____________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(b)
of The Securities Exchange Act of 1934
Date of Report May 24, 1996
(Date of earliest event reported)
______________________
STORAGE TRUST REALTY
(Exact name of registrant as specified in its charter)
Maryland 1-13462 43-1689825
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2407 Rangeline
Columbia, Missouri 65202
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code:(573)499-4799
Not Applicable
(Former name or former address, if changed since last report.)
<PAGE>
Item 2: Acquisition of Assets
Storage Trust Realty (the "Company") has acquired from
Balcor/Colonial Storage Income Fund - 86 (the "Seller") 25
self-storage facilities (the "Balcor/Colonial Facilities")
through Storage Trust Properties L.P. (the "Operating
Partnership"), a limited partnership controlled by the Company
as its sole general partner and in which the Company holds a
94.87% ownership interest. The information contained herein is
in all respects subject to and qualified in its entirety by
reference to the Agreement of Sale, dated as of March 5, 1996,
and the First Amendment thereto, dated April 24, 1996 (such
Agreement of Sale as amended by such First Amendment thereto,
collectively referred to as the Agreement ) which are exhibits
hereto and are incorporated by reference herein. The
Balcor/Colonial Facilities, totaling approximately 1,500,000
square feet, are located in 13 states, and were purchased for
approximately $67.1 million in cash.
The Balcor/Colonial Facilities were acquired in arms-length
transactions from the Seller and there are no material
relationships between the Seller and the Company, the Operating
Partnership, any other affiliate of the Company, any trustee or
officer of the Company or any associate of any trustee or officer
of the Company.
The Balcor/Colonial Facilities were acquired for cash. The funds
for the acquisitions were provided from funds available under the
Company's line of credit with The First National Bank of Boston
and other lenders, and other debt financing provided by the
First National Bank of Boston. The Balcor/Colonial Facilities
have been used by the Seller as self-storage facilities prior to
their acquisition by the Company, and the Company intends to
continue the use of all of the Balcor/Colonial Facilities for
that purpose. Company's management determined the purchase
price through arms-length negotiations, after taking into
consideration such factors as the geographic location of the
properties, demographics of the market areas, age and condition
of the Balcor/Colonial Facilities, the projected amounts of
maintenance costs and capital improvements, the current revenues
of the Balcor/Colonial Facilities, comparable facilities
competing in the applicable markets, rental rates and occupancy
levels for the Balcor/Colonial Facilities and competing
facilities, and the estimated amount of taxes, utility costs,
personnel costs, and other anticipated expenses.
The following provides certain additional information concerning
the Balcor/Colonial Facilities:
<PAGE>
<TABLE>
<CAPTION>
Physical
Occupancy
Purchase Square # of as of
Location Price Footage Units March 31, 1996
<S> <C> <C> <C> <C>
Casselberry, FL $2,560,085 67,159 641 88%
Fort Myers, FL $2,252,768 65,086 583 96%
Jacksonville, FL $3,339,011 67,925 768 90%
Orlando, FL $1,086,395 30,050 345 90%
Tarpon Springs, FL $2,838,129 80,732 748 96%
Atlanta, GA $2,952,213 45,700 174 89%
Marietta, GA $3,199,272 47,980 431 97%
Roswell, GA $6,711,918 113,310 680 95%
Winfield, IL $4,046,776 48,145 550 91%
Lexington, KY $2,823,187 55,700 450 82%
Louisville, KY $2,083,495 34,490 329 93%
Louisville, KY, $2,308,118 44,340 447 96%
4301 Poplar Level Rd.
Louisville, KY, $1,815,013 37,552 351 95%
4324 Poplar Level Rd.
Durham, NC $2,552,934 47,502 657 84%
Columbus, OH $2,119,784 62,190 518 70%
Tulsa, OK $1,720,226 57,540 464 82%
Greenville, SC $1,978,947 50,325 446 97%
Memphis, TN, $1,901,434 46,010 377 93%
Summer Avenue
Memphis, TN, $1,663,734 39,444 360 86%
Winchester Rd.
Garland, TX, $1,772,515 40,701 299 83%
Buckingham Rd.
Garland, TX, $2,745,267 72,572 612 71%
Jackson Drive
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Physical
Occupancy
Purchase Square # of as of
Location Price Footage Units March 31, 1996
<S> <C> <C> <C> <C>
Plano, TX $4,286,210 87,654 897 90%
Chesapeake, VA $3,193,123 75,201 747 93%
Milwaukee, WI $3,319,719 205,190 1,107 67%
Waukesha, WI $1,829,727 49,632 219 96%
</TABLE>
The Company has acquired two facilities through the Operating
Partnership. These two facilities (the Acquired Facilities )
were acquired in arms-length transactions from unaffiliated third
parties (the Sellers of Acquired Facilities ) and there are no
material relationships between the Sellers of Acquired Facilities
and the Company, the Operating Partnership, any other affiliate
of the Company, any trustee or officer of the Company or any
associate of any trustee or officer of the Company. The two
facilities were acquired for cash from the Company s line of
credit. The Acquired Facilities were used by the Sellers of
Acquired Facilities as self-storage facilities prior to their
acquisition and the Company intends to continue to use them for
that purpose. The Company s management determined the purchase
price through arms-length negotiations, after taking into
consideration the same factors listed above for the
Balcor/Colonial Facilities.
The following provides certain additional information concerning
the Acquired Facilities:
<TABLE>
<CAPTION>
Physical
Occupancy
Purchase Square # of as of
Location Price Footage Units March 31, 1996
<S> <C> <C> <C> <C>
Kansas City, MO $1,115,339 35,250 303 97%
Mobile, AL $1,892,000 49,150 423 97%
</TABLE>
Item 7: Financial Statements and Exhibits
(a) Financial Statements Applicable to Balcor/Colonial
Facilities
* Independent Auditors' Report.
* Balcor/Colonial Facilities Historical Summaries of
Combined Gross Revenue and Direct Operating Expenses
<PAGE>
for the three months ended March 31, 1996
(Unaudited), and for the year ended December 31,
1995.
* Notes to Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses.
(b) Financial Statements Applicable to Acquired Facilities
* Report of Independent Auditors.
* Acquired Facilities Historical Summaries of Combined
Gross Revenue and Direct Operating Expenses for the
three months ended March 31, 1996 (Unaudited), and for
the year ended December 31, 1995.
* Notes to Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses.
(C) Pro Forma Combined Financial Information
* Pro Forma Combined Balance Sheet as of March 31, 1996
(Unaudited).
* Pro Forma Combined Statement of Operations for the
three months ended March 31, 1996 (Unaudited).
* Pro Forma Combined Statement of Operations for
the year ended December 31, 1995 (Unaudited).
* Notes to Pro Forma Combined Financial Statements
(Unaudited).
(d) See Index to Exhibits which is hereby incorporated by
reference herein.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
Storage Trust Realty:
We have audited the accompanying Historical Summary of Combined
Gross Revenue and Direct Operating Expenses (the "Historical
Summary") for certain self-storage facilities (the
"Balcor/Colonial Facilities") described in Note 1 to the
Historical Summaries for the year ended December 31, 1995. The
Historical Summary is the responsibility of management of the
Balcor/Colonial Facilities. Our responsibility is to express an
opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the Historical Summary is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Historical Summary.
An audit also includes assessing the accounting principles used
and the significant estimates made by management, as well as
evaluating the overall presentation of the Historical Summary.
We believe that our audit provides a reasonable basis for our
opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion on Form 8-K of Storage Trust
Realty) as described in Note 1 to the Historical Summaries, and
is not intended to be a complete presentation of the
Balcor/Colonial Facilities revenues and expenses.
In our opinion, the Historical Summary referred to above presents
fairly, in all material respects, the combined gross revenue and
direct operating expenses described in Note 1 of the
Balcor/Colonial Facilities for the year ended December 31, 1995,
in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Fort Worth, Texas
May 31, 1996
<PAGE>
STORAGE TRUST REALTY
BALCOR/COLONIAL FACILITIES
HISTORICAL SUMMARIES OF COMBINED GROSS
REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
Three Months Year Ended
Ended March 31, December 31,
1996 1995
<S> <C> <C>
Gross revenue: (unaudited)
Rental . . . . . . . . . . . $2,016 8,258
Other . . . . . . . . . . . . 141 564
Total gross revenue . . . . 2,157 8,822
Direct operating expenses:
Property operations . . . . . 387 1,454
Real estate taxes . . . . . . 204 732
Total direct operating expenses 591 2,186
Gross revenue in excess of direct
operating expenses . . . . . . . .$ 1,566 6,636
</TABLE>
The accompanying notes are an integral part of these historical
summaries.
<PAGE>
STORAGE TRUST REALTY
BALCOR/COLONIAL FACILITIES
NOTES TO HISTORICAL SUMMARIES OF
COMBINED GROSS REVENUE AND DIRECT OPERATING EXPENSES
NOTE 1 - BASIS OF PRESENTATION
The Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses (the "Historical Summaries") include the
operations of the self-storage facilities (the "Balcor/Colonial
Facilities") which were acquired by Storage Trust Properties,
L.P. (the "Operating Partnership") from unaffiliated parties.
The sole general partner of the Operating Partnership is Storage
Trust Realty (the "Company"). The Balcor/Colonial Facilities
consist of the following 25 self-storage facilities acquired from
Balcor/Colonial Storage Income Fund - 86:
5708 Fort Caroline Road Jacksonville, FL
5036 Cleveland Avenue Fort Myers, FL
1131 Semoran Boulevard Casselberry, FL
1900 U.S. Highway 19, North Tarpon Springs, FL
2275 South Semoran Blvd. Orlando, FL
3281 Western Branch Blvd. Chesapeake, VA
2300 Kangaroo Drive Durham, NC
36 Pine Knoll Road Greenville, SC
11195 Alpharetta Highway Roswell, GA
2064 Briarcliff Atlanta, GA
201 Cobb Parkway Marietta, GA
750 East Third Street Lexington, KY
3120 Breckenridge Lane Louisville, KY
4301 Poplar Level Road Louisville, KY
4324 Poplar Level Road Louisville, KY
6390 Winchester Road Memphis, TN
5675 Summer Avenue Memphis, TN
28 West 650 Roosevelt Road Winfield, IL
7415 W. Dean Road Milwaukee, WI
W229 N590 Foster Court Waukesha, WI
2719 Morse Road Columbus, OH
4333 Jackson Drive Garland, TX
321 East Buckingham Road Garland, TX
3401 Avenue K Plano, TX
3218 South Garnett Road Tulsa, OK
The Historical Summaries have been prepared in accordance with
Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission for real estate operations to be acquired. The
Historical Summaries are not representative of the actual
operations for the periods presented, as certain income and
expenses which may not be comparable to the income and expenses
expected to be incurred by the Company in the proposed future
operations of the Balcor/Colonial Facilities have been
<PAGE>
excluded. Interest income was excluded and expenses excluded
consist of management fees, interest, depreciation and
amortization, professional fees and other indirect costs not
directly related to the future operations of the Balcor/Colonial
Facilities. Rental income is recognized when due from occupants.
Expenses are recognized on the accrual basis.
Factors considered by management of the Company in assessing
these acquisitions included geographic locations of the
properties, demographics of the market areas, rental rates and
occupancy levels, competition, expenses such as maintenance and
real estate taxes and projected capital expenditures. After a
review of these factors and others, the Company is not aware of
any material items relating to these properties that would cause
the reported financial information not to be representative of
future operating results.
NOTE 2 - INTERIM PERIOD
The unaudited Interim Historical Summaries for the three
months ended March 31,1996, have been prepared in accordance with
generally accepted accounting principles for interim financial
information and as described in Note 1. In the opinion of
management, all adjustments of a normal recurring nature
considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1996, are
not necessarily indicative of future operating results.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees of
Storage Trust Realty
We have audited the accompanying Historical Summaries of Combined
Gross Revenue and Direct Operating Expenses (the "Historical
Summaries") for certain self-storage facilities (the "Acquired
Facilities") described in Note 1 to the Historical Summaries for
the year ended December 31, 1995. These Historical Summaries
are the responsibility of management of the Acquired
Facilities. Our responsibility is to express an opinion on these
Historical Summaries based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the Historical Summaries are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Historical Summaries. An
audit also includes assessing the accounting principles used and
the significant estimates made by management, as well as
evaluating the overall presentation of the Historical Summaries.
We believe that our audits provide a reasonable basis for our
opinion.
The accompanying Historical Summaries were prepared for the
purpose of complying with the Rules and Regulations of the
Securities and Exchange Commission (for inclusion on Form 8-K of
Storage Trust Realty) as described in Note 1 to the Historical
Summaries, and are not intended to be a complete presentation of
the Acquired Facilities' revenues and expenses.
In our opinion, such Historical Summaries present fairly, in all
material respects, the combined gross revenue and direct
operating expenses described in Note 1 of the Acquired Facilities
for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
May 31, 1996
<PAGE>
STORAGE TRUST REALTY
ACQUIRED FACILITIES
HISTORICAL SUMMARIES OF COMBINED GROSS
REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
Three Months Year Ended
Ended March 31, December 31,
1996 1995
<S> <C> <C>
Gross revenue: (unaudited)
Rental . . . . . . . . . . $ 65 412
Direct operating expenses:
Property operations . . . . 7 91
Real estate taxes . . . . . 3 39
Total direct operating expenses 10 130
Gross revenue in excess of direct
operating expenses . . . . . . . $ 55 282
</TABLE>
The accompanying notes are an integral part of these historical
summaries.
<PAGE>
<PAGE>
STORAGE TRUST REALTY
ACQUIRED FACILITIES
NOTES TO HISTORICAL SUMMARIES OF
COMBINED GROSS REVENUE AND DIRECT OPERATING EXPENSES
NOTE 1 - BASIS OF PRESENTATION
The Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses (the "Historical Summaries") include the
operations of the self-storage facilities (the Acquired
Facilities") which were acquired by Storage Trust Properties,
L.P. (the Operating Partnership") from unaffiliated parties in
the first quarter of 1996. The general partner of the Operating
Partnership is Storage Trust Realty (the "Company"). The
Acquired Facilities consist of the following 2 self-storage
facilities:
<TABLE>
<CAPTION>
Facility Location Acquisition Date
<S> <C> <C>
Stadium Stor-All Kansas City, MO March 4, 1996
Grelot Mini Storage Mobile, AL February 16, 1996
</TABLE>
The Historical Summaries have been prepared pursuant to the Rules
and Regulations of the Securities and Exchange Commission for
real estate operations to be acquired. The Historical
Summaries are not representative of the actual operations for
the periods presented, as certain expenses which may not be
comparable to the expenses expected to be incurred by the Company
in the proposed future operations of the Acquired Facilities have
been excluded. Expenses excluded consist of management fees,
interest, depreciation and amortization, professional fees and
other indirect costs not directly related to the future
operations of the Acquired Facilities. Rental income is
recognized when due from occupants. Expenses are recognized on
the accrual basis.
