Exhibit 10.1

CONTRIBUTION AGREEMENT

BY AND AMONG

STRATEGIC STORAGE OPERATING PARTNERSHIP II, L.P.,

AS CONTRIBUTEE,

STRATEGIC STORAGE TRUST II, INC.,

AND

SMARTSTOP ASSET MANAGEMENT, LLC AND

SMARTSTOP OP HOLDINGS, LLC,

AS CONTRIBUTOR

DATED AS OF JUNE 28, 2019

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This CONTRIBUTION AGREEMENT (this “Agreement”) is entered into as of June 28,
2019, by and among Strategic Storage Operating Partnership II, L.P., a Delaware
limited partnership (the “Operating Partnership” or the “Contributee”), and
Strategic Storage Trust II, Inc., a Maryland corporation (“SST II”), as the
general partner of the Contributee, on the one hand, and SmartStop Asset
Management, LLC, a Delaware limited liability company (“SAM”), and SmartStop OP
Holdings, LLC, a Delaware limited liability company (“SS OP Holdings”) (SAM and
SS OP Holdings collectively referred to as the “Contributor”), on the other
hand. The Contributee and the Contributor are collectively referred to as the
“Parties,” and each, a “Party.” Capitalized terms used in this Agreement shall
have the meanings ascribed to such terms in Article 9 of this Agreement.

R E C I T A L S

WHEREAS, SAM is the parent company of SS OP Holdings, which is in turn the
parent company of SmartStop Storage Advisors, LLC (“SSA”);

WHEREAS, SSA owns 100% of the membership interests of each of Strategic Storage
Advisor II, LLC, Strategic Storage Advisor IV, LLC, Strategic Storage Property
Management II, LLC, SS Growth Property Management, LLC, Strategic Storage
Property Management IV, LLC, SS Growth Advisor II, LLC, SS Growth Property
Management II, LLC, SmartStop TI, LLC (which in turn owns 100% of the membership
interests of each of SmartStop TI II, LLC, SmartStop TI GT, LLC, SmartStop TI
IV, LLC, and SmartStop TI GT II, LLC), SSPM Canada, LLC (which in turn owns 100%
of the membership interests of Strategic Storage PM Canada, ULC), SAM Canadian
JV, LLC, and SAM Canadian Developer, LLC (such entities each individually an
“SSA Subsidiary” and collectively the “SSA Subsidiaries”);

WHEREAS, each of SAM and SS OP Holdings own certain operating assets including,
but not limited to, the Contributed Assets (as defined below);

WHEREAS, SSA, through the SSA Subsidiaries, is engaged in the business of
serving as the advisor and property manager to SST II, Strategic Storage Trust
IV, Inc. (“SST IV”), and Strategic Storage Growth Trust II, Inc. (“SSGT II”),
including performance of the self storage real estate asset management and
property management services, tenant insurance program, and sponsor platform
supporting the real estate operations of SST II, SST IV, and SSGT II (the
“Business”), and owns certain assets including, but not limited to, direct or
indirect ownership of the membership interests in the SSA Subsidiaries described
above;

WHEREAS, concurrently with this Agreement, certain of the Parties are entering
into the Transaction Documents; and

WHEREAS, the Contributee and the Contributor desire to enter into a
self-administration transaction in which the Contributor contributes to the
Contributee, and the Contributee receives and accepts, the Contributed Assets.

NOW, THEREFORE, in consideration of the above recitals, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

 

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ARTICLE 1

CONTRIBUTION OF ASSETS

1.1 Contribution of the Contributed Assets. On and subject to the terms and
conditions of this Agreement, at the Closing, the Contributor agrees to
contribute, convey, transfer, irrevocably assign and deliver to the Contributee
the assets specifically set forth on, or specifically described in, Schedule 1.1
(collectively, the “Contributed Assets”), free and clear of all Encumbrances
(other than Permitted Encumbrances) in exchange for the Contribution Value, and
at the Closing, the Contributee agrees to accept contribution of the Contributed
Assets and assume the Assumed Liabilities, if any, in exchange for the
Contribution Value.

1.2 Excluded Assets. Notwithstanding anything to the contrary contained herein,
the Contributed Assets shall not include, and the Contributee shall not have any
right to receive or otherwise acquire, any of the rights, properties or assets
of the Contributor specifically set forth on, or specifically described in,
Schedule 1.2 (collectively, the “Excluded Assets”).

1.3 Assumed Liabilities. On the terms and subject to the conditions set forth in
this Agreement, at the Closing, the Contributee shall assume from the
Contributor (a) the Liabilities specifically set forth on, or specifically
described in, Schedule 1.3, and (b) all Liabilities accruing on or after Closing
relating to or arising out of or with respect to the Business or the Contributed
Assets (each an “Assumed Liability” and, collectively, the “Assumed
Liabilities”), and the Contributee shall thereafter pay, perform and otherwise
discharge the Assumed Liabilities in accordance with their terms. Except for the
Assumed Liabilities, nothing contained in any Transaction Document shall be
interpreted or construed to result in the assumption by the Contributee, or
result in the Contributee becoming in any way liable for, any other Liability of
the Contributor (each an “Excluded Liability” and, collectively, the “Excluded
Liabilities”).

1.4 Consideration. The consideration for the Contributed Assets to be delivered
at Closing shall consist of (a) a cash payment of $769,126 (the “Cash
Consideration”) by Contributee to SAM, (b) the assumption by Contributee of
existing debt of SSA and the SSA Subsidiaries in the aggregate amount of
$15,000,000 (the “Existing Debt”), and (c) the issuance and delivery to SS OP
Holdings of (i) 8,698,956 units of Class A-1 limited partnership interests in
the Contributee (the “Class A-1 OP Units”) having the agreed value per unit set
forth on Schedule 1.4(c)(i), and (ii) 3,283,302 units of Class A-2 limited
partnership interests in the Contributee (the “Class A-2 OP Units”; together
with the Class A-1 OP Units, the “OP Units”) having the agreed value per unit
set forth on Schedule 1.4(c)(ii) (the sum of (a), (b), and (c), the
“Contribution Value”).

1.5 Assignment of Certain Contracts. Subject to Section 1.6, at the Closing,
effective as of the Closing Date, the Contributee shall succeed to the rights
and privileges of the Contributor, and shall perform, or cause its subsidiaries
to perform, at and after the Closing Date as an Assumed Liability, all Contracts
and Permits of SAM, SS OP Holdings, and SSA that are set forth on Schedule 1.5
(the “Assigned Contracts”).

1.6 Consent of Third Parties. Notwithstanding anything to the contrary contained
in any Transaction Document, to the extent that the assignment of all or any
portion of any of the Assigned Contracts shall require the consent of the other
party thereto or any third Person (including the Contributor Consents and SST II
Required Third Party Consents), or if any Permit is non-assignable or assignable
only with the consent of the Governmental Entity issuing the same or any third
Person, then in any and all such instances, this Agreement shall not constitute
an agreement to assign any such Assigned Contracts or Permits, if such an
assignment would constitute a breach or violation thereof. In order, however, to
provide the Contributee the full realization and value of such Assigned
Contracts and Permits in the event that such

 

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consent with respect to such Assigned Contract or Permit shall not have been
obtained, the Contributor shall cooperate with the Contributee in any
arrangement reasonably acceptable to the Parties intended to both (a) provide
the Contributee with the benefit of any such Contributed Assets and (b) cause
the Contributee to bear all costs and Liabilities (including Taxes) of or under
any such Contributed Assets; provided, that (i) SAM and SS OP Holdings shall not
be required to pay any amounts or provide other consideration to any Third Party
in obtaining any such consents, and (ii) for so long as Contributor holds any
such Assigned Contracts or Permits pursuant to the foregoing, the Contributee
shall indemnify and hold Contributor and its Affiliates harmless from any
Liabilities incurred or asserted as a result of the Contributee’s or such
Affiliate’s ownership, management or operation of any such Assigned Contracts or
Permits.

1.7 Tax Treatment. The acquisition of the Contributed Assets from the
Contributor by the Contributee in exchange for the Contribution Value is
intended to qualify as (a) a part tax-deferred contribution of assets to the
Contributee in exchange for OP Units under Code Section 721 and (b) a part sale
from the Contributor to the Contributee under Code Section 707. Contributee and
Contributor each hereby agree to report the transactions contemplated herein for
all income tax purposes (including for purposes of reporting on any income tax
returns filed by Contributee and Contributor) in a manner that is consistent
with the provisions of this Section 1.7 and none of the Parties shall take any
position (whether in audits, or Tax Returns or otherwise) that is inconsistent
with the provisions of this Section 1.7 unless required to do so by applicable
Law.

1.8 Contributor Name. From and after the Closing Date, the Contributee, on its
own behalf and on behalf of its Affiliates, grants to the Contributor a limited,
non-exclusive, non-transferable, non-sublicenseable, royalty-free license to use
the name, trademark, and service mark “SmartStop,” and certain domain names, as
set forth and subject to the terms and conditions of the Trademark License
Agreement.

ARTICLE 2

CLOSING

2.1 Closing. The closing of the contribution and exchange of the Contributed
Assets, as the case may be (the “Closing”), is taking place contemporaneously
with the execution and delivery of this Agreement and all other Transaction
Documents by the Parties who or which are parties thereto at the offices of SAM,
10 Terrace Road, Ladera Ranch, California 92694, at 11:30 a.m., local time on
Friday, June 28, 2019 (the “Closing Date”).

