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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM---------------------- TO--------------
COMMISSION FILE NUMBER 1-13462
STORAGE TRUST REALTY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 43-1689825
STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION
2407 RANGELINE STREET 65202
COLUMBIA, MISSOURI (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (573) 499-4799
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
COMMON SHARES OF BENEFICIAL INTEREST, NEW YORK STOCK EXCHANGE
$.01 PAR VALUE (THE "COMMON SHARES")
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS
(OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO
FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
---- ----
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS
PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN,
AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE,
IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY
REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. X
----
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AS OF FEBRUARY 21, 1997, THE AGGREGATE MARKET VALUE OF THE
12,679,908 COMMON SHARES HELD BY NON-AFFILIATES OF THE REGISTRANT
WAS APPROXIMATELY $339 MILLION, BASED UPON THE CLOSING PRICE
($26.75) ON THE NEW YORK STOCK EXCHANGE COMPOSITE TAPE ON SUCH
DATE.
AS OF FEBRUARY 21, 1997, THERE WERE 12,884,352 COMMON SHARES
OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE REGISTRANT'S 1996 ANNUAL REPORT TO SHAREHOLDERS
ARE INCORPORATED BY REFERENCE INTO PARTS I AND II. PORTIONS OF
THE PROXY STATEMENT FOR THE REGISTRANT'S ANNUAL SHAREHOLDERS
MEETING TO BE HELD IN MAY 1997 ARE INCORPORATED BY REFERENCE INTO
PART III.
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TABLE OF CONTENTS
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Page
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PART I
Item 1. Business 1
Item 2. Properties 9
Item 3. Legal Proceedings 16
Item 4. Submission of Matters to a Vote of Security Holders 16
PART II
Item 5. Market for Registrant's Common Equity and
Related Shareholder Matters 17
Item 6. Selected Financial Data 17
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 17
Item 8. Financial Statements and Supplementary Data 17
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 17
PART III
Item 10. Directors and Executive Officers of the Registrant 18
Item 11. Executive Compensation 18
Item 12. Security Ownership of Certain Beneficial Owners and Management 18
Item 13. Certain Relationships and Related Transactions 18
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 19
SIGNATURES 23
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PART I
ITEM 1. BUSINESS
THE COMPANY
GENERAL
Storage Trust Realty (the "Company") was formed as a Maryland real estate
investment trust ("REIT") on July 12, 1994 to continue the self-storage
business of Burnam Holding Companies Co. ("BHC") and certain of its
affiliates (collectively, the "Predecessor Company") in owning, operating
and managing self-storage facilities. The Company and its subsidiaries
commenced operations effective with the completion of the Company's initial
public offering (the "IPO") on November 16, 1994. As of December 31, 1996,
the Company owned 165 self-storage facilities in 18 states and was a partner
in two joint ventures that owned one operating self-storage facility and one
self-storage facility under development.
Substantially all of the Company's assets and interest in self-storage
facilities are held by, and all of its operations are conducted through,
Storage Trust Properties, L.P. (the "Operating Partnership"). The Company
is the sole general partner of, and thereby controls the operations of, the
Operating Partnership, holding a 93.61% ownership interest therein as of
December 31, 1996. The remaining ownership interests in the Operating
Partnership (the "Units") are held by certain owners of the Predecessor
Company, including BHC, and certain former owners of assets acquired by the
Operating Partnership subsequent to the IPO.
Storage Realty Management Co. (the "Management Company") manages
self-storage facilities owned by unrelated third parties and conducts other
business, such as the sale of locks, the processing of customer property
insurance and the rental of trucks, at various facilities. Through its
ownership of the preferred stock of the Management Company, the Operating
Partnership receives substantially all of the economic benefits of the
business carried on by the Management Company.
The Company derives its revenue principally from the Operating Partnership,
which is generated primarily by (a) the Operating Partnership's rental of
self-storage units at its facilities, (b) revenues (for financial reporting
purposes) of the Management Company, and (c) earnings from joint ventures.
The Company believes that it is the fifth largest operator of self-storage
facilities in the United States, based on the number of facilities operated.
As of December 31, 1996, the Company (through its interest in the Operating
Partnership) owned 165 self-storage facilities in 18 states in the Southern,
Mid-Atlantic, Midwest and Western regions of the United States, including
South Carolina (22), Texas (22), Missouri (20), Florida (18), Tennessee
(18), Georgia (17), North Carolina (11), Colorado (8), Kansas (6), Illinois
(5), Kentucky (5), Alabama (4), Mississippi (3), Wisconsin (2), Oklahoma
(1), Louisiana (1), Ohio (1) and Virginia (1). The Operating Partnership,
through joint ventures, has a 15% ownership interest in an operating
self-storage facility in Louisiana and a 25% ownership interest in a
self-storage facility under development in Missouri. Additionally, the
Management Company manages ten facilities for unaffiliated third parties. The
facilities which the Operating Partnership owns or in which the Operating
Partnership owns a joint venture interest, together with the facilities
managed for unrelated third parties by the Management Company are referred
to herein as the "Facilities".
In 1996, the Company acquired 46 self-storage facilities for a combined
purchase price of $116.6 million. The Company acquired facilities in
Florida (7), Texas (5), Kansas (5), Missouri (5), Tennessee (4), Kentucky
(4), Georgia (3), Colorado (3), South Carolina (2), Wisconsin (2), Alabama
(1), Illinois (1), Oklahoma (1), North Carolina (1), Virginia (1) and Ohio
(1). In 1996, the Company exchanged two of its facilities in Oklahoma with
a publicly-held self-storage REIT for its facility in Florida (included in
the acquisition totals above).
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The Company is self-administered and self-managed. The Company has elected
and expects to continue to qualify as a real estate investment trust for
federal income tax purposes.
BUSINESS OBJECTIVES AND OPERATING STRATEGIES
Business Objectives
The Company's primary objectives are to increase cash available for
distribution and enhance shareholder value. These objectives are
accomplished by (a) managing the Facilities and expanding them where
economically feasible, (b) acquiring existing self-storage facilities, (c)
converting other commercial real estate into self-storage facilities, and
(d) developing new self-storage facilities. The Company's strategies for
accomplishing these objectives are:
Internal Growth Strategies
The Company's internal growth strategy is to increase cash flow at the
Facilities (and any additional facilities hereafter acquired) by (a)
aggressively increasing rents on a regular basis, (b) containing costs and
improving operating leverage, and (c) selectively expanding the Facilities,
which includes the addition of climate controlled space.
* Increasing Rents - Revenues are increased through the use of
sales and marketing programs that are customized for each
location and an aggressive leasing program. The Company
pursues an objective of being a price leader in its local
markets and will attempt to increase rents at all of the
Facilities throughout the year. The Company has a general
policy that, as occupancy of all same-size units at a
particular Facility nears 90%, it will consider increasing
rents applicable to these units. The Company plans to continue
this strategy at the Facilities and to implement it at
facilities that may be acquired or developed in the future.
* Containing Costs and Improving Operating Leverage - The Company
seeks to increase cash flow by containing facility operating
expenses and spreading corporate overhead expense over an
increasing number of facilities. The Company believes that new
facilities can be added to the portfolio with very little
additional overhead expense because of the Company's operating
procedures, decentralized regional managers and management
information systems. Through the use of area managers and
regional managers, the Company operates with only one level of
management between on-site managers and senior management.
* Expanding the Facilities - Many of the Facilities maintain
levels of occupancy that when combined with local demand may
make it economically feasible to expand existing storage space.
In 1996, the Company completed the expansion of four Facilities
that totaled 58,050 square feet. Additionally, in several of
the Company's markets, there is increasing demand for climate
controlled space which the Company currently rents for a
premium over non-climate controlled space. In 1996, the
Company completed climate-controlled conversions at six
Facilities that totaled 18,450 square feet. The Company is
exploring opportunities to add new climate controlled space or
convert existing space to climate controlled space at the
Facilities and other facilities that may be acquired in the
future.
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External Growth Strategies
The Company's external growth strategy focuses on (a) selectively acquiring
additional self-storage facilities, (b) converting other real estate
properties into self-storage facilities, and (c) developing new facilities.
The Company's management consists of experienced acquisition, development,
operations and finance personnel who, when evaluating potential
opportunities for acquisition, development and conversion, analyze
employment, population and income trends, proximity to major transportation
arteries, retail centers and commercial services, visibility and other
market data. However, certain potential financing techniques to support
acquisition, development or conversion, such as incurrence of debt or
issuance of additional equity securities, involve potential leveraging of
the Company or dilution to existing shareholders.
* Acquiring Existing Facilities - The Company intends to acquire
self-storage facilities that are (a) in the Company's
geographic regions of operations where the Company can achieve
greater market penetration and economies of scale or in
attractive new markets and in new geographic regions where the
Company can acquire sufficient facilities to achieve economies
of scale, (b) available at attractive prices or currently
underperforming and (c) capable of enhanced performance through
the application of the Company's management expertise. The
Company focuses on acquisitions of Facilities of sufficient
size to provide attractive operating efficiencies. The Company
believes attractive opportunities exist to acquire self-storage
facilities because of the fragmented ownership throughout the
industry and the shortage of skilled operators. By actively
targeting underperforming facilities or facilities where the
Company can apply its proven management techniques, the Company
believes that it will be able to enhance its yields by
maximizing cash flows at such properties. In addition, the
Company believes it has the ability to attract potential
sellers of self-storage properties by offering Units in
exchange for such properties, thus allowing the sellers to
defer taxes which would otherwise be payable upon a profitable
sale of property. In 1996, the consideration for ten of the
facilities acquired by the Company included 406,759 Units
valued at $8,743,000.
* Converting Other Real Estate into Self-Storage Facilities - The
Company also has the ability to perform complex conversions of
other real estate buildings into self-storage facilities,
especially in metropolitan markets where new development or
acquisitions may not be economically feasible. The Company
believes that in certain markets the costs relating to
conversion or redevelopment can be substantially less than
those of acquisition or development. Additionally, the Company
believes that conversions can simultaneously provide rapid
in-fill of current regions of the Company's markets at
attractive capitalization rates. Previously completed conversion
projects include an automobile dealership in St. Louis, Missouri, and a
hotel in New Orleans, Louisiana, and a 68,000 square foot
former shoe warehouse in Atlanta, Georgia that commenced
operations in March 1996.
* Developing New Facilities - The Company intends to develop
self-storage facilities in certain of its markets where there
are favorable demographics and where suitable acquisitions may
not be available. New development may be done by the Company
or by joint ventures in which the Company has an interest. The
Company's management (through BHC) developed 36 self-storage
facilities between 1974 and the IPO. This development
capability will allow the Company the opportunity to grow when
acquisition opportunities are not plentiful or economically
attractive. In making its decision to develop a facility, the
Company obtains information such as census data for the
relevant market with respect to population density, income
levels and the relative proportions of rental, commercial and
residential space. In addition, the Company weighs the costs
of acquisition, as measured by recent market sales or bids,
versus the costs of development, including construction, land
acquisition and site preparation. The Company intends to
develop self-storage facilities where it believes there are
strong barriers to entry, such as a limited number of suitable
sites with the requisite zoning. The Company also intends to
focus on development of facilities of sufficient size to
provide attractive operating efficiencies.
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DISPOSITIONS AND EXCHANGES
Management constantly reviews the Facilities comprising the Company's
portfolio. The Company has no current intention to dispose of any of the
Facilities, but may do so in the future. Any decision to dispose of a
particular Facility would be based on a variety of factors, including, but
not limited to, (a) the strategic fit with the rest of the Company's
portfolio, (b) the potential to continue to increase cash flow and value in
the particular market, (c) the current market value and (d) alternate uses
of capital.
The Company may dispose of Facilities for cash or other consideration or may
exchange Facilities with other entities, including other publicly-held
self-storage REITs. During 1996, the Company exchanged two of its
facilities in Oklahoma City, Oklahoma and $1,400,000 in additional
consideration with Storage USA, Inc. for its facility in Jacksonville,
Florida.
CAPITAL STRATEGY
Mortgages and Notes Payable:
The Company intends to maintain a conservative capital strategy and
currently has a policy of limiting the amount of debt related to the
Facilities as reflected on the Company's consolidated balance sheet,
including debt of joint ventures in which the Company owns an interest,
("Company Debt") to less than 50% of the market value of the issued and
outstanding Common Shares (including interests exchangeable for Common
Shares) plus Company Debt ("Total Market Capitalization"). At December 31,
1996, the Company's Debt-to-Total Market Capitalization was 15.4%. The
Company does not believe that this limit will restrict its operations or
have a material adverse effect on its financial condition or results of
operations, although there can be no assurance that it will not do so in the
future. The Board of Trustees can change the policy at any time in light of
then current economic conditions and other relevant factors.
The expansion of existing facilities, the acquisition, conversion and
development of additional self-storage facilities, and the repayment of
indebtedness, including amounts outstanding on the revolving line of credit,
represent the Company's principal liquidity requirements.
The Company expects to meet its short-term liquidity requirements by using
(a) net cash provided by operating activities, (b) any portion of net cash
flow not currently distributed, (c) borrowings under the revolving line of
credit and (d) the second funding under the Senior Notes (as described
below). The Company intends to meet its long-term liquidity requirements
primarily through (a) borrowings under the revolving line of credit, (b) the
issuance of new debt and (c) the sale of Common Shares. The Company
believes that its future net cash flow will be adequate to meet operating
requirements and provide for payment of distributions by the Company in
accordance with tax requirements relating to a REIT in the short-term and in
the long-term.
The Company has a $100 million unsecured revolving line of credit that may
be used to fund the acquisition, development or conversion of additional
facilities. The credit line expires in January 1998, with a one-year
extension at the Company's option upon satisfaction of certain conditions,
and bears interest at a floating rate of LIBOR plus 162.5 basis points
(7.267% at December 31, 1996).
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CAPITAL STRATEGY (continued)
MORTGAGES AND NOTES PAYABLE: (continued)
In December 1996, the Company received commitments from various
institutional investors for the private placement of $100 million of
unsecured Senior Notes. The Company funded $75 million of the Senior Notes
on January 22, 1997, and the remaining $25 million is expected to be funded
during April 1997. The fixed rate debt has two separate series - Series A
Senior Notes totaling $44 million with a final maturity of seven years, an
average maturity of six years and a fixed interest rate of 7.47% (125 basis
points over comparable Treasuries) and Series B Senior Notes totaling $56
million with a final maturity of ten years, an average maturity of eight
years and a fixed interest rate of 7.66% (135 basis points over comparable
Treasuries). The proceeds of the financing are being utilized to repay
indebtedness under the revolving line of credit, to finance the acquisition
of additional self-storage facilities and for general corporate purposes.
Issuance of Common Shares and Units:
On November 16, 1994, the Company completed the IPO with the public offering
of 5,760,000 Common Shares at $17.50 per Common Share. Net of underwriting
discounts and offering costs, the Company received $92,051,000 from the IPO.
Concurrent with the IPO, the Original Investors transferred their interests
in the Predecessor Company, the management business of BHC and other assets,
to the Operating Partnership as set forth in the registration statement on
Form S-11 relating to the IPO. Additionally, the Predecessor Company
purchased 50,000 Common Shares pursuant to a concurrent private placement.
Accordingly, the Original Investors received a 1.7% interest in the Company
and 4.7% interest in the Operating Partnership.
During June and July 1995, the Company completed a public offering of
2,875,000 Common Shares at $20.00 per Common Share. Net of underwriting
discounts and offering costs, the Company received $53,561,000 from this
offering. The net proceeds have been used to repay indebtedness under the
revolving line of credit, which was incurred in connection with the
acquisition of facilities, and to acquire additional self-storage
facilities.
During July 1996, the Company completed a public offering of 4,140,000
Common Shares at $20.25 per Common Share. Net of underwriting discounts and
offering costs, the Company received $78,894,000 from this offering. The
net proceeds were used to repay indebtedness under the revolving line of
credit and a short-term acquisition loan, which was incurred in connection
with the acquisition of facilities.
In November 1996, the Company filed a shelf registration statement covering
$150,000,000 of equity securities. This registration statement has been
declared effective and should permit the Company to access the equity
markets efficiently when it deems appropriate. However, no assurance can be
given that market conditions will be favorable for such an offering.
In connection with the acquisition of Facilities during 1995, the Company
issued 183,774 Units valued at $3,652,000. In connection with the
acquisition of Facilities during 1996, the Company issued 406,759 Units
valued at $8,743,000.
The Units in the Operating Partnership not held by the Company can be
exchanged for Common Shares of the Company on a one-for-one basis or
redeemed in cash at the Company's option. As of December 31, 1996, no Units
had been converted to Common Shares or redeemed for cash.
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COMPETITION
All of the Facilities are located in developed areas that include other
self-storage facilities. The number of competitive self-storage facilities
in a particular area could have a material effect on the Company's ability
to lease self-storage units at the Facilities or at any newly developed or
acquired facilities and on the rents charged. The Company may be competing
with others that have greater resources than the Company and whose officers
and directors have more experience than the Company's officers and Trustees.
In addition, other forms of storage properties, warehouses and single-family
housing provide alternatives to potential customers of self-storage
facilities.
REGULATION
Environmental Matters
The Company is subject to federal, state, and local environmental laws,
ordinances and regulations that apply to the development of real property,
including construction activities, the ownership of real property, and the
operation of self-storage facilities.
In developing properties and constructing facilities, the Company utilizes
environmental consultants to determine whether there are any flood plains or
wetlands or environmentally sensitive areas that are part of the property to
be developed. If flood plains are identified, development and construction
are planned so that flood plain areas are preserved or alternative flood
plain capacity is created in conformance with federal and local flood plain
management requirements.
Stormwater discharge from a construction facility is evaluated in connection
with the requirements for stormwater permits under the Clean Water Act.
This is an evolving program in most states. It is anticipated that general
stormwater permits will be applicable to the Company's activities, and
individual permits will not be required for existing or new development.
Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real property may become liable for the costs of
removal or remediation of certain hazardous or toxic substances on, under or
in such property. Such laws, ordinances and regulations often impose
liability without regard to whether the owner or operator knew of, or was
responsible for, the presence of such hazardous or toxic substances. The
presence of hazardous or toxic substances, or the failure to properly
remediate such substances, when released, may adversely affect the owner's
ability to sell or lease such real estate or to borrow using such real
estate as collateral, and may cause the property owner to incur substantial
remediation costs. In addition to claims for cleanup costs, the presence of
hazardous substances on a property could result in a claim by a private
party for personal injury or a claim by an adjacent property for property
damage.
The Company has not been notified by any governmental authority of any
material noncompliance, claim, or liability in connection with any of the
Facilities. The Company has not been notified of a claim for personal
injury or property damage by a private party in connection with any of the
Facilities in connection with environmental conditions.
A Phase I environmental assessment for each of the Facilities has been
prepared by an independent environmental consultant. The purpose of each
such report was to identify, to the extent reasonably possible and based on
reasonably available information, whether the environmental quality of the
Facility had been affected by hazardous or toxic substances, including
petroleum products and asbestos.
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REGULATION (continued)
Environmental Matters (continued)
The scope of the Phase I environmental assessment for each such Facility
generally included: (a) a review of reasonably available maps, aerial
photographs and other public information to analyze the past and present
uses of the site; (b) limited inquiries of federal, state and local agencies
having jurisdiction over certain environmental matters; and (c) an on-site
assessment of the Facility to inspect for evidence of past or present
on-site waste disposal, visible surface contamination, above-surface and
subsurface storage tanks, drums, barrels and other storage containers,
current waste streams and management practices, ACMs, and PCB transformers.
In addition, as part of the Phase I environmental assessment, abutting
properties and nearby sources of potential contamination were identified and
evaluated for potential impact to the Facility, to the extent reasonably
possible.
In connection with the acquisition of 25 facilities (the "Balcor/Colonial
Facilities") from Balcor/Colonial Storage Income Fund - 86 (the "Seller") in
May 1996, the Seller had a Phase I environmental assessment for each of the
Balcor/Colonial Facilities prepared by an independent environmental
consultant. The purpose and scope of such assessments was generally the
same as set forth above with respect to Phase I environmental assessments of
the other Facilities. None of these Phase I environmental assessments
recommended any further investigation (except, in one instance, to confirm
radon test results which was subsequently confirmed) at any of the
Balcor/Colonial Facilities. However, based on the historical use of two of
the sites, the Company engaged environmental consultants to conduct a
limited subsurface soil and groundwater investigation to confirm the
opinions expressed in the Phase I assessments of these sites. The results
of such investigations indicated the presence of certain substances, the
presence of which may require monitoring, reporting or remediation. Based
on the investigations, remedial action plans were prepared based on the
maximum remediation effort that could be required under the appropriate
state law. The Seller had placed $250,000 into escrow to be used towards a
portion of the cost of remediation of these sites. Based on the remedial
action plans, the Company received the full $250,000 held in escrow. Based
upon the information which the Company has obtained and the receipt of the
escrowed funds, the Company does not currently expect the aggregate cost of
the remedying environmental conditions at these two Balcor/Colonial
Facilities to have a material adverse effect on the financial condition or
results of operations of the Company, although there can be no assurance
that this will be the case.
The environmental assessments, and in certain circumstances further
investigation, have not revealed, nor is the Company aware of, any
environmental condition with respect to the Facilities that is expected to
have a material adverse effect on the Company's financial condition or
results of operations. No assurances can be given, however, that (a) the
environmental assessments and further investigation which have been
conducted with respect to the Facilities or which will be conducted with
respect to the facilities that may be acquired or developed in the future,
have revealed, or will reveal, all potential environmental liabilities, (b)
any prior owner or operator of the real property on which the Facilities are
located did not create any material environmental condition not known to the
Company, or (c) an environmental condition does not otherwise exist as to
any one or more of the Facilities, which liabilities or conditions could
have a material adverse effect upon the financial condition or results of
operations of the Company.
Americans with Disability Act
Under the Americans with Disability Act ("ADA"), all public accommodations
are required to meet certain federal requirements related to physical access
and use by disabled persons. While the Company believe that the Facilities
comply in all material respects with these physical requirements (or would
be eligible for applicable exemptions from material requirements because of
adaptive assistance provided), a determination that the Company is not in
compliance with the ADA could result in the imposition of fines, injunctive
relief, damages or attorney's fees. If the Company were required to make
modifications to comply with the ADA, the Company's ability to make expected
distributions to its shareholders could be adversely affected; however,
management believes that such effect would be minimal.
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REGULATION (continued)
Local Regulation
As with all real property, self-storage facilities must conform to local
zoning ordinances. The Facilities' operations have not been subjected to
any material zoning complaints. Typically, self-storage facilities are not
a permitted use within the commercial and retail areas desired by the
Company for the development of a new facility. Therefore, the Company must
generally obtain a variance to undertake the development of a new facility.
The zoning classifications for self-storage have been narrowed repeatedly so
that new self-storage development within major metropolitan areas is
becoming increasingly difficult. The restrictive zoning regulations may
keep the industry restricted to all but those who have the expertise to show
the benefits of self-storage to a community and have the credentials
necessary to persuade zoning boards to rezone or grant variances.
INSURANCE
Management believes that each of the Facilities is covered by adequate fire,
flood and property insurance provided by reputable companies and with
commercially reasonable deductibles and limits. The Company maintains
comprehensive liability, all-risk property insurance coverage with respect
to the Facilities with policy specifications, limits and deductibles
customarily carried for similar properties. In addition, the Company
maintains a policy insuring against environmental liabilities resulting from
tenant storage on terms customary and standard for the industry. The
Company also has obtained or continued existing title insurance insuring fee
title to each of the Facilities owned by the Company in an aggregate amount
which the Company believes to be adequate.
EMPLOYEES
As of February 14, 1997, the Company (through the Operating Partnership and
the Management Company) employed a total of 506 persons of which (a) 460
work at the Facilities, (b) nine work in the regional offices and (c) 37
work at the home office. The Company believes that relations with their
employees are good.
STORAGE REALTY MANAGEMENT CO.
The Management Company manages ten Facilities owned by unrelated third
parties. The managed Facilities contain approximately 470,000 net rentable
square feet and are located in the following seven states: Florida (4),
North Carolina (1), Georgia (1), Alabama (1), Missouri (1), Kansas (1) and
Virginia (1). While the Management Company does not intend to actively
expand this aspect of its operations, management of additional facilities in
the future may be considered as a precursor to acquisition by the Operating
Partnership or in order for the Company to become familiar with an
attractive new market. Additionally, the Management Company conducts
various other businesses, such as the sale of locks, the processing of
customer property insurance and the rental of trucks, at various Facilities.
BHC owns 95% of the voting common stock of the Management Company, which is
generally entitled to dividends equal to 4.75% of all distributions. The
remaining 5% of the voting common stock, entitled to .25% of all
distributions, is owned by the Operating Partnership. The Operating
Partnership owns 100% of the nonvoting preferred stock of the Management
Company. The nonvoting preferred stock is entitled to dividends equal to
95% of all distributions of the Management Company. The charter of the
Management Company requires the quarterly distribution as dividends of its
net cash flow, subject to the discretion of the board of directors that
there are funds legally available therefor. Such provision may not be
changed without the consent of the holder of the preferred stock.
Accordingly, the Operating Partnership expects to receive substantially all
of the available net cash flow from the Management Company through ownership
of the preferred stock and thereby will receive substantially all of the
economic benefit of the operations carried on by the Management Company.
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THE INDUSTRY
The self-storage industry is an integral part of the commercial and
residential real estate markets, serving the storage needs of businesses and
consumers. Initially developed in the early 1960s in the southwestern
portion of the United States, self-storage facilities were built in response
to the growing need for low-cost accessible storage. A number of factors
have accelerated the demand for storage facilities including, among others,
a more mobile society, with individuals moving to new homes and new cities
needing short-term storage for their belongings, the increasing cost of
residential housing (resulting in smaller houses), the increased popularity
of apartments and condominiums, more individuals with growing discretionary
income (resulting in the accumulation of more possessions and the purchase
of items such as boats and recreational vehicles which cannot be stored at
residences), the growing number of small businesses and the escalating cost
of other storage alternatives. In addition to traditional use by consumers,
many retail stores and other businesses use self-storage facilities to store
goods received from warehouses or, in some instances, directly from
manufacturers, through just-in-time delivery systems. Self-storage
facilities serve as additional storage capacity for households acquiring
goods or businesses building inventory or producing storable items, such as
new products or records.
In addition to providing affordable, accessible storage space for personal
and business use, many facilities offer climate controlled units as well as
outside storage pads for vehicles and boats. With the advent of resident
managers, storing goods became a far more convenient process for customers
(i.e. tenants renting self-storage space), resulting in increased customer
awareness and appreciation. Rental units are usually secured by customer
locks and only the customer has the key, thus ensuring controlled access.
Facilities are generally fenced, have locked gates and are lighted at night.
Computerized access gates for self-storage have made the overall storage
process more convenient for the customer.
The successful development of self-storage facilities is becoming
increasingly sophisticated. Specialized skills in areas such as site
selection, design and unit mix are critical to the development of successful
new self-storage projects on a cost efficient basis. Furthermore, new
development in self-storage has become more difficult due to the lack of
available capital, pressure from zoning boards and municipalities, and
increases in building costs as new facilities are required to meet rigorous
landscaping and other aesthetically oriented standards.
ITEM 2. PROPERTIES
As of December 31, 1996, the Facilities owned by the Company consisted of
165 self-storage facilities located in 18 states containing approximately
8,491,000 net rentable square feet and 71,000 units. For these Facilities,
the average net rentable square footage per property was approximately
51,500 and the average number of units per property was approximately 430.
As of December 31, 1996, the weighted-average occupancy in these owned
Facilities on a square footage basis was approximately 86%.
As of December 31, 1996, the Company, through joint ventures, had a 15%
ownership interest in an operating self-storage facility and a 25% ownership
interest in a self-storage facility under development.
As of December 31, 1996, the Facilities managed by the Management Company
consisted of ten self-storage facilities located in seven states containing
approximately 470,000 rentable square feet.
The table on the following pages sets forth the location of and other
information relating to the Company's portfolio of owned Facilities and
those Facilities in which the Company has a joint venture interest. The
table does not include those Facilities managed by the Management Company.
