Employment Agreement

Employment Agreement


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                                                                    EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT
                              --------------------


                  THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into this 28th day of December, 1999, at Cleveland, Ohio, by and between
LIBERTY SELF-STOR, INC., a Maryland corporation (hereinafter referred to as
"Employer"), and THOMAS J. SMITH (hereinafter referred to as "Employee").

                                    RECITALS:

                  Employer desires to offer Employee an opportunity to work for
Employer as President and Chief Operating Officer, upon the terms and conditions
hereinafter set forth, and Employee desires to accept such offer. Accordingly,
the parties agree as follows:

                  1. EMPLOYMENT. Employer hereby employs Employee and Employee
agrees to be employed by Employer as President and Chief Operating Officer, for
a term of two (2) years, commencing on the date that the reincorporation of
Meridian Point Realty Trust '83 into Liberty Self-Stor, Inc. is approved by the
shareholders of Meridian Point Realty Trust '83 and terminating two years from
that date (hereinafter referred to as the "Employment Period"). Thereafter, the
Employment Period shall be automatically renewed for additional, subsequent and
consecutive one (1) year terms, unless either Employer or Employee gives written
notice to the other of the intent to terminate this Agreement at least sixty
(60) days prior to the end of the then current term, in which event the
Employment Period shall end at the end of the then current term.

                  2. COMPENSATION. During the Employment Period, Employee shall
receive as compensation:

                  (a) Salary at the annual rate of $125,000, payable not less
frequently than


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semi-monthly;

                     (b) The right to participate in all corporate employee
benefit programs offered to employees by Employer;

                     (c) Bonuses as determined in the sole discretion of
Employer's Board of Directors;

                     (d) Two weeks vacation each calendar year, commensurate
with Employer's vacation policy; and

                     (e) Use of a company car of Employee's choosing, including
all expenses related to the use of such car with the exception of gasoline.

                  3. DUTIES. During the Employment Period, the Board of
Directors of Employer shall be entitled to establish the business hours,
conditions of employment, job assignments, duties and responsibilities of
Employee hereunder, and to modify the foregoing from time to time. Employee
shall devote all of his business efforts to Employer.

                  4. EXPENSES. Employer shall reimburse Employee for all
reasonable and necessary business expenses incurred by Employee on behalf of
Employer during the Employment Period.

                  5. DEATH OF EMPLOYEE. If Employee should die during the
Employment Period, Employer shall continue to pay compensation to Employee's
wife (or if at the time of Employee's decease Employee has no wife, then to his
beneficiaries) for a period of ninety days at the rate of compensation earned by
Employee immediately prior to his death. The amount of the bonus, if any, which
Employee is to receive under paragraph 2 for such year shall be prorated for the
portion of the year beginning on the first day of the Employment Period (or the
most recent anniversary thereof) and ending upon the date of Employee's death.

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                  6. DISABILITY OF EMPLOYEE.

                     (a) In the event that Employee shall become mentally or
physically disabled (as hereinafter defined) during the Employment Period,
Employer shall continue to pay compensation to Employee, at the rate of
compensation earned by Employee immediately prior to his disability, for a
period of six months after the onset of such disability. If, at the end of such
period, Employee shall continue to be so disabled Employer may elect, upon ten
days prior written notice, to discontinue payments of compensation. Employer
shall have no further duties or obligations hereunder. The amount of the bonus,
if any, which Employee is to receive under paragraph 2 for such year shall be
prorated for the portion of the year ending upon the end of the period described
in this paragraph.

                     (b) If Employee, within six months after he had initially
become mentally or physically disabled, shall recover from such mental or
physical disability so as to be able to again perform the duties required of him
hereunder, he shall be entitled to return to work. Upon such return to work, all
of the terms and conditions hereof shall be reinstituted and shall continue in
full force and effect as if no such disability had occurred. However, if
following such return to work, Employee shall once again become mentally or
physically disabled so as to be unable to perform the duties required of him
hereunder, and such disability shall continue for a period of ninety consecutive
days, Employer may, upon ten days prior written notice, terminate this
Agreement. Upon such termination, Employer shall have no further obligations to
Employee hereunder. The amount of the bonus, if any, which Employee is to
receive under paragraph 2 for such year shall be prorated for the portion of the
year ending upon the end of the period described in this paragraph.