2.2 Closing Deliveries by SAM. On the Closing Date, SAM shall deliver or cause
to be delivered to the Contributee:

(a) A Bill of Sale, Assignment and Assumption Agreement, substantially in the
form set forth as Exhibit A (a “Bill of Sale and Assumption Agreement”), duly
executed by SAM and SS OP Holdings, assigning and transferring the Contributed
Assets used in the Business and effecting the assumption of the Assumed
Liabilities;

(b) An Assignment of Contracts, substantially in the form set forth as Exhibit B
(an “Assignment of Contracts Agreement”), duly executed by SAM, SS OP Holdings,
and SSA, assigning and transferring the Assigned Contracts;

(c) An Assignment of Domain Names, substantially in the form set forth as
Exhibit C (an “Assignment of Domain Names”), duly executed by SAM;

 

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(d) An Assignment of Trademarks, substantially in the form set forth as Exhibit
D (an “Assignment of Trademarks”) duly executed by SAM;

(e) The Trademark License Agreement, duly executed by SAM;

(f) An assignment in form and substance reasonably acceptable to the Contributee
of SS OP Holdings’ right, title and interest in all of the membership interests
in SSA, duly executed by SS OP Holdings and SSA;

(g) Any Contributor Consents received on or before the Closing Date;

(h) The Severance Agreements between the Key Employees and SSA, SST II, and
Contributee, duly executed by such individuals and SSA (the “Key Person
Agreements”);

(i) The Administrative Services Agreement, duly executed by SAM and SSA;

(j) A certificate of the Secretary of SAM, certifying as to:

(A) Resolutions of SAM’s and SS OP Holdings’ managers and members, if necessary,
authorizing the execution, delivery and performance of the Transaction Documents
to which SAM and SS OP Holdings, respectively, is a party, and

(B) The incumbency of any and all SAM and SS OP Holdings officers or managers,
executing the Transaction Documents on behalf of SAM and SS OP Holdings,
respectively;

(k) A good standing certificate, dated not earlier than ten (10) Business Days
prior to the Closing Date, for SAM, SS OP Holdings, and SSA from their
respective jurisdiction of formation or organization, as applicable;

(l) The Redemption of Limited Partner Interest Agreement, duly executed by SST
II Advisor;

(m) The Registration Rights Agreement, duly executed by SS OP Holdings;

(n) A certification of non-foreign status of the Contributor, in form and
substance reasonably satisfactory to the Contributee, in accordance with
Treasury Regulations Section 1.1445-2(b);

(o) Such other certificates, opinions, documents or instruments as may
reasonably be requested of SAM, SS OP Holdings, and SSA by Contributee,
consistent with the terms of and transactions contemplated by this Agreement;

(p) Proof reasonably acceptable to the Contributee that (i) the employment of
all Business Employees, (ii) except as may be limited by applicable Law, any
related personnel records (including all human resources and other records), and
(iii) all employee handbooks, training materials and other marketing and expense
management programs and materials that pertain to the Business, have been
properly transferred to, or established at, SSA prior to the Closing, with all
necessary third Person consents (except that SAM may retain copies of such
records or files, to the extent that it determines, in its reasonable
discretion, is necessary to satisfy its obligations under Law);

 

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(q) The Assumption Agreement and First Amendment to Credit Agreement, duly
executed by SST II, the Contributee, SmartStop TI II, LLC, SmartStop TI GTI, LLC
and SmartStop TI IV, LLC; and

(r) The Indemnity Agreement by and among SST II and H. Michael Schwartz, among
other parties, duly executed by SST II.

2.3 Closing Deliveries by the Contributee. On the Closing Date, SST II, or the
Contributee, as the case may be, shall deliver to the Contributor:

(a) Payment of the Cash Consideration to an account specified in writing by SS
OP Holdings;

(b) Issuance of the OP Units to SS OP Holdings, in accordance with Section 1.4,
with such evidence of the OP Units accompanied by such other good and sufficient
instruments of transfer as SS OP Holdings reasonably deems necessary and
appropriate to vest in such SS OP Holdings all right, title and interest in and
to such OP Units;

(c) The Bill of Sale and Assumption Agreement, duly executed by Contributee;

(d) The Assignment of Contracts Agreement, referred to in Section 2.2(b), duly
executed by Contributee;

(e) The Assignment of Domain Names, referred to in Section 2.2(c), duly executed
by Contributee;

(f) The Assignment of Trademarks, referred to in Section 2.2(d), duly executed
by Contributee;

(g) The Trademark License Agreement, referred to in Section 2.2(e), duly
executed by Contributee;

(h) The assignment referred to in Section 2.2(f), duly executed by Contributee;

(i) The Key Person Agreements, referred to in Section 2.2(h), duly executed by
SST II and the Contributee;

(j) The Administrative Services Agreement, referred to in Section 2.2(i), duly
executed by SST II and the Contributee;

(k) A certificate of the Secretary of SST II, certifying as to:

(A) Resolutions of the board of directors of SST II on behalf of SST II itself
and as general partner of the Contributee authorizing the execution, delivery
and performance of the Transaction Documents to which SST II and the
Contributee, respectively, is a party, and

(B) The incumbency of any and all SST II officers, executing the Transaction
Documents on behalf of SST II;

 

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(l) Good standing certificates, dated not earlier than ten (10) Business Days
prior to the Closing Date, for SST II and the Contributee, respectively, from
their respective jurisdictions of formation or organization;

(m) The Redemption of Limited Partner Interest Agreement, duly executed by SST
II and the Contributee;

(n) The Registration Rights Agreement, duly executed by SST II; and

(o) Such other certificates, opinions, documents or instruments as may
reasonably be requested of SST II and/or the Contributee by SAM, consistent with
the terms of, and the transactions contemplated by, this Agreement; and

(p) The Assumption Agreement and First Amendment to Credit Agreement, duly
executed by SAM.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SAM AND SS OP HOLDINGS

Except as set forth in, or qualified by any matter set forth in, the Schedules
(it being agreed that the disclosure of any matter in any section in the
Schedules shall be deemed to have been disclosed in any other section in the
Schedules to which the applicability of such disclosure is reasonably apparent),
SAM and SS OP Holdings, severally and not jointly, and each solely as to itself,
represent and warrant to the Contributee as follows:

3.1 Organization and Good Standing of SAM and SS OP Holdings. Each of SAM and SS
OP Holdings is a limited liability company duly organized, validly existing, and
in good standing under the Limited Liability Company Act of the State of
Delaware as amended. Each of SAM and SS OP Holdings is duly authorized to
conduct its business and is in good standing under the applicable Laws of each
jurisdiction where such qualification is required, except where the failure to
be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect on the Business. Each of SAM and SS OP Holdings has the requisite
power and authority necessary to own or lease its properties and to carry on its
business as presently conducted. Each of SAM and SS OP Holdings has delivered to
SST II or the Contributee complete and correct copies of its Organizational
Documents, as amended to date.

3.2 Organization and Good Standing of SSA and SSA Subsidiaries. SSA is, and each
of the SSA Subsidiaries is, a limited liability company duly organized, validly
existing, and in good standing under the Limited Liability Company Act of the
State of Delaware as amended, except that Strategic Storage PM Canada, ULC is an
unlimited liability company duly organized, validly existing, and in good
standing under the Business Corporations Act (British Columbia). SSA, along with
each SSA Subsidiary, is duly authorized to conduct its business and is in good
standing under the applicable Laws of each jurisdiction where such qualification
is required. SSA, along with each SSA Subsidiary, has the requisite power and
authority necessary to own or lease its properties and to carry on its business
as presently conducted. Each of SSA and each SSA Subsidiary has delivered to SST
II or the Contributee complete and correct copies of its Organizational
Documents, as amended to date.

3.3 Power and Authority; Enforceability. Each of SAM, SS OP Holdings, SSA, and
the SSA Subsidiaries have all requisite power and authority to enter into each
of the Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby or thereby. The execution and delivery of each
of the Transaction Documents by SAM, SS OP Holdings, SSA, and the SSA
Subsidiaries

 

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and the consummation by SAM, SS OP Holdings, SSA, and the SSA Subsidiaries of
the transactions contemplated hereby or thereby have been duly authorized by all
necessary action on their respective parts. Each of the Transaction Documents
has been, or upon execution and delivery will be, duly executed and delivered by
SAM, SS OP Holdings, SSA, and the SSA Subsidiaries, as applicable, and assuming
the due authorization, execution and delivery of such Transaction Documents by
the other Parties thereto, will constitute the valid and binding obligations of
SAM, SS OP Holdings, SSA, and the SSA Subsidiaries, enforceable against SAM, SS
OP Holdings, SSA, and the SSA Subsidiaries in accordance with their terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).

3.4 No Conflicts; Required Consents. Except as provided in Schedule 3.4, the
execution and delivery of the Transaction Documents by SAM, SS OP Holdings, SSA,
and the SSA Subsidiaries does not, and the performance by SAM, SS OP Holdings,
SSA, and the SSA Subsidiaries of the transactions contemplated hereby or thereby
will not, (a) violate, conflict with, or result in any breach of any provision
of their respective Organizational Documents, (b) violate, conflict with, or
result in a violation or breach of, or constitute a default (with or without due
notice or lapse of time or both) under, or permit the termination of, or result
in the acceleration of, or entitle any Person to accelerate, any obligation of
SAM or SS OP Holdings applicable to the Business, or any obligation of SSA or
the SSA Subsidiaries, or result in the loss of any benefit of, or give rise to
the creation of any Encumbrance (other than a Permitted Encumbrance) on, any
Contributed Asset under any of the terms, conditions or provisions of any
material instrument or obligation applicable to the Business, or (c) violate any
Law applicable to the Business or by which or to which any Contributed Asset is
bound or subject, except, in each case of clause (b) or (c), as would not,
individually or in the aggregate, be material to the Business. Schedule 3.4 sets
forth a complete and accurate list of each material consent, approval, waiver
and authorization that is required to be obtained by any of SAM, SS OP Holdings,
SSA or any SSA Subsidiary, as applicable, from, and each material notice that is
required to be made by any of SAM, SS OP Holdings, SSA or any SSA Subsidiary, as
applicable, to, any Person in connection with the execution, delivery and
performance of this Agreement by any of SAM, SS OP Holdings, SSA or any SSA
Subsidiary (the “Contributor Consents”).

