<PAGE>
Exhibit 10.2
LOAN AGREEMENT
Dated as of August 4, 2005
Between
YASKY LLC,
as Borrower
And
LASALLE BANK NATIONAL ASSOCIATION,
as Lender
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TABLE OF CONTENTS
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ARTICLE 1 - DEFINITIONS; PRINCIPLES OF
CONSTRUCTION...................... 1
SECTION 1.1
Definitions........................................... 1
SECTION 1.2 Principles of
Construction............................ 19
ARTICLE 2 - GENERAL
TERMS................................................ 19
SECTION 2.1 Loan Commitment;
Disbursement to Borrower............. 19
SECTION 2.2 Interest; Loan
Payments; Late Payment Charge.......... 20
SECTION 2.3
Prepayments........................................... 22
SECTION 2.4
Defeasance............................................ 23
SECTION 2.5 Release of
Property................................... 25
SECTION 2.6 Manner of Making
Payments; Cash Management............ 27
SECTION 2.7 Substitute
Property................................... 28
ARTICLE 3 - CONDITIONS
PRECEDENT......................................... 33
SECTION 3.1 Conditions Precedent
to Closing....................... 33
SECTION 3.2 Loan Agreement
and Note............................... 34
ARTICLE 4 - REPRESENTATIONS AND
WARRANTIES............................... 37
SECTION 4.1 Borrower
Representations.............................. 37
SECTION 4.2 Survival of
Representations........................... 49
ARTICLE 5 - BORROWER
COVENANTS........................................... 49
SECTION 5.1 Affirmative
Covenants................................. 49
SECTION 5.2 Negative
Covenants.................................... 58
SECTION 5.3 Traded
Shares......................................... 63
ARTICLE 6 - INSURANCE; CASUALTY;
CONDEMNATION; REQUIRED REPAIRS.......... 64
SECTION 6.1
Insurance............................................. 68
SECTION 6.2
Casualty.............................................. 68
SECTION 6.3
Condemnation.......................................... 68
SECTION 6.4
Restoration........................................... 68
ARTICLE 7 - RESERVE
FUNDS................................................ 73
SECTION 7.1 Required Repair
Funds................................. 73
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SECTION 7.2 Tax and
Insurance Escrow Fund......................... 74
SECTION 7.3 Replacements and
Replacement Reserve.................. 75
SECTION 7.4 Intentionally
Deleted................................. 79
SECTION 7.5 Intentionally
Deleted................................. 80
SECTION 7.6 Reserve Funds,
Generally.............................. 80
ARTICLE 8 -
DEFAULTS.....................................................
81
SECTION 8.1 Event of
Default...................................... 81
SECTION 8.2
Remedies.............................................. 84
SECTION 8.3 Remedies
Cumulative; Waivers.......................... 85
ARTICLE 9 - SPECIAL
PROVISIONS........................................... 85
SECTION 9.1 Sale of Notes
and Securitization...................... 85
SECTION 9.2 Securitization
Indemnification........................ 87
SECTION 9.3 Intentionally
Deleted................................. 89
SECTION 9.4
Exculpation........................................... 89
SECTION 9.5 Management
Agreement.................................. 91
SECTION 9.6
Servicer.............................................. 92
SECTION 9.7 Restructuring of
Mortgage and/or Mezzanine Loan....... 92
ARTICLE 10 -
MISCELLANEOUS...............................................
94
SECTION 10.1
Survival.............................................. 94
SECTION 10.2 Lender's
Discretion................................... 95
SECTION 10.3 Governing
Law......................................... 95
SECTION 10.4 Modification, Waiver
in Writing....................... 96
SECTION 10.5 Delay Not a
Waiver.................................... 96
SECTION 10.6
Notices............................................... 97
SECTION 10.7 Trial by
Jury......................................... 98
SECTION 10.8
Headings.............................................. 98
SECTION 10.9
Severability.......................................... 98
SECTION 10.10
Preferences........................................... 98
SECTION 10.11 Waiver of
Notice...................................... 98
SECTION 10.12 Remedies of
Borrower.................................. 99
SECTION 10.13 Expenses;
Indemnity................................... 99
SECTION 10.14 Schedules
Incorporated................................ 100
SECTION 10.15 SeOffsets, Counterclaims and
Defenses................. 100
SECTION 10.16 No Joint Venture or
Partnership; No Third Party
Beneficiaries......................................... 101
SECTION 10.17
Publicity............................................. 101
SECTION 10.18 Cross-Default;
Cross-Collateralization; Waiver of
Marshalling of Assets................................. 101
SECTION 10.19 Waiver of
Counterclaim................................ 102
SECTION 10.20 Conflict; Construction of
Documents; Reliance......... 102
SECTION 10.21 Brokers and Financial
Advisors........................ 103
SECTION 10.22 Prior
Agreements...................................... 103
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<PAGE>
SCHEDULES
Schedule I -
Properties - Allocated Loan Amounts
Schedule II - 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
iii
<PAGE>
LOAN AGREEMENT
THIS LOAN
AGREEMENT, dated as of August 4, 2005 (as amended, restated,
replaced, supplemented or otherwise
modified from time to time, this
"AGREEMENT"), between LASALLE BANK NATIONAL
ASSOCIATION, a national banking
association having an address at 135 South
LaSalle Street, Suite 1225, Chicago,
Illinois 60603 ("LENDER") and YASKY 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:
ARTICLE 1 - 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.