                     (c) For purposes of this paragraph 6, Employee shall become
"mentally or physically disabled" if (i) Employee has been declared legally
incompetent by a final court

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decree, (ii) Employee receives disability insurance benefits from any disability
income insurance policy maintained by Employer for a period of six (6)
consecutive months, or (iii) the Board shall find, on the basis of medical
evidence satisfactory to the Board, that as a result of a mental or physical
condition Employee is unable to perform his normal duties of employment
hereunder or is prevented from engaging in the same level of performance as he
engaged in prior to the onset of such condition, and that such disability is
likely to continue for a substantial period of time. Such decision of the Board
shall be referred to hereinafter as a "Disability Determination."

                     (d) The date on which the disability will be deemed to have
occurred shall be the day after Employee last performed the services for
Employer which are required of him pursuant to this Agreement, which performance
of services was discontinued because of the condition which gave rise to the
court decree of legal incompetence, the payment of disability insurance benefit,
or the Disability Determination, whichever is applicable.

                     (e) In the event that Employee disagrees with the
Disability Determination, Employee shall be entitled to request that the Board
reconsider its decision. Such request shall be in writing, shall be delivered
within thirty (30) days of the date on which the Board advised Employee of the
Disability Determination, and shall be supported by medical evidence from a
physician selected and paid for by Employee. If the Board does not grant
Employee's request for reconsideration, Employee may advise the Board, in
writing within thirty (30) days, of his desire to appeal. At that time, a
physician selected by the Board and the physician who supported Employee's
request for reconsideration shall choose a third consulting physician to decide
the dispute. Such physician (hereinafter, the "Arbitrator") must be
board-certified in the specialty most closely related to the nature of the
disability alleged to exist. The expenses of the Arbitrator shall be borne
equally by

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Employer and Employee. The decision of the Arbitrator shall be final and binding
and shall be conclusive on the issue of the disability of the Employee (or lack
thereof).

                  7. TERMINATION.

                     (a) TERMINATION FOR CAUSE. Employer may terminate
Employee's employment hereunder at any time for cause, which shall be deemed to
include but not be limited to the following:

                         (i) Employee's engaging in fraud, misappropriation of
                     funds, embezzlement or like conduct committed against
                     Employer.

                         (ii) Employee's conviction of a felony.

                         (iii) Employee's material violation of a generally
                     recognized policy of Employer.

                         (iv) Employee's material violation of any provision of
                     this Agreement.

In the event of such a termination for cause, Employer shall have no further
obligation to Employee pursuant to this Agreement after the date of termination.

                     (b) TERMINATION WITHOUT CAUSE. Employer may elect to
terminate Employee's employment for any reason other than for cause (pursuant to
subparagraph (a) above) prior to the expiration of the Employment Period. In the
event of a termination without cause, Employer shall be obligated (i) to
continue to pay the salary amount set forth in paragraph 2(a) above for one year
following the date of termination, and (ii) to pay to Employee any bonus earned
but not yet paid on the date of termination, prorated to reflect the portion of
the bonus computation period during which Employee actually worked; provided
however that all other employment benefits such as use of a company car shall
immediately cease. The amounts to be paid to Employee pursuant to this
subparagraph are

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intended by the parties to be in settlement of any and all claims of Employee
arising out of or related to Employee's employment with Employer, including,
without limitation, the termination of such employment, any express or implied
employment agreement, this Agreement, or the breach thereof (collectively,
"Employment Claims"). In consideration of such payment, Employee hereby releases
and waives any and all Employment Claims against Employer, and covenants not to
sue Employer in connection with any Employment Claim. In further consideration
for such release and waiver, it is agreed that Employee shall not be required to
mitigate damages, by seeking other employment or otherwise, and Employer shall
not be entitled to set off against amounts payable to Employee pursuant to this
subparagraph any amounts earned by Employee from other employment during the
balance of the Employment Period.