Factors considered by management of the Company in assessing
these acquisitions included geographic locations of the
properties, demographics of the market areas, rental rates and
occupancy levels, competition, expenses such as maintenance and
real estate taxes and projected capital expenditures. After a
review of these factors and others, the Company is not aware of
any material items relating to these properties that would cause
the reported financial information not to be representative
of future operating results.
<PAGE>
NOTE 2 - INTERIM PERIOD
The unaudited Interim Historical Summaries for the three months
ended March 31, 1996, have been prepared in accordance with
generally accepted accounting principles for interim financial
information. The operations of the Acquired Facilities through
the date of acquisition are included in the unaudited Historical
Summaries. Operations subsequent to acquisition are included in
the financial statements of the Company. In the opinion of
management, all adjustments of a normal recurring nature
considered necessary for a fair presentations have been included.
Operating results for the three months ended March 31, 1996, are
not necessarily indicative of future operating results.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma Combined Balance Sheet as of
March 31, 1996 and unaudited Pro Forma Combined Statements of
Operations for the three months ended March 31, 1996 and for the
year ended December 31, 1995 have been prepared to reflect the
acquisition of 25 self storage facilities (the "Balcor/Colonial
Facilities") and two recently acquired self-storage facilities
(the Acquisition Facilities ) and the adjustments described in
the accompanying notes. The pro forma combined financial
information is based on the historical financial statements of
Storage Trust Realty in the Company's Form 10-Q for the period
ended March 31, 1996, and the other financial information in the
Company's 1995 Annual Report to Shareholders and should be read
in conjunction with those financial statements and the notes
thereto. The Pro Forma Combined Balance Sheet was prepared as if
the Balcor/Colonial Facilities were purchased on March 31, 1996.
The Pro Forma Combined Statements of Operations were prepared as
if the Balcor/Colonial Facilities and the Acquisition Facilities
were purchased at the beginning of the period reflected thereon.
The combined pro forma financial information is not necessarily
indicative of the financial position or results of operations
which actually would have occurred if such transactions had been
consummated on the dates described, nor does it purport to
represent the Company's future financial position or results of
operations.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 1996
(unaudited - amounts in thousands)
<TABLE>
<CAPTION>
Storage
Trust Storage
Realty Pro-forma Trust
Historical Adjustments Realty
(Note 1) (Note 2) Pro Forma
<S> <C> <C> <C>
ASSETS
Investment in storage
facilities,net $ 193,585 $ 67,575 $ 261,160
Cash and cash equivalents 3,232 3,232
Accounts receivable,
deferred costs and other
assets 5,346 (3,350) 1,997
Investment in joint ventures 395 394
Total assets $ 202,558 $ 64,225 $ 266,783
LIABILITIES AND EQUITY
Liabilities:
Mortgage and notes payable $ 48,653 $ 64,225 $ 112,878
Accounts payable and accrued
expenses 4,231 4,231
Dividends payable 3,581 3,581
Total liabilities 56,465 64,225 120,690
Minority Interest $ 7,806 $ - $ 7,806
Shareholder's equity:
Common shares, $.01 par value 87 87
Additional paid-in capital 140,952 140,952
Distribution in excess of
net income (2,752) (2,752)
Total shareholder's equity 138,287 - 138,287
Total liabilities and
shareholder's equity $ 202,558 $ 64,225 $ 266,783
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1996
(in thousands,except per share data and common stock outstanding)
(unaudited)
<TABLE>
<CAPTION>
Storage
Trust Balcor/ Storage
Realty Colonial Pro-forma Trust
Historical Facilities Adjustments Realty
(Note 1) (Note 3) (Note 4) Pro Forma
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 7,762 $ 2,016 $ 65(a) $ 9,843
Management income 61 61
Equity in earnings of
joint ventures 35 35
Other income 135 141 276
Total revenues 7,993 2,157 65 10,215
Expenses:
Property operations 1,769 387 7(a) 2,163
Real estate taxes 716 204 3(a) 923
General and administrative 482 30(b) 512
Interest 751 1,220(c) 1,971
Depreciation and
amortization 1,231 350(d) 1,581
Total expenses 4,949 591 1,610 7,150
Net income before minority
interest 3,044 1,566 (1,545) 3,065
Minority interest (163) - (163)
Net income $ 2,881 $ 1,566 $ (1,545) $ 2,902
Net income per share $ 0.33
Common stock outstanding 8,734,332
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(in thousands,except per share data and common stock outstanding)
(unaudited)
<TABLE>
<CAPTION>
Pro-Forma Balcor/ Storage
Storage Trust Colonial Pro-forma Trust
Realty Facilities Adjustments Realty
(Note 1) (Note 3) (Note 4) Pro Forma
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 30,325 $ 8,258 $ 412(a) $ 38,995
Management income 324 324
Equity in earnings
of joint ventures 118 118
Other income 481 564 1,045
Total revenues 31,248 8,822 412 40,482
Expenses:
Property operations 6,273 1,454 91(a) 7,818
Real estate taxes 2,471 732 39(a) 3,242
General and
administrative 2,074 100(b) 2,174
Interest 2,797 5,548(c) 8,307
Depreciation and
amortization 5,061 1,402(d) 6,463
Total expenses 18,676 2,186 7,180 28,004
Net income before
minority interest 12,572 6,636 (6,768) 12,440
Minority interest (645) (645)
Net income $ 11,927 $ 6,636 $(6,730) $ 11,795
Net income per share $ 1.35
Common stock outstanding 8,734,332
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(In thousands, except per share data and share information)
(unaudited)
1. Storage Trust Realty
The consolidated balance sheet and statement of operations as of
and for the three months ended March 31, 1996 and for the year
ended December 31, 1995 include the accounts of Storage Trust
Realty (the Company ), Storage Trust Properties, L.P. (the
Operating Partnership)and Storage Realty Management Co.
2. Pro Forma Adjustments-Balance Sheet
These adjustments reflect the acquisition of the Balcor/Colonial
Facilities from unaffiliated parties for an aggregate purchase
price of $67,100 and estimated closing costs of $475. Other
assets are reduced by $3,350 for the earnest money deposit on the
Balcor/Colonial Facilities in February 1996.
3. Balcor/Colonial Facilities
The Balcor/Colonial Facilities combined statement of operations
for the three months ended March 31, 1996 and for the year ended
December 31, 1995 include the combined gross revenue and direct
operating expenses for the Balcor/Colonial Facilities. The
Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses for the Balcor/Colonial Facilities are
included elsewhere herein.
4. Pro Forma Adjustments-Statements of Operations
Pro forma adjustments are as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996
<S> <C>
(a) Record operations of the Acquired Facilities
for the period prior to being owned by the
Company:
Rental income............................. $ 65
Property operations....................... $ 7
Real estate taxes......................... $ 3
(b) Record additional general and
administrative expense related to the
Balcor/Colonial Facilities and Acquired
Facilities................................ $ 30
<PAGE>
(c) Record interest expense at 7.0625% for the
Balcor/Colonial Facilities and the Acquired
Facilities, the acquisition of which was
funded from the line of credit . . . . . . $1,220
(d) Record additional depreciation expense related
to the Balcor/Colonial Facilities and the
Acquired Facilities (based on a 40-year
depreciable life and $14,021 of purchase price
allocated to land).............. . . . . . $ 350
Year Ended
December 31, 1995
(a) Record operations of the Acquired Facilities:
Rental income . . . . . . . . . . . . . . . . $ 412
Property operations . . . . . . . . . . . . . $ 91
Real estate taxes . . . . . . . . . . . . . . $ 39
(b) Record additional general and administrative
expense related to the Balcor/Colonial
Facilities and the Acquisition Facilities ... $ 100
(c) Record interest expense at 7.86% for the
Balcor/Colonial facilities, the acquisition
of which is assumed to be funded from the line
of credit and the Acquisition Facilities. . . . $5,548
(d) Record additional depreciation expense related
to the Balcor/Colonial Facilities (based on a
40-year depreciable life and $14,021 of purchase
price allocated to land) and the Acquisition
Facilities...................................... $1,402
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
STORAGE TRUST REALTY
June 6, 1996 /S/ Michael G. Burnam
(Date) Michael G. Burnam
Chief Executive Officer
June 6, 1996 /S/ Stephen M. Dulle
(Date) Stephen M. Dulle
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequential
No. Document Descriptions Page No.
2.1 Agreement of Sale between Storage Trust
Properties, L.P. and Balcor/Colonial
Storage Income Fund - 86, dated as of March
5, 1996 (Incorporated by reference to
Exhibit 2 to the Registrant's Current Report
on Form 8-K dated March 5, 1996).
2.2 First Amendment to Agreement of Sale between
Storage Trust Properties, L.P. and
Balcor/Colonial Storage Income Fund - 86
(Incorporated by reference to Exhibit 2.2
to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1996).
10.1 Loan Agreement between Storage Trust Properties,
L.P. and The First National Bank of Boston
(and related guaranty by the Registrant) dated as
of May 24, 1996.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of KPMG Peat Marwick LLP.
<PAGE>
Exhibit
No.
10.1
LOAN AGREEMENT
This LOAN AGREEMENT is made the 24th day of May, 1996 by and between
STORAGE TRUST PROPERTIES, L.P. (the "Borrower"), a Delaware limited
partnership having its principal place of business at 2407 Rangeline,
Columbia, Missouri 65202, and THE FIRST NATIONAL BANK OF BOSTON, (the "Bank").
RECITALS.
WHEREAS, Borrower has requested that the Bank provide a credit facility
to Borrower; and
WHEREAS, Bank is willing to provide such facility to Borrower upon the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby covenant and agree as
follows:
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1 Definitions. The following terms shall have the meanings
set forth in this Section l or elsewhere in the provisions of this Agreement
referred to below:
Agreement. This Loan Agreement, including the Schedules and Exhibits
hereto.
Balance Sheet Date. March 31, 1996.
Bank. The First National Bank of Boston, its successors and assigns.
Bank's Head Office. The Bank's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Bank may
designate from time to time by notice to the Borrower.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by Bank at Bank's Head Office as its "base rate", and (b) one
half of one percent (0.5%) above the Federal Funds Effective Rate (rounded
upwards, if necessary, to the next one-eighth of one percent). Any change in
the rate of interest payable hereunder resulting from a change in the Base
Rate shall become effective as of the opening of business on the day on which
such change in the Base Rate becomes effective.
Base Rate Loans. The Loans bearing interest calculated by reference to
the Base Rate.
Borrower. As defined in the preamble hereto.
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Business Day. Any day on which banking institutions located in the same
city and State as Bank's Head Office are located and are open for the
transaction of banking business and, in the case of the LIBOR Rate Loans,
which also is a LIBOR Business Day.
Commitment. The Bank s obligation to make the Loans.
Conversion Request. A notice given by the Borrower to the Bank of its
election to convert or continue the Loans in accordance with Section 4.1.
Credit Agreement. The Revolving Credit Agreement dated January 25,
1996, among Borrower, Bank, Bank of America Illinois, the other banks which
may become parties to the Agreement, and Bank as Agent.
Default. See Section 12.1.
Domestic Lending Office. The Bank s Head Office.
Event of Default. See Section 12.1.
Federal Funds Effective Rate. For any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day on such transactions received by the Bank from
three Federal funds brokers of recognized standing selected by the Bank.
Guarantor. Storage Trust Realty, a Maryland real estate investment
trust, having a usual place of business at 2407 Rangeline, Columbia, Missouri
65202.
Guaranty. The Unconditional Guaranty of Payment and Performance dated
of even date herewith made by the Guarantor in favor of the Bank, as the same
may be modified or amended, such Guaranty to be in form and substance
satisfactory to the Bank.
Interest Period. With respect to a LIBOR Rate Loan (a) initially, the
period commencing on the Drawdown Date of such Loan and ending one, two or
three months thereafter, and (b) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that with respect
to the LIBOR Rate Loans all of the foregoing provisions relating to Interest
Periods are subject to the following:
(A) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a LIBOR Business Day, that
Interest Period shall end and the next Interest Period shall commence on
the next preceding or succeeding LIBOR Business Day as determined
conclusively by the Reference Bank in accordance with the then current
bank practice in the applicable LIBOR interbank market;
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(B) if the Borrower shall fail to give notice as provided in
Section 4.1, the Borrower shall be deemed to have requested a conversion
of the affected LIBOR Rate Loan to a Base Rate Loan of the same category
on the last day of the then current Interest Period with respect
thereto;
(C) no Interest Period relating to any LIBOR Rate Loan shall
extend beyond the Maturity Date; and
(D) there shall not be more than one Interest Period in effect
at any one time.
LIBOR Lending Office. The Bank s Head Office; thereafter such other
office of the Bank as it may designate.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan,
the rate per annum equal to the quotient (rounded upwards to the nearest 1/16
of one percent) of (a) the rate per annum as determined by the LIBOR Lending
Office to be the rate at which Dollar deposits are offered to prime banks by
such banks in the London Interbank Market as are selected by the Bank at
approximately 11:00 a.m. London time two LIBOR Business Days prior to the
beginning of such Interest Period for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the LIBOR Rate Loan to which such Interest Period
applies, divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve
Rate.
LIBOR Rate Loans. The Loans bearing interest calculated by reference to
the LIBOR Rate.
Loan. The aggregate Loan to be made by the Bank hereunder in the amount
of $17,000,000.00.
Loan Documents. This Agreement, the Note, the Guaranty and all other
documents, instruments or agreements now or hereafter executed or delivered by
or on behalf of the Borrower or the Guarantor evidencing or securing the Loan.
Maturity Date. August 24, 1996, or such earlier date on which the Loan
shall become due and payable pursuant to the terms hereof.
Note. See Section 2.2.
Notice. See Section 19.
Obligations. All indebtedness, obligations and liabilities of the
Borrower to the Bank under this Agreement or any of the other Loan Documents
or in respect of the Loan or the Note, or other instruments at any time
evidencing any of the foregoing, whether existing on the date of this
Agreement or arising or incurred hereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise.
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Record. The grid attached to the Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by
the Bank with respect to the Loan referred to in the Note.
Section 1.2 Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied
on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are
not limiting.
(g) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.