"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.
<PAGE>
"APPLICABLE INTEREST RATE"
shall mean 4.960% 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 and (ii)
Insurance Premiums.
"BORROWER" shall
mean YASKY 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.
"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.
2
<PAGE>
"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:
(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
four
percent (4%) 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.
3
<PAGE>
"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.
"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 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 Indemnity
Agreement executed by Borrower and
Guarantor 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.
4
<PAGE>
"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.
"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.
"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.
"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.
5
<PAGE>
"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 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.
6
<PAGE>
"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.
"INTEREST
PERIOD" shall mean, with respect to the application of the
Monthly Debt Service Payment Amount paid by
Borrower on a Payment Date, the
period commencing on the first day of the
prior calendar month to and including
the last day of the prior calendar
month.
"INVESTOR" shall
mean each purchaser, transferee, assignee, servicer,
participant or investor in such Securities
or any credit rating agency rating
such Securities.
"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.
"LASALLE" shall
have the meaning set forth in Section 9.2(b) hereof.
"LASALLE GROUP"
shall have the meaning set forth in Section 9.2(b) hereof.
"LENDER" shall
mean LaSalle Bank National Association, a national banking
association, together with its successors
and assigns.
7
<PAGE>
"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.
"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
8
<PAGE>
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 September 1, 2012, 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 monthly payment interest
on the principal amount of the Loan.
"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
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.
"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 EIGHTY MILLION AND 00/100 DOLLARS
($80,000,000.00), 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 II 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.
9
<PAGE>
"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 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 first 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
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
10
<PAGE>
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, 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
11
<PAGE>
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 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
12
<PAGE>
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.
"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.
13
<PAGE>
"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.
"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
14
<PAGE>
(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.
"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.
15
<PAGE>
"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 mean an amount equal to (A) the
aggregate square footage of all
Improvements at the Properties after giving
effect to such release or substitution
times (B) $0.15, divided by 12. The
Replacement Reserve Monthly Deposit shall
be adjusted following the release of
an Individual Property from the lien of its
related Security Instrument pursuant
to Section 2.5 hereof or following the
release and substitution of an Individual
Property pursuant to Section 2.7
hereof.
"REPLACEMENT
RESERVE TRIGGER EVENT" shall mean the failure of Borrower to
satisfy each of the following
conditions:
(i) The owner of
the Properties is Borrower or a transferee permitted under
the terms of this Loan Agreement and for
which Lender has approved in writing
the suspension of the Replacement Reserve
Monthly Deposit;
(ii) Borrower
furnishes to Lender evidence (in the form of schedules
listing the type and costs of replacements,
together with copies of paid
invoices and other appropriate supporting
documentation) demonstrating to the
satisfaction of Lender and its servicer
that Borrower is on a regular basis
expending the amounts set forth in the
Annual Budget approved by Lender;
16
<PAGE>
(iii) The
Properties are, in the judgment of Lender or its servicer,
being
properly maintained by Borrower in
accordance with the terms of this Agreement;
(iv) The Debt
Service Coverage Ratio for all of the Properties for the
twelve (12) full calendar months
immediately preceding the determination date is
less than 1.15:1.00; and
(v) no Event of
Default has occurred and ids continuing.
"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, the Tax and Insurance
Escrow Fund, the Replacement Reserve Fund,
the Excess Cash Reserve 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.
"RESTRICTED
PARTY" shall mean Borrower, SPC Party, Guarantor, Sponsor or
any affiliated Manager or any shareholder,
partner, member or non-member
manager, or any direct or indirect legal or
beneficial owner of, Borrower, SPC
Party, Guarantor, Sponsor, any affiliated
Manager or any non-member manager.
"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.
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<PAGE>
"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.
"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.
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"TRADED ENTITY"
shall have the meaning set forth in Section 5.2.13(h)
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.
"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.
ARTICLE 2 - 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
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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.
