released to Borrower upon
                                    the delivery to Lender of (A) an update to
                                    such Physical Conditions Report or a letter
                                    from engineer that prepared such Physical
                                    Conditions Report indicating that the
                                    recommended repairs were completed in good
                                    manner and (B) paid receipts indicating that
                                    the costs of all such repairs have been
                                    paid;

                           (10)     annual operating statements and occupancy
                                    statements for the Substitute Property for
                                    the most current completed fiscal year and a
                                    current operating statement for the Replaced
                                    Property, each certified to Lender as being
                                    true and correct, and a certificate from
                                    Borrower certifying that there has been no
                                    adverse change in the financial condition of
                                    the Substitute Property since the date of
                                    such operating statements;

                                       35
<PAGE>

                           (12)     a release of Lien (and related Loan
                                    Documents) for the Replaced Property for
                                    execution by Lender. Such release shall be
                                    in a form appropriate for the jurisdiction
                                    in which the Replaced Property is located;
                                    and

                           (13)     Lender shall have received such other and
                                    further approvals, opinions, documents and
                                    information in connection with the
                                    substitution as the Rating Agencies may have
                                    requested.

         III. CONDITIONS PRECEDENT

         SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING.

                  The obligation of Lender to make the Loan hereunder is subject
to the fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date:

         3.1.1 REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH CONDITIONS. The
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the Closing Date with the same effect as if made on and as of such date,
and no Default or an Event of Default shall have occurred and be continuing; and
Borrower shall be in compliance in all material respects with all terms and
conditions set forth in this Agreement and in each other Loan Document on its
part to be observed or performed.

         3.1.2 LOAN AGREEMENT AND NOTE. Lender shall have received a copy of
this Agreement and the Note, in each case, duly executed and delivered on behalf
of Borrower.

         3.1.3 DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES.

         (a) SECURITY INSTRUMENT, ASSIGNMENT OF LEASES AND OTHER LOAN DOCUMENTS.
Lender shall have received from Borrower fully executed and acknowledged
counterparts of the Security Instrument and the Assignment of Leases and
evidence that counterparts of the Security Instrument and Assignment of Leases
have been delivered to the title company for recording, in the reasonable
judgment of Lender, so as to effectively create upon such recording valid and
enforceable liens upon each Individual Property, of the requisite priority, in
favor of Lender (or such other trustee as may be required or desired under local
law), subject only to the Permitted Encumbrances and such other Liens as are
permitted pursuant to the Loan Documents. Lender shall have also received from
(i) Borrower fully executed counterparts of the Environmental Indemnity, Cash
Management Agreement and Assignment of Management Agreement and (ii) Guarantor,
a fully executed counterpart of the Guaranty.

         (b) TITLE INSURANCE. Lender shall have received Title Insurance
Policies issued by a title company acceptable to Lender and dated as of the
Closing Date, with reinsurance and direct access agreements acceptable to
Lender. Such Title Insurance Policies shall (i) provide coverage in amounts
satisfactory to Lender, (ii) insure Lender that the applicable Security
Instrument creates a valid lien on the Individual Property encumbered thereby of
the requisite priority, free

                                       36
<PAGE>

and clear of all exceptions from coverage other than Permitted Encumbrances and
standard exceptions and exclusions from coverage (as modified by the terms of
any endorsements), (iii) contain such endorsements and affirmative coverages as
Lender may reasonably request, and (iv) name Lender as the insured. The Title
Insurance Policies shall be assignable. Lender also shall have received evidence
that all premiums in respect of such Title Insurance Policies have been paid.

         (c) SURVEY. Lender shall have received a current title Survey for each
Individual Property, certified to the title company and Lender and their
successors and assigns, in form and content satisfactory to Lender and prepared
by a professional and properly licensed land surveyor satisfactory to Lender in
accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. The Surveys shall show the following additional items from the
list of "Optional Survey Responsibilities and Specifications" (Table A) should
be added to each survey: 2, 3, 4, 6, 7(a), 7(b)(1), 8, 9, 10, 11(a) (as to
utilities, surface matters only) and 13. Each such Survey shall reflect the same
legal description contained in the Title Insurance Policy relating to such
Individual Property referred to in clause (ii) above and shall include, among
other things, a metes and bounds description of the real property comprising
part of such Individual Property reasonably satisfactory to Lender. The
surveyor's seal shall be affixed to each Survey and the surveyor shall provide a
certification for each Survey in accordance with the 1999 Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys in form and substance
acceptable to Lender.

         (d) INSURANCE. Lender shall have received valid certificates of
insurance for the policies of insurance required hereunder, satisfactory to
Lender in its sole discretion, and evidence of the payment of all premiums
payable for the existing policy period.

         (e) ENVIRONMENTAL REPORTS. Lender shall have received an environmental
report in respect of each Individual Property, in each case satisfactory to
Lender.

         (f) ZONING. With respect to each Individual Property, Lender shall have
received, at Lender's option, (i) letters or other evidence with respect to each
Individual Property from the appropriate municipal authorities (or other
Persons) concerning applicable zoning and building laws, (ii) an ALTA 3.1 zoning
endorsement for the applicable Title Insurance Policy or (iii) a zoning opinion
letter, in each case in substance reasonably satisfactory to Lender.

         (g) ENCUMBRANCES. Borrower shall have taken or caused to be taken such
actions in such a manner so that Lender has a valid and perfected first lien as
of the Closing Date with respect to each Security Instrument on the applicable
Individual Property, subject only to applicable Permitted Encumbrances and such
other Liens as are permitted pursuant to the Loan Documents, and Lender shall
have received satisfactory evidence thereof.

         3.1.4 RELATED DOCUMENTS. Each additional document not specifically
referenced herein, but relating to the transactions contemplated herein, shall
have been duly authorized, executed and delivered by all parties thereto and
Lender shall have received and approved certified copies thereof.

                                       37
<PAGE>

         3.1.5 DELIVERY OF ORGANIZATIONAL DOCUMENTS. On or before the Closing
Date, Borrower shall deliver or cause to be delivered to Lender copies certified
by Borrower of all organizational documentation related to Borrower and/or the
formation, structure, existence, good standing and/or qualification to do
business, as Lender may request in its sole discretion, including, without
limitation, good standing certificates, qualifications to do business in the
appropriate jurisdictions, resolutions authorizing the entering into of the Loan
and incumbency certificates as may be requested by Lender.

         3.1.6 OPINIONS OF BORROWER'S COUNSEL. Lender shall have received
opinions of Borrower's counsel (a) with respect to non-consolidation issues, and
(b) with respect to due execution, authority, enforceability of the Loan
Documents and such other matters as Lender may require, all such opinions in
form, scope and substance satisfactory to Lender and Lender's counsel in their
sole discretion.

         3.1.7 BUDGETS. Borrower shall have delivered to Lender the Annual
Budget for the current Fiscal Year.

         3.1.8 BASIC CARRYING COSTS. Borrower shall have paid all Basic Carrying
Costs relating to the Properties which are in arrears, including without
limitation, (a) accrued but unpaid insurance premiums relating to the
Properties, (b) currently due Taxes (including any in arrears) relating to the
Properties, and (c) currently due Other Charges relating to the Properties,
which amounts shall be funded with proceeds of the Loan.

         3.1.9 COMPLETION OF PROCEEDINGS. All corporate and other organizational
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be satisfactory in form and substance to Lender, and
Lender shall have received all such counterpart originals or certified copies of
such documents as Lender may reasonably request.

         3.1.10 PAYMENTS. All payments, deposits or escrows required to be made
or established by Borrower under this Agreement, the Note and the other Loan
Documents on or before the Closing Date shall have been paid.

         3.1.11 TENANT ESTOPPELS. Lender shall have received an executed tenant
estoppel letter, which shall be in form and substance satisfactory to Lender,
from each tenant under a Major Lease.

         3.1.12 TRANSACTION COSTS. Borrower shall have paid or reimbursed Lender
for all title insurance premiums, recording and filing fees, costs of
environmental reports, Physical Conditions Reports, appraisals and other
reports, the fees and costs of Lender's counsel and all other third party
out-of-pocket expenses incurred in connection with the origination of the Loan.

         3.1.13 MATERIAL ADVERSE EFFECT. There shall have been no Material
Adverse Effect on the financial condition or business condition of Borrower or
the Properties since the date of the most recent financial statements delivered
to Lender. The income and expenses of the Properties, the occupancy and Leases
thereof, and all other features of the transaction shall be as represented to
Lender without material adverse change. Neither Borrower nor any of its

                                       38
<PAGE>

constituent Persons shall be the subject of any bankruptcy, reorganization, or
insolvency proceeding.

         3.1.14 LEASES AND RENT ROLL. Lender shall have received copies of all
tenant leases, certified copies of any tenant leases as requested by Lender and
certified copies of all ground leases affecting the Properties. Lender shall
have received a current certified rent roll of the Properties, reasonably
satisfactory in form and substance to Lender.

         3.1.15 TAX LOT. Lender shall have received evidence that each
Individual Property constitutes one (1) or more separate tax lots, which
evidence shall be reasonably satisfactory in form and substance to Lender.

         3.1.16 PHYSICAL CONDITIONS REPORTS. Lender shall have received Physical
Conditions Reports with respect to each Individual Property, which reports shall
be reasonably satisfactory in form and substance to Lender.

         3.1.17 MANAGEMENT AGREEMENT. Lender shall have received a certified
copy of the Management Agreement with respect to the Properties which shall be
satisfactory in form and substance to Lender.

         3.1.18 APPRAISAL. Lender shall have received an appraisal of each
Individual Property, which shall be satisfactory in form and substance to
Lender.

         3.1.19 FINANCIAL STATEMENTS. Lender shall have received a balance sheet
with respect to each Individual Property for the two most recent Fiscal Years
and statements of income and statements of cash flows with respect to each
Individual Property for the three most recent Fiscal Years, each in form and
substance satisfactory to Lender.

         3.1.20 FURTHER DOCUMENTS. Lender or its counsel shall have received
such other and further approvals, opinions, documents and information as Lender
or its counsel may have reasonably requested including the Loan Documents in
form and substance satisfactory to Lender and its counsel.

         IV. REPRESENTATIONS AND WARRANTIES

         SECTION 4.1 BORROWER REPRESENTATIONS.

                  Borrower represents and warrants as of the date hereof and as
of the Closing Date that:

         4.1.1 ORGANIZATION. Borrower has been duly organized and is validly
existing and in good standing with requisite power and authority to own its
properties and to transact the businesses in which it is now engaged. Borrower
is duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified in connection with its properties,
businesses and operations. Borrower possesses all rights, licenses, permits and
authorizations, governmental or otherwise, necessary to entitle it to own its
properties and to transact the businesses in which it is now engaged, and the
sole business of Borrower is the

                                       39
<PAGE>

ownership, management and operation of the Properties. Schedule 4.1.1 attached
hereto accurately depicts the organizational structure of Borrower.

         4.1.2 PROCEEDINGS. Borrower has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the other Loan
Documents. This Agreement and such other Loan Documents have been duly executed
and delivered by or on behalf of Borrower and constitute legal, valid and
binding obligations of Borrower enforceable against Borrower in accordance with
their respective terms, subject only to applicable bankruptcy, insolvency and
similar laws affecting rights of creditors generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

         4.1.3 NO CONFLICTS. The execution, delivery and performance of this
Agreement and the other Loan Documents by Borrower will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, partnership agreement or other agreement or instrument to
which Borrower is a party or by which any of Borrower's property or assets is
subject, nor will such action result in any violation of the provisions of any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over Borrower or any of Borrower's properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental agency or body required for the execution, delivery and performance
by Borrower of this Agreement or any other Loan Documents has been obtained and
is in full force and effect.

         4.1.4 LITIGATION. Except as set forth on Schedule 4.1.4 attached hereto
and made a part hereof there are no actions, suits or proceedings at law or in
equity by or before any Governmental Authority or other agency now pending or
threatened against or affecting Borrower or any Individual Property, which
actions, suits or proceedings, if determined against Borrower or any Individual
Property, might materially adversely affect the condition (financial or
otherwise) or business of Borrower or the condition or ownership of any
Individual Property.

         4.1.5 AGREEMENTS. Borrower is not a party to any agreement or
instrument or subject to any restriction which might materially and adversely
affect Borrower or any Individual Property, or Borrower's business, properties
or assets, operations or condition, financial or otherwise. Borrower 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 Borrower or any of the Properties
are bound. Borrower has no material financial obligation under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which Borrower is a party or by which Borrower or the Properties is otherwise
bound, other than (a) obligations incurred in the ordinary course of the
operation of the Properties and specifically permitted under this Agreement and
(b) obligations under the Loan Documents. Set forth on Schedule 4.1.5 attached
hereto are the material agreements to which Borrower is a party or by which
Borrower or any of the Properties are bound. Each such material agreement is
cancellable without penalty or premium on no more than thirty (30) days notice
unless otherwise specifically set forth on such Schedule 4.1.5.

                                       40
<PAGE>

         4.1.6 TITLE. Borrower has good, marketable and insurable fee simple
title (or the leasehold title with respect to the East Hanover Property) to the
real property comprising part of each Individual Property and good title to the
balance of such Individual Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. Each Security
Instrument, when properly recorded in the appropriate records, together with any
Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected lien on the applicable Individual
Property, subject only to Permitted Encumbrances and the Liens created by the
Loan Documents and (b) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Leases), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. There are no claims for
payment for work, labor or materials affecting the Properties which are or may
become a lien prior to, or of equal priority with, the Liens created by the Loan
Documents.

         4.1.7 SOLVENCY / NO BANKRUPTCY FILING. Borrower (a) has not entered
into the transaction or executed the Note, this Agreement or any other Loan
Documents with the actual intent to hinder, delay or defraud any creditor and
(b) has received reasonably equivalent value in exchange for its obligations
under the Loan Documents. Giving effect to the Loan, the fair saleable value of
Borrower's assets exceeds and will, immediately following the making of the
Loan, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its debts as such debts
become absolute and matured. Borrower's assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to incur debt and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debt and liabilities as they mature
(taking into account the timing and amounts of cash to be received by Borrower
and the amounts to be payable on or in respect of obligations of Borrower). No
petition under the Bankruptcy Code or similar State bankruptcy or insolvency law
has been filed against Borrower or any constituent Person in the last seven (7)
years, and neither Borrower nor any constituent Person in the last seven (7)
years has ever made an assignment for the benefit of creditors or taken
advantage of any insolvency act for the benefit of debtors. Neither Borrower nor
any of its constituent Persons are contemplating either the filing of a petition
by it under the Bankruptcy Code or similar State bankruptcy or insolvency law or
the liquidation of all or a major portion of Borrower's assets or property, and
Borrower has no knowledge of any Person contemplating the filing of any such
petition against it or such constituent Persons.

         4.1.8 FULL AND ACCURATE DISCLOSURE. No statement of fact made by
Borrower in this Agreement or in any of the other Loan Documents contains any
untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading. There
is no material fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, any Individual Property or the business, operations or
condition (financial or otherwise) of Borrower.

                                       41
<PAGE>

         4.1.9 NO PLAN ASSETS. Borrower is not a Plan and none of the assets of
Borrower constitute or will constitute "Plan Assets" of one or more Plans. In
addition, (a) Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to State statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code currently in effect, which prohibit or otherwise
restrict the transactions contemplated by this Agreement.

         4.1.10 COMPLIANCE. Borrower and the Properties and the use thereof
comply in all material respects with all applicable Legal Requirements,
including, without limitation, Environmental Laws, building and zoning
ordinances and codes. Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority. There has not
been committed by Borrower or, to Borrower's actual knowledge, any other Person
in occupancy of or involved with the operation or use of the Properties any act
or omission affording the Federal government or any other Governmental Authority
the right of forfeiture as against any Individual Property or any part thereof
or any monies paid in performance of Borrower's obligations under any of the
Loan Documents. Borrower hereby covenants and agrees not to commit, permit or
suffer to exist any act or omission affording such right of forfeiture.

         4.1.11 FINANCIAL INFORMATION. All financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of Borrower and the Properties (i) are
true, complete and correct in all material respects, (ii) accurately represent
the financial condition of Borrower and the Properties, as applicable, as of the
date of such reports, and (iii) to the extent prepared or audited by an
Acceptable Accountant, have been prepared in accordance with GAAP throughout the
periods covered, except as disclosed therein. Borrower does not have any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Borrower and reasonably likely to have a Material Adverse
Effect on any Individual Property or the operation thereof in the manner
currently operated, except as referred to or reflected in said financial
statements. Since the date of such financial statements, there has been no
Material Adverse Effect on the financial condition, operations or business of
Borrower from that set forth in said financial statements.

         4.1.12 CONDEMNATION. No Condemnation or other similar proceeding has
been commenced or, to the best of Borrower's knowledge, is contemplated with
respect to all or any portion of any Individual Property or for the relocation
of roadways providing access to any Individual Property.

         4.1.13 FEDERAL RESERVE REGULATIONS. No part of the proceeds of the Loan
will be used for the purpose of purchasing or acquiring any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.

                                       42
<PAGE>

         4.1.14 UTILITIES AND PUBLIC ACCESS. Each Individual Property has rights
of access to public ways and is served by public water, sewer, sanitary sewer
and storm drain facilities adequate to service such Individual Property for its
respective intended uses. All public utilities necessary or convenient to the
full use and enjoyment of each Individual Property are located either in the
public right-of-way abutting such Individual Property (which are connected so as
to serve such Individual Property without passing over other property) or in
recorded easements serving such Individual Property and such easements are set
forth in and insured by the Title Insurance Policies. All roads necessary for
the use of each Individual Property for their current respective purposes have
been completed, are physically open and are dedicated to public use and have
been accepted by all Governmental Authorities.

         4.1.15 NOT A FOREIGN PERSON. Borrower is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.

         4.1.16 SEPARATE LOTS. Each Individual Property is comprised of one (1)
or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of such Individual
Property.

         4.1.17 ASSESSMENTS. There are no pending or proposed special or other
assessments for public improvements or otherwise affecting any Individual
Property, nor, has Borrower received any notice of any contemplated improvements
to any Individual Property that may result in such special or other assessments.

         4.1.18 ENFORCEABILITY. The Loan Documents are not subject to any right
of rescission, set-off, counterclaim or defense by Borrower, 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, and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.

         4.1.19 NO PRIOR ASSIGNMENT. There are no prior assignments of the
Leases or any portion of the Rents due and payable or to become due and payable
which are presently outstanding.

         4.1.20 INSURANCE. Borrower has obtained and has delivered to Lender
certified copies of all insurance policies reflecting the insurance coverages,
amounts and other requirements set forth in this Agreement. No claims have been
made under any such policy, and no Person, including Borrower, has done, by act
or omission, anything which would impair the coverage of any such policy.

         4.1.21 USE OF PROPERTY. Each Individual Property is used exclusively
for self-service storage facility purposes and other appurtenant and related
uses (except the Lake Worth Property and the Laurel Property and such other
Individual Properties which are used, in addition to self-service storage
facility uses, for office, office / warehouse and retail uses approved by Lender
which approval shall not be unreasonably withheld). [POOL 1 ONLY]

         4.1.22 CERTIFICATE OF OCCUPANCY; LICENSES. All certifications, permits,
licenses and approvals, including without limitation, certificates of completion
and occupancy permits required for the legal use, occupancy and operation of
each Individual Property as currently

                                       43
<PAGE>

operated (collectively, the "LICENSES"), have been obtained and are in full
force and effect. Borrower shall keep and maintain all licenses necessary for
the operation of each Individual Property as currently operated. The use being
made of each Individual Property is in conformity with the certificate of
occupancy issued for such Individual Property.

         4.1.23 FLOOD ZONE. Except as shown on the Surveys, none of the
Improvements on any Individual Property are located in an area as identified by
the Federal Emergency Management Agency as an area having special flood hazards
and, if so located, the flood insurance required hereunder is in full force and
effect with respect to each such Individual Property.

         4.1.24 PHYSICAL CONDITION. Each Individual 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 any Individual Property, whether latent
or otherwise, and Borrower has not received notice from any insurance company or
bonding company of any defects or inadequacies in any Individual 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. Each
Individual Property is free from damage covered by fire or other casualty. All
liquid and solid waste disposal, septic and sewer systems located on each
Individual Property are in a good and safe condition and repair and in
compliance with all Legal Requirements.

         4.1.25 BOUNDARIES. Except as otherwise as shown on the Survey, all of
the Improvements which were included in determining the appraised value of each
Individual Property lie wholly within the boundaries and building restriction
lines of such Individual Property, and no improvements on adjoining properties
encroach upon such Individual Property, and no easements or other encumbrances
upon the applicable Individual Property encroach upon any of the Improvements,
so as to affect the value or marketability of the applicable Individual Property
except those which are insured against by title insurance; provided, however, to
the extent that any of the foregoing are not satisfied, such encroachments do
not have a Material Adverse Effect.

         4.1.26 LEASES.

         (a) The Properties are not subject to any Leases other than the Leases
disclosed to Lender in writing or set forth in the occupancy and/or rental
reports delivered to Lender on or prior to the Closing Date. Except as set forth
on Schedule 4.1.26 attached hereto, there are no Major Leases on any Individual
Property. Borrower is the owner and lessor of landlord's interest in the Leases.
No Person has any possessory interest in any Individual Property or right to
occupy the same except under and pursuant to the provisions of the Leases. The
current Leases are in full force and effect and there are no defaults by
Borrower or, to the best of Borrower's knowledge, any tenant under any Lease
which have a Material Adverse Effect and, to the best of Borrower's knowledge,
there are no conditions that, with the passage of time or the giving of notice,
or both, would constitute defaults under any Lease which would have a Material
Adverse Effect. Except as disclosed to Lender in writing or set forth in the
Rent Rolls delivered to

                                       44
<PAGE>

Lender on or prior to the Closing Date, no Rent (including security deposits)
has been paid more than one (1) month in advance of its due date. There are no
offsets or defenses to the payment of any portion of the Rents. All work to be
performed by Borrower under each Lease has been performed as required and has
been accepted by the applicable tenant, and, except as disclosed to Lender in
writing or set forth in the Rent Rolls, any payments, free rent, partial rent,
rebate of rent or other payments, credits, allowances or abatements required to
be given by Borrower to any tenant has already been received by such tenant.
There has been no prior sale, transfer or assignment, hypothecation or pledge of
any Lease or of the Rents received therein which is still in effect. Except as
disclosed to Lender in writing or set forth in the Rent Rolls, to the best of
Borrower's knowledge, no tenant has assigned its Lease or sublet all or any
portion of the premises demised thereby, no such tenant holds its leased
premises under assignment or sublease, nor does anyone except such tenant and
its employees occupy such leased premises. No tenant under any Lease has a right
or option pursuant to such Lease or otherwise to purchase all or any part of the
leased premises or the building of which the leased premises are a part. No
tenant under any Lease has any right or option for additional space in the
Improvements. To Borrower's knowledge, no hazardous wastes or toxic substances,
as defined by applicable Federal, State or local statutes, rules and
regulations, have been disposed, stored or treated by any tenant under any Lease
on or about the leased premises nor does Borrower have any knowledge of any
tenant's intention to use its leased premises for any activity which, directly
or indirectly, involves the use, generation, treatment, storage, disposal or
transportation of any petroleum product or any toxic or hazardous chemical,
material, substance or waste.

         (b) With respect to any Individual Property located within the State of
New York, Lender shall have all of the rights against lessees of each Individual
Property located in the State of New York set forth in Section 291-f of the Real
Property Law of New York.

         4.1.27 SURVEY. The Survey for each Individual Property delivered to
Lender in connection with this Agreement has been prepared in accordance with
the provisions of Section 3.1.3(c) hereof, and does not fail to reflect any
material matter affecting such Individual Property or the title thereto.

         4.1.28 LOAN TO VALUE. The maximum principal amount of the Loan does not
exceed one hundred twenty-five percent (125%) of the fair market value of the
Properties.

         4.1.29 FILING AND RECORDING TAXES. All transfer taxes, deed stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under applicable Legal Requirements currently in effect in
connection with the transfer of the Properties to Borrower have been paid. All
mortgage, mortgage recording, stamp, intangible or other similar tax required to
be paid by any Person under applicable Legal Requirements currently in effect in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Security Instrument, been paid, and, under current Legal
Requirements, each Security Instrument is enforceable in accordance with their
respective terms by Lender (or any subsequent holder thereof).

         4.1.30 SINGLE PURPOSE ENTITY/SEPARATENESS. Borrower represents,
warrants and covenants as follows:

                                       45
<PAGE>

                  (a) The purpose for which Borrower is organized is and shall
         be limited solely to (i) owning, holding, selling, leasing,
         transferring, exchanging, operating and managing the Properties, (ii)
         entering into this Agreement with Lender, (iii) refinancing the
         Properties in connection with a permitted repayment of the Loan and
         (iv) transacting any and all lawful business for which a Borrower may
         be organized under its constitutive law that is incident, necessary and
         appropriate to accomplish the foregoing.

                  (b) Borrower does not own and will not own any asset or
         property other than (i) the Properties, and (ii) incidental personal
         property necessary for and used or to be used in connection with the
         ownership or operation of the Properties.

                  (c) Borrower will not engage in any business other than the
         ownership, management and operation of the Properties.

                  (d) Borrower will not enter into any contract or agreement
         with any Affiliate of Borrower, any constituent party of Borrower, any
         guarantors of the obligations of Borrower or any Affiliate of any
         constituent party, owner or guarantor (collectively, the "RELATED
         PARTIES"), except upon terms and conditions that are intrinsically
         fair, commercially reasonable and substantially similar to those that
         would be available on an arms-length basis with third parties not so
         affiliated with Borrower or such Related Parties. Borrower will
         maintain an arm's length relationship with such Related Parties or any
         other Person.

                  (e) Borrower has not incurred and will not incur any
         Indebtedness other than (i) the Loan and (ii) trade payables in the
         ordinary course of business with trade creditors in amounts as are
         normal and reasonable under the circumstances, provided such debt is
         not evidenced by a note, does not exceed $4,000,000.00 in the
         aggregate, and is not in excess of sixty (60) days past due. No
         Indebtedness other than the Debt may be secured (senior, subordinate or
         pari passu) by the Properties.

                  (f) Borrower has not made and will not make any loans or
         advances to any Person and shall not acquire obligations or securities
         of any Related Party. Borrower will not form, acquire or hold any
         subsidiaries, or own or acquire any stock or equity interest in any
         Related Parties or any other Person (except that Borrower may invest in
         those investments permitted under the Loan Documents).

                  (g) Borrower is and will remain solvent and Borrower will pay
         its debts and liabilities (including, as applicable, shared personnel
         and overhead expenses) from its assets as the same shall become due.

                  (h) Borrower has done or caused to be done and will do all
         things necessary to observe organizational formalities and preserve its
         existence, and Borrower will not, nor will Borrower permit any Related
         Party to, amend, modify or otherwise change the partnership
         certificate, partnership agreement, articles of incorporation and
         bylaws, operating agreement, trust or other organizational documents of
         Borrower or such Related Party without the prior written consent of
         Lender.

                                       46
<PAGE>

                  (i) Borrower will maintain all of its books, records,
         financial statements and bank accounts separate from those of any other
         Person and Borrower's assets will not be listed as assets on the
         financial statement of any other Person. Borrower will file its own tax
         returns provided, however, that Borrower's assets and income may be
         included in a consolidated tax return of its parent companies if
         inclusion on such a consolidated tax return is required to comply with
         the requirement of GAAP or any applicable law.

                  (j) Borrower will be, and at all times will hold itself out to
         the public as, a legal entity separate and distinct from any other
         Person (including any Affiliate or other Related Party), shall correct
         any known misunderstanding regarding its status as a separate entity,
         shall conduct business in its own name, shall not identify itself or
         any of its Affiliates as a division or part of the other and shall
         maintain and utilize separate stationery, invoices and checks.

                  (k) Borrower will maintain adequate capital for the normal
         obligations reasonably foreseeable in a business of its size and
         character and in light of its contemplated business operations, except
         that no constituent party of Borrower shall be required to make any
         additional capital contributions to Borrower.

                  (l) Neither Borrower nor any Related Party will seek the
         dissolution, winding up, liquidation, consolidation or merger in whole
         or in part, or the sale of material assets of Borrower.

                  (m) Borrower will not commingle its assets with those of any
         other Person and will hold all of its assets in its own name. Borrower
         will deposit all of its funds in checking accounts, savings accounts,
         time deposits or certificate deposits in its own name or invest such
         funds in its own name.

                  (n) Borrower will not guarantee or become obligated for the
         debts of any other Person and does not and will not hold itself out as
         being responsible for the debts or obligations of any other Person.

                  (o) Unless Borrower is a single member limited liability
         company formed under the laws of the State of Delaware, Borrower shall
         require that a Person holding an interest in Borrower be a corporation
         or limited liability company (the "SPC PARTY") which will at all times
         comply, and will cause Borrower to comply, with each of the
         representations, warranties, and covenants contained in this Section
         4.1.30 as if such representation, warranty or covenant was made
         directly by such Person. The structure of Borrower and the interest of
         the SPC Party shall be reasonably acceptable to Lender and shall
         satisfy the requirements of the Rating Agencies for "single purpose,
         bankruptcy remote entities". Notwithstanding the foregoing so long as
         Borrower is a single member limited liability company formed under the
         laws of the State of Delaware and the organizational documents of
         Borrower as delivered to Lender in connection with the Closing are not
         modified, Borrower shall not be required to have an SPC Party and all
         provisions of this Agreement and the other Loan Documents pertaining to
         SPC Party shall be disregarded.