3.5 Capitalization. The equity capitalization of SSA is as set forth on Schedule
3.5(a) hereto. Except for this Agreement and as set forth on Schedule 3.5(a),
there are no rights of any kind, written or oral, granted by SAM, SS OP
Holdings, SSA, or any SSA Subsidiary to any Person to acquire any interest in
SSA. The equity capitalization of each SSA Subsidiary is as set forth on
Schedule 3.5(b) hereto. Except for this Agreement and as set forth on Schedule
3.5(a), there are no rights of any kind, written or oral, granted by SAM, SS OP
Holdings, SSA, or any SSA Subsidiary to any Person to acquire any interest in
any SSA Subsidiary.

3.6 Financial Statements; Absence of Changes or Events.

(a) Schedule 3.6(a) contains: (i) the consolidated audited balance sheets of SAM
and its subsidiaries as of December 31, 2018 and 2017, respectively, and the
related statements of income and cash flows for the fiscal years then ended; and
(ii) the unaudited balance sheet of SAM and its subsidiaries as of March 31,
2019, and the related statements of income for the three (3) months then ended
(collectively, the “SAM Financial Statements”). Except as set forth therein or
in Schedule 3.6(a), the SAM Financial Statements have been prepared in
accordance with GAAP, applied on a basis consistent with SAM’s prior practices,
are consistent with SAM’s books and records, and in all material respects
present accurately and fairly the financial position, results of operations and
cash flows of SAM and its subsidiaries as of their respective dates and for the
respective periods covered thereby in accordance with GAAP; provided, however,
that such unaudited financial statements are subject to year-end adjustments,
none of which are expected as of the date hereof to be material.

 

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(b) Except (i) in connection with or in preparation for the transactions
contemplated by this Agreement or (ii) as set forth in Schedule 3.6(b), since
March 31, 2019 through the date of this Agreement, each SSA Subsidiary has
conducted its Business in the ordinary course of business in all material
respects, consistent with past practice. Without limiting the foregoing, since
such date through the date of this Agreement, with respect to the Business,
there has not occurred a Material Adverse Effect.

3.7 Absence of Undisclosed Liabilities. Except (a) in connection with or in
preparation for the transactions contemplated by this Agreement or (b) as set
forth in Schedule 3.7, as of the date hereof, to SAM’s Knowledge, neither SSA
nor any SSA Subsidiary has any material Liability (whether known or unknown,
accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due and regardless of when asserted) other than Liabilities that (i) are
reflected on the Liabilities side of the SAM Financial Statements, (ii) have
arisen after March 31, 2019 in the ordinary course of business, or (iii) are
Excluded Liabilities.

3.8 Compliance with Applicable Laws.

(a) Except as set forth in Schedule 3.8(a), since January 1, 2018 (i) SAM, SS OP
Holdings, SSA, and the SSA Subsidiaries, possess, and are in compliance in all
material respects with, all Permits, approvals, franchises and registrations
with Governmental Entities required to operate the Business and own, lease or
otherwise hold the Contributed Assets under applicable Law; (ii) all material
Permits required for the conduct of the Business in the ordinary course of
business, consistent with past practices, are in force and effect, and there are
no Actions pending, or to SAM’s Knowledge, threatened, that seek the revocation,
cancellation, suspension or any material adverse modification of any such
Permits; and (iii) SAM, SS OP Holdings, SSA, and the SSA Subsidiaries have
conducted the Business and are now doing so in material compliance with all Laws
applicable to such Permits, approvals, franchises and registrations with
Governmental Entities. The Permits included in the Contributed Assets
constitute, to SAM’s Knowledge, all of the material Permits required for the
Contributee to own and use the Contributed Assets and operate the Business in
the ordinary course of business, consistent with past practices commencing on
the Closing Date.

(b) Except as set forth in Schedule 3.8(a) and to the extent not otherwise
provided in Section 3.8(a), (i) since January 1, 2018, SAM, SS OP Holdings, SSA,
and the SSA Subsidiaries have conducted the Business and are now doing so in
material compliance with all applicable Laws; and (ii) none of SAM, SS OP
Holdings, SSA, or the SSA Subsidiaries have received any written notice of any
investigation commenced or pending by any Governmental Entity with respect to
SSA, any SSA Subsidiary, the Business, or the Contributed Assets, except where
such investigation would not have a Material Adverse Effect on the Business.
Except as would not have a Material Adverse Effect on the Business, each of SSA
and each SSA Subsidiary is in compliance with its Organizational Documents.

3.9 Legal Proceedings. Except as would not have a Material Adverse Effect on the
Business or as set forth in Schedule 3.9, (a) there are no Actions pending, or
to SAM’s Knowledge, threatened, against SAM, SS OP Holdings, SSA, or any SSA
Subsidiary, or the respective businesses and material properties or assets of
SSA and each SSA Subsidiary, or with respect to which SSA or any SSA Subsidiary
would have an indemnification obligation, by or before any arbitrator or
Governmental Entity, in each case with respect to the Business, nor is there any
material investigation relating to SAM, SS OP Holdings, SSA, or any SSA
Subsidiary, or the respective businesses and material properties or assets of
SSA and each SSA Subsidiary, or with respect to which SSA or any SSA Subsidiary
would have an indemnification obligation, pending, or to SAM’s Knowledge,
threatened, by or before any arbitrator or Governmental Entity, in each case
with respect to the Business, and (b) there is no Order outstanding against SAM,
SS OP Holdings, SSA, or any SSA Subsidiary, or against any third Person to whom
SSA or any SSA Subsidiary would have an indemnification obligation, with respect
to the Business. Except as would not have a Material Adverse Effect on the
Business, there is no pending, or to SAM’s Knowledge, threatened Action for the
dissolution, liquidation, or insolvency of SAM, SS OP Holdings, SSA or any SSA
Subsidiary.

 

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3.10 Real Property. Neither SSA nor any SSA Subsidiary owns or leases any real
property.

3.11 Availability, Title to and Condition of Contributed Assets. To SAM’s
Knowledge, the Contributed Assets constitute all the assets, properties, and
rights necessary for the conduct of the Business in all material respects as
presently conducted in the ordinary course of business, consistent with past
practices. All of the material Personal Property used in the Business and
included in the Contributed Assets, whether owned or leased, has been maintained
in accordance with reasonable and customary business practice and is in good
operating condition, ordinary wear and tear excepted. SAM and SS OP Holdings
each has good and valid title to all Contributed Assets that it purports to own,
free and clear of any Encumbrances, except for Permitted Encumbrances or as
would not be material to the Business. None of SAM, SS OP Holdings, SSA, nor any
SSA Subsidiary is in material default under any lease agreement for Personal
Property included in the Contributed Assets to which such entity is a party.

3.12 Taxes. Except as set forth on Schedule 3.12, (a) SSA and each SSA
Subsidiary, or a duly-authorized third Person acting on its behalf, has timely
filed all Tax Returns required to be filed by SSA and each SSA Subsidiary;
(b) all such Tax Returns were correct and complete in all material respects;
(c) SSA and each SSA Subsidiary, or a duly-authorized third Person acting on its
behalf, has paid all Taxes shown as due and owing on such Tax Returns and all
other material Taxes due and owing by SSA and each SSA Subsidiary, other than
any such Taxes that are being contested in good faith; (d) other than in the
ordinary course of business and consistent with past practice, neither SSA nor
any SSA Subsidiary is currently the beneficiary of any extension of time within
which to file any Tax Return; (e) there are no liens for Taxes (other than Taxes
not yet due and payable or which are being contested in good faith) upon any of
the Contributed Assets; (f) no foreign, federal, state, or local tax audits or
Actions on the part of any Taxing Authority are pending, or to SAM’s Knowledge
are being conducted with respect to SSA or any SSA Subsidiary; (g) none of SSA,
any SSA Subsidiary, or a duly-authorized third Person acting on its behalf, has
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to a Tax assessment or deficiency, in each case of SSA or
any SSA Subsidiary; (h) the Contributed Assets are not subject to any joint
venture, partnership or other arrangement or Contract that is treated as a
partnership for federal, state, local or foreign Tax purposes; and (i) no
written claim against SSA or any SSA Subsidiary, or any third Person to whom
such entity would have an indemnification obligation, has been received by SAM
from a Taxing Authority that SSA or any SSA Subsidiary is or may be subject to
taxation by that jurisdiction and in which SSA or any SSA Subsidiary does not
file Tax Returns.

3.13 Contracts. Schedule 3.13 contains a list of Contracts (other than purchase
or services orders or invoices issued pursuant to a Contract) relating to the
Business, including all Contracts necessary for the continued operation of the
Business, and which SAM reasonably anticipates will involve aggregate payments
to or consideration furnished by SAM, SS OP Holdings, SSA, or any SSA Subsidiary
of more than $100,000 in any calendar year and which are not cancelable
(x) without material penalty, cost or other Liability or (y) with sixty
(60) days’ notice (collectively, the “SSA Contracts”). SAM has delivered to the
Contributee a correct and complete copy of each written agreement listed in
Schedule 3.13 and a written summary setting forth the terms and conditions of
each oral agreement referred to therein. With respect to each SSA Contract,
except as disclosed on Schedule 3.13, (a) such SSA Contract is legal, valid,
binding and in force and effect in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally,
and to general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity); (b) SSA and each SSA Subsidiary is not,
and to SAM’s Knowledge, each other Person who or which is a party to a SSA
Contract is not, in material breach or default, and no material event has
occurred (or, to SAM’s Knowledge, is reasonably likely to occur) which with
notice or lapse of time (or both) would

 

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constitute a material breach or default, or permit termination, material
modification, or acceleration under, such SSA Contract; (c) no party to a SSA
Contract has repudiated or, to SAM’s Knowledge, threatened to repudiate any
material provision of any such SSA Contract; and (d) the Contributee’s
acquisition of the Contributed Assets at Closing, effective as of the Closing
Date, will not give rise to a material breach, default, or violation by SAM, SS
OP Holdings, SSA, or any SSA Subsidiary of any SSA Contract.

