Exhibit 10.23

GUARANTY

THIS GUARANTY (“Guaranty”) is executed as of September 5, 2007 by U.S.
Commercial LLC, a Virginia limited liability company, (“Commercial”), USA Self
Storage REIT, Inc., a Maryland corporation (“REIT I”) and USA Self Storage REIT
II, Inc., a Maryland corporation (“REIT II”) (singularly and collectively
referred to as “Guarantor”), for the benefit of LaSalle Bank National
Association, a national banking association, its successors and assigns
(“Lender”).

A. Baffin Bay Self Storage, LLC, a Delaware limited liability company
(“Borrower”) is indebted to Lender with respect to a loan (the “Loan”) pursuant
to that certain Promissory Note dated of even date herewith, payable to the
order of Lender in the original principal amount of $18,000,000.00 (together
with all renewals, modifications, increases and extensions thereof, the “Note”),
which is secured by the liens and security interests of a Deed of Trust,
Security Agreement and Fixture Filing, of even date herewith (the “Deed of
Trust”), and further evidenced, secured or governed by the other Loan Documents
(as defined in the Note). Capitalized terms used in this Guaranty and not
otherwise defined shall have the meanings assigned in the Deed of Trust.

B. Lender is not willing to make the Loan, or otherwise extend credit, to
Borrower unless Guarantor unconditionally guarantees payment and performance to
Lender of the Guaranteed Obligations (as herein defined).

C. Guarantor is the owner of a direct or indirect interest in Borrower, and
Guarantor will directly benefit from Lender’s making the Loan to Borrower.

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower
thereunder, and to extend such additional credit as Lender may from time to time
agree to extend under the Loan Documents, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:

ARTICLE 1

NATURE AND SCOPE OF GUARANTY

1.1 Guaranty of Obligations. Guarantor hereby irrevocably and unconditionally
guarantees to Lender (and its successors and assigns), jointly and severally,
the payment and performance of the Guaranteed Obligations as and when the same
shall be due and payable, whether by lapse of time, by acceleration of maturity
or otherwise. Guarantor hereby irrevocably and unconditionally covenants and
agrees that it is liable, jointly and severally, for the Guaranteed Obligations
as a primary obligor, and that each Guarantor shall fully perform, jointly and
severally, each and every term and provision hereof.

1.2 Definition of Guaranteed Obligations. As used herein, the term “Guaranteed
Obligations” shall mean the unpaid balance of the Loan (as defined in the Note)
in the event of (a) Borrower’s failure to make the first full monthly payment of
principal and interest due under the Note, (b) a breach of the terms of
Paragraphs 15 or 16 of the Deed of Trust or (c) the voluntary filing by
Borrower, or the filing against Borrower by any Guarantor or any affiliate of
any Guarantor, or an involuntary bankruptcy filing against Borrower in which
Borrower or Guarantor acts in collusion with the filing party with respect to
the filing, of any proceeding for relief under any federal or state bankruptcy,
insolvency or receivership laws or any assignment for the benefit of creditors
made by Borrower. In addition, the Guaranteed Obligations shall also include and
Guarantor shall also be liable for, and shall indemnify, defend and hold Lender
harmless from and against, any and all loss, liability, damage, cost, expense,
claim or other obligation (including without limitation reasonable attorney’s
fees and costs of defense) incurred or suffered by Lender and arising out of or
in connection with the matters listed in subparagraphs (i) through
(v) immediately below:

 

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(i) any fraud, willful misconduct or material misrepresentation by Borrower or
any Guarantor in connection with the Loan;

(ii) any waste of the Property caused by act(s) or omission(s) of Borrower, its
agents, affiliates, officers and employees; or the removal or disposal of any
portion of the Property after an Event of Default under the Loan Documents to
the extent such Property is not replaced by Borrower with like property of
equivalent value, function and design;

(iii) the misapplication, misappropriation or conversion of: (A) any rents,
security deposits, proceeds or other funds; (B) any insurance proceeds paid by
reason of any loss, damage or destruction to the Property and not used by
Borrower for restoration or repair of the Property when and as permitted by the
Loan Documents; and/or (C) any awards or amounts received in connection with the
condemnation of all or any portion of the Property and not used by Borrower for
restoration or repair of the Property when and as permitted by the Loan
Documents;

(iv) Borrower’s failure to deliver any security deposits collected with respect
to the Property to Lender or any other party entitled to receive such security
deposits under the Loan Documents following a default; and any rents (including
advanced or prepaid rents), issues, profits, accounts or other amounts generated
by or related to the Property attributable to, or accruing after a default,
which amounts were collected by Borrower or any other party on its behalf or for
its benefit and not turned over to the Lender or used to pay unaffiliated third
parties for reasonable and customary operating expenses and capital expenditures
for the Property, taxes and insurance premiums with respect to the Property or
any other amounts required to be paid under the Loan Documents with respect to
the Property; and/or

(v) the breach of the obligations set forth in that certain Hazardous Substances
Indemnification Agreement from Borrower and Guarantor to Lender of even date
herewith, as hereinafter amended, if at all.