                                       47
<PAGE>

                  (p) Borrower shall at all times cause there to be at least one
         (1) duly appointed members of the board of directors of the SPC Party
         or if Borrower is a single member Delaware limited liability company,
         its board of managers (an "INDEPENDENT DIRECTOR") reasonably
         satisfactory to Lender who shall not have been at the time of each such
         individual's respective appointment, and shall not be at any time while
         serving as a Independent Director and may not have been at any time
         during the preceding five years (i) a shareholder of, or an officer,
         director, partner or employee of, Borrower or any of its or their
         shareholders, subsidiaries or Affiliates, (ii) a customer of, or
         supplier to, or who derives any of its purchases or revenues from its
         activities with Borrower or SPC Party (if applicable) or any Affiliate
         of either of them any of its or their shareholders, subsidiaries or
         Affiliates, (iii) a Person controlling or under common control with any
         such shareholder, partner supplier or customer, or (iv) a member of the
         immediate family of any such shareholder, officer, director, partner,
         employee, supplier or customer of any other director of Borrower or the
         SPC Party (if applicable). Notwithstanding the foregoing, an individual
         that otherwise satisfies the foregoing shall not be disqualified from
         serving as an Independent Director if such individual is at the time of
         initial appointment, or at any time while serving as an Independent
         Director, an independent director of a "special purpose entity"
         affiliated with Borrower. As used in this clause (p), the term "special
         purpose entity" shall mean an entity whose organizational documents
         contain restrictions on its activities and impose requirements intended
         to preserve separateness that are substantially similar to those of
         Borrower and provide, inter alia, that it: (a) is organized for a
         limited purpose; (b) has restrictions on its ability to incur
         indebtedness, dissolve, liquidate, consolidate, merge and/or sell
         assets; (c) may not file voluntarily a bankruptcy petition without the
         consent of independent managers or independent directors and (d) shall
         conduct itself in accordance with certain "separateness covenants",
         including, but not limited to, the maintenance of its books, records,
         bank accounts and assets separate from those of any other Person.

                  (q) Borrower shall not cause or permit the board of directors
         of the SPC Party to take any action which, under the terms of any
         certificate of incorporation, by-laws or any voting trust agreement
         with respect to any common stock, requires a vote of the board of
         directors of the SPC Party of Borrower unless at the time of such
         action there shall be at least one member who is an Independent
         Director.

                  (r) Borrower shall allocate fairly and reasonably any overhead
         expenses that are shared with an Affiliate, including paying for office
         space and services performed by any employee of an Affiliate or Related
         Party.

                  (s) Borrower shall not pledge its assets for the benefit of
         any other Person other than with respect to the Loan.

                  (t) Borrower shall maintain a sufficient number of employees
         in light of its contemplated business operations and pay the salaries
         of its own employees from its own funds.

                                       48
<PAGE>

                  (u) Borrower shall conduct its business so that the
         assumptions made with respect to Borrower in the Insolvency Opinion, a
         true copy of which is attached as Schedule 4.1.30 attached hereto,
         shall be and remain true and correct in all respects.

         4.1.31 MANAGEMENT AGREEMENT. The Management Agreement is in full force
and effect and there is no default thereunder by any party thereto and no event
has occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder. Except with respect to the Properties set forth
on Schedule 4.1.31 attached hereto, the Properties are managed and operated as
"U-Store-It" self-service storage facilities.

         4.1.32 ILLEGAL ACTIVITY. No portion of any Individual Property has been
or will be purchased with proceeds of any illegal activity and to the best of
Borrower's knowledge, there are no illegal activities or activities relating to
any controlled substances at any Individual Property.

         4.1.33 NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. All information
submitted by Borrower to Lender and in all financial statements, rent rolls,
reports, certificates and other documents submitted in connection with the Loan
or in satisfaction of the terms thereof and all statements of fact made by
Borrower in this Agreement or in any other Loan Document, are accurate, complete
and correct in all material respects. There has been no material adverse change
in any condition, fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely affects or might materially
and adversely affect the Properties or the business operations or the financial
condition of Borrower. Borrower has disclosed to Lender all material facts and
has not failed to disclose any material fact that could cause any Provided
Information or representation or warranty made herein to be materially
misleading.

         4.1.34 INTELLECTUAL PROPERTY.

                  Borrower owns or has the right to use, under valid license
agreements or otherwise, all Intellectual Property necessary to or used in the
conduct of its businesses as now conducted and as contemplated by this Agreement
or the other Loan Documents, without known conflict with any patent, license,
franchise, trademark, trade secret, trade name, copyright, or other proprietary
right of any other Person, provided, however, Borrower may not be able to use
the "U-Store-It" name with respect to the Properties set forth on Schedule
4.1.31 attached hereto. All such Intellectual Property is fully protected and/or
duly and properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filings or issuances. No material claim
has been asserted by any Person with respect to the use of any Intellectual
Property, or challenging or questioning the validity or effectiveness of any
Intellectual Property. The use of such Intellectual Property by Borrower 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 Borrower that could reasonably be expected to have a Material Adverse
Effect.

         4.1.35 INVESTMENT COMPANY ACT.

                  Borrower is not (a) an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as

                                       49
<PAGE>

amended; (b) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or (c) subject to any other Federal or State law or regulation which
purports to restrict or regulate its ability to borrow money.

         4.1.36 PRINCIPAL PLACE OF BUSINESS; STATE OF ORGANIZATION.

                  Borrower's principal place of business as of the date hereof
is the address set forth in the introductory paragraph of this Agreement.
Borrower is organized under the laws of the State of Delaware and its
organizational identification number is [2647415].

         4.1.37 BUSINESS PURPOSES.

                  The Loan is solely for the business purpose of Borrower, and
is not for personal, family, household, or agricultural purposes.

         4.1.38 TAXES.

                  Borrower has filed all Federal, State, county, municipal, and
city income and other tax returns required to have been filed by it and has paid
all taxes and related liabilities which have become due pursuant to such returns
or pursuant to any assessments received by it. Borrower knows of no basis for
any additional assessment in respect of any such taxes and related liabilities
for prior years.

         4.1.39 FORFEITURE.

                  Neither Borrower nor, to Borrower's actual knowledge, any
other Person in occupancy of or involved with the operation or use any of the
Properties has committed any act or omission affording the Federal government or
any State or local government the right of forfeiture as against any of the
Properties or any part thereof or any monies paid in performance of Borrower's
obligations under the Note, this Agreement or the other Loan Documents. Borrower
hereby covenants and agrees not to commit, permit or suffer to exist any act or
omission affording such right of forfeiture.

         4.1.40 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.

                  Borrower represents and warrants, except as disclosed in the
written reports resulting from the environmental site assessments of the
Properties delivered to and approved by Lender prior to the Closing Date (the
"ENVIRONMENTAL REPORT") and to the best of Borrower's knowledge: (a) there are
no Hazardous Substances or underground storage tanks in, on, or under any of the
Properties, except those that are both (i) in compliance with current
Environmental Laws and with permits issued pursuant thereto (if such permits are
required), and (ii) in amounts not in excess of that necessary to operate,
clean, repair and maintain the applicable Individual Property or each tenant's
respective business at such Individual Property as set forth in their respective
Leases; (b) there are no past, present or threatened Releases of Hazardous
Substances in violation of any Environmental Law in, on, under or from any of
the Properties and which would require remediation by a Governmental Authority;
(c) there is no threat of any Release of Hazardous Substances migrating to any
of the Properties which would require remediation by a

                                       50
<PAGE>

Governmental Authority; (d) there is no past or present non-compliance with
current Environmental Laws, or with permits issued pursuant thereto, in
connection with any of the Properties except as described in the Environmental
Reports; (e) Borrower does not know of, and has not received, any written or
oral notice or other communication from any Person (including but not limited to
a Governmental Authority) relating to Hazardous Substances in, on, under or from
any of the Properties; and (f) Borrower has truthfully and fully provided to
Lender, in writing, any and all information relating to environmental conditions
in, on, under or from any of the Properties known to Borrower or contained in
Borrower's files and records, including but not limited to any reports relating
to Hazardous Substances in, on, under or migrating to or from any of the
Properties and/or to the environmental condition of the Properties.

         4.1.41 TAXPAYER IDENTIFICATION NUMBER.

                  Borrower's United States taxpayer identification number is
[34-1837021].

         4.1.42 OFAC.

                  Borrower represents and warrants that none of Borrower or any
Guarantor or any of their respective Affiliates is a Prohibited Person, and
Borrower and each Guarantor and their respective Affiliates are in full
compliance with all applicable orders, rules, regulations and recommendations of
The Office of Foreign Assets Control of the U.S. Department of the Treasury.

         4.1.43 GROUND LEASE REPRESENTATIONS.

         (a) (i) Each Ground Lease is in full force and effect and has not been
modified or amended in any manner whatsoever, (ii) there are no defaults under
any Ground Lease by Borrower, or, to the best of Borrower's knowledge, landlord
thereunder, and, to the best of Borrower's knowledge, no event has occurred
which but for the passage of time, or notice, or both would constitute a default
under such Ground Lease, (iii) all rents, additional rents and other sums due
and payable under each Ground Lease have been paid in full, (iv) neither
Borrower nor the landlord under each Ground Lease has commenced any action or
given or received any notice for the purpose of terminating such Ground Lease,
(v) no Fee Owner, as debtor in possession or by a trustee for such Fee Owner,
has given any notice of, and Borrower has not consented to, any attempt to sell
or transfer the related Fee Estate free and clear of such Ground Lease under
Section 363(f) (or any similar provision) of the Bankruptcy Code, and (vi) to
the best of Borrower's knowledge, no Fee Owner under any Ground Lease is subject
to any voluntary or involuntary bankruptcy, reorganization or insolvency
proceeding and no Fee Estate with respect to any Ground Lease is an asset being
administered in any voluntary or involuntary bankruptcy, reorganization or
insolvency proceeding.

         (b) The Ground Lease does not by its terms provide that it will be
subordinated to the Lien of any other mortgage or other Lien upon the related
fee interest;

         (c) The Ground Leases or a memorandum thereof have been duly recorded,
the Ground Leases permits the interest of the lessee thereunder to be encumbered
by the applicable Security Instrument, and there has not been any change in the
terms of the Ground Leases since their recordation;

                                       51
<PAGE>

         (d) Except as indicated in the related Title Insurance Policy,
Borrower's interest in the Ground Leases are not subject to any Liens superior
to, or of equal priority with, the applicable Security Instrument;

         (e) Borrower's interest in the Ground Leases are assignable upon notice
to, but without the consent of, Fee Owner thereunder and, in the event that it
is so assigned, it is further assignable upon notice to, but without the need to
obtain the consent of, such Fee Owner;

         (f) The Ground Leases require Fee Owner thereunder to give notice of
any default by Borrower to Lender and the Ground Lease Estoppel provides that
notice of termination given under the Ground Leases are not effective against
Lender unless a copy of the notice has been delivered to Lender in the manner
described in the applicable Ground Lease;

         (g) Lender is permitted the opportunity (including, where necessary,
sufficient time to gain possession of the interest of Borrower under the Ground
Leases) to cure any default under the Ground Leases, which is curable after the
receipt of notice of any default before Fee Owner thereunder may terminate such
Ground Lease;

         (h) Each Ground Lease has a term (including extension options) which
extends not less than twenty (20) years beyond the Maturity Date;

         (i) The Ground Lease Estoppel provides that Fee Owner thereunder shall
enter into a new lease with Lender upon termination of the applicable Ground
Lease for any reason, including rejection of such Ground Lease in a bankruptcy
proceeding;

         (j) Under the terms of each Ground Lease and the applicable Loan
Documents, taken together, any Net Proceeds will be applied either to the
Restoration of all or part of the Properties, with Lender or a trustee appointed
by Lender having the right to hold and disburse such Net Proceeds as the
Restoration progresses, or to the payment of the outstanding principal balance
of the Loan together with any accrued interest thereon; and

         (k) The Ground Leases do not impose restrictions on subletting.

         4.1.44 EMBARGOED PERSON.

                  As of the date hereof and at all times throughout the term of
the Loan, including after giving effect to any transfers permitted pursuant to
the Loan Documents, (a) none of the funds or other assets of Borrower, SPC Party
or any Guarantor constitutes property of, or are beneficially owned, directly or
indirectly, by any person, entity or government subject to trade restrictions
under U.S. law, including but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. Sections 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 the investment in Borrower, SPC
Party or any Guarantor (whether directly or indirectly), is prohibited by law or
the Loan made by the Lender is in violation of law ("EMBARGOED PERSON"); (b) no
Embargoed Person has any interest of any nature whatsoever in Borrower, SPC
Party or any Guarantor with the result that the investment in Borrower, SPC
Party or any Guarantor (whether directly or indirectly), is prohibited by law or
the Loan is in violation of law; and (c) none of the funds of Borrower, SPC
Party or any Guarantor (whether directly or indirectly), has

                                       52
<PAGE>

been derived from any unlawful activity with the result that the investment in
Borrower, SPC Party or any Guarantor (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law.

         SECTION 4.2 SURVIVAL OF REPRESENTATIONS.

                  Borrower agrees that all of the representations and warranties
of Borrower set forth in Section 4.1 and elsewhere in this Agreement and in the
other Loan Documents shall survive for so long as any amount remains owing to
Lender under this Agreement or any of the other Loan Documents by Borrower. All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by Borrower shall be deemed to have been relied upon
by Lender notwithstanding any investigation heretofore or hereafter made by
Lender or on its behalf.

         V. BORROWER COVENANTS

         SECTION 5.1 AFFIRMATIVE COVENANTS.

                  From the date hereof and until payment and performance in full
of all obligations of Borrower under the Loan Documents or the earlier release
of the Liens of all Security Instruments encumbering the Properties (and all
related obligations) in accordance with the terms of this Agreement and the
other Loan Documents, Borrower hereby covenants and agrees with Lender that:

         5.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS; INSURANCE.

         (a) Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises, and comply, in all material respects, with all
Legal Requirements applicable to it and the Properties. There shall never be
committed by Borrower, nor shall Borrower suffer or permit any other Person in
occupancy of or involved with the operation or use of the Properties to do, any
act or omission affording the Federal government or any State or local
government the right of forfeiture as against any Individual Property or any
part thereof or any monies paid in performance of Borrower's obligations under
any of the Loan Documents. Borrower hereby covenants and agrees not to commit,
permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall, at all times, maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its property used
or useful in the conduct of its business and shall keep the Properties in good
working order and repair, and from time to time make, or cause to be made, all
reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided in this Agreement and the
Security Instruments. Borrower shall keep the Properties insured at all times by
financially sound and reputable insurers, to such extent and against such risks,
and maintain liability and such other insurance, as is more fully provided in
this Agreement. Borrower shall operate any Individual Property that is the
subject of any O&M Program in accordance with the terms and provisions thereof
in all material respects.

         (b) After prior written notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding promptly initiated and conducted in
good faith and with due

                                       53
<PAGE>

diligence, the validity of any Legal Requirement, the applicability of any Legal
Requirement to Borrower or any Individual Property or any alleged violation of
any Legal Requirement, provided that (i) no Default or Event of Default has
occurred and remains uncured; (ii) such proceeding shall be permitted under and
be conducted in accordance with the provisions of any instrument to which
Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable laws; (iii) no
Individual Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall
promptly upon final determination thereof comply with any such Legal Requirement
determined to be valid or applicable or cure any violation of any Legal
Requirement; (v) such proceeding shall suspend the enforcement of the contested
Legal Requirement against Borrower or any Individual Property; and (vi) Borrower
shall furnish such security as may be required in the proceeding, or as may be
requested by Lender, to insure compliance with such Legal Requirement, together
with all interest and penalties payable in connection therewith. Lender may
apply any such security or part thereof, as necessary to cause compliance with
such Legal Requirement at any time when, in the judgment of Lender, the
validity, applicability or violation of such Legal Requirement is finally
established or any Individual Property (or any part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost.

         5.1.2 TAXES AND OTHER CHARGES. Borrower shall pay all Taxes and Other
Charges now or hereafter levied or assessed or imposed against the Properties or
any part thereof as the same become due and payable; provided, however,
Borrower's obligation to directly pay Taxes and comply with the following
sentence shall be suspended for so long as Borrower complies with the terms and
provisions of Section 7.2 hereof. Borrower will deliver to Lender receipts for
payment or other evidence satisfactory to Lender that the Taxes and Other
Charges have been so paid or are not then delinquent no later than ten (10) days
prior to the date on which the Taxes and/or Other Charges would otherwise be
delinquent if not paid. Borrower shall not suffer and shall promptly cause to be
paid and discharged any Lien or charge whatsoever which may be or become a Lien
or charge against the Properties, and shall promptly pay for all utility
services provided to the Properties. After prior written notice to Lender,
Borrower, at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (i) no Default or Event of Default has occurred and
remains uncured; (ii) such proceeding shall be permitted under and be conducted
in accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) no Individual Property nor any part thereof or interest therein will be in
danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower
shall promptly upon final determination thereof pay the amount of any such Taxes
or Other Charges, together with all costs, interest and penalties which may be
payable in connection therewith; (v) such proceeding shall suspend the
collection of such contested Taxes or Other Charges from the applicable
Individual Property; and (vi) Borrower shall furnish such security as may be
required in the proceeding, or as may be requested by Lender, to insure the
payment of any such Taxes or Other Charges, together with all interest and
penalties thereon. Lender may pay over any such cash deposit or part thereof
held by Lender to the claimant entitled thereto at any time when, in the
judgment of Lender, the entitlement of such claimant is established or any
Individual Property (or part thereof or interest therein) shall be in danger of
being sold, forfeited, terminated,

                                       54
<PAGE>

cancelled or lost or there shall be any danger of the Lien of any Security
Instrument being primed by any related Lien.

         5.1.3 LITIGATION. Borrower shall give prompt written notice to Lender
of any litigation or governmental proceedings pending or threatened against
Borrower which might materially adversely affect Borrower's condition (financial
or otherwise) or business or any Individual Property.

         5.1.4 ACCESS TO PROPERTIES. Borrower shall permit agents,
representatives and employees of Lender to inspect the Properties or any part
thereof at reasonable hours upon reasonable advance notice.

         5.1.5 NOTICE OF DEFAULT. Borrower shall promptly advise Lender of any
Material Adverse Effect on Borrower's condition, financial or otherwise, or of
the occurrence of any Default or Event of Default of which Borrower has
knowledge.

         5.1.6 COOPERATE IN LEGAL PROCEEDINGS. Borrower shall cooperate fully
with Lender with respect to any proceedings before any court, board or other
Governmental Authority which may in any way adversely affect the rights of
Lender hereunder or any rights obtained by Lender under any of the other Loan
Documents and, in connection therewith, permit Lender, at its election, to
participate in any such proceedings.

         5.1.7 PERFORM LOAN DOCUMENTS. Borrower shall observe, perform and
satisfy all the terms, provisions, covenants and conditions of, and shall pay
when due all costs, fees and expenses to the extent required under the Loan
Documents executed and delivered by, or applicable to, Borrower. Borrower shall
execute and deliver the Cash Management Agreement within fifteen (15) Business
Days of the Closing Date.

         5.1.8 AWARDS OR INSURANCE BENEFITS. Borrower shall cooperate with
Lender in obtaining for Lender the benefits of any Awards or Insurance Proceeds
lawfully or equitably payable in connection with any Individual Property, and
Lender shall be reimbursed for any expenses incurred in connection therewith
(including attorneys' fees and disbursements, and the payment by Borrower of the
expense of an appraisal on behalf of Lender in case of a Casualty or
Condemnation affecting any Individual Property or any part thereof) out of such
Award or Insurance Proceeds.

         5.1.9 FURTHER ASSURANCES. Borrower shall, at Borrower's sole cost and
expense:

         (a) furnish to Lender all instruments, documents, boundary surveys,
footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by Borrower pursuant to the terms of the Loan Documents or reasonably requested
by Lender in connection therewith;

         (b) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of Borrower under the Loan
Documents, as Lender may reasonably require, including, without

                                       55
<PAGE>
limitation, the authorization of Lender to execute and/or the execution by
Borrower of UCC financing statements; and

         (c) do and execute all and such further lawful and reasonable acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan Documents, as Lender
shall reasonably require from time to time.

         5.1.10 SUPPLEMENTAL SECURITY INSTRUMENT AFFIDAVITS. As of the date
hereof, Borrower represents that it has paid all State, county and municipal
recording and all other taxes imposed upon the execution and recordation of the
Security Instruments. If at any time Lender determines, based on applicable law,
that Lender is not being afforded the maximum amount of security available from
any one or more of the Properties as a direct or indirect result of applicable
taxes not having been paid with respect to any Individual Property, Borrower
agrees that Borrower will execute, acknowledge and deliver to Lender,
immediately upon Lender's request, supplemental affidavits increasing the amount
of the Debt attributable to any such Individual Property (as set forth as the
Release Amount on Schedule I attached hereto) for which all applicable taxes
have been paid to an amount determined by Lender to be equal to the lesser of
(a) the greater of the fair market value of the applicable Individual Property
(i) as of the date hereof and (ii) as of the date such supplemental affidavits
are to be delivered to Lender, and (b) the amount of the Debt attributable to
any such Individual Property (as set forth as the Release Amount on Schedule I
attached hereto), and Borrower shall, on demand, pay any additional taxes.

         5.1.11 FINANCIAL REPORTING.

         (a) Borrower will keep and maintain or will cause to be kept and
maintained on a Fiscal Year basis, in accordance with GAAP (or such other
accounting basis acceptable to Lender), proper and accurate books, records and
accounts reflecting all of the financial affairs of Borrower and all items of
income and expense in connection with the operation on an individual basis of
the Properties. Lender shall have the right from time to time at all times
during normal business hours upon reasonable notice to examine such books,
records and accounts at the office of Borrower or other Person maintaining such
books, records and accounts and to make such copies or extracts thereof as
Lender shall desire. After the occurrence of an Event of Default, Borrower shall
pay any costs and expenses incurred by Lender to examine Borrower's accounting
records with respect to the Properties, as Lender shall determine to be
necessary or appropriate in the protection of Lender's interest.

         (b) Borrower will furnish to Lender annually, within ninety (90) days
following the end of each Fiscal Year of Borrower, a complete copy of Borrower's
annual financial statements audited by an Acceptable Accountant in accordance
with GAAP (or such other accounting basis acceptable to Lender) covering the
Properties on a combined basis as well as each Individual Property for such
Fiscal Year and containing statements of profit and loss for Borrower and the
Properties and a balance sheet for Borrower. Such statements shall set forth the
financial condition and the results of operations for the Properties for such
Fiscal Year, and shall include, but not be limited to, amounts representing
annual Net Cash Flow, Net Operating Income, Gross Income from Operations and
Operating Expenses. Borrower's annual financial statements shall be accompanied
by (i) a comparison of the budgeted income and expenses and the actual income

                                       56
<PAGE>

and expenses for the prior Fiscal Year; (ii) an Officer's Certificate stating
that each such annual financial statement presents fairly the financial
condition and the results of operations of Borrower and the Properties being
reported upon and has been prepared in accordance with GAAP; (iii) an
unqualified opinion of an Acceptable Accountant; (iv) a list of tenants under
Major Leases; (v) a breakdown showing the year in which each Major Lease then in
effect expires and the percentage of total floor area of the Improvements and
the percentage of base rent with respect to which Major Leases shall expire in
each such year, each such percentage to be expressed on both a per year and
cumulative basis; (vi) if requested by Lender, an annual occupancy report for
such year; and (vii) a schedule audited by such Acceptable Accountant
reconciling Net Operating Income to Net Cash Flow (the "NET CASH FLOW
SCHEDULE"), which shall itemize all adjustments made to Net Operating Income to
arrive at Net Cash Flow deemed material by such Acceptable Accountant. Together
with Borrower's annual financial statements, Borrower shall furnish to Lender an
Officer's Certificate certifying as of the date thereof whether there exists an
event or circumstance which constitutes a Default or Event of Default under the
Loan Documents executed and delivered by, or applicable to, Borrower, and if
such Default or Event of Default exists, the nature thereof, the period of time
it has existed and the action then being taken to remedy the same.

         (c) Borrower will furnish, or cause to be furnished, to Lender on or
before twenty (20) days after the end of each calendar month the following
items, accompanied by an Officer's Certificate stating that such items are true,
correct, accurate, and complete and fairly present the financial condition and
results of the operations of Borrower and the Properties on a combined basis as
well as each Individual Property (subject to normal year-end adjustments) as
applicable: (i) a rent roll or other record of leasing for the subject month
accompanied by an Officer's Certificate with respect thereto; (ii) monthly and
year-to-date operating statements (including Capital Expenditures) prepared for
each calendar month, noting Net Operating Income, Gross Income from Operations,
and Operating Expenses (not including any contributions to the Replacement
Reserve Fund), and other information necessary and sufficient to fairly
represent the financial position and results of operation of the Properties
during such calendar month (on a combined basis as well as each Individual
Property), and containing a comparison of budgeted income and expenses and the
actual income and expenses; (iii) a calculation reflecting the annual Debt
Service Coverage Ratio for the immediately preceding twelve (12) month period as
of the last day of such month accompanied by an Officer's Certificate with
respect thereto; and (iv) a Net Cash Flow Schedule. In addition, such
certificate shall also state that the representations and warranties of Borrower
set forth in Section 4.1.30 are true and correct as of the date of such
certificate and that there are no trade payables outstanding for more than sixty
(60) days.

         (d) For the partial year period commencing on the date hereof, and for
each Fiscal Year thereafter, Borrower shall submit to Lender an Annual Budget
not later than sixty (60) days prior to the commencement of such period or
Fiscal Year in form reasonably satisfactory to Lender.

         (e) Intentionally Deleted.

         (f) Borrower shall furnish to Lender, within ten (10) Business Days
after request (or as soon thereafter as may be reasonably possible), such
further detailed information with respect

                                       57
<PAGE>

to the operation of any Individual Property and the financial affairs of
Borrower as may be reasonably requested by Lender.

         (g) Any reports, statements or other information required to be
delivered under this Agreement shall be delivered (i) in paper form, (ii) on a
diskette, and (iii) if requested by Lender in electronic form and prepared using
a Microsoft Word for Windows or Microsoft Excel for Windows program.

         (h) Borrower agrees that Lender may forward to each purchaser,
transferee, assignee, servicer, participant, or investor in all or any portion
of the Loan or any Securities or any Rating Agency rating such participations
and/or Securities and each prospective investor, and any organization
maintaining databases on the underwriting and performance of commercial mortgage
loans, all documents and information which Lender now has or may hereafter
acquire relating to the Debt and to Borrower, any Guarantor and the Properties,
whether furnished by Borrower, any Guarantor or otherwise, as Lender determines
necessary or desirable. Borrower irrevocably waives any and all rights it may
have under any applicable laws to prohibit such disclosure, including, but not
limited, to any right of privacy.

         5.1.12 BUSINESS AND OPERATIONS. Borrower will continue to engage in the
businesses presently conducted by it as and to the extent the same are necessary
for the ownership, maintenance, management and operation of the Properties.
Borrower will qualify to do business and will remain in good standing under the
laws of each jurisdiction as and to the extent the same are required for the
ownership, maintenance, management and operation of the Properties.

         5.1.13 TITLE TO THE PROPERTIES. Borrower will warrant and defend (a)
the title to each Individual Property and every part thereof, subject only to
Liens permitted hereunder (including Permitted Encumbrances) and (b) the
validity and priority of the Liens of the Security Instruments and the
Assignments of Leases on the Properties, subject only to Liens permitted
hereunder (including Permitted Encumbrances), in each case against the claims of
all Persons whomsoever. Borrower shall reimburse Lender for any losses, costs,
damages or expenses (including reasonable attorneys' fees and court costs)
incurred by Lender if an interest in any Individual Property, other than as
permitted hereunder, is claimed by another Person.

         5.1.14 COSTS OF ENFORCEMENT. In the event (a) that any Security
Instrument encumbering any Individual Property is foreclosed in whole or in part
or that any such Security Instrument is put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage
prior to or subsequent to any Security Instrument encumbering any Individual
Property in which proceeding Lender is made a party, or (c) of the bankruptcy,
insolvency, rehabilitation or other similar proceeding in respect of Borrower or
any of its constituent Persons or an assignment by Borrower or any of its
constituent Persons for the benefit of its creditors, Borrower, its successors
or assigns, shall be chargeable with and agrees to pay all costs of collection
and defense, including attorneys' fees and costs, incurred by Lender or Borrower
in connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or use
taxes.

         5.1.15 ESTOPPEL STATEMENT. (a) After request by Lender, Borrower shall
within ten (10) days furnish Lender with a statement, duly acknowledged and
certified, setting forth (i) the

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<PAGE>

amount of the original principal amount of the Note, (ii) the unpaid principal
amount of the Note, (iii) the Applicable Interest Rate of the Note, (iv) the
date installments of interest and/or principal were last paid, (v) any offsets
or defenses to the payment of the Debt, if any, and (vi) that the Note, this
Agreement, the Security Instruments and the other Loan Documents are valid,
legal and binding obligations and have not been modified or if modified, giving
particulars of such modification.

         (b) After request by Lender, Borrower shall use its commercially
reasonable efforts to deliver to Lender, tenant estoppel certificates from each
commercial tenant leasing space at the Properties pursuant to a Major Lease in
form and substance reasonably satisfactory to Lender provided that Borrower
shall not be required to deliver such certificates more frequently than two (2)
times in any calendar year.