(h) All terms not specifically defined herein or by
generally accepted accounting principles, which terms are defined in either
(i) the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts or (ii) the Credit Agreement, have the meanings assigned to them
therein. Borrower and Bank agree that if the Credit Agreement terminates
prior to the Maturity Date of the Loan, the definitions contained in the
Credit Agreement and used herein shall be incorporated in this Agreement and
shall continue in full force and effect.
(i) Reference to a particular "Section", refers to that
section of this Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
Section 2. CREDIT FACILITY.
Section 2.1. Commitment to Lend. Subject to the terms and conditions
set forth in this Agreement, the Bank agrees to lend to the Borrower the Loan
in the amount of $17,000,000.00.
Section 2.2. Note. The Loan shall be evidenced by a promissory note of
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the Borrower in substantially the form of Exhibit A hereto (the "Note"), dated
the date of this Agreement and completed with appropriate insertions. The
Borrower irrevocably authorizes the Bank to make or cause to be made, at or
about the time of the Drawdown Date of the Loan or at the time of receipt of
any payment of principal thereof, an appropriate notation on such Bank's
Record reflecting the making of such Loan or (as the case may be) the receipt
of such payment. The outstanding amount of the Loan set forth on the Bank's
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to the Bank, but the failure to record, or any error in so recording,
any such amount on the Bank's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Note to make payments of
principal of or interest on the Note when due.
Section 2.3. Interest on Loan.
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof or the date a LIBOR Rate Loan is
converted to a Base Rate Loan and ending on the date on which such Base Rate
Loan is repaid or converted to a LIBOR Rate Loan at the rate per annum equal
to the Base Rate.
(b) Each LIBOR Rate Loan shall bear interest for the
applicable Interest Period commencing on the first day of the Interest Period
and ending on the last day of the Interest Period with respect thereto at the
rate per annum equal to the LIBOR Rate determined for such Interest Period
plus one and three-fourths percent (1.75%).
(c) The Borrower promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
(d) Each Base Rate Loan and LIBOR Rate Loan, respectively,
may be converted to Loan of the other Type as provided in Section 4.1.
Section 2.4. Advance of Balance of Commitment. Subject to the terms
and conditions set forth in this Agreement, Borrower shall have the right
prior to the Maturity Date to borrow any portion of the Commitment which has
not previously been advanced by the Bank under this Agreement (a) for working
capital purposes, or (b) for such other purposes as the Bank may approve;
provided, that no Default or Event of Default shall have occurred and be
continuing; and provided, further, that Borrower shall comply with and be
subject to the requirements set forth in Section 2.6 of the Credit Agreement,
which are incorporated herein by reference. In no event shall the principal
amount outstanding at any time hereunder exceed the principal face amount of
the Note. Each Loan request shall be irrevocable and binding on Maker and
shall obligate Maker to accept the advance requested from the Bank on the
proposed disbursement date. Upon the satisfaction of the conditions set forth
herein, the Bank will make available to Maker such advance by crediting such
amount to the account of the Borrower maintained at the Bank s Head Office.
Section 3 REPAYMENT OF THE LOAN.
Section 3.1. Stated Maturity. The Borrower promises to pay on the
Maturity Date and there shall become absolutely due and payable on the
Maturity Date, all of the Loan outstanding on such date, together with any and
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all accrued and unpaid interest thereon.
Section 3.2. Mandatory Prepayments. If at any time the Credit
Agreement shall be terminated, expire or be cancelled, then the Borrower shall
immediately pay the outstanding principal balance of the Loan and all accrued
but unpaid interest.
Section 3.3. Optional Prepayments. The Borrower shall have the right,
at its election, to prepay the outstanding amount of the Loan, as a whole or
in part, at any time without penalty or premium; provided, that the full or
partial prepayment of the outstanding amount of any LIBOR Rate Loan pursuant
to this Section 3.3 may be made only on the last day of the Interest Period
relating thereto except as otherwise required pursuant to Section 4.6. The
Borrower shall give the Bank, no later than 10:00 a.m., Boston time, at least
three Business Days prior written notice of any prepayment pursuant to this
Section 3.3 of any Base Rate Loan and at least four LIBOR Business Days notice
of any proposed repayment pursuant to this Section 3.3 of a LIBOR Rate Loan,
in each case specifying the proposed date of payment of the Loan and the
principal amount to be paid.
Section 3.4. Partial Prepayments. Each partial prepayment of the Loan
under Section 3.3 shall be in an integral multiple of $300,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of payment and, after payment of such interest, shall be applied, in the
absence of instruction by the Borrower, first to the principal of the Base
Rate Loans and then to the principal of LIBOR Rate Loans.
Section 3.5. Effect of Prepayments. Amounts of the Loan prepaid under
Section 3.2 and Section 3.3 prior to the Maturity Date may not be reborrowed.
Section 4. CERTAIN GENERAL PROVISIONS.
Section 4.1. Conversion Options.
(a) Subject to the limits set forth in this Agreement, the
Borrower may elect from time to time to convert an outstanding LIBOR Rate Loan
to a Base Rate Loan or a Base Rate Loan to a LIBOR Rate Loan and such Loan
shall thereafter be a Base Rate Loan or a LIBOR Rate Loan, as applicable;
provided that (i) with respect to any such conversion of a LIBOR Rate Loan to
a Base Rate Loan, the Borrower shall give the Bank at least three Business
Days' prior written notice of such election, and such conversion shall only be
made on the last day of the Interest Period with respect to such LIBOR Rate
Loan; (ii) with respect to any such conversion of a Base Rate Loan to a LIBOR
Rate Loan, the Borrower shall give the Bank at least four (4) Business Days'
prior written notice of such election and the Interest Period requested, the
principal amount of the Loan so converted shall be in a minimum aggregate of
$1,000,000 or an integral multiple of $100,000.00 in excess thereof; and
(iii) no Loan may be converted into a LIBOR Rate Loan when any Default or
Event of Default has occurred and is continuing. There shall be no more than
three (3) LIBOR Rate Loans outstanding at any one time. Each Conversion
Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan
shall be irrevocable by the Borrower. No partial conversion shall result in a
Base Rate Loan in an aggregate principal amount of less than $500,000.00 or a
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LIBOR Rate Loan in an aggregate principal amount of less than $1,000,000.00
and the aggregate principal amount of each Loan shall be in an integral
multiple of $100,000.00.
(b) Any Loan may be continued as such Type upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the terms of Section 4.1; provided that no LIBOR Rate Loan may
be continued as such when any Default of the type described in subsections
(a), (b), (c) or (d) of Section 12.1 or Event of Default has occurred and is
continuing, but shall be automatically converted to a Loan bearing interest by
reference to the Base Rate on the last day of the Interest Period relating
thereto ending during the continuance of any Default or Event of Default.
(c) In the event that the Borrower does not notify the
Bank of its election hereunder with respect to any Loan, such Loan shall be
automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.
Section 4.2. Funds for Payments.
(a) All payments of principal, interest and any other
amounts due hereunder or under any of the other Loan Documents shall be made
to the Bank, at the Bank's Head Office, not later than 1:00 p.m. (Boston time)
on the day when due, in each case in immediately available funds. The Bank is
hereby authorized to charge the account of the Borrower with the Bank, on the
dates when the amount thereof shall become due and payable, with the amounts
of the principal of and interest on the Loan and all fees, charges, expenses
and other amounts owing to the Bank under the Loan Documents.
(b) All payments by the Borrower hereunder and under any
of the other Loan Documents shall be made without setoff or counterclaim and
free and clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loan, restrictions
or conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other authority
therein unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with respect
to any amount payable by it hereunder or under any of the other Loan
Documents, the Borrower will pay to the Bank on the date on which such amount
is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Bank to
receive the same net amount which the Bank would have received on such due
date had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Bank certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made by
the Borrower hereunder or under such other Loan Document.
Section 4.3. Computations. All computations of interest on the Loan
and of other fees to the extent applicable shall be based on a 360-day year
and paid for the actual number of days elapsed. Except as otherwise provided
in the definition of the term "Interest Period" with respect to a LIBOR Rate
Loan, whenever a payment hereunder or under any of the other Loan Documents
becomes due on a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and interest shall
<PAGE>
accrue during such extension. The outstanding amount of the Loan as reflected
on the records of the Bank from time to time shall be considered prima facie
evidence of such amount.
Section 4.4. Inability to Determine LIBOR Rate. In the event that,
prior to the commencement of any Interest Period relating to any LIBOR Rate
Loan, the Bank shall determine that adequate and reasonable methods do not
exist for ascertaining the LIBOR Rate for such Interest Period, the Bank shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower) to the Borrower. In such event (a) any Loan request
with respect to a LIBOR Rate Loan shall be automatically withdrawn and shall
be deemed a request for a Base Rate Loan and (b) the LIBOR Rate Loans will
automatically, on the last day of the then current Interest Period thereof,
become a Base Rate Loan, and the obligations of the Bank to make a LIBOR Rate
Loan shall be suspended until the Bank determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Bank shall so
notify the Borrower.
Section 4.5. Illegality. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful, or any central
bank or other governmental authority having jurisdiction over the Bank or its
LIBOR Lending Office shall assert that it is unlawful, for the Bank to make or
maintain a LIBOR Rate Loan, the Bank shall forthwith give notice of such
circumstances to the Borrower and thereupon (a) the commitment of the Bank to
make a LIBOR Rate Loan or convert a Loan of another type to a LIBOR Rate Loan
shall forthwith be suspended and (b) the LIBOR Rate Loans then outstanding
shall be converted automatically to a Base Rate Loan on the last day of each
Interest Period applicable to such LIBOR Rate Loan or within such earlier
period as may be required by law.
Section 4.6. Additional Interest. If any LIBOR Rate Loan or any
portion thereof is repaid or is converted to a Base Rate Loan for any reason
on a date which is prior to the last day of the Interest Period applicable to
such LIBOR Rate Loan, the Borrower will pay to the Bank upon demand, in
addition to any amounts of interest otherwise payable hereunder, any amounts
required to compensate the Bank for any losses, costs or expenses which may
reasonably be incurred as a result of such payment or conversion, including,
without limitation, an amount equal to daily interest for the unexpired
portion of such Interest Period on the LIBOR Rate Loan or portion thereof so
repaid or converted at a per annum rate equal to the excess, if any, of (a)
the interest rate calculated on the basis of the LIBOR Rate applicable to such
LIBOR Rate Loan minus (b) the yield obtainable by the Bank upon the purchase
of debt securities customarily issued by the Treasury of the United States of
America which have a maturity date most closely approximating the last day of
such Interest Period (it being understood that the purchase of such securities
shall not be required in order for such amounts to be payable and that a Bank
shall not be obligated or required to have actually obtained funds at the
LIBOR Rate or to have actually reinvested such amount as described above).
Section 4.7. Additional Costs, Etc. Notwithstanding anything herein to
the contrary, if any future applicable law or any amendment or modification of
present applicable law which expression, as used herein, includes statutes,
rules and regulations thereunder and legally binding interpretations thereof
<PAGE>
by any competent court or by any governmental or other regulatory body or
official with appropriate jurisdiction charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at
any time or from time to time hereafter made upon or otherwise issued to the
Bank by any central bank or other fiscal, monetary or other authority (whether
or not having the force of law), shall:
(a) subject the Bank to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Agreement,
the other Loan Documents or the Loan (other than taxes based upon or measured
by the income or profits of the Bank), or
(b) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to the Bank of the principal of or
the interest on the Loan or any other amounts payable to the Bank under this
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits
in or for the account of, or the Loan by, or letters of credit from, or
commitments of the Bank beyond those in effect as of the date hereof, or
(d) impose on the Bank any other conditions or requirements with
respect to this Agreement, the other Loan Document, the Loan, or any class of
Loan or commitments of which the Loan forms a part; and the result of any of
the foregoing is
(i) to increase the cost to the Bank of making, funding,
issuing, renewing, extending or maintaining the Loan, or
(ii) to reduce the amount of principal, interest or other
amount payable to the Bank hereunder on account of the Loan, or
(iii) to require the Bank to make any payment or to forego
any interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by the Bank from the Borrower
hereunder, then, and in each such case, the Borrower will, within fifteen (15)
days of demand made by the Bank at any time and from time to time and as often
as the occasion therefor may arise, pay to the Bank such additional amounts as
the Bank shall determine in good faith to be sufficient to compensate the Bank
for such additional cost, reduction, payment or foregone interest or other
sum. The Bank in determining such amounts may use any reasonable averaging
and attribution methods, generally applied by the Bank.
Section 4.8. Capital Adequacy. If after the date hereof the Bank
determines that (a) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements of general application for banks or
bank holding companies (as opposed to a particular bank) or any change in the
interpretation or application thereof by any governmental authority charged
with the administration thereof, or (b) compliance by the Bank or its parent
bank holding company with any future guideline, request or directive of any
such entity regarding capital adequacy or any amendment or change in
<PAGE>
interpretation of any existing guideline, request or directive (whether or not
having the force of law) of general application for banks or bank holding
companies (as opposed to a particular bank), has the effect of reducing the
return on the Bank's or such holding company's capital as a consequence of the
Bank's commitment to make the Loan hereunder to a level below that which the
Bank or holding company could have achieved but for such adoption, change or
compliance (taking into consideration the Bank's or such holding company's
then existing policies with respect to capital adequacy and assuming the full
utilization of such entity's capital) by any amount deemed by the Bank to be
material, then the Bank may notify the Borrower thereof. The Borrower agrees
to pay to the Bank the amount of such reduction in the return on capital which
is attributable to the Loan as and when such reduction is determined, upon
presentation by the Bank of a statement of the amount setting for the Bank's
calculation thereof. In determining such amount, the Bank may use any
reasonable averaging and attribution methods, generally applied by the Bank.
Section 4.9. Indemnity of Borrower. The Borrower agrees to indemnify
the Bank and to hold the Bank harmless from and against any loss, cost or
expense that the Bank may sustain or incur as a consequence of (a) default by
the Borrower in payment of the principal amount of or any interest on any
LIBOR Rate Loan as and when due and payable, including any such loss or
expense arising from interest or fees payable by the Bank to lenders of funds
obtained by it in order to maintain its LIBOR Rate Loans, or (b) default by
the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan request or a Conversion Request.
Section 4.10. Interest on Overdue Amounts; Late Charge. Overdue
principal and (to the extent permitted by applicable law) interest on the Loan
and all other overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest payable on demand at a rate per annum equal to
four percent (4.0%) above the Base Rate until such amount shall be paid in
full (after as well as before judgment). In addition, the Borrower shall pay
a late charge equal to three percent (3%) of any amount of interest and/or
principal payable on the Loan or any other amounts payable hereunder or under
the Loan Documents, which is not paid within ten days of the date when due.