1.3 Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing
guaranty of payment and performance, is joint and several and is not a guaranty
of collection. This Guaranty may not be revoked by Guarantor and shall continue
to be effective with respect to any Guaranteed Obligations arising or created
after any attempted revocation by Guarantor and after (if Guarantor is a natural
person) Guarantor’s death (in which event this Guaranty shall be binding upon
Guarantor’s estate and Guarantor’s legal representatives and heirs). The fact
that at any time or from time to time the Guaranteed Obligations may be
increased or reduced shall not release or discharge the obligation of Guarantor
to Lender with respect to Guaranteed Obligations. This Guaranty may be enforced
by Lender and any subsequent holder of the Note and shall not be discharged by
the assignment or negotiation of all or part of the Note.

1.4 Guaranteed Obligations Not Reduced by Offset. The Guaranteed Obligations and
the liabilities and obligations of Guarantor to Lender hereunder, shall not be
reduced, discharged or released because or by reason of any existing or future
offset, claim or defense of Borrower, or any other party, against Lender or
against payment of the Guaranteed Obligations, whether such offset, claim or
defense arises in connection with the Guaranteed Obligations (or the
transactions creating the Guaranteed Obligations) or otherwise.

1.5 Payment by Guarantor. If all or any part of the Guaranteed Obligations shall
not be punctually paid when due, whether at maturity or earlier by acceleration
or otherwise, Guarantor shall, immediately upon demand by Lender, and without
presentment, protest, notice of protest, notice of non-payment, notice of
intention to accelerate the maturity, notice of acceleration of the maturity, or
any other notice whatsoever, pay in lawful money of the United States of
America, the amount due on the Guaranteed Obligations to Lender at Lender’s
address as set forth herein. Such demand(s) may be

 

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made at any time coincident with or after the time for payment of all or part of
the Guaranteed Obligations, and may be made from time to time with respect to
the same or different items of Guaranteed Obligations. Such demand shall be
deemed made, given and received in accordance with the notice provisions hereof.

1.6 No Duty to Pursue Others. It shall not be necessary for Lender (and
Guarantor hereby waives any rights which Guarantor may have to require Lender),
in order to enforce such payment by Guarantor, first to (a) institute suit or
exhaust its remedies against Borrower or others liable on the Loan or the
Guaranteed Obligations or any other person, (b) enforce or exhaust any of
Lender’s rights or remedies against any collateral which shall ever have been
given to secure the Loan, (c) enforce Lender’s rights or remedies available to
Lender against any other guarantors of the Guaranteed Obligations, (d) join
Borrower or any others liable on the Guaranteed Obligations in any action
seeking to enforce this Guaranty, or (e) resort to any other means of obtaining
payment of the Guaranteed Obligations. Lender shall not be required to mitigate
damages or take any other action to reduce, collect or enforce the Guaranteed
Obligations.

1.7 Waivers. Guarantor agrees to the provisions of the Loan Documents, and
hereby waives notice of (a) any loans or advances made by Lender to Borrower,
(b) acceptance of this Guaranty, (c) any amendment or extension of the Note or
of any other Loan Documents, (d) the execution and delivery by Borrower and
Lender of any other loan or credit agreement or of Borrower’s execution and
delivery of any promissory notes or other documents arising under the Loan
Documents or in connection with the Property, (e) the occurrence of any breach
by Borrower or default, (f) Lender’s transfer or disposition of the Guaranteed
Obligations, or any part thereof, (g) sale or foreclosure (or posting or
advertising for sale or foreclosure) of any collateral for the Guaranteed
Obligations, (h) protest, proof of non-payment or default by Borrower, or
(i) any other action at any time taken or omitted by Lender, and, generally, all
demands and notices of every kind in connection with this Guaranty, the Loan
Documents, any documents or agreements evidencing, securing or relating to any
of the Guaranteed Obligations and the obligations hereby guaranteed.

1.8 Payment of Expenses. In the event that Guarantor should breach or fail to
timely perform any provisions of this Guaranty, Guarantor shall, immediately
upon demand by Lender, pay Lender all costs and expenses (including court costs
and reasonable attorneys’ fees) incurred by Lender in the enforcement hereof or
the preservation of Lender’s rights hereunder. The covenant contained in this
paragraph shall survive the payment and performance of the Guaranteed
Obligations.

1.9 Effect of Bankruptcy. In the event that, pursuant to any insolvency,
bankruptcy, reorganization, receivership or other debtor relief law, or any
judgment, order or decision thereunder, Lender must rescind or restore any
payment, or any part thereof, received by Lender in satisfaction of the
Guaranteed Obligations, as set forth herein, any prior release or discharge from
the terms of this Guaranty given to Guarantor by Lender shall be without effect,
and this Guaranty shall remain in full force and effect. It is the intention of
Borrower and Guarantor that Guarantor’s obligations hereunder shall not be
discharged except by Guarantor’s performance of such obligations and then only
to the extent of such performance.