         5.1.16 LOAN PROCEEDS. Borrower shall use the proceeds of the Loan
received by it on the Closing Date only for the purposes set forth in Section
2.1.4 hereof.

         5.1.17 PERFORMANCE BY BORROWER. Borrower shall in a timely manner
observe, perform and fulfill each and every covenant, term and provision of each
Loan Document executed and delivered by, or applicable to, Borrower, and shall
not enter into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, Borrower without the prior written consent of Lender.

         5.1.18 CONFIRMATION OF REPRESENTATIONS. Borrower shall deliver, in
connection with any Securitization, (a) one or more Officer's Certificates
certifying as to the accuracy of all representations made by Borrower in the
Loan Documents as of the date of the closing of such Securitization in all
relevant jurisdictions, and (b) certificates of the relevant Governmental
Authorities in all relevant jurisdictions indicating the good standing and
qualification of Borrower and SPC Party as of the date of the Securitization.

         5.1.19 NO JOINT ASSESSMENT. Borrower shall not suffer, permit or
initiate the joint assessment of any Individual Property (a) with any other real
property constituting a tax lot separate from such Individual Property, and (b)
which constitutes real property with any portion of such Individual 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 such real property portion of the
Individual Property.

         5.1.20 LEASING MATTERS.

         (a) Except as otherwise consented to by Lender in writing, all Leases
shall be written on the standard form of lease which shall have been approved by
Lender. Upon reasonable request (not to be made more than once in any
consecutive twelve (12) month period), Borrower shall furnish Lender with
executed copies of a sample of the Leases as requested by Lender. No material
changes may be made to the Lender-approved standard form of lease without the
prior written consent of Lender. In addition, all renewals of Leases and all
proposed leases shall provide for rental rates and terms comparable to existing
local market rates and terms and shall be arm's-length transactions with bona
fide, independent third party tenants. All Major Leases

                                       59
<PAGE>

shall provide that they are subordinate to the applicable Security Instrument
and that the tenant agrees to attorn to Lender.

         (b) Borrower (i) shall observe and perform all the obligations imposed
upon the landlord under the Leases and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii) shall
enforce all of the terms, covenants and conditions contained in the Leases upon
the part of the tenant thereunder to be observed or performed (except for
termination of a Major Lease which shall require Lender's prior written
approval); (iii) shall not collect any of the Rents more than two (2) months in
advance (other than security deposits); (iv) shall not execute any other
assignment of the landlord's interest in the Leases or the Rents; and (v) shall
not consent to any assignment of or subletting under the Leases not in
accordance with their terms, without the prior written consent of Lender.

         (c) All proposed Leases, renewals of Leases or amendments or
terminations of Leases shall be subject to the prior approval of Lender, which
approval shall not be unreasonably withheld, conditioned or delayed; provided,
however, Borrower may, without the consent of Lender, terminate any Lease (other
than a Major Lease) if the tenant thereunder is in default beyond applicable
notice and grace periods under such Lease. Notwithstanding the provisions of the
preceding sentence, renewals of Leases and proposed Leases shall not be subject
to the prior approval of Lender, provided all of the following conditions are
satisfied: (i) the Lease is not a Major Lease; (ii) the term is on a
month-to-month basis; (iii) the renewal or proposed Lease is on the standard
form of lease approved by Lender and provides for a term of less than one (1)
year; (iv) the renewal or proposed Lease does not contain any option, offer,
right of first refusal, or other similar right to acquire all or any portion of
the applicable Individual Property; and (v) the renewal or proposed Lease
provides for rental rates and terms (including credits or concessions)
comparable to existing market rates and terms and is an arm's-length transaction
with a bona fide, independent third party tenant. Upon Lender's reasonable
request, Borrower shall deliver to Lender, (i) within thirty (30) days after the
execution of any renewal or proposed Major Lease, copies of all such Major
Leases, and (ii) within thirty days of such request, Borrower's certification
that it has satisfied all of the conditions of this Section 5.1.20(c) with
respect to all renewal or new Leases (which are not Major Leases) which were
entered into pursuant to this Section 5.1.20(c) since the date of Lender's last
request.

         5.1.21 ALTERATIONS. Borrower shall obtain Lender's prior written
consent to any alterations to any Improvements, which consent shall not be
unreasonably withheld or delayed except with respect to alterations that may
have a Material Adverse Effect. Notwithstanding the foregoing, Lender's consent
shall not be required in connection with any alterations that will not have a
Material Adverse Effect, provided that such alterations are made in connection
with (a) tenant improvement work performed pursuant to the terms of any Lease
executed on or before the date hereof, (b) tenant improvement work performed
pursuant to the terms and provisions of a Lease and not adversely affecting any
structural component of any Improvements, any utility or HVAC system contained
in any Improvements or the exterior of any building constituting a part of any
Improvements, or (c) alterations performed in connection with the restoration of
an Individual Property after the occurrence of a casualty in accordance with the
terms and provisions of this Agreement. If the total unpaid amounts with respect
to alterations to the Improvements at any Individual Property (other than such
amounts to be paid or reimbursed by tenants under the Leases), together with any
other alterations undertaken at the

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<PAGE>

same time at any of the other Properties, shall at any time exceed Four Million
and 00/100 Dollars ($4,000,000.00) (the "THRESHOLD AMOUNT"), Borrower shall
promptly deliver to Lender as security for the payment of such amounts and as
additional security for Borrower's obligations under the Loan Documents any of
the following: (A) cash, (B) U.S. Obligations, (C) other securities having a
rating acceptable to Lender and that the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization, or (D) a completion bond or
letter of credit issued by a financial institution having a rating by S&P of not
less than A-1+ if the term of such bond or letter of credit is no longer than
three (3) months or, if such term is in excess of three (3) months, issued by a
financial institution having a rating that is acceptable to Lender and that the
applicable Rating Agencies have confirmed in writing will not, in and of itself,
result in a downgrade, withdrawal or qualification of the initial, or, if
higher, then current ratings assigned in connection with any Securitization.
Such security shall be in an amount equal to the excess of the total unpaid
amounts with respect to alterations to the Improvements on the applicable
Individual Property (other than such amounts to be paid or reimbursed by tenants
under the Leases), together with any other alterations undertaken at the same
time at any of the other Properties over the Threshold Amount and applied from
time to time at the option of Lender to pay for such alterations or to terminate
any of the alterations and restore the applicable Properties to the extent
necessary to prevent any Material Adverse Effect.

         5.1.22 ENVIRONMENTAL COVENANTS.

         (a) Borrower covenants and agrees that so long as the Loan is
outstanding (i) all uses and operations on or of the Properties, whether by
Borrower or any other Person, shall be in compliance in all material respects
with all Environmental Laws and permits issued pursuant thereto; (ii) Borrower
shall not cause or permit any Releases of Hazardous Substances in, on, under or
from any of the Properties; (iii) there shall be no Hazardous Substances in, on,
or under any of the Properties, except those that are both (A) in compliance
with all Environmental Laws and with permits issued pursuant thereto, if and to
the extent required, and (B) (1) in amounts not in excess of that necessary to
operate the applicable Individual Property or (2) fully disclosed to and
approved by Lender in writing; (iv) Borrower shall keep the Properties free and
clear of all liens and other encumbrances imposed pursuant to any Environmental
Law, whether due to any act or omission of Borrower or any other Person (the
"ENVIRONMENTAL LIENS"); (v) Borrower shall, at its sole cost and expense, fully
and expeditiously cooperate in all activities pursuant to paragraph (b) below,
including but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (vi) Borrower shall, at its sole
cost and expense, perform any environmental site assessment or other
investigation of environmental conditions in connection with any of the
Properties, pursuant to any reasonable written request of Lender, upon Lender's
reasonable belief that an Individual Property is not in full compliance with all
Environmental Laws, and share with Lender the reports and other results thereof,
and Lender and other Indemnified Parties shall be entitled to rely on such
reports and other results thereof; (vii) Borrower shall, at its sole cost and
expense, comply with all reasonable written requests of Lender to (A) reasonably
effectuate remediation of any Hazardous Substances in, on, under or from any
Individual Property to the extent required by Environmental Laws; and (B) comply
with any Environmental Law; (viii) Borrower shall not allow any tenant or other
user of any of the Properties to violate any Environmental Law; and (ix)
Borrower shall immediately notify Lender in writing after it has become aware
of: (A) any presence or Release or threatened

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<PAGE>

Releases of Hazardous Substances in, on, under, from or migrating towards any of
the Properties if it would reasonably be expected to result in a Material
Adverse Effect; (B) any non compliance with any Environmental Laws related in
any way to any of the Properties if it would reasonably be expected to result in
a Material Adverse Effect; (C) any actual or potential Environmental Lien; (D)
any required or proposed remediation of environmental conditions relating to any
of the Properties; and (E) any written or oral notice or other communication of
which Borrower becomes aware from any source whatsoever (including but not
limited to a Governmental Authority) relating in any way to Hazardous
Substances.

         (b) Lender and any other Person designated by Lender, including but not
limited to any representative of a Governmental Authority, and any environmental
consultant, and any receiver appointed by any court of competent jurisdiction,
shall have the right, but not the obligation, to enter upon any Individual
Property at all reasonable times upon reasonable notice to Borrower to assess
any and all aspects of the environmental condition of any Individual Property
and its use, including but not limited to conducting any environmental
assessment or audit (the scope and need of which shall be determined in Lender's
reasonable discretion based upon its good-faith belief that any Individual
Property is not in full compliance with all Environmental Laws) and taking
samples of soil, groundwater or other water, air, or building materials, and
conducting other invasive testing reasonably necessary to assess the
environmental condition of such Individual Property. Borrower shall cooperate
with and provide access to Lender and any such Person or entity designated by
Lender and Lender shall take reasonable steps to minimize any disruption to
Borrower's use and operation of such Individual Property.

         5.1.23 OFAC.

                  At all times throughout the term of the Loan, Borrower, each
Guarantor and their respective Affiliates shall be in full compliance with all
applicable orders, rules, regulations and recommendations of The Office of
Foreign Assets Control of the U.S. Department of the Treasury.

         5.1.24 O&M PROGRAM.

                  Borrower covenants and agrees to implement and follow the
terms and conditions of the O&M Program for each applicable Property during the
term of the Loan, including any extension or renewal thereof. Lender's
requirement that Borrower comply with the O&M Program shall not be deemed to
constitute a waiver or modification of any of Borrower's covenants and
agreements with respect to Hazardous Substances or Environmental Laws.

         5.1.25 THE GROUND LEASES.

                  With respect to each Ground Lease:

         (a) Borrower shall (i) pay all rents, additional rents and other sums
required to be paid by Borrower, as tenant under and pursuant to the provisions
of each Ground Lease, (ii) diligently perform and observe all of the terms,
covenants and conditions of each Ground Lease on the part of Borrower, as tenant
thereunder, (iii) promptly notify Lender of the giving of any notice by the Fee
Owner under the applicable Ground Lease to Borrower of any default by

                                       62
<PAGE>

Borrower, as tenant thereunder, and deliver to Lender a true copy of each such
notice within five (5) Business Days of receipt and (iv) promptly notify Lender
of any bankruptcy, reorganization or insolvency proceeding of the Fee Owner
under the applicable Ground Lease or of any notice thereof, and deliver to
Lender a true copy of such notice within five (5) Business Days of Borrower's
receipt, together with copies of all notices, pleadings, schedules and similar
matters received by Borrower in connection with such bankruptcy, reorganization
or insolvency proceeding within five (5) Business Days after receipt. Borrower
shall not, without the prior consent of Lender, (x) surrender the leasehold
estate created by the applicable Ground Lease or terminate or cancel any Ground
Lease or modify, change, supplement, alter or amend any Ground Lease, either
orally or in writing, (y) consent to, acquiesce in, or fail to object to, any
attempt by any Fee Owner, as debtor in possession or by a trustee for such Fee
Owner, to sell or transfer the Fee Estate with respect to any Ground Lease free
and clear of the Ground Lease under Section 363(f) (or any similar provision) of
the Bankruptcy Code or otherwise. Borrower shall object to any such attempt by
such Fee Owner, as debtor in possession or by a trustee for such Fee Owner, to
sell or transfer the Fee Estate with respect to any Ground Lease free and clear
of the Ground Lease under Section 363(f) (or any similar provision) of the
Bankruptcy Code or otherwise, and in such event shall affirmatively assert and
pursue its right to adequate protection under Section 363(e) (or any similar
provision) of the Bankruptcy Code. Borrower hereby assigns to Lender all of its
rights and claims under Section 363 of the Bankruptcy Code to consent or object
to any sale or transfer of such Fee Estate, to seek valuation of the Ground
Lease and adequate protection with respect to the same and grants to Lender the
right to object to any such sale or transfer on behalf of Borrower, and Borrower
shall not contest any pleadings, motions documents or other actions filed or
taken by Lender on Lender's or Borrower's behalf in the event that any Fee
Owner, as debtor-in-possession or by a trustee for such Fee Owner, attempts to
sell or transfer the Fee Estate with respect to any Ground Lease or under
Section 363(f) (or any similar provision) of the Bankruptcy Code or otherwise,
or (z) vacate the premises upon the land underlying the Ground Lease.

         (b) If Borrower shall default in the performance or observance of any
term, covenant or condition of any Ground Lease on the part of Borrower, as
tenant thereunder, and shall fail to cure the same prior to the expiration of
any applicable cure period provided thereunder, Lender shall have the right, but
shall be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all of the terms, covenants and conditions
of such Ground Lease on the part of Borrower to be performed or observed on
behalf of Borrower, to the end that the rights of Borrower in, to and under such
Ground Lease shall be kept unimpaired and free from default. If the landlord
under the applicable Ground Lease shall deliver to Lender a copy of any notice
of default under such Ground Lease, such notice shall constitute full protection
to Lender for any action taken or omitted to be taken by Lender, in good faith,
in reliance thereon. Borrower shall exercise each individual option, if any, to
extend or renew the term of each Ground Lease upon demand by Lender made at any
time within one (1) year prior to the last day upon which any such option may be
exercised, and Borrower hereby expressly authorizes and appoints Lender its
attorney-in-fact to exercise any such option in the name of and upon behalf of
Borrower, which power of attorney shall be irrevocable and shall be deemed to be
coupled with an interest.

         (c) Subleases. Notwithstanding anything contained in any Ground Lease
to the contrary, Borrower shall not further sublet any portion of the related
Individual Property (other

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<PAGE>

than as permitted pursuant to Section 5.1.20 hereof) without prior written
consent of Lender. Each sublease hereafter made (other than as permitted
pursuant to Section 5.1.20 hereof) shall provide that, (a) in the event of the
termination of the Ground Lease, the sublease shall not terminate or be
terminable by the lessee thereunder; (b) in the event of any action for the
foreclosure of the Security Instrument with respect to the related Individual
Property, the sublease shall not terminate or be terminable by the lessee
thereunder by reason of the termination of the Ground Lease unless such lessee
is specifically named and joined in any such action and unless a judgment is
obtained therein against such lessee; and (c) in the event that the Ground Lease
is terminated as aforesaid, the lessee under the sublease shall attorn to the
lessor under the Ground Lease or to the purchaser at the sale of the related
Individual Property on such foreclosure, as the case may be. In the event that
any portion of such Individual Property shall be sublet pursuant to the terms of
this subsection, such sublease shall be deemed to be included in the Individual
Property.

         SECTION 5.2 NEGATIVE COVENANTS.

                  From the date hereof until payment and performance in full of
all obligations of Borrower under the Loan Documents or the earlier release of
the Liens of all Security Instruments encumbering the Properties (and all
related obligations) in accordance with the terms of this Agreement and the
other Loan Documents, Borrower covenants and agrees with Lender that it will not
do, directly or indirectly, any of the following:

         5.2.1 OPERATION OF PROPERTY. Borrower shall not, without the prior
consent of Lender (which consent shall not be unreasonably withheld), amend,
modify, cancel or terminate the Management Agreement or otherwise replace the
Manager or enter into any other management agreement with respect to any
Individual Property.

         5.2.2 LIENS. Borrower shall not, without the prior written consent of
Lender, create, incur, assume or suffer to exist any Lien on any portion of any
Individual Property or permit any such action to be taken, except:

                  (i)      Permitted Encumbrances;

                  (ii)     Liens created by or permitted pursuant to the Loan
                           Documents; and

                  (iii)    Liens for Taxes or Other Charges not yet due.

         5.2.3 DISSOLUTION. Borrower shall not (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity,
(b) engage in any business activity not related to the ownership and operation
of the Properties, (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
properties or assets of Borrower except to the extent permitted by the Loan
Documents, (d) except as expressly permitted under the Loan Documents, modify,
amend, waive or terminate its organizational documents or its qualification and
good standing in any jurisdiction or (e) cause the SPC Party to (i) dissolve,
wind up or liquidate or take any action, or omit to take an action, as a result
of which the SPC Party would be dissolved, wound up or liquidated in whole or in
part, or (ii) except as expressly permitted under the Loan Documents, amend,
modify, waive or terminate the certificate of incorporation, bylaws or similar
organizational documents of the

                                       64
<PAGE>

SPC Party, in each case, without obtaining the prior written consent of Lender
or Lender's designee.

         5.2.4 CHANGE IN BUSINESS. Borrower shall not enter into any line of
business other than the ownership, acquisition, development, operation, leasing
and management of the Properties (including providing services in connection
therewith), or make any material change in the scope or nature of its business
objectives, purposes or operations, or undertake or participate in activities
other than the continuance of its present business.

         5.2.5 DEBT CANCELLATION. Borrower shall not cancel or otherwise forgive
or release any material claim or debt (other than termination of Leases in
accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business.

         5.2.6 AFFILIATE TRANSACTIONS. Borrower shall not enter into, or be a
party to, any transaction with an Affiliate of Borrower or any of the Affiliates
of Borrower except in the ordinary course of business and on terms which are no
less favorable to Borrower or such Affiliate than would be obtained in a
comparable arm's-length transaction with an unrelated third party.

         5.2.7 ZONING. Borrower shall not initiate or consent to any zoning
reclassification of any portion of any Individual Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
any Individual Property in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender.

         5.2.8 ASSETS. Borrower shall not purchase or own any property other
than the Properties.

         5.2.9 DEBT. Borrower shall not create, incur or assume any Indebtedness
other than the Debt except to the extent expressly permitted hereby.

         5.2.10 NO JOINT ASSESSMENT. Borrower shall not suffer, permit or
initiate the joint assessment of any Individual Property with (a) any other real
property constituting a tax lot separate from such Individual Property, or (b)
any portion of such Individual 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 such Individual Property.

         5.2.11 PRINCIPAL PLACE OF BUSINESS. Borrower shall not change its
principal place of business set forth on the first page of this Agreement
without first giving Lender thirty (30) days prior written notice.

         5.2.12 ERISA. (a) During the term of the Loan or of any obligation or
right hereunder, Borrower shall not be a Plan and none of the assets of Borrower
shall constitute Plan Assets.

         (b) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its

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sole discretion, and represents and covenants that (A) Borrower is not and does
not maintain an "employee benefit plan" as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(32) of ERISA; (B) Borrower is not subject to State statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (C) one or more of the following circumstances is true:

                  (i)      Equity interests in Borrower are publicly offered
                           securities, within the meaning of 29 C.F.R. Section
                           2510.3-101(b)(2);

                  (ii)     Less than twenty-five percent (25%) of each
                           outstanding class of equity interests in Borrower are
                           held by "benefit plan investors" within the meaning
                           of 29 C.F.R. Section 2510.3-101(f)(2); or

                  (iii)    Borrower qualifies as an "operating company" or a
                           "real estate operating company" within the meaning of
                           29 C.F.R. Section 2510.3-101(c) or (e).

         5.2.13 TRANSFERS. (a) Except as otherwise permitted by the provisions
of this Section 5.2.13 or except to the extent permitted elsewhere in the Loan
Documents, Borrower will not (i) permit or suffer (by operation of law or
otherwise) any sale, assignment, conveyance, transfer or other disposition of
legal or equitable interest in all or any part of any Individual Property, (ii)
permit or suffer (by operation of law or otherwise) any sale, assignment,
conveyance, transfer or other disposition of any direct or indirect interest in
Borrower, (iii) permit or suffer (by operation of law or otherwise) any
mortgage, lien or other encumbrance of all or any part of any Individual
Property, (iv) permit or suffer (by operation of law or otherwise) any pledge,
hypothecation, creation of a security interest in or other encumbrance of any
direct or indirect interests in Borrower, or (v) file a declaration of
condominium with respect to any Individual Property.

         (b) A sale or conveyance by Borrower of any Individual Property (but
not a mortgage, lien or other encumbrance) is permitted provided that each of
the following conditions have been satisfied:

                           (i) no Event of Default shall have occurred and be
                  continuing;

                           (ii) the Person to whom such Individual Property is
                  sold or conveyed satisfies the requirements of a Special
                  Purpose Entity and not less than 50% of the direct or indirect
                  interests are owned and controlled by a Permitted Owner;

                           (iii) Lender has received a non-consolidation opinion
                  which may be relied upon by Lender, the Rating Agencies and
                  their respective counsel, successors and assigns, with respect
                  to the sale or conveyance, which opinion shall be reasonably
                  acceptable to Lender and, after a Securitization, the Rating
                  Agencies;

                           (iv) if a Securitization has occurred, Borrower shall
                  deliver confirmation in writing from the applicable Rating
                  Agencies to the effect that such transfer or sale will not
                  result in a downgrading, withdrawal or qualification

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<PAGE>

                  of the respective ratings in effect immediately prior to such
                  transfer or sale for the Securities issued in connection with
                  the Securitization which are then outstanding;

                           (v) the transferee of such Individual Property shall
                  execute an assumption of all of the obligations of the
                  Borrower under the Loan Agreement, the applicable Security
                  Instrument and the other Loan Documents, subject, however, to
                  the provisions of Section 9.4 of this Agreement and the
                  proposed replacement guarantor shall assume all of the
                  obligations of Guarantor under the Guaranty, in a manner
                  satisfactory to Lender in all respects, including, without
                  limitation, by entering into an assumption agreement in form
                  and substance satisfactory to Lender, and, in each case,
                  delivering such legal opinions as Lender may reasonably
                  require;

                           (vi) Borrower shall give written notice to Lender of
                  the proposed sale or conveyance not later than fifteen (15)
                  days prior thereto, which notice shall set forth the name of
                  the proposed transferee, identify the owners of such direct
                  and indirect interests of the proposed transferee and set
                  forth the date the sale or conveyance is expected to be
                  effective.

                  (c) A transfer or sale (but not a pledge, hypothecation,
         creation of a security interest in or other encumbrance) of an indirect
         ownership interest in Borrower is permitted provided the following
         conditions have been satisfied:

                           (i) such transfer or sale is to a Permitted Owner;

                           (ii) prior to any such transfer or sale of direct or
                  indirect ownership interests in Borrower, as a result of which
                  (and after giving effect to such transfer or sale), more than
                  49% of the direct or indirect ownership interests in Borrower
                  shall have been transferred to a Person or entity not owning
                  at least 49% of the direct or indirect ownership interests in
                  Borrower on the date of closing, Borrower shall deliver to
                  Lender a non-consolidation opinion which may be relied upon by
                  Lender, the Rating Agencies and their respective counsel,
                  successors and assigns, with respect to the proposed transfer
                  or sale, which opinion shall be reasonably acceptable to
                  Lender and, after a Securitization, the Rating Agencies;

                           (iii) immediately prior to such transfer or sale no
                  Event of Default has occurred and is continuing;

                           (iv) Borrower shall deliver confirmation in writing
                  from the applicable Rating Agencies to the effect that such
                  transfer or sale will not result in a downgrading, withdrawal
                  or qualification of the respective ratings in effect
                  immediately prior to such transfer or sale for the Securities
                  issued in connection with the Securitization which are then
                  outstanding; and

                           (v) Borrower shall give or cause to be given written
                  notice to Lender of the proposed transfer or sale not later
                  than fifteen (15) days prior thereto, which notice shall set
                  forth the name of the Person to which the interest in Borrower
                  is to

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<PAGE>

                  be transferred or sold, identify the proposed transferee and
                  set forth the date the transfer or sale is expected to be
                  effective.

                  (d) Borrower agrees to bear and shall reimburse Lender on
         demand all reasonable expenses incurred by Lender in connection with
         any transaction described in this Section 5.2.13.

                  (e) Lender shall not be required to demonstrate any actual
         impairment of its security or any increased risk of default hereunder
         in order to declare the Debt immediately due and payable upon any
         violation of this Section 5.2.13.

                  (f) The provisions of this Section 5.2.13 shall not be
         modified or amended by Borrower and Lender unless the Rating Agencies
         have confirmed that such amendment or modification will not result in a
         downgrade, qualification or withdrawal of the then current ratings
         assigned to the Securities.

                  (g) Nothing contained in this Section 5.2.13 or in any other
         provision of this Agreement or in any of the other Loan Documents shall
         limit or prohibit transfers, sales, pledges or issuance of direct or
         indirect interests in Sponsor (the "TRADED ENTITY").

                  (h) Notwithstanding the preceding provisions of this Section
         5.2.13, Borrower upon prior consent of Lender (which shall not be
         unreasonably withheld upon receipt of such information pertaining to
         such transfer as Lender may request) may (i) make transfers of
         immaterial portions of the Property to Governmental Authorities in
         connection with a Condemnation of such immaterial portions of the
         Property for dedication or public use, and (ii) grant easements,
         restrictions, covenants, reservations and rights of way in the ordinary
         course of business for water and sewer lines, telephone and telegraph
         lines, electric lines and other utilities or for other similar
         purposes, provided that no such transfer, described in the foregoing
         clauses (i) and (ii) shall materially impair the utility and operation
         of the Property or materially adversely affect the value of the
         Property or materially adversely affect Borrower's ability to pay the
         Debt, the Interest Only Payment Amount or the Monthly Debt Service
         Payment Amount. Lender shall approve or disapprove such transfers or
         easements within thirty (30) days after receipt of all information
         pertaining thereto by Borrower.

                  (i) Notwithstanding anything to the contrary contained in this
         Section 5.2.13 and except with respect to the Person to whom an
         Individual Property is sold or conveyed pursuant to Section 5.2.13(b)
         hereof, Sponsor must continue to control Borrower and Guarantor and
         own, directly or indirectly, at least a 51% interest in Borrower and in
         Guarantor.

                  Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon a transfer in violation of
this Section 5.2.13. This provision shall apply to every transfer regardless of
whether voluntary or not, or whether or not Lender has consented to any previous
transfer. Notwithstanding anything to the contrary contained in this Section
5.2.13, (a) no transfer shall be made to any Prohibited Person and (b) in the
event any transfer results in any

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<PAGE>

Person owning in excess of forty-nine percent (49%) of the ownership interest in
any direct or indirect owner of Borrower or Guarantor and a Securitization has
occurred, Borrower shall, prior to such transfer, deliver an updated Insolvency
Opinion to Lender, which opinion shall be in form, scope and substance
acceptable in all respects to Lender and the Rating Agencies.

         SECTION 5.3 TRADED SHARES.

                  The Traded Entity shall cause its issued and outstanding
shares of stock to be listed for trading on the New York Stock Exchange or such
other nationally recognized stock exchange throughout the term of the Loan.

         VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS

         SECTION 6.1 INSURANCE.

         (a) Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Properties providing at least the following
coverages:

                  (i) comprehensive all risk insurance on the Improvements and
         the Personal Property, including contingent liability from Operation of
         Building Laws, Demolition Costs and Increased Cost of Construction
         Endorsements, in each case (A) in an amount equal to one hundred
         percent (100%) of the "Full Replacement Cost," which for purposes of
         this Agreement shall mean actual replacement value (exclusive of costs
         of excavations, foundations, underground utilities and footings) with a
         waiver of depreciation, but the amount shall in no event be less than
         the Release Amount applicable to the Individual Property; (B)
         containing an agreed amount endorsement with respect to the
         Improvements and Personal Property waiving all co-insurance provisions;
         (C) providing for no deductible in excess of $25,000; and (D)
         containing an "Ordinance or Law Coverage" or "Enforcement" endorsement
         if any of the Improvements or the use of the Individual Property shall
         at any time constitute legal non-conforming structures or uses. In
         addition, Borrower shall obtain: (y) if any portion of the Improvements
         is currently or at any time in the future located in a federally
         designated "special flood hazard area", flood hazard insurance in an
         amount equal to the lesser of (1) the Release Amount applicable to the
         Individual Property or (2) the maximum amount of such insurance
         available under the National Flood Insurance Act of 1968, the Flood
         Disaster Protection Act of 1973 or the National Flood Insurance Reform
         Act of 1994, as each may be amended or such greater amount as Lender
         shall require; and (z) earthquake insurance in amounts and in form and
         substance satisfactory to Lender in the event the Individual Property
         is located in an area with a high degree of seismic activity, provided
         that the insurance pursuant to clauses (y) and (z) hereof shall be on
         terms consistent with the comprehensive all risk insurance policy
         required under this subsection (i).