3.14 Employee Benefit Matters.

(a) Schedule 3.14(a) sets forth a list, as of the date of this Agreement, of
(i) each Employee Plan sponsored or maintained by SAM (“US Plans”) and (ii) each
Employee Plan sponsored or maintained by Strategic Storage PM Canada, ULC
(“Canadian Plans”), in each case other than an Employee Plan maintained by
TriNet. Except for SAM and Strategic Storage PM Canada, ULC, none of SS OP
Holdings, SSA, or the SSA Subsidiaries, sponsor or maintain any Employee Plans,
in each case other than an Employee Plan maintained by TriNet and the plans set
forth on Schedule 3.14(a) with respect to bonuses and PTO. SSA has delivered to
the Contributee with respect to each US Plan that is not maintained by TriNet
and that covers any Business Employees either a copy of such US Plan or an
accurate description of the material terms of such plan and, to the extent
applicable, the most recent IRS determination letter, opinion letter, or
advisory letter. SAM has delivered to the Contributee with respect to each
Canadian Plan that is not maintained by TriNet a current, accurate, and complete
copy of the plan document and, to the extent applicable, any related trust
agreement or other funding vehicle, any summary materials, and any filings or
material correspondence with a Governmental Entity.

(b) None of SAM, SS OP Holdings, SSA, any SSA Subsidiary, or any ERISA Affiliate
has within the past six (6) years maintained, established, sponsored,
participated in, or contributed to, or has within the past six (6) years had any
Liability with respect to, any employee benefit plan that: (i) is subject to
Title IV or Section 302 of ERISA or Section 412 of the Code; (ii) is a
“multiemployer plan” within the meaning of Section 3(37) of ERISA; or
(iii) promises or provides retiree medical or other retiree welfare benefits to
any Person other than as required under COBRA or other applicable Law.

(c) With respect to any Employee Plan that is not maintained by TriNet, (i) no
actions, suits, or claims (other than routine claims for benefits in the
ordinary course of business) are pending or, to SAM’s Knowledge, threatened with
respect to any Canadian Plan or with respect to any US Plan that could
reasonably be expected to affect the benefits of any Business Employee, (ii) no
audit or investigation by the IRS, the DOL or other Governmental Entity is
pending or, to SAM’s Knowledge, threatened with respect to any Canadian Plan or
with respect to any US Plan and (iii) each US Plan and each Canadian Plan has
been maintained and administered in all material respects in compliance with its
terms and the applicable provisions of ERISA, the Code and other applicable
Laws, and if such plan is intended to meet the requirements of a “qualified
plan” under Code Section 401(a), it has received and is entitled to rely on a
favorable determination (or opinion or advisory letter) from the IRS and no
event or documentation defect has occurred which would reasonably be expected to
jeopardize such qualification.

(d) All contributions and other payments required to be made at or before the
Closing Date with respect to, or on behalf of, any Canadian Plan, have been paid
or accrued on the SAM Financial Statements. With respect to US Plans, SAM has
paid or will timely pay amounts sufficient to pay health and welfare insurance
premiums for coverage of Business Employees and their covered dependents through
June 30, 2019 and has taken any steps necessary to ensure that such coverage
will be continued through June 30, 2019. SAM has or will timely make all
contributions to the SmartStop Asset Management 401(k) Plan on behalf of
Business Employees participating thereunder with respect to their eligible
compensation paid by SAM prior to the Transfer Date, disregarding any minimum
service or last day of the year employment requirements.

 

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(e) None of SSA or any SSA Subsidiary has terminated any nonqualified deferred
compensation plan (as defined in Code Section 409A) covering a Business Employee
since May 1, 2016.

(f) No amount that could be received (whether in cash or property or the vesting
of property) as a result of the consummation of any of the transactions
contemplated by this Agreement (alone or in combination with any other event) by
any Business Employee who is a “disqualified individual” (as such term is
defined in Treasury Regulation Section 1.280G-1) under any compensation
arrangement with SAM, SS OP Holdings, SSA or any SSA Subsidiary will result in a
“parachute payment” (as such term is defined in Section 280G(b)(1) of the Code).

3.15 Labor. None of SSA or any SSA Subsidiary or, with respect to the Business
Employees, neither SAM nor SS OP Holdings, is, or has ever been, a party to any
collective bargaining agreement. To SAM’s Knowledge, no application or petition
for an election, or for certification or recognition, of a collective bargaining
agent or employee association is pending with respect to any Business Employees.
There has never been, there is not presently pending or existing, and, to SAM’s
Knowledge, there is not threatened, any strike, slowdown, picketing, lockout or
work stoppage or employee grievance process involving SSA, any SSA Subsidiary or
the Business Employees. No Action is pending or threatened against or affecting
SSA or any SSA Subsidiary or involving any Business Employee, nor has there ever
been any such actual or threatened Action, relating to the alleged violation of
any Law pertaining to labor relations, including any charge or complaint filed
with the National Labor Relations Board or the Ontario Labour Relations Board,
and there is no organizational activity or other labor dispute against or
affecting SSA or any SSA Subsidiary or with respect to the Business Employees.

3.16 Employees.

(a) Except for Strategic Storage PM Canada, ULC, no SSA Subsidiary has employees
as of the Closing Date. Prior to the transfer of the Business Employees employed
by SAM on the Transfer Date as described in Section 5.3(a), SSA had no
employees.

(b) All payments of compensation, including wages, PTO, commissions, and
bonuses, and related Taxes that were required to be made, or accrued, by SAM, SS
OP Holdings, SSA or any SSA Subsidiary on or before the Closing Date were made
or accrued in full as of such date with respect to, or on behalf of, any current
or former employee or independent contractor of the Business in accordance with
the applicable Employee Plan and Laws.

(c) Except as listed on Schedule 3.16(c), as of the Closing, (i) no Business
Employees are on a leave of absence for any reason, including a leave of absence
for short or long term disability or a protected leave of absence, and (ii) no
Business Employee has given notice that he or she has planned a leave of absence
that would commence after the Closing Date.

(d) The aggregate vacation, leave, or other paid time-off accrued but unused by
Business Employees employed by SAM as of the Transfer Date or by Business
Employees employed by Strategic Storage PM Canada, ULC as of the Closing Date
(together, “PTO”) has been properly accrued on the SAM Financial Statements.
Except for such PTO, no other PTO, vacation, or other paid leave obligations
have been accrued by or are owing to the Business Employees or any former
employees of SSA Subsidiaries as of the Transfer Date or Closing Date, as
applicable, whether directly by SAM, SS OP Holdings, or an SSA Subsidiary, or
indirectly through any third Person, including TriNet.

 

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(e) SAM, SS OP Holdings, SSA, and each SSA Subsidiary is, and has been, since
three (3) years preceding the date of this Agreement (or, if such entity has
been in formation for less than three (3) years, then since such entity’s
formation), in material compliance with all Laws and Orders regarding the terms
and conditions of employment or other labor related matters, including Laws and
Orders relating to discrimination, fair labor standards and occupational health
and safety or wrongful discharge, wages, hours, workers compensation, worker
classification, collective bargaining, plant closing, and the payment and
withholding of Taxes with respect to their employees or, in the case of SAM and
SS OP Holdings, with respect to the Business Employees. There are no, and there
has not been for the three (3) years preceding the date of this Agreement,
material Actions pending or, to SAM’s Knowledge, threatened against SSA or any
SSA Subsidiary, brought by or on behalf of any applicant for employment, any
current or former employee, or any current or former independent contractor, or
any class of the foregoing, relating to any Laws or Orders referenced in the
foregoing sentence; alleging breach of any express or implied contract of
employment, misclassification, wrongful termination of employment or service; or
alleging any other discriminatory, wrongful, or tortious conduct in connection
with the employment or service relationship.

(f) All Persons who have provided services to any SSA Subsidiary as independent
contractors or consultants have been properly classified under applicable Law as
independent contractors rather than employees. To SAM’s Knowledge, all current
and former Business Employees are and at all times have been legally authorized
to work in the country in which they are employed by SAM or Strategic Storage PM
Canada, ULC, as applicable. SAM does not employ any US Continuing Employee
pursuant to a restrictive work authorization.

(g) Except as disclosed on Schedule 3.16(g), the execution, delivery and
performance of this Agreement by the Parties, alone or in combination with any
other event, will not (i) constitute a triggering event that will result in any
payment (whether of severance pay or otherwise) becoming due from SSA, any of
the SSA Subsidiaries, or from any Employee Plan (other than the Key Person
Agreements) to any current or former employee, officer, independent contractor,
or director, to, or (ii) accelerate the time of payment or vesting or increase
the amount of compensation or benefit under any Employee Plan due to, any
current or former employee, independent contractor, officer, or director (or
dependents of such Persons).

3.17 Insurance.

(a) Schedule 3.17(a) accurately sets forth, with respect to each material
insurance policy (other than policies underlying Employee Plans) maintained by,
or at the expense of, or for the direct benefit of, SAM, SS OP Holdings, SSA, or
any SSA Subsidiary in connection with the Business or the Contributed Assets:
(i) the name of the insurance carrier that issued such policy and the policy
number of such policy; (ii) whether such policy is a “claims made” or an
“occurrences” policy; (iii) a description of the coverage provided by such
policy and the material terms and provisions of such policy (including all
applicable coverage limits, deductible amounts and co-insurance arrangements and
any non-customary exclusions from coverage); (iv) the annual premium payable
with respect to such policy, and the cash value (if any) of such policy; and
(v) a description of any material claims pending, and any material claims that
have been asserted since January 1, 2018, with respect to such policy or any
predecessor insurance policy. Each of the policies identified in Schedule
3.17(a) is valid, enforceable and in force and effect and has been issued by an
insurance carrier that is to SAM’s Knowledge solvent, financially sound and
reputable. To SAM’s Knowledge, all of the information contained in the
applications submitted in connection with such policies was (at the time such
applications were submitted) accurate and complete in all material respects, and
to SAM’s Knowledge, all premiums and other amounts owing with respect to such
policies were paid in full to the extent due.