1.10 Deferment of Rights of Subrogation, Reimbursement and Contribution.

(a) Notwithstanding any payment or payments made by any Guarantor hereunder, no
Guarantor will assert or exercise any right of Lender or of such Guarantor
against Borrower to recover the amount of any payment made by such Guarantor to
Lender by way of subrogation, reimbursement, contribution, indemnity, or
otherwise arising by contract or operation of law, and such Guarantor shall not
have any right of recourse to or any claim against assets or property of
Borrower, whether or not the obligations of Borrower have been satisfied, all of
such rights being herein expressly waived by such Guarantor. Each Guarantor
agrees not to seek contribution or indemnity or other recourse from any other
guarantor. If any amount shall nevertheless be paid to a Guarantor by Borrower
or another Guarantor prior to payment in full of the Obligations (hereinafter
defined), such amount shall be held in trust for the benefit of Lender and shall
forthwith be paid to Lender to be credited and applied to the Obligations,
whether matured or unmatured. The provisions of this paragraph shall survive the
termination of this Guaranty, and any satisfaction and

 

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discharge of Borrower by virtue of any payment, court order or any applicable
law.

(b) Notwithstanding the provisions of Subparagraph 1.10(a), each Guarantor shall
have and be entitled to (i) all rights of subrogation otherwise provided by
applicable law in respect of any payment it may make or be obligated to make
under this Guaranty and (ii) all claims it would have against Borrower in the
absence of Subparagraph 1.10(a) and to assert and enforce same, in each case on
and after, but at no time prior to, the date (the “Subrogation Trigger Date”)
which is ninety-one (91) days after the date on which all sums owed to Lender
under the Loan Documents (the “Obligations”) have been paid in full, if and only
if (x) no Event of Default of the type described in Paragraph 20(f) of the Deed
of Trust with respect to any other Guarantor has existed at any time on and
after the date of this Guaranty to and including the Subrogation Trigger Date
and (y) the existence of each Guarantor’s rights under this Subparagraph 1.10(b)
would not make such Guarantor a creditor (as defined in the Code, as such term
is hereinafter defined) of Borrower or any other Guarantor in any insolvency,
bankruptcy, reorganization or similar proceeding commenced on or prior to the
Subrogation Trigger Date.

1.11 Bankruptcy Code Waiver. It is the intention of the parties that Guarantor
shall not be deemed to be a “creditor” or “creditors” (as defined in Section 101
of the Bankruptcy Code) of Borrower, or any such guarantor, by reason of the
existence of this Guaranty, in the event that Borrower or any such guarantor,
becomes a debtor in any proceeding under the Bankruptcy Code, and in connection
herewith, Guarantor hereby waives any such right as a “creditor” under the
Bankruptcy Code. This waiver is given to induce Lender to make the Loan
evidenced by the Note to Borrower. After the Loan is paid in full and there
shall be no obligations or liabilities under this Guaranty outstanding, this
waiver shall be deemed to be terminated.

1.12 “Borrower.” The term “Borrower” as used herein shall include any new or
successor corporation, association, partnership (general or limited), joint
venture, trust or other individual or organization formed as a result of any
merger, reorganization, sale, transfer, devise, gift or bequest of Borrower or
any interest in Borrower.

1.13 Additional Waivers. Without limiting the generality, scope or meaning of
any of the foregoing or any other provision of this Guaranty, to the extent it
is determined that California law is applicable to this Guaranty:

(a) Guarantor hereby waives any and all benefits and defenses under California
Civil Code Section 2810 and agrees that by doing so Guarantor shall be liable
even if Borrower had no liability at the time of execution of the Note, the Deed
of Trust or any other Loan Document, or thereafter ceases to be liable.
Guarantor hereby waives any and all benefits and defenses under California Civil
Code Section 2809 and agrees that by doing so Guarantor’s liability may be
larger in amount and more burdensome than that of Borrower. Guarantor waives all
rights to require Lender to pursue any other remedy it may have against
Borrower, or any member of Borrower, including any and all benefits under
California Civil Code Section 2845, 2849 and 2850. Guarantor further waives any
rights, defenses and benefits that may be derived from Sections 2787 to 2855,
inclusive, of the California Civil Code or comparable provisions of the laws of
any other jurisdiction and further waives all other suretyship defenses
Guarantor would otherwise have under the laws of California or any other
jurisdiction.

(b) Upon a default by Borrower, Lender in its sole discretion, without prior
notice to or consent of Guarantor, may elect to: (i) foreclose either judicially
or nonjudicially against any real or personal property security it may hold for
the Loan, (ii) accept a transfer of any such security in lieu of foreclosure,
(iii) compromise or adjust the Loan or any part of it or make any other
accommodation with Borrower or any Guarantor, or (iv) exercise any other remedy
against Borrower or any security. No such action by Lender shall release or
limit the liability of Guarantor, who shall remain liable under this Guaranty
after the action, even if the effect of the action is to deprive Guarantor of
any subrogation rights,

 

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rights of indemnity, or other rights to collect reimbursement from Borrower for
any sums paid to Lender, whether contractual or arising by operation of law or
otherwise. Guarantor expressly agrees that under no circumstances shall it be
deemed to have any right, title, interest or claim in or to any real or personal
property to be held by Lender or any third party after any foreclosure or
transfer in lieu of foreclosure of any security for the Loan.