                  (ii) commercial general liability insurance against claims for
         personal injury, bodily injury, death or property damage occurring
         upon, in or about the Individual Property, such insurance (A) to be on
         the so-called "occurrence" form with a combined limit, including
         umbrella coverage, of not less than Ten Million and No/100 Dollars
         ($10,000,000) or, if any of the Improvements contain elevators, Ten
         Million and No/100

                                       69
<PAGE>

         Dollars ($10,000,000); (B) to continue at not less than the aforesaid
         limit until required to be changed by Lender in writing by reason of
         changed economic conditions making such protection inadequate; and (C)
         to cover at least the following hazards: (1) premises and operations;
         (2) products and completed operations on an "if any" basis; (3)
         independent contractors; (4) blanket contractual liability for all
         legal contracts; and (5) contractual liability covering the indemnities
         contained in Article 10 of the Security Instruments to the extent the
         same is available;

                  (iii) business interruption/loss of rents insurance (A) with
         loss payable to Lender; (B) covering all risks required to be covered
         by the insurance provided for in subsection (i) above; (C) in an amount
         equal to 100% of the projected gross income from each Individual
         Property (on an actual loss sustained basis) for a period continuing
         until the Restoration of the Individual Property is completed; the
         amount of such business interruption/loss of rents insurance shall be
         determined prior to the Closing Date and at least once each year
         thereafter based on the greatest of: (x) Borrower's reasonable estimate
         of the gross income from each Individual Property and (y) the highest
         gross income received during the term of the Note for any full calendar
         year prior to the date the amount of such insurance is being
         determined, in each case for the succeeding eighteen (18) month period
         and (D) containing an extended period of indemnity endorsement which
         provides that after the physical loss to the Improvements and the
         Personal Property has been repaired, the continued loss of income will
         be insured until such income either returns to the same level it was at
         prior to the loss, or the expiration of eighteen (18) months from the
         date that the applicable Individual Property is repaired or replaced
         and operations are resumed, whichever first occurs, and notwithstanding
         that the policy may expire prior to the end of such period; All
         insurance proceeds payable to Lender pursuant to this subsection shall
         be held by Lender and shall be applied to the obligations secured
         hereunder from time to time due and payable hereunder and under the
         Note and this Agreement; provided, however, that nothing herein
         contained shall be deemed to relieve Borrower of its obligations to pay
         the obligations secured hereunder on the respective dates of payment
         provided for in the Note and this Agreement except to the extent such
         amounts are actually paid out of the proceeds of such business
         interruption/loss of rents insurance;

                  (iv) at all times during which structural construction,
         repairs or alterations are being made with respect to the Improvements,
         and only if the Individual Property coverage form does not otherwise
         apply, (A) owner's contingent or protective liability insurance
         covering claims not covered by or under the terms or provisions of the
         above mentioned commercial general liability insurance policy; and (B)
         the insurance provided for in subsection (i) above written in a
         so-called builder's risk completed value form (1) on a non-reporting
         basis, (2) against all risks insured against pursuant to subsection (i)
         above, (3) including permission to occupy the Individual Property, and
         (4) with an agreed amount endorsement waiving co-insurance provisions;

                  (v) workers' compensation, subject to the statutory limits of
         the State in which each Individual Property is located, and employer's
         liability insurance with a limit of at least $1,000,000 per accident
         and per disease per employee, and $1,000,000 for disease

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<PAGE>

         aggregate in respect of any work or operations on or about the
         Individual Property, or in connection with the Individual Property or
         its operation (if applicable);

                  (vi) comprehensive boiler and machinery insurance, if
         applicable, in amounts as shall be reasonably required by Lender on
         terms consistent with the commercial property insurance policy required
         under subsection (i) above;

                  (vii) umbrella liability insurance in an amount not less than
         $25,000,000 per occurrence and $25,000,000 in the aggregate on terms
         consistent with the commercial general liability insurance policy
         required under subsection (ii) above;

                  (viii) motor vehicle liability coverage for all owned and
         non-owned vehicles, including rented and leased vehicles containing
         minimum limits per occurrence, including umbrella coverage, of not less
         than $1,000,000;

                  (ix) [intentionally deleted];

                  (x) coverage for the peril of Sprinkler Leakage in an amount
         not less than $______________ per each Individual Property;

                  (xi) Comprehensive Plate Glass Insurance in an amount not less
         than $______________ per each Individual Property; and

                  (xii) upon sixty (60) days' written notice, such other
         reasonable insurance and in such reasonable amounts as Lender from time
         to time may reasonably request against such other insurable hazards
         which at the time are commonly insured against for property similar to
         the Individual Property located in or around the region in which the
         Individual Property is located.

         (b) No Policy shall contain an exclusion from coverage under such
Policy for loss or damage incurred as a result of an act of terrorism (including
bio-terrorism) or similar acts of sabotage. If a Policy contains such exclusion,
Borrower shall obtain a separate Policy providing coverage for loss or damage
incurred as a result of an act of terrorism (including bio-terrorism) or similar
acts of sabotage if such coverage is commercially available at commercially
reasonable rates.

         (c) All insurance provided for in Section 6.1(a) hereof shall be
obtained under valid and enforceable policies (collectively, the "POLICIES" or
in the singular, the "POLICY"), and shall be subject to the approval of Lender
as to insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State in which each Individual
Property is located and approved by Lender. The insurance companies must have a
claims paying ability/financial strength rating of "A" (or its equivalent) or
better by at least two (2) of the Rating Agencies (one of which shall be S&P).
The Policies described in Section 6.1 (other than those strictly limited to
liability protection) shall designate Lender as loss payee. Not less than thirty
(30) days prior to the expiration dates of the Policies theretofore furnished to
Lender, certificates of insurance evidencing the Policies accompanied by
evidence satisfactory to Lender of payment of the premiums due thereunder (the
"INSURANCE PREMIUMS"), shall be delivered by Borrower to Lender.

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<PAGE>

         (d) Borrower shall not obtain (i) any umbrella or blanket liability or
casualty Policy unless, in each case, such Policy is approved in advance in
writing by Lender and Lender's interest is included therein as provided in this
Agreement and such Policy is issued by a Qualified Insurer, or (ii) separate
insurance concurrent in form or contributing in the event of loss with that
required in Section 6.1(a) hereof to be furnished by, or which may be reasonably
required to be furnished by, Borrower. In the event Borrower obtains separate
insurance or an umbrella or a blanket policy, Borrower shall notify Lender of
the same and shall cause certified copies of each Policy to be delivered as
required in Section 6.1(a) hereof. Any blanket insurance Policy shall
specifically allocate to the Individual Property the amount of coverage from
time to time required hereunder and shall otherwise provide the same protection
as would a separate Policy insuring only the Individual Property in compliance
with the provisions of Section 6.1(a) hereof. Notwithstanding Lender's approval
of any umbrella or blanket liability or casualty Policy hereunder, Lender
reserves the right, in its sole discretion, to require Borrower to obtain a
separate Policy in compliance with this Section 6.1.

         (e) All Policies provided for or contemplated by Section 6.1(a) hereof,
except for the Policy referenced in Section 6.1(a)(v), shall name Borrower and
Lender as the insured or additional insured, as their respective interests may
appear, and in the case of property damage, boiler and machinery, flood and
earthquake insurance, shall contain a so-called New York standard
non-contributing mortgagee clause in favor of Lender providing that the loss
thereunder shall be payable to Lender.

         (f) All Policies provided for in Section 6.1(a)(v) hereof shall contain
clauses or endorsements to the effect that:

                  (i) no act or negligence of Borrower, or anyone acting for
         Borrower, or of any tenant or other occupant, or failure to comply with
         the provisions of any Policy, which might otherwise result in a
         forfeiture of the insurance or any part thereof, shall in any way
         affect the validity or enforceability of the insurance insofar as
         Lender is concerned;

                  (ii) the Policy shall not be materially changed (other than to
         increase the coverage provided thereby) or canceled without at least
         thirty (30) days' written notice to Lender and any other party named
         therein as an additional insured;

                  (iii) each Policy shall provide that the issuers thereof shall
         give written notice to Lender if the Policy has not been renewed thirty
         (30) days prior to its expiration; and

                  (iv) Lender shall not be liable for any Insurance Premiums
         thereon or subject to any assessments thereunder.

         (g) If at any time Lender is not in receipt of written evidence that
all insurance required hereunder is in full force and effect, Lender shall have
the right, without notice to Borrower, to take such action as Lender deems
necessary to protect its interest in the Properties, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole

                                       72
<PAGE>

discretion deems appropriate. All premiums incurred by Lender in connection with
such action or in obtaining such insurance and keeping it in effect shall be
paid by Borrower to Lender upon demand and, until paid, shall be secured by the
Security Instruments and shall bear interest at the Default Rate.

         (h) Borrower shall furnish to Lender, on or before thirty (30) days
after the close of each of Borrower's fiscal years, a statement certified by
Borrower or a duly authorized officer of Borrower of the amounts of insurance
maintained in compliance herewith, of the risks covered by such insurance and of
the insurance company or companies which carry such insurance and, if requested
by Lender, verification of the adequacy of such insurance by an independent
insurance broker or appraiser acceptable to Lender.

         SECTION 6.2 CASUALTY. If the Individual Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a "CASUALTY"),
Borrower shall give prompt notice of such damage to Lender and shall promptly
commence and diligently prosecute the completion of the repair and restoration
of the Individual Property as nearly as possible to the condition the Individual
Property was in immediately prior to such Casualty, with such alterations as may
be reasonably approved by Lender (a "RESTORATION") and otherwise in accordance
with Section 6.4 hereof. Borrower shall pay all costs of such Restoration
whether or not such costs are covered by insurance. Lender may, but shall not be
obligated to make proof of loss if not made promptly by Borrower.

         SECTION 6.3 CONDEMNATION. Borrower shall promptly give Lender notice of
the actual or threatened commencement of any proceeding for the Condemnation of
all or any part of any Individual Property and shall deliver to Lender copies of
any and all papers served in connection with such proceedings. Lender may
participate in any such proceedings, and Borrower shall from time to time
deliver to Lender all instruments requested by it to permit such participation.
Borrower shall, at its expense, diligently prosecute any such proceedings, and
shall consult with Lender, its attorneys and experts, and cooperate with them in
the carrying on or defense of any such proceedings. Notwithstanding any taking
by any public or quasi-public authority through Condemnation or otherwise
(including, but not limited to, any transfer made in lieu of or in anticipation
of the exercise of such taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement and the Debt shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If any Individual Property or any portion thereof is
taken by a condemning authority, Borrower shall promptly commence and diligently
prosecute the Restoration of the applicable Individual Property and otherwise
comply with the provisions of Section 6.4 hereof. If any Individual Property is
sold, through foreclosure or otherwise, prior to the receipt by Lender of the
Award, Lender shall have the right, whether or not a deficiency judgment on the
Note shall have been sought, recovered or denied, to receive the Award, or a
portion thereof sufficient to pay the Debt.

         SECTION 6.4 RESTORATION. The following provisions shall apply in
connection with the Restoration of the Properties:

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<PAGE>

         (a) If the Net Proceeds shall be less than Four Million and 00/100
Dollars ($4,000,000) (on an aggregate basis for all of the Properties affected
by a Casualty or Condemnation) and the costs of completing the Restoration shall
be less than Four Million and 00/100 Dollars ($4,000,000) (on an aggregate basis
for all of the Properties affected by a Casualty or Condemnation), the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that all
of the conditions set forth in Section 6.4(b)(i) are met and Borrower delivers
to Lender a written undertaking to expeditiously commence and to satisfactorily
complete with due diligence the Restoration in accordance with the terms of this
Agreement.

         (b) If the Net Proceeds are equal to or greater than Four Million and
00/100 Dollars ($4,000,000) (on an aggregate basis for all of the Properties
affected by a Casualty or Condemnation) or the costs of completing the
Restoration is equal to or greater than Four Million and 00/100 Dollars
($4,000,000) (on an aggregate basis for all of the Properties affected by a
Casualty or Condemnation), Lender shall make the Net Proceeds available for the
Restoration in accordance with the provisions of this Section 6.4. The term "NET
PROCEEDS" shall mean: (i) the net amount of all insurance proceeds received by
Lender pursuant to Section 6.1 (a)(i), (iv), (vi) and (vii) as a result of such
damage or destruction, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in collecting
same ("INSURANCE PROCEEDS"), or (ii) the net amount of the Award, after
deduction of its reasonable costs and expenses (including, but not limited to,
reasonable counsel fees), if any, in collecting same ("CONDEMNATION PROCEEDS"),
whichever the case may be.

                           (i) The Net Proceeds shall be made available to
                  Borrower for Restoration provided that each of the following
                  conditions are met:

                  (A) no Event of Default shall have occurred and be continuing;

                  (B) (1) in the event the Net Proceeds are Insurance Proceeds,
less than twenty-five percent (25%) of the total aggregate floor area of the
Improvements on the Properties has been damaged, destroyed or rendered unusable
as a result of such Casualty or (2) in the event the Net Proceeds are
Condemnation Proceeds, less than ten percent (10%) of the land constituting the
Properties is taken, and such land is located along the perimeter or periphery
of the Properties affected by such Condemnation, and no portion of the
Improvements is located on such land;

                  (C) Intentionally Deleted;

                  (D) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than sixty (60) days after such
Casualty or Condemnation, whichever the case may be, occurs) and shall
diligently pursue the same to satisfactory completion in accordance with all
applicable laws, including, without limitation, all applicable Environmental
Laws;

                  (E) Lender shall be satisfied that any operating deficits,
including all scheduled payments of principal and interest under the Note, which
will be incurred with respect to the Properties as a result of the occurrence of
any such Casualty or Condemnation, whichever the case may be, will be covered
out of (1) the Net Proceeds, (2) the insurance coverage referred to in Section
6.1(a)(iii) hereof, if applicable, or (3) by other funds of Borrower;

                                       74
<PAGE>

                  (F) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months prior to the
Maturity Date, (2) six (6) months after the occurrence of such Casualty or
Condemnation, (3) the earliest date required for such completion under the terms
of any Leases, if any, which are required in accordance with the provisions of
this Section 6.4(b) to remain in effect subsequent to the occurrence of such
Casualty or Condemnation and the completion of the Restoration, (4) such time as
may be required under applicable zoning law, ordinance, rule or regulation, in
order to repair and restore the Properties affected by such Casualty or
Condemnation to the condition they were in immediately prior to such Casualty or
Condemnation or (5) the expiration of the insurance coverage referred to in
Section 6.1(a)(iii) hereof;

                  (G) the Properties affected by such Casualty or Condemnation
and the use thereof after the Restoration will be in compliance with and
permitted under all applicable zoning laws, ordinances, rules and regulations;

                  (H) the Restoration shall be done and completed by Borrower in
an expeditious and diligent fashion and in compliance with all applicable
governmental laws, rules and regulations (including, without limitation, all
applicable Environmental Laws); and

                  (I) such Casualty or Condemnation, as applicable, does not
result in the total loss of access to the Properties affected by such Casualty
or Condemnation or the related Improvements.

                  (J) Borrower shall deliver, or cause to be delivered, to
Lender a signed detailed budget approved in writing by Borrower's architect or
engineer stating the entire cost of completing the Restoration, which budget
shall be acceptable to Lender;

                  (K) the Net Proceeds together with any cash or cash equivalent
deposited by Borrower with Lender are sufficient in Lender's discretion to cover
the cost of the Restoration, or, if not sufficient, Borrower shall deposit the
deficiency with Lender; and

                  (L) the Management Agreement in effect as of the date of the
occurrence of such Casualty or Condemnation, whichever the case may be, shall
(1) remain in full force and effect during the Restoration and shall not
otherwise terminate as a result of the Casualty or Condemnation or the
Restoration or (2) if terminated, shall have been replaced with a Replacement
Management Agreement with a Qualifying Manager, prior to the opening or
reopening of the Properties affected by such Casualty or Condemnation or any
portion thereof for business with the public.

                           (ii) The Net Proceeds shall be held by Lender in an
                  interest-bearing account and, until disbursed in accordance
                  with the provisions of this Section 6.4(b), shall constitute
                  additional security for the Debt and other obligations under
                  the Loan Documents. The Net Proceeds shall be disbursed by
                  Lender to, or as directed by, Borrower from time to time
                  during the course of the Restoration, upon receipt of evidence
                  satisfactory to Lender that (A) all materials installed and
                  work and labor performed (except to the extent that they are
                  to be paid for out of the requested disbursement) in
                  connection with the Restoration

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                  have been paid for in full, and (B) there exist no notices of
                  pendency, stop orders, mechanic's or materialman's liens or
                  notices of intention to file same, or any other liens or
                  encumbrances of any nature whatsoever on the Individual
                  Property which have not either been fully bonded to the
                  satisfaction of Lender and discharged of record or in the
                  alternative fully insured to the satisfaction of Lender by the
                  title company issuing the Title Insurance Policy.

                           (iii) All plans and specifications required in
                  connection with the Restoration, the cost of which is greater
                  than $100,000, shall be subject to prior review and acceptance
                  in all respects by Lender and by an independent consulting
                  engineer selected by Lender (the "CASUALTY CONSULTANT").
                  Lender shall have the use of the plans and specifications and
                  all permits, licenses and approvals required or obtained in
                  connection with the Restoration. The identity of the
                  contractors, subcontractors and materialmen engaged in the
                  Restoration, the cost of which is greater than $100,000, as
                  well as the contracts under which they have been engaged,
                  shall be subject to prior review and acceptance by Lender and
                  the Casualty Consultant. All costs and expenses incurred by
                  Lender in connection with making the Net Proceeds available
                  for the Restoration including, without limitation, reasonable
                  counsel fees and disbursements and the Casualty Consultant's
                  fees, shall be paid by Borrower.

                           (iv) In no event shall Lender be obligated to make
                  disbursements of the Net Proceeds in excess of an amount equal
                  to the costs actually incurred from time to time for work in
                  place as part of the Restoration, as certified by the Casualty
                  Consultant, minus the Casualty Retainage. The term "CASUALTY
                  RETAINAGE" shall mean an amount equal to ten percent (10%) of
                  the costs actually incurred for work in place as part of the
                  Restoration, as certified by the Casualty Consultant, until
                  the Restoration has been completed. The Casualty Retainage
                  shall in no event, and notwithstanding anything to the
                  contrary set forth above in this Section 6.4(b), be less than
                  the amount actually held back by Borrower from contractors,
                  subcontractors and materialmen engaged in the Restoration. The
                  Casualty Retainage shall not be released until the Casualty
                  Consultant certifies to Lender that the Restoration has been
                  completed in accordance with the provisions of this Section
                  6.4(b) and that all approvals necessary for the re-occupancy
                  and use of the Individual Property have been obtained from all
                  appropriate Governmental Authorities, and Lender receives
                  evidence satisfactory to Lender that the costs of the
                  Restoration have been paid in full or will be paid in full out
                  of the Casualty Retainage; provided, however, that Lender will
                  release the portion of the Casualty Retainage being held with
                  respect to any contractor, subcontractor or materialman
                  engaged in the Restoration as of the date upon which the
                  Casualty Consultant certifies to Lender that the contractor,
                  subcontractor or materialman has satisfactorily completed all
                  work and has supplied all materials in accordance with the
                  provisions of the contractor's, subcontractor's or
                  materialman's contract, the contractor, subcontractor or
                  materialman delivers the lien waivers and evidence of payment
                  in full of all sums due to the contractor, subcontractor or
                  materialman as may be reasonably requested by Lender or by the
                  title company issuing the Title Insurance Policy for the
                  related Individual Property, and Lender

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<PAGE>

                  receives an endorsement to such Title Insurance Policy
                  insuring the continued priority of the lien of the related
                  Security Instrument and evidence of payment of any premium
                  payable for such endorsement. If required by Lender, the
                  release of any such portion of the Casualty Retainage shall be
                  approved by the surety company, if any, which has issued a
                  payment or performance bond with respect to the contractor,
                  subcontractor or materialman.

                           (v) Lender shall not be obligated to make
                  disbursements of the Net Proceeds more frequently than once
                  every calendar month.

                           (vi) If at any time the Net Proceeds or the
                  undisbursed balance thereof shall not, in the opinion of
                  Lender in consultation with the Casualty Consultant, if any,
                  be sufficient to pay in full the balance of the costs which
                  are estimated by the Casualty Consultant to be incurred in
                  connection with the completion of the Restoration, Borrower
                  shall deposit the deficiency (the "NET PROCEEDS DEFICIENCY")
                  with Lender before any further disbursement of the Net
                  Proceeds shall be made. The Net Proceeds Deficiency deposited
                  with Lender shall be held by Lender and shall be disbursed for
                  costs actually incurred in connection with the Restoration on
                  the same conditions applicable to the disbursement of the Net
                  Proceeds, and until so disbursed pursuant to this Section
                  6.4(b) shall constitute additional security for the Debt and
                  other obligations under the Loan Documents.

                           (vii) The excess, if any, of the Net Proceeds and the
                  remaining balance, if any, of the Net Proceeds Deficiency
                  deposited with Lender after the Casualty Consultant certifies
                  to Lender that the Restoration has been completed in
                  accordance with the provisions of this Section 6.4(b), and the
                  receipt by Lender of evidence satisfactory to Lender that all
                  costs incurred in connection with the Restoration have been
                  paid in full, shall be remitted by Lender to Borrower,
                  provided no Event of Default shall have occurred and shall be
                  continuing under the Note, this Agreement or any of the other
                  Loan Documents.

         (c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Section 6.4(b)(vii) may be retained and applied by Lender toward the payment
of the Debt whether or not then due and payable in such order, priority and
proportions as Lender in its sole discretion shall deem proper, or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate, in its discretion. If
Lender shall receive and retain Net Proceeds, the Lien of the Security
Instruments shall be reduced only by the amount thereof received and retained by
Lender and actually applied by Lender in reduction of the Debt.

         (d) In the event of foreclosure of the Security Instrument with respect
to the Individual Property, or other transfer of title to the Individual
Property in extinguishment in whole or in part of the Debt all right, title and
interest of Borrower in and to the Policies that are not blanket Policies then
in force concerning the Individual Property and all proceeds payable thereunder
shall thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.

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<PAGE>

         (e) The provisions of subsection 4 of Section 254 of the New York Real
Property Law covering the insurance of buildings against loss by fire shall not
apply to this Agreement. In the event of any conflict, inconsistency or
ambiguity between the provisions of Section 6.4 hereof and the provisions of
subsection 4 of Section 254 of the New York Real Property Law covering the
insurance of buildings against loss by fire, the provisions of Section 6.4
hereof shall control.

         VII. RESERVE FUNDS

         SECTION 7.1 REQUIRED REPAIR FUNDS.

         7.1.1 DEPOSITS.

                  On the Closing Date, Borrower shall deposit with Lender the
amount for each Individual Property set forth on Schedule 7.1.1 attached hereto
to perform the Required Repairs for such Individual Property. Amounts so
deposited with Lender shall be held by Lender in accordance with Section 7.6
hereof. Amounts so deposited shall hereinafter be referred to as Borrower's
"Required Repair Fund." Borrower shall perform the repairs at the Properties, as
more particularly set forth on Schedule 7.1.1 attached hereto (such repairs
hereinafter referred to as "REQUIRED REPAIRS"). Borrower shall complete the
Required Repairs on or before the required deadline for each repair as set forth
on Schedule 7.1.1 attached hereto. It shall be an Event of Default under this
Agreement if (a) Borrower does not complete the Required Repairs at each
Individual Property by the required deadline for each repair as set forth on
Schedule 7.1.1 attached hereto, or (b) Borrower does not satisfy each condition
contained in Section 7.1.2 hereof. Upon the occurrence of an Event of Default,
Lender, at its option, may withdraw all Required Repair Funds from the Required
Repair Account and Lender may apply such funds either to completion of the
Required Repairs at one or more of the Properties or toward payment of the Debt
in such order, proportion and priority as Lender may determine in its sole
discretion. Lender's right to withdraw and apply Required Repair Funds shall be
in addition to all other rights and remedies provided to Lender under this
Agreement and the other Loan Documents.

         7.1.2 RELEASE OF REQUIRED REPAIR FUNDS.

                  Lender shall disburse to Borrower the Required Repair Funds
from the Required Repair Account from time to time upon satisfaction by Borrower
of each of the following conditions: (a) Borrower shall submit a written request
for payment to Lender at least thirty (30) days prior to the date on which
Borrower requests such payment be made and specifies the Required Repairs to be
paid, (b) on the date such request is received by Lender and on the date such
payment is to be made, no Default or Event of Default shall exist and remain
uncured, (c) Lender shall have received an Officer's Certificate (i) stating
that all Required Repairs at the applicable Individual Property to be funded by
the requested disbursement have been completed in good and workmanlike manner
and, to the best of Borrower's knowledge, in accordance with all Legal
Requirements and Environmental Laws, such certificate to be accompanied by a
copy of any license, permit or other approval by any Governmental Authority
required to commence and/or complete the Required Repairs, (ii) identifying each
Person that supplied materials or labor in connection with the Required Repairs
performed at such Individual Property with

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<PAGE>

respect to the reimbursement to be funded by the requested disbursement, and
(iii) stating that each such Person has been paid in full upon such
disbursement, such Officer's Certificate to be accompanied by lien waivers or
other evidence of payment satisfactory to Lender, (d) at Lender's option, a
title search for such Individual Property indicating that such Individual
Property is free from all Liens, claims and other encumbrances not previously
approved by Lender, and (e) Lender shall have received such other evidence as
Lender shall reasonably request that the Required Repairs at such Individual
Property to be funded by the requested disbursement have been completed and are
paid for upon such disbursement to Borrower. Lender shall not be required to
make disbursements from the Required Repair Account with respect to any
Individual Property unless such requested disbursement is in an amount greater
than $25,000 (or a lesser amount if the total amount in the Required Repair
Account is less than $25,000, in which case only one disbursement of the amount
remaining in the account shall be made). Lender shall not be obligated to make
disbursements from the Required Repair Account with respect to an Individual
Property in excess of the amount allocated for such Individual Property as set
forth on Schedule 7.1.1 attached hereto. Upon the earlier of (1) Borrower's
completion of all Required Repairs to the satisfaction of Lender (provided
Borrower has supplied Lender with evidence satisfactory to Lender of payment of
all Required Repairs applicable to such Individual Property and, if requested by
Lender, waivers of liens and/or, in the case of Required Repairs greater than
$100,000.00, a title search of the Property or an endorsement to the mortgagee's
title insurance policy), (2) payment in full by Borrower of all sums evidenced
by the Note and secured by the Security Instruments and release by Lender of the
lien of the Security Instruments, or (3) release of such Individual Property in
accordance with the provisions of Section 2.5 hereof, Lender shall disburse to
Borrower all remaining Required Repair Funds allocated to such Individual
Property as set forth on Schedule 7.1.1 attached hereto.

         SECTION 7.2 TAX AND INSURANCE ESCROW FUND.

                  Borrower shall pay to Lender on each Payment Date (a)
one-twelfth of the Taxes that Lender estimates will be payable during the next
ensuing twelve (12) months in order to accumulate with Lender sufficient funds
to pay all such Taxes at least thirty (30) days prior to their respective due
dates, and (b) at the option of Lender, if the liability or casualty Policy
maintained by Borrower covering the Properties shall not constitute an approved
blanket or umbrella Policy pursuant to Section 6.1(c) hereof, or Lender shall
require Borrower to obtain a separate Policy pursuant to Section 6.1(c) hereof,
an amount equal to one-twelfth of the Insurance Premiums that Lender estimates
will be payable for the renewal of the coverage afforded by the Policies upon
the expiration thereof in order to accumulate with Lender sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (said amounts in (a) and (b) above hereinafter called
the "TAX AND INSURANCE ESCROW FUND"). In the event Lender shall elect to collect
payments in escrow for Insurance Premiums pursuant to clause (b) above, Borrower
shall pay to Lender an initial deposit to be determined by Lender, in its sole
discretion, to increase the amounts in the Tax and Insurance Escrow Fund to an
amount which, together with anticipated monthly deposits for the payment of
Insurance Premiums, shall be sufficient to pay all Insurance Premiums as they
become due. The Tax and Insurance Escrow Fund and the payments of interest or
principal or both, payable pursuant to the Note, shall be added together and
shall be paid as an aggregate sum by Borrower to Lender. Lender will apply the
Tax and Insurance Escrow Fund to payments of Taxes and Insurance

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<PAGE>

Premiums required to be made by Borrower pursuant to Sections 5.1.2 and 6.1
hereof, respectively. In making any payment relating to the Tax and Insurance
Escrow Fund, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office (with respect to Taxes) or insurer
or agent (with respect to Insurance Premiums), without inquiry into the accuracy
of such bill, statement or estimate or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax
and Insurance Escrow Fund shall exceed the amounts due for Taxes and Insurance
Premiums pursuant to Sections 5.1.2 and 6.1 hereof, respectively, Lender shall,
in its sole discretion, return any excess to Borrower or credit such excess
against future payments to be made to the Tax and Insurance Escrow Fund. Any
amount remaining in the Tax and Insurance Escrow Fund after the Debt has been
paid in full shall be returned to Borrower. In allocating such excess, Lender
may deal with the Person shown on the records of Lender to be the owner of the
Properties. If at any time Lender reasonably determines that the Tax and
Insurance Escrow Fund is not or will not be sufficient to pay Taxes and
Insurance Premiums by the dates set forth in (a) and (b) above, Lender shall
notify Borrower of such determination and Borrower shall increase its monthly
payments to Lender by the amount that Lender estimates is sufficient to make up
the deficiency at least thirty (30) days prior to delinquency of the Taxes
and/or thirty (30) days prior to expiration of the Policies, as the case may be.
Any amount held in the Tax and Insurance Escrow Fund and allocated for an
Individual Property shall be retained by Lender and credited toward the future
payments of Taxes and Insurance Premiums required by Lender hereunder in the
event such Individual Property is released from the Lien of its related Security
Instrument in accordance with Section 2.5 hereof.