(b) Schedule 3.17(b) identifies each material insurance claim made by SAM, SS OP
Holdings, SSA or any SSA Subsidiary in connection with the Business or the
Contributed Assets since January 1, 2018. Since January 1, 2018, SAM has not
received any written notice from the issuer of any of the policies identified in
Schedule 3.17 (i) cancelling or invalidating, or threatening to cancel or
invalidate, any such policy; (ii) refusing coverage or rejecting a claim under,
or threatening to refuse cover or reject claim under, any such policy; or
(iii) indicating that such issuer may be unwilling or unable to perform any of
its obligations thereunder.

 

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(c) Schedule 3.17(c) accurately sets forth the tenant insurance policies
maintained in connection with the Business or the Contributed Assets as it
relates to the tenant insurance program.

3.18 Subsidiaries. Except for its direct or indirect ownership interests in SSA
and the SSA Subsidiaries or as set forth on Schedule 3.18, neither SAM nor SS OP
Holdings directly or indirectly owns any equity or similar interest in, or any
interest convertible into, or exchangeable or exercisable for, any equity or
similar interest in, any Person that is necessary for the conduct of the
Business.

3.19 Intellectual Property.

(a) Schedule 3.19(a) lists each material Mark included in the Contributed Assets
or currently used by SAM, SS OP Holdings, SSA, or any SSA Subsidiary in the
operation of the Business in the ordinary course of business, consistent with
past practices. To SAM’s Knowledge, unless otherwise set forth on Schedule
3.19(a), except as would not reasonably be expected to be, individually or in
the aggregate, material to the Business, all such Marks (i) have been registered
or are currently pending registration with the United States Patent and
Trademark Office or the Canadian Intellectual Property Office as the case may
be, (ii) are currently in compliance in all material respects with all legal
requirements (including the timely post-registration filing of affidavits of use
and renewal applications), (iii) are valid and enforceable, (iv) do not infringe
the Intellectual Property rights of any other Person, and (v) are not subject to
any Actions or maintenance fees that are or will become due within 90 days after
the Closing Date. To SAM’s Knowledge, except as would not reasonably be expected
to be, individually or in the aggregate, material to the Business, no Mark
listed on Schedule 3.19(a) and except as otherwise described on such Schedule
3.19(a) has been, or is now involved in any pending or threatened Action that
opposes or seeks invalidation or cancellation of any such Mark.

(b) Schedule 3.19(b) lists each material Domain Name used by SAM, SS OP
Holdings, SSA, or any SSA Subsidiary in the operation of the Business in the
ordinary course of business, consistent with past practices. To SAM’s Knowledge,
except as would not reasonably be expected to be, individually or in the
aggregate, material to the Business, all Domain Names listed on Schedule 3.19(b)
that have been registered are (i) currently in compliance in all material
respects with all legal requirements and (ii) not subject to any Actions or
maintenance fees that are or will become due within ninety (90) days after the
Closing Date.

(c) To SAM’s Knowledge, SAM has taken all reasonably necessary action to
maintain and protect, and use without infringing the rights of other Persons,
each item of Intellectual Property used by SAM, SS OP Holdings, SSA or any SSA
Subsidiary in the operation of the Business, except where the failure to do so
would not have a Material Adverse Effect on the Business. To SAM’s Knowledge,
the Contributee will have as of the Closing reasonably sufficient Intellectual
Property rights and licenses required to sell, offer for sale, and use the goods
and perform the services as presently being offered for sale, sold, used or
performed in the operation of the Business, including the rights and licenses
required to offer for sale, sell and use all such goods and perform all such
services without (i) incurring any material liability for license fees or
royalties or, (ii) to SAM’s Knowledge, being subject to any claims of violation,
infringement, dilution, or misappropriation of the Intellectual Property rights
of any other Person, or of unfair competition.

 

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(d) SAM has delivered to the Contributee copies of all material written
documentation in its possession that evidences the ownership (or other right to
use), the right to maintain and prosecute (if applicable), and support, each
item of Intellectual Property used by SAM, SS OP Holdings, SSA, or any SSA
Subsidiary in the operation of the Business. With respect to each such item of
Intellectual Property, and except as set forth on Schedule 3.19(d) or as
expressly set forth in any written agreement relating to such item of
Intellectual Property which has been provided to the Contributee, to SAM’s
Knowledge: (i) SAM, SS OP Holdings, SSA, and each SSA Subsidiary, as applicable,
possesses all right, title, and interest in and to the item, free and clear of
any Encumbrance other than Permitted Encumbrances, and has the right to transfer
ownership or, as applicable, the right to use such item to the Contributee;
(ii) each item is not subject to any outstanding Order; (iii) no Action is
pending, or threatened, which challenges the enforceability, use, or ownership
of the item; and (iv) none of SAM, SS OP Holdings, SSA, or any SSA Subsidiary
agreed to indemnify any Person for, or against, any interference, infringement,
misappropriation, or other conflict with respect to each such item. As of
immediately following the Closing, to SAM’s Knowledge, the Contributee will own
or have the same rights in the Intellectual Property embodied in the Contributed
Assets or used in the operation of the Business that SAM had immediately prior
to the Closing, free and clear of all Encumbrances other than Permitted
Encumbrances without the payment of any additional amounts or consideration
other than ongoing fees, royalties or payments which SAM would otherwise have
been required to pay absent the transactions contemplated hereunder.

(e) There is no pending or, to SAM’s Knowledge, threatened claim or litigation
against SAM, SS OP Holdings, SSA or any SSA Subsidiary relating to the
Intellectual Property embodied in the Contributed Assets or used in the
operation of the Business. To SAM’s Knowledge, no Person is infringing,
misappropriating, diluting or violating any Intellectual Property embodied in
the Contributed Assets in any material respect.

(f) SAM, SS OP Holdings, SSA and all SSA Subsidiaries have, to the extent
possible, each taken reasonable security measures to protect the secrecy,
confidentiality and value of all Trade Secrets protectable under applicable
trade secrets Laws and embodied in the Intellectual Property.

3.20 Securities Law Matters; Transfer Restrictions.

(a) SAM and SS OP Holdings acknowledge that the Contributee intends the offer
and issuance of the OP Units hereunder to be exempt from registration under the
Securities Act and applicable state securities Laws by virtue of (i) the status
of SS OP Holdings as an “accredited investor” within the meaning of the federal
securities Laws, and (ii) Regulation D promulgated under Section 4(a)(2) of the
Securities Act (“Regulation D”), and that the Contributee will rely in part upon
the representations and warranties made by SS OP Holdings in this Agreement in
making the determination that the offer and issuance of the OP Units qualify for
exemption under Rule 506 of Regulation D as an offer and sale only to
“accredited investors.”

(b) SS OP Holdings is an “accredited investor” within the meaning of the federal
securities Law, particularly Regulation D.

(c) SS OP Holdings will acquire the OP Units for its own account and not with a
view to, or for sale in connection with, any “distribution” thereof within the
meaning of the Securities Act.

(d) SS OP Holdings has sufficient knowledge and experience in financial and
business matters to enable it to evaluate the merits and risks of investment in
the OP Units. SS OP Holdings has the ability to bear the economic risk of
acquiring the OP Units. SS OP Holdings acknowledges that (i) the transactions
contemplated by this Agreement involve complex Tax consequences for SS OP
Holdings, and SS OP Holdings is relying solely on the advice of SS OP Holdings’
own Tax advisors in evaluating such

 

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consequences; (ii) the Contributee has not made (nor shall it be deemed to have
made) any representations or warranties as to the Tax consequences of such
transaction to SS OP Holdings; and (iii) references in this Agreement to the
intended Tax effect of the transactions contemplated hereby shall not be deemed
to imply any representation by the Contributee as to a particular Tax effect
that may be obtained by SS OP Holdings. SS OP Holdings remains solely
responsible for all Tax matters relating to SS OP Holdings.

(e) SS OP Holdings has had an opportunity to ask questions of, and receive
information and answers from, the Contributee and SST II concerning the
Contributee, SST II, the OP Units, the contribution of the Contributed Assets
and the shares of SST II common stock into which the OP Units may be exchanged,
and to assess and evaluate any information supplied to SS OP Holdings by the
Contributee or SST II.

(f) SS OP Holdings acknowledges that SS OP Holdings is aware that there are
restrictions on the transferability of the OP Units and that the OP Units will
not be registered under the Securities Act or any state securities Laws, and SS
OP Holdings has no right to require that they be so registered. SS OP Holdings
agrees that any OP Units it acquires will not be sold in the absence of
registration unless such sale is exempt from registration under the Securities
Act and applicable state securities Laws.

(g) SS OP Holdings understands that there is no established public, private or
other market for the OP Units to be issued to SS OP Holdings hereunder, and it
is not anticipated that there will be any public, private or other market for
such OP Units in the foreseeable future.

(h) SS OP Holdings understands that Rule 144 promulgated under the Securities
Act is not currently available with respect to the sale of OP Units.