9
<PAGE> 13
FACILITIES OWNED BY OPERATING PARTNERSHIP:
<TABLE>
<CAPTION>
Net Percentage
Rentable Year Occupancy
Square Acquired by as of
Units Footage Storage Trust 12/31/96
------ -------- -------------- --------
<S> <C> <C> <C> <C> <C>
ALABAMA:
MOBILE AREA:
Hillcrest Road Mobile, AL 306 34,350 1994 91
Azalea Road Mobile, AL 284 31,965 1995 98
Moffat Road Mobile, AL 451 42,838 1995 92
Grelot Road Mobile, AL 425 49,150 1996 100
COLORADO:
COLORADO SPRINGS AREA:
North Powers Blvd. Colo. Springs, CO 500 <F*> 93,664 <F*> 1995 91
Parkmoor Village Drive Colo. Springs, CO 495 <F*> 59,975 <F*> 1995 82
Van Teylingen Drive Colo. Springs, CO 366 76,850 1995 91
Centennial Blvd. Colo. Springs, CO 443 81,700 1996 77
DENVER AREA:
South Clinton Street Denver, CO 336 32,260 1996 79
North Washington Street Denver, CO 376 56,150 1996 78
OTHER AREAS:
College Avenue Ft. Collins, CO 596 57,190 1995 80
Wedgewood Avenue Longmont, CO 447 51,020 1995 79
FLORIDA:
JACKSONVILLE AREA:
Phillips Highway Jacksonville, FL 405 59,018 1994 88
Roosevelt Blvd. Jacksonville, FL 471 54,280 1995 97
Ft. Caroline Road Jacksonville, FL 664 67,745 1996 92
Southside Blvd. Jacksonville, FL 773 90,030 1996 97
Park Avenue Orange Park, FL 395 52,950 1994 94
FLORIDA KEYS AREA:
U.S. Highway 1 Big Coppitt, FL 229 15,269 1995 95
Third Street, Stock Island Key West, FL 324 29,515 1994 94
ORLANDO AREA:
Semoran Blvd. Casselberry, FL 637 66,625 1996 89
Orange Blossom Trail Orlando, FL 799 83,350 1995 92
McLeod Road Orlando, FL 290 27,618 1995 100
South Semoran Blvd. Orlando, FL 345 30,200 1996 95
PENSACOLA AREA:
Brent Lane Pensacola, FL 322 34,346 1994 95
Creighton Blvd. Pensacola, FL 431 46,277 1994 89
TAMPA BAY AREA:
North Highland Clearwater, FL 422 55,330 1996 88
Alt. Highway 19 South Tarpon Springs, FL 387 60,481 1994 93
Highway 19 North Tarpon Springs, FL 740 80,670 1996 93
OTHER AREAS:
Cleveland Avenue Ft. Myers, FL 574 65,219 1996 91
N.W. 14th Street Miami, FL 781 61,675 1995 87
10
<PAGE> 14
<CAPTION>
Net Percentage
Rentable Year Occupancy
Square Acquired by as of
Units Footage Storage Trust 12/31/96
------ -------- -------------- --------
<S> <C> <C> <C> <C> <C>
GEORGIA:
ATLANTA AREA:
2064 Briarcliff Road Atlanta, GA 174 45,725 1996 92
2080 Briarcliff Road Atlanta, GA 442 49,172 1994 92
Spring Street Atlanta, GA 449 47,641 1995 27
North Decatur Road Decatur, GA 467 53,234 1994 92
McElroy Road Doraville, GA 637 75,810 1995 80
Westmoreland Plaza Douglasville, GA 424 <F*> 45,670 <F*> 1995 78
Dura Lee Lane Douglasville, GA 379 42,910 1995 83
Highway 5 Douglasville, GA 354 50,000 1995 78
Jonesboro Road Forest Park, GA 388 44,350 1995 89
Tara Blvd. Jonesboro, GA 364 63,185 1994 93
Whitlock Place Marietta, GA 574 63,350 1995 87
Cobb Parkway Marietta, GA 431 47,980 1996 84
Alpharetta Highway Roswell, GA 678 113,310 1996 84
AUGUSTA AREA:
Old Petersburg Road Augusta, GA 354 41,115 1994 86
Peach Orchard Road Augusta, GA 548 69,290 1994 93
OTHER AREAS:
Atlanta Highway Bogart, GA 416 43,530 1995 80
North Columbia Street Milledgeville, GA 400 45,000 1995 87
ILLINOIS:
CHICAGO AREA:
Phillips Court Carol Stream, IL 422 50,625 1994 88
North Broadway Chicago, IL 444 19,150 1994 92
West Jarvis Chicago, IL 299 12,752 1994 92
West Lake Street Hanover Park, IL 501 66,875 1994 94
Roosevelt Road Winfield, IL 540 48,050 1996 88
KANSAS:
KANSAS CITY AREA:
State Avenue Kansas City, KS 366 40,477 1996 88
Long Avenue Lenexa, KS 332 51,316 1996 90
Foxridge Lane Mission, KS 565 78,850 1996 96
Hemlock Avenue Overland Park, KS 374 54,875 1996 92
Hedge Lane Terrace Shawnee, KS 304 <F*> 57,000 <F*> 1996 77
OTHER AREA:
Haskell Avenue Lawrence, KS 447 61,920 1995 65
KENTUCKY:
LEXINGTON AREA:
Twilight Trail Frankfort, KY 286 37,200 1994 82
Winchester Road Lexington, KY 454 55,700 1996 87
11
<PAGE> 15
FACILITIES OWNED BY OPERATING PARTNERSHIP:
<CAPTION>
Net Percentage
Rentable Year Occupancy
Square Acquired by as of
Units Footage Storage Trust 12/31/96
------ -------- -------------- --------
<S> <C> <C> <C> <C> <C>
KENTUCKY: (continued)
LOUISVILLE AREA:
Breckenridge Lane Louisville, KY 319 34,490 1996 96
4301 Poplar Level Louisville, KY 437 44,305 1996 87
4324 Poplar Level Louisville, KY 357 37,525 1996 94
LOUISIANA:
Church Street Lake Charles, LA 356 65,620 1995 90
MISSISSIPPI:
GULFPORT AREA:
Highway 90 Gautier, MS 351 36,150 1994 91
Highway 49 North Gulfport, MS 482 64,620 1994 85
Pass Road Gulfport, MS 437 55,070 1994 86
MISSOURI:
COLUMBIA AREA:
Paris Road Columbia, MO 302 36,924 1994 71
Rangeline Street Columbia, MO 500 122,000 1994 87
I-70 Drive SE Columbia, MO 210 29,625 1995 59
Providence Road Columbia, MO 271 68,957 1995 88
KANSAS CITY AREA:
South Highway M291 Independence, MO 564 59,192 1995 94
East 67th Terrace Kansas City, MO 674 77,834 1995 87
James A. Reed Road Kansas City, MO 456 51,152 1995 85
47th Street Kansas City, MO 315 42,406 1996 92
Woodson Road Raytown, MO 432 66,165 1996 90
ST. LOUIS AREA:
West Florrisant Ferguson, MO 407 38,758 1996 96
New Halls Ferry Florrisant, MO 645 68,044 1994 87
North Highway 67 Florrisant, MO 407 54,061 1996 95
1550 North Lindbergh St. Louis, MO 660 73,105 1994 91
2956 North Lindbergh St. Louis, MO 443 75,600 1994 83
Bus Barn St. Louis, MO 78 7,900 1995 89
Third Street St. Louis, MO 621 68,957 1995 89
World Parkway Center St. Louis, MO 465 56,195 1995 86
North Vandeventer St. Louis, MO 524 33,147 1996 86
OTHER AREAS:
St. Mary's Blvd. Jefferson City, MO 344 34,750 1994 76
Florida Street Springfield, MO 232 32,814 1994 77
12
<PAGE> 16
FACILITIES OWNED BY OPERATING PARTNERSHIP:
<CAPTION>
Net Percentage
Rentable Year Occupancy
Square Acquired by as of
Units Footage Storage Trust 12/31/96
------ -------- -------------- --------
<S> <C> <C> <C> <C> <C>
NORTH CAROLINA:
CHARLOTTE AREA:
East W. T. Harris Blvd Charlotte, NC 361 36,790 1994 89
South Blvd. Charlotte, NC 318 36,074 1994 89
North Tryon Charlotte, NC 685 69,125 1994 73
York Road Gastonia, NC 362 38,400 1995 77
Oregon Street Kannapolis, NC 416 45,900 1994 72
RALEIGH / DURHAM AREA:
North Duke Street Durham, NC 284 34,000 1994 89
Kangaroo Drive Durham, NC 669 47,502 1996 71
Maitland Raleigh, NC 332 38,700 1994 86
OTHER AREAS:
Skibo Road Fayetteville, NC 364 41,600 1994 89
O'Henry Blvd. Greensboro, NC 393 37,180 1994 79
Shipyard Blvd. Wilmington, NC 365 41,092 1994 82
OHIO:
Morse Road Columbus, OH 511 62,140 1996 85
OKLAHOMA:
South Garnett Road Tulsa, OK 471 57,590 1996 86
SOUTH CAROLINA:
CHARLESTON AREA:
2560 Ashley Phosphate Road Charleston, SC 287 33,514 1994 80
2840 Ashley Phosphate Road Charleston, SC 219 22,722 1994 56
5715 Dorchester Road Charleston, SC 186 33,010 1994 87
6654 Dorchester Road Charleston, SC 354 43,274 1994 69
Sam Rittenburg Blvd. Charleston, SC 251 31,230 1994 94
COLUMBIA AREA:
Broad River Road Columbia, SC 319 38,088 1994 87
Buckner Road Columbia, SC 499 56,830 1994 94
Decker Park Road Columbia, SC 274 34,414 1994 85
Rosewood Drive Columbia, SC 292 31,534 1994 94
River Drive Columbia, SC 383 51,700 1996 83
Plumbers Road Columbia, SC 335 30,900 1995 71
Airport Blvd. West Columbia, SC 280 34,416 1994 90
Orchard Drive West Columbia, SC 253 24,447 1994 90
13
<PAGE> 17
FACILITIES OWNED BY OPERATING PARTNERSHIP:
<CAPTION>
Net Percentage
Rentable Year Occupancy
Square Acquired by as of
Units Footage Storage Trust 12/31/96
------ -------- -------------- --------
<S> <C> <C> <C> <C> <C>
SOUTH CAROLINA: (continued)
GREENVILLE AREA:
Whitehorse Road Greenville, SC 448 49,700 1994 82
Wood Lake Road Greenville, SC 285 30,300 1994 86
Pineknoll Road Greenville, SC 442 50,325 1996 89
North Main Street Mauldin, SC 329 42,950 1994 73
Grand View Drive Simpsonville, SC 369 48,225 1994 59
Chesnee Highway Spartanburg, SC 423 51,421 1995 72
Wade Hampton Blvd. Taylors, SC 299 37,394 1994 81
HILTON HEAD AREA:
Office Park Road Hilton Head, SC 420 46,925 1994 97
Yacht Cove Drive Hilton Head, SC 492 58,575 1995 79
TENNESSEE:
CHATTANOOGA AREA:
Gadd Road Hixson, TN 322 35,115 1994 71
Highway 153 Hixson, TN 434 46,450 1994 81
Harding Road Red Bank, TN 342 37,980 1994 90
KNOXVILLE AREA:
Kingston Pike Knoxville, TN 365 38,850 1994 87
Middlebrook Pike Knoxville, TN 302 29,752 1994 97
MEMPHIS AREA:
American Way Memphis, TN 362 39,790 1994 88
Raleigh-LaGrange Memphis, TN 348 37,480 1994 94
4175 Winchester Road Memphis, TN 362 36,820 1994 85
4705 Winchester Road Memphis, TN 484 60,693 1995 89
6390 Winchester Road Memphis, TN 360 39,444 1996 94
Madison Avenue Memphis, TN 286 27,771 1995 92
Summer Avenue Memphis, TN 369 46,010 1996 92
NASHVILLE AREA:
Myatt Drive Madison, TN 318 32,300 1994 84
Williams Avenue Madison, TN 946 136,899 1996 90
Lafayette Street Nashville, TN 339 37,775 1994 89
Metroplex Drive Nashville, TN 396 49,780 1994 80
Welshwood Drive Nashville, TN 518 60,475 1995 81
McNally Drive Nashville, TN 612 85,228 1996 83
14
<PAGE> 18
FACILITIES OWNED BY OPERATING PARTNERSHIP:
<CAPTION>
Net Percentage
Rentable Year Occupancy
Square Acquired by as of
Units Footage Storage Trust 12/31/96
------ -------- -------------- --------
<S> <C> <C> <C> <C> <C>
TEXAS:
DALLAS / FT. WORTH AREA:
Inwood Road Addison, TX 558 79,192 1995 92
3006 West Division Arlington, TX 23 46,000 1994 100
3008 West Division Arlington, TX 301 49,315 1994 95
West Trinity Mills Carrollton, TX 385 45,816 1994 95
South Cedar Ridge Duncanville, TX 327 36,000 1994 99
Spaceway / Cedar Ridge Duncanville, TX 475 73,094 1995 94
Jackson Drive Garland, TX 603 72,520 1996 78
East Buckingham Road Garland, TX 318 40,700 1996 99
Bolen Road Kennedale, TX 299 33,080 1994 89
Avenue K Plano, TX 861 87,122 1996 85
HOUSTON AREA:
Fondren Houston, TX 393 41,538 1994 85
Wallisville Road Houston, TX 415 44,944 1994 97
Addicks Satsuma Houston, TX 361 38,354 1995 88
South Main Houston, TX 604 68,638 1995 100
Bingle Road Houston, TX 702 63,300 1995 88
Hayes Road Houston, TX 744 67,500 1995 89
Mangum Road Houston, TX 466 33,250 1995 81
S.W. Freeway Houston, TX 1,562 109,717 1995 77
2510 FM 1960 West Houston, TX 506 50,565 1996 85
Dominion Drive Katy, TX 469 69,575 1996 76
OTHER AREA:
West 42nd Street Odessa, TX 345 37,116 1994 84
VIRGINIA:
Western Branch Blvd. Chesapeake, VA 654 75,300 1996 90
WISCONSIN:
MILWAUKEE AREA:
West Dean Road Milwaukee, WI 1,103 <F*> 205,190 <F*> 1996 69
Foster Court Waukesha, WI 217 49,632 1996 91
------ --------- --
TOTAL 71,242 8,491,288 86
====== ========= ==
<FN>
<F*> Units and Net Rentable Square Footage include
outside parking for the following locations:
<S> <C> <C> <C>
West Dean Road Milwaukee, WI 374 98,062
North Powers Blvd. Colorado Springs, CO 42 9,350
Hedge Lane Terrace Shawnee, KS 27 6,050
Westmoreland Plaza Douglasville, GA 38 5,920
Parkmoor Village Drive Colorado Springs, CO 17 3,200
15
<PAGE> 19
FACILITIES OWNED BY JOINT VENTURES:
<CAPTION>
Net Percentage
Rentable Year Occupancy
Square Acquired by as of
Units Footage Storage Trust 12/31/96
------ -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Tulane Avenue New Orleans, LA 821 153,986 1994 96
Marian Ridge Kansas City, MO <F1> - - 1996 -
--- -------
TOTAL 821 153,986
=== =======
<FN>
<F1> Currently being developed into self-storage space.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are not subject to any pending material
legal proceedings. The Company and its subsidiaries are parties to a
variety of legal proceedings arising in the ordinary course of their
business. It is management's opinion that the ultimate resolution of these
matters will not have a material adverse impact on the financial condition,
results of operations or liquidity of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to the Company's shareholders for a vote
since the last annual meeting of shareholders held on May 8, 1996.
16
<PAGE> 20
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
The information required by this item is hereby incorporated by reference to
the material appearing on page 25 of the Company's 1996 Annual Report (the
"Annual Report") under the caption "Shareholder and Investor Information."
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is hereby incorporated by reference to
the data appearing on the inside front cover of the Annual Report under the
caption "Selected Financial Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item is hereby incorporated by reference to
the material appearing on pages 9 through 12 of the Annual Report under the
caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is hereby incorporated by reference to
the "Report of Independent Auditors," "Storage Trust Realty Consolidated
Balance Sheets as of December 31, 1996 and 1995," "Storage Trust Realty and
Predecessor Company Consolidated and Combined Statements of Operations for
the Years Ended December 31, 1996, 1995 and 1994," "Storage Trust Realty and
Predecessor Company Consolidated and Combined Statements of Shareholders'
Equity for the Years Ended December 31, 1996, 1995 and 1994," "Storage Trust
Realty and Predecessor Company Consolidated and Combined Statements of Cash
Flows for the Years Ended December 31, 1996, 1995 and 1994" and "Storage
Trust Realty and Predecessor Company Notes to Consolidated and Combined
Financial Statements" appearing in the Annual Report on pages 13 through 23.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
17
<PAGE> 21
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is hereby incorporated by reference to
the material appearing on pages 2 through 4 of the Company's Proxy Statement
for the Annual Meeting of Shareholders to be held on May 7, 1997 (the "Proxy
Statement"), under the captions "Election of Trustees" and "Management -
Trustees and Executive Officers" and page 14 of the Proxy Statement under
the caption "Section 16(a) Beneficial Ownership Reporting Compliance."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is hereby incorporated by reference to
the material appearing on pages 6 through 11 of the Proxy Statement under
the captions "Executive Compensation - Summary Compensation Table," " -
Option Grants," " - Aggregated Option Exercises in 1996 and Year-End Option
Values," " - Option Plan," " - Incentive Compensation," " - Retirement
Savings Plan," " - Compensation of Trustees," " - Non-competition Agreements
and Termination of Employment," "Compensation Committee Interlocks and
Insider Participation," " - Executive Compensation Committee Report on
Executive Compensation" and " - Performance Graph."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is hereby incorporated by reference to
the material appearing on pages 13 and 14 of the Proxy Statement under the
caption "Security Ownership."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is hereby incorporated by reference to
the material appearing on page 12 of the Proxy Statement under the caption
"Certain Relationships and Related Transactions."
18
<PAGE> 22
PART IV
<TABLE>
<CAPTION>
<C> <S>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements
The balance sheets as of December 31, 1996 and 1995 and the
statements of operations, shareholders' equity and cash flows
for each of the three years in the period ended December 31,
1996, together with related notes and the independent auditors
report dated January 22, 1997, except for Note 9, which is dated
January 31, 1997, appearing on pages 13 through 23 of the Annual
Report, which is filed as Exhibit 13.1 to this report.
(2) Financial Statement Schedules and Independent Auditors Report
Title Schedule
----- --------
Real Estate and Accumulated Depreciation III
The independent auditors' report with respect to the financial
statement schedule appears on page 27 herein.
(3) Exhibits
2.1 Agreement of Sale between Storage Trust Properties, L.P.
and Balcor/Colonial Storage Income Fund - 86, dated as of
March 5, 1996, is hereby 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, dated as of April 24, 1996, is hereby incorporated by
reference to Exhibit 2.2 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1996.
3.1 Second Amended and Restated Declaration of Trust of the
Registrant is hereby incorporated by reference to Exhibit
3.5 to the Registrant's Registration Statement on Form
S-11 (No. 33-83016).
3.2 Amended and Restated Bylaws of the Registrant are hereby
incorporated by reference to Exhibit 3.4 to the
Registrant's Registration Statement on Form S-11
(No. 33-83016).
4.1 Form of Common Share Certificate is hereby incorporated
by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-11 (No. 33-83016).
19
<PAGE> 23
(3) Exhibits (continued)
10.1 Amended and Restated Agreement of Limited Partnership of
Storage Trust Properties, L.P. is hereby incorporated by
reference to Exhibit 10.1 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.
10.1(a) First Amendment to the Amended and Restated Agreement
of Limited Partnership, dated November 12, 1996, is
hereby incorporated by reference to Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996.
10.2 Non-competition Agreement between the Registrant and
each of Gordon Burnam, Michael G. Burnam and P.
Crismon Burnam are hereby incorporated by reference
to Exhibit 10.2 to the Registrant's Registration
Statement on Form S-11 (No. 33-92556).
10.3 Storage Trust Realty 1994 Share Option Plan is hereby
incorporated by reference to Exhibit 10.3 to the
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1995.
10.3(a) First Amendment to Share Option Plan is hereby
incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.
10.4 Retirement Savings Plan is hereby incorporated by
reference to Exhibit 10.4 to the Registrant's
Registration Statement on Form S-11 (No. 33-83016).
10.4(a) Amendment to Retirement Savings Plan, dated October 31,
1996.
10.5 Indemnification Agreement between the Registrant and
its Trustees and officers is hereby incorporated by
reference to Exhibit 10.5 to the Registrant's
Registration Statement on Form S-11 (No. 33-92556).
10.6 Registration Rights and Lock-Up Agreement between the
Registrant and certain investors is hereby
incorporated by reference to Exhibit 10.6 to the
Registrant's Registration Statement on Form S-11 (No.
33-92556).
10.7 Contract for the Purchase and Sale of Commercial Real
Estate (Self-Storage Properties), entered into on July
15, 1994, between Burnam Storage Associates, L.L.C. and
Vanguard Self-Storage Partnership is hereby
incorporated by reference to Exhibit 10.7 to the
Registrant's Registration Statement on Form S-11 (No.
33-83016).
10.8 Contract for the Purchase and Sale of Commercial Real
Estate (Self-Storage Properties), entered into on July
14, 1994, between Burnam Storage Associates, L.L.C. and
Colonial Storage Center I, Ltd. is hereby incorporated
by reference to Exhibit 10.8 to the Registrant's
Registration Statement on Form S-11 (No. 33-83016).
20
<PAGE> 24
(3) Exhibits (continued)
10.9 Contract for the Purchase and Sale of Commercial Real
Estate (Self-Storage Properties), entered into on July
14, 1994, between Burnam Storage Associates, L.L.C. and
Colonial Storage Centers II, Ltd. is hereby
incorporated by reference to Exhibit 10.9 to the
Registrant's Registration Statement on Form S-11 (No.
33-83016).
10.10 Contract for the Purchase and Sale of Commercial Real
Estate (Self-Storage Properties), entered into on July
14, 1994, between Burnam Storage Associates, L.L.C. and
Colonial Storage Centers III, Ltd. is hereby
incorporated by reference to Exhibit 10.10 to the
Registrant's Registration Statement on Form S-11 (No.
33-83016).
10.11 Corporate Services Agreement, dated as of November 16,
1994, among Storage Trust Management Co., Storage
Trust Properties, L.P. and the Registrant is hereby
incorporated by reference to Exhibit 10.11 to the
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1994.
10.11(a) Amendment to Corporate Services Agreement, dated as of
January 1, 1996.
10.13 Revolving Credit Agreement, dated January 25, 1996, by
and among Storage Trust Properties, L.P., The First
National Bank of Boston, Bank of America Illinois and
the other lending institutions which may become
parties thereto, and The First National Bank of Boston,
as agent is hereby incorporated by reference to the
Exhibit 10.13 to the Registrant's Registration
Statement on Form S-3 (No. 333-01576).
10.13(a) Unconditional Guaranty of Payment and Performance,
dated January 25, 1996, executed by Storage Trust
Realty.
10.13(b) First Amendment to the Revolving Credit Agreement and
Guaranty, dated December 13, 1996.
10.14 Note Purchase Agreement and Guaranty Agreement with
respect to $100,000,000 of Senior Notes of Storage
Trust Properties, L.P., guaranteed by the Registrant.
13.1 1996 annual report to shareholders.
21
<PAGE> 25
(3) Exhibits (continued)
21.1 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP.
27 Financial Data Schedule.
(b) One report on Form 8-K, dated September 16, 1996, was filed in
the fourth quarter of 1996 to report financial information with
respect to the acquisition of 12 self-storage facilities by the
Company. Historical Summaries of Combined Gross Revenue and
Direct Operating Expenses for the six months ended June 30, 1996
(Unaudited) and for the year ended December 31, 1995 (Audited)
were filed with the Form 8-K for nine of the 12 facilities
acquired. In addition, an unaudited Pro Forma Balance Sheet as
of June 30, 1996 and unaudited Pro Forma Statements of Operation
for the six months ended June 30, 1996 and for the year ended
December 31, 1995 were presented.
</TABLE>
22
<PAGE> 26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
Date: February 27, 1997 By /s/ Michael G. Burnam
----------------------------------
Michael G. Burnam
Chief Executive Officer and Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Michael G. Burnam Chief Executive Officer and Trustee February 27, 1997
- ----------------------- (Principal Executive Officer)
Michael G. Burnam
/s/ Stephen M. Dulle Chief Financial Officer February 27, 1997
- ----------------------- (Principal Accounting and
Stephen M. Dulle Financial Officer)
/s/ Gordon Burnam Chairman of the Board of February 27, 1997
- ----------------------- Trustees
Gordon Burnam
/s/ P. Crismon Burnam Chief Operating Officer and February 27, 1997
- ----------------------- Trustee
P. Crismon Burnam
/s/ Blake Eagle Trustee February 27, 1997
- -----------------------
Blake Eagle
/s/ Randall K. Rowe Trustee February 27, 1997
- -----------------------
Randall K. Rowe
/s/ Daniel C. Staton Trustee February 27, 1997
- -----------------------
Daniel C. Staton
/s/ Fredrick W. Petri Trustee February 27, 1997
- -----------------------
Fredrick W. Petri
</TABLE>
23
<PAGE> 27
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of
Storage Trust Realty
We have audited the consolidated balance sheets of Storage Trust Realty (the
"Company") as of December 31, 1996 and 1995, and the related consolidated
and combined statements of operations, shareholders' equity and cash flows
of Storage Trust Realty and Predecessor Company for each of the three years
in the period ended December 31, 1996, and have issued our report thereon
dated January 22, 1997 (except for Note 9, as to which the date is January
31, 1997); such consolidated and combined financial statements and report
are included in the Company's 1996 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the financial
statement schedule of Storage Trust Realty listed in Item 14. This
financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on the schedule
based on our audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic consolidated and combined financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
ERNST & YOUNG LLP
Chicago, Illinois
January 22, 1997
24
<PAGE> 28
<TABLE>
STORAGE TRUST REALTY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(amounts in thousands)
<CAPTION>
Cost
Capitalized Build-
Initial Subsequent Gross Carrying ing
Cost To To Amount At De-
Company Acquisition December 31, 1996 pre-
------------- ---------------------------------------------- Year cia-
Accumu- Ac- tion
Build- Build- Build- lated quired Term
ings ings ings Depre- By Stor- In
Encum- & Fix- & Fix- & Fix- Total ciation age Years
Description(a) brances Land tures Land tures Land tures (b)(d) (c) Realty (e)
- --------------------------------------------- ------- ---- ------ ---- ----- ---- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3008 West Division Arlington, TX $ 150 $ 945 $ - $ 27 $ 150 $ 972 $ 1,122 $ 53 1994 40
3006 West Division Arlington, TX 163 741 - 29 163 770 933 41 1994 40
2080 Briarcliff Road Atlanta, GA 465 2,303 - 23 465 2,326 2,791 129 1994 40
Peach Orchard Road Augusta, GA 367 1,531 - 14 367 1,545 1,912 141 1994 40
Old Petersburg Road Augusta, GA 71 1,050 - 38 71 1,088 1,159 59 1994 40
Phillips Court Carol Stream, IL 345 1,409 - 21 345 1,430 1,775 74 1994 40
West Trinity Mills Carrollton, TX 320 1,642 - 16 320 1,658 1,978 92 1994 40
Sam Rittenburg Blvd. Charleston, SC 200 929 - 13 200 942 1,142 54 1994 40
5715 Dorchester Road Charleston, SC 58 820 - 64 58 884 942 48 1994 40
6654 Dorchester Road Charleston, SC 175 676 - 14 175 690 865 41 1994 40
2840 Ashley Phosphate Road Charleston, SC 37 572 - 58 37 630 667 35 1994 40
2560 Ashley Phosphate Road Charleston, SC 113 539 - 13 113 552 665 33 1994 40
North Tyron Charlotte, NC 119 1,797 - 98 119 1,895 2,014 104 1994 40
East W.T. Harris Blvd. Charlotte, NC 320 1,099 - 31 320 1,130 1,450 65 1994 40
South Blvd. Charlotte, NC 275 1,075 - 18 275 1,093 1,368 63 1994 40
North Broadway Chicago, IL 60 610 - 101 60 711 771 41 1994 40
West Jarvis Chicago, IL 40 419 - 52 40 471 511 24 1994 40
Rangeline Street Columbia, MO 205 2,840 (30) 344 175 3,184 3,359 171 1994 40
Home Office Columbia, MO 33 252 3 590 36 842 878 108 1994 40
Paris Road Columbia, MO 175 981 - 20 175 1,001 1,176 57 1994 40
Rosewood Drive Columbia, SC 245 1,227 - 13 245 1,240 1,485 69 1994 40
Decker Park Road Columbia, SC 205 970 - 17 205 987 1,192 57 1994 40
Broad River Road Columbia, SC 213 945 - 27 213 972 1,185 55 1994 40
Buckner Road Columbia, SC 211 883 - 80 211 963 1,174 50 1994 40
North Decatur Road Decatur, GA 325 1,304 - 22 325 1,326 1,651 70 1994 40
South Cedar Ridge Duncanville, TX 173 910 - 27 173 937 1,110 54 1994 40
North Duke Street Durham, NC 300 1,228 - 16 300 1,244 1,544 69 1994 40
Skibo Road Fayetteville, NC 348 1,540 - 15 348 1,555 1,903 88 1994 40
New Halls Ferry Florissant, MO 390 1,551 - 76 390 1,627 2,017 84 1994 40
Twilight Trial Frankfort, KY 64 929 - 93 64 1,022 1,086 55 1994 40
Highway 90 Gautier, MS 62 955 - 115 62 1,070 1,132 60 1994 40
</TABLE>
25
<PAGE> 29
<TABLE>
STORAGE TRUST REALTY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(amounts in thousands)
<CAPTION>
Cost
Capitalized Build-
Initial Subsequent Gross Carrying ing
Cost To To Amount At De-
Company Acquisition December 31, 1996 pre-
------------- ---------------------------------------------- Year cia-
Accumu- Ac- tion
Build- Build- Build- lated quired Term
ings ings ings Depre- By Stor- In
Encum- & Fix- & Fix- & Fix- Total ciation age Years
Description(a) brances Land tures Land tures Land tures (b)(d) (c) Realty (e)
- --------------------------------------------- ------- ---- ------ ---- ----- ---- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
O'Henry Blvd. Greensboro, NC $ 64 $ 978 $ - $ 93 $ 64 $ 1,071 $ 1,135 $ 58 1994 40
Whitehorse Road Greenville, SC 310 1,269 - 12 310 1,281 1,591 96 1994 40
Wood Lake Road Greenville, SC 171 686 - 16 171 702 873 38 1994 40
Pass Road Gulfport, MS 95 1,394 - 78 95 1,472 1,567 80 1994 40
Highway 49 North Gulfport, MS 227 1,157 - 39 227 1,196 1,423 64 1994 40
West Lake Street Hanover Park, IL 493 2,015 - 27 493 2,042 2,535 108 1994 40
Office Park Road Hilton Head, SC (f) 482 1,965 - 12 482 1,977 2,459 139 1994 40
Highway 153 Hixson, TN 270 1,084 - 32 270 1,116 1,386 59 1994 40
Gadd Road Hixson, TN 170 960 - 6 170 966 1,136 56 1994 40
Wallisville Road Houston, TX 313 1,550 - 23 313 1,573 1,886 88 1994 40
Fondren Houston, TX 240 1,096 - 7 240 1,103 1,343 62 1994 40
Phillips Highway Jacksonville, FL 335 1,465 - 30 335 1,495 1,830 204 1994 40
St. Mary's Blvd. Jefferson City, MO 60 892 - 49 60 941 1,001 52 1994 40
Tara Boulevard Jonesboro, GA 320 1,361 - 33 320 1,394 1,714 162 1994 40
Oregon Street Kannapolis, NC 353 1,416 - 7 353 1,423 1,776 76 1994 40
Bolen Road Kennedale, TX 175 951 - 14 175 965 1,140 55 1994 40
Third Street, Stock Island Key West, FL 320 1,280 - 291 320 1,571 1,891 74 1994 40
Kingston Pike Knoxville, TN 315 1,095 - 15 315 1,110 1,425 62 1994 40
Middlebrook Pike Knoxville, TN 220 975 - 18 220 993 1,213 57 1994 40
Myatt Drive Madison, TN 233 936 - 6 233 942 1,175 54 1994 40
North Main Street Mauldin, SC 212 881 - 9 212 890 1,102 85 1994 40
American Way Memphis, TN 300 1,170 - 166 300 1,336 1,636 71 1994 40
Raleigh-LaGrange Memphis, TN 220 1,173 - 25 220 1,198 1,418 69 1994 40
4175 Winchester Road Memphis, TN 165 962 - 30 165 992 1,157 57 1994 40
Hillcrest Road Mobile, AL 153 699 - 68 153 767 920 125 1994 40
Lafayette Street Nashville, TN 270 1,122 - 45 270 1,167 1,437 90 1994 40
Metroplex Drive Nashville, TN 268 1,444 - 16 268 1,460 1,728 83 1994 40
West 42nd Street Odessa, TX 145 865 - 15 145 880 1,025 50 1994 40
Park Avenue Orange Park, FL 310 1,320 - 22 310 1,342 1,652 150 1994 40
Brent Lane Pensacola, FL 127 613 - 28 127 641 768 137 1994 40
Creighton Blvd. Pensacola, FL 65 994 - 148 65 1,142 1,207 57 1994 40
Maitland Raleigh, NC 275 1,368 - 24 275 1,392 1,667 79 1994 40
Harding Road Red Bank, TN 158 934 - 7 158 941 1,099 56 1994 40
26
<PAGE> 30
STORAGE TRUST REALTY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(amounts in thousands)
<CAPTION>
Cost
Capitalized Build-
Initial Subsequent Gross Carrying ing
Cost To To Amount At De-
Company Acquisition December 31, 1996 pre-
------------- ---------------------------------------------- Year cia-
Accumu- Ac- tion
Build- Build- Build- lated quired Term
ings ings ings Depre- By Stor- In
Encum- & Fix- & Fix- & Fix- Total ciation age Years
Description(a) brances Land tures Land tures Land tures (b)(d) (c) Realty (e)
- ------------------------------------------- ------- ---- ------ ---- ----- ---- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Grand View Drive Simpsonville, SC $ 157 $ 641 $ 87 $ 432 $ 244 $ 1,073 $ 1,317 $ 37 1994 40
Florida Street Springfield, MO 98 636 - 19 98 655 753 38 1994 40
2956 North Lindbergh St. Louis, MO 554 2,269 - 99 554 2,368 2,922 174 1994 40
1550 North Lindbergh St. Louis, MO 339 1,362 - 24 339 1,386 1,725 81 1994 40
Alt. Highway 19 South Tarpon Springs, FL 448 1,092 - 556 448 1,648 2,096 64 1994 40
Wade Hampton Blvd. Taylors, SC 190 917 - 19 190 936 1,126 53 1994 40
Airport Blvd. West Columbia, SC 145 847 - 19 145 866 1,011 50 1994 40
Orchard Drive West Columbia, SC 42 643 - 99 42 742 784 40 1994 40
Shipyard Blvd. Wilmington, NC 297 1,195 - 11 297 1,206 1,503 64 1994 40
Inwood Road Addison, TX 650 2,603 - 73 650 2,676 3,326 120 1995 40
Spring Street Atlanta, GA 379 1,526 - 1,212 379 2,738 3,117 77 1995 40
U.S. Highway 1 Big Coppitt, FL 230 930 - 15 230 945 1,175 41 1995 40
Atlanta Highway Bogart, GA 278 1,110 - 39 278 1,149 1,427 45 1995 40
Van Teylingen Drive Colorado Springs, CO 580 2,316 - 36 580 2,352 2,932 116 1995 40
North Powers Colorado Springs, CO 680 2,722 - 28 680 2,750 3,430 98 1995 40
Parkmoor Village Drive Colorado Springs, CO 415 1,661 - 48 415 1,709 2,124 83 1995 40
Providence Road Columbia, MO 220 891 - 21 220 912 1,132 48 1995 40
I-70 Drive SE Columbia, MO 150 662 - 38 150 700 850 37 1995 40
Plumbers Road Columbia, SC 140 315 - 42 140 357 497 17 1995 40
McElroy Road Doraville, GA 395 1,584 - 63 395 1,647 2,042 79 1995 40
Westmoreland Plaza Douglasville, GA 260 1,052 - 50 260 1,102 1,362 58 1995 40
Highway 5 Douglasville, GA 283 1,136 - 66 283 1,202 1,485 49 1995 40
Dura Lee Lane Douglasville, GA 251 1,008 - 60 251 1,068 1,319 43 1995 40
Spaceway Duncanville, TX 200 809 - 68 200 877 1,077 49 1995 40
South Cedar Ridge Duncanville, TX 220 887 - 6 220 893 1,113 42 1995 40
Jonesboro Road Forest Park, GA 321 1,286 - 25 321 1,311 1,632 54 1995 40
College Avenue Fort Collins, CO 415 1,667 - 30 415 1,697 2,112 88 1995 40
York Road Gastonia, NC 200 802 - 25 200 827 1,027 32 1995 40
Yacht Cove Drive Hilton Head, SC 868 3,477 - 59 868 3,536 4,404 144 1995 40
S.W. Freeway Houston, TX 600 2,884 - 233 600 3,117 3,717 147 1995 40
South Main Houston, TX 737 2,951 - 42 737 2,993 3,730 112 1995 40
Mangum Road Houston, TX 420 1,684 - 58 420 1,742 2,162 64 1995 40
Hayes Road Houston, TX 409 1,641 - 56 409 1,697 2,106 63 1995 40
27
<PAGE> 31
STORAGE TRUST REALTY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(amounts in thousands)
<CAPTION>
Cost
Capitalized Build-
Initial Subsequent Gross Carrying ing
Cost To To Amount At De-
Company Acquisition December 31, 1996 pre-
------------- ---------------------------------------------- Year cia-
Accumu- Ac- tion
Build- Build- Build- lated quired Term
ings ings ings Depre- By Stor- In
Encum- & Fix- & Fix- & Fix- Total ciation age Years
Description(a) brances Land tures Land tures Land tures (b)(d) (c) Realty (e)
- --------------------------------------------- ------- ---- ------ ---- ----- ---- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Addicks Satsuma Houston, TX $ 248 $ 1,000 $ - $ 72 $ 248 $ 1,072 $ 1,320 $ 59 1995 40
Bingle Road Houston, TX 321 1,286 - 39 321 1,325 1,646 49 1995 40
South Highway M291 Independence, MO 352 1,460 - 62 352 1,522 1,874 64 1995 40
Roosevelt Blvd. Jacksonville, FL 305 1,225 - 37 305 1,262 1,567 52 1995 40
East 67th Terrace Kansas City, MO 404 1,680 101 465 505 2,145 2,650 80 1995 40
James A. Reed Road Kansas City, MO 323 1,343 - 162 323 1,505 1,828 59 1995 40
Church Street Lake Charles, LA 215 869 - 40 215 909 1,124 52 1995 40
Haskell Avenue Lawrence, KS 379 1,574 - 61 379 1,635 2,014 69 1995 40
Wedgewood Avenue Longmont, CO 300 1,709 - 25 300 1,734 2,034 94 1995 40
Whitlock Place Marietta, GA 483 1,931 - 17 483 1,948 2,431 73 1995 40
4705 Winchester Road Memphis, TN 395 1,611 - 133 395 1,744 2,139 86 1995 40
Madison Avenue Memphis, TN 178 718 - 35 178 753 931 38 1995 40
N.W. 14th Street Miami, FL 703 3,090 - 37 703 3,127 3,830 134 1995 40
North Columbia Street Milledgeville, GA 325 1,303 - 33 325 1,336 1,661 55 1995 40
Moffat Road Mobile, AL 300 1,199 - 62 300 1,261 1,561 49 1995 40
Azalea Road Mobile, AL 210 839 - 62 210 901 1,111 43 1995 40
Welshwood Drive Nashville, TN 601 2,407 - 28 601 2,435 3,036 101 1995 40
McLeod Road Orlando, FL 234 936 - 44 234 980 1,214 41 1995 40
Orange Blossom Trial Orlando, FL 482 1,939 - 86 482 2,025 2,507 89 1995 40
Chesnee Highway Spartanburg, SC 283 1,136 - 106 283 1,242 1,525 48 1995 40
Third Street St. Louis, MO 670 2,770 - 56 670 2,826 3,496 141 1995 40
Bus Barn St. Louis, MO 256 9 - 149 256 158 414 5 1995 40
World Parkway Center St. Louis, MO 320 1,315 - 17 320 1,332 1,652 67 1995 40
------------------------------------------------------------------
33,919 153,297 161 8,994 34,080 162,291 196,371 8,755
------------------------------------------------------------------
28
<PAGE> 32
STORAGE TRUST REALTY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(amounts in thousands)
<CAPTION>
Cost
Capitalized Build-
Initial Subsequent Gross Carrying ing
Cost To To Amount At De-
Company Acquisition December 31, 1996 pre-
------------- ---------------------------------------------- Year cia-
Accumu- Ac- tion
Build- Build- Build- lated quired Term
ings ings ings Depre- By Stor- In
Encum- & Fix- & Fix- & Fix- Total ciation age Years
Description(a) brances Land tures Land tures Land tures (b)(d) (c) Realty (e)
- --------------------------------------------- ------- ---- ------ ---- ----- ---- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 ACQUISITIONS
2064 Briarcliff Road Atlanta, GA $ 738 $ 2,223 $ - $ 15 $ 738 $ 2,238 $ 2,976 $ 40 1996 40
Semoran Blvd. Casselberry, FL 640 1,948 - 38 640 1,986 2,626 35 1996 40
Western Branch Blvd. Chesapeake, VA 798 2,410 - 22 798 2,432 3,230 44 1996 40
North Highland Clearwater, FL 368 1,472 - 50 368 1,521 1,889 31 1996 40
Centennial Blvd. Colorado Springs, CO 670 2,748 - 16 670 2,765 3,435 31 1996 40
River Drive Columbia, SC 252 1,038 - - 252 1,038 1,290 22 1996 40
Morse Road Columbus, OH 530 1,598 - 25 530 1,623 2,153 29 1996 40
North Washington Street Denver, CO 431 1,731 - 13 431 1,744 2,175 20 1996 40
South Clinton Street Denver, CO (g) 260 1,065 - 4 260 1,069 1,329 14 1996 40
Kangaroo Drive Durham, NC 638 1,925 - 19 638 1,944 2,582 35 1996 40
West Florissant Ferguson, MO 302 1,206 - 312 302 1,518 1,820 29 1996 40
North Highway 67 Florissant, MO 441 1,737 - 6 441 1,743 2,184 36 1996 40
Cleveland Avenue Ft. Myers, FL 563 1,715 - 45 563 1,760 2,323 32 1996 40
East Buckingham Road Garland, TX 443 1,346 - 27 443 1,374 1,817 25 1996 40
Jackson Drive Garland, TX 686 2,076 - 33 686 2,110 2,796 38 1996 40
Pineknoll Road Greenville, SC 495 1,499 - 45 495 1,544 2,039 28 1996 40
2510 FM 1960 West Houston, TX 325 1,305 - 7 325 1,312 1,637 10 1996 40
Southside Blvd. Jacksonville, FL 750 3,030 - 18 750 3,048 3,798 40 1996 40
Ft. Caroline Road Jacksonville, FL 835 2,537 - 36 835 2,573 3,408 46 1996 40
State Avenue Kansas City, KS 211 841 - 42 211 882 1,093 12 1996 40
47th Street Kansas City, MO 223 904 - 15 223 918 1,141 21 1996 40
Dominion Drive Katy, TX 550 1,877 - - 550 1,877 2,427 9 1996 40
Long Avenue Lenexa, KS 480 1,951 - 13 480 1,964 2,444 22 1996 40
Winchester Road Lexington, KY 706 2,119 - 41 706 2,160 2,866 38 1996 40
4324 Poplar Road Louisville, KY 454 1,369 - 34 454 1,403 1,857 25 1996 40
4301 Poplar Road Louisville, KY 577 1,740 - 35 577 1,775 2,352 32 1996 40
Breckenridge Lane Louisville, KY 521 1,571 - 22 521 1,593 2,114 28 1996 40
Williams Avenue Madison, TN 1,154 4,633 - 56 1,154 4,689 5,843 53 1996 40
Cobb Parkway Marietta, GA 800 2,409 - 36 800 2,445 3,245 44 1996 40
Summer Avenue Memphis, TN 475 1,439 - 39 475 1,478 1,953 27 1996 40
6390 Winchester Road Memphis, TN 416 1,259 - 25 416 1,284 1,700 23 1996 40
29
<PAGE> 33
STORAGE TRUST REALTY
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(amounts in thousands)
<CAPTION>
Cost
Capitalized Build-
Initial Subsequent Gross Carrying ing
Cost To To Amount At De-
Company Acquisition December 31, 1996 pre-
------------- ---------------------------------------------- Year cia-
Accumu- Ac- tion
Build- Build- Build- lated quired Term
ings ings ings Depre- By Stor- In
Encum- & Fix- & Fix- & Fix- Total ciation age Years
Description(a) brances Land tures Land tures Land tures (b)(d) (c) Realty (e)
- --------------------------------------------- ------- ---- ------ ---- ----- ---- ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
West Dean Road Milwaukee, WI $ 830 $ 2,490 $ - $ 41 $ 830 $ 2,531 $ 3,361 $ 45 1996 40
Foxridge Lane Mission, KS 500 2,032 - 14 500 2,047 2,547 23 1996 40
Grelot Road Mobile, AL 378 1,519 - 36 378 1,555 1,933 38 1996 40
McNally Drive Nashville, TN 621 2,494 - 67 621 2,561 3,182 29 1996 40
South Semoran Blvd. Orlando, FL 272 832 - 38 272 870 1,142 16 1996 40
Hemlock Avenue Overland Park, KS 560 2,275 - 15 560 2,290 2,850 26 1996 40
Avenue K Plano, TX 1,072 3,232 - 121 1,072 3,353 4,425 59 1996 40
Woodson Road Raytown, MO 720 2,920 - 14 720 2,934 3,654 33 1996 40
Alpharetta Highway Roswell, GA 1,678 5,051 - 27 1,678 5,078 6,756 91 1996 40
Hedge Lane Terrace Shawnee, KS 340 1,385 - 14 340 1,399 1,739 16 1996 40
North Vandeventer St. Louis, MO 186 745 - 307 186 1,052 1,238 16 1996 40
Highway 19 North Tarpon Springs, FL 710 2,158 - 26 710 2,184 2,894 39 1996 40
South Garnett Road Tulsa, OK 430 1,297 - 19 430 1,316 1,746 24 1996 40
Foster Court Waukesha, WI 457 1,381 - 32 457 1,413 1,870 25 1996 40
Roosevelt Road Winfield, IL 1,012 3,037 - 22 1,012 3,059 4,071 55 1996 40
--------------------------------------------------------------------
Total 1996 Acquisitions 26,498 89,566 - 1,884 26,498 91,450 117,948 1,451
--------------------------------------------------------------------
--------------------------------------------------------------------
Total of All Facilities $60,417 $242,862 $161 $10,878 $60,578 $253,741 $314,319 $10,205
====================================================================
See Accompanying Notes to Schedule III
</TABLE>
30
<PAGE> 34
<TABLE>
STORAGE TRUST REALTY
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
(amounts in thousands)
(a). The land, building and fixtures detailed in Schedule III are used for
self-storage facilities, with the exception of the Home Office.