         SECTION 7.3 REPLACEMENTS AND REPLACEMENT RESERVE.

         7.3.1 REPLACEMENT RESERVE FUND. [ON THE CLOSING DATE, BORROWER SHALL
DEPOSIT $________________ INTO THE REPLACEMENT RESERVE ACCOUNT.] Borrower shall
pay to Lender on each Payment Date $______________ [$0.15 PER SQUARE FOOT OF
IMPROVEMENTS PER ANNUM] (the "REPLACEMENT RESERVE MONTHLY DEPOSIT") for
replacements and repairs required to be made to the Properties during the
calendar year (collectively, the "REPLACEMENTS"). Amounts so deposited shall
hereinafter be referred to as Borrower's "REPLACEMENT RESERVE FUND" and the
account in which such amounts are held shall hereinafter be referred to as
Borrower's "REPLACEMENT RESERVE ACCOUNT". Lender may reassess its estimate of
the amount necessary for the Replacement Reserve Fund from time to time, and may
increase the monthly amounts required to be deposited into the Replacement
Reserve Fund upon thirty (30) days notice to Borrower if Lender determines in
its reasonable discretion that an increase is necessary to maintain the proper
maintenance and operation of the Properties. Any amount held in the Replacement
Reserve Account and allocated for an Individual Property shall be retained by
Lender and credited toward the future Replacement Reserve Monthly Deposits
required by Lender hereunder in the event such Individual Property is released
from the Lien of its related Security Instrument in accordance with Section 2.5
hereof.

         7.3.2 DISBURSEMENTS FROM REPLACEMENT RESERVE ACCOUNT. (a) Lender shall
make disbursements from the Replacement Reserve Account to pay Borrower only for
the costs of the Replacements. Lender shall not be obligated to make
disbursements from the Replacement Reserve Account to reimburse Borrower for the
costs of routine maintenance to an Individual

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<PAGE>

Property or for costs which are to be reimbursed from the Required Repair Fund.
Lender shall not be obligated to make disbursements from the Replacement Reserve
Account with respect to an Individual Property in excess of the amount allocated
for such Individual Property as set forth on Schedule 7.3.2 attached hereto.

         (b) Lender shall, upon written request from Borrower and satisfaction
of the requirements set forth in this Section 7.3.2, disburse to Borrower
amounts from the Replacement Reserve Account necessary to pay for the actual
approved costs of Replacements or to reimburse Borrower therefor, upon
completion of such Replacements (or, upon partial completion in the case of
Replacements made pursuant to Section 7.3.2(e)) as determined by Lender. In no
event shall Lender be obligated to disburse funds from the Replacement Reserve
Account if a Default or an Event of Default exists.

         (c) Each request for disbursement from the Replacement Reserve Account
shall be in a form specified or approved by Lender and shall specify (i) the
specific Replacements for which the disbursement is requested, (ii) the quantity
and price of each item purchased, if the Replacement includes the purchase or
replacement of specific items, (iii) the price of all materials (grouped by type
or category) used in any Replacement other than the purchase or replacement of
specific items, and (iv) the cost of all contracted labor or other services
applicable to each Replacement for which such request for disbursement is made.
With each request Borrower shall certify that, to the best of Borrower's
knowledge, all Replacements have been made in accordance with all applicable
Legal Requirements of any Governmental Authority having jurisdiction over the
applicable Individual Property to which the Replacements are being provided.
Each request for disbursement shall include copies of invoices for all items or
materials purchased and all contracted labor or services provided and, unless
Lender has agreed to issue joint checks as described below in connection with a
particular Replacement, each request shall include evidence satisfactory to
Lender of payment of all such amounts. Except as provided in Section 7.3.2(e)
hereof, each request for disbursement from the Replacement Reserve Account shall
be made only after completion of the Replacement for which disbursement is
requested. Borrower shall provide Lender evidence of completion satisfactory to
Lender in its reasonable judgment.

         (d) Borrower shall pay all invoices in connection with the Replacements
with respect to which a disbursement is requested prior to submitting such
request for disbursement from the Replacement Reserve Account or, at the request
of Borrower, Lender will issue joint checks, payable to Borrower and the
contractor, supplier, materialman, mechanic, subcontractor or other party to
whom payment is due in connection with a Replacement. In the case of payments
made by joint check, Lender may require a waiver of lien from each Person
receiving payment prior to Lender's disbursement from the Replacement Reserve
Account. In addition, as a condition to any disbursement, Lender may require
Borrower to obtain lien waivers from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount equal to or greater
than $25,000 for completion of its work or delivery of its materials. Any lien
waiver delivered hereunder shall conform to the requirements of applicable law
and shall cover all work performed and materials supplied (including equipment
and fixtures) for the applicable Individual Property by that contractor,
supplier, subcontractor, mechanic or materialman through the date covered by the
current reimbursement request (or, in the event that payment to such contractor,
supplier, subcontractor, mechanic or materialmen is to be made by a joint check,
the release of lien shall be effective through the date covered by the previous
release of funds request).

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<PAGE>

         (e) If (i) the cost of a Replacement exceeds $50,000, (ii) the
contractor performing such Replacement requires periodic payments pursuant to
terms of a written contract, and (iii) Lender has approved in writing in advance
such periodic payments, a request for reimbursement from the Replacement Reserve
Account may be made after completion of a portion of the work under such
contract, provided (A) such contract requires payment upon completion of such
portion of the work, (B) the materials for which the request is made are on site
at the applicable Individual Property and are properly secured or have been
installed in such Individual Property, (C) all other conditions in this Section
7.3 for disbursement have been satisfied, (D) funds remaining in the Replacement
Reserve Account are, in Lender's judgment, sufficient to complete such
Replacement and other Replacements when required, and (E) if required by Lender,
each contractor or subcontractor receiving payments under such contract shall
provide a waiver of lien with respect to amounts which have been paid to that
contractor or subcontractor.

         (f) Borrower shall not make a request for disbursement from the
Replacement Reserve Account more frequently than once in any calendar month and
(except in connection with the final disbursement) the total cost of all
Replacements in any request shall not be less than $50,000.

         7.3.3 PERFORMANCE OF REPLACEMENTS. (a) Borrower shall make Replacements
when required in order to keep each Individual Property in condition and repair
consistent with other properties in the same market segment in the metropolitan
area in which the respective Individual Property is located (but at all times
consistent with the standards of other "U-Store-It" properties, irrespective of
whether such Individual Property is currently operated as a "U-Store-It"
self-service storage facility), and to keep each Individual Property or any
portion thereof from deteriorating. Borrower shall complete all Replacements in
a good and workmanlike manner as soon as practicable following the commencement
of making each such Replacement.

         (b) Lender reserves the right, at its option, to approve all contracts
or work orders with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Replacements costing, in the aggregate, in excess of $50,000 with respect to
each Individual Property. Upon Lender's request, Borrower shall assign any
contract or subcontract to Lender.

         (c) In the event Lender determines in its reasonable discretion that
any Replacement is not being performed in a workmanlike or timely manner or that
any Replacement has not been completed in a workmanlike or timely manner, Lender
shall have the option to withhold disbursement for such unsatisfactory
Replacement and to proceed under existing contracts or to contract with third
parties to complete such Replacement and to apply the Replacement Reserve Fund
toward the labor and materials necessary to complete such Replacement, without
providing any prior notice to Borrower and to exercise any and all other
remedies available to Lender upon an Event of Default hereunder.

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         (d) In order to facilitate Lender's completion or making of the
Replacements pursuant to Section 7.3.3(c) above, Borrower grants Lender the
right to enter onto any Individual Property and perform any and all work and
labor necessary to complete or make the Replacements and/or employ watchmen to
protect such Individual Property from damage. All sums so expended by Lender, to
the extent not from the Replacement Reserve Fund, shall be deemed to have been
advanced under the Loan to Borrower and secured by the Security Instruments. For
this purpose, Borrower constitutes and appoints Lender its true and lawful
attorney-in-fact with full power of substitution to complete or undertake the
Replacements in the name of Borrower. Such power of attorney shall be deemed to
be a power coupled with an interest and cannot be revoked. Borrower empowers
said attorney-in-fact as follows: (i) to use any funds in the Replacement
Reserve Account for the purpose of making or completing the Replacements; (ii)
to make such additions, changes and corrections to the Replacements as shall be
necessary or desirable to complete the Replacements; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all existing bills
and claims which are or may become Liens against any Individual Property, or as
may be necessary or desirable for the completion of the Replacements, or for
clearance of title; (v) to execute all applications and certificates in the name
of Borrower which may be required by any of the contract documents; (vi) to
prosecute and defend all actions or proceedings in connection with any
Individual Property or the rehabilitation and repair of any Individual Property;
and (vii) to do any and every act which Borrower might do in its own behalf to
fulfill the terms of this Agreement.

         (e) Nothing in this Section 7.3.3 shall: (i) make Lender responsible
for making or completing the Replacements; (ii) require Lender to expend funds
in addition to the Replacement Reserve Fund to make or complete any Replacement;
(iii) obligate Lender to proceed with the Replacements; or (iv) obligate Lender
to demand from Borrower additional sums to make or complete any Replacement.

         (f) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties making Replacements pursuant to this Section 7.3.3
to enter onto each Individual Property during normal business hours (subject to
the rights of tenants under their Leases) to inspect the progress of any
Replacements and all materials being used in connection therewith, to examine
all plans and shop drawings relating to such Replacements which are or may be
kept at each Individual Property, and to complete any Replacements made pursuant
to this Section 7.3.3. Borrower shall cause all contractors and subcontractors
to cooperate with Lender or Lender's representatives or such other persons
described above in connection with inspections described in this Section
7.3.3(f) or the completion of Replacements pursuant to this Section 7.3.3.

         (g) Lender may require an inspection of the Individual Property at
Borrower's expense prior to making a monthly disbursement from the Replacement
Reserve Account in order to verify completion of the Replacements for which
reimbursement in excess of $10,000 is sought. Lender may require that such
inspection be conducted by an appropriate independent qualified professional
selected by Lender and/or may require a copy of a certificate of completion by
an independent qualified professional acceptable to Lender prior to the
disbursement of any amounts from the Replacement Reserve Account. Borrower shall
pay the

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reasonable expense of the inspection as required hereunder, whether such
inspection is conducted by Lender or by an independent qualified professional.

         (h) The Replacements and all materials, equipment, fixtures, or any
other item comprising a part of any Replacement shall be constructed, installed
or completed, as applicable, free and clear of all mechanic's, materialman's or
other liens (except for those Liens existing on the date of this Agreement which
have been approved in writing by Lender).

         (i) Before each disbursement from the Replacement Reserve Account,
Lender may require Borrower to provide Lender with a search of title to the
applicable Individual Property effective to the date of the disbursement, which
search shows that no mechanic's or materialmen's liens or other liens of any
nature have been placed against the applicable Individual Property since the
date of recordation of the related Security Instrument and that title to such
Individual Property is free and clear of all Liens (other than the lien of the
related Security Instrument and any other Liens previously approved in writing
by Lender, if any).

         (j) All Replacements shall comply with all applicable Legal
Requirements of all Governmental Authorities having jurisdiction over the
applicable Individual Property and applicable insurance requirements including,
without limitation, applicable building codes, special use permits,
environmental regulations, and requirements of insurance underwriters.

         (k) In addition to any insurance required under the Loan Documents,
Borrower shall provide or cause to be provided workmen's compensation insurance,
builder's risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement. All
such policies shall be in form and amount reasonably satisfactory to Lender. All
such policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed. Certified copies of such
policies shall be delivered to Lender.

         7.3.4 FAILURE TO MAKE REPLACEMENTS. (a) It shall be an Event of Default
under this Agreement if Borrower fails to comply with any provision of this
Section 7.3 and such failure is not cured within thirty (30) days after notice
from Lender. Upon the occurrence of such an Event of Default, Lender may use the
Replacement Reserve Fund (or any portion thereof) for any purpose, including but
not limited to completion of the Replacements as provided in Section 7.3.3, or
for any other repair or replacement to any Individual Property or toward payment
of the Debt in such order, proportion and priority as Lender may determine in
its sole discretion. Lender's right to withdraw and apply the Replacement
Reserve Funds shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents.

         (b) Nothing in this Agreement shall obligate Lender to apply all or any
portion of the Replacement Reserve Fund on account of an Event of Default to
payment of the Debt or in any specific order or priority.

         7.3.5 BALANCE IN THE REPLACEMENT RESERVE ACCOUNT. The insufficiency of
any balance in the Replacement Reserve Account shall not relieve Borrower from
its obligation to fulfill all preservation and maintenance covenants in the Loan
Documents.

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         SECTION 7.4 GROUND LEASE ESCROW FUND.

                  Borrower shall pay to Lender on each Payment Date, an amount
(the "MONTHLY GROUND RENT Deposit") that is estimated by Lender to be due and
payable by Borrower under the Ground Lease for all Ground Rent which may be due
by Borrower under the Ground Lease in order to accumulate with Lender sufficient
funds to pay all sums payable under the Ground Lease at least ten (10) Business
Days prior to the next date such Ground Rents are due and payable (said amounts,
hereinafter called the "GROUND LEASE ESCROW FUND"). The Ground Lease Escrow Fund
is for the purpose of paying all sums due under the Ground Lease. Upon
Borrower's failure to pay any Ground Rents after the receipt of any notice and
at least ten (10) days prior to the expiration of any cure period available to
Borrower pursuant to the Ground Lease, Lender may, in its discretion, apply any
amounts held in the Ground Lease Escrow Fund to the payment of such Ground Rent;
provided however, that the provisions of this Section 7.4 shall not be deemed to
create any obligation on the part of Lender to pay any such Ground Rent from
amounts on deposit in the Ground Lease Escrow Fund. Such deposit may be
increased by Lender in the amount Lender deems is necessary in its reasonable
discretion based on any increases in the Ground Rent due under the Ground Lease.

         SECTION 7.5 LEASING RESERVE FUND.

         7.5.1 DEPOSITS TO LEASING RESERVE FUND. All Lease Termination Payments
shall be deposited in the Leasing Reserve Account with and held by Lender for
tenant improvement and leasing commission obligations incurred in connection
with the re-leasing of the space demised under the related Lease. Amounts so
deposited shall hereinafter be referred to as the "Leasing Reserve Fund".

         7.5.2 WITHDRAWALS OF LEASING RESERVE FUNDS. Lender shall make
disbursements from the Leasing Reserve Fund for tenant improvement and leasing
commission obligations incurred by Borrower in connection with the re-leasing of
the space demised under the related Lease. All such expenses shall be approved
by Lender in its sole discretion. Lender shall make disbursements as requested
by Borrower on a monthly basis in increments of no less than $50,000.00 upon
delivery by Borrower of Lender's standard form of draw request accompanied by
copies of paid invoices for the amounts requested and, if required by Lender,
lien waivers and releases from all parties furnishing materials and/or services
in connection with the requested payment. Lender may require an inspection of
the applicable Individual Property at Borrower's expense prior to making a
quarterly disbursement in order to verify completion of improvements for which
reimbursement is sought. All earnings or interest on the Leasing Reserve Fund
shall be and become part of such Leasing Reserve Fund and shall be disbursed as
provided in this Section 7.5.

         SECTION 7.6 RESERVE FUNDS, GENERALLY.

         (a) Borrower grants to Lender a first-priority perfected security
interest in each of the Reserve Funds and any and all monies now or hereafter
deposited in each Reserve Fund as additional security for payment of the Debt.
Until expended or applied in accordance herewith, the Reserve Funds shall
constitute additional security for the Debt.

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         (b) Upon the occurrence of an Event of Default, Lender may, in addition
to any and all other rights and remedies available to Lender, apply any sums
then present in any or all of the Reserve Funds to the payment of the Debt in
any order in its sole discretion.

         (c) The Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Lender.

         (d) The Reserve Funds shall be held in interest bearing accounts and
all earnings or interest on a Reserve Fund shall be added to and become a part
of such Reserve Fund and shall be disbursed in the same manner as other monies
deposited in such Reserve Fund.

         (e) Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in any Reserve
Fund or the monies deposited therein or permit any lien or encumbrance to attach
thereto, or any levy to be made thereon, or any UCC-1 Financing Statements,
except those naming Lender as the secured party, to be filed with respect
thereto.

         (f) Lender shall not be liable for any loss sustained on the investment
of any funds constituting the Replacement Reserve Fund.

         (g) Borrower shall indemnify Lender and hold Lender harmless from and
against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and
reasonable attorneys fees and expenses) arising from or in any way connected
with the Reserve Funds or the related Accounts or the performance of the
obligations for which the Reserve Funds or the related Accounts were
established, except to the extent arising from the gross negligence or willful
misconduct of Lender, its agents or employees or arising from the failure of
Lender to disburse funds from the Reserve Funds or related Accounts when
required to do so hereunder. Borrower shall assign to Lender all rights and
claims Borrower may have against all Persons supplying labor, materials or other
services which are to be paid from or secured by the Reserve Funds or the
related Accounts; provided, however, that Lender may not pursue any such right
or claim unless an Event of Default has occurred and remains uncured.

         VIII. DEFAULTS

         SECTION 8.1 EVENT OF DEFAULT.

         (a) Each of the following events shall constitute an event of default
hereunder (an "EVENT OF DEFAULT"):

                  (i) if any portion of the Debt is not paid on or prior to the
         date when due and payable;

                  (ii) if any of the Taxes or Other Charges are not paid on or
         prior to the date when the same are due and payable;

                  (iii) if the Policies are not kept in full force and effect,
         or if certified copies of the Policies are not delivered to Lender upon
         request;

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                  (iv) if Borrower transfers or encumbers any portion of the
         Properties without Lender's prior written consent or otherwise violates
         the provisions of Section 5.2.13 hereof or Article 7 of any Security
         Instrument;

                  (v) if any representation or warranty made by Borrower, the
         SPC Party or Guarantor herein or in any other Loan Document, or in any
         report, certificate, financial statement or other instrument, agreement
         or document furnished to Lender shall have been false or misleading in
         any material respect as of the date the representation or warranty was
         made;

                  (vi) if Borrower, the SPC Party, Guarantor or any other
         guarantor under any guaranty issued in connection with the Loan shall
         make an assignment for the benefit of creditors;

                  (vii) if a receiver, liquidator or trustee shall be appointed
         for Borrower, the SPC Party, Guarantor or any other guarantor under any
         guaranty issued in connection with the Loan or if Borrower, the SPC
         Party, Guarantor or such other guarantor shall be adjudicated a
         bankrupt or insolvent, or if any petition for bankruptcy,
         reorganization or arrangement pursuant to the Bankruptcy Code, or any
         similar Federal or State law, shall be filed by or against, consented
         to, or acquiesced in by, Borrower, the SPC Party, Guarantor or such
         other guarantor, or if any proceeding for the dissolution or
         liquidation of Borrower, the SPC Party, Guarantor or such other
         guarantor shall be instituted; provided, however, if such appointment,
         adjudication, petition or proceeding was involuntary and not consented
         to by Borrower, the SPC Party, Guarantor or such other guarantor, upon
         the same not being discharged, stayed or dismissed within sixty (60)
         days;

                  (viii) if Borrower attempts to assign its rights under this
         Agreement or any of the other Loan Documents or any interest herein or
         therein in contravention of the Loan Documents;

                  (ix) if Borrower breaches any of its respective negative
         covenants contained in Section 5.2 or any covenant contained in Section
         4.1.30 hereof;

                  (x) with respect to any term, covenant or provision set forth
         herein which specifically contains a notice requirement or grace
         period, if Borrower shall be in default under such term, covenant or
         condition after the giving of such notice or the expiration of such
         grace period;

                  (xi) if any of the assumptions contained in the Insolvency
         Opinion, or in any other "non-consolidation" opinion delivered to
         Lender in connection with the Loan, or in any other "non-consolidation"
         delivered subsequent to the closing of the Loan, is or shall become
         untrue in any material respect;

                  (xii) if Borrower violates or does not comply with any of the
         provisions of Section 5.1.20 hereof;

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                  (xiii) if a default has occurred and continues beyond any
         applicable cure period under the Management Agreement (or any
         Replacement Management Agreement) if such default permits the Manager
         thereunder to terminate or cancel the Management Agreement (or any
         Replacement Management Agreement) unless in such case Borrower shall
         enter into a Replacement Management Agreement in accordance with the
         terms hereof;

                  (xiv) if any Individual Property becomes subject to any
         mechanic's, materialman's or other Lien other than a Lien for local
         real estate taxes and assessments not then due and payable and the Lien
         shall remain undischarged of record (by payment, bonding or otherwise)
         for a period of thirty (30) days;

                  (xv) if any Federal tax Lien or State or local income tax Lien
         is filed against Borrower, SPC Party, any Guarantor or any Individual
         Property and same is not discharged of record within thirty (30) days
         after same is filed;

                  (xvi) (A) Borrower fails to timely provide Lender with the
         written certification and evidence referred to in Section 5.2.12
         hereof, (B) Borrower is a Plan or its assets constitute Plan Asset; or
         (C) Borrower consummates a transaction which would cause the Security
         Instruments or Lender's exercise of its rights under the Security
         Instruments, the Note, this Agreement or the other Loan Documents to
         constitute a nonexempt prohibited transaction under ERISA or result in
         a violation of a State statute regulating governmental plans,
         subjecting Lender to liability for a violation of ERISA, the Code, a
         State statute or other similar law;

                  (xvii) if Borrower shall fail to deliver to Lender, within ten
         (10) days after request by Lender, the estoppel certificates required
         pursuant to the terms of Section 5.1.15(a) hereof;

                  (xviii) if any default occurs under any guaranty or indemnity
         executed in connection herewith (including, without limitation, the
         Guaranty and the Environmental Indemnity) and such default continues
         after the expiration of applicable grace periods, if any;

                  (xix) if Borrower shall be in default beyond applicable notice
         and grace periods under any other mortgage, deed of trust, deed to
         secure debt or other security agreement covering any part of any
         Individual Property whether it be superior or junior in lien to the
         related Security Instrument;

                  (xx) if Borrower operates any Individual Property (other than
         the Properties set forth on Schedule 4.1.31 attached hereto) under the
         name other than "U-Store-It", without Lender's prior written consent;

                  (xxi) if Borrower shall fail to pay the Ground Rent or any
         additional rent or other charge mentioned in or made payable by any
         Ground Lease when said rent or other charge is due and payable (except
         to the extent that sufficient funds have been deposited

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         with Lender to satisfy such obligations on the date each such payment
         is required and Lender is not prohibited from withdrawing or applying
         such funds by Legal Requirements or otherwise);

                  (xxii) if there shall occur any default by Borrower, as tenant
         under any Ground Lease, in the observance or performance of any term,
         covenant or condition of such Ground Lease on the part of Borrower to
         be observed or performed and said default is not cured following the
         expiration of any applicable grace and notice periods therein provided,
         or if the leasehold estate created by such Ground Lease shall be
         surrendered or if such Ground Lease shall cease to be in full force and
         effect or such Ground Lease shall be terminated or canceled for any
         reason or under any circumstances whatsoever, or if any of the terms,
         covenants or conditions of such Ground Lease shall in any manner be
         modified, changed, supplemented, altered, or amended without the
         consent of Lender;

                  (xxiii) if there shall be a default under any of the other
         Loan Documents beyond any applicable cure periods contained in such
         documents, whether as to Borrower or any Individual Property, or if any
         other such event shall occur or condition shall exist, if the effect of
         such event or condition is to accelerate the maturity of any portion of
         the Debt or to permit Lender to accelerate the maturity of all or any
         portion of the Debt; or

                  (xxiv) if Borrower shall continue to be in Default under any
         of the other terms, covenants or conditions of this Agreement not
         specified in subsections (i) to (xxiii) above, for ten (10) days after
         notice to Borrower from Lender, in the case of any Default which can be
         cured by the payment of a sum of money, or for thirty (30) days after
         notice from Lender in the case of any other Default; provided, however,
         that if such non-monetary Default is susceptible of cure but cannot
         reasonably be cured within such thirty (30) day period and provided
         further that Borrower shall have commenced to cure such Default within
         such thirty (30) day period and thereafter diligently and expeditiously
         proceeds to cure the same, such thirty (30) day period shall be
         extended for such time as is reasonably necessary for Borrower in the
         exercise of due diligence to cure such Default, such additional period
         not to exceed sixty (60) days.

         (b) Upon the occurrence of an Event of Default (other than an Event of
Default described in clauses (vi), (vii) or (viii) above) and at any time
thereafter, in addition to any other rights or remedies available to it pursuant
to this Agreement and the other Loan Documents or at law or in equity, Lender
may take such action, without notice or demand, that Lender deems advisable to
protect and enforce its rights against Borrower and in and to all or any
Individual Property, including, without limitation, declaring the Debt to be
immediately due and payable, and Lender may enforce or avail itself of any or
all rights or remedies provided in the Loan Documents against Borrower and any
or all of the Properties, including, without limitation, all rights or remedies
available at law or in equity; and upon any Event of Default described in
clauses (vi), (vii) or (viii) above, the Debt and all other obligations of
Borrower hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding.

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         SECTION 8.2 REMEDIES.

         (a) Upon the occurrence of an Event of Default, all or any one or more
of the rights, powers, privileges and other remedies available to Lender against
Borrower under this Agreement or any of the other Loan Documents executed and
delivered by, or applicable to, Borrower or at law or in equity may be exercised
by Lender at any time and from time to time, whether or not all or any of the
Debt shall be declared due and payable, and whether or not Lender shall have
commenced any foreclosure proceeding or other action for the enforcement of its
rights and remedies under any of the Loan Documents with respect to all or any
Individual Property. Any such actions taken by Lender shall be cumulative and
concurrent and may be pursued independently, singly, successively, together or
otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
Without limiting the generality of the foregoing, Borrower agrees that if an
Event of Default is continuing (i) Lender is not subject to any "one action" or
"election of remedies" law or rule, and (ii) all liens and other rights,
remedies or privileges provided to Lender shall remain in full force and effect
until Lender has exhausted all of its remedies against the Properties and each
Security Instrument has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.

         (b) With respect to Borrower and the Properties, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to any Individual Property for the satisfaction of any of the Debt in
preference or priority to any other Individual Property, and Lender may seek
satisfaction out of all of the Properties or any part thereof, in its absolute
discretion in respect of the Debt. In addition, Lender shall have the right from
time to time to partially foreclose the Security Instruments in any manner and
for any amounts secured by the Security Instruments then due and payable as
determined by Lender in its sole discretion including, without limitation, the
following circumstances: (i) in the event Borrower defaults beyond any
applicable grace period in the payment of one or more scheduled payments of
principal and interest, Lender may foreclose one or more of the Security
Instruments to recover such delinquent payments, or (ii) in the event Lender
elects to accelerate less than the entire outstanding principal balance of the
Loan, Lender may foreclose one or more of the Security Instruments to recover so
much of the principal balance of the Loan as Lender may accelerate and such
other sums secured by one or more of the Security Instruments as Lender may
elect. Notwithstanding one or more partial foreclosures, the Properties shall
remain subject to the Security Instruments to secure payment of the Debt and not
previously recovered.

         (c) Lender shall have the right, from time to time, to sever the Note
and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the "SEVERED LOAN DOCUMENTS") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any

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such documents under such power until three (3) days after notice has been given
to Borrower by Lender of Lender's intent to exercise its rights under such
power. Except as may be required in connection with a Securitization pursuant to
Section 9.1 hereof, (i) Borrower shall not be obligated to pay any costs or
expenses incurred in connection with the preparation, execution, recording or
filing of the Severed Loan Documents, and (ii) the Severed Loan Documents shall
not contain any representations, warranties or covenants not contained in the
Loan Documents and any such representations and warranties contained in the
Severed Loan Documents will be given by Borrower only as of the Closing Date.

         SECTION 8.3 REMEDIES CUMULATIVE; WAIVERS.

                  The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singularly, concurrently or otherwise, at such time
and in such order as Lender may determine in Lender's sole discretion. No delay
or omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.

         IX. SPECIAL PROVISIONS

         SECTION 9.1 SALE OF NOTES AND SECURITIZATION.