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 first day of the next
succeeding calendar month, and (b) on
October 1, 2005 and on each Payment Date
thereafter up to and through and including
the Payment Date occurring on August
1, 2012, interest only on the outstanding
principal balance 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,
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. Interest at
the Default Rate shall 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; 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.
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 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
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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 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
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<PAGE>
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 June 1, 2012 (the
"PERMITTED PREPAYMENT DATE") or on date
thereafter, Borrower may, at its option and
upon thirty (30) days prior written
notice to Lender, prepay the Debt in whole
without payment of the Yield
Maintenance Premium, provided, Borrower
pays to Lender (a) all accrued and
unpaid interest on the principal amount of
the Loan and (b) all other amounts
due and owing under the Loan Documents. If
for any reason Borrower prepays the
Loan on a date other than a Payment Date,
Borrower shall pay Lender, in addition
to the Debt, all interest which would have
accrued on the amount of the Loan
through and including the Payment Date next
occurring following the date of such
prepayment.
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 to this Section
2.3.2.
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<PAGE>
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
defeasance), provided, however, that no such partial defeasance
shall take place
unless the conditions outlined in Section 2.5 are
satisfied;
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<PAGE>
(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.
(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.
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<PAGE>
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 two (2) Independent
Directors approved by Lender, 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
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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);
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(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 Monthly Debt Service Payment Amount and
amounts due for the Reserve Funds
shall be deemed satisfied to the extent
sufficient
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<PAGE>
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.
2.7.1 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.
2.7.2 SUBSTITUTE
PROPERTY REQUIREMENTS. To qualify as a Substitute
Property, the property nominated to be a
Substitute Property must, at the time
of substitution:
(a) 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;
(b) 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;
(c) 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 date that such
Property became a Property hereunder
all as set forth in a Physical Conditions
Report delivered to Lender;
28
<PAGE>
(d) be in
compliance, in all material respects, with Legal Requirements
which shall be certified in an Officer's
Certificate;
(e) 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;
(f) be used
primarily for self-service storage and related uses; and
(g) 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.
2.7.3 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:
(a)
simultaneously with the Substitution, Borrower shall convey fee
simple
title to the Replaced Property to a Person
other than Borrower;
(b)
Intentionally Deleted;
(c)
Intentionally Deleted;
(d) 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;
(e) 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;
(f) 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;
(g) no Event of
Default shall have occurred and be continuing;
(h) 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
29
<PAGE>
(except as to title exceptions) as to the
Substitute Property on the
Substitution Date in all material
respects;
(i) 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;
(j) 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;
(k) delivery to
Lender of originals of the following:
(i) 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 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
30
<PAGE>
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;
(ii) 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 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;
(iii) 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,
31
<PAGE>
or, if such
Substitute Property is in a flood plain area, Borrower shall
deliver on the
Closing Date evidence of flood insurance;
(iv) 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
real estate records for the county in which the Replaced
Property is
located;
(v) insurance certificates issued by insurance companies
evidencing
the insurance
coverage required under Section 6.1 hereof;
(vi) 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;
(vii) payments of or reimbursement for (A) all costs and
expenses
incurred by
Lender (including, without limitation, reasonable attorneys'
fees and
disbursements) in connection with the substitution, (B) a
substitution fee
to Lender of $5,000 for each Substitute Property, (c) 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, and (D) all costs and
expenses
of the Rating
Agencies incurred in connection with the substitution;
(viii) 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 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;
(ix) 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
32
<PAGE>
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;
(x) 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;
(xi) 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
(xii) 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.
ARTICLE 3 - 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
33
<PAGE>
with all terms and conditions set forth in
this Agreement and in each other Loan
Document on its part to be observed or
performed.
SECTION 3.2 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.
3.2.1 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
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
34
<PAGE>
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.
3.2.2 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.
3.2.3 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.
3.2.4 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.
3.2.5 BUDGETS.
Borrower shall have delivered to Lender the Annual Budget
for the current Fiscal Year.
3.2.6 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
35
<PAGE>
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.
3.2.7 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.
3.2.8 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.
3.2.9 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.
3.2.10
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.
3.2.11 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
constituent Persons shall be the subject of
any bankruptcy, reorganization, or
insolvency proceeding.
3.2.12 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.
3.2.13 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.
3.2.14 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.
3.2.15
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.
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3.2.16
APPRAISAL. Lender shall have received an appraisal of each
Individual Property, which shall be
satisfactory in form and substance to
Lender.
3.2.17 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.
3.2.18 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.
ARTICLE 4 - 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 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
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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.
4.1.6 TITLE.
Borrower has good, marketable and insurable fee simple title
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,
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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.
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.
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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.
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
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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.
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
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
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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 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.
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(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 de