(c) Regardless of whether Guarantor may have made any payments to Lender,
Guarantor hereby waives all rights to enforce any remedy that Lender may have
against Borrower. The waiver given in this subsection (c) shall be effective
until the Loan has been paid and performed in full.

(d) Guarantor waives all rights and defenses arising out of an election of
remedies by Lender, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guarantied obligation, has destroyed
Guarantor’s rights of subrogation and reimbursement against Borrower by
operation of Section 580d of the California Code of Civil Procedure or
otherwise. Guarantor further waives any right to a fair value hearing under
California Code of Civil Procedure Section 580a, or any other similar law, to
determine the size of any deficiency owing (for which any Guarantor would be
liable hereunder) following a nonjudicial foreclosure sale.

(e) Without limiting the foregoing or anything else contained in this Guaranty,
Guarantor waives all rights and defenses that Guarantor may have because
Borrower’s Loan is secured by real property. This means, among other things:

(i) that Lender may collect from Guarantor without first foreclosing on any real
or personal property collateral pledged by Borrower; and

(ii) if Lender forecloses on any real property collateral pledged by Borrower:
(x) the amount of the Loan may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and (y) Lender may collect from Guarantor even if Lender,
by foreclosing on the real property collateral, has destroyed any right
Guarantor may have to collect from Borrower.

This subsection (e) is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because Borrower’s Loan is secured by real property.
These rights and defenses include, but are not limited to, any rights or
defenses based upon Sections 580a, 580b, 580d, or 726 of the California Code of
Civil Procedure.

(f) Guarantor waives all rights and defenses arising out of any failure of the
Lender to disclose to the Guarantor any information relating to the financial
condition, operations, properties or prospects of Borrower now or in the future
known to the Lender (Guarantor waiving any duty on the part of the Lender to
disclose such information).

(g) Guarantor waives all rights and defenses, if any, now or hereafter arising
under the laws of the State of Illinois, which are the same as or similar to the
rights and defenses waived as described above.

ARTICLE 2

EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTOR’S OBLIGATIONS

Guarantor hereby consents and agrees to each of the following, and agrees that
Guarantor’s obligations under this Guaranty shall not be released, diminished,
impaired, reduced or adversely affected by any of the

 

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following, and waives any common law, equitable, statutory or other rights
(including without limitation rights to notice) which Guarantor might otherwise
have as a result of or in connection with any of the following:

2.1 Modifications. Any renewal, extension, increase, modification, alteration or
rearrangement of all or any part of the Guaranteed Obligations, Note, Loan
Documents, or other document, instrument, contract or understanding between
Borrower and Lender, or any other parties, pertaining to the Guaranteed
Obligations or any failure of Lender to notify Guarantor of any such action.

2.2 Adjustment. Any adjustment, indulgence, forbearance or compromise that might
be granted or given by Lender to Borrower or any Guarantor.

2.3 Condition of Borrower or Guarantor. The insolvency, bankruptcy, arrangement,
adjustment, composition, liquidation, disability, dissolution or lack of power
of Borrower, Guarantor or any other party at any time liable for the payment of
all or part of the Guaranteed Obligations; or any dissolution of Borrower or
Guarantor, or any sale, lease or transfer of any or all of the assets of
Borrower or Guarantor, or any changes in the shareholders, partners or members
of Borrower or Guarantor; or any reorganization of Borrower or Guarantor.

2.4 Invalidity of Guaranteed Obligations. The invalidity, illegality or
unenforceability of all or any part of the Guaranteed Obligations, or any
document or agreement executed in connection with the Guaranteed Obligations,
for any reason whatsoever, including without limitation the fact that (a) the
Guaranteed Obligations, or any part thereof, exceeds the amount permitted by
law, (b) the act of creating the Guaranteed Obligations or any part thereof is
ultra vires, (c) the officers or representatives executing the Note or the other
Loan Documents or otherwise creating the Guaranteed Obligations acted in excess
of their authority, (d) the Guaranteed Obligations violate applicable usury
laws, (e) Borrower has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Guaranteed Obligations wholly or
partially uncollectible from Borrower, (f) the creation, performance or
repayment of the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the Guaranteed
Obligations or executed in connection with the Guaranteed Obligations, or given
to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible
or unenforceable, or (g) the Note or any of the other Loan Documents have been
forged or otherwise are irregular or not genuine or authentic, it being agreed
that Guarantor shall remain liable hereon regardless of whether Borrower or any
other person be found not liable on the Guaranteed Obligations or any part
thereof for any reason.

2.5 Release of Obligors. Any full or partial release of the liability of
Borrower on the Guaranteed Obligations, or any part thereof, or of any
co-guarantors, or any other person or entity now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally, to pay,
perform, guarantee or assure the payment of the Guaranteed Obligations, or any
part thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other parties will be liable to pay or perform the Guaranteed
Obligations, or that Lender will look to other parties to pay or perform the
Guaranteed Obligations.