                  At the request of the holder of the Note and, to the extent
not already required to be provided by Borrower under this Agreement, Borrower
shall use reasonable efforts to satisfy the market standards to which the holder
of the Note customarily adheres or which may be reasonably required in the
marketplace or by the Rating Agencies in connection with the sale of the Note or
participations therein or the first successful securitization (such sale and/or
securitization, the "SECURITIZATION") of rated single or multi-class securities
(the "SECURITIES") secured by or evidencing ownership interests in the Note and
the Security Instruments, including, without limitation, to:

                  (a)      (i) provide such financial and other information with
                           respect to the Properties, Borrower, Guarantor and
                           the Manager, (ii) provide budgets relating to the
                           Properties and (iii) at Lender's cost, to perform or
                           permit or cause to be performed or permitted such
                           site inspection, appraisals, market studies,
                           environmental reviews and reports (Phase I's and, if
                           appropriate, Phase II's), engineering reports and
                           other due diligence investigations of the Properties,
                           as may be reasonably requested by the holder of the
                           Note or the Rating Agencies or as may be necessary or
                           appropriate in connection with the Securitization
                           (the "PROVIDED INFORMATION"), together, if customary,
                           with appropriate verification and/or consents of the

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                           Provided Information through letters of auditors or
                           opinions of counsel of independent attorneys
                           acceptable to Lender and the Rating Agencies;

                  (b)      if required by the Rating Agencies, deliver (i) a
                           revised Insolvency Opinion, (ii) revised or
                           additional opinions of counsel as to due execution
                           and enforceability with respect to the Properties,
                           Borrower, any Guarantor and Manager and their
                           respective Affiliates and the Loan Documents, and
                           (iii) revised organizational documents for Borrower,
                           any Guarantor and Manager and their respective
                           Affiliates (including without limitation, such
                           revisions as are necessary to comply with the
                           provisions of Section 4.1.30 hereof, and if required
                           by any Rating Agency, amend such organizational
                           documents to require that there shall be two (2)
                           Independent Directors serving in such capacity at all
                           times), which counsel, opinions, and organizational
                           documents shall be satisfactory to Lender and the
                           Rating Agencies;

                  (c)      make such representations and warranties as of the
                           closing date of the Securitization with respect to
                           the Properties, Borrower, Guarantor, Manager and the
                           Loan Documents as are customarily provided in
                           securitization transactions and as may be reasonably
                           requested by the holder of the Note or the Rating
                           Agencies and consistent with the facts covered by
                           such representations and warranties as they exist on
                           the date thereof, including the representations and
                           warranties made in the Loan Documents;

                  (d)      execute such amendments to the Loan Documents and
                           Borrower's organizational documents as may be
                           requested by the holder of the Note or the Rating
                           Agencies or otherwise to effect the Securitization
                           including (i) bifurcating the Note into two or more
                           notes and splitting the Security Instrument into two
                           mortgages, including a first priority mortgage or
                           otherwise as determined by and acceptable to Lender
                           or (ii) dividing the Note into multiple components
                           corresponding to tranches of certificates to be
                           issued in a Securitization each having a notional
                           balance and an interest rate determined by Lender;
                           provided, however, that Borrower shall not be
                           required to modify or amend any Loan Document if the
                           overall effect of such modification or amendment
                           would (i) change the interest rate, the stated
                           maturity (as the same may be extended pursuant to
                           this Agreement) or the amortization of principal set
                           forth in the Note, or (ii) modify or amend any other
                           material economic term of the Loan;

                  (e)      if Lender elects, in its sole discretion, prior to or
                           upon a Securitization, to split the Loan into two or
                           more parts, or the Note into multiple component notes
                           or tranches which may have different interest rates,
                           amortization payments, principal amounts and
                           maturities, Borrower agrees to cooperate with Lender
                           in connection with the foregoing and to execute the
                           required modifications and amendments to the Note,
                           this Agreement and the Loan Documents and to provide
                           opinions necessary to effectuate the same.

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                           Such Notes or components may be assigned different
                           interest rates, so long as the initial weighted
                           average of such interest rates does not exceed the
                           Applicable Interest Rate ;and

                  (f)      supply to Lender such documentation, financial
                           statements and reports in form and substance required
                           for Lender to comply with the Federal securities law,
                           if applicable.

                  All reasonable third party costs and expenses incurred by
Lender or Borrower in connection with Borrower's complying with requests made
under this Section 9.1 shall be paid by Lender (other than the fees and expenses
of Borrower's counsel).

         SECTION 9.2 SECURITIZATION INDEMNIFICATION.

         (a) Borrower understands that certain of the Provided Information may
be included in disclosure documents in connection with the Securitization,
including, without limitation, a prospectus, prospectus supplement, private
placement memorandum, offering circular or other offering document (each, a
"DISCLOSURE DOCUMENT") and may also be included in filings with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or the Securities and Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), or provided or made available to investors or prospective
investors in the Securities, the Rating Agencies, and service providers relating
to the Securitization. In the event that the Disclosure Document is required to
be revised prior to the sale of all Securities, Borrower will cooperate with the
holder of the Note in updating the Disclosure Document by providing all current
information necessary to keep the Disclosure Document accurate and complete in
all material respects.

         (b) Borrower agrees to provide in connection with each of (i) a
preliminary and a final private placement memorandum, (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, or (iii) collateral
and structured term sheets or similar materials, an indemnification certificate
(A) certifying that Borrower has carefully examined such memorandum, prospectus
or term sheets, as applicable, including without limitation, the sections
entitled "Special Considerations," "Description of the Mortgages," "Description
of the Mortgage Loans and Mortgaged Property," "The Manager," "The Borrower" and
"Certain Legal Aspects of the Mortgage Loan," and such sections (and any other
sections reasonably requested) do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made, not
misleading, (B) indemnifying Lender (and for purposes of this Section 9.2,
Lender hereunder shall include its officers and directors), the Affiliate of
Lehman Brothers Inc. ("LEHMAN") that has filed the registration statement
relating to the Securitization (the "REGISTRATION STATEMENT"), each of its
directors, each of its officers who have signed the Registration Statement and
each Person or entity who controls the Affiliate within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (collectively, the
"LEHMAN GROUP"), and Lehman, each of its directors and each Person who controls
Lehman within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act (collectively, the "UNDERWRITER GROUP") for any losses, claims,
damages or liabilities (collectively, the "LIABILITIES") to which Lender, the

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Lehman Group or the Underwriter Group may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such sections described in
clause (A) above, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated in such sections
or necessary in order to make the statements in such sections or in light of the
circumstances under which they were made, not misleading and (C) agreeing to
reimburse Lender, the Lehman Group and the Underwriter Group for any legal or
other expenses reasonably incurred by Lender and Lehman in connection with
investigating or defending the Liabilities; provided, however, that Borrower
will be liable in any such case under clauses (B) or (C) above only to the
extent that any such Liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by or on behalf of Borrower in connection with
the preparation of the memorandum or prospectus or in connection with the
underwriting of the debt, including, without limitation, financial statements of
Borrower, operating statements, rent rolls, environmental site assessment
reports and property condition reports with respect to the Properties. This
indemnification will be in addition to any liability which Borrower may
otherwise have. Moreover, the indemnification provided for in clauses (B) and
(C) above shall be effective whether or not an indemnification certificate
described in (A) above is provided and shall be applicable based on information
previously provided by Borrower or its Affiliates if Borrower does not provide
the indemnification certificate.

         (c) In connection with filings under the Exchange Act, Borrower agrees
to indemnify (i) Lender, the Lehman Group and the Underwriter Group for
Liabilities to which Lender, the Lehman Group or the Underwriter Group may
become subject insofar as the Liabilities arise out of or are based upon the
omission or alleged omission to state in the Provided Information a material
fact required to be stated in the Provided Information in order to make the
statements in the Provided Information, in light of the circumstances under
which they were made not misleading and (ii) reimburse Lender, the Lehman Group
or the Underwriter Group for any legal or other expenses reasonably incurred by
Lender, the Lehman Group or the Underwriter Group in connection with defending
or investigating the Liabilities.

         (d) Promptly after receipt by an indemnified party under this Section
9.2 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 9.2, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party hereunder except to the extent that failure to notify
causes prejudice to the indemnifying party. In the event that any action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party, to participate therein and, to the extent that it
(or they) may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party.
After notice from the indemnifying party to such indemnified party under this
Section 9.2 the indemnifying party shall not be responsible for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the indemnified party
and the

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indemnifying party and the indemnified party shall have reasonably concluded
that there are any legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. The indemnifying party shall not be liable for the expenses of more
than one such separate counsel unless an indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to another indemnified party.

         (e) In order to provide for just and equitable contribution in
circumstances in which the indemnifications provided for in Section 9.2(b) or
(c) is or are for any reason held to be unenforceable by an indemnified party in
respect of any Liabilities (or action in respect thereof) referred to therein
which would otherwise be indemnifiable under Section 9.2(b) or (c), the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such Liabilities (or action in respect
thereof); provided, however, that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, the following factors shall be considered:
(i) Lehman's and Borrower's relative knowledge and access to information
concerning the matter with respect to which claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances. Lender and
Borrower hereby agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.

         (f) The liabilities and obligations of both Borrower and Lender under
this Section 9.2 shall survive the termination of this Agreement and the
satisfaction and discharge of the Debt.

         SECTION 9.3 INTENTIONALLY DELETED.

         SECTION 9.4 EXCULPATION.

                  Subject to the qualifications below, Lender shall not enforce
the liability and obligation of Borrower to perform and observe the obligations
contained in the Note, this Agreement, the Security Instruments or the other
Loan Documents by any action or proceeding wherein a money judgment shall be
sought against Borrower or any of its partners or members except that Lender may
bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest under the Note, this Agreement, the Security Instruments and the
other Loan Documents, or in the Properties, the Rents, or any other collateral
given to Lender pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower's interest
in the Properties, in the Rents and in any other collateral given to Lender, and
Lender, by accepting the Note, this Agreement, the Security Instruments and the
other Loan Documents, agrees that it shall not sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding under or
by reason of or under or in connection with the Note, this Agreement, the
Security Instruments or the other Loan Documents. The provisions of this

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Section shall not, however, (a) constitute a waiver, release or impairment of
any obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under any of the Security Instruments; (c) affect the
validity or enforceability of any indemnity (including, without limitation, the
Environmental Indemnity), guaranty (including, without limitation, the
Guaranty), master lease or similar instrument made in connection with the Loan
Documents; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of any of the Assignments of Leases; (f)
constitute a prohibition against Lender to seek a deficiency judgment against
Borrower in order to fully realize the security granted by each of the Security
Instruments or to commence any other appropriate action or proceeding in order
for Lender to exercise its remedies against all of the Properties; or (g)
constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys' fees and costs reasonably incurred) arising out of
or in connection with the following:

                  (i)      fraud or intentional misrepresentation by Borrower,
                           Guarantor or any other guarantor in connection with
                           the Loan;

                  (ii)     the gross negligence or willful misconduct of
                           Borrower or Guarantor;

                  (iii)    the breach of any representation, warranty, covenant
                           or indemnification provision in the Environmental
                           Indemnity or in the Security Instruments concerning
                           Environmental Laws, hazardous substances and asbestos
                           and any indemnification of Lender with respect
                           thereto in either document;

                  (iv)     the removal or disposal of any portion of the
                           Properties after an Event of Default;

                  (v)      the misapplication or conversion by Borrower (but
                           only to the extent of such misapplication or
                           conversion) of (A) any Insurance Proceeds paid by
                           reason of any loss, damage or destruction to the
                           Properties, (B) any Awards or other amounts received
                           in connection with the condemnation of all or a
                           portion of the Properties, or (C) any Rents following
                           an Event of Default;

                  (vi)     failure to pay Taxes, charges for labor or materials
                           or Other Charges that can create liens on any portion
                           of the Properties;

                  (vii)    any security deposits, advance deposits or any other
                           deposits collected with respect to the Properties
                           which are not delivered to Lender upon a foreclosure
                           of the Properties or action in lieu thereof, except
                           to the extent any such security deposits were applied
                           in accordance with the terms and conditions of any of
                           the Leases prior to the occurrence of the Event of
                           Default that gave rise to such foreclosure or action
                           in lieu thereof; and

                  (viii)   Borrower's indemnifications of Lender set forth in
                           Section 9.2 hereof.

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                  Notwithstanding anything to the contrary in this Agreement,
the Note or any of the Loan Documents, (A) Lender shall not be deemed to have
waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the Bankruptcy Code to file a claim for the full amount
of the Debt secured by the Security Instruments or to require that all
collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Loan Documents, and (B) the Debt shall be fully recourse to
Borrower in the event that: (i) the first Interest Only Payment Amount is not
paid when due; (ii) Borrower fails to permit on-site inspections of the
Properties, fails to provide financial information, fails to maintain its status
as a single purpose entity or fails to appoint a new property manager upon the
request of Lender after an Event of Default, each as required by, and in
accordance with the terms and provisions of, this Agreement and the Security
Instruments; (iii) Borrower fails to obtain Lender's prior written consent to
any subordinate financing or other voluntary lien encumbering any Individual
Property; (iv) Borrower fails to obtain Lender's prior written consent to any
assignment, transfer, or conveyance of any Individual Property or any interest
therein as required by the Security Instrument or hereunder; or (v) if any
Individual Property or any part thereof shall become an asset in (A) a voluntary
bankruptcy or insolvency proceeding or (B) an involuntary bankruptcy or
insolvency proceeding commenced by any Person (other than Lender) and Borrower
consents to such proceedings or where Borrower (or any Person acting at the
direction or request of Borrower) colludes, conspires or otherwise acts in
concert with its creditors (other than Lender) in the filing of such involuntary
bankruptcy or insolvency proceeding.

         SECTION 9.5 MANAGEMENT AGREEMENT.

         (a) The Improvements on the Properties are operated and managed as
"U-Store-It" self-service storage facilities (other than the Properties set
forth on Schedule 4.1.31 attached hereto) under the terms and conditions of the
Management Agreement, which have been approved by Lender including the
management fees and any other items set forth therein. The Properties (other
than the Properties set forth on Schedule 4.1.31 attached hereto) shall at all
times continue to be operated as "U-Store-It" self-service storage facilities or
under such other tradename or trademark as may be approved by Lender. In no
event shall the management fees under the Management Agreement exceed three
percent (3%) of the gross income derived from the applicable Individual
Property. Borrower shall, (i) diligently perform and observe all of the terms,
covenants and conditions of the Management Agreement, on the part of Borrower to
be performed and observed to the end that all things shall be done which are
necessary to keep unimpaired the rights of Borrower under the Management
Agreement and (ii) promptly notify Lender of the giving of any notice by Manager
to Borrower of any default by Borrower in the performance or observance of any
of the terms, covenants or conditions of the Management Agreement on the part of
Borrower to be performed and observed and deliver to Lender a true copy of each
such notice. Borrower shall not surrender the Management Agreement, consent to
the assignment by the Manager of its interest under the Management Agreement, or
terminate or cancel the Management Agreement, or modify, change, supplement,
alter or amend the Management Agreement, in any respect, either orally or in
writing. Borrower hereby assigns to Lender as further security for the payment
of the Debt and for the performance and observance of the terms, covenants and
conditions of this Agreement, all the rights, privileges and prerogatives of
Borrower to surrender the Management Agreement, or to terminate, cancel, modify,
change, supplement, alter or amend the Management Agreement, in any respect, and
any

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such surrender of the Management Agreement, or termination, cancellation,
modification, change, supplement, alteration or amendment of the Management
Agreement, without the prior consent of Lender shall be void and of no force and
effect. If Borrower shall default in the performance or observance of any
material term, covenant or condition of the Management Agreement on the part of
Borrower to be performed or observed, then, without limiting the generality of
the other provisions of this Agreement, and without waiving or releasing
Borrower from any of its obligations hereunder, Lender shall have the right, but
shall be under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all the terms, covenants and conditions of
the Management Agreement on the part of Borrower to be performed or observed to
be promptly performed or observed on behalf of Borrower, to the end that the
rights of Borrower in, to and under the Management Agreement shall be kept
unimpaired and free from default. Lender and any Person designated by Lender
shall have, and are hereby granted, the right to enter upon the applicable
Individual Property at any time and from time to time for the purpose of taking
any such action. If the Manager shall deliver to Lender a copy of any notice
sent to Borrower of default under the Management Agreement, such notice shall
constitute full protection to Lender for any action taken or omitted to be taken
by Lender in good faith, in reliance thereon. Borrower shall not, and shall not
permit the Manager to, sub-contract any or all of its management
responsibilities under the Management Agreement to a third-party without the
prior written consent of Lender, which consent shall not be unreasonably
withheld. Borrower shall, from time to time, obtain from the Manager such
certificates of estoppel with respect to compliance by Borrower with the terms
of the Management Agreement as may be requested by Lender. Borrower shall
exercise each individual option, if any, to extend or renew the term of the
Management Agreement upon demand by Lender made at any time within one (1) year
of the last day upon which any such option may be exercised, and Borrower hereby
expressly authorizes and appoints Lender its attorney-in-fact to exercise any
such option in the name of and upon behalf of Borrower, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest. Any
sums expended by Lender pursuant to this paragraph (i) shall bear interest at
the Default Rate from the date such cost is incurred to the date of payment to
Lender, (ii) shall be deemed to constitute a portion of the Debt, (iii) shall be
secured by the lien of the Security Instruments and the other Loan Documents and
(iv) shall be immediately due and payable upon demand by Lender therefor.

         (b) Without limitation of the foregoing, Borrower, upon the request of
Lender, shall terminate the Management Agreement and replace Manager, without
penalty or fee, if at any time during the Loan: (a) Manager shall become
insolvent or a debtor in any bankruptcy or insolvency proceeding, (b) there
exists an Event of Default, (c) there exists a default by Manager under the
Management Agreement that continues beyond the expiration of any applicable
notice and cure periods. At such time as the Manager may be removed, a
Qualifying Manager shall assume management of the applicable Individual Property
pursuant to a Replacement Management Agreement.

         SECTION 9.6 SERVICER.

                  At the option of Lender, the Loan may be serviced by a
servicer/trustee (the "SERVICER") selected by Lender and Lender may delegate all
or any portion of its responsibilities under this Agreement and the other Loan
Documents to the Servicer pursuant to a servicing

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agreement (the "SERVICING AGREEMENT") between Lender and Servicer. Borrower
shall not be responsible for (i) any set-up fees or any other initial costs
relating to or arising under the Servicing Agreement, and (ii) the monthly
servicing fee due to the Servicer under the Servicing Agreement.

         SECTION 9.7 RESTRUCTURING OF MORTGAGE AND/OR MEZZANINE LOAN.

                  Lender shall have the right at any time to divide the Loan
and/or the Mezzanine Loan into two or more parts (the "RESTRUCTURING OPTION"):
one or more mortgage loans (the "MORTGAGE LOAN(S)") and/or one or more mezzanine
loans (the "MEZZANINE LOAN(S)"). The principal amount of the Mortgage Loan(s)
plus the principal amount of the Mezzanine Loan(s) shall equal the outstanding
principal balance of the Loan and the Mezzanine Loan immediately prior to the
creation of the Mortgage Loan(s) and the Mezzanine Loan(s). In effectuating the
foregoing, Mezzanine Lender will make a loan to Mezzanine Borrower(s); Mezzanine
Borrower(s) will contribute the amount of the Mezzanine Loan(s) to Borrower (in
its capacity as Borrower under the Mortgage Loan(s), "MORTGAGE BORROWER") and
Mortgage Borrower will apply the contribution to pay down the Loan, without the
payment of the Yield Maintenance Premium or other premium. The Mortgage Loan(s)
and the Mezzanine Loan(s) will be on the same terms and subject to the same
conditions set forth in this Agreement, the Note, the Security Instrument and
the other Loan Documents except as follows:

                  (a) Lender (in its capacity as the lender under the Mortgage
Loan(s), the "MORTGAGE LENDER") shall have the right to establish different
interest rates and debt service payments for the Mortgage Loan(s) and the
Mezzanine Loan(s) and to require the payment of the Mortgage Loan(s) and the
Mezzanine Loan(s) in such order of priority as may be designated by Lender;
provided, that (i) the total loan amounts for the Mortgage Loan(s) and the
Mezzanine Loan(s) shall equal the amount of the Loan and the Mezzanine Loan
immediately prior to the creation of the Mortgage Loan(s) and the Mezzanine
Loan(s); (ii) the initial weighted average interest rate of the Mortgage Loan(s)
and the Mezzanine Loan(s) shall initially on the date created equal the interest
rate which was applicable to the Loan immediately prior to creation of the
Mortgage Loan(s) and the Mezzanine Loan(s); and (iii) the initial debt service
payments on the Mortgage Loan(s) and the Mezzanine Loan(s) shall initially on
the date created equal the debt service payment which was due under the Loan and
the Mezzanine Loan immediately prior to creation of the Mortgage Loan(s) and the
Mezzanine Loan(s). The Mortgage Loan(s) and the Mezzanine Loan(s) will be made
pursuant to Lender's standard loan documents; provided, however, in the case of
the Mortgage Loan(s), the Mortgage Loan(s) shall be made pursuant to loan
documents substantially similar to the Loan Documents. The Mezzanine Loan(s)
will be subordinate to the Mortgage Loan(s) and will be governed by the terms of
an intercreditor agreement between the holders of the Mortgage Loan(s) and the
Mezzanine Loan(s).

                  (b) Mezzanine Borrower(s) shall be a special purpose,
bankruptcy remote entity pursuant to applicable Rating Agency criteria and shall
own directly or indirectly one hundred percent (100%) of Mortgage Borrower. The
direct equity holder(s) of Mezzanine Borrower(s) (such holder(s), the "SECOND
LEVEL SPE(S)") shall be a special purpose, bankruptcy remote entity pursuant to
applicable Rating Agency criteria and shall own directly or indirectly one
hundred percent (100%) of Mezzanine Borrower(s). The security for the Mezzanine
Loan(s)

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shall be a pledge of one hundred percent (100%) of the direct and indirect
ownership interests held by such Mezzanine Borrower(s).

                  (c) Mezzanine Borrower(s), Second Level SPE(s) and Mortgage
Borrower shall cooperate with all reasonable requests of Lender in order to
divide the Loan and/or the Mezzanine Loan into one or more Mortgage Loan(s) and
one or more Mezzanine Loan(s) and shall execute and deliver such documents as
shall reasonably be required by Lender and any Rating Agency in connection
therewith, including, without limitation, (i) the delivery of non-consolidation
opinions, (ii) the modification of organizational documents and loan documents,
including , without limitation, this Agreement, (iii) authorize Lender to file
any UCC-1 Financing Statements reasonably required by Lender to perfect its
security interest in the collateral pledged as security for the Mortgage Loan(s)
and/or the Mezzanine Loan(s), (iv) execute such other documents reasonably
required by Lender in connection with the creation of the Mortgage Loan(s)
and/or the Mezzanine Loan(s), including, without limitation, a guaranty
substantially similar in form and substance to the Guaranty delivered on the
date hereof, an environmental indemnity substantially similar in form and
substance to the Environmental Indemnity delivered on the date hereof and a
conditional assignment of management agreement substantially similar in form and
substance to the Assignment of Management Agreement delivered on the date
hereof, (v) deliver appropriate authorization, execution and enforceability
opinions with respect to the Mezzanine Loan(s) and the Mortgage Loan(s), and
(vi) deliver such title insurance policies, "Eagle 9" or equivalent UCC title
insurance policies, satisfactory to Lender, insuring the perfection and priority
of the lien on the collateral pledged as security for the Mortgage Loan(s)
and/or the Mezzanine Loan(s).

                  It shall be an Event of Default hereunder if Borrower,
Mezzanine Borrower(s), Second Level SPE(s) or Sponsor fails to comply with any
of the terms, covenants or conditions of this Section 9.7 after expiration of
ten (10) Business Days after notice thereof.

                  Solely for the purposes of this Section 9.7, Lender shall
reimburse Borrower for all of its actual out-of-pocket costs and expenses (other
than the fees and expenses of Borrower's counsel) that Borrower incurs in
connection with complying with a request made by Lender under this Section 9.7.
Notwithstanding the foregoing, the provisions of this paragraph shall in no way
limit or affect any Borrower obligation to pay any costs expressly required to
be paid by Borrower pursuant to any other Sections of this Agreement. Lender,
without in any way limiting its other rights hereunder, in its sole and absolute
discretion, shall have the right, at any time prior to a Securitization, to
reallocate the amount of the Loan and the Mezzanine Loan and/or adjust the
interest rate rates thereon provided that (i) the aggregate principal amount of
the Loan and the Mezzanine Loan immediately following such reallocation shall
equal the outstanding principal balance of the Loan and the Mezzanine Loan
immediately prior to such reallocation and (ii) the weighted average interest
rate of the Note and the Mezzanine Note immediately following such reallocation
shall equal the weighted average interest rate which was applicable to the Note
and the Mezzanine Note immediately prior to such reallocation. Borrower shall
cooperate with all reasonable requests of Lender in order to reallocate the
amount of the Loan and the Mezzanine Loan and shall execute and deliver such
documents as shall reasonably be required by Lender in connection therewith, all
in form and substance reasonably satisfactory to Lender.

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<PAGE>

         X. MISCELLANEOUS

         SECTION 10.1 SURVIVAL.

                  This Agreement and all covenants, agreements, representations
and warranties made herein and in the certificates delivered pursuant hereto
shall survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.

         SECTION 10.2 LENDER'S DISCRETION.

                  Whenever pursuant to this Agreement, Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.

         SECTION 10.3 GOVERNING LAW.

         (a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN
WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, 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 AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF 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 LIENS AND SECURITY INTERESTS
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS AND THE
DETERMINATION OF DEFICIENCY JUDGMENTS, SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL

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LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO
THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION
GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

         (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

                  CT CORPORATION SYSTEM
                  111 EIGHTH AVENUE - 13TH FLOOR
                  NEW YORK, NEW YORK  10011

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

         SECTION 10.4 MODIFICATION, WAIVER IN WRITING.

                  No modification, amendment, extension, discharge, termination
or waiver of any provision of this Agreement, or of the Note, or of any other
Loan Document, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in a

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writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to, or demand on Borrower, shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.

         SECTION 10.5 DELAY NOT A WAIVER.

                  Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under the Note
or under any other Loan Document, or any other instrument given as security
therefor, shall operate as or constitute a waiver thereof, nor shall a single or
partial exercise thereof preclude any other future exercise, or the exercise of
any other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.

         SECTION 10.6 NOTICES.

                  All notices, consents, approvals and requests required or
permitted hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, return receipt
requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, and by telecopier (with
answer back acknowledged), addressed as follows (or at such other address and
Person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section):

         If to Lender:              [LEHMAN BROTHERS BANK, FSB
                                    C/O LEHMAN BROTHERS HOLDINGS INC.]
                                    [LEHMAN BROTHERS HOLDINGS INC.]
                                    399 Park Avenue
                                    New York, New York 10022
                                    Attention:  Gary Taylor
                                    Facsimile No.:  (646) 758-2256

         With a copy to:            Lehman Brothers Holdings Inc.
                                    399 Park Avenue
                                    New York, New York 10022
                                    Attention:  Scott Weiner
                                    Facsimile No.:  (646) 758-4872

                                      103
<PAGE>

         with a copy to:            Thacher Proffitt & Wood LLP
                                    2 World Financial Center
                                    New York, New York 10281
                                    Attention:  Mitchell G. Williams, Esq.
                                    Facsimile No.:  (212) 912-7751

         If to Borrower:            [YSI I LLC] [YSI II LLC] [YSI III LLC]
                                    6745 Engle Road, Suite 300
                                    Middleburg Heights, Ohio 44130
                                    Attention:  Steven Osgood
                                    Facsimile No.:  (216) 234-8776

         With a copy to:            Hogan & Hartson L.L.P.
                                    8300 Greensboro Drive, Suite 1100
                                    McLean, Virginia 22101
                                    Attention:  Lee E. Berner, Esq.
                                    Facsimile No.:  (703) 610-6200

A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day.

         SECTION 10.7 TRIAL BY JURY.

                  EACH OF BORROWER AND LENDER HEREBY AGREES 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 BORROWER AND LENDER, 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 PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER PARTY.

         SECTION 10.8 HEADINGS.

                  The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.

                                      104
<PAGE>

         SECTION 10.9 SEVERABILITY.

                  Wherever possible, each provision of this Agreement shall be
interpreted in such 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 provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

         SECTION 10.10 PREFERENCES.

                  Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds 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, State or Federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.

         SECTION 10.11 WAIVER OF NOTICE.

                  Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.

         SECTION 10.12 REMEDIES OF BORROWER.

                  In the event that a claim or adjudication is made that Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where by law or under this Agreement or the other Loan Documents, Lender or such
agent, as the case may be, has an obligation to act reasonably or promptly,
Borrower agrees that neither Lender nor its agents shall be liable for any
monetary damages, and Borrower's sole remedies shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties hereto
agree that any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.

         SECTION 10.13 EXPENSES; INDEMNITY.

         (a) Borrower covenants and agrees to pay or, if Borrower fails to pay,
to reimburse, Lender within five (5) days of receipt of written notice from
Lender for all reasonable costs and expenses (including reasonable attorneys'
fees and disbursements) incurred by Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Loan Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without

                                      105
<PAGE>

limitation any opinions requested by Lender as to any legal matters arising
under this Agreement or the other Loan Documents with respect to the
Properties); (ii) Borrower's ongoing performance of and compliance with
Borrower's respective agreements and covenants contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (iii) Lender's ongoing performance and
compliance with all agreements and conditions contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (iv) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan Documents and any other documents or matters
requested by Lender; (v) securing Borrower's compliance with any requests made
pursuant to the provisions of this Agreement; (vi) the filing and recording fees
and expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other Loan Documents; (vii) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Properties, or
any other security given for the Loan; and (viii) enforcing any obligations of
or collecting any payments due from Borrower under this Agreement, the other
Loan Documents or with respect to the Properties or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason of
the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any
cost and expenses due and payable to Lender may be paid from any amounts in the
Lockbox Account.

         (b) Borrower shall indemnify, defend and hold harmless Lender from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of (i)
any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "INDEMNIFIED LIABILITIES"); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.

         (c) Borrower shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless Lender and the Indemnified Parties from and
against any and all losses (including, without limitation, reasonable attorneys'
fees and costs incurred in the investigation,

                                      106
<PAGE>

defense, and settlement of losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA, the Code, any State statute or
other similar law that may be required, in Lender's sole discretion) that Lender
may incur, directly or indirectly, as a result of a default under Sections 4.1.9
or 5.2.12 hereof.