3.21 No Other Representations or Warranties. Each of SAM, SS OP Holdings, SSA,
and the SSA Subsidiaries acknowledges that (a) neither SST II, the Contributee,
nor their Affiliates has made any representation or warranty, expressed or
implied, as to any matter set forth in Article 4, or the accuracy or
completeness of any information regarding the matters set forth in Article 4,
except as expressly set forth in Article 4, (b) none of SAM, SS OP Holdings,
SSA, and the SSA Subsidiaries have relied on any representation or warranty from
SST II or the Contributee or any of their Affiliates in determining to enter
into the Transaction Documents, except as expressly set forth in Article 4, and
(c) none of SST II or the Contributee or any of their Affiliates shall have or
be subject to any Liability of SAM, SS OP Holdings, SSA, each SSA Subsidiary,
their Affiliates or representatives resulting solely from the distribution to
SAM, SS OP Holdings, SSA, the SSA Subsidiaries, their Affiliates or
representatives, or SAM’s, SS OP Holdings’s, SSA’s, each SSA Subsidiary’s use
of, or their Affiliates’ or representatives’ use of, any such information,
including any information, documents or material made available to SAM, SS OP
Holdings, SSA, each SSA Subsidiary, and their Affiliates or representatives in
any form in expectation of or negotiation of this Agreement, the other
Transaction Documents and the other transactions contemplated hereby and
thereby.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTEE AND SST II

Except as set forth in, or qualified by any matter set forth in, the Schedules
(it being agreed that the disclosure of any matter in any section in the
Schedules shall be deemed to have been disclosed in any other section in the
Schedules to which the applicability of such disclosure is reasonably apparent),
the Contributee and SST II, severally and not jointly, and each solely as to
itself, represent and warrant to the Contributor as follows:

 

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4.1 Organization and Related Matters. Each of the Contributee and SST II is a
limited partnership or corporation, respectively, duly organized or
incorporated, validly existing and in good standing under the Laws of its
jurisdiction of organization or incorporation. Each of the Contributee and SST
II is duly authorized to conduct its business and is in good standing under the
applicable Laws of each jurisdiction where such qualification is required,
except where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect on the Contributee, SST II, or either
of them. Each of the Contributee and SST II has the requisite power and
authority to carry on its business as presently conducted. Each of the
Contributee and SST II has delivered to the Contributor complete and correct
copies of its Organizational Documents, as amended to date.

4.2 Authority. Each of the Contributee and SST II has all requisite power and
authority to enter into each of the Transaction Documents to which the
Contributee or SST II is a party and to consummate the transactions contemplated
hereby or thereby. The execution and delivery of each of the Transaction
Documents by the Contributee and SST II and the consummation by the Contributee
and SST II of the transactions contemplated hereby or thereby have been duly
authorized by all necessary action on the part of the Contributee and SST II,
respectively. Each of the Transaction Documents has been, or upon execution and
delivery will be, duly executed and delivered, and assuming the due
authorization, execution and delivery of such Transaction Documents by the other
Parties thereto, will constitute the valid and binding obligations of the
Contributee and SST II, enforceable against the Contributee and SST II in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

4.3 No Conflicts; Required Consents. Except as provided in Schedule 4.3, the
execution and delivery of the Transaction Documents by the Contributee and SST
II does not, and the performance by the Contributee and SST II of the
transactions contemplated hereby or thereby will not, (a) violate, conflict
with, or result in any breach of any provision of the Contributee’s and SST II’s
respective Organizational Documents, (b) violate, conflict with, or result in a
violation or breach of, or constitute a default (with or without due notice or
lapse of time or both) under, or permit the termination, or result in the
acceleration, of, or entitle any party to accelerate, any obligation of the
Contributee and SST II, or result in the loss of any benefit of, or give rise to
the creation of any Encumbrance on, any property or asset of the Contributee or
SST II under any of the terms, conditions or provisions of any material
instrument or obligation to which any property or asset of the Contributee or
SST II may be bound or subject, or (c) violate any Law applicable to the
Contributee or SST II or by or to which any property or asset of the Contributee
or SST II is bound or subject, except, in each case of clause (b) or (c), as
would not, individually or in the aggregate, have a Material Adverse Effect on
the Contributee, SST II or either of them. Schedule 4.3 sets forth a complete
and accurate list of each material consent, approval, waiver and authorization
that is required to be obtained by the Contributee or SST II from, and each
material notice that is required to be made by the Contributee or SST II to, any
Person in connection with the execution, delivery and performance by the
Contributee or SST II of this Agreement (the “SST II Required Third Party
Consents”).

4.4 Issuance of Units. The OP Units, when issued and delivered in compliance
with the provisions of this Agreement, will be duly authorized, validly issued,
fully paid and, except as provided in the Operating Partnership Agreement and
except as affected by Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act, non-assessable, free and clear of any Encumbrances; provided,
however, that such OP Units are subject to restrictions on transfer under
federal and state securities Laws and as otherwise set forth in the Operating
Partnership Agreement. Except for this Agreement, there are no Contracts to
which SST II or the Contributee are a party restricting the transfer of, or
affecting the rights of any holder of, such OP Units, and there are no
conversion, preemptive, subscription or other rights, and there are no
outstanding options, calls, warrants, rights, or other commitments of any kind,
in any such case,

 

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relating to such OP Units or that that give any Person the right to receive any
contractual right similar to or derived from the economic benefits and rights
accruing to holders of such OP Units. Such OP Units will not be issued in
violation of any preemptive rights or rights of first refusal granted by SST II
or the Contributee. Except for this Agreement, there are no voting trusts,
stockholder agreements, proxies or other rights or agreements in effect with
respect to the voting, transfer or dividend rights of such OP Units. Neither SST
II nor the Contributee has materially violated any applicable federal or state
securities Laws or any preemptive or similar rights created by statute,
Organizational Document or agreement in connection with the offer, sale,
issuance or allotment of such OP Units.

4.5 Tax Status of the Contributee. The Contributee has at all times during its
existence been properly treated as a partnership for federal income tax purposes
and not as an association or publicly traded partnership taxable as a
corporation for such purposes. Except as set forth on Schedule 4.5, each
subsidiary of the Contributee has at all times during its existence been
properly treated as either a “disregarded entity” or a partnership for federal
income tax purposes and not as an association or publicly traded partnership
taxable as a corporation for such purposes.

4.6 REIT Status. SST II elected to be treated as a REIT for federal income tax
purposes beginning with its taxable year ended December 31, 2014. Commencing
with such taxable year, SST II has at all times been organized and operated in
such a manner so as to qualify for taxation as a REIT under the Code, and the
current and proposed method of operation for SST II is expected to enable SST II
to continue to meet the requirements for qualification as a REIT.

4.7 Legal Proceedings. Except as set forth on Schedule 4.7, there are no Actions
pending, or to the Knowledge of SST II or the Contributee, threatened, against
the Contributee or SST II, their respective businesses or any of their
respective material properties or assets by, or before any arbitrator or
Governmental Entity, nor is there any material investigation relating to the
Contributee or SST II or any property or asset of the Contributee or SST II
pending, or to the Knowledge of SST II or the Contributee threatened, by or
before any arbitrator or Governmental Entity, in each case which would
reasonably be expected to have a Material Adverse Effect on SST II or the
Contributee. There is no Order of any Governmental Entity or arbitrator
outstanding against the Contributee or SST II or any property or asset of the
Contributee or SST II which would reasonably be expected to have a Material
Adverse Effect on either of them.

4.8 No Other Representations or Warranties. Each of SST II and Contributee
acknowledges that (a) none of SAM, SS OP Holdings, SSA, each SSA Subsidiary and
their Affiliates has made any representation or warranty, expressed or implied,
as to the Contributed Assets, the Assumed Liabilities, the Business, their
financial condition, results of operations, future operating or financial
results, estimates, projections, forecasts, plans or prospects (including the
reasonableness of the assumptions underlying such estimates, projections,
forecasts, plans or prospects) or the accuracy or completeness of any
information regarding the Contributed Assets, the Assumed Liabilities or the
Business furnished or made available to SST II, Contributee, their Affiliates
and representatives, except as expressly set forth in Article 3, (b) neither SST
II nor Contributee has relied on any representation or warranty from SAM, SS OP
Holdings, SSA, any SSA Subsidiary or any of their Affiliates in determining to
enter into the Transaction Documents, except as expressly set forth in Article
3, and (c) none of SAM, SS OP Holdings, SSA, each SSA Subsidiary or any of their
Affiliates shall have or be subject to any Liability of SST II, Contributee,
their Affiliates or representatives resulting solely from the distribution to
SST II, Contributee, their Affiliates or representatives, or use of SST II’s,
Contributee’s or their Affiliates’ or representatives’ use of, any such
information, including any information, documents or material made available to
SST II, Contributee, their Affiliates or representatives in any “data rooms,”
management presentations or in any other form in expectation of or negotiation
of this Agreement, the other Transaction Documents and the other transactions
contemplated hereby and thereby. Each of SST II and Contributee acknowledges
that the acquisition of the Contributed Assets, Assumed Liabilities and Business
hereunder is without any representation or warranty as to merchantability or
fitness thereof for any particular purpose, in an “as is” condition and on a
“where is” basis, except as otherwise expressly set forth in this Agreement.

 

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ARTICLE 5

COVENANTS

5.1 Covenants Against Disclosure.

(a) Except as may be required by Law, SAM shall not, and shall not permit its
Affiliates to (i) disclose to any Person in any manner, directly or indirectly,
any confidential information or data, whether of a technical or commercial
nature, exclusively relating to the Contributed Assets or Assumed Liabilities,
or (ii) use, or permit or assist, by acquiescence or otherwise, any Person to
use, in any manner, directly or indirectly, any such information or data, except
to the extent that SAM or any such Affiliates have retained rights therein as
provided herein, or is required to disclose such information by judicial or
administrative process or pursuant to applicable Law, and excepting disclosure
of such data or information as is at the time generally known to the public or
otherwise in the public domain and which did not become so generally known or a
part of the public domain through any breach of any provision of this
Section 5.1(a) hereof by SAM.

(b) The initial public disclosures, including a Form 8-K to be filed with the
Securities and Exchange Commission by SST II, relating to this Agreement and the
transactions contemplated herein shall be made solely by SST II; provided,
however, that SST II shall provide SAM a reasonable period of time to review and
comment on such disclosures, and in good faith take into account any comment
made by SAM during such period; provided further, however, that the Parties
shall be permitted to make any other public disclosures regarding this Agreement
or the transactions contemplated hereby that are necessary to fulfill public
disclosure requirements of any Governmental Entity or required to be made by
applicable Law or Order.

5.2 Notification of Certain Matters. Following the Closing, except as prohibited
by Law, each of the Contributor, SST II, and the Contributee shall promptly
notify the other Parties in writing of:

(a) any inaccuracy of any representation or warranty contained in this
Agreement, provided, however, that obligations under this Section 5.2(a) shall
expire on the date that is twelve (12) months following the Closing;

(b) any notice or other communication from any Person alleging that notice to or
consent of such Person is required in connection with the transactions
contemplated by this Agreement;

(c) any material notice or other material communication from any Governmental
Entity in connection with the transactions contemplated by this Agreement; and

(d) any filing or notice made by such Party with any Governmental Entity in
connection with the transactions contemplated by this Agreement.