Section 4.11. Certificate. A certificate prepared in good faith setting
forth any amounts payable pursuant to Section 4.6, Section 4.7, Section 4.8,
Section 4.9 or Section 4.10 and a brief explanation of such amounts which are
due, submitted by the Bank to the Borrower, shall be conclusive in the absence
of manifest error.
Section 4.12. Limitation on Interest. Notwithstanding anything in this
Agreement to the contrary, all agreements between the Borrower and the Bank,
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of acceleration of
the maturity of any of the Obligations or otherwise, shall the interest
contracted for, charged or received by the Bank exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever,
interest would otherwise be payable to the Bank in excess of the maximum
lawful amount, the interest payable to the Bank shall be reduced to the
maximum amount permitted under applicable law; and if from any circumstance
the Bank shall ever receive anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excessive
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interest shall be applied to the reduction of the principal balance of the
Obligations and to the payment of interest or, if such excessive interest
exceeds the unpaid balance of principal of the Obligations, such excess shall
be refunded to the Borrower. All interest paid or agreed to be paid to the
Bank shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal of the Obligations (including the period of any renewal or extension
thereof) so that the interest thereon for such full period shall not exceed
the maximum amount permitted by applicable law. This section shall control
all agreements between the Borrower and the Bank.
Section 5. SECURITY.
The Bank has agreed to make the Loan to the Borrower on an unsecured
basis. Notwithstanding the foregoing, the Obligations shall be guaranteed by
Guarantor pursuant to the Guaranty.
Section 6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Bank as follows:
Section 6.1. Corporate Authority, Etc.
(a) Incorporation; Good Standing. The Borrower (i) is a
Delaware limited partnership duly organized pursuant to a Limited Partnership
Agreement dated November 16, 1994 filed with the Secretary of State of
Delaware and is validly existing and in good standing under the laws of
Delaware, and (ii) is in good standing as a foreign entity and is duly
authorized to do business in the jurisdictions where a failure to be so
qualified in such other jurisdiction could have a materially adverse effect on
the business, assets or financial condition of the Borrower. The Guarantor is
a Maryland real estate investment trust duly organized pursuant to its
organizational documents and amendments thereto filed with the Secretary of
State of Maryland and is validly existing and in good standing under the laws
of Maryland. Each of the Borrower and the Guarantor has all requisite power
to own its respective property and conduct its respective business as now
conducted and as presently contemplated.
(b) Authorization. The execution, delivery and
performance of this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby (i) are within the authority of
the Borrower and the Guarantor, (ii) have been duly authorized by all
necessary proceedings on the part of such Person, (iii) do not and will not
conflict with or result in any breach or contravention of any provision of
law, statute, rule or regulation to which such Person is subject or any
judgment, order, writ, injunction, license or permit applicable to such
Person, (iv) do not and will not conflict with or constitute a default
(whether with the passage of time or the giving of notice, or both) under any
provision of the charter documents, partnership agreement, declaration of
trust or other charter documents or bylaws of, or any agreement or other
instrument binding upon, such Person or any of its properties, and (v) do not
and will not result in or require the imposition of any lien or other
encumbrance on any of the properties, assets or rights of such Person.
<PAGE>
(c) Enforceability. The execution and delivery of this
Agreement and the other Loan Documents are valid and legally binding
obligations of the Borrower and the Guarantor enforceable in accordance with
the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
Section 6.2. Governmental Approvals. The execution, delivery and
performance by the Borrower and the Guarantor of this Agreement and the other
Loan Documents and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
Section 6.3. Title to Properties; Leases. The Borrower and its
Subsidiaries own all of the assets reflected in the consolidated balance sheet
of the Borrower as at the Balance Sheet Date or acquired since that date
(except property and assets sold or otherwise disposed of in the ordinary
course of business since that date), subject to no rights of others, including
any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except liens permitted by the Credit
Agreement.
Section 6.4. Financial Statements. The Borrower has furnished or
caused the Guarantor to furnish to the Bank the consolidated balance sheet of
the Borrower and its Subsidiaries and of the Guarantor and its Subsidiaries as
of the Balance Sheet Date and their related consolidated statements of
operations and cash flows for the period then ended, certified by an officer
of the Borrower and the Guarantor. Such balance sheet and statements of
operations and cash flows have been prepared in accordance with generally
accepted accounting principles and fairly present the financial condition of
the Borrower and the Guarantor and their respective Subsidiaries as of such
dates and the results of the operations of the Borrower and the Guarantor and
their respective Subsidiaries for such periods. There are no liabilities,
contingent or otherwise, of the Borrower, the Guarantor or any of their
respective Subsidiaries involving material amounts not disclosed in said
financial statements and the related notes thereto.
Section 6.5. No Material Changes. Since the Balance Sheet Date, there
has occurred no materially adverse change in the financial condition or
business of the Borrower and its Subsidiaries or the Guarantor and its
Subsidiaries taken as a whole as shown on or reflected in the consolidated
balance sheet of the Borrower and the Guarantor as of the Balance Sheet Date,
or their respective consolidated statement of income or cash flows for the
fiscal year then ended, other than changes in the ordinary course of business
that have not had any materially adverse effect either individually or in the
aggregate on the business or financial condition of such Person.
Section 6.6. Franchises, Patents, Copyrights, Etc. The Borrower and
its Subsidiaries possess all franchises, patents, copyrights, trademarks,
trade names, servicemarks, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of their business substantially as now
<PAGE>
conducted without known conflict with any rights of others.
Section 6.7. Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against the Borrower or any
of its Subsidiaries or the Guarantor before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of such Person or materially impair
the right of such Person to carry on business substantially as now conducted
by it, or result in any liability not adequately covered by insurance, or for
which adequate reserves are not maintained on the balance sheet of such
Person, or which question the validity of this Agreement or any of the other
Loan Documents, any action taken or to be taken pursuant hereto or thereto or
any lien or security interest created or intended to be created pursuant
hereto or thereto, or which will adversely affect the ability of the Borrower
or the Guarantor to pay and perform the Obligations in the manner contemplated
by this Agreement and the other Loan Documents.
Section 6.8. No Materially Adverse Contracts, Etc. Neither the
Borrower, any of its Subsidiaries nor the Guarantor is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a materially adverse
effect on the business, assets or financial condition of such Person. Neither
the Borrower, any of its Subsidiaries nor the Guarantor is a party to any
contract or agreement that has or is expected, in the judgment of the officers
or partners of such Person, to have any materially adverse effect on the
business of any of them.
Section 6.9. Compliance with Other Instruments, Laws, Etc. Neither the
Borrower, any of its Subsidiaries nor the Guarantor is in violation of any
provision of its charter or other organizational documents, by-laws, or any
agreement or instrument to which it may be subject or by which it or any of
its properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could
result in the imposition of substantial penalties or materially and adversely
affect the financial condition, properties or business of such Person.
Section 6.10. Tax Status. The Borrower and each of its Subsidiaries
and the Guarantor (a) has made or filed all federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (b) has paid all taxes and other governmental assessments
and charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings and (c) has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers or partners of such Person know of no basis for any such
claim.
Section 6.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.
Section 6.12. Holding Company and Investment Company Acts. Neither the
<PAGE>
Borrower, any of its Subsidiaries nor the Guarantor is a "holding company", or
a "subsidiary company" of a "holding company", or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined
in the Investment Company Act of 1940.
Section 6.13. Absence of UCC Financing Statements, Etc. Except as
permitted in the Credit Agreement, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry, or other public office, that
purports to cover, affect or give notice of any present or possible future
lien on, or security interest or security title in, any property of the
Borrower or its Subsidiaries or rights thereunder.
Section 6.14. Employee Benefit Plans. The Borrower and each ERISA
Affiliate has fulfilled its obligations under the minimum funding standards of
ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan.
Neither the Borrower nor any ERISA Affiliate has (a) sought a waiver of the
minimum funding standard under Section 412 of the Code in respect of any
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan,
(b) failed to make any contribution or payment to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan, or made any amendment to any
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, which
has resulted or could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Code, or (c) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA. None of the Unencumbered Operating Properties
constitutes a "plan asset" of any Employee Plan, Multiemployer Plan or
Guaranteed Pension Plan.
Section 6.15. Regulations U and X. No portion of the Loan is to be
used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Section 6.16. Loan Documents and the Guarantor. All of the
representations and warranties of the Borrower made in this Agreement and the
other Loan Documents or any document or instrument delivered to the Bank
pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects, and neither the Borrower nor the Guarantor
has failed to disclose such information as is necessary to make such
representations and warranties not misleading.
Section 6.17. Brokers. Neither the Borrower nor any of its
Subsidiaries has engaged or otherwise dealt with any broker, finder or similar
entity in connection with this Agreement or the Loan contemplated hereunder.
Section 6.18. Other Debt. Neither the Borrower, any of its
Subsidiaries nor the Guarantor is in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust, security
<PAGE>
agreement, financing agreement, indenture or lease to which any of them is a
party. The Borrower is not a party to or bound by any agreement, instrument
or indenture that may require the subordination in right or time of payment of
any of the Obligations to any other indebtedness or obligation of the
Borrower.
Section 6.19. Solvency. As of the Closing Date and after giving effect
to the transactions contemplated by this Agreement and the other Loan
Documents, including all of the Loan made hereunder, the Borrower is not
insolvent on a balance sheet basis such that the sum of the Borrower's assets
exceeds the sum of the Borrower's liabilities, the Borrower is able to pay its
debts as they become due, and the Borrower has sufficient capital to carry on
its business.
Section 6.20. Partners and the Guarantor. Guarantor is the sole general
partner of the Borrower and owns a 94.87% general partnership interest in the
Borrower.
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or the Bank has any obligation to make the Loan:
Section 7.1. Punctual Payment. The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Loan and all
interest and fees provided for in this Agreement, all in accordance with the
terms of this Agreement and the Note as well as all other sums owing pursuant
to the Loan Documents.
Section 7.2. Maintenance of Office. The Borrower will maintain its
chief executive office at 2407 Rangeline, Columbia, Missouri, or at such other
place in the United States of America as the Borrower shall designate upon
prior written notice to the Bank, where notices, presentations and demands to
or upon the Borrower in respect of the Loan Documents may be given or made.
Section 7.3. Records and Accounts. The Borrower will (a) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance
with generally accepted accounting principles and (b) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation and
amortization of its properties and the properties of its Subsidiaries,
contingencies and other reserves.
Section 7.4. Financial Statements, Certificates and Information. The
Borrower will deliver to the Bank:
(a) as soon as practicable, but in any event not later
than 90 days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Subsidiaries at the end of
such year, and the related audited consolidated statements of income, changes
in shareholder's equity and cash flows for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and accompanied by an auditor's report
<PAGE>
prepared without qualification by Ernst & Young or by another "Big Six"
accounting firm. At any time that the Bank has reasonable grounds to request
the same, the Bank may require that such report be accompanied by a written
statement from such accountants to the effect that they have read a copy of
this Agreement, and that, in making the examination necessary for said
certification, they have obtained no knowledge of any Default or Event of
Default or, if such accountants shall have obtained knowledge of any then
existing Default or Event of Default, they shall disclose in such statement
any such Default or Event of Default;
(b) as soon as practicable, but in any event not later
than 60 days after the end of each of the first three fiscal quarters of the
Borrower, copies of the unaudited consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such quarter, and the related unaudited
consolidated statements of operations and cash flows for the portion of the
Borrower's fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles, together with a
certification by the principal financial officer of the Borrower that the
information contained in such financial statements fairly presents the
financial position of the Borrower and its Subsidiaries on the date thereof
(subject to year-end adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, within thirty (30)
days of the filing by the Guarantor of a Form 8-K with the SEC or the filing
with the SEC of any other document amending any other filing made by the
Guarantor, a statement (a "Compliance Certificate") certified by the principal
financial officer of the Guarantor in the form required by the Credit
Agreement setting forth in reasonable detail computations evidencing
compliance with covenants described in the Credit Agreement, and (if
applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date;
(d) concurrently with the delivery of the financial
statements described in subsection (b) above, a certificate signed by the
President or Chief Financial Officer of the sole general partner of the
Borrower to the effect that, having read this Agreement, and based upon an
examination which they deem sufficient to enable them to make an informed
statement, there does not exist any Default or Event of Default, or if such
Default or Event of Default has occurred, specifying the facts with respect
thereto;
(e) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature sent to the partners of the
Borrower;
(f) promptly after they are filed with the Internal
Revenue Service, copies of all annual federal income tax returns and
amendments thereto of the Borrower; and
(g) from time to time such other financial data and
information in the possession of the Borrower (including without limitation
auditors' management letters, evidence of payment of taxes, property
inspection and environmental reports and information as to zoning and other
<PAGE>
legal and regulatory changes affecting the Borrower) as the Bank may
reasonably request.
Section 7.5. Notices.
(a) Defaults. The Borrower will promptly notify the Bank
in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Agreement
or under any note, evidence of indebtedness, indenture or other obligation to
which or with respect to which the Borrower, any of its Subsidiaries or the
Guarantor is a party or obligor, whether as principal or surety, and such
default would permit the holder of such note or obligation or other evidence
of indebtedness to accelerate the maturity thereof, which acceleration would
have a material adverse effect on the Borrower or the Guarantor or the
existence of which claimed default might become an Event of Default, the
Borrower shall forthwith give written notice thereof to the Bank, describing
the notice or action and the nature of the claimed default.
(b) Notice of Litigation and Judgments. The Borrower will
give notice to the Bank in writing within 15 days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower, any of its Subsidiaries or the Guarantor
or to which any of such Persons is or is to become a party involving an
uninsured claim against such Person that could reasonably be expected to have
a materially adverse effect on the Borrower or the Guarantor and stating the
nature and status of such litigation or proceedings. The Borrower will give
notice to the Bank, in writing, in form and detail satisfactory to the Bank,
within ten days of any judgment not covered by insurance, whether final or
otherwise, against the Borrower, any of its Subsidiaries or the Guarantor in
an amount in excess of $250,000.
Section 7.6. Existence; Maintenance of Properties.
(a) The Borrower will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
Delaware limited partnership. The Borrower will cause each of its
Subsidiaries to do or cause to be done all things necessary to preserve and
keep in full force and effect its legal existence. The Borrower will do or
cause to be done all things necessary to preserve and keep in full force all
of its rights and franchises and those of its Subsidiaries. The Borrower
will, and will cause each of its Subsidiaries to, continue to engage primarily
in the businesses now conducted by it and in related businesses.