(b). The changes in land, building and fixtures for the years ended
December 31, 1996, 1995, and 1994 are as follows:
<CAPTION>
1996 1995 1994
-------------------------- ------------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of the year $194,216 $101,077 $26,763
Additions during the year:
Cost of facilities acquired 116,064 88,541 77,095
Improvements 6,477 4,628 0
-------------------------- ------------------ -----------------
Total additions during the year 122,541 93,169 77,095
Deductions during year:
Cost of facilities exchanged (2,438) (30) 0
Non-cash reorganization
adjustment 0 0 (2,781)
-------------------------- ------------------ -----------------
Total deductions during the year (2,438) (30) (2,781)
------------- ----------- -----------
Balance at end of year $314,319 $194,216 $101,077
============= =========== ===========
</TABLE>
(c). The changes in accumulated depreciation of buildings and fixtures
for the years ended December 31, 1996, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------- ---------- -----------
<S> <C> <C> <C>
Balance at beginning of the year $ 4,197 $ 1,029 $ 4,898
Depreciation expense 6,102 3,168 1,019
Facilities exchanged (94) 0 0
Non-cash reorganization adjustment 0 0 (4,888)
------------ ---------- -----------
Balance at end of the year $ 10,205 $ 4,197 $ 1,029
============ ========== ===========
</TABLE>
(d). The aggregate cost of land, buildings, and fixtures for federal
income tax basis purposes is approximately $ 312,492.
(e). Depreciation is computed based upon the following useful lives:
Building and building improvements 5 - 40 Years
Fixtures, furniture and equipment 10 Years
Signs/gates/fences 10 - 20 Years
Computer hardware 5 Years
Computer software 3 Years
(f). Property secured a mortgage loan, which had a balance of $1,582 as of
December 31, 1996. This was paid off on January 17, 1997.
(g). Property secured a mortgage loan, which had a balance of $1,000 as of
December 31, 1996. This was paid off on January 31, 1997.
31
<PAGE>
First Amendment to
Storage Trust Properties, L.P.
Integrated 401(k) Profit Sharing Plan and Trust
This first Amendment shall become effective as of November 1,
1996 (the Effective Date ), and is made and entered into this 31st
day of October, 1996, by and between Storage Trust Properties, L.P.,
a Delaware limited partnership, whose only general partner is Storage
Trust Realty, a Maryland Real Estate Investment Trust (hereinafter
referred to as the "Employer"), and Boone County National Bank of
Columbia, Missouri (the "Trustee");
WITNESSETH:
WHEREAS, Storage Trust Properties, L.P., has adopted the Storage
Trust Properties, L.P., Integrated 401(k) Profit Sharing Plan and
Trust as a Section 401(k) Profit Sharing Plan effective as of July 1,
1995; and
WHEREAS, the Storage Trust Properties, L.P., Integrated 401(k)
Profit Sharing Plan and Trust has been adopted to reward the faithful
service of its employees and to encourage its employees to continue
in its employ; and
WHEREAS, Storage Trust Properties, L.P., desires that this Plan
qualify under all pertinent provisions of the Employee's Retirement
Income Security Act of 1974 as amended, and the 1986 Tax Reform Act,
and all pertinent provisions of the Internal Revenue Code of 1986
including any substitute and successor sections; and
WHEREAS, it is intended that all full-time employees of the
following entities shall be eligible to become Participants in this
Plan, to-wit: Storage Trust Properties, L.P., a Delaware limited
partnership; Storage Trust Realty, a Maryland Real Estate Investment
Trust; Storage Realty Management Co., a Delaware corporation; and
WHEREAS, Storage Trust Properties, L.P., now desires to amend
the terms of the Plan as more fully set out herein;
<PAGE>
NOW THEREFORE, effective November 1, 1996, Storage Trust
Properties, L.P., in accordance with the provisions of Article XV of
this 401(k) Profit Sharing Plan and Trust, hereby amends the Storage
Trust Properties, L.P., Integrated 401(k) Profit Sharing Plan as set
out below, and in consideration of the promises and agreements herein
contained, the parties hereto do mutually covenant and agree as
follows:
1. A new Section 1.72 is added to the Plan, said new Section
to read as follows:
1.72 401(k) Participant. 401(k) Participant shall
mean those Employees who, based on the Employer's work standards
and practices, are expected by the Employer to perform 1,000 or
more Hours of Service for the Employer during each full Fiscal
Year of their employment. The Committee shall certify to the
Trustee the identity of the 401(k) Participants within a
reasonable time after such Employees are hired, but in no case
later than 60 days after hiring.
2. Section 4.03 of the Plan is deleted in its entirety, and
the following new Section 4.03 is inserted in lieu thereof:
4.03 Employee's Salary Reduction Election.
a. Each 401(k) Participant may elect to defer a
portion of his Basic Annual Compensation which would have been
received in the Plan Year (except for the deferral election) by
up to the maximum amount which will not cause the Plan to
violate the provisions of Sections 4.14(a) and 1.47, or cause
the Plan to exceed the maximum amount allowable as a deduction
to the Employer under Code Section 404. A deferral election (or
modification of an earlier election) may not be made with
respect to Basic Annual Compensation which is currently
available on or before the date the 401(k) Participant adopts
this cash or deferred arrangement, or the date such arrangement
first became effective.
b. The amount by which Basic Annual Compensation is
reduced shall be that 401(k) Participant's Deferred Compensation
and shall be treated as an Elective Contribution and allocated
to the 401(k) Participant's Elective Contribution Account.
c. The balance in each 401(k) Participant's Elective
Contribution Account attributable to the deferral election,
shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
<PAGE>
d. Amounts held in the 401(k) Participant's Elective
Contribution Account attributable to the salary reduction
agreement may not be distributable earlier than the following:
(1) A 401(k) Participant's termination of
employment, Disability, or death;
(2) A 401(k) Participant's attainment of age 59
and one-half;
(3) The termination of the Plan without the
establishment or existence of a "successor plan", as that
term is described in Regulation 1.401(k)-1(d)(3);
(4) The date of disposition by the Employer to
an entity that is not an Affiliated Employer of
substantially all of the assets (within the meaning of Code
Section 409(d)(2)) used in a trade or business of the
Employer if the Employer continues to maintain this Plan
after the disposition, but only with respect to a 401(k)
Participant who continues employment with the entity
acquiring such assets;
(5) The date of disposition by the Employer or
an Affiliated Employer who maintains the Plan of its
interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an Affiliated
Employer but only with respect to a 401(k) Participant who
continues employment with such subsidiary;
(6) The proven financial hardship of a 401(k)
Participant, subject to the limitations of Section 1.37; or
(7) Pursuant to the provisions of Section
4.03(g) or Section 5.03.
<PAGE>
e. For each Plan Year, a 401(k) Participant's
Deferred Compensation under this Plan shall not exceed, during
any taxable year of the 401(k) Participant, the limitation
imposed by Code Section 402(g), as in effect at the beginning of
such taxable year. If such dollar limitation is exceeded, a
401(k) Participant will be deemed to have notified the
Administrator of such excess amount which shall be distributed
in a manner consistent with Section 4.03(g). The dollar
limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
f. In the event a 401(k) Participant has received a
Hardship Distribution from his Elective Contribution Account
pursuant to Section 12.10 or pursuant to Regulation 1.401(k)-
1(d)(2)(iv)(B) from any other plan maintained by the Employer,
then such 401(k) Participant shall not be permitted to elect to
have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code
Section 402(g) shall be reduced, with respect to the 401(k)
Participant's taxable year following the taxable year in which
the Hardship Distribution was made, by the amount of such 401(k)
Participant's Deferred Compensation, if any, pursuant to this
Plan (and any other plan maintained by the Employer) for the
taxable year of the Hardship Distribution.
g. If a 401(k) Participant's Deferred Compensation
under this Plan together with any elective deferrals (as Defined
in Regulation 1.402(g)-1(b) under another qualified cash or
deferred arrangement ( as defined in code Section 401(k)), a
simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code
Section 3121(a)(5)(D)), a deferred compensation plan under Code
Section 457, or a trust described in Code Section 501(c)(18)
cumulatively exceed the limitation imposed by Code Section
402(g) (as adjusted annually in accordance with the method
provided in Code Section 415(d) pursuant to Regulations) for
such 401(k) Participant's taxable year, the 401(k) Participant
may, not later than March 1 following the close of the 401(k)
Participant's taxable year, notify the Administrator in writing
of such excess and request that his Deferred Compensation under
this Plan be reduced by an amount specified by the 401(k)
Participant. In such event, the Administrator may direct the
Trustee to distribute such excess amount (and any income
allocable to such excess amount) to the 401(k) Participant not
later than the first April 15th following the close of the
401(k) Participant's taxable year. Any distribution of less
than the entire amount of Excess Deferred Compensation and
income shall be treated as a pro rata distribution of Excess
Deferred Compensation and income. The amount distributed shall
not exceed the 401(k) Participant's Deferred Compensation under
the Plan for the taxable year. Any distribution on of before
the last day of the 401(k) Participant's taxable year must
satisfy each of the following conditions:
<PAGE>
(i) the distribution must be made after the date
on which the Plan received the Excess Deferred
Compensation;
(ii) the 401(k) Participant shall designate the
distribution as Excess Deferred Compensation; and
(iii) the Plan must designate the distribution as
a distribution of Excess Deferred Compensation.
h. Not withstanding Section 4.03(g) above, a 401(k)
Participant's Excess Deferred Compensation shall be reduced, but
not below zero, by any distribution and/or recharacterization of
Excess Aggregate Contributions pursuant to Section 4.15(a) for
the Plan Year beginning with or within the taxable year of the
401(k) Participant.
i. At Normal Retirement Date, or such other date when
the 401(k) Participant shall be entitled to receive benefits,
the fair market value of the 401(k) Participant's Elective
Contribution account attributable to salary reduction
contributions shall be used to provide additional benefits to
the 401(k) Participant or his Beneficiary.
j. All amounts contributed to the 401(k)
Participant's Elective Contribution Account pursuant to Section
4.03 may be self-directed as provided in Article VII.
k. The Employer and the Administrator shall
implement the salary reduction elections provided for herein in
accordance with the following:
(i) Subject to subparagraph (ii) below, the
Employer, on behalf of all 401(k) Participants whose
Employment Date occurs on or after the Effective Date,
shall commence making elective deferrals to the Plan equal
to two percent (2%) of the 401(k) Participant s Basic
Annual Compensation, effective for the first pay period of
the month following three full months of employment (the
Initial Deferral ). All 401(k) Participants who are not
Participants as defined in the Plan as of the Effective
Date, but who have been employed for at least three full
months, may commence making elective deferrals to the Plan
effective as of the earlier of the Effective Date or the
first pay period of the month following three full months
of employment by filing a written notice with the
Administrator within a reasonable time before the
applicable date.
<PAGE>
(ii) A 401(k) Participant whose Employment Date
occurs on or after the Effective Date may, prior to the end
of the second full month of employment, elect to revoke the
Initial Deferral or to make an alternative salary reduction
election of more or less than two percent (2%) of Basic
Annual Compensation, within the limits of this section.
The 401(k) Participant shall make such an election by
entering into a written revocation agreement or salary
reduction agreement with the Employer and filing such
agreement with the Administrator. Such election shall
remain in force until modified or revoked. If the 401(k)
Participant fails to revoke the Initial Deferral or to make
an alternative salary deferral election within such time,
then such 401(k) Participant may thereafter revoke or
modify the Initial Deferral in accordance with the rules
governing revocations or modifications as set out below.
(ii) A 401(k) Participant may modify a prior
election during the Plan Year and concurrently make a new
election by filing a written notice with the Administrator
within a reasonable time before the pay period for which
modification is to be effective. However, modifications to
a salary deferral election shall only be permitted quarter-
annually, or four times per year, during election periods
established by the Administrator prior to the first day of
a Plan Year and prior to the first day of the fourth,
seventh and tenth months of a Plan Year. Any modification
shall not have retroactive effect and shall remain in force
until revoked.
(iii) A 401(k) Participant may elect to
prospectively revoke his salary reduction agreement in its
entirety at any time during the Plan Year by providing the
Administrator with thirty (30) days written notice of such
revocation (or upon such shorter notice period as may be
acceptable to the Administrator). Such revocation shall
become effective as of the beginning of the first pay
period coincident with or next following the expiration of
the notice period. Furthermore, the termination of the
401(k) Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke any
salary reduction agreement then in effect, effective
immediately following the close of the pay period within
which such termination or cessation occurs.
<PAGE>
3. Except as specifically set out herein, the Plan is hereby
ratified and continued.
IN WITNESS WHEREOF, the Employer has executed this First Amendment to
Profit Sharing Plan to be effective as of the 1st day of November,
1996.
Storage Trust Properties, L.P.
("Employer")
By: Storage Trust Realty, its General
Partner
By:____Michael G. Burnam____________
Michael G. Burnam, Chief Executive
Officer and Trustee
Attest:
_____Stephen M. Dulle___________________________
Stephen M. Dulle, Chief Financial
Officer
Boone County National Bank ("Trustee")
By:____Faye Johnson_____________________
8\plans\stp_1amd.401 -Page 6-
<PAGE>
FIRST AMENDMENT TO
CORPORATE SERVICES AGREEMENT
This Amendment, dated as of January 1, 1996, amends the Corporate
Services Agreement, dated as of November 16, 1994 (the "Agreement"), by and
among of Storage Trust Realty, a Maryland real estate investment trust (the
"Company"), Storage Trust Properties, L.P., a Delaware limited partnership
(the "Operating Partnership"), and Storage Realty Management Co., a Delaware
corporation (the "Subsidiary Company").
W I T N E S E T H:
WHEREAS, the Company, the Operating Partnership and the Subsidiary
Company desire to amend the Agreement as set forth in this Amendment;
N O W, THEREFORE, the Company, the Operating Partnership and the
Subsidiary Company, being all of the parties to the Agreement, hereby amend
the Agreement as follows:
1. Amendments.
(a) Effective as of the date hereof, Section 2.4.2 of the Agreement is
hereby deleted in its entirety and replaced with the following:
2.4.2 After each quarter, the Operating Partnership shall
submit to the Subsidiary Company a calculation, certified by one
of its executive officers as to its accuracy, of the amount owed
by the Subsidiary Company for services listed on Exhibit A that
the Operating Partnership provided for the Subsidiary Company
during that quarter. The amount owed by the Subsidiary Company
under subsection 2.2.3 and for services listed on Exhibit A shall
be the lesser of (i) $50,000 per quarter or (ii) the amount owed
under subsection 2.2.3 plus the amount determined on the following
basis:
<PAGE>
3% of Gross Receipts From
Sales of Locks, Boxes and Other Items and
the Processing of Insurance
and 45% of Subsidiary Company's
Gross Income from Truck Rental
Business (Including Compensation Received
in Respect of Doing
Proper Paperwork for Truck Rentals)
at Properties
Owned by Operating
Partnership
Amount Owed = +
Number of Properties Managed Total Operating Partnership
by Subsidiary Company General Administrative
Total Number of Properties x Expenses for the Quarter, Minus
Owned or Managed by Operating such Expenses Reimbursed by the
Partnership and Subsidiary Company Company
(b) Effective as of the date hereof, line 14 on EXHIBIT A to the
Agreement is hereby deleted in its entirety and replaced with the
following:
14. Sales of Locks, Boxes and Other Items and Processing of
Insurance and Truck Rental and Related Site Use at Operating
Partnership Properties
2. Continuing Effectiveness. As herein amended, the Agreement shall
remain in full force and effect and is hereby ratified and confirmed in all
respects.
3. Defined Terms. Capitalized terms used and not defined herein
shall have the respective meanings assigned such terms in the Agreement.
4. Governing Law. This Amendment shall be governed in all respects,
whether as to validity, construction, capacity, performance or otherwise, by
the laws of the State of Missouri, in which it has a situs.
5. Severability. If any provision of this Amendment shall be held
invalid by a court with jurisdiction over the parties to this Amendment, then
such provision shall be deleted from the Amendment, which shall then be
construed to give effect to the remaining provisions thereof. If any one or
more of the provisions contained in this Amendment or in any other instrument
referred to herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then, to the maximum extent permitted by law,
such invalidity, illegality or enforceability shall not affect any other
provisions of this Amendment, the Agreement or any other such instrument.
<PAGE>
6. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
taken together shall be considered one and the same instrument.
7. Limitation of Liability of Shareholders and Officers of the
Company. ANY OBLIGATION OR LIABILITY WHATSOEVER OF THE COMPANY WHICH MAY
ARISE AT ANY TIME UNDER THIS AMENDMENT OR THE AGREEMENT OR ANY OBLIGATION OR
LIABILITY WHICH MAY BE INCURRED BY IT PURSUANT TO ANY OTHER INSTRUMENT,
TRANSACTION OR UNDERTAKING CONTEMPLATED HEREBY OR THEREBY SHALL BE SATISFIED,
IF AT ALL, OUT OF THE COMPANY'S ASSETS ONLY. NO SUCH OBLIGATION OR LIABILITY
SHALL BE PERSONALLY BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF
BE HAD TO, THE PROPERTY OF ANY OF ITS SHAREHOLDERS, TRUSTEES, OFFICERS,
EMPLOYEES OR AGENTS, REGARDLESS OF WHETHER SUCH OBLIGATION OR LIABILITY IS IN
THE NATURE OF CONTRACT, TORT OR OTHERWISE.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
STORAGE TRUST REALTY
By:/s/ MICHAEL G. BURNAM
Name: Michael G. Burnam
Title: Chief Executive Officer
STORAGE TRUST PROPERTIES, L.P.
By: Storage Trust Realty,
General Partner
By:/s/ MICHAEL G. BURNAM
Name: Michael G. Burnam
Title: Chief Executive Officer
STORAGE REALTY MANAGEMENT CO.
By:/s/ MICHAEL G. BURNAM
Name: Michael G. Burnam
Title: President
<PAGE> 1
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 "FNBB"), BANK OF AMERICA ILLINOIS, an Illinois banking corporation
(hereinafter referred to as "BOA"; FNBB and BOA are hereinafter referred to
collectively as "Lender", which term shall also include each other Bank which
may now or hereafter become party to the "Credit Agreement" (as hereinafter
defined) and shall also include any such individual Bank acting as agent for
all of the Banks), 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 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 FNBB in the principal face
amount of Sixty-Two Million Five Hundred Thousand and No/100 Dollars
($62,500,000.00) and that certain Swing Loan Note of even date herewith made
by Borrower to the order of FNBB in the principal face amount of Ten Million
and No/100 Dollars ($10,000,000.00) (hereinafter referred to collectively as
the "FNBB Note") together with interest as provided in the FNBB Note, together
with any replacements, supplements, renewals, modifications, consolidations,
restatements and extensions thereof; and
(b) 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 BOA in the principal face
amount of Thirty-Seven Million Five Hundred Thousand and No/100 Dollars
($37,500,000.00) (hereinafter referred to as the "BOA Note") together with
interest as provided in the BOA Note, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
(c) the full and prompt payment when due, whether by acceleration or
otherwise, either before or after maturity thereof, of each other note as may
be issued under that certain Revolving Credit Agreement dated of even date
herewith (hereinafter referred to as the "Credit Agreement") among Borrower,
FNBB, for itself and as agent, and BOA, together with interest as provided in
each such note, together with any replacements, supplements, renewals,
modifications, consolidations, restatements and extensions thereof (the FNBB
Note, the BOA Note and each of the notes described in this subparagraph (c) is
hereinafter referred to collectively as the "Note"); and
<PAGE>
(d) the full and prompt payment and performance of all obligations of
Borrower to Lender under the terms of the Credit Agreement, together with any
replacements, supplements, renewals, modifications, consolidations,
restatements and extensions thereof; and
(e) 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 Credit Agreement (the Note, the
Credit 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 Credit 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 Credit 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.
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
<PAGE>
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. Without limiting the generality of the foregoing,
Guarantor acknowledges the terms of Section 18.3 of the Credit Agreement and
agrees that this Guaranty shall extend and be applicable to each new or
replacement note delivered by Borrower pursuant thereto without notice to or
further consent from Guarantor.
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 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
<PAGE>
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;
(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 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;
<PAGE>
(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
defult 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 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
<PAGE>
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 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. 105 or any other
<PAGE>
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 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 Credit 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 Agent has reasonable grounds to
request the same (including, without limitation, at any time that the
Compliance Certificate indicates that the Guarantor is at or near the minimum
compliance with the financial covenants in this Guaranty), the Agent 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
Credit 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
<PAGE>
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 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;
<PAGE>
(i) not later than five (5) Business Days after the Guarantor
receives notice of the same from the Rating Agency or otherwise learns of the
same, notice of the issuance of any change in the rating by the Rating Agency
in respect of any debt of the Guarantor (including any change in an Implied
Rating), together with the details thereof, and of any announcement by the
Rating Agency that any such rating is "under review" or that any such rating
has been placed on a watch list or that any similar action has been taken by
the Rating Agency (collectively a "Rating Notice");
(j) promptly upon becoming aware thereof, written 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
(k) 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 Banks 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
<PAGE>
ownership of the stock of the corporate general partners of Subsidiaries of
the Borrower;
(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
odinary 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;
(iii) Indebtedness in respect of taxes, assessments and
governmental charges to the extent that payment therefor shall not at
<PAGE>
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; and
(v) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business.
(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 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; and
(v) liens specifically permitted pursuant to Section 8.2 of
the Credit Agreement.
<PAGE>
(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 this
Guaranty;
(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
(including, without limitation, the proceeds from any Debt Offering or Equity
Offering);
(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 shall not pay any Distribution to the shareholders
of the Guarantor if such Distribution is in excess of the amount which, when
added to the amount of all other Distributions paid in the same fiscal quarter
and the preceding three (3) fiscal quarters will exceed (I) ninety percent
(90%) of its Funds from Operations for the four (4) consecutive fiscal
quarters ending prior to the quarter in which such Distribution is paid, or
(ii) ninety-five percent (95%) of its Funds Available for Distribution for the
four (4) consecutive fiscal quarters ending prior to the quarter in which such
Distribution is paid. The foregoing limitation on Distributions shall not
preclude the Guarantor from paying Distributions necessary to maintain its
REIT Status; and
(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,
<PAGE>
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 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
<PAGE>
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
and to:
Bank of America Illinois
231 South LaSalle Street
15th Floor
Chicago, Illinois 60697
Attn: Andy Hensel
and a copy to each other Lender which may now or hereafter become a party to
the Credit Agreement at such address as may be designated by such Lender.
The address of Guarantor is:
Storage Trust Realty
2407 Rangeline
Columbia, Missouri 65202
Attn: Stephen 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
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
<PAGE>
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 ANY
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 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 Credit 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
<PAGE>
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 AGENT AND THE BANKS TO PURSUE ANY REMEDY AGAINST ANY
ASSETS OF THE GUARANTOR.
<PAGE>
IN WITNESS WHEREOF, Guarantor has executed this Guaranty under seal on
the 25th day of January, 1996.
STORAGE TRUST REALTY,
a Maryland real estate investment trust
By:______________________________
Name:_________________________
Title:__________________________
[SEAL]
<PAGE> 1
FIRST AMENDMENT TO
REVOLVING CREDIT AGREEMENT
AND GUARANTY
THIS FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT AND
GUARANTY (this "Amendment") made this 13th day of December, 1996,
by and among STORAGE TRUST PROPERTIES, L. P., a Delaware limited
partnership ("Borrower"), STORAGE TRUST REALTY, a Maryland real
estate investment trust ( Guarantor ), THE FIRST NATIONAL BANK OF
BOSTON, individually ("FNBB"), BANK OF AMERICA ILLINOIS ( BOA ),
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as successor
to Dresdner Bank AG Chicago and Grand Cayman Branches
( Dresdner ), NBD BANK ( NBD ), SIGNET BANK ( Signet ) and KEY
BANK, as successor to Society National Bank ( Key ; FNBB, BOA,
Dresdner, NBD, Signet and Key are hereinafter referred to
collectively as the Banks ), and THE FIRST NATIONAL BANK OF
BOSTON, as Agent (the "Agent").
W I T N E S E T H:
WHEREAS, Borrower, Agent and the Banks (or their
predecessors-in-interest) entered into that certain Revolving
Credit Agreement dated January 25, 1996 (the "Credit Agreement");
and
WHEREAS, Guarantor has executed and delivered to the Agent
and the Banks that certain Unconditional Guaranty of Payment and
Performance dated January 25, 1996 (the Guaranty ); and
WHEREAS, Borrower has requested that Agent and the Banks
modify and amend certain terms and provisions of the Credit
Agreement and the Guaranty;
NOW, THEREFORE, for and in consideration of the sum of TEN
and NO/100 DOLLARS ($10.00), and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby covenant and agree as
follows:
1. Definitions. All the terms used herein which are not
otherwise defined herein shall have the meanings set forth in the
Credit Agreement.