                  8. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. As a material
inducement to Employer to enter into this Agreement, Employee represents and
warrants as follows:

                     (a) Neither Employee, nor any member of Employee's
immediate family, nor any entity in which Employee has a substantial interest
(i) has any direct or indirect ownership interest in any entity with which
Employer or any affiliate of Employer has a business relationship or which
competes with Employer or any affiliate of Employer, except that the ownership
of 1% or less of any class of securities of a publicly-held corporation shall
not constitute a breach of this representation and warranty, and (ii) is, and
will not become during the term of this Agreement, directly or indirectly,
interested in any material contract with Employer or any affiliate of Employer
(other than this Agreement).

                     (b) Neither Employee's execution of this Agreement nor
Employee's employment by Employer hereunder will breach any agreement or
covenant entered into by


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Employee that is currently in effect.

                  9. COVENANTS AGAINST COMPETITION. Employee recognizes and
acknowledges that (i) the principal business of Employer will be the operation,
management, development, expansion, ownership and acquisition of self-storage
facilities (the "Company Business"); and (ii) the work of Employee for Employer
has brought Employee and will continue to bring him into close contact with many
confidential affairs not readily available to the public. Accordingly, Employee
covenants and agrees that:

                     (a) NON-COMPETE. During the Employment Period and for two
(2) years following the termination of Employee's employment hereunder, however
caused (the "Restricted Period"), Employee shall not, directly or indirectly,
(A) within the State of Ohio, (B) in any other state in which Employer has
actively engaged in the Company Business during any part of the term of
Employee's employment with Employer, and (C) with respect to any customer or
supplier with whom Employer has had material dealings during any part of the
term of Employee's employment with Employer, compete with Employer in any
manner, on behalf of himself or any other person, firm, business, corporation or
other entity (each such other person, firm, business or other entity being
referred to hereinafter as a "Person"), including, without limitation, that
Employee shall not (i) engage in the Company Business for his own account; (ii)
except for employment of Employee by Employer or an affiliate of Employer, enter
the employ of, or render any services to, any Person engaged in the Company
Business; (iii) request or instigate any account or customer of Employer to
withdraw, diminish, curtail or cancel any of its business with Employer, or (iv)
become interested in any Person engaged in the Company Business as an owner,
partner, shareholder, officer, director, licensor, licensee, principal, agent,
employee, trustee, consultant or in any other relationship or capacity;
provided, however, that Employee may own, directly or

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indirectly, solely as an investment, securities of any corporation which are
publicly-traded if he (A) is not a controlling person of, or a member of a group
which controls, such corporation, or (B) does not, directly or indirectly, own
1% or more of any class of securities of such corporation. In the event of
Employee's breach of any provision of this paragraph 9, the running of the
Restricted Period shall be automatically tolled (i.e., no part of the Restricted
Period shall expire) from and after the date of the first such breach.

                     (b) CONFIDENTIAL INFORMATION. Employee recognizes and
acknowledges that confidential information, including, without limitation,
information, knowledge or data (i) of a technical nature such as but not limited
to methods, know-how, formulae, compositions, processes, discoveries, machines,
inventions, products, product specifications, computer programs and similar
items or research projects; (ii) of a business nature such as but not limited to
information about cost, purchasing, profits, market, sales or customers,
including lists of customers, and the financial condition of Employer; (iii)
pertaining to future developments such as but not limited to research and
development or future marketing or merchandising, and trade secrets of Employer;
and (iv) all other matters which Employer treats as confidential (the items
described above being referred to collectively hereinafter as "Confidential
Information"), are valuable, special and unique assets of Employer. During and
after the Restricted Period, Employee shall keep secret and retain in strictest
confidence, and shall not use for the benefit of himself or others except in
connection with the business and affairs of Employer, any and all Confidential
Information learned by Employee before or after the date of this Agreement, and
shall not disclose such Confidential Information to anyone outside of Employer
either during or after employment by Employer, except as required in the course
of performing duties of his employment with Employer, without the express
written consent of Employer or as required by law.