         (d) Borrower covenants and agrees to pay for or, if Borrower fails to
pay, to reimburse Lender for, (i) any fees and expenses incurred by any Rating
Agency in connection with any Rating Agency review of the Loan, the Loan
Documents or any transaction contemplated thereby or (ii) any consent, approval,
waiver or confirmation obtained from such Rating Agency pursuant to the terms
and conditions of this Agreement or any other Loan Document and Lender shall be
entitled to require payment of such fees and expenses as a condition precedent
to the obtaining of any such consent, approval, waiver or confirmation.

         SECTION 10.14 SCHEDULES INCORPORATED.

                  The Schedules and Exhibits attached hereto are hereby
incorporated herein as a part of this Agreement with the same effect as if set
forth in the body hereof.

         SECTION 10.15 OFFSETS, COUNTERCLAIMS AND DEFENSES.

                  Any assignee of Lender's interest in and to this Agreement,
the Note and the other Loan Documents shall take the same free and clear of all
offsets, counterclaims or defenses which are unrelated to such documents which
Borrower may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower in
any action or proceeding brought by any such assignee upon such documents and
any such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.

         SECTION 10.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
                       BENEFICIARIES.

         (a) Borrower and Lender intend that the relationships created hereunder
and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Properties other than that of mortgagee,
beneficiary or lender.

         (b) This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.

                                      107
<PAGE>

         SECTION 10.17 PUBLICITY.

                  All news releases, publicity or advertising by Borrower or
their Affiliates through any media intended to reach the general public which
refers to the Loan Documents or the financing evidenced by the Loan Documents,
to Lender, Lehman, or any of their Affiliates shall be subject to the prior
written approval of Lender, which shall not be unreasonably withheld.
Notwithstanding the foregoing, disclosure required by any Federal or State
securities laws, rules or regulations, as determined by Borrower's counsel,
shall not be subject to the prior written approval of Lender.

         SECTION 10.18 CROSS-DEFAULT; CROSS-COLLATERALIZATION; WAIVER OF
                       MARSHALLING OF ASSETS.

         (a) Borrower acknowledges that Lender has made the Loan to Borrower
upon the security of its collective interest in the Properties and in reliance
upon the aggregate of the Properties taken together being of greater value as
collateral security than the sum of each Individual Property taken separately.
Borrower agrees that the Security Instruments are and will be
cross-collateralized and cross-defaulted with each other so that (i) an Event of
Default under any of the Security Instruments shall constitute an Event of
Default under each of the other Security Instruments which secure the Note; (ii)
an Event of Default under the Note or this Agreement shall constitute an Event
of Default under each Security Instrument; and (iii) each Security Instrument
shall constitute security for the Note as if a single blanket lien were placed
on all of the Properties as security for the Note.

         (b) To the fullest extent permitted by law, Borrower, for itself and
its successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower's partners and others with interests in Borrower, Guarantor
and of the 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 Lender under the Loan Documents to a sale of the Properties
or any other assets of Borrower or Guarantor for the collection of the Debt
without any prior or different resort for collection or of the right of Lender
to the payment of the Debt out of the net proceeds of the Properties or any
other assets of Borrower or Guarantor in preference to every other claimant
whatsoever. In addition, Borrower, 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 Borrower which would require the
separate sale of the Properties or any other assets of Borrower or Guarantor or
require Lender to exhaust its remedies against any Individual Property or any
combination of the Properties or any other assets of Borrower or Guarantor
before proceeding against any other Individual Property or combination of
Properties or any other assets of Borrower or Guarantor; and further in the
event of such foreclosure Borrower does hereby expressly consents to and
authorizes, at the option of Lender, the foreclosure and sale either separately
or together of any combination of the Properties or any other assets of Borrower
or Guarantor.

                                      108
<PAGE>

         SECTION 10.19 WAIVER OF COUNTERCLAIM.

                  Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents.

         SECTION 10.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.

                  In the event of any conflict between the provisions of this
Agreement and any of the other Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution of
the Loan Documents and that such Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely
on its own judgment and advisors in entering into the Loan without relying in
any manner on any statements, representations or recommendations of Lender or
any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to
any limitation whatsoever in the exercise of any rights or remedies available to
it under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender's exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.

         SECTION 10.21 BROKERS AND FINANCIAL ADVISORS.

                  Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Borrower hereby
agrees to indemnify, defend and hold Lender harmless from and against any and
all claims, liabilities, costs and expenses of any kind (including Lender's
attorneys' fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower or Lender in connection
with the transactions contemplated herein. The provisions of this Section 10.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.

         SECTION 10.22 PRIOR AGREEMENTS.

                  This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, between Borrower and/or its Affiliates and
Lender are superseded by the terms of this Agreement and the other Loan
Documents.

                         [NO FURTHER TEXT ON THIS PAGE]

                                      109
<PAGE>

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

                                    BORROWER:

                                    [YSI I LLC] [YSI II LLC] [YSI III LLC], a
                                    Delaware limited liability company

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    LENDER:

                                    [LEHMAN BROTHERS BANK, FSB, A FEDERAL STOCK
                                    SAVINGS BANK]

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    [LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN
                                    CAPITAL, A DIVISION OF LEHMAN BROTHERS
                                    HOLDINGS INC., A DELAWARE CORPORATION]

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title:<PAGE>
================================================================================

                                  $150,000,000

                            FORM OF CREDIT AGREEMENT

                                      AMONG

                                U-STORE-IT TRUST,

                                U-STORE-IT, L.P.,
                                  AS BORROWER,

                               THE SEVERAL LENDERS
                        FROM TIME TO TIME PARTIES HERETO,

                              LEHMAN BROTHERS INC.
                                       AND
                         WACHOVIA CAPITAL MARKETS, LLC,
                             AS JOINT LEAD ARRANGERS

                         WACHOVIA CAPITAL MARKETS, LLC,
                              AS SYNDICATION AGENT

                                       AND

                          LEHMAN COMMERCIAL PAPER INC.,
                             AS ADMINISTRATIVE AGENT

                          DATED AS OF OCTOBER __, 2004

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   Page
<S>     <C>                                                                         <C>
Section 1.DEFINITIONS................................................................1
         1.1      Defined Terms......................................................1
         1.2      Other Definitional Provisions.....................................24

Section 2.AMOUNT AND TERMS OF COMMITMENTS...........................................24
         2.1      Commitments.......................................................24
         2.2      Procedure for Borrowing...........................................25
         2.3      Repayment of Loans; Evidence of Debt..............................25
         2.4      Commitment Fees, etc..............................................26
         2.5      Termination or Reduction of Commitments...........................26
         2.6      Optional Prepayments..............................................26
         2.7      Mandatory Prepayments.............................................27
         2.8      Conversion and Continuation Options...............................27
         2.9      Minimum Amounts and Maximum Number of Eurodollar Tranches.........27
         2.10     Interest Rates and Payment Dates..................................28
         2.11     Computation of Interest and Fees..................................28
         2.12     Inability to Determine Interest Rate..............................28
         2.13     Pro Rata Treatment and Payments...................................29
         2.14     Requirements of Law...............................................30
         2.15     Taxes.............................................................31
         2.16     Indemnity.........................................................33
         2.17     Illegality........................................................33
         2.18     Change of Lending Office..........................................34
         2.19     Extension of Termination Date.....................................34
         2.20     Commitment Increases..............................................35

Section 3.LETTERS OF CREDIT.........................................................36
         3.1      L/C Commitment....................................................36
         3.2      Procedure for Issuance of Letter of Credit........................36
         3.3      Fees and Other Charges............................................37
         3.4      L/C Participations................................................37
         3.5      Reimbursement Obligation of the Borrower..........................38
         3.6      Obligations Absolute..............................................39
         3.7      Letter of Credit Payments.........................................39
         3.8      Applications......................................................40

Section 4.BORROWING BASE PROPERTIES.................................................40
         4.1      Acceptance of Borrowing Base Properties...........................40
         4.2      Release of Borrowing Base Properties..............................43
         4.3      Frequency of Calculations of Borrowing Base.......................43
         4.4      Appraisals Required by Governmental Authorities...................44
         4.5      Recording of Mortgages............................................44
         4.6      Status of Escrowed Documents......................................46
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                   Page
<S>     <C>                                                                         <C>
Section 5.REPRESENTATIONS AND WARRANTIES............................................46
         5.1      Financial Condition...............................................47
         5.2      No Change.........................................................47
         5.3      Corporate Existence; Compliance with Law..........................47
         5.4      Corporate Power; Authorization; Enforceable Obligations...........48
         5.5      No Legal Bar......................................................48
         5.6      No Material Litigation............................................48
         5.7      No Default........................................................49
         5.8      Ownership of Property; Liens......................................49
         5.9      Intellectual Property.............................................49
         5.10     Taxes.............................................................49
         5.11     Federal Regulations...............................................49
         5.12     Labor Matters.....................................................49
         5.13     ERISA.............................................................50
         5.14     Investment Company Act; Other Regulations.........................50
         5.15     Subsidiaries......................................................50
         5.16     Use of Proceeds...................................................50
         5.17     Environmental Matters.............................................51
         5.18     Accuracy of Information, etc......................................52
         5.19     Security Documents................................................52
         5.20     Solvency..........................................................53
         5.21     REIT Status; Borrower Tax Status; Listing.........................53
         5.22     Regulation H......................................................53

Section 6.CONDITIONS PRECEDENT......................................................53
         6.1      Conditions to Initial Extension of Credit.........................53
         6.2      Conditions to Each Extension of Credit............................57
         6.3      Conditions to Borrowing Base Properties...........................57

Section 7.AFFIRMATIVE COVENANTS.....................................................60
         7.1      Financial Statements..............................................61
         7.2      Certificates; Other Information...................................61
         7.3      Payment of Obligations............................................63
         7.4      Conduct of Business and Maintenance of Existence; Compliance......63
         7.5      Maintenance of Property; Insurance................................63
         7.6      Inspection of Property; Books and Records; Discussions............63
         7.7      Notices...........................................................64
         7.8      Environmental Laws................................................65
         7.9      Interest Rate Protection..........................................65
         7.10     Additional Collateral, etc........................................65
         7.11     Further Assurances................................................66
         7.12     Maintenance of Occupancy Rate.....................................66

Section 8.NEGATIVE COVENANTS........................................................67
         8.1      Financial Condition Covenants.....................................67
         8.2      Limitation on Indebtedness........................................67
         8.3      Limitation on Liens...............................................68
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                                   Page
<S>     <C>                                                                         <C>
         8.4      Limitation on Fundamental Changes.................................69
         8.5      Limitation on Disposition of Property.............................69
         8.6      Limitation on Restricted Payments.................................70
         8.7      Limitation on Investments.........................................71
         8.8      Limitation on Transactions with Affiliates........................72
         8.9      Limitation on Sales and Leasebacks................................72
         8.10     Limitation on Changes in Fiscal Periods...........................72
         8.11     Limitation on Negative Pledge Clauses.............................72
         8.12     Limitation on Restrictions on Subsidiary Distributions............72
         8.13     Limitation on Lines of Business...................................73
         8.14     Limitation on Subject Property and Ground Leases..................73
         8.15     Special Covenants Relating to the REIT............................73
         8.16     Taxation of the Borrower..........................................73
         8.17     Limitation on Hedge Agreements....................................74

Section 9.EVENTS OF DEFAULT.........................................................74

Section 10.THE AGENTS...............................................................77
         10.1     Appointment.......................................................77
         10.2     Delegation of Duties..............................................77
         10.3     Exculpatory Provisions............................................77
         10.4     Reliance by Agents................................................77
         10.5     Notice of Default.................................................78
         10.6     Non-Reliance on Agents and Other Lenders..........................78
         10.7     Indemnification...................................................79
         10.8     Agent in Its Individual Capacity..................................79
         10.9     Successor Administrative Agent....................................79
         10.10    Authorization to Release Liens and Guarantees.....................80
         10.11    The Arrangers; the Syndication Agent..............................80

Section 11.MISCELLANEOUS............................................................80
         11.1     Amendments and Waivers............................................80
         11.2     Notices...........................................................81
         11.3     No Waiver; Cumulative Remedies....................................83
         11.4     Survival of Representations and Warranties........................84
         11.5     Payment of Expenses...............................................84
         11.6     Successors and Assigns; Participations and Assignments............85
         11.7     Adjustments; Set-off..............................................88
         11.8     Counterparts......................................................89
         11.9     Severability......................................................89
         11.10    Integration.......................................................89
         11.11    GOVERNING LAW.....................................................89
         11.12    Submission To Jurisdiction; Waivers...............................89
         11.13    Acknowledgments...................................................90
         11.14    Confidentiality...................................................90
         11.15    Release of Collateral and Guarantee Obligations...................91
         11.16    Accounting Changes................................................91
</TABLE>

                                      iii
<PAGE>
<TABLE>
<CAPTION>
                                                                                   Page
<S>     <C>                                                                         <C>
         11.17    Delivery of Lender Addenda........................................92
         11.18    WAIVERS OF JURY TRIAL.............................................92
</TABLE>

                                       iv
<PAGE>
ANNEXES:

A        Pricing Grid

SCHEDULES:

1.1A           Initial Borrowing Base Properties
1.1B           Real Property
4.1(b)         Limited Review Criteria
5.4            Consents, Authorizations, Filings and Notices
5.15           Subsidiaries
5.19(a)-1      UCC Filing Jurisdictions
5.19(a)-2      UCC Financing Statements to Remain on File
5.19(a)-3      UCC Financing Statements to be Terminated
5.19(b)        Mortgage Filing Jurisdictions
6.1(c)         Terminated Indebtedness
8.2(d)         Existing Indebtedness
8.2(f)         Exceptions to Non-Recourse
8.3(f)         Existing Liens

EXHIBITS:

A        Form of Guarantee and Collateral Agreement
B        Form of Compliance Certificate
C        Form of Closing Certificate
D        Form of Mortgage
E        Form of Assignment and Acceptance
F        Form of Legal Opinion of Hogan & Hartson L.L.P.
G        Form of Note
H        Form of Exemption Certificate
I        Form of Lender Addendum
J        Form of Borrowing Notice
K-1      Form of New Lender Supplement
K-2      Form of Commitment Increase Supplement
L        Form of Borrowing Base Certificate
M        Form of Borrowing Base Property Officer's Certificate
N        Form of Escrow Agreement
O        Form of Environmental Indemnity Agreement

<PAGE>

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

                              W I T N E S S E T H:

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

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

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

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

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

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

                             Section 1. DEFINITIONS

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

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

                  "Adjusted Asset Value": with respect to any Subject Property,
on any date of determination, (i) with respect to any Subject Property owned in
fee simple or leased by the REIT or any of its Subsidiaries for more than two
full fiscal quarters ended prior to such date of

<PAGE>
                                                                               2

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

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

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

                  "Adjustment Date":  as defined in the Pricing Grid.

                  "Administrative Agent":  as defined in the preamble hereto.

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

                  "Agents": the collective reference to the Syndication Agent
and the Administrative Agent.

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

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

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

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

<PAGE>
                                                                               3

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

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

<Table>
<Caption>
           Base Rate                        Eurodollar
             Loans                            Loans
           ---------                        ----------
<S>                                         <C>
             0.75%                            1.75%
</Table>

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

                  "Applicable Reserve Amount": $0.15.

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

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

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

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

                  "Arrangers":  as defined in the preamble hereto.

                  "Assignee":  as defined in Section 11.6(c).

                  "Assignor":  as defined in Section 11.6(c).
<PAGE>
                                                                               4

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

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

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

                  "Benefitted Lender":  as defined in Section 11.7.

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

                  "Borrower":  as defined in the preamble hereto.

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

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

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

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

<PAGE>
                                                                               5

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

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

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

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

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

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

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

<PAGE>
                                                                               6

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>
                                                                               7

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

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

                  "Capitalization Rate":  8.50%.

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

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

<PAGE>
                                                                               8

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

                  "CMBS Financing": as defined in the recitals.

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

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

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

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

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

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

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

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

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

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

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

<PAGE>
                                                                               9

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

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

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

                  "Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b) all
regularly scheduled payments made during such period on account of principal of
Indebtedness of the REIT or any of its Subsidiaries, other than balloon
principal, bullet or similar principal payments which repays in full such
Indebtedness, and (c) the REIT's and its Subsidiaries' pro-rata share of all
expenses and payments referred to in the preceding clauses (a) and (b) of any
unconsolidated Person in which they have an equity interest.

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

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

<PAGE>
                                                                              10

with GAAP, plus the REIT's and its Subsidiaries' pro-rata share of all such
expenses of any unconsolidated Person in which they have an equity interest.

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

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

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

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

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

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

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

<PAGE>
                                                                              11

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

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

                  "Derivatives Counterparty": as defined in Section 8.6.

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

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

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

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

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

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

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

                  "Escrow Agent": _____________, and its successors and assigns.

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

                  "Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in

<PAGE>
                                                                              12

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

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

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

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

                              Eurodollar Base Rate
--------------------------------------------------------------------------------
                    1.00 - Eurocurrency Reserve Requirements

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

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

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

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

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

<PAGE>
                                                                              13

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

                  "Facility": the Commitments and the extensions of credit made
thereunder.

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

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

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

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

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

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

<PAGE>
                                                                              14

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

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

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

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

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

                  "Guarantors": the collective reference to the REIT and the
Subsidiary Guarantors.

<PAGE>
                                                                              15

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

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

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

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

                  "Indemnified Liabilities": as defined in Section 11.5.

                  "Indemnitee": as defined in Section 11.5.

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

<PAGE>
                                                                              16

                  "Insolvent": pertaining to a condition of Insolvency.

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

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

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

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

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

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

                  "Investments": as defined in Section 8.7.

                  "IPO": as defined in the recitals.

<PAGE>
                                                                              17

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

                  "L/C Commitment": $10,000,000.

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

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

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

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

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

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

                  "Lenders": as defined in the preamble hereto.

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

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

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

                  "Loans": as defined in Section 2.1.

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

<PAGE>
                                                                              18

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

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

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

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

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

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

<PAGE>
                                                                              19

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

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

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

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

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

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

                  "Note": as defined in Section 2.3.

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

<PAGE>
                                                                              20

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

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

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

                  "Participant": as defined in Section 11.6(b).

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

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

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

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

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

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

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

                  "Projections": as defined in Section 7.2(c).

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

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

<PAGE>
                                                                              21

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

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

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

                  "REIT": as defined in the preamble.

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

                  "Register": as defined in Section 11.6(d).

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

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

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

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

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

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

                  "Required Lenders": at any time, the holders of more than 66?%
of the Total Commitments then in effect or, if the Commitments have been
terminated, more than 66?% of the Total Extensions of Credit then outstanding.

                  "Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in

<PAGE>
                                                                              22

each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.

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

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

                  "Restricted Payments": as defined in Section 8.6.

                  "Restructuring": as defined in the recitals.

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

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

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

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

                  "Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.

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

<PAGE>
                                                                              23

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

                  "Subject Property": any Storage Property or Business Park
Property.

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

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

                  "Syndication Agent": as defined in the preamble hereto.

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

                  "Termination Date": October __, 2007, as it may be extended
pursuant to Section 2.19.

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

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

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

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

                  "Transferee": as defined in Section 11.15.

<PAGE>
                                                                              24

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

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

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

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

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

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

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

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

                  Section 2. AMOUNT AND TERMS OF COMMITMENTS

                  2.1 Commitments. (a) Subject to the terms and conditions
hereof, the Lenders severally agree to make revolving credit loans ("Loans") to
the Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding (i) for each Lender which, when
added to such Lender's Commitment Percentage of the L/C Obligations then
outstanding, does not exceed the amount of such Lender's Commitment and (ii) for
all Lenders, does not exceed the Borrowing Base at such time. During the
Commitment Period the Borrower may use the Commitments by borrowing, prepaying
the Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof. The Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.8,

<PAGE>
                                                                              25

provided that no Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Termination Date.

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

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

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

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

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

<PAGE>
                                                                              26

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

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

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

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

                  2.5 Termination or Reduction of Commitments. The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Commitments or, from time to time, to
reduce the aggregate amount of the Commitments; provided that no such
termination or reduction of Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Loans made on the effective date
thereof, the Total Extensions of Credit would exceed the Total Commitments. Any
such reduction shall be in an amount equal to $10,000,000, or a whole multiple
of $5,000,000 in excess thereof, and shall reduce permanently the Commitments
then in effect.

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

<PAGE>
                                                                              27

date specified therein, together with (except in the case of Base Rate Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.

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

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

                  (b) The Borrower may elect to continue any Eurodollar
Loan as such upon the expiration of the then current Interest Period with
respect thereto by giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loan, provided that no Eurodollar Loan may be continued as such (i) when
any Event of Default has occurred and is continuing and the Administrative Agent
has, or the Required Lenders have, determined in its or their sole discretion
not to permit such continuations or (ii) after the date that is one month prior
to the Termination Date, and provided, further, that if the Borrower shall fail
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso, such Loans
shall be converted automatically to Base Rate Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.

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

<PAGE>
                                                                              28

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

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

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

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

                  2.11 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.

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

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

<PAGE>
                                                                              29

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

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

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

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

                  (b) Each payment (including each prepayment) by the Borrower
on account of principal of the Loans shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
Each payment in respect of Reimbursement Obligations in respect of any Letter of
Credit shall be made to the Issuing Lender that issued such Letter of Credit.

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

                  (d) All payments (including prepayments) to be made by
the Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. Any payment made by the Borrower after 12:00 Noon,
New York City time, on any Business Day shall be deemed to have been on the next
following Business Day. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be

<PAGE>
                                                                              30

extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.

                  (e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate
Loans, on demand, from the Borrower.

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

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

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

<PAGE>
                                                                              31

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

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

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

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

                  (b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.

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

                  2.15 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any

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                                                                              32

Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on any Agent or any Lender as a result of a
present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent's or such Lender's having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or any Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement; provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or (e) of this Section
or (ii) that are United States withholding taxes imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph (a).

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

                  (c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.

                  (d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall

<PAGE>
                                                                              33

deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify the Borrower at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this paragraph, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph that
such Non-U.S. Lender is not legally able to deliver.

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

                  2.16 Indemnity. The Borrower agrees to indemnify each Lender
for, and to hold each Lender harmless from, any loss or expense that such Lender
may sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

                  2.17 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be

<PAGE>
                                                                              34

converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.16.

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

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

                  (b) The Termination Date shall be extended to the same date in
the following calendar year, effective as of a date to be determined by
Administrative Agent and the Borrower (the "Extension Effective Date"), and
Administrative Agent shall promptly notify Lenders thereof. On or prior to the
Extension Effective Date, the Borrower shall deliver to Administrative Agent, in
form and substance satisfactory to Administrative Agent: (x) corporate
resolutions and incumbency certificates of the Borrower dated as of the
Extension Effective Date approving such extension, (y) new or amended Notes, if
requested by any new or affected Lender, evidencing such new or extended
Commitments and (z) an acknowledgment and consent from each Guarantor affirming
the effectiveness of the Guarantee and Collateral Agreement and any Security
Document to which it is a party after giving effect to the Termination Date, as
extended hereunder.

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

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

<PAGE>
                                                                              35

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

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

                  (b) Any additional bank, financial institution or other entity
which the Borrower selects to offer participation in any Offered Increase Amount
and which elects to become a party to this Agreement and provide a Commitment in
an amount so offered and accepted by it pursuant to clause (ii) of Section
2.20(a) shall execute a New Lender Supplement with the Borrower and the
Administrative Agent, substantially in the form of Exhibit K-1, whereupon such
bank, financial institution or other entity (herein called a "New Lender") shall
become a Lender for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement,
provided that, the Commitment of any such New Lender shall be in an amount not
less than $5,000,000.

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

                  (d) On any Increase Effective Date, (i) each bank, financial
institution or other entity that is a New Lender pursuant to Section 2.20(b) or
any Lender which has increased its Commitment pursuant to Section 2.20(c) shall
make available to the Administrative Agent such amounts in immediately available
funds as the Administrative Agent shall determine, for the benefit of the other
relevant Lenders, as being required in order to cause, after giving effect to
such increase and the use of such amounts to make payments to such other
relevant Lenders, each Lender's portion of the outstanding Loans of all the
Lenders to equal its Commitment Percentage of such outstanding Loans and (ii)
the Borrower shall be deemed to have repaid and reborrowed all outstanding Loans
as of the date of any increase in the Commitments (with such reborrowing to
consist of the Types of Loans, with related Interest Periods if applicable,

<PAGE>
                                                                              36

specified in a notice delivered by the Borrower in accordance with the
requirements of Section 2.2). The deemed payments made pursuant to clause (ii)
of the immediately preceding sentence in respect of each Eurodollar Loan shall
be subject to indemnification by the Borrower pursuant to the provisions of
Section 2.16 if the deemed payment occurs other than on the last day of the
related Interest Periods.

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

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

                          SECTION 3. LETTERS OF CREDIT

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

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

                  3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor, completed to the

<PAGE>
                                                                              37

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

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

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

                  3.4 L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce each
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
each Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk, an undivided interest equal to such L/C
Participant's Commitment Percentage in each Issuing Lender's obligations and
rights under each Letter of Credit issued by such Issuing Lender hereunder and
the amount of each draft paid by such Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit issued by such Issuing
Lender for which such Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Administrative Agent for the account of such Issuing Lender upon demand
at such Issuing Lender's address for notices specified herein (and thereafter
the Administrative Agent shall promptly pay to such Issuing Lender) an amount
equal to such L/C Participant's Commitment Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed. Each L/C Participant's
obligation to

<PAGE>
                                                                              38

pay such amount shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such L/C Participant may have against the Issuing Lender, the
Borrower or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other L/C Participant or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

                  (b) If any amount (a "Participation Amount") required to be
paid by any L/C Participant to an Issuing Lender pursuant to Section 3.4(a) in
respect of any unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit is paid to such Issuing Lender within three Business
Days after the date such payment is due, such Issuing Lender shall so notify the
Administrative Agent, which shall promptly notify the L/C Participants, and each
L/C Participant shall pay to the Administrative Agent, for the account of such
Issuing Lender, on demand (and thereafter the Administrative Agent shall
promptly pay to such Issuing Lender) an amount equal to the product of (i) such
Participation Amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such payment is required to the
date on which such payment is immediately available to such Issuing Lender,
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any Participation
Amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is
not made available to the Administrative Agent for the account of the relevant
Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, the Administrative Agent on behalf of such Issuing Lender
shall be entitled to recover from such L/C Participant, on demand, such
Participation Amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans. A certificate of the
Administrative Agent submitted on behalf of an Issuing Lender to any L/C
Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.

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

                  3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender, on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing

<PAGE>
                                                                              39

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

                  3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender that such Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The Borrower agrees that any action taken or omitted by an
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of such Issuing Lender to the
Borrower.

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

<PAGE>
                                                                              40

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

                      SECTION 4. BORROWING BASE PROPERTIES

                  4.1 Acceptance of Borrowing Base Properties.

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

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

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

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

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

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

<PAGE>
                                                                              41

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

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

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

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

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

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

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

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

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

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

<PAGE>
                                                                              42

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

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

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

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

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

                           Each Lender shall notify the Administrative Agent in
                  writing whether it conditionally approves of the designation
                  of such Property as a Borrowing Base Property within ten
                  Business Days of receipt of all such documents and
                  information. If a Lender shall fail to so notify the
                  Administrative Agent, then such Lender shall be deemed to have
                  not conditionally approved of such Property.

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

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

<PAGE>
                                                                              43

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

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

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

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

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

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

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

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

                  4.3 Frequency of Calculations of Borrowing Base. On the
Closing Date, the Borrowing Base shall be the amount set forth as such in the
Borrowing Base Report delivered under Section 6.1(s). Thereafter, the Borrowing
Base shall be the amount set forth as such in the Borrowing Base Certificate
most recently delivered under Section 4.2(b), Section 6.3(h) and Section 7.2(f).
Any increase in the Borrowing Base Value of a Borrowing Base Property shall
become effective as of the date on which the next Borrowing Base Report is
delivered pursuant to Section 6.3(h) or Section 7.2(f), provided that, prior to
such date of determination (a) the

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                                                                              44

applicable Borrowing Base Report substantiates such increase and if such
increase is the result of an increase in the Appraised Value of such Property,
the Required Lenders shall have given their written approval of such increase,
and (b) if the Recordation Date has occurred, the Borrower delivers to the
Administrative Agent the following: (i) if the Property is not located in a
Tie-In Jurisdiction, an endorsement to the title insurance policy in favor of
the Administrative Agent with respect to such Property increasing the coverage
amount thereof as related to such Property to not less than 100% of the
Borrowing Base Value of such Property and (ii) if the Property is located in a
Tie-In Jurisdiction, an endorsement to the title insurance policy in favor of
the Administrative Agent with respect to such Property increasing the coverage
amount thereof as related to such Property to not less than the Borrowing Base
Value of such Property, as well as endorsements to all other existing title
insurance policies issued to the Administrative Agent with respect to all other
Properties located in Tie-In Jurisdictions reflecting an increase in the
aggregate insured amount under the "tie-in" endorsements to an amount equal to
the aggregate amount of the Borrowing Base Values of all such Properties
(including the Property which experienced the increase in Borrowing Base Value)
but in no event in an amount in excess of the aggregate amount of the
Commitments.

                  4.4 Appraisals Required by Governmental Authorities. If under
FIRREA or required by any other Governmental Authority, a Lender is required to
obtain an Appraisal of any Borrowing Base Property, whether or not subject to a
Mortgage and whether or not in addition to any other Appraisal previously
obtained with respect to such Property pursuant to this Agreement, the
Administrative Agent shall have the right to cause such an Appraisal to be
prepared at the Borrower's cost and expense. The Borrowing Base Value of such
Property shall only be redetermined as a result of delivery of any such new
Appraisal if any Governmental Authority requires such redetermination, in which
case such Borrowing Base Value shall be redetermined in the manner required by
such Governmental Authority.