2. Modification of the Credit Agreement. Borrower, Banks
and Agent do hereby modify and amend the Credit Agreement as
follows:
(a) By deleting in their entirety the definitions of
the following terms appearing in Sect. 1.1 of the Credit Agreement:
Assignment of Leases and Rents , Assignment of Management
Agreement and Subordination , Eligible Real Estate , Eligible
Real Estate Qualification Documents , Indemnity Agreement ,
Management Agreements , Mortgaged Property or Mortgaged
<PAGE>
Properties , Secured Asset Value , Secured Debt Service
Coverage Amount , Security Deeds , Security Documents and
Service Agreement ;
(b) By deleting in their entirety the definitions of
the terms Applicable Margin , Borrowing Base , Debt Service ,
Debt Service Coverage Amount , Funds Available for
Distribution , Loan Documents , Pro Forma Principal Payments
and Rent Roll appearing in Sect. 1.1 of the Credit Agreement, and
inserting in lieu thereof the following:
Actual Scheduled Principal Payments. For any
period, the sum of all scheduled or mandatory principal
payments due and payable during such period with
respect to all Indebtedness of the Borrower excluding
any balloon payments due upon maturity of any
Indebtedness.
Applicable Margin. On any date that the lower of
the Implied Ratings issued from time to time by either
of the Rating Agencies for the Borrower or the
Guarantor is an Investment Grade Rating, the applicable
margin set forth below based on the lower of the
Implied Ratings issued by either of the Rating Agencies
for the Borrower or the Guarantor and the type of the
Loan:
<TABLE>
<CAPTION>
Rating Base Rate Loans LIBOR
Rate Loans
<S> <C> <C>
A/A2 or better 0% 1.25%
BBB+/Baa1 to A-/A3 0% 1.30%
BBB/Baa2 0% 1.40%
BBB-/Baa3 0% 1.50%
</TABLE>
<PAGE>
provided, however, that on any date that the lower of
the Implied Ratings for the Borrower or the Guarantor
is not an Investment Grade Rating or neither the
Borrower nor the Guarantor has obtained a rating from
either of the Rating Agencies, the Applicable Margin
for Base Rate Loans shall be 0.00% and the Applicable
Margin for LIBOR Rate Loans shall be 1.625%. In the
event of any change in an Implied Rating of either the
Borrower or the Guarantor by either of the Rating
Agencies or if either the Borrower s or the Guarantor's
Implied Rating shall cease at any time to be an
Investment Grade Rating by either of the Rating
Agencies (but subject to the provisions within the
definition of the term "Investment Grade Rating"), such
change shall effect a change in the Applicable Margin
on the first Business Day after the Rating Notice Date.
It is the intention of the parties that if either the
Borrower or the Guarantor shall only obtain an
Investment Grade Rating from one of the Rating Agencies
without seeking an Investment Grade Rating from the
other of the Rating Agencies, the Borrower shall be
entitled to the benefit of the rate reductions
described above (it being the intent of the parties
that the Borrower shall be entitled to the benefit of
the rate reductions described above if only one of the
Borrower or the Guarantor obtains an Investment Grade
Rating); provided that if one of the Borrower or the
Guarantor shall have obtained an Investment Grade
Rating from both of the Rating Agencies, the lower of
the two ratings (or the loss of the Investment Grade
Rating from one of the Rating Agencies thereafter),
shall control; and provided further that if only one of
the Borrower or the Guarantor shall have obtained an
Investment Grade Rating from one of the Rating
Agencies, the loss of the Investment Grade Rating from
such Rating Agency shall control. It is further the
intention of the parties that if both the Borrower and
the Guarantor shall have obtained an Investment Grade
Rating from one or both of the Rating Agencies, the
lowest of any of such ratings (or the loss of the
Investment Grade Rating from either Rating Agency
thereafter as to either the Borrower or the Guarantor),
shall control.
Borrowing Base. The Borrowing Base shall be the
amount which is the lesser of (a) the maximum amount
which, when added to the total outstanding balance of
all unsecured Indebtedness of the Borrower and its
Subsidiaries (including the Loans), would not exceed
forty-five percent (45%) of the aggregate Asset Value
of the Unencumbered Operating Properties, and (b) the
maximum amount which, when added to the total
outstanding balance of all unsecured Indebtedness of
the Borrower and its Subsidiaries (including the
Loans), would not exceed the Debt Service Coverage
Amount for the Unencumbered Operating Properties.
Debt Service. For any period, the sum of all
interest (including capitalized interest) and the
Actual Scheduled Principal Payments that are due and
payable during such period.
<PAGE>
Debt Service Coverage Amount. At any time
determined by Agent, an amount equal to the maximum
principal loan amount which, when bearing interest at a
rate per annum equal to the then-current annual yield
on ten (10) year obligations issued by the United
States Treasury most recently prior to the date of
determination plus two and one-fourth percent (2.25%)
and payable based on a twenty year mortgage style
amortization schedule (expressed as a mortgage constant
percentage), could be paid by the monthly principal and
interest payment amount resulting from dividing (x) the
quotient obtained by dividing an amount equal to
(i) the sum of (A) the aggregate Operating Cash Flow
from the Unencumbered Operating Properties for the
preceding two (2) fiscal quarters multiplied by two
(2), minus (B) the Capital Improvement Reserve, by
(ii) 2.00, by (y) 12. An example of the calculation of
the Debt Service Coverage Amount is set forth in
Schedule 2 attached hereto. In the event that the
Borrower shall have owned a property within the
Unencumbered Operating Properties for less than two (2)
consecutive fiscal quarters, then for the purposes of
performing such calculation, the Operating Cash Flow
with respect to such property shall be annualized in
such manner as the Agent shall reasonably determine.
Funds Available for Distribution. With respect to
any Person for any fiscal period, an amount equal to
Funds from Operations minus the Actual Scheduled
Principal Payments for such period minus the Capital
Improvement Reserve.
Loan Documents. This Agreement, the Notes, 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 Loans.
Rent Roll. A report prepared by the Borrower
showing for each Unencumbered Operating Property its
location, Net Rentable Area, occupancy status, rent and
other information in substantially the form presented
to the Banks prior to the date hereof or in such other
form as may have been approved by the Agent, such
approval not to be unreasonably withheld. ;
<PAGE>
(c) By deleting the words Guarantor has an Investment
Grade Rating from either of the Rating Agencies or a rating of
BBB- or better from Duff & Phelps Credit Rating Company
appearing in the seventh (7th) and eighth (8th) lines of Sect. 2.2 of
the Credit Agreement and inserting in lieu thereof the words
Borrower or Guarantor has an Investment Grade Rating from either
of the Rating Agencies ;
(d) By deleting Sect. 2.8(b)(i) of the Credit Agreement in
its entirety, and inserting in lieu thereof the following:
(i) Investment Grade Rating. The Borrower or the
Guarantor shall have obtained an Investment Grade
Rating from either or both of the Rating Agencies,
which continues in full force and effect as to any such
rating obtained prior to the Maturity Date (it being
understood that if either the Borrower or the Guarantor
shall have obtained an Investment Grade Rating from
either or both of the Rating Agencies and any such
Implied Rating as to the Borrower or the Guarantor
ceases to be an Investment Grade Rating by either of
the Rating Agencies at the time required by Sect. 2.8(b),
then Borrower shall not be entitled to an extension of
the Maturity Date pursuant to Sect. 2.8(b)(i). ;
(e) By deleting the words (or Mortgaged Properties,
if applicable) appearing in the second (2nd) and third (3rd)
lines of Sect. 7.4(h) of the Credit Agreement;
(f) By renumbering Sect. 7.4(i) of the Credit Agreement as
Sect. 7.4(j), and inserting the following paragraph as new Sect.
7.4(i) of the Credit Agreement:
(i) Not later than five (5) Business Days after
the Borrower receives notice of the same from the
Rating Agency or otherwise learns of the same, notice
of a Rating Notice as to the Borrower; and ;
(g) By inserting the following sentence at the end of
Sect. 7.4 of the Credit Agreement:
Notwithstanding the foregoing, unless otherwise
requested by the Agent or the Majority Banks, Borrower
shall not be required to deliver the balance sheets,
statements or other matters required by Sect. 7.4(a) or
Sect. 7.4(b) to the extent the same are incorporated in the
balance sheets, statements and other matters delivered
to the Banks by the Guarantor as and when required by
the Guaranty. ;
(h) By deleting the word and number four (4)
appearing in the sixth (6th) line of Sect. 7.14(b) of the Credit
Agreement, and inserting in lieu thereof the word and number two
(2) ;
(i) By inserting the following as new Sect. 7.16 of the
Credit Agreement:
<PAGE>
7.16. More Restrictive Agreements. Should the
Borrower or the Guarantor or any of their respective
Subsidiaries enter into or modify any agreements or
documents pertaining to any existing or future
Indebtedness permitted by Sect. 8.1(h), which agreements or
documents include covenants (whether affirmative or
negative), warranties, defaults or events of default
(or any other provision which may have the same
practical effect as any of the foregoing) which are
individually or in the aggregate more restrictive
against the Borrower, the Guarantor or their respective
Subsidiaries than those set forth herein or in any of
the other Loan Documents, the Borrower shall promptly
notify the Agent and, if requested by the Agent or the
Majority Banks, the Borrower, the Agent, and the Banks
shall promptly amend this Agreement and the other Loan
Documents to include some or all of such more
restrictive provisions as determined by the Agent or
the Majority Banks in their sole discretion, and the
Borrower shall cause the Guarantor to consent to such
amendment. ;
(j) By deleting Sect. 8.1(h) of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
(h) subject to the provisions of Sect. 9, unsecured
subordinated debt or senior unsecured long-term debt of
the Borrower and its Subsidiaries (which senior
unsecured long term debt of the Borrower may rank pari
passu with the Obligations), provided that (i) the
aggregate outstanding principal amount of such
Indebtedness shall not exceed forty-five percent (45%)
of Shareholder's Equity, and (ii) at the time such
Indebtedness is issued the scheduled maturity date of
such Indebtedness is not sooner than 180 days after the
Maturity Date (after giving effect to any extension of
the Maturity Date which may have been requested by the
Borrower prior to the issuance of such Indebtedness or
approved by the Banks, whether or not the same has
become effective), and provided further that neither
the Borrower nor any of its Subsidiaries shall incur
any of the Indebtedness described in this Sect. 8.1(h)
unless it shall have provided to the Banks (A) prior
written notice of the proposed issuance of such
Indebtedness, a statement that no Default or Event of
Default exists and a certificate that the Borrower will
be in compliance with its covenants referred to therein
after giving effect to such incurrence, (B) evidence
reasonably satisfactory to the Agent that the Rating
Agency has been advised of the issuance of such
Indebtedness within five (5) days of such issuance, and
(C) upon the request of Agent, evidence that the annual
rating maintenance fee has been paid to the Rating
Agency; and ;
<PAGE>
(k) By deleting Sect. 8.7 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
"Sect. 8.7 Distributions. The Borrower will not pay
any Distribution to the partners of the Borrower if
such Distribution is in excess of the greater of the
amount which, when added to the amount of all other
Distributions paid in the same fiscal quarter and the
preceding fiscal quarter would exceed (i) ninety
percent (90%) of its Funds from Operations for the two
(2) consecutive fiscal quarters ending prior to the
quarter in which such Distribution is paid, or
(ii) ninety-five percent (95%) of its Funds Available
for Distribution for the two (2) consecutive fiscal
quarters ending prior to the quarter in which such
Distribution is paid. The foregoing limitation on
Distributions shall not preclude the Borrower from
paying Distributions to the Guarantor in an amount
equal to the minimum Distributions required under the
Code to maintain the REIT Status of the Guarantor. ;
(l) By deleting the word four appearing in the
twelfth (12th) line of Sect. 8.9 of the Credit Agreement, and
inserting in lieu thereof the word two ;
(m) By deleting Sect. 9.1 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
Sect. 9.1 Liabilities to Assets Ratio. The Borrower
will not, at the end of any fiscal quarter, permit the
ratio of Consolidated Total Liabilities to Consolidated
Total Assets of the Borrower to exceed 0.45 to 1. ;
(n) By deleting Sect. 9.2 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
Sect. 9.2 Debt Coverage. The Borrower will not, at
the end of any fiscal quarter, permit the Funds from
Operations plus interest expense of the Borrower and
its Subsidiaries for such quarter and the preceding
quarter (treated as a single accounting period) (the
Test Period ) to be less than 2.50 times the Debt
Service for the Test Period. ;
(o) By deleting Sect. 9.3 of the Credit Agreement in its
entirety, and inserting in lieu thereof the following:
Sect. 9.3 Fixed Charge Coverage. The Borrower will
not, at the end of any fiscal quarter, permit the sum
equal to (a) Funds from Operations plus (b) interest
expense minus (c) the Capital Improvement Reserve minus
(d) the minimum Distributions required under the Code
to maintain the REIT Status of the Guarantor minus
(e) the Actual Scheduled Principal Payments for the
Test Period, to be less than 1.25 times the interest
expense of the Borrower and its Subsidiaries (including
capitalized interest) for the Test Period. ;
<PAGE>
(p) By deleting Sect. 15(g) of the Credit Agreement in its
entirety, and by deleting the words including, without
limitation, the cost of reviewing the Eligible Real Estate
Qualification Documents pursuant to Sect. 2.8(b) appearing in 15(c)
and in the penultimate sentence of 15;
(q) By deleting Paragraph 2 of Exhibit D to the
Credit Agreement in its entirety, and inserting in lieu thereof
the following:
2. Investment Grade Rating. Borrower or
Guarantor has obtained an Investment Grade Rating from
either of the Rating Agencies, which continues in full
force and effect as required by 2.8(b)(i) of the
Credit Agreement. ;
(r) By deleting Schedule 2 attached to the Credit
Agreement in its entirety, and inserting in lieu thereof Schedule
2 attached to this Amendment; and
(s) By deleting Schedule 3 attached to the Credit
Agreement in its entirety.
3. Modification of the Guaranty. Guarantor, the Banks and
the Agent do hereby modify and amend the Guaranty as follows:
(a) By deleting Paragraph 11(b) of the Guaranty in its
entirety and inserting in lieu thereof the following:
(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, its ownership of the stock of the
corporate general partners of Subsidiaries of the
Borrower and other assets (such as prepaid insurance)
reasonably necessary for the operation of Guarantor s
business in the ordinary course of business consistent
with the terms of this Guaranty and the other Loan
Documents; and
(b) By deleting Paragraph 11(o) of the Guaranty in its
entirety and inserting in lieu thereof the following:
(o) Guarantor shall not pay any Distribution to
the shareholders of the Guarantor if such Distribution
is in excess of the amount which, when added to the
amount of all other Distributions paid in the same
fiscal quarter and the preceding fiscal quarter will
exceed (i) ninety percent (90%) of its Funds from
Operations for the two (2) consecutive fiscal quarters
ending prior to the quarter in which such Distribution
is paid, or (ii) ninety-five percent (95%) of its Funds
Available for Distribution for the two (2) consecutive
fiscal quarters ending prior to the quarter in which
such Distribution is paid. The foregoing limitation on
Distributions shall not preclude the Guarantor from
paying Distributions necessary to maintain its REIT
Status; and .
<PAGE>
4. Fees. In consideration of the execution of this
Amendment by the Banks, the Borrower has contemporaneously with
the execution hereof paid to Agent for the account of the Banks a
modification fee in the amount of $75,000.00, which fee is fully
earned and non-refundable under any circumstances. Such fee
shall be allocated among the Banks in accordance with their
respective Commitment Percentages.
5. References to Credit Agreement and Guaranty. All
references in the Loan Documents to the Credit Agreement or the
Guaranty shall be deemed a reference to the Credit Agreement or
the Guaranty, as applicable, as modified and amended herein.
6. Consent of Guarantor. By execution of this Amendment,
Guarantor hereby expressly consents to the modifications and
amendments relating to the Credit Agreement as set forth herein,
and Guarantor hereby acknowledges, represents and agrees that the
Guaranty remains in full force and effect and constitutes the
valid and legally binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, and that the
execution and delivery of this Amendment does not constitute, and
shall not be deemed to constitute, a release, waiver or
satisfaction of Guarantor s obligations under the Guaranty.
7. No Default. By execution hereof, the Borrower and
Guarantor certify that the Borrower and Guarantor are and will be
in compliance with all covenants under the Loan Documents after
the execution and delivery of this Amendment, and that no Default
or Event of Default has occurred and is continuing except with
respect to which a waiver has been obtained in accordance with
the terms of the Credit Agreement.
8. Waiver of Claims. Borrower and Guarantor acknowledge,
represent and agree that Borrower and Guarantor have no defenses,
setoffs, claims, counterclaims or causes of action of any kind or
nature whatsoever with respect to the Loan Documents, the
administration or funding of the Loans or with respect to any
acts or omissions of Agent or any of the Banks, or any past or
present officers, agents or employees of Agent or any of the
Banks, and each of Borrower and Guarantor does hereby expressly
waive, release and relinquish any and all such defenses, setoffs,
claims, counterclaims and causes of action, if any.
9. Guaranty of Debt by Guarantor. Notwithstanding the
terms of the Guaranty, the Banks hereby consent to the
indebtedness evidenced by the guaranty by the Guarantor of the
obligations of the Borrower with respect to the senior notes of
the Borrower to be issued in a principal amount not exceeding
$100,000,000.00 within six (6) months of the date hereof pursuant
to a private debt placement with Lehman Brothers acting as lead
placement agent.
<PAGE>
10. Ratification. Except as hereinabove set forth, all
terms, covenants and provisions of the Credit Agreement and the
Guaranty remain unaltered and in full force and effect, and the
parties hereto do hereby expressly ratify and confirm the Credit
Agreement and the Guaranty as modified and amended herein.
Nothing in this Amendment shall be deemed or construed to
constitute, and there has not otherwise occurred, a novation,
cancellation, satisfaction, release, extinguishment or
substitution of the indebtedness evidenced by the Notes or the
other obligations of Borrower and Guarantor under the Loan
Documents.
11. Counterparts. This Amendment may be executed in any
number of counterparts which shall together constitute but one
and the same agreement.
12. Miscellaneous. This Amendment shall be construed and
enforced in accordance with the laws of the Commonwealth of
Massachusetts. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
permitted successors, successors-in-title and assigns as provided
in the Credit Agreement and the Guaranty.
IN WITNESS WHEREOF, the parties hereto have hereto set their
hands and affixed their seals as of the day and year first above
written.
BORROWER:
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:__________________________________
Name:
Title:
[SEAL]
<PAGE>
GUARANTOR:
STORAGE TRUST REALTY, a Maryland real
estate investment trust
By:
_____________________________________
Name:
Title:
[SEAL]
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:_______________________________________
Jeffrey L. Warwick, Director
[BANK SEAL]
<PAGE>
BANK OF AMERICA ILLINOIS
By:_______________________________________
Title:
[BANK SEAL]
<PAGE>
DRESDNER BANK, AG New York and Grand
Cayman Branches
By:_______________________________________
Title:
Attest:____________________________________
Title:
[BANK SEAL]
<PAGE>
KEY BANK
By:_______________________________________
Title:
[BANK SEAL]
<PAGE>
NBD BANK
By:_______________________________________
Title:
[BANK SEAL]
<PAGE>
SIGNET BANK
By:_______________________________________
Title:
[BANK SEAL]
<PAGE> 1
Draft of January 20, 1997
Storage Trust Properties, L.P.
Storage Trust Realty
$44,000,000 7.47% Series A Senior Notes due January 15, 2004
$56,000,000 7.66% Series B Senior Notes due January 15, 2007
______________
Note Purchase Agreement
_____________
Dated as of January 20, 1997
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
(Not a part of the Agreement)
Section Heading Page
<S> <C> <S>
Section 1. Authorization of Notes 1
Section 2. Sale and Purchase of Notes; Guaranty of Notes 1
Section 3. Closings 2
Section 4. Conditions to Closings 2
Section 4.1. Guaranty Agreement 3
Section 4.2. Representations and Warranties 3
Section 4.3. Performance; No Default. 3
Section 4.4. Compliance Certificates 3
Section 4.5. Opinions of Counsel 3
Section 4.6. Purchase Permitted By Applicable Law, etc 3
Section 4.7. Sale of Other Notes 4
Section 4.8. Payment of Special Counsel Fees 4
Section 4.9. Private Placement Number 4
Section 4.10. Changes in Corporate Structure 4
Section 4.11. Duff & Phelps Rating 4
Section 4.12. Proceedings and Documents 4
Section 5. Representations and Warranties of the Constituent
Companies 4
Section 5.1. Organization; Power and Authority 4
Section 5.2. Authorization, etc 5
Section 5.3. Disclosure 5
Section 5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates 6
Section 5.5. Financial Statements 7
Section 5.6. Compliance with Laws, Other Instruments, etc 7
Section 5.7. Governmental Authorizations, etc 7
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders 7
Section 5.9. REIT Status; Taxes 8
Section 5.10. Title to Property; Leases 8
Section 5.11. Licenses, Permits, etc 8
Section 5.12. Compliance with ERISA 9
Section 5.13. Private Offering 9
Section 5.14. Use of Proceeds; Margin Regulations 10
Section 5.15. Existing Debt; Future Liens 10
Section 5.16. Foreign Assets Control Regulations, etc 10
Section 5.17. Status under Certain Statutes 10
Section 5.18. Environmental Matters 11
<PAGE>
Section 6. Representations of the Purchaser 11
Section 6.1. Purchase for Investment 11
Section 6.2. Source of Funds 11
Section 7. Information as to the Trust 13
Section 7.1. Financial and Business Information 13
Section 7.2. Officer's Certificate 16
Section 7.3. Financial Statements of the Operating Partnership 16
Section 7.4. Inspection 17
Section 8. Prepayment of the Notes 17
Section 8.1. Required Prepayments 17
Section 8.2. Optional Prepayments with Make-Whole Amount 18
Section 8.3. Allocation of Partial Prepayments 18
Section 8.4. Maturity; Surrender, etc 18
Section 8.5. Purchase of Notes 18
Section 8.6. Make-Whole Amount 19
Section 9. Affirmative Covenants 20
Section 9.1. Compliance with Law 20
Section 9.2. Insurance 20
Section 9.3. Maintenance of Properties 20
Section 9.4. Payment of Taxes and Claims 21
Section 9.5. Corporate Existence, Maintenance of REIT Status 21
Section 10. Negative Covenants 22
Section 10.1. Consolidated Adjusted Tangible Net Worth 22
Section 10.2. Incurrence of Debt 22
Section 10.3. Interest Charges Coverage Ratio 22
Section 10.4. Unencumbered Asset Coverage 22
Section 10.5. Liens 22
Section 10.6. Merger, Consolidation, etc 24
Section 10.7. Sales of Assets 24
Section 10.8. Restricted Investments 24
Section 11. Events of Default 25
<PAGE>
Section 12. Remedies on Default, etc 27
Section 12.1. Acceleration 27
Section 12.2. Other Remedies 28
Section 12.3. Rescission 28
Section 12.4. No Waivers or Election of Remedies, Expenses, etc 28
Section 13. Registration; Exchange; Substitution of Notes 28
Section 13.1. Registration of Notes 28
Section 13.2. Transfer and Exchange of Notes 29
Section 13.3. Replacement of Notes 29
Section 14. Payments on Notes 30
Section 14.1. Place of Payment 30
Section 14.2. Home Office Payment 30
Section 15. Expenses, Etc 30
Section 15.1. Transaction Expenses 30
Section 15.2. Survival 31
Section 16. Survival of Representations and Warranties;
Entire Agreement 31
Section 17. Amendment and Waiver 31
Section 17.1. Requirements 31
Section 17.2. Solicitation of Holders of Notes 32
Section 17.3. Binding Effect, etc 32
Section 17.4. Notes Held by a Constituent Company, etc 32
Section 18. Notices 32
Section 19. Reproduction of Documents 33
Section 20. Confidential Information 33
Section 21. Substitution of Purchaser 34
Section 22. Miscellaneous 35
Section 22.1. Successors and Assigns 35
Section 22.2. Payments Due on Non-Business Days 35
Section 22.3. Severability 35
Section 22.4. Construction 35
Section 22.5. Counterparts 35
Section 22.6. Governing Law 35
Section 22.7. No Recourse to Shareholders etc 35
Signature 37
</TABLE>
<PAGE>
Schedule A Information Relating To Purchasers
Schedule B Defined Terms
Schedule 4.10 Changes in Corporate Structure
Schedule 5.3 Disclosure Materials
Schedule 5.4 Subsidiaries of the Trust and Ownership of Subsidiary
Stock
Schedule 5.5 Financial Statements
Schedule 5.15 Existing Indebtedness
Schedule 5.18 Environmental Matters
Exhibit 1-A Form of 7.47% Series A Senior Note due January 15, 2004
Exhibit 1-B Form of 7.66% Series B Senior Note due January 15, 2007
Exhibit 2 Form of Guaranty Agreement
Exhibit 4.5(a) Form of Opinion of Special Counsel for the Trust and
its Subsidiaries
Exhibit 4.5(b) Form of Opinion of Special Counsel for the Purchasers
<PAGE>
Storage Trust Properties, L.P.
Storage Trust Realty
2407 Rangeline Street
Columbia, Missouri 65202
7.47% Series A Senior Note due January 15, 2004
7.66% Series B Senior Note due January 15, 2007
Dated as of
January 20, 1997
To the Purchaser listed in
the attached Schedule A
which is a signatory of this
Agreement:
Ladies and Gentlemen:
Storage Trust Properties, L.P., a Delaware limited partnership, and
Storage Trust Realty, a Maryland real estate investment trust (respectively
the "Operating Partnership" and the "Trust", collectively the "Constituent
Companies" and individually a "Constituent Company"), agree with you as
follows:
Section 1. Authorization of Notes.
The Operating Partnership will authorize the issue and sale of
(i) $44,000,000 aggregate principal amount of its 7.47% Series A Senior Notes
due January 15, 2004 (the "Series A Notes") and (ii) $56,000,000 aggregate
principal amount of its 7.66% Series B Senior Notes due January 15, 2007 (the
"Series B Notes"). The Series A Notes and the Series B Notes are hereinafter
collectively referred to as the "Notes", such term to include any such notes
issued in substitution therefor pursuant to Section 13 of this Agreement or
the Other Agreements (as hereinafter defined). The Series A Notes and the
Series B Notes are each referred to as Notes of a "Series". The Series A
Notes shall be substantially in the form set out in Exhibit 1-A and the
Series B Notes shall be substantially in the form set out in Exhibit 1-B, in
each case, with such changes therefrom, if any, as may be approved by you and
the Operating Partnership. Certain capitalized terms used in this Agreement
are defined in Schedule B; references to a "Schedule" or an "Exhibit" are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
Section 2. Sale and Purchase of Notes; Guaranty of Notes.
Subject to the terms and conditions of this Agreement, the Operating
Partnership will issue and sell to you and you will purchase from the
Operating Partnership, at each Closing provided for in Section 3, Notes in the
principal amount and of the Series specified opposite your name in Schedule A
with respect to such Closing at the purchase price of 100% of the principal
amount thereof. Contemporaneously with entering into this Agreement, the
Constituent Companies are entering into separate Note Purchase Agreements (the
"Other Agreements") identical with this Agreement with each of the other
purchasers named in Schedule A (the "Other Purchasers"), providing for the
sale at each Closing to each of the Other Purchasers of Notes in the principal
amount and of the Series specified opposite its name in Schedule A with
respect to such Closing. Your obligation hereunder, and the obligations of
the Other Purchasers under the Other Agreements, are several and not joint
obligations, and you shall have no obligation under any Other Agreement and
no liability to any Person for the performance or nonperformance by any Other
Purchaser thereunder.
<PAGE>
The obligations of the Operating Partnership hereunder and under the
Other Agreements and the Notes are unconditionally guaranteed by the Trust
pursuant to that certain Guaranty Agreement dated as of the date hereof (the
"Guaranty Agreement") substantially in the form of Exhibit 2.
Section 3. Closings.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, at 10:00 a.m. Chicago time, at not more than
two closings (the "Closings"). The first Closing shall be held on January 22,
1997 or such earlier date as the Operating Partnership shall specify by not
less than three Business Days' prior written notice to you and the Other
Purchasers, and the second Closing shall be held on April 15, 1997 or such
earlier date as the Operating Partnership shall specify by not less than ten
Business Days' prior written notice to you and the Other Purchasers. At each
Closing, the Operating Partnership will deliver to you the Notes of the Series
to be purchased by you at such Closing, as set forth opposite your name in
Schedule A, in the form of a single Note (or such greater number of Notes in
denominations of at least $1,000,000 as you may request) dated the date of
such Closing and registered in your name (or in the name of your nominee),
against delivery by you to the Operating Partnership or its order of
immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Operating
Partnership to account number 1017446 at Boone County National Bank, P.O. Box
678, Columbia, Missouri 65205, ABA No. 081500859. If at a Closing the
Operating Partnership shall fail to tender such Notes to you as provided above
in this Section 3, or any of the conditions specified in Section 4 shall not
have been fulfilled to your satisfaction, you shall, at your election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights you may have by reason of such failure or such
nonfulfillment.
<PAGE>
Section 4. Conditions to Closings.
Your obligation to purchase and pay for the Notes to be sold to you at
each Closing is subject to the fulfillment to your satisfaction, prior to or
at such Closing, of the following conditions:
Section 4.1. Guaranty Agreement. The Guaranty Agreement shall have
been executed and delivered by the Trust.
Section 4.2. Representations and Warranties. The representations and
warranties of the Constituent Companies in this Agreement shall be correct
when made and at the time of such Closing.
Section 4.3. Performance; No Default. The Constituent Companies shall
have performed and complied with all agreements and conditions contained in
this Agreement required to be performed or complied with by them prior to or
at such Closing, and after giving effect to the issue and sale of the Notes at
such Closing (and the application of the proceeds thereof as contemplated by
Schedule 5.14), no Default or Event of Default shall have occurred and be
continuing. Neither any Constituent Company nor any Subsidiary shall have
entered into any transaction since the date of the Memorandum that would have
been prohibited by Section 10 hereof or Section 5 of the Guaranty Agreement
had such Sections applied since such date.
Section 4.4. Compliance Certificates.
(a) Officer's Certificate. Each Constituent Company shall have
delivered to you an Officer's Certificate, dated the date of such Closing,
certifying that the conditions specified in Sections 4.2, 4.3 and 4.10 have
been fulfilled.
(b) Secretary's Certificate. Each Constituent Company shall have
delivered to you a certificate certifying as to the resolutions attached
thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Agreements and, in the case of the Trust, the
Guaranty Agreement.
Section 4.5. Opinions of Counsel. You shall have received opinions in
form and substance satisfactory to you, dated the date of such Closing
(a) from Mayer, Brown & Platt, special counsel for the Trust and its
Subsidiaries and Ballard Spahr Andrews & Ingersoll, special Maryland counsel
for the Trust, which opinions when taken together shall cover the matters set
forth in Exhibit 4.5(a) (and the Constituent Companies hereby instruct their
counsel to deliver such opinions to you) and (b) from Chapman and Cutler, your
special counsel in connection with such transactions, substantially in the
form set forth in Exhibit 4.5(b) and covering such other matters incident to
such transactions as you may reasonably request.
Section 4.6. Purchase Permitted By Applicable Law, etc. On the date of
such Closing your purchase of Notes shall (i) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without restriction as
to the character of the particular investment, (ii) not violate any applicable
law or regulation (including, without limitation, Regulation G, T or X of the
Board of Governors of the Federal Reserve System) and (iii) not subject you to
any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's Certificate certifying
as to such matters of fact as you may reasonably specify to enable you to
determine whether such purchase is so permitted.
<PAGE>
Section 4.7. Sale of Other Notes. Contemporaneously with such Closing,
the Operating Partnership shall sell to the Other Purchasers, and the Other
Purchasers shall purchase, the Notes to be purchased by them at such Closing
as specified in Schedule A. In the case of the second Closing, the Operating
Partnership shall have sold to the Other Purchasers, and the Other Purchasers
shall have purchased, the Notes to be purchased by them at the first Closing
as specified in Schedule A.
Section 4.8. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Trust shall have paid on or before such
Closing the fees, charges and disbursements of your special counsel referred
to in Section 4.5 to the extent reflected in a statement of such counsel
rendered to the Trust at least one Business Day prior to such Closing.
Section 4.9. Private Placement Number. On or prior to the first
Closing, a Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each
Series of the Notes.
Section 4.10. Changes in Corporate Structure. Except as specified in
Schedule 4.10, neither Constituent Company shall have changed its jurisdiction
of organization or been a party to any merger or consolidation or shall have
succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements
referred to in Schedule 5.5.
Section 4.11. Duff & Phelps Rating. On or prior to the date of such
Closing, the Notes shall have been accorded a rating of "BBB-" or better from
Duff & Phelps Credit Rating Co., and such rating shall not have been amended,
modified or rescinded prior to such Closing and shall remain in full force and
effect on the date of such Closing.
Section 4.12. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other
copies of such documents as you or they may reasonably request.
Section 5.Representations and Warranties of the Constituent Companies.
<PAGE>
Each Constituent Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. (a) The Trust is a
real estate investment trust duly organized, validly existing and in good
standing under the laws of the State of Maryland and is duly qualified as a
foreign entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Trust has the requisite power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts, to execute and deliver this Agreement, the Other Agreements and the
Guaranty Agreement and to perform the provisions hereof and thereof. The
Trust is the sole general partner of the Operating Partnership. The Trust
owns no assets other than its general partnership interest in the Operating
Partnership, short-term Investments, interests in Subsidiaries which hold
interests in other Subsidiaries and assets it deems necessary to carry out its
responsibilities contemplated under the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership and the Second Amended and
Restated Declaration of Trust of the Trust.
(b) The Operating Partnership is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and is duly qualified as a foreign entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Operating Partnership has the power and
authority to own or hold under lease the properties it purports to own or hold
under lease, to transact the business it transacts, to execute and deliver
this Agreement, the Other Agreements and the Notes and to perform the
provisions hereof and thereof.