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                     (c) PROPERTY OF EMPLOYER. Employee agrees to deliver
promptly to Employer all drawings, blueprints, manuals, letters, notes,
notebooks, reports, sketches, formulae, computer programs and files, memoranda,
customer lists and all other materials relating in any way to the Company
Business and in any way obtained by Employee during the period of his employment
with Employer which are in his possession or under his control, and all copies
thereof, (i) upon termination of Employee's employment with Employer, or (ii) at
any other time at Employer's request. Employee further agrees he will not make
or retain any copies of any of the foregoing and will so represent to Employer
upon termination of his employment.

                     (d) EMPLOYEES OF EMPLOYER. During the Restricted Period,
Employee shall not, directly or indirectly, hire, solicit or encourage to leave
the employment of Employer or its affiliates any employee of Employer or its
affiliates or hire any such employee who has left the employment of Employer or
its affiliates within one year of the termination of such Employee's employment
with Employer or its affiliates.

                     (e) CONSULTANTS OF THE EMPLOYER. During the Restricted
Period, Employee shall not, directly or indirectly, hire, solicit or encourage
to cease to work with Employer or its affiliates any consultant then under
contract or under contract within the prior year with Employer or its
affiliates.

                  10. RIGHTS AND REMEDIES UPON BREACH. Both parties recognize
that the services to be rendered under this Agreement by Employee are special,
unique and of extraordinary character. If Employee breaches, or threatens to
commit a breach of, any of the provisions of paragraph 9 (the "Restrictive
Covenants"), then Employer shall have the following rights and remedies, each of
which shall be independent of the other and severally enforceable, and all of
which rights and remedies shall be in addition to, and not in lieu of,


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any other rights and remedies available to Employer under law or in equity:

                     (a) SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to Employer and that money
damages will not provide adequate remedy to Employer. As to the covenants
contained in paragraph 9, specific performance shall be for a period of time
equal to the unexpired portion of the Restricted Period, giving full effect to
the tolling provision of paragraph 9, and beginning on the earlier of the date
on which the court's order becomes final and non-appealable, and the date on
which all appeals have been exhausted.

                     (b) ACCOUNTING. The right and remedy to require Employee to
account for and pay over to Employer all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits") derived or
received by him as the result of any transactions constituting a breach of any
of the Restrictive Covenants, and Employee shall account for and pay over such
Benefits to Employer.

                     (c) BLUE-PENCILLING. If any court determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable because of the
scope, duration and/or geographical area covered by such provision, such court
shall have the power to reduce the scope, duration or area of such provision
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.

                 11. LIMITATIONS ON AUTHORITY. Notwithstanding anything else
herein contained, Employee, without the consent and direction of the Board of
Directors of Employer, may not on behalf of Employer:

                     (a) Borrow or loan money, except as required by his duties
                 in the ordinary course of business.



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                     (b) Assign, transfer, pledge, compromise, or release any
                 claims or debts of Employer, except in the ordinary course of
                 business.

                     (c) Make, execute or deliver any assignment for the benefit
                 of creditors, any bond, confession of judgment, chattel
                 mortgage, deed, guaranty, indemnity bond, contract to sell or
                 contract of sale of any of the assets of Employer.

                     (d) Lease or mortgage with respect to any of Employer's
                 corporate real property or any interest therein, or enter into
                 any such contract for such purposes, except in the ordinary
                 course of business.

                     (e) Pledge or hypothecate or in any manner whatsoever
                 transfer any interest in the assets of Employer.

                     (f) Materially change or alter Employer's present lines of
                 business.

                     (g) Do any act outside of the normal course of business
                 which could have a materially adverse effect on the business
                 and/or financial condition of Employer. Any violation of the
                 terms of this paragraph shall be deemed to be a material
                 violation of a provision of this Agreement.