                  4.5 Recording of Mortgages.

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

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

<PAGE>
                                                                              45

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

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

                           (iii) a current or currently certified survey dated
                  within 12 months of the date of the filing of such Mortgage,
                  certified by a surveyor licensed in the jurisdiction where
                  such Property is located to have been prepared in accordance
                  with the then effective Minimum Standard Detail Requirements
                  for ALTA/ACSM Land Title Surveys, and if not adequately
                  covered by the survey certification, a certificate from a
                  licensed engineer or other professional satisfactory to the
                  Administrative Agent that such Property is not located in a
                  Special Flood Hazard Area as defined by the Federal Insurance
                  Administration; provided, with respect to any survey dated
                  more than 30 days prior to the date of the filing of such
                  Mortgage, such survey shall be accompanied by an affidavit
                  from the Borrower stating that there has been no changes to
                  the Property or improvements thereto since the date of such
                  survey; provided, further, in any case such survey shall be
                  such that title insurance issued described in clause (i) with
                  respect to such Property does not contain an exception for a
                  current and accurate survey;

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

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

<PAGE>
                                                                              46

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

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

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

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

                  (c) Mortgage Filing Tax. If the Mortgages may be recorded
pursuant to Section 4.5(a), the Borrower shall pay to the Administrative Agent
an amount equal to any mortgage, recording or documentary filing or similar tax
required to be paid in connection with delivery or filing of such Mortgages
within two Business Days after demand therefor.

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

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

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

                    SECTION 5. REPRESENTATIONS AND WARRANTIES

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

<PAGE>
                                                                              47

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

                  (b) The audited consolidated balance sheets of the Borrower
and its consolidated Subsidiaries as at December 31, 2001, December 31, 2002 and
December 31, 2003, and the related consolidated statements of income and of cash
flows for the fiscal years ended on such dates, reported on by and accompanied
by an unqualified report from Deloitte & Touche LLP, copies of which have
heretofore been furnished to each Lender, present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. The unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at June 30,
2004, and the related unaudited consolidated statements of income and cash flows
for the six-month period ended on such date, copies of which have heretofore
been furnished to each Lender, present fairly the consolidated financial
condition of the REIT and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
nine-month period then ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). The REIT, the Borrower and its Subsidiaries do not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from December 31, 2003 to and including the date hereof there
has been no Disposition by the REIT or any of its Subsidiaries of any material
part of its business or Property.

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

                  5.3 Corporate Existence; Compliance with Law. Each of the
REIT, the Borrower and its Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has the corporate power and authority, and the legal right, to own and operate
its Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation or other organization and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such

<PAGE>
                                                                              48

qualification and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

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

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

                  5.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the REIT or the Borrower, threatened by or against the REIT,
the Borrower or any of its Subsidiaries or

<PAGE>
                                                                              49

against any of their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated hereby or thereby,
or (b) that could reasonably be expected to have a Material Adverse Effect.

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

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

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

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

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

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

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                                                                              50

aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of the REIT, the
Borrower or the relevant Subsidiary.

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

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

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

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

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

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                                                                              51

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

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

                  (b) Materials of Environmental Concern are not present at, on,
         under, in, or about any real property now or formerly owned, leased or
         operated by the Borrower or any of its Subsidiaries, or at any other
         location (including, without limitation, any location to which
         Materials of Environmental Concern have been sent for re-use or
         recycling or for treatment, storage, or disposal) which could
         reasonably be expected to (i) give rise to liability of the Borrower or
         any of its Subsidiaries under any applicable Environmental Law or
         otherwise result in costs to the Borrower or any of its Subsidiaries,
         or (ii) interfere with the Borrower's or any of its Subsidiaries'
         continued operations, or (iii) impair the fair saleable value of any
         real property owned or leased by the Borrower or any of its
         Subsidiaries.

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

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

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

<PAGE>
                                                                              52

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

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

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

<PAGE>
                                                                              53

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

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

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

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

                         SECTION 6. CONDITIONS PRECEDENT

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

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

<PAGE>
                                                                              54

         Borrower, the Subsidiary Guarantors and the Escrow Agent and (iv) a
         Lender Addendum executed and delivered by each Lender and accepted by
         the Borrower.

                  (b) The Transactions.

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

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

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

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

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

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

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

<PAGE>
                                                                              55

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

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

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

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

                  (j) Lien Searches. The Administrative Agent shall have
         received the results of a recent lien search in each of the
         jurisdictions in which Uniform Commercial Code financing statement or
         other filings or recordations should be made to evidence or perfect
         security interests in all assets of the Loan Parties, and such search
         shall reveal no liens on any of the assets of the Loan Party, except
         for Liens permitted by Section 8.3.

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

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

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

                  (n) Legal Opinion. The Administrative Agent shall have
         received the executed legal opinion of Hogan & Hartson L.L.P., counsel
         to the REIT, the Borrower and its Subsidiaries, substantially in the
         form of Exhibit F. Such legal opinion shall cover

<PAGE>
                                                                              56

         such other matters incident to the transactions contemplated by this
         Agreement as the Administrative Agent may reasonably require and shall
         be addressed to the Administrative Agent and the Lenders.

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

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

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

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

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

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

                  (u) Liquidity. The Lenders shall be satisfied with the
         sufficiency of amounts available under the Facility to meet the ongoing
         working capital needs of the Borrower

<PAGE>
                                                                              57

         and its Subsidiaries following the Transactions and the consummation of
         the other transactions contemplated hereby.

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

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

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

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

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

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

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

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

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

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                                                                              58

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

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

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

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

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

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

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

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

<PAGE>
                                                                              59

                  contemplated hereby as the Administrative Agent may reasonably
                  request, in form and substance reasonably satisfactory to the
                  Administrative Agent.

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

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

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

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

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

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

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

                                    (A) an ALTA 1992 Form mortgagee's Policy of
                           Title Insurance (with deletion of the creditor's
                           rights exclusion and deletion of the mandatory
                           arbitration provision) or other form acceptable to
                           the Administrative Agent in favor of the
                           Administrative Agent for the benefit of the Secured
                           Parties with respect to such Property, including
                           endorsements with respect to such items of coverage
                           as the Administrative Agent may request (and which
                           endorsements are available in the applicable state),
                           in a coverage amount equal to no less than 100% of
                           the Borrowing Base Value of such Property (excluding
                           the value of any personal property located at such
                           Property), issued by a title insurance

<PAGE>
                                                                              60

                           company acceptable to the Administrative Agent and
                           with coinsurance or reinsurance (with direct access
                           agreements) with title insurance companies acceptable
                           to the Administrative Agent, showing the fee simple
                           title to (or a valid leasehold interest in) the land
                           and improvements described in the applicable Mortgage
                           as vested in the Borrower or a Subsidiary, and
                           insuring that the Lien granted by such Mortgage is a
                           valid first priority Lien against such Property,
                           subject only to Liens permitted by Sections 8.3(b)
                           through (e);

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

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

                                    (D) if such Property is located in a
                           Tie-In-Jurisdiction, endorsements to all other
                           existing title insurance policies issued to the
                           Administrative Agent with respect to all other
                           Properties located in Tie-In Jurisdictions reflecting
                           an increase in the aggregate insured amount under the
                           "tie-in" endorsements to an amount equal to the
                           aggregate amount of the Borrowing Base Values of all
                           such Properties (including the Property to be
                           included as a Borrowing Base Property) but in no
                           event in an amount in excess of the aggregate amount
                           of the Commitments.

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

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

                        SECTION 7. AFFIRMATIVE COVENANTS

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

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                                                                              61

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

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

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

all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).

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

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

                  (b) concurrently with the delivery of any financial statements
         pursuant to Section 7.1, (i) a certificate of a Responsible Officer
         stating that, to the best of such Responsible Officer's knowledge, each
         Loan Party during such period has observed or performed all of its
         covenants and other agreements, and satisfied every condition,
         contained in this Agreement and the other Loan Documents to which it is
         a party to be observed, performed or satisfied by it, and that such
         Responsible Officer has obtained no knowledge of any Default or Event
         of Default except as specified in such certificate and (ii) in the case
         of quarterly or annual financial statements, (x) a Compliance
         Certificate

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                                                                              62

         containing all information and calculations necessary for determining
         compliance by the REIT, the Borrower and its Subsidiaries with the
         provisions of this Agreement referred to therein as of the last day of
         the fiscal quarter or fiscal year of the Borrower, as the case may be,
         and (y) any UCC financing statements or other filings specified in such
         Compliance Certificate as being required to be delivered therewith;

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

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

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

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

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

<PAGE>
                                                                              63

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

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

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

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

                  7.4 Conduct of Business and Maintenance of Existence;
Compliance. (a)(i) Preserve, renew and keep in full force and effect its
organizational existence and (ii) take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except, in each case, as otherwise permitted by Section 8.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law, except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.

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

                  7.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired during normal business
hours and to discuss the

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                                                                              64

business, operations, properties and financial and other condition of the REIT,
the Borrower and its Subsidiaries with officers and employees of the REIT, the
Borrower and its Subsidiaries and with its independent certified public
accountants, provided that, so long as no Event of Default has occurred and is
continuing, the Borrower shall only be required to pay the expense of the
Administrative Agent with respect to one such visit and inspection per calendar
year.

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

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

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

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

                  (d) the following events, as soon as possible and in any event
         within 30 days after the Borrower knows or has reason to know thereof:
         (i) the occurrence of any Reportable Event with respect to any Plan, a
         failure to make any required contribution to a Plan, the creation of
         any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
         termination, Reorganization or Insolvency of, any Multiemployer Plan or
         (ii) the institution of proceedings or the taking of any other action
         by the PBGC or the Borrower or any Commonly Controlled Entity or any
         Multiemployer Plan with respect to the withdrawal from, or the
         termination, Reorganization or Insolvency of, any Plan;

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

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

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

<PAGE>
                                                                              65

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

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

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

                  7.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the REIT, the Borrower or any
Material Subsidiary (other than (x) any real property, (y) any Property subject
to a Lien expressly permitted by Section 8.3(g) and (z) the Capital Stock of any
Excluded Foreign Subsidiary) as to which the Administrative Agent, for the
benefit of the Secured Parties, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such Property and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such Property, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.

                  (b) With respect to any new Material Subsidiary created or
acquired after the Closing Date (which, for the purposes of this paragraph, may
include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary
or an Excluded Financing Subsidiary), by the REIT, the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by the REIT, the Borrower
or, to the extent not prohibited by the terms of Indebtedness permitted by
Section 8.2, any of its Subsidiaries, (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
REIT, the Borrower or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Secured Parties a perfected

<PAGE>
                                                                              66

first priority security interest in the Collateral described in the Guarantee
and Collateral Agreement with respect to such new Subsidiary, including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

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

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

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

<PAGE>
                                                                              67

                          SECTION 8. NEGATIVE COVENANTS

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

                  8.1 Financial Condition Covenants.

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

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

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

                  (d) Minimum Tangible Net Worth. Permit the Tangible Net Worth
of the REIT and its Subsidiaries determined on a consolidated basis in
accordance with GAAP on any date to be less than an amount equal to (x)
$400,000,000 plus (y) 85% of the Net Proceeds of any issuance of Capital Stock
consummated by the REIT or any of its Subsidiaries at any time after the Closing
Date.

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

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

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

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

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

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

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

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                                                                              68

                  (f) Indebtedness in respect of the Borrower and its
         Subsidiaries secured by fee-owned or leasehold real property of the
         Borrower and its Subsidiaries which is not subject to a Mortgage or
         owned by a Loan Party, including the CMBS Financing and any extensions
         or renewals or restructurings (including any restructuring that may be
         required by the lender thereunder) thereof and of the Indebtedness
         permitted by Section 8.2(d), provided that, with respect to any such
         Indebtedness (other than Indebtedness permitted by Section 8.2(d) and
         the CMBS Financing, in each case, as in effect on the date hereof) (x)
         such Indebtedness shall not mature prior to _______, 2009(1), (y) none
         of the REIT, the Borrower or any of its Subsidiaries provides credit
         support of any kind (including any undertaking, agreement or instrument
         that would constitute Indebtedness) or is directly or indirectly liable
         (as guarantor or otherwise), other than as primary obligor or, in the
         case of the Borrower as guarantor on terms no less favorable than those
         set forth on Schedule 8.2(f), and (z) as to which the lenders
         thereunder will not have any recourse to the Capital Stock or assets of
         the Borrower, the Borrower or any of its Subsidiaries other than the
         asset financed by such Indebtedness, additions, accessions and
         improvements thereto and proceeds thereof and, in the case of the
         Borrower, recourse on terms no less favorable than those set forth on
         Schedule 8.2(f).

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

                  (a) Liens for taxes not yet due or that are being contested in
         good faith by appropriate proceedings, provided that adequate reserves
         with respect thereto are maintained on the books of the Borrower or its
         Subsidiaries, as the case may be, in conformity with GAAP;

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

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

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

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

----------
(1) Date that is six months after fourth anniversary of the Closing Date.

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                                                                              69

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

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

                  (h) Liens created pursuant to the Security Documents;

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

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

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

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

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

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

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

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

<PAGE>
                                                                              70

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

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

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

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

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

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

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

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

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

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

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

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

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

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                                                                              71

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

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

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

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

                  (b) Investments in Cash Equivalents;

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

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

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

                  (f) Investments permitted by Section 8.15; and

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

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                                                                              72

         conditions of Section 7.10 have been satisfied substantially
         contemporaneously with such acquisition.

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

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

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

                  8.11 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of the REIT, the Borrower or any Material Subsidiary to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues, whether
now owned or hereafter acquired, to secure the Obligations or, in the case of
any guarantor, its obligations under the Guarantee and Collateral Agreement,
other than (a) this Agreement and the other Loan Documents, (b) any agreements
governing any purchase money Liens, Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby) and (c) with respect to
limitations on the pledge of the Capital Stock of (x) any Excluded Financing
Subsidiary, any agreements governing Indebtedness permitted by Sections 8.2(d)
and 8.2(f) and (y) any direct or indirect parent of such Excluded Financing
Subsidiary, any agreements governing Indebtedness permitted by Sections 8.2(d)
and 8.2(f) (as in effect on the Closing Date or pursuant to any extension,
renewal or restructuring thereof permitted by Section 8.2(f)).

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

<PAGE>
                                                                              73

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

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

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

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

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

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

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

                  (a) make any disposition of or encumber, pledge or
         hypothecate, whether directly or indirectly, all or any portion of its
         interest in the Borrower or any Subsidiary at any time or any rights to
         distributions or dividends therefrom other than to the Borrower or a
         Wholly-Owned Subsidiary, other than any pledges of equity interests
         pursuant to the Security Documents in connection with this Agreement;

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

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

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

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

<PAGE>
                                                                              74

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

                          SECTION 9. EVENTS OF DEFAULT

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

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

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

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

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

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

<PAGE>
                                                                              75

         described in clauses (i), (ii) and (iii) of this paragraph (e) shall
         have occurred and be continuing with respect to Indebtedness the
         outstanding principal amount of which exceeds in the aggregate
         $10,000,000; or

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

                  (g) (i) any Person shall engage in any "prohibited
         transaction" (as defined in Section 406 of ERISA or Section 4975 of the
         Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
         defined in Section 302 of ERISA), whether or not waived, shall exist
         with respect to any Plan, or any Lien in favor of the PBGC or a Plan
         shall arise on the assets of the Borrower or any Commonly Controlled
         Entity, (iii) a Reportable Event shall occur with respect to, or
         proceedings shall commence to have a trustee appointed, or a trustee
         shall be appointed, to administer or to terminate, any Single Employer
         Plan, which Reportable Event or commencement of proceedings or
         appointment of a trustee is, in the reasonable opinion of the Required
         Lenders, likely to result in the termination of such Plan for purposes
         of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
         purposes of Title IV of ERISA, (v) the Borrower or any Commonly
         Controlled Entity shall, or in the reasonable opinion of the Required
         Lenders shall be likely to, incur any liability in connection with a
         withdrawal from, or the Insolvency or Reorganization of, a
         Multiemployer Plan or (vi) any other event or condition shall occur or
         exist with respect to a Plan; and in each case in clauses (i) through
         (vi) above, such event or condition, together with all other such
         events or conditions, if any, could, in the sole judgment of the
         Required Lenders, reasonably be expected to have a Material Adverse
         Effect; or

<PAGE>
                                                                              76

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

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

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

                  (k) any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. In the case of all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired face amount of
such Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrower

<PAGE>
                                                                              77

hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower (or such other Person as may be lawfully entitled thereto).

                             SECTION 10. THE AGENTS

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

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

                  10.3 Exculpatory Provisions. Neither any Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.

                  10.4 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by

<PAGE>
                                                                              78

such Agent. The Agents may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 11.6 and all actions required by such Section in
connection with such transfer shall have been taken. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders or any
other instructing group of Lenders specified by this Agreement) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement), and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans.

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

                  10.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information

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                                                                              79

concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

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

                  10.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.

                  10.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon ten days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or Section
9(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative

<PAGE>
                                                                              80

Agent by the date that is ten days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.
The Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
duties, rights, obligations and responsibilities of the Syndication Agent
hereunder shall automatically be assumed by, and inure to the benefit of, the
Administrative Agent, without any further act by the Syndication Agent, the
Administrative Agent or any Lender. After any retiring Agent's resignation as
Agent, the provisions of this Section 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.

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

                  10.11 The Arrangers; the Syndication Agent. Neither the
Arrangers nor the Syndication Agent, in their respective capacities as such,
shall have any duties or responsibilities, nor shall any such Person incur any
liability, under this Agreement and the other Loan Documents.

                            SECTION 11. MISCELLANEOUS

                  11.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 11.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:

                  (i) forgive the principal amount or extend the final scheduled
         date of maturity of any Loan or Reimbursement Obligation, reduce the
         stated rate of any interest or fee payable under this Agreement (except
         (x) in connection with the waiver of applicability of any post-default
         increase in interest rates (which waiver shall be effective with the
         consent of the Required Lenders) and (y) that any amendment or
         modification of defined terms used in the financial covenants in this
         Agreement shall not constitute a reduction in the rate of interest or
         fees for purposes of this clause (i)) or extend the scheduled date of
         any payment thereof,

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                                                                              81

         or increase the amount or extend the expiration date of any Commitment
         of any Lender, in each case without the consent of each Lender directly
         affected thereby;

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

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

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

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

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

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.

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

                  11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise

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                                                                              82

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

   The REIT:                       U-Store-It Trust
                                   6745 Engle Road, Suite 300
                                   Cleveland, Ohio  44310
                                   Attention:  Steve Osgood, President and Chief
                                   Financial Officer
                                   Telecopy:  (440) 234-8776
                                   Telephone:  (440) 260-2223

         with a copy to:           Hogan & Hartson, L.L.P.
                                   8300 Greensboro Drive
                                   Suite 1100
                                   McLean, Virginia 22102
                                   Attention:  Lee E. Berner, Esq.
                                   Telecopy:  (703) 610-6200
                                   Telephone:  (703) 610-6100

   The Borrower:                   U-Store-It, L.P.
                                   6745 Engle Road, Suite 300
                                   Cleveland, Ohio  44310
                                   Attention:  Steve Osgood, President and Chief
                                   Financial Officer
                                   Telecopy:  (440) 234-8776
                                   Telephone:  (440) 260-2223

         with a copy to:           Hogan & Hartson, L.L.P.
                                   8300 Greensboro Drive
                                   Suite 1100
                                   McLean, Virginia 22102
                                   Attention:  Lee E. Berner, Esq.
                                   Telecopy:  (703) 610-6200
                                   Telephone:  (703) 610-6100

<PAGE>
                                                                              83

The Syndication Agent:                       Wachovia Capital Markets, LLC
                                             One Wachovia Center
                                             301 South College Street
                                             Charlotte, North Carolina  28288
                                             Attention:  Rex E. Rudy
                                             Telecopy:  (704) 383-6205
                                             Telephone:  (704) 383-6506

The Administrative Agent:                    Lehman Commercial Paper Inc.
                                             745 Seventh Avenue
                                             16th Floor
                                             New York, New York 10019-6801
                                             Attention:  Diane Albanese
                                             Telecopy:  (646) 758-5130
                                             Telephone:  (212) 526-4979

                                             and

                                             Attention: Tom Buffa
                                             Telecopy:  (646) 758-4672
                                             Telephone: (212) 526-5153

     with a copy to:                         Trimont Real Estate Advisors
                                             Monarch Tower
                                             3424 Peachtree Road, N.E.
                                             Suite 2200
                                             Atlanta, GA  30326
                                             Attention: Eric Minton
                                             Telecopy: (404) 582-8928
                                             Telephone: (404) 954-5326

Issuing Lender:                              As notified by such Issuing Lender
                                             to the Administrative Agent and
                                             the Borrower

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

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

                  11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any

<PAGE>
                                                                              84

single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.

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

                  11.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the syndication of the Facility (other than fees
payable to syndicate members) and the development, preparation and execution of,
and any amendment, supplement or modification to, this Agreement and the other
Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements and other charges of counsel to the Administrative Agent
and the charges of Intralinks, (b) to pay or reimburse each Lender and the
Agents for all costs and expenses incurred in connection with the evaluation and
review of proposed Borrowing Base Properties pursuant to Section 4.1 (other than
the allocated cost of in-house review), regardless of whether the related
Subject Property is accepted as a Borrowing Base Property as a result of such
review, (c) to pay or reimburse each Lender and the Agents for all their costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation, the
fees and disbursements of counsel (including the allocated fees and
disbursements and other charges of in-house counsel) to each Lender and of
counsel to the Agents, (d) to pay, indemnify, or reimburse each Lender and the
Agents for, and hold each Lender and the Agents harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (e) to pay, indemnify or reimburse each Lender,
each Agent, their respective affiliates, and their respective officers,
directors, trustees, employees, advisors, agents and controlling persons (each,
an "Indemnitee") for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever incurred by an Indemnitee or asserted against any Indemnitee by any
third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit
or the use or proposed use of the proceeds thereof (including any refusal by any
Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit),

<PAGE>
                                                                              85

(iii) any actual or alleged presence or release of Materials of Environmental
Concern on or from any property owned, occupied or operated by the Borrower or
any of its Subsidiaries, or any actual or alleged violation of, or liability or
other obligation under, any Environmental Law related in any way to the Borrower
or any of its Subsidiaries or any or their respective properties, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory,
whether brought by any third party or by the Borrower or any other Loan Party,
and regardless of whether any Indemnitee is a party thereto (all the foregoing
in this clause (e), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. No Indemnitee shall be liable for any damages arising from the use
by unauthorized persons of Information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with the Facility. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee, other than any such claims,
demands, penalties, fines, liabilities, settlements, damages, costs or expenses
which are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnitee. All amounts due under this Section shall be payable not later
than 30 days after written demand therefor. Statements payable by the Borrower
pursuant to this Section shall be submitted to Steve Osgood, President and Chief
Financial Officer (Telephone No. (440) 260-2223) (Fax No. (440) 234-8776), at
the address of the Borrower set forth in Section 11.2, or to such other Person
or address as may be hereafter designated by the Borrower in a notice to the
Administrative Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.

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

                  (b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and

<PAGE>
                                                                              86

directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
11.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
11.7(a) as fully as if such Participant were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections
2.14, 2.15 and 2.16 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if such Participant were a Lender;
provided that, in the case of Section 2.15, such Participant shall have complied
with the requirements of said Section, and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.

                  (c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or, with the consent of the Borrower, the
Administrative Agent and the Issuing Lender (which, in each case, shall not be
unreasonably withheld or delayed) (provided that no such consent need be
obtained by any Lehman Entity), to an additional bank, financial institution or
other entity (an "Assignee") all or any part of its rights and obligations under
this Agreement pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit E, executed by such Assignee and such Assignor (and, where the
consent of the Borrower, the Administrative Agent and the Issuing Lender is
required pursuant to the foregoing provisions, by the Borrower and such other
Persons) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that no such assignment to an Assignee
(other than any Lender or any affiliate thereof) shall be in an aggregate
principal amount of less than $1,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement) and, the
applicable Assignor (if it shall retain any Commitment or Loans) shall have a
Commitment (or in the case the Commitments have been terminated, Loans) of at
least $1,000,000, unless otherwise agreed by the Borrower and the Administrative
Agent. Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Commitments and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto, except as to Section 2.14, 2.15 and 11.5 in respect of the period prior
to such effective date). Notwithstanding any provision of

<PAGE>
                                                                              87

this Section, the consent of the Borrower shall not be required for any
assignment that occurs at any time when any Event of Default shall have occurred
and be continuing. For purposes of the minimum assignment amounts set forth in
this paragraph, multiple assignments by two or more Related Funds shall be
aggregated.

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

                  (e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 11.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (treating multiple, simultaneous assignments by or to two or more Related
Funds as a single assignment) (except that no such registration and processing
fee shall be payable (y) in connection with an assignment by or to a Lehman
Entity or (z) in the case of an Assignee which is already a Lender or is an
affiliate or Related Fund of a Lender or a Person under common management with a
Lender), the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Borrower. On or prior to such effective date, the
Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Notes of the assigning Lender) a new
Note to the order of such Assignee in an amount equal to the Commitment assumed
or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Commitment, upon request, a new Note to the order of the
Assignor in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note or Notes replaced thereby.

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

<PAGE>
                                                                              88

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

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

<PAGE>
                                                                              89

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

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

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

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

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

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

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

<PAGE>
                                                                              90

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

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

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

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

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

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

                  (b) neither the Arranger, any Agent nor any Lender has any
         fiduciary relationship with or duty to the REIT or the Borrower arising
         out of or in connection with this Agreement or any of the other Loan
         Documents, and the relationship between the Arranger, the Agents and
         the Lenders, on one hand, and the REIT and the Borrower, on the other
         hand, in connection herewith or therewith is solely that of debtor and
         creditor; and

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

                  11.14 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Arranger, any Agent, any other
Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section or substantially equivalent provisions, (c) to any of
its employees, directors, agents, attorneys, accountants and other professional
advisors, (d) to any financial institution that is a direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section), (e) upon the request or demand of any Governmental Authority
having jurisdiction over it, (f) in response to

<PAGE>
                                                                              91

any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (g) in connection with any
litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.

                  11.15 Release of Collateral and Guarantee Obligations.

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

                  (b) Notwithstanding anything to the contrary contained herein
         or any other Loan Document, when all Obligations (other than
         obligations in respect of any Specified Hedge Agreement) have been paid
         in full, all Commitments have terminated or expired and no Letter of
         Credit shall be outstanding, upon request of the Borrower, the
         Administrative Agent shall (without notice to, or vote or consent of,
         any Lender, or any affiliate of any Lender that is a party to any
         Specified Hedge Agreement) take such actions as shall be required to
         release its security interest in all Collateral, and to release all
         guarantee obligations under any Loan Document, whether or not on the
         date of such release there may be outstanding Obligations in respect of
         Specified Hedge Agreements. Any such release of guarantee obligations
         shall be deemed subject to the provision that such guarantee
         obligations shall be reinstated if after such release any portion of
         any payment in respect of the Obligations guaranteed thereby shall be
         rescinded or must otherwise be restored or returned upon the
         insolvency, bankruptcy, dissolution, liquidation or reorganization of
         the Borrower or any Guarantor, or upon or as a result of the
         appointment of a receiver, intervenor or conservator of, or trustee or
         similar officer for, the Borrower or any Guarantor or any substantial
         part of its property, or otherwise, all as though such payment had not
         been made.

                  11.16 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall

<PAGE>
                                                                              92

continue to be calculated or construed as if such Accounting Change had not
occurred. "Accounting Change" refers to any change in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or, if applicable, the SEC.

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

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

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

                                U-STORE-IT TRUST

                                By:
                                     ------------------------------------------
                                     Name:
                                     Title:

                                U-STORE-IT, L.P.

                                By: U-STORE-IT TRUST, its general
                                       partner

                                By:
                                     ------------------------------------------
                                     Name:
                                     Title:

                                LEHMAN BROTHERS INC.,
                                as an Arranger

                                By:
                                     ------------------------------------------
                                     Name:
                                     Title:

                                WACHOVIA CAPITAL MARKETS, LLC,
                                as an Arranger and as Syndication Agent

                                By:
                                     ------------------------------------------
                                     Name:
                                     Title:

                                LEHMAN COMMERCIAL PAPER INC.,
                                as Administrative Agent

                                By:
                                     ------------------------------------------
                                     Name:
                                     Title:

<PAGE>
                                                                         Annex A

                   PRICING GRID FOR LOANS AND COMMITMENT FEES

<Table>
<Caption>
=========================== ========================= ====================== ====================
  Ratio of Consolidated
      Total Debt to
 Consolidated Total Asset      Applicable Margin        Applicable Margin
          Value               for Eurodollar Loans     for Base Rate Loans   Commitment Fee Rate
--------------------------- ------------------------- ---------------------- --------------------
<S>                                <C>                     <C>                    <C>
        <= 30%                        1.500%                  0.500%                 0.25%
--------------------------- ------------------------- ---------------------- --------------------
     > 30% but <= 50%                 1.750%                  0.750%                 0.25%
--------------------------- ------------------------- ---------------------- --------------------
     > 50% but <= 60%                 2.125%                  1.125%                 0.30%
--------------------------- ------------------------- ---------------------- --------------------
          > 60%                       2.500%                  1.500%                 0.30%
=========================== ========================= ====================== ====================
</Table>

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

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