5.3 Employee Matters.

(a) US Continuing Employees. Prior to the Closing, on or about June 24, 2019
(the “Transfer Date”), SAM shall have caused the employment of those individuals
set forth on Schedule 5.3(a) (the “US Continuing Employees”) to be transferred
to SSA, where their employment shall continue as of

 

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the Closing Date, (i) at an annual base salary or wage level, as applicable, and
annual bonus and incentive opportunities, that are the same as those provided to
each such US Continuing Employee immediately prior to the Transfer Date
(disregarding any increases in such amounts since January 1, 2019 to the extent
not made in the ordinary course of business and consistent with past practice,
and other than with respect to the US Continuing Employees that are subject to a
Key Person Agreement), and (ii) with employee benefits that are substantially
comparable in the aggregate to the employee benefits provided to each such US
Continuing Employee immediately prior to the Transfer Date (subject to the
exception for unlimited PTO described in Section 5.3(c) below).

(b) Canadian Employees. The employment of those employees who are employed by
Strategic Storage PM Canada, ULC as of the Closing Date (the “Canadian
Employees”) shall continue in effect and shall not be affected by the
transactions contemplated by this Agreement.

(c) PTO and Bonus Liabilities. Within a reasonable time after the Transfer Date,
but it no event later than ten (10) Business Days, SAM shall have delivered to
SSA a report providing a good faith detailed estimate of the following
Liabilities with respect to all Business Employees: (i) accrued but unused PTO
(other than unlimited PTO) as of the Transfer Date (the “PTO Liabilities”), and
(ii) bonuses and incentive compensation for the 2019 calendar year based on 80%
payment of accrual amounts that SAM utilized during 2019 for purposes of its SAM
Financial Statements, pro-rated based on the number of days in such calendar
year prior to the Transfer Date (all such bonuses and incentive compensation,
the “Bonus Liabilities”) (the PTO Liabilities and the Bonus Liability are
referred to collectively as the “Accrued Business Employee Obligations”). Such
Accrued Business Employee Obligations shall be reflected on the SAM Financial
Statements and the True-Up Statement as described in Section 6.6. SSA shall
continue to allow US Continuing Employees to use PTO Liabilities in the same
manner as they were entitled to use such PTO under SAM’s paid time off policy in
effect on the Transfer Date. Following the Transfer Date, US Continuing
Employees shall accrue additional PTO in accordance with SSA’s PTO policies.

(d) Allocation of Liabilities. Except with respect to the Accrued Business
Employee Obligations, SAM and its Affiliates shall be solely responsible for all
wages and compensation due to US Continuing Employees, and any related
employer-side employment Taxes, with respect to their employment by SAM prior to
the Transfer Date. On and after the Transfer Date, SSA shall be solely liable
for all wages and compensation, and any related employer-side employment Taxes,
due to US Continuing Employees with respect to their employment by SSA. US
Continuing Employees shall cease participation in the US Plans as of 12:00 a.m.
on the Transfer Date, except that participation in the insured Employee Plans
shall not terminate until June 30, 2019. US Continuing Employees shall commence
participation in the employee benefit plans of SSA as of 12:01 a.m. on the
Transfer Date, except that coverages intended to replace the insured Employee
Plans shall not commence until July 1, 2019.

(e) Qualified Plans. SAM shall use commercially reasonable efforts to avoid the
transfer of US Continuing Employees from SAM to SSA, and the transactions
contemplated by this Agreement, from triggering a default of any US Continuing
Employee’s outstanding participant loan under the SmartStop Asset Management
401(k) Plan. Following the Closing, (A) the Parties shall reasonably cooperate
with each other to take all steps necessary to transfer, in accordance with
applicable Law, the accounts (including any outstanding promissory notes held as
an asset) of US Continuing Employees from such SAM plans to new tax-qualified
plan(s) to be established by SSA; and (b) each of SAM and SSA agree not to
change the eligibility requirements, employer matching contribution amount, or
the key benefit terms and conditions under its tax-qualified plan from those in
effect as of the Closing Date or to make any profit sharing contribution to such
plan, unless the Parties agree in writing to such change, after considering any
impact on any nondiscrimination and minimum coverage testing requirements.

(f) SAM shall be solely responsible for any continuation coverage required by
COBRA for those terminated employees of SAM who are not US Continuing Employees,
and their qualified beneficiaries.

 

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(g) This Section 5.3 shall inure solely to the benefit of each of the Parties to
this Agreement, and nothing in this Section 5.3 shall confer upon any Business
Employee, or any legal representative or beneficiary thereof, any rights or
remedies, including any right to employment or continued employment for any
specified period, or compensation or benefits of any nature or kind whatsoever
under this Agreement. Nothing in this Section 5.3, express or implied, shall be
deemed an amendment of any plan providing benefits to any Business Employee or
as altering the at-will nature of any Business Employee’s employment. Nothing in
this Agreement shall be deemed to limit the right of SSA to terminate the
employment of any Business Employee at any time or construed as altering the
at-will nature of any Business Employee’s employment; and provided further that
nothing in this Agreement shall be deemed to limit the right of SSA, following
the Closing, to (y) change or modify the terms and conditions of employment for
any Business Employee or (z) change, modify, or terminate any employee benefit
plan or arrangement.

5.4 Business of SAM; Self Storage Programs. Nothing contained herein shall
prevent SAM or any of its Affiliates from engaging in or earning fees from other
activities, including, the rendering of advice to other Persons (including other
REITs) and the management of other programs advised, sponsored or organized by
SAM or its Affiliates; provided, however, SAM and its Affiliates shall be
prohibited from engaging in the Business or otherwise sponsoring, acquiring,
advising or managing any new or existing real estate program focused on self
storage properties following the Closing Date, other than as set forth on
Schedule 5.4. For the avoidance of doubt, the term Business does not include
data storage or any similar activity. This Section 5.4 shall become null and
void and have no further force or effect upon the date that is eighteen
(18) months following the date of occurrence of a Non-Compete Cancellation
Event.

ARTICLE 6

ADDITIONAL AGREEMENTS

6.1 Cooperation; Wrong Pockets; Further Assurances.

(a) In the event that, following the Closing, (i) the Contributor becomes aware
of any right, property or asset in the possession or control of the Contributor
or any of its Affiliates which is not included as a Contributed Asset on
Schedule 1.1 but which, consistent with the methodologies and principles used by
the Parties in preparing Schedule 1.1, should have been included as a
Contributed Asset, or (ii) the Contributee becomes aware of any right, property
or asset in the possession or control of the Contributee or any of its
Affiliates which is not included as an Excluded Asset on Schedule 1.2 but which
consistent with the methodologies and principles used by the Parties in
preparing Schedule 1.2, should have been included as an Excluded Asset, then the
Contributor or the Contributee, as applicable, shall notify the other Party
thereof as soon as reasonably practicable, and the Parties shall cooperate in
good faith in procuring treatment of such right, property or asset as a
Contributed Asset or Excluded Asset, as applicable, hereunder, including causing
any transfer of such Contributed Asset or Excluded Asset, as applicable,
pursuant to the other provisions of this Section 6.1.

(b) Each of the Contributor and the Contributee shall, at the request of the
other, execute and deliver to the other all such instruments and documents or
further assurances as the other may reasonably request in order to (i) vest in
the Contributee all of the rights, title and interests of the Contributor and
its Affiliates in and to the Contributed Assets as contemplated hereby,
(ii) effectuate the Contributee’s assumption of the Assumed Liabilities, and
(iii) grant to each Party all rights contemplated herein to be granted to such
Party under the Transaction Documents. In the event any Contributed Assets
remains vested

 

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in the Contributor or any of its Affiliates, the Contributor shall (or shall
cause its applicable Affiliate to), transfer such Contributed Asset as soon as
reasonably practicable to the Contributee or its designee. The Contributor shall
notify the Contributee as soon as reasonably practicable upon becoming aware
that that there are any Contributed Assets in its possession or control or that
of any of its Affiliates. In the event any Excluded Asset is vested in the
Contributee or any of its Affiliates following Closing, the Contributee shall
(or shall cause its applicable Affiliate to) transfer such Excluded Asset as
soon as reasonably practicable to the Contributor or its designee. The
Contributee shall notify the Contributor as soon as reasonably practicable upon
becoming aware that that there are any Excluded Assets in its possession or
control or that of any of its Affiliates.

(c) In the event that the Contributor receives any invoices from any obligor
with respect to any Contributed Asset or Assumed Liability, then the Contributor
shall, within thirty (30) days of receipt of such payment, remit the full amount
of such payment to the Contributee. In the event that the Contributee receives
any payments from any obligor with respect to any Excluded Asset or Excluded
Liability, then the Contributee shall, within thirty (30) days of receipt of
such payment, remit the full amount of such payment to the Contributor.

(d) Upon the terms and subject to the conditions set forth in this Agreement,
each of the Parties agrees to use their respective commercially reasonable
efforts to take, or cause to be taken, or as appropriate to refrain from taking,
all actions, and to do, or cause to be done, or as appropriate to refrain from
doing, all things reasonably necessary, proper or advisable to consummate, in
the most expeditious manner practicable, the transactions contemplated by the
Transaction Documents, including (i) defending any Actions challenging this
Agreement or otherwise seeking to enjoin or delay the consummation of the
transactions contemplated by the Transaction Documents, (ii) executing and
delivering any instruments and taking any other actions, including furnishing to
each other Party any assistance or information the other Party reasonably
requires in order to carry out the intent of the Transaction Documents, and
(iii) providing reasonable assistance or information to each other Party in
respect of regulatory or other governmental filings and disclosures and
otherwise compliance with applicable Law, to the extent such information is in
the possession of such Party. Notwithstanding the foregoing, neither the
Contributor nor any of its Affiliates will be obligated to make any payments, or
otherwise pay any consideration, to any Third Party to obtain any applicable
consent, waiver or approval.