Section 5.2. Authorization, etc. (a) This Agreement, the Other
Agreements and the Guaranty Agreement have been duly authorized by all
necessary action on the part of the Trust, and this Agreement and the Guaranty
Agreement constitute, legal, valid and binding obligations of the Trust
enforceable against the Trust in accordance with their respective terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(b) This Agreement, the Other Agreements and the Notes have been duly
authorized by all necessary action on the part of the Trust as general partner
of the Operating Partnership, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Operating Partnership enforceable against the
Operating Partnership in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
<PAGE>
Section 5.3. Disclosure. The Trust, through its agents, Lehman
Brothers and BA Securities, Inc., has delivered to you and each Other
Purchaser a copy of a Private Placement Memorandum, dated December 1996 (the
"Memorandum"), relating to the transactions contemplated hereby. The
Memorandum fairly describes, in all material respects, the general nature of
the business of the Trust and its Subsidiaries. This Agreement, the
Memorandum, the Guaranty Agreement, the documents, certificates or other
writings identified in Schedule 5.3 and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which
they were made. Since December 31, 1995, there has been no change in the
financial condition, operations, business or properties of the Trust or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact
known to either Constituent Company that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein, in the Guaranty
Agreement, in the Memorandum, in the other documents, certificates and other
writings identified in Schedule 5.3 or in the financial statements listed in
Schedule 5.5.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Trust's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Trust and each other Subsidiary, (ii) of
the Trust's Affiliates, other than Subsidiaries, and (iii) of the Trust's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Trust
and its Subsidiaries have been validly issued, are fully paid and (except in
the case of any partnership interests) nonassessable and are owned by the
Trust or another Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to
own or hold under lease and to transact the business it transacts and proposes
to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Trust or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
<PAGE>
Section 5.5. Financial Statements. The Trust has delivered to each
Purchaser copies of the consolidated financial statements of the Trust and its
Subsidiaries listed on Schedule 5.5. All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Trust and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements,
to normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, etc. The
execution, delivery and performance by the Trust of this Agreement and the
Guaranty Agreement and the execution, delivery and performance by the
Operating Partnership of this Agreement and the Notes will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Trust or any Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, charter, by-laws, declaration of trust, partnership
agreement or any other agreement or instrument to which the Trust or any
Subsidiary is bound or by which the Trust or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result
in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Trust or any Subsidiary or (iii) violate any provision of
any statute or other rule or regulation of any Governmental Authority
applicable to the Trust or any Subsidiary.
Section 5.7. Governmental Authorizations, etc. No consent, approval or
authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery
or performance (i) by the Trust of this Agreement or the Guaranty Agreement or
(ii) by the Operating Partnership of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
either Constituent Company, threatened against or affecting the Trust or any
Subsidiary or any property of the Trust or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Trust nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
<PAGE>
Section 5.9. REIT Status; Taxes. (a) The Trust qualified as a real
estate investment trust under the provisions of the Code, for all taxable
years of the Trust ended December 31, 1995 and before. Each corporate
Subsidiary of the Trust (other than Specified Affiliates) is a "qualified REIT
subsidiary" within the meaning of section 856(i) of the Code.
(b) The Trust and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which the Trust or a
Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. Neither Constituent Company knows of any basis for any
other tax or assessment that could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Trust
and its Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities of the Trust
and its Subsidiaries have been determined and paid for all fiscal years up to
and including the fiscal year ended December 31, 1995. No tax return has been
examined and reported on by the Internal Revenue Service.
Section 5.10. Title to Property; Leases. The Trust and its Subsidiaries
have good title to their respective properties that individually or in the
aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired by the Trust or any Subsidiary after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
Section 5.11. Licenses, Permits, etc. (a) The Trust and its
Subsidiaries own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others.
(b) To the best knowledge of either Constituent Company, no product of
either Constituent Company infringes in any Material respect any license,
permit, franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person.
(c) To the best knowledge of either Constituent Company, there is no
Material violation by any Person of any right of the Trust or any of its
Subsidiaries with respect to any patent, copyright, service mark, trademark,
trade name or other right owned or used by the Trust or any of its
Subsidiaries.
<PAGE>
Section 5.12. Compliance with ERISA. (a) The Trust and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Trust nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in
Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any
such liability by the Trust or any ERISA Affiliate, or in the imposition of
any Lien on any of the rights, properties or assets of the Trust or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code,
other than such liabilities or Liens as would not be individually or in the
aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent
actuarial valuation report, did not exceed the aggregate current value of the
assets of such Plan allocable to such benefit liabilities. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA and the terms
"current value" and "present value" have the meanings specified in section 3
of ERISA.
(c) The Trust and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Trust's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Trust and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Constituent Companies in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of your
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by you.
Section 5.13. Private Offering. Neither Constituent Company nor anyone
acting on their behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person other than you,
the Other Purchasers and not more than 80 other Institutional Investors, each
of which has been offered the Notes at a private sale for investment. Neither
Constituent Company nor anyone acting on their behalf has taken, or will take,
any action that would subject the issuance or sale of the Notes to the
registration requirements of Section 5 of the Securities Act.
<PAGE>
Section 5.14. Use of Proceeds; Margin Regulations. The Operating
Partnership will apply the proceeds of the sale of the Notes (i) to repay
indebtedness outstanding under that certain Revolving Credit Agreement dated
January 25, 1996, as amended by the First Amendment to Revolving Credit
Agreement and Guaranty dated December 13, 1996, among the Operating
Partnership, the First National Bank of Boston, as agent, and the other banks
named therein, (ii) to finance acquisitions and (iii) for other corporate
purposes. No part of the proceeds from the sale of the Notes hereunder will
be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation G of the Board of Governors of
the Federal Reserve System (12 CFR 207), or for the purpose of buying or
carrying or trading in any securities under such circumstances as to involve
either Constituent Company in a violation of Regulation X of said Board (12
CFR 224) or to involve any broker or dealer in a violation of Regulation T of
said Board (12 CFR 220). Neither the Trust nor any of its Subsidiaries
beneficially owns nor intends to acquire any margin stock. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall
have the meanings assigned to them in said Regulation G.
Section 5.15. Existing Debt; Future Liens. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all
outstanding Debt of the Trust and its Subsidiaries as of November 30, 1996,
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Debt of the
Trust or its Subsidiaries. Neither the Trust nor any Subsidiary is in default
and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Trust or such Subsidiary and no event
or condition exists with respect to any Debt of the Trust or any Subsidiary
that would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Debt to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
(b) Neither the Trust nor any Subsidiary has agreed or consented to
cause or permit in the future (upon the happening of a contingency or
otherwise) any of its property, whether now owned or hereafter acquired, to be
subject to a Lien not permitted by Section 10.5 hereof or Section 5.5 of the
Guaranty Agreement.
Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale
of the Notes by the Operating Partnership hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Trust nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, or the
Federal Power Act, as amended.
<PAGE>
Section 5.18. Environmental Matters. Neither the Trust nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Trust or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging
any damage to the environment or violation of any Environmental Laws, except,
in each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed in Schedule 5.18 and except
that clauses (b) and (c) below do not apply to conditions arising from the
storage of customer goods in storage units at self-storage facilities owned
and/or operated by the Trust and its Subsidiaries as to which neither the
Trust nor its Subsidiaries has actual knowledge:
(a) neither the Trust nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Trust nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and or has disposed of any Hazardous Materials
in a manner contrary to any Environmental Laws in each case in any
manner that could reasonably be expected to result in a Material Adverse
Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Trust or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
Section 6.Representations of the Purchaser.
Section 6.1. Purchase for Investment. You represent as of the date
hereof and the date of each Closing at which you are to purchase Notes that
you are purchasing such Notes for your own account or for one or more separate
accounts maintained by you or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the
disposition of your or their property shall at all times be within your or
their control. You understand that the Notes have not been registered under
the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Operating Partnership is not
required to register the Notes.
Section 6.2. Source of Funds. You represent as of the date hereof and
the date of each Closing at which you are to purchase Notes that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by you to pay the purchase price of the Notes to
be purchased by you hereunder:
<PAGE>
(a) if you are an insurance company, the Source is an "insurance
company general account" within the meaning of Department of Labor
Prohibited Transaction Exemption ("PTE") 95-60 (issued July 12, 1995),
and there is no employee benefit plan (treating as a single plan all
plans maintained by the same employer or employee organization) with
respect to which the amount of the general account reserves and
liabilities for all contracts held by or on behalf of such plan exceed
10% of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in your most recent annual statement in the form required by the
National Association of Insurance Commissioners as filed with your state
of domicile and the requirements of PTE 95-60 with respect to the
purchase of the Notes have been satisfied; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Constituent Companies in writing pursuant to this paragraph (b),
no employee benefit plan or group of plans maintained by the same
employer or employee organization beneficially owns more than 10% of all
assets allocated to such pooled separate account or collective
investment fund and the requirements of PTE 90-1 or 91-38, as
applicable, with respect to the purchase of the Notes have been
satisfied; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part l(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in either
Constituent Company and (i) the identity of such QPAM and (ii) the names
of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Constituent Companies in
writing pursuant to this paragraph (c) and the requirements of PTE 84-14
with respect to the purchase of the Notes have been satisfied; or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Constituent Companies in
writing pursuant to this paragraph (e); or
<PAGE>
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
Section 7. Information as to the Trust
Section 7.1. Financial and Business Information. The Trust shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Trust (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of:
(i) a consolidated balance sheet of the Trust and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income and cash flows of
the Trust and its Subsidiaries for such quarter and (in the case
of the second and third quarters) for the portion of the fiscal
year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer as fairly presenting,
in all material respects, the financial position of the companies being
reported on and their results of operations and cash flows, subject to changes
resulting from year-end adjustments, provided that delivery within the time
period specified above of copies of the Trust's Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements
of this Section 7.1 (a);
(b) Annual Statements within 90 days after the end of each
fiscal year of the Trust, duplicate copies of,
(i) a consolidated balance sheet of the Trust and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Trust and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied
<PAGE>
(A) by an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements present
fairly, in all material respects, the financial position of
the companies being reported upon and their results of
operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has
been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis
for such opinion in the circumstances, and
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further
whether, in making their audit, they have become aware of
any condition or event that then constitutes a Default or an
Event of Default, and, if they are aware that any such
condition or event then exists, specifying the nature and
period of the existence thereof (it being understood that
such accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of any
Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did
not make such an audit),
provided that the delivery within the time period specified above of the
Trust's Annual Report on Form 10-K for such fiscal year (together with
the Trust's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in
clause (B) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(c) SEC and Other Reports promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Trust or any Subsidiary to public securities
holders generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly requested
by such holder), and each prospectus and all amendments thereto filed by
the Trust or any Subsidiary with the Securities and Exchange Commission
and of all press releases and other statements made available generally
by the Trust or any Subsidiary to the public concerning developments
that are Material;
(d) Notice of Default or Event of Default promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has
given any notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken any action
with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Trust is taking or proposes to
take with respect thereto;
<PAGE>
(e) ERISA Matters promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Trust or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(c) of ERISA and the regulations
thereunder, for which notice thereof has not been waived pursuant
to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the Trust
or any ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or condition that could result
in the incurrence of any liability by the Trust or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Trust or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any
other such liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Trust or any Subsidiary from any Federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect; and
(g) Specified Affiliates (i) during any period when GAAP or
related auditing standards requires that a Specified Affiliate be
accounted for as a Subsidiary for purposes of the consolidated financial
statements of the Trust and its Subsidiaries, the term "Subsidiary"
shall include a Specified Affiliate for purposes of paragraphs (a) and
(b) above; and
(ii) during any period when GAAP or related auditing standards
does not require that a Specified Affiliate be accounted for as a
Subsidiary for purposes of the consolidated financial statements of the
Trust and its Subsidiaries, the term "Subsidiary" shall not include a
Specified Affiliate for purposes of paragraphs (a) and (b) above and, if
the Trust shall have any Specified Affiliates during any period covered
by the financial statements delivered pursuant to paragraphs (a) or (b)
above, financial statements of the character specified in paragraphs (a)
and (b) above for such Specified Affiliates, and, on a combined basis,
financial statements of the character specified in paragraphs (a) and
(b) above for the Trust, its Subsidiaries and such Specified Affiliates
accompanied by the opinions and certificates specified in paragraphs
(b)(A) and (B) above; and
<PAGE>
(h) Requested Information with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Trust or any
of its Subsidiaries or relating to the ability of the Trust to perform
its obligations hereunder and under the Notes as from time to time may
be reasonably requested by any such holder of Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance the information (including detailed
calculations) required in order to establish whether the Trust was in
compliance with the requirements of Sections 5.1 through 5.7, inclusive,
and Section 5.10 of the Guaranty Agreement during the quarterly or
annual period covered by the statements then being furnished (including
with respect to each such Section, where applicable, the calculations of
the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
(b) Event of Default a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Trust and its Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Trust or any
Subsidiary to comply with any Environmental Law), specifying the nature
and period of existence thereof and what action the Trust shall have
taken or proposes to take with respect thereto.
Section 7.3. Financial Statements of the Operating Partnership. At the
request of the holders of more than 50% of the principal amount of the Notes
at the time outstanding, the Operating Partnership shall deliver to each
holder of Notes that is an Institutional Investor financial statements of the
character described in clauses (a) and (b) of Section 7.1 and a certificate of
a Senior Financial Officer of the Operating Partnership certifying as to the
matters referred to in Section 7.1(a) and Section 7.2 (with reference to
Sections 10.1 through 10.8, inclusive, of this Agreement), in each case, with
respect to the Operating Partnership and its Subsidiaries on a consolidated
basis for all fiscal periods ending after the date of such request.
Section 7.4. Inspection. The Trust shall permit the representatives of
each holder of Notes that is an Institutional Investor:
<PAGE>
(a) No Default if no Default or Event of Default then exists,
at the expense of such holder and upon reasonable prior notice to the
Trust, to visit the principal executive office of the Trust, to discuss
the affairs, finances and accounts of the Trust and its Subsidiaries
with the Trust's officers, and (with the consent of the Trust, which
consent will not be unreasonably withheld) its independent public
accountants, and (with the consent of the Trust, which consent will not
be unreasonably withheld) to visit the other offices and properties of
the Trust and each Subsidiary, all at such reasonable times and as often
as may be reasonably requested in writing; and
(b) Default if a Default or Event of Default then exists, at
the expense of the Trust to visit and inspect any of the offices or
properties of the Trust or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Trust authorizes said
accountants to discuss the affairs, finances and accounts of the Trust
and its Subsidiaries), all at such times and as often as may be
requested.
Notwithstanding the foregoing, it is understood and agreed that the inspection
rights granted under this Section 7.4 shall be subject to the rights of any
tenants under any leases then in effect to which the Trust or any Subsidiary
is a party.
Section 8. Prepayment of the Notes
Section 8.1. Required Prepayments.
(a) Series A Notes. On January 15, 2002 and on January 15, 2003
the Operating Partnership will prepay $14,700,000 principal amount (or
such lesser principal amount as shall then be outstanding) of the
Series A Notes at par and without payment of the Make-Whole Amount or
any premium.
(b) Series B Notes. On January 15, 2003 and on each January 15
thereafter to and including January 15, 2006 the Operating Partnership
will prepay $11,200,000 principal amount (or such lesser principal
amount as shall then be outstanding) of the Series B Notes at par and
without payment of the Make-Whole Amount or any premium.
Upon any partial prepayment of the Notes pursuant to Section 8.2 or
purchase of the Notes permitted by Section 8.5 the principal amount of each
required prepayment of the Notes of each Series becoming due under this
Section 8.1 on and after the date of such prepayment or purchase shall be
reduced in the same proportion as the aggregate unpaid principal amount of the
Notes of such Series is reduced as a result of such prepayment or purchase.
<PAGE>
Section 8.2. Optional Prepayments with Make-Whole Amount. The
Operating Partnership may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes of either
Series, in an amount not less than $1,000,000 in the case of a partial
prepayment, at 100% of the principal amount so prepaid, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal
amount. The Operating Partnership will give each holder of Notes of such
Series written notice of each optional prepayment under this Section 8.2 not
less than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of the Notes of such Series to be prepaid on such date, the principal
amount of each Note of such Series held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on
the prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment,
the Operating Partnership shall deliver to each holder of Notes of such Series
a certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to Section 8.1, the principal amount
of the Notes of any Series to be prepaid shall be allocated among all of the
Notes of such Series at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof. In the case
of each partial prepayment of the Notes pursuant to Section 8.2, the principal
amount of the Notes of any Series to be prepaid shall be allocated among all
of the Notes of such Series at the time outstanding in proportion, as nearly
as practicable, to the respective unpaid principal amounts thereof.
Section 8.4. Maturity; Surrender, etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date and the applicable Make-Whole Amount, if any. From and after such date,
unless the Operating Partnership shall fail to pay such principal amount when
so due and payable, together with the interest and Make-Whole Amount, if any,
as aforesaid, interest on such principal amount shall cease to accrue. Any
Note paid or prepaid in full shall be surrendered to the Operating Partnership
and cancelled and shall not be reissued, and no Note shall be issued in lieu
of any prepaid principal amount of any Note.
Section 8.5. Purchase of Notes. Neither Constituent Company will, nor
will it permit any Affiliate to, purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes. The Operating Partnership will promptly cancel all
Notes acquired by it or any Affiliate pursuant to any payment, prepayment or
purchase of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.
<PAGE>
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called Principal,
provided that the Make-Whole Amount may in no event be less than zero. For
the purposes of determining the Make-Whole Amount, the following terms have
the following meanings:
"Called Principal" means, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2 or has become
or is declared to be immediately due and payable pursuant to Section 12.
1, as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal,
on the display designated as "Page 500" on the Telerate Access Service
(or such other display as may replace Page 500 on Telerate Access
Service) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such time
or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called Principal,
in Federal Reserve Statistical Release H. 15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded U.S.
Treasury security with the duration closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
<PAGE>
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such
Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
Section 9. Affirmative Covenants.
The Constituent Companies covenant that so long as any of the Notes are
outstanding:
Section 9.1. Compliance with Law. The Constituent Companies will and
will cause each Subsidiary to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.2. Insurance. The Constituent Companies will and will cause
each Subsidiary to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Constituent Companies will
and will cause each Subsidiary or the respective tenants of either Constituent
Company or any Subsidiary to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that
this Section shall not prevent either Constituent Company or any Subsidiary
from discontinuing the operation and the maintenance of any of its properties
if such discontinuance is desirable in the conduct of its business and the
Trust has concluded that such discontinuance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
<PAGE>
Section 9.4. Payment of Taxes and Claims. The Constituent Companies
will and will cause each Subsidiary to file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due
and payable on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of either Constituent Company or any Subsidiary, provided that neither
any Constituent Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
such Constituent Company or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and such Constituent Company or a Subsidiary
has established adequate reserves therefor in accordance with GAAP on the
books of such Constituent Company or such Subsidiary or (ii) the nonpayment of
all such taxes and assessments in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Maintenance of REIT Status. (a) The
Constituent Companies will at all times preserve and keep in full force and
effect their legal existence. Subject to Sections 10.6 and 10.7 hereof and
Sections 5.6 and 5.7 of the Guaranty Agreement, the Constituent Companies will
at all times preserve and keep in full force and effect the corporate or other
legal existence of each Subsidiary and all licenses and permits of the
Constituent Companies and each Subsidiary unless, in the good faith judgment
of the Trust, the termination of or failure to preserve and keep in full force
and effect such corporate or other legal existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
(b) The Trust will preserve and maintain its qualification as a real
estate investment trust under the Code and the applicability to the Trust and
its stockholders of the method of taxation provided for in Section 857(b) of
the Code (and any successor provision thereto) for all taxable years of the
Trust ended December 31, 1996 and thereafter.
(c) The Trust will maintain as its sole business purpose being the
sole general partner of the Operating Partnership and will own no assets other
than its general partnership interest in the Operating Partnership, short-term
Investments, interests in Subsidiaries which hold interests in other
Subsidiaries and assets it deems necessary to carry out its responsibilities
contemplated under the Amended and Restated Agreement of Limited Partnership
of the Operating Partnership and the Second Amended and Restated Declaration
of Trust of the Trust. The Trust will at all times remain the sole general
partner of the Operating Partnership.
<PAGE>
Section 10. Negative Covenants.
The Operating Partnership covenants that so long as any of the Notes are
outstanding:
Section 10.1. Consolidated Adjusted Tangible Net Worth. The Operating
Partnership will not at any time permit Consolidated Adjusted Tangible Net
Worth to be less than $175,000,000; provided, however, that the Operating
Partnership shall be permitted to make distributions to the Trust to enable
the Trust to pay dividends to the extent required by the provisions of
subchapter M of the Code to maintain the deductibility from its income of
dividends paid by it so long as after giving effect to the payment of such
dividends, no Default or Event of Default described in paragraph (a), (b), (h)
or (i) of Section 11 shall have occurred and be continuing.
Section 10.2. Incurrence of Debt. The Operating Partnership will not,
and will not permit any Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to, any Debt, unless on the date the Operating Partnership or such
Subsidiary becomes liable with respect to any such Debt and immediately after
giving effect thereto and the concurrent retirement of any other Debt,
(a) no Default or Event of Default exists,
(b) Consolidated Debt does not exceed 45% of Consolidated
Adjusted Capitalization, and
(c) in the case of Priority Debt, Consolidated Priority Debt
does not exceed 30% of Consolidated Adjusted Capitalization.
For the purposes of this Section 10.2, any Person becoming a Subsidiary after
the date hereof shall be deemed, at the time it becomes a Subsidiary, to have
incurred all of its then outstanding Debt, and any Person extending, renewing
or refunding any Debt shall be deemed to have incurred such Debt at the time
of such extension, renewal or refunding.
Section 10.3. Interest Charges Coverage Ratio. The Operating
Partnership will not permit the Interest Charges Coverage Ratio on any date to
be less than 2.00 to 1.00.
Section 10.4. Unencumbered Asset Coverage. The Operating Partnership
will at all times keep and maintain Unencumbered Assets at an amount not less
than 200% of Unsecured Debt.
Section 10.5. Liens. The Operating Partnership will not, and will not
permit any of its Subsidiaries to, directly or indirectly create, incur,
assume or permit to exist (upon the happening of a contingency or otherwise)
any Lien on or with respect to any property or asset (including, without
limitation, any document or instrument in respect of goods or accounts
receivable) of the Operating Partnership or any such Subsidiary, whether now
owned or held or hereafter acquired, or any income or profits therefrom, or
assign or otherwise convey any right to receive income or profits, except:
<PAGE>
(a) Liens for taxes, assessments or other governmental charges
the payment of which is not at the time required by Section 9.4;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case, incurred in the ordinary course of business for sums not yet due
or the payment of which is not at the time required by Sections 9.1 or
9.4;
(c) any attachment or judgment Lien, provided the judgment it
secures shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal;
(d) Liens on properties securing security deposits of tenants,
provided that the aggregate amount of such security deposits secured by
such Liens shall not exceed 5% of Consolidated Adjusted Capitalization
at any time outstanding;
(e) Liens incidental to the conduct of business or the ownership
of properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and attorneys' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money; provided in each case, the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(f) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Operating Partnership and its Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in
the operation of the business of the Operating Partnership and its
Subsidiaries;
(g) Liens existing on the date of this Agreement and securing
the Debt of the Operating Partnership and its Subsidiaries referred to
in item 2 of Schedule 5.15 and refinancing, renewal or extension of such
Debt, provided that (i) the principal amount of such Debt is not
increased over the principal amount thereof immediately prior to such
refinancing, renewal or extension, and (ii) such Lien is not extended to
other property of the Operating Partnership or any Subsidiary;
(h) Liens securing Debt incurred within the limitations of
Section 10.2;
(i) Liens on property or assets of a Subsidiary securing Debt
owing to the Operating Partnership or to any of its Subsidiaries; and
<PAGE>
(j) any Lien existing on property of a Person immediately prior
to its being consolidated with or merged into the Operating Partnership
or a Subsidiary or its becoming a Subsidiary, or any Lien existing on
any property acquired by the Operating Partnership or any Subsidiary at
the time such property is so acquired (whether or not the Debt secured
thereby shall have been assumed), provided that (i) no such Lien shall
have been created or assumed in contemplation of such consolidation or
merger or such Person's becoming a Subsidiary or such acquisition of
property, and (ii) each such Lien shall extend solely to the item or
items of property so acquired and, if required by the terms of the
instrument originally creating such Lien, other property which is an
improvement to or is acquired for specific use in connection with such
acquired property.
Section 10.6. Merger, Consolidation, etc. The Operating Partnership
will not consolidate with or merge with any other entity unless (i) the
Operating Partnership or the Trust is the surviving or continuing entity and
(ii) immediately after giving effect to such transaction no Default or Event
of Default would exist.
Section 10.7. Sales of Assets. (a) The Operating Partnership will not,
and will not permit any Subsidiary to, engage in any Asset Disposition unless,
(x) after giving effect to such Asset Disposition, no Default or Event of
Default shall have occurred and be continuing and (y) such Asset Disposition
does not involve any substantial part of the assets of the Operating
Partnership and its Subsidiaries. An Asset Disposition shall be deemed to
involve a "substantial part" of the assets of the Operating Partnership and
its Subsidiaries (i) if the book value of the assets subject to such Asset
Disposition, when added to the book value of all other assets subject to other
Asset Dispositions during the same fiscal year exceeds 15% of Consolidated
Total Assets determined as of the end of the immediately preceding fiscal
year, or (ii) if the portion of consolidated total revenue for the preceding
fiscal year attributable to the assets subject to such Asset Disposition, when
added to the portion of consolidated total revenue for the preceding fiscal
year attributable to all other assets subject to other Asset Dispositions
during the same fiscal year exceeds 15% of consolidated total revenue for the
fiscal year immediately preceding such Asset Disposition; provided, however,
that in any computation of "substantial part" there shall be excluded any
Asset Disposition, to the extent that the proceeds thereof are applied within
180 days after the receipt of the proceeds of such Asset Disposition to either
(i) the voluntary prepayment of the Notes pursuant to Section 8.2, or (ii) the
purchase of other similar assets for use in the business of the Operating
Partnership and its Subsidiaries.
Section 10.8. Restricted Investments. The Operating Partnership will
not, and will not permit any Subsidiary to (i) make any Restricted Investment
if, after giving effect thereto, the aggregate amount of Restricted
Investments held by the Operating Partnership and its Subsidiaries would
exceed 10% of Consolidated Total Assets or (ii) make any Unimproved Real
Estate Investments if, after giving effect thereto, the aggregate amount of
Unimproved Real Estate Investments held by the Operating Partnership and its
Subsidiaries would exceed 10% of Consolidated Total Assets.
<PAGE>
Section 11.Events of Default.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Operating Partnership defaults in the payment of any
principal or Make-Whole Amount, if any, on any Note when the same
becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or
(b) the Operating Partnership defaults in the payment of any
interest on any Note for more than five days after the same becomes due
and payable; or
(c) (i) the Operating Partnership defaults in the performance of
or compliance with any term contained in Sections 9.5 or 10 or (ii) the
Trust defaults in the performance of or compliance with any term
contained in Section 9.5 hereof or Section 5 of the Guaranty Agreement;
or
(d) either Constituent Company defaults in the performance of or
compliance with any term contained herein (other than those referred to
in paragraphs (a), (b) and (c) of this Section 11) and such default is
not remedied within 30 days after the earlier of (i) a Responsible
Officer obtaining actual knowledge of such default and (ii) such
Constituent Company receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "notice
of default"); or
(e) any representation or warranty made in writing by or on
behalf of either Constituent Company or by any officer of either
Constituent Company in this Agreement, the Guaranty Agreement or in any
writing furnished in connection with the transactions contemplated
hereby proves to have been false or incorrect in any material respect on
the date as of which made; or
(f) (i) the Trust or any Subsidiary is in default (as principal
or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Debt that is outstanding
in an aggregate principal amount of at least $5,000,000 beyond any
period of grace provided with respect thereto, or (ii) the Trust or any
Subsidiary is in default in the performance of or compliance with any
term of any evidence of any Debt in an aggregate outstanding principal
amount of at least $5,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Debt has become, or has
been declared (or one or more Persons are entitled to declare such Debt
to be), due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Debt to convert such Debt
into equity interests), (x) the Trust or any Subsidiary has become
obligated to purchase or repay Debt before its regular maturity or
before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $5,000,000, or (y) one or more
Persons have the right to require the Trust or any Subsidiary so to
purchase or repay such Debt; or
<PAGE>
(g) (i) the Guaranty Agreement shall prove to be unenforceable
or invalid or the Trust shall deny or disaffirm its obligations under
the Guaranty Agreement, or (ii) Default shall occur in the observance or
performance by the Trust of any provision of the Guaranty Agreement
(other than Section 5 of the Guaranty Agreement, which is governed by
clause (c) above) which is not remedied within 30 days after the earlier
of (x) a Responsible Officer obtaining actual knowledge of such default
and (y) the Trust receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "notice
of default"); or
(h) the Trust or any Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it
of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(i) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Trust or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Trust or any of its Subsidiaries, or
any such petition shall be filed against the Trust or any of its
Subsidiaries and such petition shall not be dismissed within 90 days; or
(j) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of
the Trust and its Subsidiaries and which judgments are not, within 30
days after entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 30 days after the expiration of such stay;
or
(k) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of intent
to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Trust or any ERISA Affiliate
that a Plan may become a subject of any such proceedings, (iii) the
aggregate "amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $2,000,000, (iv) the
Trust or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Trust or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Trust or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Trust or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be
expected to have a Material Adverse Effect.
<PAGE>
As used in Section 11(k), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
Section 12. Remedies on Default, etc.
Section 12.1. Acceleration.
(a) If an Event of Default with respect to a Constituent Company
described in paragraph (h) or (i) of Section 11 has occurred, all the
Notes then outstanding shall automatically become immediately due and
payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 25% in principal amount
of the Notes of either Series at the time outstanding may at any time at
its or their option, by notice or notices to the Operating Partnership,
declare all the Notes of such Series then outstanding to be immediately
due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Operating
Partnership, declare all the Notes held by it or them to be immediately
due and payable.
Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus (x) all accrued and unpaid
interest thereon and (y) the Make-Whole Amount determined in respect of such
principal amount (to the full extent permitted by applicable law), shall all
be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The
Operating Partnership acknowledge, and the parties hereto agree, that each
holder of a Note has the right to maintain its investment in the Notes free
from repayment by the Constituent Companies (except as herein specifically
provided for), and that the provision for payment of a Make-Whole Amount by
the Operating Partnership in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
<PAGE>
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become
or have been declared immediately due and payable under Section 12.1, the
holder of any Note at the time outstanding may proceed to protect and enforce
the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of
any of the terms hereof or thereof, or in aid of the exercise of any power
granted hereby or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes of either Series
have been declared due and payable pursuant to clause (b) or (c) of
Section 12.1, the holders of not less than 66-2/3% in principal amount of the
Notes of such Series then outstanding, by written notice to the Operating
Partnership, may rescind and annul any such declaration and its consequences
if (a) the Operating Partnership has paid all overdue interest on the Notes of
such Series, all principal of and Make-Whole Amount, if any, on any Notes of
such Series that are due and payable and are unpaid other than by reason of
such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes of such Series, at the Default Rate, (b) all
Events of Default and Defaults, other than non-payment of amounts that have
become due solely by reason of such declaration, have been cured or have been
waived by the holders of the Notes of such Series pursuant to Section 17, and
(c) no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes of such Series. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of
Default or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Operating Partnership
under Section 15, the Operating Partnership will pay to the holder of each
Note on demand such further amount as shall be sufficient to cover all costs
and expenses of such holder incurred in any enforcement or collection under
this Section 12, including, without limitation, reasonable attorneys' fees,
expenses and disbursements.
Section 13.Registration; Exchange; Substitution of Notes.
<PAGE>
Section 13.1. Registration of Notes. The Operating Partnership shall
keep at its principal executive office a register for the registration and
registration of transfers of Notes. The name and address of each holder of
one or more Notes, each transfer thereof and the name and address of each
transferee of one or more Notes shall be registered in such register. Prior
to due presentment for registration of transfer, the Person in whose name any
Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Operating Partnership shall not be
affected by any notice or knowledge to the contrary. The Operating
Partnership shall give to any holder of a Note that is an Institutional
Investor promptly upon request therefor, a complete and correct copy of the
names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. (a) Upon surrender of any
Note at the principal executive office of the Operating Partnership for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of such Note or its
attorney duly authorized in writing and accompanied by the address for notices
of each transferee of such Note or part thereof), the Operating Partnership
shall, subject to paragraph (b) of this Section, execute and deliver, at the
Operating Partnership's expense (except as provided below), one or more new
Notes (as requested by the holder thereof) of the same Series in exchange
therefor, in an aggregate principal amount equal to the unpaid principal
amount of the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially in the form of
Exhibit 1-A or Exhibit 1-B, as the case may be. Each such new Note shall be
dated and bear interest from the date to which interest shall have been paid
on the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Operating Partnership may require
payment of a sum sufficient to cover any stamp tax or governmental charge
imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $1,000,000, provided that if
necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $1,000,000.
Any transferee, by its acceptance of a Note registered in its name (or the
name of its nominee), shall be deemed to have made the representation set
forth in Section 6.2.
(b) You agree, and each holder of a Note shall be deemed to have
agreed by acceptance of such Note, not to transfer Notes to a Competitor.
Section 13.3. Replacement of Notes. Upon receipt by the Operating
Partnership of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation),
and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $50,000,000, such Person's own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
<PAGE>
the Operating Partnership at its own expense shall execute and deliver, in
lieu thereof, a new Note of the same Series, dated and bearing interest from
the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed
or mutilated Note if no interest shall have been paid thereon.