2.6 Other Collateral. The taking or accepting of any other security, collateral
or guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations.

2.7 Release of Collateral. Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation
negligent, willful, unreasonable or unjustifiable impairment) of any collateral,
property or security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Guaranteed Obligations.

2.8 Care and Diligence. The failure of Lender or any other party to exercise
diligence or

 

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reasonable care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such collateral, property or
security, including but not limited to any neglect, delay, omission, failure or
refusal of Lender (a) to take or prosecute any action for the collection of any
of the Guaranteed Obligations, or (b) to foreclose, or initiate any action to
foreclose, or, once commenced, prosecute to completion any action to foreclose
upon any security therefor, or (c) to take or prosecute any action in connection
with any instrument or agreement evidencing or securing all or any part of the
Guaranteed Obligations.

2.9 Unenforceability. The fact that any collateral, security, security interest
or lien contemplated or intended to be given, created or granted as security for
the repayment of the Guaranteed Obligations, or any part thereof, shall not be
properly perfected or created, or shall prove to be unenforceable or subordinate
to any other security interest or lien, it being recognized and agreed by
Guarantor that Guarantor is not entering into this Guaranty in reliance on, or
in contemplation of the benefits of, the validity, enforceability,
collectability or value of any of the collateral for the Guaranteed Obligations.

2.10 Offset. Any existing or future right of offset, claim or defense of
Borrower against Lender, or any other party, or against payment of the
Guaranteed Obligations, whether such right of offset, claim or defense arises in
connection with the Guaranteed Obligations (or the transactions creating the
Guaranteed Obligations) or otherwise.

2.11 Merger. The reorganization, merger or consolidation of Borrower into or
with any other corporation or entity.

2.12 Preference. Any payment by Borrower to Lender is held to constitute a
preference under bankruptcy laws, or for any reason Lender is required to refund
such payment or pay such amount to Borrower or someone else.

2.13 Other Actions Taken or Omitted. Any other action taken or omitted to be
taken with respect to the Loan Documents, the Guaranteed Obligations, or the
security and collateral therefor, whether or not such action or omission
prejudices Guarantor or increases the likelihood that Guarantor will be required
to pay the Guaranteed Obligations pursuant to the terms hereof, it being the
unambiguous and unequivocal intention of Guarantor that Guarantor shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether or not
contemplated, and whether or not otherwise or particularly described herein,
which obligation shall be deemed satisfied only upon the full and final payment
and satisfaction of the Guaranteed Obligations.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

To induce Lender to enter into the Loan Documents and extend credit to Borrower,
Guarantor represents and warrants to Lender as follows:

3.1 Benefit. Guarantor is an affiliate of Borrower or is the owner of a direct
or indirect interest in Borrower, and has received, or will receive, direct or
indirect benefit from the making of this Guaranty with respect to the Guaranteed
Obligations.

3.2 Familiarity and Reliance. Guarantor is familiar with, and has independently
reviewed books and records regarding, the financial condition of Borrower and is
familiar with the value of any and all collateral intended to be created as
security for the payment of the Note or Guaranteed Obligations; however,
Guarantor is not relying on such financial condition or the collateral as an
inducement to enter into this Guaranty.

3.3 No Representation by Lender. Neither Lender nor any other party has made any

 

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representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty.

3.4 Guarantor’s Financial Condition. As of the date hereof, and after giving
effect to this Guaranty and the contingent obligation evidenced hereby,
Guarantor is, and will be, solvent, and has and will have assets which, fairly
valued, exceed its obligations, liabilities (including contingent liabilities)
and debts, and has and will have property and assets sufficient to satisfy and
repay its obligations and liabilities. There have been no (a) assignment made
for the benefit of Guarantor’s creditors, (b) appointment of a receiver for
Guarantor or for Guarantor’s properties, or (c) bankruptcy, reorganization, or
liquidation proceeding instituted by or against Guarantor.

3.5 Legality. The execution, delivery and performance by Guarantor of this
Guaranty and the consummation of the transactions contemplated hereunder do not,
and will not, contravene or conflict with any law, statute or regulation
whatsoever to which Guarantor is subject or constitute a default (or an event
which with notice or lapse of time or both would constitute a default) under, or
result in the breach of, any indenture, mortgage, deed of trust, charge, lien,
or any contract, agreement or other instrument to which Guarantor is a party or
which may be applicable to Guarantor. This Guaranty is a legal and binding
obligation of Guarantor and is enforceable in accordance with its terms, except
as limited by bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors’ rights.