(b) The Borrower (i) will cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition,
repair and working order (ordinary wear and tear excepted) and supplied with
all necessary equipment, and (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof in all cases in
which the failure so to do would have a material adverse effect on the
condition of its properties or on the financial condition, assets or
operations of the Borrower and its Subsidiaries.
<PAGE>
Section 7.7. Insurance. The Borrower will, at its expense, procure and
maintain or cause to be procured and maintained insurance covering the
Borrower, its Subsidiaries and their respective properties in such amounts and
against such risks and casualties as are customary for properties of similar
character and location, due regard being given to the type of improvements
thereon, their construction, location, use and occupancy.
Section 7.8. Taxes. The Borrower and each Subsidiary will duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon it
and upon their respective properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property, subject to the Borrower's and its
Subsidiaries' right to contest the same as set forth in the Credit Agreement.
Section 7.9. Inspection of Properties and Books. The Borrower shall
permit the Bank or any representative designated by the Bank, at the
Borrower's expense to visit and inspect any of the properties of the Borrower
or any of its Subsidiaries, to examine the books of account of the Borrower
and its Subsidiaries (and to make copies thereof and extracts therefrom) and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its officers, all at
such reasonable times and intervals as the Bank or any Bank may reasonably
request. The Bank shall use good faith efforts to coordinate such visits and
inspections so as to minimize the interference with and disruption to the
Borrower's normal business operations.
Section 7.10. Compliance with Laws, Contracts, Licenses, and Permits.
The Borrower will comply with, and will cause each of its Subsidiaries to
comply in all respects with (i) all applicable laws and regulations now or
hereafter in effect wherever its business is conducted, (ii) the provisions of
its corporate charter, partnership agreement or declaration of trust, as the
case may be, and other charter documents and bylaws, (iii) all agreements and
instruments to which it is a party or by which it or any of its properties may
be bound, (iv) all applicable decrees, orders, and judgments, and (v) all
licenses and permits required by applicable laws and regulations for the
conduct of its business or the ownership, use or operation of its properties.
If at any time while any Loan or Note is outstanding or the Bank has any
obligation to make the Loan hereunder, any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the Borrower may
fulfill any of its obligations hereunder, the Borrower will immediately take
or cause to be taken all steps necessary to obtain such authorization,
consent, approval, permit or license and furnish the Bank and the Bank with
evidence thereof.
Section 7.11. Use of Proceeds. Except as provided in Section 2.4 with respect
to advances after the date hereof, the Borrower will use the proceeds of the
Loan solely to provide short-term financing for the acquisition from
Balcor/Colonial Self-Storage of fee interests in twenty-five (25) properties
utilized principally for self-storage facilities or mini-warehouses (including
reasonable transaction costs related thereto).
<PAGE>
Section 7.12. Credit Agreement. Borrower, Guarantor and their
respective Subsidiaries shall perform and comply with all covenants,
agreements and restrictions (whether affirmative, negative, financial or
otherwise) set forth in the Credit Agreement and the other "Loan Documents"
(as defined in the Credit Agreement) within the time periods provided therein
for performance.
Section 7.13. Further Assurances. The Borrower will cooperate with,
and will cause each of its Subsidiaries to cooperate with the Bank and the
Bank and execute such further instruments and documents as the Bank or the
Bank shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.
Section 8. INTENTIONALLY OMITTED.
Section 9. INTENTIONALLY OMITTED.
Section 10. INTENTIONALLY OMITTED.
Section 11. INTENTIONALLY OMITTED.
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 12.1. Events of Default and Acceleration. If any of the
following events ("Events of Default" or, if the giving of notice or the lapse
of time or both is required, then, prior to such notice or lapse of time,
"Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the
Loan when the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay any interest on the
Loan or any other sums due hereunder or under any of the other Loan Documents,
when the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(c) the Borrower or any of its Subsidiaries or the
Guarantor shall fail to perform any other term, covenant or agreement
contained herein or in any of the other Loan Documents (other than those
specified above in this Section 12);
(d) any representation or warranty of the Borrower or any
of its Subsidiaries or the Guarantor in this Agreement or any other Loan
Document, or in any report, certificate, financial statement, request for a
Loan, or in any other document or instrument delivered pursuant to or in
connection with this Agreement, any advance of a Loan or any of the other Loan
Documents shall prove to have been false in any material respect upon the date
when made or deemed to have been made or repeated;
(e) the Borrower or any of its Subsidiaries or the
Guarantor, (i) shall make an assignment for the benefit of creditors, or admit
<PAGE>
in writing its general inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or the Guarantor or of any substantial part of the assets of
any thereof, (ii) shall commence any case or other proceeding relating to the
Borrower or any of its Subsidiaries or the Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, or
(iii) shall take any action to authorize or in furtherance of any of the
foregoing;
(f) a petition or application shall be filed for the
appointment of a trustee or other custodian, liquidator or receiver of the
Borrower or any of its Subsidiaries or the Guarantor or any substantial part
of the assets of any thereof, or a case or other proceeding shall be commenced
against the Borrower or any of its Subsidiaries or the Guarantor under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, and the Borrower or any of its Subsidiaries or the
Guarantor shall indicate its approval thereof, consent thereto or acquiescence
therein or such petition, application, case or proceeding shall not have been
dismissed within 60 days following the filing or commencement thereof;
(g) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries or the Guarantor bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for relief
is entered in respect of the Borrower or any of its Subsidiaries or the
Guarantor, in each case of the foregoing in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(h) if any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in accordance with the terms
thereof or with the express prior written agreement, consent or approval of
the Bank, or any action at law, suit in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be commenced by or
on behalf of the Borrower or the Guarantor or any of its partners or
shareholders, or any court or any other governmental or regulatory authority
or agency of competent jurisdiction shall make a determination that, or issue
a judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the
terms thereof in any material respect as determined by the Bank;
(i) the Guarantor denies that the Guarantor has any
liability or obligation under the Guaranty, or shall notify the Bank of the
Guarantor's intention to attempt to cancel or terminate the Guaranty, or shall
fail to observe or comply with any term, covenant, condition or agreement
under the Guaranty; or
(j) there shall exist an Event of Default under the Credit
Agreement.
then, in any such event, the Bank may by notice in writing to the Borrower
declare all amounts owing with respect to this Agreement, the Note and the
<PAGE>
other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided that in the event of any Event of Default specified in Section
12.1(e), Section 12.1(f), Section 12.1(g) or Section 12.1(j), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Bank.
Section 12.1A Limitation of Cure Periods.
(a) Notwithstanding anything contained in Section 12.1 to the
contrary, (i) no Event of Default shall exist hereunder upon the occurrence of
any failure described in Section 12.1(a) or Section 12.1(b) in the event that
the Borrower cures such default within five (5) days following receipt of
written notice of such default, provided, however, that Borrower shall not be
entitled to receive more than two (2) notices in the aggregate pursuant to
this clause (i) in any period of 365 days ending on the date of any such
occurrence of default, and provided further that no such cure period shall
apply to any payments due upon the maturity of the Note, and (ii) no Event of
Default shall exist hereunder upon the occurrence of any failure described in
Section 12.1(c) in the event that the Borrower cures such default with thirty
(30) days following receipt of written notice of such default, provided that
the provisions of this clause (ii) shall not pertain to any default excluded
from any provision of cure of defaults contained in any other of the Loan
Documents.
(b) Notwithstanding the provisions of subsection (c) of Section
12.1, the cure periods provided therein shall not be allowed and the
occurrence of a Default thereunder immediately shall constitute an Event of
Default for all purposes of this Agreement and the other Loan Documents if,
within the period of twelve months immediately preceding the occurrence of
such Default, there shall have occurred two periods of cure or portions
thereof under any one or more of said subsections (provided that no cure
period shall be provided if such occurrence would constitute an Event of
Default under the Credit Agreement).
Section 12.2. Remedies. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Bank
shall have accelerated the maturity of the Loan pursuant to Section 12.1, the
Bank may proceed to protect and enforce its rights and remedies under this
Agreement, the Note or any of the other Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced, including to the full extent permitted by applicable law the
obtaining of the ex parte appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right. No remedy herein conferred
upon the Bank or the holder of any Note is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law. In the event
that all or any portion of the Obligations is collected by or through an
attorney-at-law, the Borrower shall pay all costs of collection including, but
<PAGE>
not limited to, reasonable attorney's fees not to exceed fifteen percent (15%)
of such portion of the Obligations.
Section 12.3. Distribution of Proceeds. In the event that, following
the occurrence or during the continuance of any Event of Default, any monies
are received in connection with the enforcement of any of the Loan Documents,
or otherwise with respect to the realization upon any of the assets of the
Borrower or Guarantor, such monies shall be distributed for application as
follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Bank for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or sustained
by the Bank in connection with the collection of such monies by the Bank, for
the exercise, protection or enforcement by the Bank of all or any of the
rights, remedies, powers and privileges of the Bank under this Agreement or
any of the other Loan Documents or in support of any provision of adequate
indemnity to the Bank against any taxes or liens which by law shall have, or
may have, priority over the rights of the Bank to such monies;
(b) Second, to all other Obligations in such order or
preference as the Bank shall determine; and
(c) Third, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
Section 13. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits (general or specific, time or demand,
provisional or final, regardless of currency, maturity, or the branch of where
such deposits are held) or other sums credited by or due from the Bank to the
Borrower or the Guarantor and any securities or other property of the Borrower
or the Guarantor in the possession of the Bank may be applied to or set off
against the payment of Obligations and any and all other liabilities, direct,
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to the Bank.
Section 14. [INTENTIONALLY OMITTED]
Section 15. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Bank (other than taxes based upon
the Bank's gross or net income), including any recording, mortgage,
documentary or intangibles taxes in connection with the Loan Documents, or
other taxes payable on or with respect to the transactions contemplated by
this Agreement, including any such taxes payable by the Bank after the date
hereof (the Borrower hereby agreeing to indemnify the Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the counsel
to the Bank incurred in connection with the preparation, execution and
delivery of the Loan Documents and the initial closing hereunder; provided,
<PAGE>
however, that such fees payable by the Borrower pursuant to this (c) shall not
exceed $5,000.00 (provided that such amount shall not include fees and
expenses incurred after the date of this Agreement), (d) the reasonable fees,
expenses and disbursements of the counsel to the Bank and any local counsel to
the Bank incurred in connection with the interpretation of the Loan Documents
and other instruments mentioned herein (excluding, however, the preparation of
agreements evidencing participations granted under Section 18.1), and
amendments, modifications, approvals, consents or waivers hereto or hereunder
(provided that the Bank shall notify the Borrower on or about the time such
costs are incurred that such costs are being or are to be incurred), (e) the
reasonable fees, expenses and disbursements of the Bank incurred by the Bank
in connection with the preparation or interpretation of the Loan Documents and
other instruments mentioned herein, (f) all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and costs, which attorneys may be
employees of the Bank and the fees and costs of appraisers, engineers,
investment bankers or other experts retained by the Bank) incurred by the Bank
in connection with (i) the enforcement of or preservation of rights under any
of the Loan Documents against the Borrower or the Guarantor or the
administration thereof after the occurrence of a Default or Event of Default
and (ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to the Bank's relationship with the Borrower or
the Guarantor. The covenants of this Section 15 shall survive payment or
satisfaction of payment of amounts owing with respect to the Note.
Section 16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Bank and each
director, officer, employee, Bank and Person who controls the Bank from and
against any and all claims, actions and suits, whether groundless or
otherwise, and from and against any and all liabilities, losses, damages and
expenses of every nature and character arising out of or relating to this
Agreement or any of the other Loan Documents or the transactions contemplated
hereby and thereby including, without limitation, (a) any leasing fees and any
brokerage, finders or similar fees asserted against any Person indemnified
under this Section 16 based upon any agreement, arrangement or action made or
taken, or alleged to have been made or taken, by the Borrower or any of its
Subsidiaries or the Guarantor, (b) any actual or proposed use by the Borrower
of the proceeds of any of the Loan (c) any actual or alleged infringement of
any patent, copyright, trademark, service mark or similar right of the
Borrower or any of its Subsidiaries or the Guarantor or (d) the Borrower and
the Guarantor entering into or performing this Agreement or any of the other
Loan Documents; provided, however, that the Borrower shall not be obligated
under this Section 16 to indemnify any Person for liabilities arising from
such Person's own gross negligence or willful misconduct. In litigation, or
the preparation therefor, the Bank shall be entitled to select a single law
firm as their own counsel and, in addition to the foregoing indemnity, the
Borrower agrees to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of the Borrower under
this Section 16 are unenforceable for any reason, the Borrower hereby agrees
to make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law. The provisions of this
Section 16 shall survive the repayment of the Loan and the termination of the
obligations of the Bank hereunder.
<PAGE>
Section 17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Note, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries or
the Guarantor pursuant hereto or thereto shall be deemed to have been relied
upon by the Bank, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Bank of the Loan, as
herein contemplated, and shall continue in full force and effect so long as
any amount due under this Agreement or the Note or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any Loan.
The indemnification obligations of the Borrower provided herein and the other
Loan Documents shall survive the full repayment of amounts due and the
termination of the obligations of the Bank hereunder and thereunder to the
extent provided herein and therein. All statements contained in any
certificate or other paper delivered to the Bank at any time by or on behalf
of the Borrower or any of its Subsidiaries or the Guarantor pursuant hereto or
in connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary or the
Guarantor hereunder.
Section 18. PARTICIPATIONS.
Section 18.1. Participations. The Bank may sell participations to one
or more banks or other entities in all or a portion of the Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that
(a) any such sale or participation shall not affect the rights and duties of
the Bank hereunder to the Borrower, (b) such sale and participation shall not
entitle such participant to any rights or privileges under this Agreement or
the Loan Documents (including, without limitation, the right to approve
waivers, amendments or modifications), (c) such participant shall have no
direct rights against the Borrower or the Guarantor except the rights granted
to the Bank pursuant to Section 13, (d) such sale is effected in accordance
with all applicable laws, and (e) such participant shall not be a Person
controlling, controlled by or under common control with, or which is not
otherwise free from influence or control by, the Borrower or the Guarantor.
Section 18.2. Pledge by Bank. The Bank may at any time pledge all or
any portion of its interest and rights under this Agreement (including all or
any portion of its Note) to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or the enforcement thereof shall release the Bank from its obligations
hereunder or under any of the other Loan Documents.
Section 18.3. No Assignment by Borrower. The Borrower shall not assign
or transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of the Bank.