Section 14. Payments on Notes.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Chicago, Illinois at the principal office of Harris
Trust and Savings Bank in such jurisdiction. The Operating Partnership may at
any time, by notice to each holder of a Note, change the place of payment of
the Notes so long as such place of payment shall be either the principal
office of the Operating Partnership in such jurisdiction or the principal
office of a bank or trust company in such jurisdiction.
Section 14.2. Home Office Payment. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Operating Partnership will
pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose
below your name in Schedule A, or by such other method or at such other
address as you shall have from time to time specified to the Operating
Partnership in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Operating Partnership made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Operating Partnership at its principal executive office or at the place of
payment most recently designated by the Operating Partnership pursuant to
Section 14.1. Prior to any sale or other disposition of any Note held
by you or your nominee you will, at your election, either endorse thereon the
amount of principal paid thereon and the last date to which interest has been
paid thereon or surrender such Note to the Operating Partnership in exchange for
a new Note or Notes pursuant to Section 13.2. The Operating Partnership will
afford the benefits of this Section 14.2 to any Institutional Investor that is
the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you
have made in this Section 14.2.
<PAGE>
Section 15.Expenses, Etc.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Trust will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other Purchaser or
holder of a Note in connection with such transactions and in connection with
any amendments, waivers or consents under or in respect of this Agreement, the
Guaranty Agreement or the Notes (whether or not such amendment, waiver or
consent becomes effective), including, without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement, the Guaranty Agreement or
the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Guaranty
Agreement or the Notes, or by reason of being a holder of any Note, and
(b) the costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Trust or any Subsidiary or
in connection with any work-out or restructuring of the transactions
contemplated hereby, by the Guaranty Agreement and by the Notes. The Trust
will pay, and will save you and each other holder of a Note harmless from, all
claims in respect of any fees, costs or expenses, if any, of brokers and
finders (other than those retained by you).
Section 15.2. Survival. The obligations of the Trust under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, the Guaranty Agreement
or the Notes, and the termination of this Agreement or the Guaranty Agreement.
Section 16.Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a
Note, regardless of any investigation made at any time by or on behalf of you
or any other holder of a Note. All statements contained in any certificate or
other instrument delivered by or on behalf of either Constituent Company
pursuant to this Agreement shall be deemed representations and warranties of
such Constituent Company under this Agreement. Subject to the preceding
sentence, this Agreement, the Guaranty Agreement and the Notes embody the
entire agreement and understanding between you and the Constituent Companies
and supersede all prior agreements and understandings relating to the subject
matter hereof.
Section 17. Amendment and Waiver.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Constituent Companies and the Required Holders, except that
(a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5,
6 or 21 hereof, or any defined term (as it is used therein), will be effective
as to you unless consented to by you in writing, and (b) no such amendment or
waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time
of payment or method of computation of interest or of the Make-Whole Amount
on, the Notes, (ii) change the percentage of the principal amount of the Notes
the holders of which are required to consent to any such amendment or waiver,
or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
<PAGE>
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Constituent Companies will provide each holder
of the Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a decision is
required, to enable such holder to make an informed and considered decision
with respect to any proposed amendment, waiver or consent in respect of any of
the provisions hereof or of the Notes. The Constituent Companies will deliver
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.
(b) Payment. The Constituent Companies will not directly or
indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any security,
to any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of any of the
terms and provisions hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder of
Notes then outstanding even if such holder did not consent to such waiver or
amendment.
Section 17.3. Binding Effect, etc. Any amendment or waiver consented
to as provided in this Section 17 applies equally to all holders of Notes and
is binding upon them and upon each future holder of any Note and upon the
Constituent Companies without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to
or affect any obligation, covenant, agreement, Default or Event of Default not
expressly amended or waived or impair any right consequent thereon. No course
of dealing between the Constituent Companies and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate
as a waiver of any rights of any holder of such Note. As used herein, the
term "this Agreement" and references thereto shall mean this Agreement as it
may from time to time be amended or supplemented.
Section 17.4. Notes Held by a Constituent Company, etc. Solely for the
purpose of determining whether the holders of the requisite percentage of the
aggregate principal amount of Notes then outstanding approved or consented to
any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the
Notes to be taken upon the direction of the holders of a specified percentage
of the aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by either Constituent Company or any of its Affiliates shall
be deemed not to be outstanding.
Section 18.Notices.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
<PAGE>
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Trust in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Trust in
writing, or
(iii) if to either Constituent Company, to the Trust at its
address set forth at the beginning hereof to the attention of Chief
Financial Officer, or at such other address as the Trust shall have
specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually
received.
Section 19. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at a Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and you may destroy any original document so reproduced.
Each Constituent Company agrees and stipulates that, to the extent permitted
by applicable law, any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by you in the regular course of business) and any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence. This Section 19 shall not prohibit either Constituent Company or
any other holder of Notes from contesting any such reproduction to the same
extent that it could contest the original, or from introducing evidence to
demonstrate the inaccuracy of any such reproduction.
<PAGE>
Section 20. Confidential Information.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Trust or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Trust or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you
prior to the time of such disclosure, (b) subsequently becomes publicly known
through no act or omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than through disclosure by the Trust
or any Subsidiary or (d) constitutes financial statements delivered to you
under Section 7.1 that are otherwise publicly available. You will maintain
the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any
part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by
the provisions of this Section 20), (v) any Person from which you offer to
purchase any security of either Constituent Company (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be bound
by the provisions of this Section 20), (vi) any federal or state regulatory
authority having jurisdiction over you, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about your
investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule or regulation applicable to you, (x) in response to any subpoena,
court order or other legal process, (y) in connection with any litigation to
which you are a party or (z) if an Event of Default has occurred and is
continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes, this Agreement or the
Guaranty Agreement. With respect to disclosure of Confidential Information
pursuant to clause (viii) of the preceding sentence, you shall use reasonable
efforts in accordance with your established procedures to provide the Trust
with prompt written notice of any such matter so that the Trust may seek a
protective order or other appropriate remedy. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Trust in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is
a party to this Agreement or its nominee), such holder will enter into an
agreement with the Trust embodying the provisions of this Section 20.
<PAGE>
Section 21. Substitution of Purchaser.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Trust, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted
as a purchaser hereunder and such Affiliate thereafter transfers to you all of
the Notes then held by such Affiliate, upon receipt by the Trust of notice of
such transfer, wherever the word "you" is used in this Agreement (other than
in this Section 21), such word shall no longer be deemed to refer to such
Affiliate, but shall refer to you, and you shall have all the rights of an
original holder of the Notes under this Agreement.
Section 22. Miscellaneous.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and
assigns (including, without limitation, any subsequent holder of a Note)
whether so expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Note that is due on a
date other than a Business Day shall be made on the next succeeding Business
Day without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full
extent permitted by law) not invalidate or render unenforceable such provision
in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the law of the State of Illinois excluding choice-of-law principles of the
law of such State that would require the application of the laws of a
jurisdiction other than such State.
Section 22.7. No Recourse to Shareholders etc. No obligation or
liability whatsoever of the Trust (whether as guarantor or as general partner
of the Operating Partnership) on account of or arising under the Notes, the
Guaranty Agreement, this Agreement or the Other Agreements or any other
document executed by the Trust or the Operating Partnership in connection
herewith or therewith shall be personally binding upon, nor shall resort for
the enforcement thereof be had to, the private property of any of the Trust's
shareholders, trustees, officers or employees, regardless of whether such
obligation or liability of the Trust is in the nature of contract, tort or
otherwise. Nothing herein shall diminish or impair your rights or the rights
of the Other Purchasers or the holders from time to time of the Notes to
pursue any remedy against the Trust or any assets of the Trust.
<PAGE>
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to
the Constituent Companies, whereupon the foregoing shall become a binding
agreement between you and the Constituent Companies.
Very truly yours,
Storage Trust Properties, L.P.
By: Storage Trust Realty,
Its general partner
By
Title
Storage Trust Realty
By
Title
<PAGE>
The foregoing is hereby agreed
to as of the date thereof.
[Variation]
By
Title
[By
Title]
<PAGE>
Information Relating to Purchasers
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
Pacific Mutual Life Insurance $13,000,000 -0- A
Company $7,000,000 -0- B
700 Newport Center Drive
Newport Beach, California 92658-9000
Attention: Fixed Income Securities Department
Telephone: (714) 640-3379; Facsimile: (714) 640-3199
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1 $____________ principal and/or $___________ interest" or
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9 $____________ principal and/or $___________ interest") to:
Chase Manhattan Bank, N.A.
ABA #021-000-021
A/C - 900-9-002206
BNF - Funds Pending - DNI/ABS
BBK - Chase Manhattan Bank/SSTO
A/C Name: General Account
A/C Number: 47363300
Regarding: Security Description and PPN
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such
payment, to be addressed:
Pacific Mutual Life Insurance Company
Attention: Securities Administration
P.O. Box 9000
Newport Beach, California 92658-9000
With a copy to:
The Chase Manhattan Bank, N.A.
P.O. Box 456, Wall Street Station
New York, New York 10005
Name of Nominee in which Notes are to be issued: ATWELL & CO
General Taxpayer I.D. Number: 95-4229487
Private Placement Taxpayer I.D. Number: 13-6065575
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
National Travelers Life Company $1,000,000 -0- B
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
First Bank, N.A
Minneapolis, Minnesota
ABA #091-000-022
for credit to: First Trust, N.A.
Account Number 180121167365, TSU: 050
for further credit to: National Travelers Life Company
Account Number 12609110
Attention: Peggy Sime (612) 244-0647
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: Var & Co.
Taxpayer I.D. Number: 42-0432940
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
FB Annuity Company $1,000,000 -0- B
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
Comerica Bank
Detroit, Michigan
ABA #072-000-096
For credit to: Trust Operation Fixed Income
Unit Cost Center 98530
Account Number 21585-98530
For further credit to: FB Annuity Company
Account Number: 84-553
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-2315027
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
Farm Bureau Mutual Insurance $1,500,000 -0- A
Company of Michigan
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
Comerica Bank
Detroit, Michigan
ABA #072-000-096
For credit to: Trust Operation Fixed Income
Unit Cost Center 98530
Account Number 21585-98530
For further credit to: Farm Bureau Mutual Insurance Company of Michigan
Account Number: 84-551
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1316179
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <C> <S>
Farm Bureau Life Insurance -0- $1,000,000 B
Company of Michigan
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
Comerica Bank
Detroit, Michigan
ABA #072-000-096
For credit to: Trust Operation Fixed Income
Unit Cost Center 98530
Account Number 21585-98530
For further credit to: Farm Bureau Life Insurance Company of Michigan
Account Number: 84-550
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-6053670
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <C> <S>
Pioneer Mutual Life Insurance -0- $1,000,000 B
Company
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
Norwest Bank Minnesota
Minneapolis, Minnesota
ABA #091-000-019
for credit to: Trust Clearing
Account Number 0840245
for further credit to: Pioneer Mutual Life Insurance Company
Account Number 40597400
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 45-0220640
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
The Reliable Life Insurance $1,000,000 -0- B
Company
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
Mercantile Bank
St. Louis, Missouri
ABA #081-000-210
for credit to: The Reliable Life Insurance Company
Account Number 1000602969
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 43-0476110
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
The Minnesota Mutual Life $6,000,000 -0- B
Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: MIMLIC Asset Management Company
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
First Bank National Association
Minneapolis, Minnesota
ABA #091000022
BNF The Minnesota Mutual Life Insurance Company
Account Number 1801-10-00600-4
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0417830
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
The Minnesota Mutual Life $1,000,000 -0- B
Insurance Company - Separate
Account F
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Bond Technician
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
First Bank, N.A
Minneapolis, Minnesota
ABA #091-0000-22
for further credit to: First Trust N.A.
Account Number 180121167365, TSU: 050
for credit to: Minnesota Mutual - Separate Account F
Account Number 12-6039000
Attention: Peggy Sime (612) 244-0647
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: Var & Co.
Taxpayer I.D. Number: 41-0417830
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
Life of Maryland, Inc. $1,000,000 -0- B
c/o MIMLIC Asset
Management Company -0- $1,000,000 B
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
NationsBank
Baltimore, Maryland
ABA #052-001-633
for credit to: Life of Maryland, Inc.
Account Number 200-060-085-8
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 52-1220516
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <C> <S>
State Mutual Insurance Company -0- $1,000,000 B
c/o MIMLIC Asset Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
The Bank of New York
New York, New York
ABA #021-000-018
Reference: GLA-566 (PPN & Payable Date)
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: Polly & Co.
Taxpayer I.D. Number: 58-1449898
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
Northern Life Insurance $4,000,000 -0- A
Company
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2147
Attention: Mark Ponder
Phone: (612) 372-5257
Fax: (612) 372-5368
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
First National Bank N.A./Mpls. (ABA #091000022)
601 2nd Avenue South
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon & Maturity
for credit to: Northern Life Insurance Company
Account Number 1602-3237-6105
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-1295933
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
ReliaStar Life Insurance Company $3,000,000 -0- A
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2147
Attention: Mark Ponder
Phone: (612) 372-5257
Fax: (612) 372-5368
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
First National Bank N.A./Mpls. (ABA #091000022)
601 2nd Avenue South
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon & Maturity
for credit to: ReliaStar Life Insurance Company
Account Number 1102-4001-4461
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0451140
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
ReliaStar United Services Life $3,000,000 -0- A
Insurance Company
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Mark Ponder
Phone: (612) 372-5257
Fax: (612) 372-5368
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
Bankers Trust (ABA #021001033)
New York, New York
Ref: Security description and P&I Breakdown
for credit to: ReliaStar United Services Life Insurance Company
Account Number 99-911-145
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: SALKELD & CO.
Taxpayer I.D. Number: 53-0159267
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
ReliaStar Bankers Security Life $2,000,000 -0- A
Insurance Company
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Mark Ponder
Phone: (612) 372-5257
Fax: (612) 372-5368
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
Chemical NYC/GEOCUST
ABA #021000128
New York, NY
DDA #544755102
A/C #1960 Dept 571 NonStandard Securities
F/C to N9254120
Ref: Issue Name, PPN and P&I Breakdown
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: SIGLER & CO.
Taxpayer I.D. Number: 53-0242530
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <C> <S>
Jackson National Life Insurance $-0- $11,000,000 B
Company
5901 Executive Drive
Lansing, Michigan 48909
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
NORTHERN TRUST CHGO
ABA #0710-0015-2
Credit Account #5186041000 (General ledger for all clients of Northern
Trust)
For Further Credit to: 26-91241/Jackson National Life Insurance Company
Ref: (Name of Company) PVTPL, date of payment, principal and interest
breakdown
Attention: Oscell Owens/Sharon Stifter
Notices
All notices and communications, including notices with respect to payment and
written confirmation of each such payment, and copies of documents, notes
and/or certificates, waivers, amendments, consents, and financial information
should be sent to:
PPM America, Inc.
225 West Wacker Drive, Suite 1200
Chicago, Illinois 60606-1228
Attention: Private Placements/David Brett
Phone: (312) 634-2510
Fax: (312) 634-0054
Interest and principal payment notices should also be faxed to:
Osell Owens, Northern Trust
801 South Canal, Floor CIN
Chicago, Illinois 60607
Phone: (312) 444-5754
Fax: (312) 630-8179
and
Claudia Baron, PPM America
225 West Wacker Drive, Suite 1200
Chicago, Illinois 60606
Phone: (312) 634-2504
Fax: (312) 634-0054
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1659835
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <C> <S>
American International Life $-0- $6,000,000 A
Assurance Company of New York
c/o AIG Global Investment Corp.
One Chase Manhattan Plaza, 57th Floor
New York, New York 10005
Attention: Jerome Muldowney
Telecopier Number: (212) 504-5297
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
Federal Reserve Bank of New York (ABA #0260-0792-2)
A/C Fiduciary TR NYC/CUST
for credit to: American International Life Assurance Company of New
York
Account Number 440-520203
Attention: Edward Abad
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-6101875
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <C> <S>
AIG Life Insurance Company $-0- $4,000,000 A
c/o AIG Global Investment Corp.
One Chase Manhattan Plaza, 57th Floor
New York, New York 10005
Attention: Jerome Muldowney
Telecopier Number: (212) 504-5297
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
Federal Reserve Bank of New York (ABA #0260-0792-2)
A/C Fiduciary TR NYC/CUST
for credit to: AIG Life Insurance Company
Account Number 440-526903
Attention: Edward Abad
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 25-1118523
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
Teachers Insurance and Annuity $9,000,000 -0- B
Association
730 Third Avenue
New York, New York 10017
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
Chase Manhattan Bank
ABA #021000021
New York, New York
Account of: Teachers Insurance and Annuity Association
Account Number: 910-2-766475
On order of: [Name of Issuer] [PPN #]
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
Teachers Insurance and Annuity Association
730 Third Avenue
New York, New York 10017
Attention: Securities Division
All other notices and communications to be addressed to:
Ms. Susan Sanford
TIAA-CREF
730 Third Avenue, 8th Floor
New York, New York 10017
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-1624203N
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
Monumental Life Insurance $8,000,000 -0- B
Company
c/o AEGON USA Investment Management, Inc.
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499-5335
Attention: Director of Private Placements
Fax Number: (319) 369-2666
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
Citibank, N.A. (ABA #021000089)
111 Wall Street
New York, New York 10043
for credit to: Monumental Life Insurance Company
Account Number 40560774
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
AEGON USA Investment Management, Inc.
4333 Edgewood Road N.E.
Cedar Rapids, Iowa 52499-5112
Attention: Michael Meese
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 52-0419790
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
The Ohio National Life Insurance $6,000,000 -0- B
Company
P. O. Box 237
Cincinnati, Ohio 45201
Attention: Investment Department
Facsimile: (513) 794-4506
</TABLE>
Overnight Delivery Address:
[One Financial Way
Cincinnati, Ohio 45242]
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.66% Series B Senior Notes due 2007,
PPN 86212* AB 9, principal, premium or interest") to:
Star Bank, N.A. (ABA #042-0000-13)
Fifth and Walnut Streets
Cincinnati, Ohio 45202
for credit to: The Ohio National Life Insurance Company
Account Number 910-275-7
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 31-0397080
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
COVA Financial Services Life $4,000,000 -0- A
Insurance Company
c/o General American Life Insurance Company
P. O. Box 396
St. Louis, Missouri 63166
Attention: Securities Division
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
NORTHERN CHGO/Trust
ABA #071000152
Credit wire account #5186041000
Account 26-02881/COVA Financial Services Life Insurance Company
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
General American Life Insurance Company
P. O. Box 418
St. Louis, Missouri 63166
Attention: Investment Accounting
and
COVA Financial Services Life Insurance Co.
c/o The Northern Trust Company
P. O. Box 92996
Chicago, Illinois 60675
All notices and communications, other than those in respect to payments to be
addressed to:
General American Life Insurance Company
P. O. Box 396
St. Louis, Missouri 63166
Attention: Securities Division
and
COVA Financial Life Insurance Co.
c/o The Northern Trust Company
P. O. Box 92996
Chicago, Illinois 60675
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 43-1236042
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
COVA Financial Life $1,000,000 -0- A
Insurance Company
c/o General American Life Insurance Company
P. O. Box 396
St. Louis, Missouri 63166
Attention: Securities Division
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
BK OF NYC/CTR/BBK
IOC 565 - Inst'l Custody
Account #076628
For: COVA Financial Life Insurance Co.
ABA #021000018
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
General American Life Insurance Company
P. O. Box 418
St. Louis, Missouri 63166
Attention: Investment Accounting
and
COVA Financial Life Insurance Co.
c/o COVA Financial Services
One Tower Lane, Suite 3000
Oak Brook Terrace, IL 60181
All notices and communications, other than those in respect to payments to be
addressed to:
General American Life Insurance Company
P. O. Box 396
St. Louis, Missouri 63166
Attention: Securities Division
and
COVA Financial Life Insurance Co.
c/o COVA Financial Services
One Tower Lane, Suite 3000
Oak Brook Terrace, IL 60181
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 94-2176117
<PAGE>
<TABLE>
<CAPTION>
Principal Amount
Name and Address of of Notes to Be
Purchaser Purchased Series
First Closing Second Closing
<S> <C> <S> <C>
Guarantee Life Insurance Company $2,500,000 -0- A
8801 Indian Hills Drive
Omaha, Nebraska 68114
Attention: Investment Division
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Storage Trust Properties, L.P., 7.47% Series A Senior Notes due 2004,
PPN 86212* AA 1, principal, premium or interest") to:
State Street Bank and Trust Company
Boston, Massachusetts
ABA #021 000 028
Account Number: 28946168
Account Name: Guaranty Life Insurance Company
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0179235
<PAGE>
Defined Terms
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person (other than a Person reporting, or
required to report, beneficial ownership on Schedule 13G) beneficially owning
or holding, directly or indirectly, 10% or more of any class of voting or
equity interests of the Trust or any Subsidiary or any corporation of which
the Trust and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity
interests. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of
the Trust.
"Asset Disposition" means and includes (i) a sale, lease or other
disposition of assets (other than in the ordinary course of business) by the
Operating Partnership or any Subsidiary (except by the Operating Partnership
to a Wholly-Owned Subsidiary or to a Specified Affiliate, and except by a
Subsidiary to the Operating Partnership, to a Subsidiary in which the
Operating Partnership holds, directly or indirectly, an equity or voting
interest equal to or greater than (in percentage terms) its interest in the
transferor Subsidiary, or to a Specified Affiliate), (ii) the issuance or sale
by any Subsidiary or Specified Affiliate of any shares of stock of any class
(including as "stock" for the purpose of this definition, any warrants, rights
or options to purchase or otherwise acquire stock or other Securities
exchangeable for or convertible into stock) of such Subsidiary or such
Specified Affiliate, as the case may be, to any Person other than the
Operating Partnership, a Wholly-Owned Subsidiary or a Specified Affiliate
(except for the purpose of qualifying directors, except in satisfaction of the
validly pre-existing preemptive rights of minority shareholders in connection
with the simultaneous issuance of stock to the Operating Partnership and its
Subsidiaries whereby the Operating Partnership and its Subsidiaries maintain
their same proportionate interest in such Subsidiary and except, in the case
of an issuance or sale by a Specified Affiliate, for an issuance or sale
subject to an arrangement assuring to the Operating Partnership substantially
all of the economic interest in, such Specified Affiliate), and (iii) the
sale, transfer or other disposition by the Operating Partnership of any shares
of stock of any Subsidiary or Specified Affiliate (except by the Operating
Partnership to a Wholly-Owned Subsidiary or a Specified Affiliate or except to
qualify directors and except, in the case of a sale, transfer or disposition
of any shares of stock of a Specified Affiliate, for the sale, transfer or
disposition subject to an arrangement assuring to the Operating Partnership
substantially all of the economic interest in, such Specified Affiliate) and
the sale, transfer or other disposition by any Subsidiary or by any Specified
Affiliate of any shares of stock of any other Subsidiary or other Specified
Affiliate (except to the Operating Partnership, a Subsidiary in which the
Operating Partnership holds, directly or indirectly, an equity or voting
interest equal to or greater than (in percentage terms) its interest in the
transferor Subsidiary, or a Specified Affiliate and except, in the case of a
sale, transfer or disposition of shares of stock of a Specified Affiliate, for
a sale, transfer or disposition subject to an arrangement assuring to the
Operating Partnership substantially all of the economic interest in, such
Specified Affiliate).
<PAGE>
"Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are generally closed, and (b) for the purposes of any other provision of
this Agreement, any day other than a Saturday, a Sunday or a day on which
commercial banks in Illinois or Missouri are generally closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Closings" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Competitor" means any Person engaged to any significant extent in the
business of owning self-storage and related facilities; provided that in no
event shall any Institutional Investor described in clause (c) of the
definition of such term be deemed a Competitor for purposes of this Agreement.
"Confidential Information" is defined in Section 20.
"Consolidated Adjusted Capitalization" as of any date means the sum of
Consolidated Adjusted Tangible Net Worth and Consolidated Debt as of such
date.
"Consolidated Adjusted Tangible Net Worth" means, at any time,
(a) the sum of (i) the par value (or value stated on the books
of the Operating Partnership) of the capital stock or other equity
interests (but excluding treasury stock, capital stock subscribed and
unissued and mandatorily redeemable Preferred Stock or corresponding
equity interests) of the Operating Partnership and its Subsidiaries at
such time plus (ii) the amount of the paid-in capital and retained
earnings of the Operating Partnership and its Subsidiaries at such time,
in each case as such amounts would be shown on a consolidated balance
sheet of the Operating Partnership and its Subsidiaries as of such time
prepared in accordance with GAAP, minus
<PAGE>
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock or other equity
interests and surplus of Subsidiaries, minus
(c) the net book value of all assets, after deducting any
reserves applicable thereto, which would be treated as intangible under
GAAP, including, without limitation, good will, trademarks, trade names,
service marks, brand names, copyrights, patents and unamortized debt
discount and expense, organizational expenses and the excess of the
equity in any Subsidiary over the cost of the investment in such
Subsidiary, plus
(d) accumulated depreciation on real estate properties as such
amount would be shown on a consolidated balance sheet of the Operating
Partnership and its Subsidiaries as of such time prepared in accordance
with GAAP.
"Consolidated Cash Flow Available for Interest Charges" means, in
respect of any period, the sum of (a) Consolidated Net Income for such period,
(b) the amount of all depreciation of real estate owned and amortization
allowances and other non-cash expenses of the Operating Partnership and its
Subsidiaries but only to the extent deducted in the determination of
Consolidated Net Income for such period, (c) Interest Charges but only to the
extent deducted in the determination of Consolidated Net Income for such
period and (d) all provisions for any Federal, state or other income taxes
made by the Operating Partnership and its Subsidiaries but only to the extent
deducted in the determination of Consolidated Net Income for such period.
"Consolidated Debt" means, as of any date of determination, the total of
all Debt of the Operating Partnership and its Subsidiaries outstanding on such
date, after eliminating all offsetting debits and credits among the Operating
Partnership and its Subsidiaries and all other items required to be eliminated
in the course of the preparation of consolidated financial statements of the
Operating Partnership and its Subsidiaries in accordance with GAAP.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Operating Partnership and its Subsidiaries for such
period, as determined in accordance with GAAP, after eliminating all
offsetting debits and credits among the Operating Partnership and its
Subsidiaries, all earnings or losses attributable to outstanding Minority
Interests and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Operating Partnership
and its Subsidiaries in accordance with GAAP, provided that there shall be
excluded:
(a) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary or is merged into or consolidated with the
Operating Partnership or a Subsidiary, and the income (or loss) of any
Person, substantially all of the assets of which have been acquired in
any manner, realized by such other Person prior to the date of
acquisition,
<PAGE>
(b) the income (or loss) of any Person (other than a Subsidiary)
in which the Operating Partnership or any Subsidiary has an ownership
interest, except to the extent that any such income has been actually
received by the Operating Partnership or such Subsidiary in the form of
cash dividends or similar cash distributions,
(c) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary,
(d) any restoration to income of any contingency reserve, except
to the extent that provision for such reserve was made out of income
accrued during such period,
(e) any aggregate net gain or aggregate net loss during such
period arising from the sale, conversion, exchange or other disposition
of capital assets (such term to include, without limitation, (i) all
non-current assets and, without duplication, (ii) the following, whether
or not current: all fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets, and
all Securities),
(f) any gains resulting from any write-up of any assets (but not
any loss resulting from any write-down of any assets),
(g) any net gain from the collection of the proceeds of life
insurance policies,
(h) any gain arising from the acquisition of any Security of the
Operating Partnership or any Subsidiary, or the extinguishment, under
GAAP, of any Debt of the Operating Partnership or any Subsidiary,
(i) any net income or gain (but not any net loss) during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discontinued operations or the disposition thereof,
(j) any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of the investment in
such Subsidiary,
(k) in the case of a successor to the Operating Partnership by
consolidation or merger or as a transferee of its assets, any earnings
of the successor corporation prior to such consolidation, merger or
transfer of assets, and
(l) any portion of such net income that cannot be freely
converted into United States Dollars.
<PAGE>
"Consolidated Priority Debt" means, as of any date of determination, the
total of all Priority Debt of the Operating Partnership and its Subsidiaries
outstanding on such date, after eliminating all offsetting debits and credits
among the Operating Partnership and its Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Operating Partnership and its Subsidiaries in
accordance with GAAP.
"Consolidated Total Assets" means as of any date of determination,
consolidated total assets of the Operating Partnership and its Subsidiaries,
after eliminating all offsetting debits and credits among the Operating
Partnership and its Subsidiaries and all other items required to be eliminated
in the course of the preparation of consolidated financial statements of the
Operating Partnership and its Subsidiaries in accordance with GAAP.
"Constituent Companies" means the Trust and the Operating Partnership.
"Debt" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (f) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
<PAGE>
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means that rate of interest that is the greater of (i) 2%
per annum above the rate of interest stated in clause (a) of the first
paragraph of any Note or (ii) 1% over the rate of interest publicly announced
by The First National Bank of Boston in Boston, Massachusetts as its "base" or
"prime" rate.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
but not limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Trust
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any property,
the sale value of such property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller (neither being under a compulsion to buy or sell).
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Trust or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Trust or any Subsidiary,
or
<PAGE>
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any indebtedness, dividend or other obligation of any other Person in any
manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor
under any Guaranty, the indebtedness or other obligations that are the subject
of such Guaranty shall be assumed to be direct obligations of such obligor.
"Guaranty Agreement" is defined in Section 2.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety,
the removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration
of which is or shall be restricted, prohibited or penalized by any applicable
law (including, without limitation, asbestos, urea formaldehyde foam
insulation and polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Operating Partnership
pursuant to Section 13.1.
"Institutional Investor" means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
<PAGE>
"Interest Charges" means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits among the Operating Partnership and its Subsidiaries and all other
items required to be eliminated in the course of the preparation of
consolidated financial statements of the Operating Partnership and its
Subsidiaries in accordance with GAAP): (a) all interest in respect of Debt of
the Operating Partnership and its Subsidiaries (including imputed interest on
Capital Lease Obligations) deducted in determining Consolidated Net Income for
such period, and (b) all debt discount and expense amortized or required to be
amortized in the determination of Consolidated Net Income for such period.
"Interest Charges Coverage Ratio" means, at any time, the ratio of
(a) Consolidated Cash Flow Available for Interest Charges for the period of
four consecutive fiscal quarters ending on, or most recently ended prior to,
such time to (b) Interest Charges for such period.
"Investment" means any investment, made in cash or by delivery of
property, by the Operating Partnership or any of its Subsidiaries (i) in any
Person, whether by acquisition of stock, Debt or other obligation or Security,
or by loan, guaranty, advance, capital contribution or otherwise, or (ii) in
any property.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of
any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Trust and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of
the Trust and its Subsidiaries taken as a whole, (b) the ability of the Trust
to perform its obligations under this Agreement and the Guaranty Agreement,
(c) the ability of the Operating Partnership to perform its obligations under
this Agreement and the Notes, or (d) the validity or enforceability of this
Agreement, the Guaranty Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Minority Interest" shall mean any shares of stock of any class of, or
any partnership, membership or other ownership in, a Subsidiary (other than
directors qualifying shares as required by law) that are not owned by the
Operating Partnership and/or one or more of its Subsidiaries.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Trust or the Operating Partnership, as
the case may be, whose responsibilities extend to the subject matter of such
certificate.
"Operating Partnership" means Storage Trust Properties, L.P., a Delaware
limited partnership.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Trust or any ERISA Affiliate or
with respect to which the Trust or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a corporation that
is preferred over any other class of capital stock of such corporation as to
the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"Priority Debt" means (i) Debt of the Operating Partnership secured by a
Lien on any asset of the Operating Partnership and (ii) all Debt of
Subsidiaries (except Debt of any Subsidiary owed to either Constituent Company
or a Wholly-owned Subsidiary).
The term "property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
<PAGE>
"Required Holders" means, at any time, the holders of at least 66-2/3%
in principal amount of the Notes of each Series (or, solely for the purposes
of a waiver under Section 12.3, of either Series) at the time outstanding
(exclusive of Notes then owned by the Trust or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Trust or the Operating Partnership, as the case may be, with
responsibility for the administration of the relevant portion of this
agreement.
"Restricted Investments" means all Investments except the following:
(a) Investments in property to be used in the ordinary course of
business of the Operating Partnership, its Subsidiaries and Specified
Affiliates;
(b) Investments in current assets arising in the ordinary course
of business of the Operating Partnership, its Subsidiaries and Specified
Affiliates;
(c) Investments directly in real property in the ordinary course
of business of the Operating Partnership, its Subsidiaries and Specified
Affiliates;
(d) Investments in entities owning real properties provided that
(i) income from such Investments in any such entity shall be qualified
dividends under the "75% gross income test" under Section 856(c)(3) of
the Code or (ii) at least 75% of income from such Investments in any
such entity shall be "rents from real property" under applicable
provisions of the Code;
(e) Investments in (i) one or more Specified Affiliates or any
Person that concurrently with such Investment becomes a Specified
Affiliate or (ii) one or more Subsidiaries or any Person that
concurrently with such Investment becomes a Subsidiary, provided that
each such corporate Subsidiary is a "qualified REIT subsidiary" of the
Trust within the meaning of section 856(i) of the Code or any successor
provision;
(f) Investments in United States Governmental Securities,
provided that such obligations mature within 365 days from the date of
acquisition thereof;
(g) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank, provided that such obligations
mature within 365 days from the date of acquisition thereof;
(h) Investments in commercial paper in each case rated "A-1" or
better by S&P or "P-1" or better by Moody's or an equivalent rating by
any other credit rating agency of recognized national standing, and
maturing not more than 270 days from the date of creation thereof;
(i) Investments in Repurchase Agreements;
<PAGE>
(j) Investments in tax-exempt obligations of any state of the
United States of America, or any municipality of any such state with
short term ratings in each case of at least "A-1" or better by S&P or
"P-1" or better by Moody's or an equivalent rating by any other credit
rating agency of recognized national standing, provided that such
obligations mature within 365 days from the date of acquisition thereof;
and
(k) Unimproved Real Estate Investments.