3.6 Survival. All representations and warranties made by Guarantor herein shall
survive the execution hereof.

3.7 Review of Documents. Guarantor has examined the Note and all of the Loan
Documents.

3.8 Litigation. Except as otherwise disclosed to Lender or set forth on Schedule
1 attached hereto and incorporated herein, there are no proceedings pending or,
to Guarantor’s actual knowledge, threatened before any court, governmental or
administrative agency which, if decided adversely to Guarantor, would materially
adversely affect the financial condition of Guarantor or the authority of
Guarantor to enter into, or the validity or enforceability of this Guaranty. In
addition, except as otherwise disclosed to Lender or set forth on Schedule 1
attached hereto and incorporated herein, (a) there are no outstanding
judgment(s) against or relating to Guarantor, (b) Guarantor has not (i) had any
property foreclosed upon, (ii) given a deed in lieu of foreclosure, or
(iii) been involved in any criminal proceedings where Guarantor was the
defendant and (c) Guarantor has not defaulted on any loan or other indebtedness.

3.9 Tax Returns. Guarantor has filed all required federal, state and local tax
returns and has paid all taxes as shown on such returns as they have become due.
No claims have been assessed and are unpaid with respect to such taxes.

3.10 OFAC. Guarantor is not and will not become a person (individually, a
“Prohibited Person” and collectively “Prohibited Persons”) listed on the
Specially Designated Nationals and Blocked Persons List maintained by the Office
of Foreign Asset Control, U.S. Department of the Treasury (the “OFAC List”) or
otherwise subject to any other prohibitions or restriction imposed by laws,
rules, regulations or executive orders, including Executive Order No. 13224,
administered by OFAC (collectively the “OFAC Rules”). Guarantor represents and
covenants that it also (a) is not and will not become owned or controlled by a
Prohibited Person, (b) is not acting and will not act for or on behalf of a
Prohibited Person, (c) is not otherwise associated with and will not become
associated with a Prohibited Person, (d) is not providing and will not provide
any material, financial or technological support for or financial or other
service to or in support of acts of terrorism or a Prohibited Person. Guarantor
shall immediately notify Lender if Guarantor or any member, partner or
beneficial owner of Guarantor becomes a Prohibited Person or (i) is indicted on
or (ii) arraigned and held over on charges involving money laundering or
predicate crimes to money laundering. Guarantor will not enter into any
transaction or undertake any activities related to the Loan in violation of the
Federal Bank Secrecy Act, as amended (“BSA”), 31 U.S.C. §5311, et seq. or any
federal or state laws, rules, regulations or executive orders, including, but
not limited to, 18 U.S.C. §§1956, 1957 and 1960, prohibiting money laundering
and terrorist financing (collectively “Anti-Money

 

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Laundering Laws”). Guarantor shall (A) not use or permit the use of any proceeds
of the Loan in any way that will violate either the OFAC Rules or Anti-Money
Laundering Laws, (B) comply and cause all of its subsidiaries to comply with
applicable OFAC Rules and Anti-Money Laundering Laws, (C) provide information as
Lender may require from time to time to permit Lender to satisfy its obligations
under the OFAC Rules and/or the Anti-Money Laundering Laws and (D) not engage in
or conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the foregoing.
Guarantor shall immediately notify Lender if any Tenant becomes a Prohibited
Person or (1) is convicted of, (2) pleads nolo contendere to, (3) is indicted
on, or (4) is arraigned and held over on charges involving money laundering or
predicate crimes to money laundering.

ARTICLE 4

SUBORDINATION OF CERTAIN INDEBTEDNESS

4.1 Subordination of All Guarantor Claims. As used herein, the term “Guarantor
Claims” shall mean all debts and liabilities of Borrower to Guarantor, whether
such debts and liabilities now exist or are hereafter incurred or arise, or
whether the obligations of Borrower thereon be direct, contingent, primary,
secondary, several, joint and several, or otherwise, and irrespective of whether
such debts or liabilities be evidenced by note, contract, open account, or
otherwise, and irrespective of the person or persons in whose favor such debts
or liabilities may, at their inception, have been, or may hereafter be created,
or the manner in which they have been or may hereafter be acquired by Guarantor.
The Guarantor Claims shall include without limitation all rights and claims of
Guarantor against Borrower (arising as a result of subrogation or otherwise) as
a result of Guarantor’s payment of all or a portion of the Guaranteed
Obligations to the extent the provisions of Paragraph 1.4 hereof are
unenforceable. Upon the occurrence of an Event of Default or the occurrence of
an event which would, with the giving of notice or the passage of time, or both,
constitute an Event of Default, Guarantor shall not receive or collect, directly
or indirectly, from Borrower or any other party any amount upon the Guarantor
Claims.

4.2 Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving Guarantor as debtor, Lender shall have the right to prove its claim in
any such proceeding so as to establish its rights hereunder and receive directly
from the receiver, trustee or other court custodian dividends and payments which
would otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such
dividends and payments to Lender. Should Lender receive, for application upon
the Guaranteed Obligations, any such dividend or payment which is otherwise
payable to Guarantor, and which, as between Borrower and Guarantor, shall
constitute a credit upon the Guarantor Claims, then upon payment to Lender in
full of the Guaranteed Obligations, Guarantor shall become subrogated to the
rights of Lender to the extent that such payments to Lender on the Guarantor
Claims have contributed toward the liquidation of the Guaranteed Obligations,
and such subrogation shall be with respect to that proportion of the Guaranteed
Obligations which would have been unpaid if Lender had not received dividends or
payments upon the Guarantor Claims.