Section 18.4. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices the Bank may
disclose information obtained by the Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.
<PAGE>
Section 19. NOTICES.
Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this Section 19 referred to
as "Notice"), but specifically excluding to the maximum extent permitted by
law any notices of the institution or commencement of foreclosure proceedings,
must be in writing and shall be deemed to have been properly given or served
by personal delivery or by sending same by overnight courier or by depositing
same in the United States Mail, postpaid and registered or certified, return
receipt requested, or as expressly permitted herein, by telegraph, telecopy,
telefax or telex, and addressed as follows:
If to the Bank or FNBB:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
With a copy to:
The First National Bank of Boston
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Jeffrey L. Warwick
Telecopier No.: 770/390-8434
If to the Borrower:
Storage Trust Properties, L.P.
2407 Rangeline
Columbia, Missouri 65202
Attn: Stephen M. Dulle
Telecopier No.: (314) 442-5554
Each Notice shall be effective upon being personally delivered or upon being
sent by overnight courier or upon being deposited in the United States Mail as
aforesaid. The time period in which a response to such Notice must be given
or any action taken with respect thereto (if any), however, shall commence to
run from the date of receipt if personally delivered or sent by overnight
courier, or if so deposited in the United States Mail, the earlier of three
(3) Business Days following such deposit or the date of receipt as disclosed
on the return receipt. Rejection or other refusal to accept or the inability
to deliver because of changed address for which no notice was given shall be
deemed to be receipt of the Notice sent. By giving at least fifteen (15) days
prior Notice thereof, the Borrower or the Bank shall have the right from time
to time and at any time during the term of this Agreement to change their
respective addresses and each shall have the right to specify as its address
any other address within the United States of America.
Section 20. RELATIONSHIP.
The relationship between the Bank and the Borrower is solely that of a
<PAGE>
lender and borrower, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than lender and
borrower.
Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT
FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY
BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL
COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER
BY MAIL AT THE ADDRESS SPECIFIED IN Section 19. THE BORROWER HEREBY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT
OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 22. HEADINGS.
The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
Section 23. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
so executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
Section 24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 27.
Section 25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.
EACH OF THE BORROWER AND THE BANK HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, THE
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A)
CERTIFIES THAT NO REPRESENTATIVE, BANK OR ATTORNEY OF THE AGENT HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF
<PAGE>
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE
BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVER AND
CERTIFICATIONS CONTAINED IN THIS Section 25.
Section 26. DEALINGS WITH THE BORROWER.
The Bank and its affiliates may accept deposits from, extend credit to
and generally engage in any kind of banking, trust or other business with the
Borrower, its Subsidiaries, the Guarantor or any of their affiliates
regardless of the capacity of the Bank hereunder.
Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower of any terms
of this Agreement or such other instrument or the continuance of any Default
or Event of Default may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with, the
written consent of the Bank. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Bank in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon the Borrower shall entitle the Borrower
to other or further notice or demand in similar or other circumstances.
Section 28. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
Section 29. NO UNWRITTEN AGREEMENTS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Section 30. TIME OF THE ESSENCE.
Time is of the essence with respect to each and every covenant,
agreement and obligation of the Borrower under this Agreement and the other
Loan Documents.
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
a ed instrument as of the date first set forth above.
STORAGE TRUST PROPERTIES, L.P.,
a Delaware limited partnership, by
its sole general partner
By: Storage Trust Realty, a
Maryland real estate investment
trust
By: Stephen M. Dulle
Name: Stephen M. Dulle
Title:Chief Financial
Officer
[]
THE FIRST NATIONAL BANK OF BOSTON
By: Jeffrey L. Warwick
Name: Jeffrey L. Warwick
Title: Vice President
<PAGE>
EXHIBIT A
FORM OF NOTE
$17,000,000.00 May __, 1996
FOR VALUE RECEIVED, the undersigned STORAGE TRUST PROPERTIES, L.P., a
Delaware limited partnership, hereby promises to pay to THE FIRST NATIONAL
BANK OF BOSTON, or order, in accordance with the terms of that certain Loan
Agreement dated May ___, 1996 (the "Loan Agreement"), as from time to time in
effect, between the undersigned and The First National Bank of Boston, to the
extent not sooner paid, on or before the Maturity Date the principal sum of
SEVENTEEN MILLION and NO/100 DOLLARS ($17,000,000.00), or such amount as may
be advanced by the payee hereof under the Loan Agreement as a Loan with daily
interest from the date hereof, computed as provided in the Loan Agreement, on
the principal amount hereof from time to time unpaid, at a rate per annum on
each portion of the principal amount which shall at all times be equal to the
rate of interest applicable to such portion in accordance with the Loan
Agreement, and with interest on overdue principal and, to the extent permitted
by applicable law, on overdue installments of interest and late charges at the
rates provided in the Loan Agreement. Interest shall be payable on the dates
specified in the Loan Agreement, except that all accrued interest shall be
paid at the stated or accelerated maturity hereof or upon the prepayment in
full hereof. Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Loan Agreement.
Payments hereunder shall be made to The First National Bank of Boston,
100 Federal Street, Boston, Massachusetts 02110.
This Note is entitled to the benefits and subject to the provisions of
the Loan Agreement. The principal of this Note may be due and payable in
whole or in part prior to the maturity date stated above and is subject to
mandatory prepayment in the amounts and under the circumstances set forth in
the Loan Agreement, and may be prepaid in whole or from time to time in part,
all as set forth in the Loan Agreement.
Notwithstanding anything in this Note to the contrary, all agreements
between the Borrower and the Bank, whether now existing or hereafter arising
and whether written or oral, are hereby limited so that in no contingency,
whether by reason of acceleration of the maturity of any of the Obligations or
otherwise, shall the interest contracted for, charged or received by the Bank
exceed the maximum amount permissible under applicable law. If, from any
circumstance whatsoever, interest would otherwise be payable to the Bank in
excess of the maximum lawful amount, the interest payable to the Bank shall be
reduced to the maximum amount permitted under applicable law; and if from any
circumstance the Bank shall ever receive anything of value deemed interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive interest shall be applied to the reduction of the principal balance
of the Obligations and to the payment of interest or, if such excessive
interest exceeds the unpaid balance of principal of the Obligations, such
excess shall be refunded to the Borrower. All interest paid or agreed to be
paid to the Bank shall, to the extent permitted by applicable law, be
<PAGE>
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal of the Obligations (including the period of
any renewal or extension thereof) so that the interest thereon for such full
period shall not exceed the maximum amount permitted by applicable law. This
paragraph shall control all agreements between the Borrower and the Bank.
In case an Event of Default shall occur, the entire principal amount of
this Note may become or be declared due and payable in the manner and with the
effect provided in said Loan Agreement.
This Note shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts (without giving effect to the conflict of
laws rules of any jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Loan Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without
notice.
IN WITNESS WHEREOF the undersigned has executed this Note under as
of the day and year first above written.
STORAGE TRUST PROPERTIES, L.P.,
a Delaware limited partnership, by its sole
general partner
By: Storage Trust Realty, a Maryland real estate
investment trust
By: Stephen M. Dulle
Name: Stephen M. Dulle
Title: Chief Financial Officer
[SEAL]
<PAGE>
UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE
FOR AND IN CONSIDERATION OF the sum of Ten and No/100
Dollars ($10.00) and other good and valuable consideration paid
or delivered to the undersigned STORAGE TRUST REALTY, a Maryland
real estate investment trust (hereinafter referred to as
"Guarantor"), the receipt and sufficiency whereof are hereby
acknowledged by Guarantor, and for the purpose of seeking to
induce THE FIRST NATIONAL BANK OF BOSTON, a national banking
association (hereinafter referred to as "Lender"), to extend
credit or otherwise provide financial accommodations to STORAGE
TRUST PROPERTIES, L.P., a Delaware limited partnership
(hereinafter referred to as "Borrower"), which extension of
<PAGE>
credit and provision of financial accommodations will be to the
direct interest, advantage and benefit of Guarantor, Guarantor
does hereby absolutely, unconditionally and irrevocably guarantee
to Lender:
(a) the full and prompt payment when due, whether by
acceleration or otherwise, either before or after maturity
thereof, of that certain Note of even date herewith made by
Borrower to the order of Lender, in the principal face amount of
Seventeen Million and No/100 Dollars ($17,000,000.00)
(hereinafter referred to as the Note ) together with interest as
provided in the Note, together with any replacements,
supplements, renewals, modifications, consolidations,
restatements and extensions thereof; and
(b) the full and prompt payment and performance of all
obligations of Borrower to Lender under the terms of that certain
Loan Agreement dated of even date herewith (hereinafter referred
to as the Loan Agreement ) between Borrower and Lender, together
with any replacements, supplements, renewals, modifications,
consolidations, restatements and extensions thereof; and
(c) the full and prompt payment and performance of any and
all other obligations of Borrower to Lender under any other
agreements, documents or instruments now or hereafter evidencing,
securing or otherwise relating to the indebtedness evidenced by
the Note or the Loan Agreement (the Note, the Loan Agreement and
said other agreements, documents and instruments, are hereinafter
collectively referred to as the "Loan Documents" and individually
referred to as a "Loan Document"). All terms used herein and not
otherwise defined herein shall have the meanings set forth in the
Loan Agreement.
1. Agreement to Pay and Perform; Costs of Collection.
Guarantor does hereby agree that if the Note is not paid by
Borrower in accordance with its terms, or if any and all sums
which are now or may hereafter become due from Borrower to Lender
under the Loan Documents are not paid by Borrower in accordance
with their terms, or if any and all other obligations of Borrower
to Lender under the Note and the Loan Documents are not performed
by Borrower in accordance with their terms, Guarantor will
immediately make such payments and perform such obligations.
Guarantor further agrees to pay Lender on demand all reasonable
costs and expenses (including court costs and reasonable
attorneys' fees and disbursements) paid or incurred by Lender in
endeavoring to collect the indebtedness guaranteed hereby, to
enforce any of the other obligations of Borrower guaranteed
hereby, or any portion thereof, or to enforce this Guaranty, and
until paid to Lender, such sums shall bear interest at the
default rate set forth in the Loan Agreement unless collection
from Guarantor of interest at such rate would be contrary to
applicable law, in which event such sums shall bear interest at
the highest rate which may be collected from Guarantor under
applicable law.
<PAGE>
2. Reinstatement of Refunded Payments. If, for any
reason, any payment to Lender of any of the obligations
guaranteed hereunder is required to be refunded by Lender to
Borrower, or paid or turned over to any other person, including,
without limitation, by reason of the operation of bankruptcy,
reorganization, receivership or insolvency laws or similar laws
of general application relating to creditors' rights and remedies
now or hereafter enacted, Guarantor agrees to pay the amount so
required to be refunded, paid or turned over (the "Turnover
Payment"), the obligations of Guarantor shall not be treated as
having been discharged by the original payment to Lender giving
rise to the Turnover Payment, and this Guaranty shall be treated
as having remained in full force and effect for any such Turnover
Payment so made by Lender, as well as for any amounts not
theretofore paid to Lender on account of such obligations.
3. Rights of Lender to Deal with Collateral, Borrower and
Other Persons. Guarantor hereby consents and agrees that Lender
may at any time, and from time to time, without thereby releasing
Guarantor from any liability hereunder and without notice to or
further consent from Guarantor, either with or without
consideration: release or surrender any lien or other security
of any kind or nature whatsoever held by it or by any person,
firm or corporation on its behalf or for its account, securing
any indebtedness or liability hereby guaranteed; substitute for
any collateral so held by it, other collateral of like kind, or
of any kind; modify the terms of the Note or the Loan Documents;
extend or renew the Note for any period; grant releases,
compromises and indulgences with respect to the Note or the Loan
Documents and to any persons or entities now or hereafter liable
thereunder or hereunder; release any other Guarantor, surety,
endorser or accommodation party of the Note or any other Loan
Documents; or take or fail to take any action of any type
whatsoever. No such action which Lender shall take or fail to
take in connection with the Note or the Loan Documents, or any of
them, or any security for the payment of the indebtedness of
Borrower to Lender or for the performance of any obligations or
undertakings of Borrower, nor any course of dealing with Borrower
or any other person, shall release Guarantor's obligations
hereunder, affect this Guaranty in any way or afford Guarantor
any recourse against Lender. The provisions of this Guaranty
shall extend and be applicable to all replacements, supplements,
renewals, amendments, extensions, consolidations, restatements
and modifications of the Note and the Loan Documents, and any and
all references herein to the Note and the Loan Documents shall be
deemed to include any such replacements, supplements, renewals,
extensions, amendments, consolidations, restatements or
modifications thereof.
4. No Contest with Lender; Subordination. So long as any
obligation hereby guaranteed remains unpaid or undischarged,
Guarantor will not, by paying any sum recoverable hereunder
(whether or not demanded by Lender) or by any means or on any
other ground, claim any set-off or counterclaim against Borrower
<PAGE>
in respect of any liability of Guarantor to Borrower or, in
proceedings under federal bankruptcy law or insolvency
proceedings of any nature, prove in competition with Lender in
respect of any payment hereunder or be entitled to have the
benefit of any counterclaim or proof of claim or dividend or
payment by or on behalf of Borrower or the benefit of any other
security for any obligation hereby guaranteed which, now or
hereafter, Lender may hold or in which it may have any share.
Guarantor hereby expressly waives any right of contribution from
or indemnity against Borrower, whether at law or in equity,
arising from any payments made by Guarantor pursuant to the terms
of this Guaranty, and Guarantor acknowledges that Guarantor has
no right whatsoever to proceed against Borrower for reimbursement
of any such payments. In connection with the foregoing,
Guarantor expressly waives any and all rights of subrogation to
Lender against Borrower, and Guarantor hereby waives any rights
to enforce any remedy which Lender may have against Borrower and
any rights to participate in any collateral for Borrower's
obligations under the Loan Documents. Guarantor hereby
subordinates any and all indebtedness of Borrower now or
hereafter owed to Guarantor to all indebtedness of Borrower to
Lender, and agrees with Lender that (a) Guarantor shall not
demand or accept any payment from Borrower on account of such
indebtedness, (b) Guarantor shall not claim any offset or other
reduction of Guarantor's obligations hereunder because of any
such indebtedness, and (c) Guarantor shall not take any action to
obtain any interest in any of the security described in and
encumbered by the Loan Documents because of any such
indebtedness; provided, however, that, if Lender so requests,
such indebtedness shall be collected, enforced and received by
Guarantor as trustee for Lender and be paid over to Lender on
account of the indebtedness of Borrower to Lender, but without
reducing or affecting in any manner the liability of Guarantor
under the other provisions of this Guaranty except to the extent
the principal amount of such outstanding indebtedness shall have
been reduced by such payment.