For purposes of this Agreement an Investment shall be valued at the greater of
(i) cost and (ii) the value at which such Investment is to be shown on the
books of the Operating Partnership and its Subsidiaries in accordance with
GAAP.
As used in this definition of "Restricted Investments"
"Acceptable Bank" means any bank or trust company (i) which is
organized under the laws of the United States of America or any State
thereof, (ii) which has capital, surplus and undivided profits
aggregating at least $500,000,000, and (iii) whose short-term unsecured
debt obligations (or the short-term unsecured debt obligations of the
bank holding company owning all of the capital stock of such bank or
trust company) shall have been given a rating of "A-1" or better by S&P
or "P-1" or better by Moody's.
"Acceptable Broker-Dealer" means any Person other than a natural
person (i) which is registered as a broker or dealer pursuant to the
Exchange Act and (ii) whose short-term unsecured debt obligations shall
have been given a rating of "A-1" or better by S&P or "P-1" or better by
Moody's.
"Moody's" means Moody's Investors Service, Inc.
"Repurchase Agreement" means any written agreement
(a) that provides for (i) the transfer of one or more
United States Governmental Securities in an aggregate principal
amount at least equal to the amount of the Transfer Price (defined
below) to the Operating Partnership or any of its Subsidiaries
from an Acceptable Bank or an Acceptable Broker-Dealer against a
transfer of funds (the "Transfer Price") by the Operating
Partnership or such Subsidiary to such Acceptable Bank or
Acceptable Broker-Dealer, and (ii) a simultaneous agreement by the
Operating Partnership or such Subsidiary, in connection with such
transfer of funds, to transfer to such Acceptable Bank or
Acceptable Broker-Dealer the same or substantially similar United
States Governmental Securities for a price not less than the
Transfer Price plus a reasonable return thereon at a date certain
not later than 365 days after such transfer of funds,
<PAGE>
(b) in respect of which the Operating Partnership or such
Subsidiary shall have the right, whether by contract or pursuant
to applicable law, to liquidate such agreement upon the occurrence
of any default thereunder, and
(c) in connection with which the Operating Partnership or
such Subsidiary, or an agent thereof, shall have taken all action
required by applicable law or regulations to perfect a Lien in
such United States Governmental Securities.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"United States Governmental Security" means any direct obligation
of, or obligation guaranteed by, the United States of America, or any
agency controlled or supervised by or acting as an instrumentality of
the United States of America pursuant to authority granted by the
Congress of the United States of America, so long as such obligation or
guarantee shall have the benefit of the full faith and credit of the
United States of America which shall have been pledged pursuant to
authority granted by the Congress of the United States of America.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security" has the meaning set forth in Section 2(l) of the Securities
Act.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Trust or the Operating
Partnership, as the case may be.
"Series" is defined in Section 1.
"Series A Notes" is defined in Section 1.
"Series B Notes" is defined in Section 1.
"Specified Affiliate" means any corporation, association or other
business entity formed for the purpose of earning income not qualified as
"rents from real property" under applicable provisions of the Code, in which
either Constituent Company owns, directly or indirectly, substantially all of
the economic interest but less than 10% of the voting interests, and the
charter or other organizational documents of which contain provisions
providing such Constituent Company, directly or indirectly, with substantially
the same rights as, or greater rights than, those provided by Article Fourth,
Section (C)(4) of the Certificate of Incorporation of Storage Realty
Management Co., as filed with the Secretary of State of the State of Delaware
on October 21, 1994.
<PAGE>
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence
of contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if
more than a 50% interest in the profits or capital thereof is owned by such
Person or one or more of its Subsidiaries or such Person and one or more of
its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of
its Subsidiaries). In the case of either Constituent Company, each Specified
Affiliate of such Constituent Company shall be deemed to be a Subsidiary of
such Constituent Company for all purposes of this Agreement. Unless the
context otherwise clearly requires, (i) any reference to a "Subsidiary" in
Section 7.3, Section 10 or the definitions used therein is a reference to a
Subsidiary of the Operating Partnership and (ii) any other reference to a
"Subsidiary" is a reference to a Subsidiary of the Trust.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect
thereof as of the end of the then most recently ended fiscal quarter of such
Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement
relating to such Swap provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount
of such obligation shall be the net amount so determined.
"Trust" means Storage Trust Realty, a Maryland real estate investment
trust.
"Unencumbered Assets" means at any time the book value of all real
estate properties of the Operating Partnership and its Subsidiaries, prior to
the deduction of accumulated depreciation thereon, which are free of all Liens
other than Liens permitted by paragraphs (a), (b), (c), (d), (e), (f) or (i)
of Section 10.5.
"Unimproved Real Estate Investments" means Investments in unimproved
real property and mortgages on unimproved real property.
"Unsecured Debt" means at any time the aggregate unpaid principal amount
of all Debt of the Operating Partnership and its Subsidiaries other than
(i) Debt of a Subsidiary owing to the Operating Partnership or to a Wholly-
Owned Subsidiary and (ii) Debt of the Operating Partnership or a Subsidiary
secured by a Lien on one or more parcels of their real property.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Operating Partnership and the Operating Partnership's other Wholly-Owned
Subsidiaries at such time.
<PAGE>
Changes in Corporate Structure
On November 26, 1996, the Operating Partnership acquired a self-storage
facility (d/b/a Bulls Eye Self Storage) in Houston, Texas from Lone Star
Mini-Storage, Inc.
On December 18, 1996, the Operating Partnership acquired a self-storage
facility (d/b/a Texan Storage) in Katy, Texas from Russel J. Walla and Shannon
L. Walla.
On January 3, 1997, the Operating Partnership acquired a self-storage facility
(d/b/a A Space Station) in Basalt, Colorado from International American
Company III, LLC.
<PAGE>
Disclosure Materials
On January 14, 1997, the Trust provided a binder titled Lender Due Diligence
Materials to the participants at a meeting at the Trust's offices. The binder
contained information about the Trust and was structured in the following
order:
Section I. Self-Storage Industry
Section II. Company Organization and Management
Section III. Operations
Section IV. Acquisitions
Section V. Financial Information
Exhibit I. Covenant Analysis for the Senior Note Offering
Exhibit II. Financial Projections for the year ending December 31,
1997
Exhibit III. Bank Line of Credit Summary and Covenant Analysis
<PAGE>
Subsidiaries of the Trust and Ownership of Subsidiary Stock
Subsidiaries of the Trust:
<TABLE>
<CAPTION>
Legal Name Jurisdiction of Percentage of Ownership by the
Organization Trust or other Subsidiary
<S> <C> <S>
Storage Trust Properties, L.P. Delaware 93.61% of units (the general
(the "Operating Partnership") partnership interest) held
by the Trust
Storage Realty Management Co. Delaware 5% of common stock held and
100% of preferred stock held
by Storage Trust
Properties, L.P.
STR Management Corporation Missouri 100% of stock held by the Trust
Storage Trust Investments, L.P. Missouri 1% general partnership interest
held by STR Management
Corporation
99% limited partnership
interest held by the Operating
Partnership
STR Management Corporation Tennessee 100% of stock held by the
Tennessee Trust
Storage Trust Investments - Tennessee 1% general partnership
Tennessee, L.P. interest held by STR
Management Corporation of
Tennessee
99% limited partnership
interest held by the
Operating Partnership
STR Management Corporation of Florida 100% of stock held by the
Florida Trust
Storage Trust Investments - Florida 1% general partnership
Florida, Limited Partnership interest held by STR
Management Corporation of
Florida
99% limited partnership
interest held by the
Operating Partnership
STR Management Corporation of Kentucky 100% of stock held by the Trust
Kentucky
</TABLE>
<PAGE>
Subsidiaries of the Trust: (continued)
<TABLE>
<CAPTION>
Legal Name Jurisdiction of Percentage of Ownership by the
Organization Trust or other Subsidiary
<S> <C> <S>
Storage Trust Investments - Kentucky 1% general partnership
Kentucky, L.P. interest held by STR Management
Corporation of Kentucky
99% limited partnership interest
held by the Operating
Partnership
STR Management Corporation Kansas 100% of stock held by the Trust
Storage Trust Investments Kansas 1% general partnership interest
Kansas, L.P. held by STR Management
Corporation of Kansas
99% limited partnership
interest held by the Operating
Partnership
STR Management Corporation of Wisconsin 100% of stock held by the Trust
Storage T Investments - Wisconsin 1% general partnership interest
Wisconsin, Limited Partnership held by STR Management
Corporation of Wisconsin
99% limited partnership interest
held by the Operating
Partnership
STR Management Corporation Georgia 100% of stock held by the Trust
Storage Trust Investments - Georgia 1% general partnership
interest held by STR Management
Corporation of Georgia
99% limited partnership
interest held by the Operating
Partnership
</TABLE>
<PAGE>
Affiliates of the Trust:
<TABLE>
<CAPTION>
Legal Name Jurisdiction of Percentage of Ownership by the
Organization Trust or other Subsidiary
<S> <C> <S>
Fountainbleau Storage Associates Louisiana 15% partnership interest held by
the Operating Partnership
Marian Ridge IV, L.L.C. Missouri 25% membership interest held
by the Operating Partnership
</TABLE>
Trustees and Executive Officers:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <S>
Gordon Burnam 65 Chairman of the Board of Trustees,
Trustee
Michael G. Burnam 43 Chief Executive Officer, Trustee
P. Crismon Burnam 32 Chief Operating Officer, Trustee
Blake Eagle 62 Trustee
Randall K. Rowe 41 Trustee
Daniel C. Staton 43 Trustee
Fredrick W. Petri 48 Trustee
Stephen M. Dulle 48 Chief Financial Officer
Timothy B. Burnam 38 Vice President - Construction &
Development
</TABLE>
Restrictions on Dividends or Distributions:
The Revolving Credit Agreement, dated January 25, 1996, and the Unconditional
Guaranty of Payment and Performance, dated January 25, 1996 (both as amended
by the First Amendment to Revolving Credit Agreement and Guaranty, dated
December 13, 1996) places restrictions and conditions on distributions paid by
the Operating Partnership and on dividends paid by the Trust.
<PAGE>
Financial Statements
Financial Statements of Storage Trust Realty (the "Trust"):
Financial Statements for the year ended December 31, 1995 as set forth
in the Annual Report to Shareholders and the Annual Report on Form 10-K
Financial Statements for the three months and nine months ended
September 30, 1996 as set forth in the Quarterly Report on Form 10-Q
Financial Statements of Storage Trust Properties, L.P. (the "Operating
Partnership"):
Financial Statements for the year ended December 31, 1995
Financial Statements for the three months and nine months ended
September 30, 1996
<PAGE>
Existing Debt
(as of December 31, 1996)
Outstanding Debt of the Operating Partnership:
<TABLE>
<CAPTION>
<S> <C>
Unsecured revolving line of credit with an aggregate borrowing
limit of $100 million, bearing interest at LIBOR plus 1.625%
per annum (7.267% at December 31, 1996), interest only until
expiration on January 24, 1998, with a one-year extension at
the Trust's option upon the satisfaction of certain conditions $60,672,826
Mortgage loan secured by a facility in Hilton Head, South Carolina,
bearing interest at 7.5%, requiring monthly principal and interest
payments of $16,408 and maturing on April 3, 1999, when the
remaining principal balance will be $1,402,042 $ 1,582,351
Mortgage loan secured by a facility in Denver, Colorado,
bearing interest at 5%, requiring interest only payments until
maturity on January 31, 1997 $ 1,000,000
Total $63,255,177
</TABLE>
Debt Guaranteed by the Operating Partnership:
Debt of Fountainbleau Storage Associates:
<TABLE>
<CAPTION>
<S> <C>
Mortgage loan secured by a facility in New Orleans,
Louisiana, bearing interest at 9.5% (through June 30, 2001)
requiring monthly principal and interest payments of
$37,285.25 (through June 30, 2001) and maturing on
June 30, 2006. The interest rate and monthly principal and
interest payments will change on July 1, 2001 to reflect the
new interest rate to be calculated at 300 basis points over
comparable 5-year Treasury Notes. The Operating Partnership
has not guaranteed this mortgage loan. The Operating Partnership
is a general partner in Fountainbleau Storage Associates $ 3,976,838
Debt of Marian Ridge IV, L.L.C.:
Construction and mortgage loan secured by a facility
in Kansas City, Missouri. The total commitment under the
loan is $2,045,464 and it matures on December 1, 1999.
Amounts outstanding bear interest at 8.75%, which is payable
monthly. The Operating Partnership has guaranteed 25%
of the amounts outstanding under this loan $ 182,590
</TABLE>
<PAGE>
Environmental Matters
Attached hereto and incorporated by reference in this Schedule 5.18 is a
letter from the Van Matre Law Firm dated November 20, 1996. This letter
discusses certain environmental matters. The inclusion of any particular
matter does not necessarily mean that such matter could reasonably be expected
to result in a Material Adverse Effect.
<PAGE>
[Form of Note]
Storage Trust Properties, L.P.
7.47% Series A Senior Note due January 15, 2004
No. [_________] [Date]
$[____________] PPN 86212* AA 1
For Value Received, the undersigned, Storage Trust Properties, L.P.
(herein called the "Operating Partnership"), a limited partnership organized
and existing under the laws of the State of Delaware, hereby promises to pay to
[________________], or registered assigns, the principal sum of
[________________] Dollars on January 15, 2004, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 7.47% per annum from the date hereof, payable
semiannually, on the fifteenth day of January and July in each year,
commencing with the January 15 or July 15 next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of
the registered holder hereof, on demand), at a rate per annum from time to
time equal to the greater of (i) 9.47% or (ii) 1% over the rate of interest
publicly announced by The First National Bank of Boston from time to time in
Boston, Massachusetts as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Harris Trust and Savings Bank in Chicago,
Illinois or at such other place as the Operating Partnership shall have
designated by written notice to the holder of this Note as provided in the
Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to separate Note Purchase Agreements, dated as of January 20,
1997 (as from time to time amended, the "Note Purchase Agreements"), between
the Operating Partnership, Storage Trust Realty and the respective Purchasers
named therein and is entitled to the benefits thereof. Each holder of this
Note will be deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreements and (ii) to have made the representation set forth in Section 6.2
of the Note Purchase Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Operating Partnership may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Operating Partnership
will not be affected by any notice to the contrary.
The Operating Partnership will make required prepayments of principal on
the dates and in the amounts specified in the Note Purchase Agreements. This
Note is also subject to optional prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreements,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreements.
The Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
Storage Trust Properties, L.P.
By: Storage Trust Realty,
Its general partner
By
Title
<PAGE>
[Form of Note]
Storage Trust Properties, L.P.
7.66% Series B Senior Note due January 15, 2007
No. [_________] [Date]
$[____________] PPN 86212* AB 9
For Value Received, the undersigned, Storage Trust Properties, L.P.
(herein called the "Operating Partnership"), a limited partnership organized
and existing under the laws of the State of Delaware, hereby promises to pay to
[________________], or registered assigns, the principal sum of
[________________] Dollars on January 15, 2007, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 7.66% per annum from the date hereof, payable
semiannually, on the fifteenth day of January and July in each year,
commencing with the January 15 or July 15 next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of
the registered holder hereof, on demand), at a rate per annum from time to
time equal to the greater of (i) 9.66% or (ii) 1% over the rate of interest
publicly announced by The First National Bank of Boston from time to time in
Boston, Massachusetts as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Harris Trust and Savings Bank in Chicago,
Illinois or at such other place as the Operating Partnership shall have
designated by written notice to the holder of this Note as provided in the
Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to separate Note Purchase Agreements, dated as of January 20,
1997 (as from time to time amended, the "Note Purchase Agreements"), between
the Operating Partnership, Storage Trust Realty and the respective Purchasers
named therein and is entitled to the benefits thereof. Each holder of this
Note will be deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreements and (ii) to have made the representation set forth in Section 6.2
of the Note Purchase Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Operating Partnership may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Operating Partnership
will not be affected by any notice to the contrary.
The Operating Partnership will make required prepayments of principal on
the dates and in the amounts specified in the Note Purchase Agreements. This
Note is also subject to optional prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreements,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreements.
The Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
Storage Trust Properties, L.P.
By: Storage Trust Realty,
Its general partner
By
Title
<PAGE>
Form of Opinion of
Special Counsel to the Trust and its Subsidiaries
The closing opinions of Mayer, Brown & Platt, special counsel for the
Trust and its Subsidiaries and Ballard Spahr Andrews & Ingersoll, special
Maryland counsel for the Trust, which is called for by Section 4.5(a) of the
Note Purchase Agreements, shall be dated the date of the respective Closings
and addressed to you and the Other Purchasers, and may be relied upon by
Chapman and Cutler, shall be satisfactory in scope and form to you and the
Other Purchasers and, when taken together, shall be to the effect that:
1. The Trust is a real estate investment trust, duly organized,
validly existing and in good standing under the laws of the State of
Maryland, has the power and authority to execute and perform the Note
Purchase Agreements and the Guaranty Agreement, has the requisite power
and authority to conduct the activities in which it is now engaged as
described in the Trust's reports filed last year with the Securities and
Exchange Commission (the "Commission") pursuant to the requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
is duly qualified or registered to transact business and is in good
standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify or register could not reasonably be expected to have a Material
Adverse Effect.
2. The Operating Partnership is a limited partnership, duly
organized, validly existing and in good standing under the laws of the
State of Delaware, has the power and authority to execute and perform
the Note Purchase Agreements and to issue the Notes, has the requisite
power and authority to conduct the activities in which it is now engaged
as described in the Trust's reports filed last year with the Commission
pursuant to the requirements of the Exchange Act and is duly qualified
or registered to transact business and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or register could
not reasonably be expected to have a Material Adverse Effect.
3. Storage Realty Management Co. is a corporation duly
incorporated, validly existing and in good standing under the laws of
the State of Delaware and is duly qualified or registered to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify or register could not reasonably be
expected to have a Material Adverse Effect.
<PAGE>
4. The Note Purchase Agreements have been duly authorized by
all necessary action on the part of each Constituent Company, have been
duly executed and delivered by each Constituent Company and constitute
the legal, valid and binding contracts of each Constituent Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
5. The [Notes have been duly authorized by all necessary action
on the part of the Operating Partnership, and the]* Notes being
delivered on the date hereof have been duly executed and delivered by
the Operating Partnership and constitute the legal, valid and binding
obligations of the Operating Partnership enforceable in accordance with
their terms, subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding
in equity or at law).
6. The Guaranty Agreement has been duly authorized by all
necessary action on the part of the Trust, has been duly executed and
delivered by the Trust and constitutes the legal, valid and binding
contract of the Trust enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).*
7. No approval, consent or withholding of objection on the part
of, or filing, registration or qualification with, any governmental
body, Federal or state, is necessary in connection with the execution
and delivery of the [Note Purchase Agreements, the Guaranty Agreement
or]* the Notes; provided, however, that the foregoing opinion does not
relate to the requirements of any state blue sky or securities laws.
8. Except in each case for conflicts, breaches, defaults,
creations or impositions that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect, the
issuance and sale of the Notes [and the execution, delivery and
performance by the Operating Partnership of the Note Purchase
Agreements]* do not conflict with or result in any breach of any of the
provisions of or constitute a default under or result in the creation or
imposition of any Lien upon any of the property of the Operating
Partnership pursuant to the provisions of the Certificate of Limited
Partnership or Amended and Restated Agreement of Limited Partnership of
the Operating Partnership or any agreement or other instrument known to
such counsel to which the Operating Partnership is a party or by which
the Operating Partnership may be bound.
<PAGE>
9. Except in each case for conflicts, breaches, defaults,
creations or impositions that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect, the
execution, delivery and performance by the Trust of the Note Purchase
Agreement and the Guaranty Agreement do not conflict with or result in
any breach of any of the provisions of or constitute a default under or
result in the creation or imposition of any Lien upon any of the
property of the Trust pursuant to the provisions of the Declaration of
Trust or By-Laws of the Trust or any agreement or other instrument known
to such counsel to which the Trust is a party or by which the Trust may
be bound (including, but not limited to, the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership).*
10. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
11. Since November 8, 1994, the Company has been organized in
conformity with the requirements for qualification and taxation as a
"real estate investment trust" under the Code.
12. With respect to all the taxable years of the Trust ended
December 31, 1995 and before, the Trust met the requirements for
qualification and taxation as a real estate investment trust under the
Code.*
13. To the best of such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against or affecting
either Constituent Company or any Subsidiary, at law or in equity in any
court or before any Governmental Authority, which if adversely
determined would individually or in the aggregate have a Material
Adverse Effect.
With respect to matters of fact on which such opinions are based, such
counsel shall be entitled to rely on appropriate certificates of public
officials and officers of the Trust and its Subsidiaries.
The opinion of Mayer, Brown & Platt shall also state that you and the
Other Purchasers are reasonably justified in relying on the opinion of Ballard
Spahr Andrews & Ingersoll, special Maryland counsel for the Trust.
<PAGE>
Form of Opinion of Special Counsel
to the Purchasers
The closing opinion of Chapman and Cutler, special counsel to you and the
Other Purchasers, called for by Section 4.5(b) of the Note Purchase
Agreements, shall be dated the date of the respective Closings and addressed
to you and the Other Purchasers, shall be satisfactory in form and substance
to you and the Other Purchasers and shall be to the effect that:
1. The Trust is a real estate investment trust, validly
existing and in good standing under the laws of the State of Maryland
and has the power and authority to execute and deliver the Note Purchase
Agreements and the Guaranty Agreement.
2. The Operating Partnership is a limited partnership, validly
existing and in good standing under the laws of the State of Delaware
and has the power and the authority to execute and deliver the Note
Purchase Agreements and to issue the Notes.
3. The Note Purchase Agreements have been duly authorized by
all necessary action on the part of each Constituent Company, have been
duly executed and delivered by each Constituent Company and constitute
the legal, valid and binding contracts of each Constituent Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding
in equity or at law).
4. The Notes have been duly authorized by all necessary action
on the part of the Operating Partnership, and the Notes being delivered
on the date hereof have been duly executed and delivered by the
Operating Partnership and constitute the legal, valid and binding
obligations of the Operating Partnership enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
and similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
5. The Guaranty Agreement has been duly authorized by all
necessary action on the part of the Trust, has been duly executed and
delivered by the Trust and constitutes the legal, valid and binding
contract of the Trust enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).*
<PAGE>
6. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinions of
Mayer, Brown & Platt, special counsel for the Trust and its Subsidiaries and
Ballard Spahr Andrews & Ingersoll, special Maryland counsel for the Trust, are
satisfactory in scope and form to Chapman and Cutler and that, in their
opinion, you and the Other Purchasers are justified in relying thereon.
In rendering the opinions set forth in paragraphs 1, 2 and, as to
authorizations, 3, 4 and 5, Chapman and Cutler may rely solely on the opinions
of Mayer, Brown & Platt and Ballard Spahr Andrews & Ingersoll. The opinion of
Chapman and Cutler is limited to the laws of the State of Illinois and the
Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials
and officers of the Constituent Companies and upon representations of the
Constituent Companies and you and the Other Purchasers delivered in connection
with the issuance and sale of the Notes.
<PAGE> 1
Draft of January 20, 1997
GUARANTY AGREEMENT
Dated as of January 20, 1997
of
STORAGE TRUST REALTY
Re:
$44,000,000 7.47% Series A Senior Notes
due January 15, 2004
$56,000,000 7.66% Series B Senior Notes
due January 15, 2007
of
STORAGE TRUST PROPERTIES, L.P.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Heading Page
<S> <S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. GUARANTY 1
SECTION 2. PAYMENT UPON CERTAIN EVENTS 1
SECTION 3. GENERAL PROVISIONS RELATING TO THE GUARANTY 2
SECTION 4. WAIVERS; OBLIGATION UNCONDITIONAL 2
SECTION 5. NEGATIVE COVENANTS 4
Section 5.1. Consolidated Adjusted Tangible Net
Worth 4
Section 5.2. Incurrence of Debt 4
Section 5.3. Interest Charges Coverage Ratio 5
Section 5.4. Unencumbered Asset Coverage 5
Section 5.5. Liens 5
Section 5.6. Merger, Consolidation, etc 6
Section 5.7. Sales of Assets 6
Section 5.8. Line of Business 7
Section 5.9. Transactions with Affiliates 7
Section 5.10.Restricted Investments 7
Section 5.11.Defined Terms 7
SECTION 6. COLLECTION EXPENSES 17
SECTION 7. NO SUBROGATION UNTIL PAYMENT IN FULL 17
SECTION 8. INTERPRETATION 17
SECTION 9. SUCCESSORS AND ASSIGNS 18
SECTION 10. NOTICES 18
SECTION 11. COUNTERPARTS 18
<PAGE>
SECTION 12. SEVERABILITY 18
SECTION 13. GOVERNING LAW 18
SECTION 14. NO RECOURSE TO SHAREHOLDERS ETC 18
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
<PAGE>
GUARANTY AGREEMENT
GUARANTY AGREEMENT (this Guaranty ) dated as of January 20,
1997 by STORAGE TRUST REALTY, a Maryland real estate investment
trust (the Trust ).
RECITALS:
A. Storage Trust Properties, L.P., a Delaware limited
partnership (the Operating Partnership ) and the Trust have
concurrently herewith entered into those certain Note Purchase
Agreements each dated as of January 20, 1997 (the Note Purchase
Agreements ) with the Purchasers named on Schedule A thereto (the
Purchasers ) providing for the sale by the Operating Partnership
of (i) its $44,000,000 aggregate principal amount of 7.47%
Series A Senior Notes due January 15, 2004 (the Series A Notes )
and (ii) its $56,000,000 aggregate principal amount of 7.66%
Series B Senior Notes due January 15, 2007 (the Series B Notes
and, together with the Series A Notes, the Notes ).
B. The Trust is desirous that the Purchasers enter into
the Note Purchase Agreements and by doing so the Purchasers will
be conferring financial and other benefits on the Trust. As an
inducement to enter into the Note Purchase Agreements and in
consideration therefor the Purchasers have required that the
Trust enter into this Guaranty.
C. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned in the Note Purchase
Agreements.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and to induce the Purchasers to
enter into the Note Purchase Agreements and to induce every
future holder of the Notes to be bound by the terms and entitled
to the benefits of the Note Purchase Agreements, it is hereby
agreed as follows:
SECTION 1. GUARANTY.
The Trust hereby unconditionally guarantees to each holder
of any Note (collectively the Noteholders and each individually
a Noteholder ) (a) the due and punctual payment at maturity,
whether at stated maturity, by acceleration, by notice of
prepayment or otherwise, of the principal of and premium, if any,
and interest on the Notes in accordance with the terms and
conditions thereof and of the Note Purchase Agreements, and
(b) the prompt performance and compliance by the Operating
Partnership with each of its other obligations under the Note
Purchase Agreements. This is a guaranty of payment and not a
guaranty of collection.
<PAGE>
SECTION 2. PAYMENT UPON CERTAIN EVENTS.
The Trust agrees that, if any of the Events of Default
described in Section 11(h) or (i) of the Note Purchase Agreements
occurs, the Trust shall pay forthwith to the Noteholders, upon 30
days notice and whether or not there has been any other default
under the Note Purchase Agreements or the Notes, the whole amount
of the principal of and, to the full extent permitted by
applicable law, Make-Whole Amount, if any, on the Notes then
outstanding and any unpaid interest thereon, with interest
thereon from the date of the occurrence of such event to and
including the date of payment, so far as permitted by law, at a
rate per annum equal to the greater of (i) 9.47% in case of the
Series A Notes or 9.66% in the case of the Series B Notes and
(ii) 1.0% over the rate of interest publicly announced by The
First National Bank of Boston from time to time in Boston,
Massachusetts as its base or prime rate.
SECTION 3. GENERAL PROVISIONS RELATING TO THE GUARANTY.
Each and every Event of Default under the Note Purchase
Agreements shall give rise to a separate claim and cause of
action hereunder, and separate claims or suits may be made and
brought, as the case may be, hereunder as each such default
occurs. The obligations hereunder are independent of the
obligations of the Operating Partnership to pay the principal of
and premium, if any, and interest on the Notes, and a separate
action or actions may be brought and prosecuted against the Trust
whether such action is brought and prosecuted against the
Operating Partnership or any other guarantor, or whether the
Operating Partnership is joined in any such action or actions.
The obligations of the Trust hereunder shall be reinstated and
revived, and the rights of the Noteholders shall continue, with
respect to any amount at any time paid on account of the
obligations guaranteed hereby, which shall thereafter be required
t o be restored or returned by the Noteholders upon the
b a nkruptcy, insolvency or reorganization of the Operating
Partnership, or otherwise, all as though such amount had not been
paid.
SECTION 4. WAIVERS; OBLIGATION UNCONDITIONAL.
The Trust assents to all the terms, covenants and conditions
of the Notes and the Note Purchase Agreements, and irrevocably
waives presentation, demand for payment, or protest, of any of
the Notes, notice of acceptance of this guarantee or of the terms
and provisions thereof by any Noteholder, any requirement of
diligence or promptness on the part of any Noteholder in the
enforcement of rights under the provisions hereof, of the Note
Purchase Agreements or of the Notes, or any right to require any
Noteholder to proceed first against the Operating Partnership.
The obligations of the Trust hereunder shall be unconditional
i r r espective of the genuineness, validity, regularity or
enforceability of the Note Purchase Agreements or of the Notes or
of any other circumstance which might otherwise constitute a
legal or equitable discharge of a surety or guarantor and shall
be joint and several with those of the Operating Partnership.
The obligations of the Trust hereunder shall not be affected by:
<PAGE>
(a) the recovery of any judgment against the Operating
Partnership, or by the levy of any writ or process of
execution under any such judgment, or by any action or
proceeding taken by any Noteholder, either under the Notes
or under the Note Purchase Agreements for the enforcement
thereof, or hereof, or in the exercise of any right or power
given or conferred thereby, or hereby, or
(b) any delay, failure or omission upon the part of
any Noteholder to enforce any of the rights or powers given
or conferred hereby or by the Note Purchase Agreements, or
by any delay, failure or omission upon the part of any
Noteholder to enforce any right of any Noteholder against
t h e Operating Partnership, or by any action by any
N o t e holder in granting indulgence to the Operating
Partnership, or in waiving or acquiescing in any default or
event of default upon the part of the Operating Partnership
under the Notes or under the Note Purchase Agreements, or
(c) the consolidation, amalgamation or merger of the
Operating Partnership or any of its Subsidiaries with or
into any other corporation or corporations or any sale,
lease or other disposition of the Operating Partnership or
any of its Subsidiaries properties as an entirety or
substantially as an entirety to any other corporation, or
(d) the acceptance of any additional security or other
guaranty, the advance of additional money to the Operating
Partnership or any other Person, the renewal or extension of
any amounts guaranteed hereby, or the sale, release,
substitution or exchange of any security for the amounts
guaranteed hereby, or
(e) any defense (other than the full and indefeasible
performance by the Operating Partnership of its obligations
under the Note Purchase Agreements and the Notes) whatsoever
that the Operating Partnership or any other Person might
have to the payment of any of the amounts or obligations
guaranteed hereby or to the performance or observance of any
of the provisions of the Note Purchase Agreements or the
N o tes, whether through the satisfaction or purported
satisfaction by the Operating Partnership or any other
Person of its debts due to any cause such as bankruptcy,
i n s olvency, receivership, merger, consolidation,
reorganization, dissolution, liquidation, winding-up or
otherwise, or
<PAGE>
(f) impossibility or illegality of performance on the
part of the Operating Partnership or any other Person of its
obligations under the Note Purchase Agreements or the Notes,
or
(g) any renewal, extension, refunding, amendment or
modification of or addition or supplement to or deletion
from any of the terms of the Note Purchase Agreements or the
Notes, or any other agreement which may be made relating to
any such instruments which does not specifically amend or
specifically modify the terms of this Guaranty, or
(h) any amendment, compromise, release or consent or
other action or inaction in respect of any of the terms of
the Note Purchase Agreements or the Notes (other than any
such amendment, compromise, release or consent or other
action which, by its terms, expressly modifies the terms and
provisions hereof), or
(i) any bankruptcy, insolvency, reorganization,
arrangement, adjustment, composition, liquidation, or the
l i k e of the Operating Partnership or any of its
Subsidiaries, or
(j) absence of any notice to, or knowledge by, the
Trust of the existence or occurrence of any of the matters
or events set forth in the foregoing subdivisions (a)
through (i), or
(k) any other act or delay or failure to act, or any
other thing, which may or might in any manner or to any
extent vary the risk of the Trust hereunder;
it being the purpose and intent of the parties hereto that the
obligations of the Trust hereunder shall be absolute and
unconditional under any and all circumstances, and shall not be
discharged except by payment in cash as herein provided, and then
only to the extent of such payment or payments.
SECTION 5. NEGATIVE COVENANTS.
The Trust covenants that so long as any of the Notes are
outstanding:
Section 5.1. Consolidated Adjusted Tangible Net Worth. The
Trust will not at any time permit Consolidated Adjusted Tangible
Net Worth to be less than $175,000,000; provided, however, that
the Trust shall be permitted to pay dividends to the extent
required by the provisions of subchapter M of the Code to
maintain the deductibility from its income of dividends paid by
it so long as after giving effect to the payment of such
d i v idends, no Default or Event of Default described in
paragraph (a), (b), (h) or (i) of Section 11 of the Note Purchase
Agreements shall have occurred and be continuing.