4.3 Payments Held in Trust. In the event that, notwithstanding anything to the
contrary in this Guaranty, Guarantor should receive any funds, payment, claim or
distribution which is prohibited by this Guaranty, Guarantor agrees to hold in
trust for Lender an amount equal to the amount of all funds, payments, claims or
distributions so received, and agrees that it shall have absolutely no dominion
over the amount of such funds, payments, claims or distributions so received
except to pay them promptly to Lender, and Guarantor covenants promptly to pay
the same to Lender.

4.4 Liens Subordinate. Guarantor agrees that any liens, security interests,
judgment liens, charges or other encumbrances upon Borrower’s assets securing
payment of the Guarantor Claims shall be and remain inferior and subordinate to
any liens, security interests, judgment liens, charges or other encumbrances
upon Borrower’s assets securing payment of the Guaranteed Obligations,
regardless of whether such encumbrances in favor of Guarantor or Lender
presently exist or are hereafter created or attach. Without the prior written
consent of Lender, Guarantor shall not (a) exercise or enforce any creditor’s
right it may have

 

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against Borrower, or (b) foreclose, repossess, sequester or otherwise take steps
or institute any action or proceedings (judicial or otherwise, including without
limitation the commencement of, or joinder in, any liquidation, bankruptcy,
rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens,
mortgages, deeds of trust, security interest, collateral rights, judgments or
other encumbrances on assets of Borrower held by Guarantor.

ARTICLE 5

MISCELLANEOUS

5.1 Waiver. No failure to exercise, and no delay in exercising, on the part of
Lender, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right. The rights of Lender hereunder shall
be in addition to all other rights provided by law. No modification or waiver of
any provision of this Guaranty, nor consent to departure therefrom, shall be
effective unless in writing and no such consent or waiver shall extend beyond
the particular case and purpose involved. No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other instances without such notice or demand.

5.2 Notices. Any notice, demand, statement, request or consent made hereunder
shall be in writing and shall be deemed to be received by the addressee on the
first business day after such notice is tendered to a nationally recognized
overnight delivery service or on the third day following the day such notice is
deposited with the United States Postal Service first class certified mail,
return receipt requested, in either instance, addressed to the address, as set
forth below, of the party to whom such notice is to be given, or to such other
address as either party shall in like manner designate in writing. The addresses
of the parties hereto are as follows:

Guarantor:

U.S. Commercial LLC

111 Corporate Drive

Suite 120

Ladera Ranch, California 92694

USA Self Storage REIT, Inc.

111 Corporate Drive

Suite 120

Ladera Ranch, California 92694

USA Self Storage REIT II, Inc.

111 Corporate Drive

Suite 120

Ladera Ranch, California 92694

Lender:

LaSalle Bank National Association

135 S. LaSalle Street

Suite 3410

Chicago, Illinois 60603

Attn: Real Estate Capital Markets Re: Baffin Bay Self Storage

5.3 Governing Law; Jurisdiction. THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD

 

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TO CONFLICTS OF LAW PRINCIPLES, AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY COURT
OF COMPETENT JURISDICTION LOCATED IN THE CITY OF CHICAGO AND STATE OF ILLINOIS
IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY.

5.4 Invalid Provisions. If any provision of this Guaranty is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
of this Guaranty, such provision shall be fully severable and this Guaranty
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part of this Guaranty, and the remaining
provisions of this Guaranty shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Guaranty, unless such continued effectiveness of this
Guaranty, as modified, would be contrary to the basic understandings and
intentions of the parties as expressed herein.

5.5 Amendments. This Guaranty may be amended only by an instrument in writing
executed by the party or an authorized representative of the party against whom
such amendment is sought to be enforced.

5.6 Parties Bound; Assignment. This Guaranty shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns,
legal representatives, heirs, executors, and administrators; provided, however,
that Guarantor may not, without the prior written consent of Lender, assign any
of its rights, powers, duties or obligations hereunder.

5.7 Headings. The article, paragraph and subparagraph headings are for
convenience of reference only and shall in no way affect the interpretation of
this Guaranty.

5.8 Recitals. The recital and introductory paragraphs hereof are a part hereof,
form a basis for this Guaranty and shall be considered prima facie evidence of
the facts and documents referred to therein.

5.9 Counterparts. To facilitate execution, this Guaranty may be executed in as
many counterparts as may be convenient or required. It shall not be necessary
that the signature or acknowledgment of, or on behalf of, each party, or that
the signature of all persons required to bind any party, or the acknowledgment
of such party, appear on each counterpart. All counterparts shall collectively
constitute a single instrument. It shall not be necessary in making proof of
this Guaranty to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, and the respective
acknowledgments of, each of the parties hereto. Any signature or acknowledgment
page to any counterpart may be detached from such counterpart without impairing
the legal effect of the signatures or acknowledgments thereon and thereafter
attached to another counterpart identical thereto except having attached to it
additional signature or acknowledgment pages.