                 12. INDEMNIFICATION. Employer shall indemnify Employee (and
his legal representatives or other successors) to the extent permitted by law
and Employee shall be entitled to the protection of any insurance policies which
Employer may elect to maintain generally for the benefit of its directors or
officers against all costs, charges and expenses whatsoever incurred or
sustained by Employee in connection with any action, suit or proceeding to which
he may be made a party by reason of his being or having been an employee,
director or officer of Employer or any other corporation that he served in any
such capacity at the request of Employer.

                 13. NON-ASSIGNMENT. This Agreement is a personal services
contract and

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it is expressly agreed that the rights and interests of Employee and Employer
hereunder may not be sold, transferred, assigned, pledged or hypothecated;
provided, however, that Employer may assign its rights and obligations hereunder
to a wholly-owned subsidiary of Employer, whether presently existing or formed
after the date hereof.

                 14. BINDING EFFECT. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, their heirs, representatives and
successors.

                 15. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.

                 16. EFFECT OF CAPTIONS. The captions in this Agreement are
included for convenience only and shall not in any way effect the interpretation
or construction of any provision hereof.

                 17. REMEDIES CUMULATIVE; NO WAIVER. All remedies specified
herein or otherwise available shall be cumulative and in addition to any and
every other remedy provided hereunder or now or hereafter available. No waiver
or failure (intentional or unintentional) to act with respect to any breach or
default hereunder shall be deemed to be a waiver with respect to any subsequent
breach or default, whether of a similar or different nature.

                 18. NOTICES. All notices, requests, demands or other
communications hereunder shall be sent by registered or certified mail to:

                             To Employer:  Meridian Point Realty Trust '83
                                           8500 Station St., Suite 100
                                           Mentor, Ohio 44060

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                             Copy to:      Marc C. Krantz, Esq.
                                           Kohrman Jackson & Krantz P.L.L.
                                           20th Floor, One Cleveland Center
                                           1275 East Ninth Street
                                           Cleveland, Ohio   44114-1793

                             To Employee:  Thomas J. Smith
                                           7573 Salida Road
                                           Mentor-on-the-Lake, Ohio 44160

or to such other address as a party may designate by notice in accordance with
this paragraph.

                 19. GOVERNING LAW; JURISDICTION; LIMITATIONS ON FILING ACTIONS.
This Agreement shall be governed by and construed in accordance with the
substantive law of the State of Ohio. The parties intend to and hereby do confer
jurisdiction upon the courts of any jurisdiction within the State of Ohio to
determine any dispute arising out of or related to this Agreement, including the
enforcement and the breach hereof. The parties agree that any claim arising out
of or related to this Agreement, or the breach hereof, must be filed within six
(6) months after the date of the alleged breach, and in any event within six
months after the date of termination of Employee's employment, that any claim
which is not filed within such six month period is waived, and that any statute
of limitations to the contrary is hereby waived.

                  20. ACKNOWLEDGMENT. Employee acknowledges that: (i) he has
carefully read all of the terms of this Agreement, and that such terms have been
fully explained to him; (ii) he understands the consequences of each and every
term of this Agreement; (iii) he has had sufficient time and an opportunity to
consult with his own legal advisor prior to signing this Agreement, and that
Employer has encouraged him to seek legal counsel prior to signing this
Agreement; (iv) he had other employment opportunities at the time he entered
into this Agreement; (v) he specifically understands that by signing this
Agreement he is giving up


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certain rights he may have otherwise had, and that he is agreeing to limit his
freedom to engage in certain employment during and after the termination of this
Agreement, and (vi) the limitations to his right to compete contained in this
Agreement represent reasonable limitations as to scope, duration and
geographical area, and that such limitations are reasonably related to
protection which Employer reasonably requires.

                  21. ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding between Employer and Employee and supersedes all
prior agreements and understandings relating to the subject matter hereof.


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                  IN WITNESS WHEREOF, the undersigned have hereunto set their
hands on the date first hereinabove mentioned.

                                  LIBERTY SELF-STOR, INC.


                                  By:  /s/ Richard M. Osborne
                                     --------------------------------------
                                  Its: Chairman and Chief Executive Officer
                                       ------------------------------------




                                  /s/ Thomas J. Smith
                                  -------------------

                                  Thomas J. Smith


















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