<PAGE>
Section 5.2. Incurrence of Debt. The Trust will not, and
will not permit any Subsidiary to, directly or indirectly,
create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to, any Debt, unless on the date
the Trust or such Subsidiary becomes liable with respect to any
such Debt and immediately after giving effect thereto and the
concurrent retirement of any other Debt,
(a) no Default or Event of Default exists,
(b) C o n s olidated Debt does not exceed 45% of
Consolidated Adjusted Capitalization, and
(c) i n the case of Priority Debt, Consolidated
Priority Debt does not exceed 30% of Consolidated Adjusted
Capitalization.
For the purposes of this Section 5.2, any Person becoming a
Subsidiary after the date hereof shall be deemed, at the time it
b e comes a Subsidiary, to have incurred all of its then
outstanding Debt, and any Person extending, renewing or refunding
any Debt shall be deemed to have incurred such Debt at the time
of such extension, renewal or refunding.
Section 5.3. Interest Charges Coverage Ratio. The Trust will
not permit the Interest Charges Coverage Ratio on any date to be
less than 2.00 to 1.00.
Section 5.4. Unencumbered Asset Coverage. The Trust will at
all times keep and maintain Unencumbered Assets at an amount not
less than 200% of Unsecured Debt.
Section 5.5. Liens. The Trust will not, and will not permit
any of its Subsidiaries to, directly or indirectly create, incur,
assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in
respect of goods or accounts receivable) of the Trust or any such
Subsidiary, whether now owned or held or hereafter acquired, or
any income or profits therefrom, or assign or otherwise convey
any right to receive income or profits, except:
(a) Liens for taxes, assessments or other governmental
charges the payment of which is not at the time required by
Section 9.4 of the Note Purchase Agreements;
<PAGE>
(b) s t a tutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other
similar Liens, in each case, incurred in the ordinary course
of business for sums not yet due or the payment of which is
not at the time required by Sections 9.1 or 9.4 of the Note
Purchase Agreements;
(c) any attachment or judgment Lien, provided the
judgment it secures shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal;
(d) Liens on properties securing security deposits of
tenants, provided that the aggregate amount of such security
deposits secured by such Liens shall not exceed 5% of
C o nsolidated Adjusted Capitalization at any time
outstanding;
(e) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in
c o n n ection with worker s compensation, unemployment
insurance and other like laws, warehousemen s and attorneys
liens and statutory landlords liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to
secure statutory obligations, surety or appeal bonds or
other Liens of like general nature incurred in the ordinary
course of business and not in connection with the borrowing
of money; provided in each case, the obligation secured is
not overdue or, if overdue, is being contested in good faith
by appropriate actions or proceedings;
(f) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-
of-way, utilities and other similar purposes, or zoning or
other restrictions as to the use of real properties, which
are necessary for the conduct of the activities of the Trust
a n d its Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and
similarly situated and which do not in any event materially
impair their use in the operation of the business of the
Trust and its Subsidiaries;
(g) Liens existing on the date of this Guaranty and
securing the Debt of the Trust and its Subsidiaries referred
to in item 2 of Schedule 5.15 of the Note Purchase
Agreements and refinancing, renewal or extension of such
Debt, provided that (i) the principal amount of such Debt is
not increased over the principal amount thereof immediately
prior to such refinancing, renewal or extension, and
(ii) such Lien is not extended to other property of the
Trust or any Subsidiary;
<PAGE>
(h) Liens securing Debt incurred within the
limitations of Section 5.2;
(i) Liens on property or assets of a Subsidiary
securing Debt owing to the Trust or to any of its
Subsidiaries; and
(j) a n y Lien existing on property of a Person
immediately prior to its being consolidated with or merged
into the Trust or a Subsidiary or its becoming a Subsidiary,
or any Lien existing on any property acquired by the Trust
or any Subsidiary at the time such property is so acquired
(whether or not the Debt secured thereby shall have been
assumed), provided that (i) no such Lien shall have been
created or assumed in contemplation of such consolidation or
merger or such Person s becoming a Subsidiary or such
acquisition of property, and (ii) each such Lien shall
extend solely to the item or items of property so acquired
and, if required by the terms of the instrument originally
creating such Lien, other property which is an improvement
to or is acquired for specific use in connection with such
acquired property.
Section 5.6. Merger, Consolidation, etc. The Trust will not
consolidate with or merge with any other entity unless (i) the
Trust or the Operating Partnership is the surviving or continuing
e n tity and (ii) immediately after giving effect to such
transaction no Default or Event of Default would exist.
Section 5.7. Sales of Assets. (a) The Trust will not, and
w i ll not permit any Subsidiary to, engage in any Asset
Disposition unless, (x) after giving effect to such Asset
Disposition, no Default or Event of Default shall have occurred
and be continuing and (y) such Asset Disposition does not involve
any substantial part of the assets of the Trust and its
Subsidiaries. An Asset Disposition shall be deemed to involve a
substantial part of the assets of the Trust and its
Subsidiaries (i) if the book value of the assets subject to such
Asset Disposition, when added to the book value of all other
assets subject to other Asset Dispositions during the same fiscal
year exceeds 15% of Consolidated Total Assets determined as of
the end of the immediately preceding fiscal year, or (ii) if the
portion of consolidated total revenue for the preceding fiscal
y e a r attributable to the assets subject to such Asset
Disposition, when added to the portion of consolidated total
revenue for the preceding fiscal year attributable to all other
assets subject to other Asset Dispositions during the same fiscal
year exceeds 15% of consolidated total revenue for the fiscal
year immediately preceding such Asset Disposition; provided,
however, that in any computation of substantial part there
shall be excluded any Asset Disposition, to the extent that the
proceeds thereof are applied within 180 days after the receipt of
the proceeds of such Asset Disposition to either (i) the
voluntary prepayment of the Notes pursuant to Section 8.2 of the
Note Purchase Agreements, or (ii) the purchase of other similar
assets for use in the business of the Trust and its Subsidiaries.
<PAGE>
Section 5.8. Line of Business. The Trust will not, and will
not permit any of its Subsidiaries to, engage in any business if,
as a result, the general nature of the business in which the
Trust and its Subsidiaries, taken as a whole, would then be
engaged would be substantially changed from the general nature of
the business in which the Trust and its Subsidiaries, taken as a
whole, are engaged on the date of this Agreement as described in
the Memorandum.
Section 5.9. Transactions with Affiliates. The Trust will
not and will not permit any Subsidiary to enter into directly or
indirectly any Material transaction or Material group of related
transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Trust, any
Wholly-Owned Subsidiary or Specified Affiliate), except in the
ordinary course and pursuant to the reasonable requirements of
the Trust s or such Subsidiary s business and upon fair and
reasonable terms no less favorable to the Trust or such
Subsidiary than would be obtainable in a comparable arm s-length
transaction with a Person not an Affiliate.
Section 5.10. Restricted Investments. The Trust will not, and
will not permit any Subsidiary to (i) make any Restricted
Investment if, after giving effect thereto, the aggregate amount
of Restricted Investments held by the Trust and its Subsidiaries
would exceed 10% of Consolidated Total Assets or (ii) make any
Unimproved Real Estate Investments if, after giving effect
t h e reto, the aggregate amount of Unimproved Real Estate
Investments held by the Trust and its Subsidiaries would exceed
10% of Consolidated Total Assets.
Section 5.11. Defined Terms. As used in this Section 5, the
following terms have the respective meanings set forth below:
Affiliate means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first
Person, and (b) any Person (other than a Person reporting, or
required to report, beneficial ownership on Schedule 13G)
beneficially owning or holding, directly or indirectly, 10% or
more of any class of voting or equity interests of the Trust or
any Subsidiary or any corporation of which the Trust and its
Subsidiaries beneficially own or hold, in the aggregate, directly
or indirectly, 10% or more of any class of voting or equity
interests. As used in this definition, Control means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract
or otherwise. Unless the context otherwise clearly requires, any
reference to an Affiliate is a reference to an Affiliate of the
Trust.
<PAGE>
Asset Disposition means and includes (i) a sale, lease or
other disposition of assets (other than in the ordinary course of
business) by the Trust or any Subsidiary (except by the Trust to
a Wholly-Owned Subsidiary or to a Specified Affiliate, and except
by a Subsidiary to the Trust, to a Subsidiary in which the Trust
holds, directly or indirectly, an equity or voting interest equal
to or greater than (in percentage terms) its interest in the
transferor Subsidiary, or to a Specified Affiliate), (ii) the
issuance or sale by any Subsidiary or Specified Affiliate of any
shares of stock of any class (including as stock for the
purpose of this definition, any warrants, rights or options to
p u r chase or otherwise acquire stock or other Securities
exchangeable for or convertible into stock) of such Subsidiary or
such Specified Affiliate, as the case may be, to any Person other
than the Trust, a Wholly-Owned Subsidiary or a Specified
Affiliate (except for the purpose of qualifying directors, except
in satisfaction of the validly pre-existing preemptive rights of
m i nority shareholders in connection with the simultaneous
issuance of stock to the Trust and its Subsidiaries whereby the
Trust and its Subsidiaries maintain their same proportionate
interest in such Subsidiary and except, in the case of an
issuance or sale by a Specified Affiliate, for an issuance or
s a l e subject to an arrangement assuring to the Trust
substantially all of the economic interest in, such Specified
Affiliate), and (iii) the sale, transfer or other disposition by
the Trust of any shares of stock of any Subsidiary or Specified
Affiliate (except by the Trust to a Wholly-Owned Subsidiary or a
Specified Affiliate or except to qualify directors and except, in
the case of a sale, transfer or disposition of any shares of
stock of a Specified Affiliate, for the sale, transfer or
disposition subject to an arrangement assuring to the Trust
substantially all of the economic interest in, such Specified
Affiliate) and the sale, transfer or other disposition by any
Subsidiary or by any Specified Affiliate of any shares of stock
of any other Subsidiary or other Specified Affiliate (except to
the Trust, a Subsidiary in which the Trust holds, directly or
indirectly, an equity or voting interest equal to or greater than
(in percentage terms) its interest in the transferor Subsidiary,
or a Specified Affiliate and except, in the case of a sale,
transfer or disposition of shares of stock of a Specified
Affiliate, for a sale, transfer or disposition subject to an
arrangement assuring to the Trust substantially all of the
economic interest in, such Specified Affiliate).
Capital Lease means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
<PAGE>
Capital Lease Obligation means, with respect to any Person
and a Capital Lease, the amount of the obligation of such Person
as the lessee under such Capital Lease which would, in accordance
with GAAP, appear as a liability on a balance sheet of such
Person.
Code means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
Consolidated Adjusted Capitalization as of any date means
t h e sum of Consolidated Adjusted Tangible Net Worth and
Consolidated Debt as of such date.
Consolidated Adjusted Tangible Net Worth means, at any
time,
(a) the sum of (i) the par value (or value stated on
the books of the Trust) of the capital stock or other equity
interests (but excluding treasury stock, capital stock
subscribed and unissued and mandatorily redeemable Preferred
Stock or corresponding equity interests) of the Trust and
its Subsidiaries at such time plus (ii) the amount of the
paid-in capital and retained earnings of the Trust and its
Subsidiaries at such time, in each case as such amounts
would be shown on a consolidated balance sheet of the Trust
and its Subsidiaries as of such time prepared in accordance
with GAAP, minus
(b) to the extent included in clause (a), all amounts
properly attributable to minority interests, if any, in the
stock or other equity interests and surplus of Subsidiaries
(other than the Operating Partnership), minus
(c) the net book value of all assets, after deducting
any reserves applicable thereto, which would be treated as
intangible under GAAP, including, without limitation, good
will, trademarks, trade names, service marks, brand names,
copyrights, patents and unamortized debt discount and
expense, organizational expenses and the excess of the
equity in any Subsidiary over the cost of the investment in
such Subsidiary, plus
(d) accumulated depreciation on real estate properties
as such amount would be shown on a consolidated balance
sheet of the Trust and its Subsidiaries as of such time
prepared in accordance with GAAP.
<PAGE>
Consolidated Cash Flow Available for Interest Charges
means, in respect of any period, the sum of (a) Consolidated Net
Income for such period, (b) the amount of all depreciation of
real estate owned and amortization allowances and other non-cash
expenses of the Trust and its Subsidiaries but only to the extent
deducted in the determination of Consolidated Net Income for such
period, (c) Interest Charges but only to the extent deducted in
the determination of Consolidated Net Income for such period and
(d) all provisions for any Federal, state or other income taxes
made by the Trust and its Subsidiaries but only to the extent
deducted in the determination of Consolidated Net Income for such
period.
Consolidated Debt means, as of any date of determination,
the total of all Debt of the Trust and its Subsidiaries
outstanding on such date, after eliminating all offsetting debits
and credits among the Trust and its Subsidiaries and all other
items required to be eliminated in the course of the preparation
of consolidated financial statements of the Trust and its
Subsidiaries in accordance with GAAP.
Consolidated Net Income means, with reference to any
p e riod, the net income (or loss) of the Trust and its
Subsidiaries for such period, as determined in accordance with
GAAP, after eliminating all offsetting debits and credits among
t h e Trust and its Subsidiaries, all earnings or losses
attributable to outstanding Minority Interests and all other
items required to be eliminated in the course of the preparation
of consolidated financial statements of the Trust and its
Subsidiaries in accordance with GAAP, provided that there shall
be excluded:
(a) the income (or loss) of any Person accrued prior
to the date it becomes a Subsidiary or is merged into or
consolidated with the Trust or a Subsidiary, and the income
(or loss) of any Person, substantially all of the assets of
which have been acquired in any manner, realized by such
other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Subsidiary) in which the Trust or any Subsidiary has an
ownership interest, except to the extent that any such
income has been actually received by the Trust or such
Subsidiary in the form of cash dividends or similar cash
distributions,
(c) the undistributed earnings of any Subsidiary to
the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time
permitted by the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary,
<PAGE>
(d) any restoration to income of any contingency
reserve, except to the extent that provision for such
reserve was made out of income accrued during such period,
(e) any aggregate net gain or aggregate net loss
during such period arising from the sale, conversion,
exchange or other disposition of capital assets (such term
to include, without limitation, (i) all non-current assets
and, without duplication, (ii) the following, whether or not
current: all fixed assets, whether tangible or intangible,
all inventory sold in conjunction with the disposition of
fixed assets, and all Securities),
(f) any gains resulting from any write-up of any
assets (but not any loss resulting from any write-down of
any assets),
(g) any net gain from the collection of the proceeds
of life insurance policies,
(h) any gain arising from the acquisition of any
S e c u r ity of the Trust or any Subsidiary, or the
extinguishment, under GAAP, of any Debt of the Trust or any
Subsidiary,
(i) any net income or gain (but not any net loss)
during such period from (i) any change in accounting
principles in accordance with GAAP, (ii) any prior period
a d j ustments resulting from any change in accounting
principles in accordance with GAAP, (iii) any extraordinary
i t e m s, or (iv) any discontinued operations or the
disposition thereof,
(j) any deferred credit representing the excess of
equity in any Subsidiary at the date of acquisition over the
cost of the investment in such Subsidiary,
(k) in the case of a successor to the Trust by
consolidation or merger or as a transferee of its assets,
any earnings of the successor corporation prior to such
consolidation, merger or transfer of assets, and
(l) any portion of such net income that cannot be
freely converted into United States Dollars.
Consolidated Priority Debt means, as of any date of
determination, the total of all Priority Debt of the Trust and
its Subsidiaries outstanding on such date, after eliminating all
o f f s etting debits and credits among the Trust and its
Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of
the Trust and its Subsidiaries in accordance with GAAP.
<PAGE>
Consolidated Total Assets means as of any date of
determination, consolidated total assets of the Trust and its
Subsidiaries, after eliminating all offsetting debits and credits
among the Trust and its Subsidiaries and all other items required
to be eliminated in the course of the preparation of consolidated
financial statements of the Trust and its Subsidiaries in
accordance with GAAP.
Constituent Companies means the Trust and the Operating
Partnership.
Debt with respect to any Person means, at any time,
without duplication,
(a) i t s liabilities for borrowed money and its
redemption obligations in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable
for such liabilities);
(e) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or
accepted for its account by banks and other financial
institutions (whether or not representing obligations for
borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a)
through (f) hereof.
Debt of any Person shall include all obligations of such Person
of the character described in clauses (a) through (g) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP.
<PAGE>
Default means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
Event of Default is defined in Section 11 of the Note
Purchase Agreements.
Exchange Act means the Securities Exchange Act of 1934, as
amended.
GAAP means generally accepted accounting principles as in
effect from time to time in the United States of America.
Guaranty means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation)
o b l igations incurred through an agreement, contingent or
otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to
m a intain any working capital or other balance sheet
condition or any income statement condition of any other
Person or otherwise to advance or make available funds for
the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness
or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of
the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
<PAGE>
Interest Charges means, with respect to any period, the
sum (without duplication) of the following (in each case,
eliminating all offsetting debits and credits among the Trust and
its Subsidiaries and all other items required to be eliminated in
t h e course of the preparation of consolidated financial
statements of the Trust and its Subsidiaries in accordance with
GAAP): (a) all interest in respect of Debt of the Trust and its
S u bsidiaries (including imputed interest on Capital Lease
Obligations) deducted in determining Consolidated Net Income for
such period, and (b) all debt discount and expense amortized or
required to be amortized in the determination of Consolidated Net
Income for such period.
Interest Charges Coverage Ratio means, at any time, the
ratio of (a) Consolidated Cash Flow Available for Interest
Charges for the period of four consecutive fiscal quarters ending
on, or most recently ended prior to, such time to (b) Interest
Charges for such period.
Investment means any investment, made in cash or by
delivery of property, by the Trust or any of its Subsidiaries
(i) in any Person, whether by acquisition of stock, Debt or other
obligation or Security, or by loan, guaranty, advance, capital
contribution or otherwise, or (ii) in any property.
Lien means, with respect to any Person, any mortgage,
lien, pledge, charge, security interest or other encumbrance, or
any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or
other title retention agreement or Capital Lease, upon or with
respect to any property or asset of such Person (including in the
case of stock, stockholder agreements, voting trust agreements
and all similar arrangements).
Material means material in relation to the business,
operations, affairs, financial condition, assets or properties of
the Trust and its Subsidiaries taken as a whole.
Memorandum is defined in Section 5.3 of the Note Purchase
Agreements.
Minority Interest shall mean any shares of stock of any
class of, or any partnership, membership or other ownership in, a
Subsidiary (other than directors qualifying shares as required by
law) that are not owned by the Trust and/or one or more of its
Subsidiaries.
Person means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
Preferred Stock means any class of capital stock of a
corporation that is preferred over any other class of capital
stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such
corporation.
<PAGE>
Priority Debt means (i) Debt of either Constituent Company
secured by a Lien on any asset of either Constituent Company and
(ii) all Debt of Subsidiaries (except Debt of the Operating
Partnership or Debt of any other Subsidiary owed to either
Constituent Company or a Wholly-owned Subsidiary).
The term property or properties means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.
Restricted Investments means all Investments except the
following:
(a) Investments in property to be used in the ordinary
course of business of the Trust, its Subsidiaries and
Specified Affiliates;
(b) Investments in current assets arising in the
ordinary course of business of the Trust, its Subsidiaries
and Specified Affiliates;
(c) Investments directly in real property in the
ordinary course of business of the Trust, its Subsidiaries
and Specified Affiliates;
(d) Investments in entities owning real properties
provided that (i) income from such Investments in any such
entity shall be qualified dividends under the 75% gross
income test under Section 856(c)(3) of the Code or (ii) at
least 75% of income from such Investments in any such entity
shall be rents from real property under applicable
provisions of the Code;
(e) I n v e stments in (i) one or more Specified
Affiliates or any Person that concurrently with such
Investment becomes a Specified Affiliate or (ii) one or more
Subsidiaries or any Person that concurrently with such
Investment becomes a Subsidiary, provided that each such
corporate Subsidiary is a qualified REIT subsidiary of the
Trust within the meaning of section 856(i) of the Code or
any successor provision;
(f) Investments in United States Governmental
Securities, provided that such obligations mature within 365
days from the date of acquisition thereof;
(g) Investments in certificates of deposit or banker s
acceptances issued by an Acceptable Bank, provided that such
obligations mature within 365 days from the date of
acquisition thereof;
<PAGE>
(h) Investments in commercial paper in each case rated
A-1 or better by S&P or P-1 or better by Moody s or an
equivalent rating by any other credit rating agency of
recognized national standing, and maturing not more than 270
days from the date of creation thereof;
(i) Investments in Repurchase Agreements;
(j) Investments in tax-exempt obligations of any state
of the United States of America, or any municipality of any
such state with short term ratings in each case of at least
A-1 or better by S&P or P-1 or better by Moody s or an
equivalent rating by any other credit rating agency of
recognized national standing, provided that such obligations
mature within 365 days from the date of acquisition thereof;
and
(k) Unimproved Real Estate Investments.
For purposes of this Agreement an Investment shall be valued at
the greater of (i) cost and (ii) the value at which such
Investment is to be shown on the books of the Trust and its
Subsidiaries in accordance with GAAP.
As used in this definition of Restricted Investments
Acceptable Bank means any bank or trust company
(i) which is organized under the laws of the United States
of America or any State thereof, (ii) which has capital,
s u r p lus and undivided profits aggregating at least
$500,000,000, and (iii) whose short-term unsecured debt
obligations (or the short-term unsecured debt obligations of
the bank holding company owning all of the capital stock of
such bank or trust company) shall have been given a rating
of A-1 or better by S&P or P-1 or better by Moody s.
Acceptable Broker-Dealer means any Person other than
a natural person (i) which is registered as a broker or
dealer pursuant to the Exchange Act and (ii) whose short-
term unsecured debt obligations shall have been given a
rating of A-1 or better by S&P or P-1 or better by
Moody s.
Moody s means Moody s Investors Service, Inc.
Repurchase Agreement means any written agreement
<PAGE>
(a) that provides for (i) the transfer of one or
more United States Governmental Securities in an
aggregate principal amount at least equal to the amount
of the Transfer Price (defined below) to the Trust or
any of its Subsidiaries from an Acceptable Bank or an
Acceptable Broker-Dealer against a transfer of funds
(the Transfer Price ) by the Trust or such Subsidiary
to such Acceptable Bank or Acceptable Broker-Dealer,
and (ii) a simultaneous agreement by the Trust or such
Subsidiary, in connection with such transfer of funds,
to transfer to such Acceptable Bank or Acceptable
Broker-Dealer the same or substantially similar United
States Governmental Securities for a price not less
than the Transfer Price plus a reasonable return
thereon at a date certain not later than 365 days after
such transfer of funds,
(b) in respect of which the Trust or such
Subsidiary shall have the right, whether by contract or
pursuant to applicable law, to liquidate such agreement
upon the occurrence of any default thereunder, and
(c) in connection with which the Trust or such
Subsidiary, or an agent thereof, shall have taken all
action required by applicable law or regulations to
perfect a Lien in such United States Governmental
Securities.
S&P means Standard & Poor s Ratings Group, a division
of McGraw Hill, Inc.
United States Governmental Security means any direct
obligation of, or obligation guaranteed by, the United
States of America, or any agency controlled or supervised by
or acting as an instrumentality of the United States of
America pursuant to authority granted by the Congress of the
United States of America, so long as such obligation or
guarantee shall have the benefit of the full faith and
credit of the United States of America which shall have been
pledged pursuant to authority granted by the Congress of the
United States of America.
Securities Act means the Securities Act of 1933, as
amended from time to time.
Security has the meaning set forth in Section 2(l) of the
Securities Act.
Series is defined in Section 1 of the Note Purchase
Agreements.
<PAGE>
Specified Affiliate means any corporation, association or
other business entity formed for the purpose of earning income
not qualified as rents from real property under applicable
provisions of the Code, in which the Trust owns, directly or
indirectly, substantially all of the economic interest but less
than 10% of the voting interests, and the charter or other
organizational documents of which contain provisions providing
the Trust, directly or indirectly, with substantially the same
r i g h t s as, or greater rights than, those provided by
A r t i c l e Fourth, Section (C)(4) of the Certificate of
Incorporation of Storage Realty Management Co., as filed with the
Secretary of State of Delaware on October 21, 1994.
Subsidiary means, as to any Person, any corporation,
association or other business entity in which such Person or one
or more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable
i t or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership
or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one
or more of its Subsidiaries). In the case of the Trust, each
Specified Affiliate shall be deemed to be a Subsidiary of the
Trust for all purposes of this Guaranty and the Note Purchase
Agreements. Unless the context otherwise clearly requires, any
reference to a Subsidiary is a reference to a Subsidiary of the
Trust.
Swaps means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps
and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency. For
the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case,
the amount of such obligation shall be the net amount so
determined.
Unencumbered Assets means at any time the book value of
all real estate properties of the Trust and its Subsidiaries,
prior to the deduction of accumulated depreciation thereon, which
a r e f ree of all Liens other than Liens permitted by
paragraphs (a), (b), (c), (d), (e), (f) or (i) of Section 5.5.
<PAGE>
Unimproved Real Estate Investments means Investments in
unimproved real property and mortgages on unimproved real
property.
Unsecured Debt means at any time the aggregate unpaid
principal amount of all Debt of the Trust and its Subsidiaries
other than (i) Debt of a Subsidiary owing to the Trust, to the
Operating Partnership or to a Wholly-Owned Subsidiary and
(ii) Debt of the Trust or a Subsidiary secured by a Lien on one
or more parcels of their real property.
Wholly-Owned Subsidiary means, at any time, any Subsidiary
one hundred percent (100%) of all of the equity interests (except
directors qualifying shares) and voting interests of which are
owned by any one or more of the Trust and the Trust s other
Wholly-Owned Subsidiaries at such time.
SECTION 6. COLLECTION EXPENSES.
In the event that the Trust shall be required to make any
payment to any Noteholder pursuant to this Guaranty, it shall, in
addition to such payment, pay to such Noteholder such further
amount as shall be sufficient to cover the reasonable costs and
expenses of collection, including reasonable compensation for
legal fees actually incurred of one counsel for the Noteholders
collectively, and any expenses or liabilities incurred by any
Noteholder hereunder. The covenants contained in this Guaranty
may be enforced by any Noteholder.
SECTION 7. NO SUBROGATION UNTIL PAYMENT IN FULL.
No payment by the Trust pursuant to the provisions hereof to
any Noteholder shall entitle the Trust, by subrogation to the
rights of the holders of the Notes in respect of which such
payment is made or otherwise, to any payment by the Operating
Partnership or out of the property of the Operating Partnership,
except after payment in full of the entire principal of, premium,
if any, and interest on the Notes and any other amounts due under
the Note Purchase Agreements, or provision for such payment
satisfactory to the holders of the Notes.
SECTION 8. INTERPRETATION.
The Trust acknowledges and agrees that the obligations and
agreements contained herein are in addition to, and not in
limitation of, any limitations or restrictions to which the Trust
may be subject under the Note Purchase Agreements.
SECTION 9. SUCCESSORS AND ASSIGNS.
All covenants and agreements contained in this Guaranty by
or on behalf of the Trust shall be binding upon the Trust and its
successors and assigns and shall inure to the benefit of the
Purchasers and each and every Noteholder.
<PAGE>
SECTION 10. NOTICES.
All notices, requests, demands, waivers or other
communications required or contemplated hereby shall be given or
made in the manner provided in Section 18 of the Note Purchase
Agreements at the Trust s address: Storage Trust Realty, 2407
Rangeline Street, Columbia, Missouri 65202, Attention: Chief
Financial Officer.
SECTION 11. COUNTERPARTS.
This Guaranty may be executed simultaneously in several
counterparts, each of which shall be deemed an original, and all
of which together shall constitute one and the same instrument.
SECTION 12. SEVERABILITY.
In case any one or more of the provisions contained in this
Guaranty shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions of this Guaranty shall not in any way be
affected or impaired thereby.
SECTION 13. GOVERNING LAW.
This Guaranty and all rights arising hereunder shall be
construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other
than such State.
SECTION 14. NO RECOURSE TO SHAREHOLDERS ETC.
No obligation or liability whatsoever of the Trust (whether
as guarantor or as general partner of the Operating Partnership)
on account of or arising under the Notes, the Note Purchase
Agreements or this Guaranty Agreement or any other document
executed by the Trust or the Operating Partnership in connection
herewith or therewith shall be personally binding upon, nor shall
resort for the enforcement thereof be had to, the private
property of any of the Trust s shareholders, trustees, officers
or employees, regardless of whether such obligation or liability
of the Trust is in the nature of contract, tort or otherwise.
Nothing herein shall diminish or impair the rights of the
Purchasers or the holders from time to time of the Notes to
pursue any remedy against the Trust or any assets of the Trust.
<PAGE>
IN WITNESS WHEREOF, the Trust has caused this Guaranty to be
duly executed as of the day and year first above written.
STORAGE TRUST REALTY
By
Its
<PAGE> 1
Exhibit 21.1
<TABLE>
SUBSIDIARIES OF THE STORAGE TRUST REALTY AND
OWNERSHIP OF SUBSIDIARY STOCK
Subsidiaries of the Storage Trust Realty (the "Company"):
<CAPTION>
Jurisdiction of Percentage of Ownership by the
Legal Name Organization Company or other Subsidiary
<S> <C> <C>
Storage Trus Properties, Delaware 93.75% of units (the general
(the "Operating Partnership") partnership interest) held by the
Company
Storage Realty Management Co. Delaware 5% of common stock held and
100% of preferred stock held
by the Operating Partnership
STR Management Corporation Missouri 100% of stock held by the Company
Storage Trust Investments,
L.P. Missouri 1% general partnership
interest held by STR Management
Corporation
99% limited partnership
interest held by the Operating
Partnership
STR Management Corporation Tennessee 100% of stock held by the Company
of Tennessee
Storage Trust Investments - Tennessee 1% general partnership
Tennessee, L.P. interest held STR Management
Corporation of Tennessee
99% limited partnership
interest held by the
Operating Partnership
STR Management Corporation Florida 100% of stock held by the Company
of Florida
Storage Trust Investments - Florida 1% general partnership
of Florida interest held by STR
Management Corporation of
Florida
99% limited partnership
interest held by the
Operating Partnership
<PAGE> 2
<CAPTION>
SUBSIDIARIES OF THE COMPANY AND
OWNERSHIP OF SUBSIDIARY STOCK
Subsidiaries of the Company: (continued)
Jurisdiction of Percentage of Ownership by the
Legal Name Organization Company or other Subsidiary
<S> <C> <C>
STR Management Corporation Kentucky 100% of stock held by the
of Kentucky Company
Storage Trust Investments - Kentucky 1% general partnership
Kentucky, L.P. interest held by STR
Management Corporation of
Kentucky
99% limited partnership
interest held by the Operating
Partnership
STR Management Corporation Kansas 100% of stock held by the
of Kansas Company
Storage Trust Investments - Kansas 1% general partnership
Kansas, L.P. interest held by STR
Management Corporation of
Kansas
99% limited partnership
interest held by the Operating
Partnership
STR Management Corporation Wisconsin 100% of stock held by the
of Wisconsin Company
Storage T Investments - Wisconsin 1% general partnership
Wisconsin, Limited Partnership interest held by STR
Management Corporation
of Wisconsin
99% limited partnership
interest held by the Operating
Partnership
STR Management Corporation Georgia 100% of stock held by the
of Georgia Company
Storage Trust Investments - Georgia 1% general partnership
Georgia, L.P. interest held by STR
Management Corporation
of Georgia
99% limited partnership
interest held by the Operating
Partnership
<PAGE> 3
<CAPTION>
SUBSIDIARIES OF THE COMPANY AND
OWNERSHIP OF SUBSIDIARY STOCK
Affiliates of the Company:
Jurisdiction of Percentage of Ownership by the
Legal Name Organization Company or other Subsidiary
<S> <C> <C>
Fountainbleau Storage Louisiana 15% partnership interest held
Associates by the Operating Partnership
Marian Ridge IV, L.L.C. Missouri 25% membership interest held
by the Operating
Partnership
Name of Business:
Operations at the properties are conducted under name Storage Trust Properties,
L.P.
</TABLE>
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Annual Report (Form 10-K)
of Storage Trust Realty of our report dated January 22, 1987 (except Note 9,
as to which the date is January 31, 1997), included in the 1996 Annual Report
to Shareholders of Storage Trust Realty.
We also consent to the incorporation by reference in (a) the Registration
Statements on Form S-8 pertaining to the Storage Trust Realty 1994 Share
Option Plan and the First Amendment to Share Option Plan (33-92764 and 333-
15763) and (b) the Registration Statements on Form S-3 (333-1576, 333-5363,
333-16219) of our report described above, with respect to the consolidated
financial statements of Storage Trust Realty incorporated by reference into
the Annual Report (Form 10-K) and the financial statement schedule of Storage
Trust Realty included in the Annual Report (Form 10-K) for the year ended
December 31, 1996.
Ernst & Young LLP
Chicago, Illinois
February 25, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-K.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,317
<SECURITIES> 0
<RECEIVABLES> 573
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,867
<PP&E> 314,319
<DEPRECIATION> 10,205
<TOTAL-ASSETS> 308,725
<CURRENT-LIABILITIES> 13,304
<BONDS> 63,255
0
0
<COMMON> 129
<OTHER-SE> 215,567
<TOTAL-LIABILITY-AND-EQUITY> 308,725
<SALES> 42,499
<TOTAL-REVENUES> 43,442
<CGS> 0
<TOTAL-COSTS> 13,251
<OTHER-EXPENSES> 9,114
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,190
<INCOME-PRETAX> 15,796
<INCOME-TAX> 0
<INCOME-CONTINUING> 15,796
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,796
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.46
</TABLE>