5.10 Financial Statements: Guarantor shall furnish or cause to be furnished to
Lender the following:

(a) within sixty (60) days after the close of each fiscal year of Guarantor, a
balance sheet of Guarantor dated as of the close of such fiscal year;

(b) contemporaneously with its delivery to the Internal Revenue Service, copies
of any and all tax returns, requests for extension and other similar items; and

(c) from time to time, such additional financial statements and financial
information as Lender shall require.

All balance sheets shall include, among other things, disclosure of all
contingent liabilities and changes in financial condition, together with such
supporting schedules and documentation as Lender shall require.

 

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All balance sheets shall be certified by Guarantor.

5.11 Rights and Remedies. If Guarantor becomes liable for any indebtedness owing
by Borrower to Lender, by endorsement or otherwise, other than under this
Guaranty, such liability shall not be in any manner impaired or affected hereby
and the rights of Lender hereunder shall be cumulative of any and all other
rights that Lender may ever have against Guarantor. The exercise by Lender of
any right or remedy hereunder or under any other instrument, or at law or in
equity, shall not preclude the concurrent or subsequent exercise of any other
right or remedy.

5.12 Entirety. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTOR
AND LENDER WITH RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED OBLIGATIONS
AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF.
THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A FINAL AND COMPLETE
EXPRESSION OF THE TERMS OF THIS GUARANTY, AND NO COURSE OF DEALING BETWEEN
GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY,
SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY AGREEMENT. THERE ARE NO ORAL
AGREEMENTS BETWEEN GUARANTOR AND LENDER.

5.13 Waiver of Right to Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY LAW
GUARANTOR AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY OF
ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY
TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO
THIS GUARANTY, THE MORTGAGE, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY, INTENTIONALLY AND VOLUNTARILY BY
GUARANTOR AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR. GUARANTOR ACKNOWLEDGES THAT
NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY
ACTION WHICH IN ANY WAY MODIFIES OR NULLIFIES ITS EFFECT. GUARANTOR ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THE LOAN, THAT LENDER
HAS RELIED ON THIS WAIVER IN ENTERING INTO THE LOAN DOCUMENTS AND THAT LENDER
WILL CONTINUE TO RELY ON THIS WAIVER IN ITS FUTURE DEALINGS. GUARANTOR FURTHER
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED) IN THE SIGNING OF THIS GUARANTY AND ANY OTHER LOAN DOCUMENTS THAT
GUARANTOR HAS ENTERED INTO AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.

5.14 Enforceability. Guarantor hereby acknowledges that: (a) the obligations
undertaken by Guarantor in this Guaranty are complex in nature, (b) numerous
possible defenses to the enforceability of these obligations may presently exist
and/or may arise hereafter, (c) as part of Lender’s consideration for entering
into this transaction, Lender has specifically bargained for the waiver and
relinquishment by Guarantor of all such defenses, and (d) Guarantor has had the
opportunity to seek and receive legal advice from skilled legal counsel in the
area of financial transactions of the type contemplated herein. Given all of the
above, Guarantor does hereby represent and confirm to Lender that Guarantor is
fully informed regarding, and that Guarantor does thoroughly understand: (i) the
nature of all such possible defenses, and (ii) the circumstances under which
such defenses may arise, and (iii) the benefits which such defenses might confer
upon Guarantor, and (iv) the legal consequences to Guarantor of waiving such
defenses. Guarantor acknowledges that Guarantor makes this Guaranty with the
intent that this Guaranty and all of the informed

 

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waivers herein shall each and all be fully enforceable by Lender, and that
Lender is induced to enter into this transaction in material reliance upon the
presumed full enforceability thereof.

5.15 Limitation on Liability. At such time as the Net Worth (defined below) of
Commercial is at least “$10,000,000.00 for three (3) consecutive calendar
months, (calculated in accordance with the methodology used to prepare
Commercial’s financial statements which were submitted to Lender in connect with
the Loan) and provided that neither Borrower nor any Guarantor are in default
under any of the Loan Documents, REIT I and REIT II shall have no further
liability under this Guaranty.

As used in this Section 5.15, the following terms shall have the meanings set
forth below:

(i) “GAAP” shall mean generally accepted accounting principles consistently
applied.

(ii) “Net Worth” shall mean, as of a given date, (x) the total assets of a
Guarantor as of such date less (y) such Guarantor’s total liabilities as of such
date, determined in accordance with GAAP.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK:

SIGNATURE PAGE FOLLOWS]

 

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EXECUTED as of the day and year first above written.

 

GUARANTOR: U.S. Commercial LLC, a Virginia limited liability company By:  

/s/ H. Michael Schwartz

Name: H. Michael Schwartz Its: President

USA Self Storage REIT, Inc., a

Maryland corporation

By:  

/s/ H. Michael Schwartz

Name: H. Michael Schwartz Its:       President

USA Self Storage REIT II, Inc., a

Maryland corporation

By:  

/s/ H. Michael Schwartz

Name: H. Michael Schwartz Its:       President

 

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