5. Waiver of Defenses. Guarantor hereby agrees that its
obligations hereunder shall not be affected or impaired by, and
hereby waives and agrees not to assert or take advantage of any
defense based on:
(a) any statute of limitations in any action hereunder
or for the collection of the Note or for the payment or
performance of any obligation hereby guaranteed;
(b) the incapacity or lack of authority of Borrower or
any other person or entity, or the failure of Lender to file or
enforce a claim against the estate (either in administration,
bankruptcy or in any other proceeding) of Borrower or Guarantor
or any other person or entity;
(c) the dissolution or termination of existence of
Borrower or Guarantor;
<PAGE>
(d) the voluntary or involuntary liquidation, sale or
other disposition of all or substantially all of the assets of
Borrower;
(e) the voluntary or involuntary receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, assignment, composition, or readjustment of, or
any similar proceeding affecting, Borrower or Guarantor, or any
of Borrower's or Guarantor's properties or assets;
(f) the damage, destruction, condemnation, foreclosure
or surrender of all or any part of the real estate owned by the
Borrower or its Subsidiaries (the "Real Estate") or any of the
improvements located thereon;
(g) the failure of Lender to give notice of the
existence, creation or incurring of any new or additional
indebtedness or obligation or of any action or nonaction on the
part of any other person whomsoever in connection with any
obligation hereby guaranteed;
(h) any failure or delay of Lender to commence an
action against Borrower, to assert or enforce any remedies
against Borrower under the Note or the Loan Documents, or to
realize upon any security;
(i) any failure of any duty on the part of Lender to
disclose to Guarantor any facts it may now or hereafter know
regarding Borrower, the Real Estate or any of the improvements
located thereon, whether such facts materially increase the risk
to Guarantor or not;
(j) failure to accept or give notice of acceptance of
this Guaranty by Lender;
(k) failure to make or give notice of presentment and
demand for payment of any of the indebtedness or performance of
any of the obligations hereby guaranteed;
(l) failure to make or give protest and notice of
dishonor or of default to Guarantor or to any other party with
respect to the indebtedness or performance of obligations hereby
guaranteed;
(m) except as otherwise specifically provided in this
Guaranty, any and all other notices whatsoever to which Guarantor
might otherwise be entitled;
(n) any lack of diligence by Lender in collection,
protection or realization upon any collateral securing the
payment of the indebtedness or performance of obligations hereby
guaranteed;
(o) the invalidity or unenforceability of the Note or
<PAGE>
any of the Loan Documents;
(p) the compromise, settlement, release or termination
of any or all of the obligations of Borrower under the Note or
the Loan Documents;
(q) any transfer by Borrower of all or any part of the
security encumbered by the Loan Documents;
(r) the failure of Lender to perfect any security or
to extend or renew the perfection of any security; or
(s) to the fullest extent permitted by law, any other
legal, equitable or surety defenses whatsoever to which Guarantor
might otherwise be entitled (other than the defense of payment),
it being the intention that the obligations of Guarantor
hereunder are absolute, unconditional and irrevocable.
6. Guaranty of Payment and Performance and Not of
Collection. This is a Guaranty of payment and performance and
not of collection. The liability of Guarantor under this
Guaranty shall be primary, direct and immediate and not
conditional or contingent upon the pursuit of any remedies
against Borrower or any other person, nor against securities or
liens available to Lender, its successors, successors in title,
endorsees or assigns. Guarantor hereby waives any right to
require that an action be brought against Borrower or any other
person or to require that resort be had to any security or to any
balance of any deposit account or credit on the books of Lender
in favor of Borrower or any other person.
7. Rights and Remedies of Lender. In the event of a
default under the Note or the Loan Documents, or any of them,
Lender shall have the right to enforce its rights, powers and
remedies thereunder or hereunder or under any other agreement,
document or instrument now or hereafter evidencing, securing or
otherwise relating to the indebtedness evidenced by the Note or
secured by the Loan Documents, in any order, and all rights,
powers and remedies available to Lender in such event shall be
nonexclusive and cumulative of all other rights, powers and
remedies provided thereunder or hereunder or by law or in equity.
Accordingly, Guarantor hereby authorizes and empowers Lender upon
the occurrence of any event of default under the Note or the Loan
Documents, at its sole discretion, and without notice to
Guarantor, to exercise any right or remedy which Lender may have,
including, but not limited to, judicial foreclosure, exercise of
rights of power of sale, acceptance of a deed or assignment in
lieu of foreclosure, appointment of a receiver to collect rents
and profits, exercise of remedies against personal property, or
enforcement of any assignment of leases, as to any security,
whether real, personal or intangible. At any public or private
sale of any security or collateral for any indebtedness or any
part thereof guaranteed hereby, whether by foreclosure or
otherwise, Lender may, in its discretion, purchase all or any
<PAGE>
part of such security or collateral so sold or offered for sale
for its own account and may apply against the amount bid therefor
all or any part of the balance due it pursuant to the terms of
the Note or any other Loan Document without prejudice to Lender's
remedies hereunder against Guarantor for deficiencies. If the
indebtedness guaranteed hereby is partially paid by reason of the
election of Lender to pursue any of the remedies available to
Lender, or if such indebtedness is otherwise partially paid, this
Guaranty shall nevertheless remain in full force and effect, and
Guarantor shall remain liable for the entire balance of the
indebtedness guaranteed hereby even though any rights which
Guarantor may have against Borrower may be destroyed or
diminished by the exercise of any such remedy.
8. Application of Payments. Guarantor hereby authorizes
Lender, without notice to Guarantor, to apply all payments and
credits received from Borrower or from Guarantor or realized from
any security in such manner and in such priority as Lender in its
sole judgment shall see fit to the indebtedness, obligation and
undertakings which are the subject of this Guaranty.
9. Business Failure, Bankruptcy or Insolvency. In the
event of the business failure of Guarantor or if there shall be
pending any bankruptcy or insolvency case or proceeding with
respect to Guarantor under federal bankruptcy law or any other
applicable law or in connection with the insolvency of Guarantor,
or if a liquidator, receiver, or trustee shall have been
appointed for Guarantor or Guarantor's properties or assets,
Lender may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of Lender allowed in any proceedings relative to
Guarantor, or any of Guarantor's properties or assets, and,
irrespective of whether the indebtedness or other obligations of
Borrower guaranteed hereby shall then be due and payable, by
declaration or otherwise, Lender shall be entitled and empowered
to file and prove a claim for the whole amount of any sums or
sums owing with respect to the indebtedness or other obligations
of Borrower guaranteed hereby, and to collect and receive any
moneys or other property payable or deliverable on any such
claim. Guarantor covenants and agrees that upon the commencement
of a voluntary or involuntary bankruptcy proceeding by or against
Borrower, Guarantor shall not seek a supplemental stay or
otherwise pursuant to 11 U.S.C. Section 105 or any other provision of
the Bankruptcy Reform Act of 1978, as amended, or any other
debtor relief law (whether statutory, common law, case law, or
otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, which may be or become applicable, to stay, interdict,
condition, reduce or inhibit the ability of Lender to enforce any
rights of Lender against Guarantor by virtue of this Guaranty or
otherwise.
10. Financial Statements and Other Information. Guarantor
hereby represents and warrants to Lender that all financial
statements of Guarantor heretofore delivered by Guarantor to
<PAGE>
Lender are true and correct in all material respects, have been
prepared in accordance with generally accepted accounting
principles consistently applied, and fairly present the financial
condition of Guarantor as at the close of business on the date
thereof and the results of operations for the period then ended;
that no material adverse change has occurred in the assets,
liabilities, financial condition or business of Guarantor as
shown or reflected therein since the date thereof; and that
Guarantor has no liabilities or known contingent liabilities
involving material amounts which are not reflected in such
financial statements or referred to in the notes thereto other
than Guarantor's obligations under this Guaranty. Guarantor
hereby agrees that until all indebtedness guaranteed hereby has
been completely repaid, all obligations and undertakings of
Borrower under, by reason of, or pursuant to the Note and the
Loan Documents have been completely performed and Lender has no
further obligation to make Loans to Borrower pursuant to the Loan
Agreement, Guarantor will deliver to Lender:
(a) as soon as practicable and in any event within 90
days after the end of each fiscal year of Guarantor, the audited
consolidated balance sheet of Guarantor and its Subsidiaries as
of the end of such year, and the related audited consolidated
statement of operations and statement of cash flows for such
year, each setting forth in comparative form the figures for the
previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with generally accepted accounting
principles, and accompanied by an auditor's report prepared
without qualification by Ernst & Young or by another "Big Six"
accounting firm, the Form 10-K filed with the SEC (unless the SEC
has approved an extension, in which event the Guarantor will
deliver to each Lender a copy of the Form 10-K simultaneously
with delivery to the SEC). At any time that the Lender has
reasonable grounds to request the same, the Lender may require
that such report be accompanied by a written statement from such
accountants to the effect that they have read a copy of this
Guaranty and the Loan Agreement, and that, in making the
examination necessary to said certification, they have obtained
no knowledge of any Default or Event of Default under this
Guaranty, or, if such accountants shall have obtained knowledge
of any then existing Default or Event of Default they shall
disclose in such statement any such Default or Event of Default;
(b) as soon as practicable and in any event within 60
days after the end of each of the first three fiscal quarters of
Guarantor, copies of the unaudited consolidated balance sheet of
Guarantor and its Subsidiaries as of the end of such quarter, and
the related unaudited consolidated statement of operations and
statement of cash flows for the portion of Guarantor's fiscal
year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles (which
may be provided by inclusion in the Form 10-Q of the Guarantor
for such period provided pursuant to subsection (c) below),
together with a certification by the principal financial or
<PAGE>
accounting officer of Guarantor that the information contained in
such financial statements fairly presents the financial position
of Guarantor and its Subsidiaries on the date thereof (subject to
year end adjustment);
(c) contemporaneously with the delivery of the
financial statements referred to in clause (a) above, a statement
of all contingent liabilities of Guarantor which are not
reflected in such financial statements or referred to in the
notes thereto (including, without limitation, all guarantees,
endorsements and other contingent obligations in respect of
indebtedness of others, and obligations to reimburse the issuer
in respect of any letters of credit), and a statement of
projected cash flows of Guarantor for the current fiscal year,
all in reasonable detail and certified by the principal financial
or accounting officer of Guarantor;
(d) contemporaneously with the filing or mailing
thereof, copies of all material of a financial nature filed with
the SEC or sent to the shareholders of Guarantor;
(e) as soon as practicable, but in any event not later
than 60 days after the end of each fiscal quarter of the
Guarantor (including the fourth fiscal quarter in each year),
copies of Form 10-Q filed with the SEC (unless the SEC has
approved an extension in which event the Guarantor will deliver
such copies of the Form 10-Q to each of Lender simultaneously
with delivery to the SEC);
(f) promptly after they are filed with the Internal
Revenue Service, copies of all annual federal income tax returns
and amendments thereto of Guarantor;
(g) not later than 60 days after the end of each
fiscal quarter of Guarantor (including the fourth fiscal quarter
in each year), a statement, certified as true and correct by the
principal financial or accounting officer of Guarantor, of all
Indebtedness of Guarantor as of the end of such fiscal quarter,
which statement shall include the original principal amount of
such Indebtedness and the current amount outstanding, the holder
thereof, the maturity date and any extension options, the
interest rate, the collateral provided for such Indebtedness and
whether such Indebtedness is recourse or non-recourse;
(h) concurrently with the delivery of the financial
statements described in subsections (b) and (e) above, a
certificate signed by the President or Chief Financial Officer of
Guarantor to the effect that, having read this Guaranty, and that
based upon an examination which they deem sufficient to enable
them to make an informed statement, there does not exist any
Default or Event of Default, or if such Default or Event of
Default has occurred, specifying the facts with respect thereto;
(i) promptly upon becoming aware thereof, written
<PAGE>
notice from Guarantor of any event or condition which might have
a material adverse effect on the business, operations, assets,
condition (financial or otherwise) or prospects of Guarantor or
the ability of Guarantor to perform under this Guaranty
(including but not limited to, litigation commenced or threatened
in writing against Guarantor, judgments rendered against
Guarantor, liens filed against any property of Guarantor,
defaults claimed under indebtedness for borrowed money for which
Guarantor is primarily or secondarily liable, or bankruptcy,
insolvency or trustee or receivership proceedings commenced
against Guarantor), such notice to specify the nature and the
period of existence of such event or condition, the anticipated
effect thereof, and what action Guarantor is taking or proposes
to take with respect thereto; and
(j) with reasonable promptness, such other information
respecting the business, operations, assets, liabilities and
financial condition of Guarantor as Lender may from time to time
reasonably request.
Notwithstanding anything herein to the contrary, Guarantor shall
not be required to deliver any statements or reports described in
this Paragraph 10 to the extent the same are delivered to the
Lender by the Borrower as and when required by this Guaranty.
Guarantor will permit any officer designated by Lender, at
Guarantor's expense, to visit and inspect any of the properties
of Guarantor, to examine the records and books of account of
Guarantor (and to make copies thereof and extracts therefrom) and
to discuss the affairs, finances and accounts of Guarantor with,
and to be advised as to the same by, its officers, all at such
reasonable times and intervals Lender may reasonably request.
11. Covenants of Guarantor. Guarantor hereby covenants and
agrees with Lender that until all indebtedness guaranteed hereby
has been completely repaid and all obligations and undertakings
of Borrower under, by reason of, or pursuant to the Note and the
Loan Documents have been completely performed:
(a) Guarantor will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate or legal
existence, material rights and franchises, as applicable, to
effect and maintain its foreign qualifications, licensing,
domestication or authorization, and to comply with all applicable
laws and regulations (including, without limitation,
environmental laws);
(b) Guarantor will have as its sole business purpose
being the sole general partner of the Borrower and will own no
assets other than its general partnership interest in the
Borrower, Short-term Investments and its ownership of the stock
of the corporate general partners of Subsidiaries of the
Borrower;
<PAGE>
(c) Guarantor will, and will cause each of its
Subsidiaries to, duly pay and discharge, before the same shall
become in arrears, all taxes, assessments and other governmental
charges imposed upon it and its properties, sales or activities,
or upon the income or profits therefrom, as well as claims for
labor, material, or supplies which if unpaid might become a lien
or charge on any of its property; provided that any such tax,
assessment, charge or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by
appropriate proceedings and if Guarantor or such Subsidiary shall
have set aside on its books adequate reserves with respect
thereto; and provided further that Guarantor or such Subsidiary
shall pay all such taxes, assessments, charges and claims
forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor;
(d) Guarantor will, and will cause each of its
Subsidiaries to, maintain and keep the properties used or deemed
by it to be useful in its business in first-class repair, working
order and condition, and make or cause to be made all necessary
and proper repairs thereto and replacements thereof;
(e) Guarantor will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable
insurers, insurance with respect to its properties and business
against such casualties and contingencies and in such types and
amounts as shall be in accordance with sound business practices
for companies in similar business similarly situated;
(f) Guarantor will keep, and will cause each of its
Subsidiaries to keep, complete, proper and accurate records and
books of account in which full, true and correct entries will be
made in accordance with generally accepted accounting principles
consistent with the preparation of the financial statements
heretofore delivered to Lender and will maintain adequate
accounts and reserves for all taxes (including income taxes), all
depreciation, depletion, and amortization of its properties and
the properties of its Subsidiaries, all other contingencies, and
all other proper reserves;
(g) Guarantor will not create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(i) Indebtedness to Lender arising under any of the
Note, the Loan Documents and this Guaranty;
(ii) current liabilities of Guarantor incurred in
the ordinary course of business but not incurred through the
borrowing of money or the obtaining of credit except for
credit on an open account basis customarily extended and in
fact extended in connection with normal purchases of goods
and services;
<PAGE>
(iii) Indebtedness in respect of taxes, assessments
and governmental charges to the extent that payment therefor
shall not at the time be required to be made in accordance
with the provisions of subparagraph (c) of this paragraph;
(iv) Indebtedness in respect of judgments or awards
that have been in force for less than the applicable period
for taking an appeal so long as execution is not levied
thereunder or in respect of which Guarantor shall at the
time in good faith be prosecuting an appeal or proceedings
for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review;
(v) endorsements for collection, deposit or
negotiation and warranties of products or services, in each
case incurred in the ordinary course of business; and
(vi) Indebtedness arising under the Credit Agreement
or the other "Loan Documents" referred to in the Credit
Agreement.
(h) Guarantor will not, and will not permit any of its
Subsidiaries to, create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest of any kind upon
any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom;
or transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in
priority of payment of its general creditors; or acquire, or
agree to have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money
security agreement, devise or arrangement; or suffer to exist for
a period of more than 30 days after the same shall have been
incurred any Indebtedness or claim or demand against it that if
unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general
creditors; or sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse, or incur or maintain any
obligation to any holder of Indebtedness of Guarantor or such
Subsidiary which prohibits the creation or maintenance of any
lien securing the Obligations; provided that Guarantor and any
Subsidiary of Guarantor may create or incur or suffer to be
created or incurred or to exist:
(i) liens in favor of Guarantor on all or part of
the assets of Subsidiaries of Guarantor securing
Indebtedness owing by Subsidiaries of Guarantor to
Guarantor;
(ii) liens to secure taxes, assessments and other
governmental charges or claims for labor, material or
<PAGE>
supplies in respect of obligations not overdue;
(iii) liens with respect of judgments or awards, the
Indebtedness with respect to which is permitted by
subparagraph (g)(iv) of this paragraph;
(iv) liens in favor of Lender;
(v) liens specifically permitted pursuant to the
Credit Agreement; and
(vi) liens in favor of the "Agent" and the "Banks"
pursuant to the Credit Agreement.
(i) Guarantor will not, and will not permit any of its
Subsidiaries to, become a party to any merger, consolidation or
other business combination, or agree to effect any asset
acquisition, stock acquisition or other acquisition, except
(A) the merger or consolidation or one or more of the
Subsidiaries of Guarantor with and into Guarantor, or (B) the
merger or consolidation of two or more Subsidiaries of Guarantor;
(j) Guarantor will not, and will not permit any of its
Subsidiaries to, become a party to or agree to or affect any
disposition of assets, other than distributions to its
shareholders as permitted in the Credit Agreement;
(k) Guarantor will not make or permit to be made, by
voluntary or involuntary means, any transfer or encumbrance of
its interest in Borrower, or any dilution of its interest in
Borrower;
(l) Guarantor shall contribute or otherwise downstream
to Borrower any cash or other assets received by Guarantor from
third parties;
(m) The Guarantor shall at all times comply with all
requirements of applicable laws and regulations necessary to
maintain REIT Status and shall operate its business as described
in the Prospectus and in compliance with the terms and conditions
of this Guaranty and the other Loan Documents;
(n) Guarantor will be self-directed and will not
retain or otherwise rely on any other Person for investment
advisory services;
(o) Guarantor will comply with and perform each and
every provision of the Unconditional Guaranty of Payment and
Performance delivered by Guarantor pursuant to the Credit
Agreement; and
<PAGE>
(p) Guarantor will cooperate with Lender and execute
such further instruments and documents as Lender shall reasonably
request to carry out to their satisfaction the transactions
contemplated by this Guaranty and the other Loan Documents.
12. Security and Rights of Set-off. Guarantor hereby
grants to Lender, as security for the full and prompt payment and
performance of Guarantor's obligations hereunder, a continuing
lien on and security interest in any and all securities or other
property belonging to Guarantor now or hereafter held by Lender
and in any and all deposits (general or specific, time or demand,
provisional or final, regardless of currency, maturity, or the
branch of Lender where the deposits are held) now or hereafter
held by Lender and other sums credited by or due from Lender to
Guarantor or subject to withdrawal by Guarantor; and regardless
of the adequacy of any collateral or other means of obtaining
repayment of such obligations, during the continuance of any
Event of Default under the Note or the Loan Documents, Lender may
at any time and without notice to Guarantor set-off and apply the
whole or any portion or portions of any or all such deposits and
other sums against amounts payable under this Guaranty, whether
or not any other person or persons could also withdraw money
therefrom. Any security now or hereafter held by or for
Guarantor and provided by Borrower, or by anyone on Borrower's
behalf, in respect of liabilities of Guarantor hereunder shall be
held in trust for Lender as security for the liabilities of
Guarantor hereunder.
13. Changes in Writing; No Revocation. This Guaranty may
not be changed orally, and no obligation of Guarantor can be
released or waived by Lender except by a writing signed by a duly
authorized officer of Lender. This Guaranty shall be irrevocable
by Guarantor until all indebtedness guaranteed hereby has been
completely repaid and all obligations and undertakings of
Borrower under, by reason of, or pursuant to the Note and the
Loan Documents have been completely performed.
14. Notices. All notices, demands or requests provided for
or permitted to be given pursuant to this Guaranty (hereinafter
in this paragraph referred to as "Notice") must be in writing and
shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing
the same in the United States mail, postpaid and registered or
certified, return receipt requested, at the addresses set forth
below. Each Notice shall be effective upon being delivered
personally or upon being sent by overnight courier or upon being
deposited in the United States Mail as aforesaid. The time
period in which a response to any such Notice must be given or
any action taken with respect thereto, however, shall commence to
run from the date of receipt if personally delivered or sent by
overnight courier or, if so deposited in the United States Mail,
the earlier of three (3) Business Days following such deposit and
the date of receipt as disclosed on the return receipt.
Rejection or other refusal to accept or the inability to deliver
<PAGE>
because of changed address of which no Notice was given shall be
deemed to be receipt of the Notice sent. By giving at least
fifteen (15) days prior Notice thereof, Guarantor or Lender shall
have the right from time to time and at any time during the term
of this Guaranty to change their respective addresses and each
shall have the right to specify as its address any other address
within the United States of America. For the purposes of this
Guaranty:
The address of Lender is:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
with a copy to:
The First National Bank of Boston
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Jeffrey L. Warwick
The address of Guarantor is:
Storage Trust Realty
2407 Rangeline
Columbia, Missouri 65202
Attn: Steven M. Dulle
15. Governing Law. GUARANTOR ACKNOWLEDGES AND AGREES THAT
THIS GUARANTY AND THE OBLIGATIONS OF GUARANTOR HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED AND DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
16. CONSENT TO JURISDICTION; WAIVERS. GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS OVER ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY,
AND (B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY
STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, (II) TO OBJECT
TO JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS OR VENUE
IN ANY PARTICULAR FORUM WITHIN THE COMMONWEALTH OF MASSACHUSETTS,
AND (III) TO THE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER
THAN ACTUAL
DAMAGES. GUARANTOR AGREES THAT, IN ADDITION TO ANY METHODS OF
SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE
OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED
TO GUARANTOR AT THE ADDRESS SET FORTH IN PARAGRAPH 14 ABOVE, AND
SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME
<PAGE>
SHALL BE SO MAILED. NOTHING CONTAINED HEREIN, HOWEVER, SHALL
PREVENT LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR
EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST GUARANTOR
PERSONALLY, AND AGAINST ANY PROPERTY OF GUARANTOR, WITHIN ANY
OTHER STATE. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR
TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A
WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS SHALL GOVERN THE RIGHTS AND
OBLIGATIONS OF GUARANTOR AND LENDER HEREUNDER OR OF THE
SUBMISSION HEREIN MADE BY GUARANTOR TO PERSONAL JURISDICTION
WITHIN THE COMMONWEALTH OF MASSACHUSETTS. GUARANTOR HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT. GUARANTOR CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH LENDER WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THEIR FOREGOING WAIVERS AND
ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO ENTER INTO THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES
BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS PARAGRAPH 16. GUARANTOR ACKNOWLEDGES THAT IT HAS HAD AN
OPPORTUNITY TO REVIEW THIS PARAGRAPH 16 WITH ITS LEGAL COUNSEL
AND THAT GUARANTOR AGREES TO THE FOREGOING AS ITS FREE, KNOWING
AND VOLUNTARY ACT.
17. Successors and Assigns. The provisions of this
Guaranty shall be binding upon Guarantor and its heirs,
successors, successors in title, legal representatives, and
assigns, and shall inure to the benefit of Lender, its
successors, successors in title, legal representatives and
assigns.
18. Assignment by Lender. This Guaranty is assignable by
Lender in whole or in part in conjunction with any assignment of
the Note or portions thereof, and any assignment hereof or any
transfer or assignment of the Note or portions thereof by Lender
shall operate to vest in any such assignee the rights and powers,
in whole or in part, as appropriate, herein conferred upon and
granted to Lender.
19. Severability. If any term or provision of this
Guaranty shall be determined to be illegal or unenforceable, all
other terms and provisions hereof shall nevertheless remain
effective and shall be enforced to the fullest extent permitted
by law.
20. Disclosure. Guarantor agrees that in addition to
disclosures made in accordance with standard banking practices,
any Lender may disclose information obtained by such Lender
pursuant to this Guaranty to assignees or participants and
potential assignees or participants hereunder.
21. No Unwritten Agreements. THIS GUARANTY REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
<PAGE>
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
22. Time of the Essence. Time is of the essence with
respect to each and every covenant, agreement and obligation of
Guarantor under this Guaranty.
23. Ratification. Guarantor does hereby restate, reaffirm
and ratify each and every warranty and representation regarding
Guarantor or its Subsidiaries set forth in the Loan Agreement as
if the same were more fully set forth herein.
24. Limitation on Liability. NO OBLIGATION OR LIABILITY
WHATSOEVER OF THE GUARANTOR (WHETHER AS GUARANTOR OR AS GENERAL
PARTNER OF THE BORROWER) WHICH MAY ARISE AT ANY TIME UNDER THIS
GUARANTY OR ANY OBLIGATION OR LIABILITY WHICH MAY BE INCURRED BY
IT PURSUANT TO ANY OTHER LOAN DOCUMENT SHALL BE PERSONALLY
BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD
TO, THE PRIVATE PROPERTY OF ANY OF THE GUARANTOR'S SHAREHOLDERS,
TRUSTEES, OFFICERS OR EMPLOYEES, REGARDLESS OF WHETHER SUCH
OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR
OTHERWISE. NOTHING HEREIN SHALL DIMINISH OR IMPAIR THE RIGHTS OF
LENDER TO PURSUE ANY REMEDY AGAINST ANY ASSETS OF THE GUARANTOR.
[CONTINUED ON NEXT PAGE]
IN WITNESS WHEREOF, Guarantor has executed this Guaranty
under on the _____ day of May, 1996.
STORAGE TRUST REALTY,
a Maryland real estate
investment trust
By: Stephen M. Dulle
Name: Stephen M. Dulle
Title: Chief Financial Officer
[SEAL]
<PAGE>
Exhibit
No.
23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption Experts in the
Registration Statement (Form S-3, No. 333-1576) and related Prospectus and
Prospectus Supplement of Storage Trust Realty for the registration of common
shares and common share warrants with an aggregate initial price not to exceed
$75,000,000 and to the incorporation by reference therein, and in (i) the
Registration Statement (Form S-3) filed pursuant to Rule 462(b) under the
Securities Act of 1933 on June 6, 1996 relating to the Registration Statement
(Form S-3, No. 333-1576) and (ii) the Registration Statement (Form S-8,
No. 33-92764), of (1) our report dated January 24, 1996, except for Note 9,
as to which the date is March 5, 1996, with respect to the consolidated and
combined financial statements of Storage Trust Realty incorporated by
reference in its Annual Report (Form 10-K) for the year ended
December 31, 1995 and the related financial statement schedule included
therein filed with the Securities and Exchange Commission and (2) our report
dated May 31, 1996, with respect to the Historical Summaries of Combined
Gross Revenue and Direct Operating Expenses included in the Current Report
on Form 8-K of Storage Trust Realty dated May 24, 1996.
Ernst & Young LLP
Chicago, Illinois
June 6, 1996
<PAGE>
Exhibit
No.
23.2
INDEPENDENT AUDITORS CONSENT
The Board of Trustees
Storage Trust Realty:
We consent to the incorporation by reference in the registration statement on
Form S-3 filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, on June 6, 1996 relating to the registration statement (No. 333-1576)
on Form S-3, in the registration statement (No. 33-92764) on Form S-8 and in
the registration statement (No. 333-1576) on Form S-3 of Storage Trust Realty
of our report dated May 31, 1996, with respect to the Historical Summary of
Combined Gross Revenue and Direct Operating Expenses of the Balcor/Colonial
Facilities for the year ended December 31, 1995, which report appears in the
Form 8-K of Storage Trust Realty dated May 24, 1996 as filed on June 7, 1996,
and to the reference to our firm under the heading Experts in the prospectus
supplement.
KPMG Peat Marwick LLP
Fort Worth, Texas
June 7, 1996
<PAGE>