6.2 Tax Matters.

(a) Except as otherwise provided herein, SAM and SS OP Holdings shall each be
liable for, and shall pay any transfer Taxes or other similar Tax customarily
imposed on a contributor in an asset contribution transaction, and the
Contributee shall be liable for, and shall pay any transfer Taxes or other
similar Tax customarily imposed on a contributee in an asset contribution
transaction, that are imposed in connection with the transfer of the Contributed
Assets pursuant to this Agreement and each shall timely file all Tax Returns
required with respect thereto.

(b) SAM and Contributee shall cooperate, to the extent reasonably requested by
the other Party, in connection with the preparation and filing of Tax Returns
and any audit, Action, or other proceeding involving Taxes. Cooperation shall
include the retention and, upon the other Party’s request, the provision of
records and other information reasonably relevant to the preparation of a Tax
Return or the conduct of an audit, litigation, or other proceeding. SAM and SSA
agree to take any steps reasonably necessary for SSA, as a successor employer to
SAM, to receive credit toward federal and state employment taxes paid or
deposited by SAM on behalf of Business Employees, including using the
alternative procedure set forth in Revenue Procedure 2004-53 with respect to
wage reporting for the Business Employees. SAM as the predecessor employer shall
have no W-2 or employment tax reporting responsibilities for the Business
Employees following the Closing.

 

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(c) SAM shall timely file or cause to be timely filed when due (taking into
account all extensions properly obtained) all Tax Returns that are required to
be filed by or with respect to the Business and any entity constituting part of
the Contributed Assets for periods ending on or before the Closing Date and
shall timely remit, or cause to be timely remitted, any Taxes due in respect of
such Tax Returns.

6.3 Directors’ and Officers’ Indemnification and Insurance.

(a) Without limiting any rights that any manager, director, executive officer or
employee of SAM or of its Affiliates may have under any indemnification
agreement or the Organizational Documents of SAM or as otherwise afforded by
applicable Law (including promptly advancing expenses as incurred to the fullest
extent permitted under applicable Law), all of which shall survive the Closing,
anything to the contrary contained in any Transaction Document notwithstanding,
or under the Organizational Documents of SST II or the Contributee, in addition
to, and not in limitation of any other indemnity rights contained in any
Transaction Document, from and after the Closing Date, SST II and the
Contributee shall, jointly and severally, indemnify and hold harmless the
current or former managers, directors, executive officers or employees of SAM
and its subsidiaries and Affiliates acting in their capacity as such
(collectively, the “D&O Indemnified Parties”) to the fullest extent authorized
or permitted under applicable Law, as now or hereafter in effect, for acts or
omissions by such D&O Indemnified Parties occurring prior to the Closing Date.
Without limiting the foregoing, SST II and the Contributee shall use reasonable
efforts to, and shall use reasonable efforts to cause SSA and each SSA
Subsidiary to, for a period of not less than six (6) years after the Closing
Date, (i) maintain provisions in its Organizational Documents concerning the
indemnification and exoneration (including provisions relating to expense
advancement) of D&O Indemnified Parties that are no less favorable to those
Persons than the provisions of the Organizational Documents of SAM, SSA and each
SSA Subsidiary, as applicable, in each case, as of the date of this Agreement,
and (ii) not to amend, repeal or otherwise modify such provisions in any respect
that would adversely affect the rights of those Persons thereunder, in each
case, except as required by Law.

(b) As of the Closing Date, Contributee shall have obtained, at its sole cost
and expense, and, for a period of six (6) years after the Closing Date,
Contributee shall maintain in effect a policy of directors’ and officers’
liability insurance reasonably satisfactory to SAM on terms not less favorable
than the terms of the directors’ and officers’ liability insurance coverage
obtained by SAM as in effect immediately prior to the Closing Date with respect
to such individuals, in connection with the Business with respect to claims
arising from, or related to facts or events which occurred at or before, the
Closing Date.

6.4 Access. The Parties agree to furnish or cause to be furnished to each other,
upon request, as promptly as practicable, such information and assistance
relating to the Business, Contributed Assets, Assumed Liabilities, Excluded
Assets and Excluded Liabilities (including access to books and records) as is
reasonably necessary for the filing of all Tax Returns, the making of any
election relating to Taxes, the preparation for any audit by any Governmental
Entity, and the prosecution or defense of any claims, suits or proceedings
relating to any Tax, without charge or expense to the requesting Party.

6.5 Holding Period. In addition to any restrictions on transfer contained in the
Operating Partnership Agreement, until June 28, 2021, SS OP Holdings shall not
(i) exchange the OP Units it receives pursuant to Section 1.4 of this Agreement
for REIT Shares pursuant to the provisions of the Operating Partnership
Agreement or (ii) except as set forth on Schedule 6.5, offer, pledge, sell,
contract to sell, announce the intention to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option right or
warrant for the sale of, make any short sale or otherwise transfer, dispose or
encumber (collectively, “Transfer”) the OP Units it receives pursuant to
Section 1.4 of this Agreement, provided, that, subject to compliance with
applicable laws, including applicable securities laws, SS OP Holdings may engage
in a Permitted Transfer.

 

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6.6 Working Capital True-Up.

(a) On or before the seventy-fifth (75th) day next following the Closing Date,
SAM shall deliver to the Contributee a statement (the “True-Up Statement”),
which shall set forth all assets and obligations/liabilities accrued on the
books and records of SAM, SS OP Holdings, SSA, and the SSA Subsidiaries as of
the Closing Date, in each instance also with respect to Business Employees,
including Accrued Business Employee Obligations.

(b) There also shall be included in the True-Up Statement the sum of: (i) as of
the Closing Date, the GAAP basis value of the cash accounts listed on Schedule
6.6(b), (ii) as of the Closing Date, the balance of each prepaid account of SAM
or any Affiliate thereof, other assets, valid receivables and similar items
based upon values in accordance with GAAP, (iii) $204,000, constituting the
aggregate “seed capital” advances made by SAM’s Affiliates, as follows: (A)
$200,000 contributed by Strategic Storage Advisor IV, LLC to the operating
partnership of SST IV and $1,000 contributed to SST IV for shares of SST IV, and
(B) $2,000 contributed by SS Growth Advisor II, LLC to the operating partnership
of SSGT II and $1,000 contributed to SSGT II for shares of SSGT II, (iv) any and
all other amounts attributable to the conduct of the Business or the ownership
and operation of the Contributed Assets, which in accordance with GAAP, as of
the Closing Date are credited to, or inure to the benefit of, Contributee or any
of its Affiliates (each an “Adjustment Amount” and collectively, the “Adjustment
Amounts”). Contributee shall be permitted to review all work papers and
procedures used by SAM to prepare the True-Up Statement and shall have the right
to perform any other reasonable procedures to verify the accuracy thereof and of
all information set forth thereon.

(c) Subject to Sections 6.6(a) and (b), (i) if there is a positive difference
between (A) the Adjustment Amounts, and (B) the Accrued Business Employee
Obligations (the “Positive True-Up Amount”), at the Contributee’s election, made
by notice to SAM, given within ten (10) Business Days of the Contributee’s
receipt of the True-Up Statement, the Positive True-Up Amount shall be paid to
SAM or its designee in immediately available funds by the Contributee not later
than the last Business Day of the calendar month next following the month in
which the True-Up Statement is delivered to the Contributee by SAM; but (ii) if
the Accrued Business Employee Obligations are greater than the Adjustment
Amounts, then the positive difference between (A) the Accrued Business Employee
Obligations, and (B) the Adjustment Amounts (the “ABEO Amount”) shall be paid to
the Contributee or its designee in immediately available funds by SAM not later
than the last Business Day of the calendar month in which the True-Up Statement
is delivered to the Contributee by SAM.

(d) Subject to Sections 6.6(a) and (b), the True-Up Statement and either the
Positive True-Up Amount or the ABEO Amount, as the case may be, shall be deemed
to be, and shall be, final, binding and conclusive on the Parties. The
Contributee may dispute any amounts reflected on the True-Up Statement,
including SAM’s calculation of either the Positive True-Up Amount or the ABEO
Amount, as the case may be, or that the True-Up Statement contained mathematical
errors on its face; provided, however, that the Contributee shall notify SAM in
writing of any such dispute, setting forth in reasonable detail any item on the
True-Up Statement with which the Contributee disagrees and the basis in
reasonable detail for such disagreement, which notice must be provided within
ten (10) calendar days of the Contributee’s receipt of the True-Up Statement. In
the event of such a dispute, SAM and the Contributee shall attempt to reconcile
their differences, and any written resolution by them as to any disputed amounts
and any revisions to the Positive True-Up Amount or the ABEO Amount shall be
final, binding and conclusive. If, however, SAM and the Contributee are unable
to reach a resolution to such effect within ten (10) calendar days of SAM’s
receipt of the Contributee’s written notice of dispute, then SAM and the
Contributee shall submit the amounts remaining in dispute for resolution to an
independent accounting firm, mutually appointed by the Parties (such independent
accounting firm being herein referred to as the “Arbiter”). The Arbiter shall
determine and report to the Parties such remaining disputed amounts and any

 

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resulting revisions to the Positive True-Up Amount or the ABEO Amount, as the
case may be, and such report shall be final, binding and conclusive on the
parties hereto, and the True-Up Statement shall be revised forthwith upon
receipt of, and consistent with, the report of the Arbiter, and the revised
Positive True-Up Amount or the revised ABEO Amount, as the case may be,
thereafter shall be deemed to be, and shall be the Positive True-Up Amount or
the ABEO Amount, as the case may be, for all purposes of this Section 6.6,
including offset and payment, if any, pursuant to Section 6.6(c), anything to
the contrary contained in this Agreement or any other Transaction Document
notwithstanding. Each of the Parties agree to use commercially reasonable
efforts to cooperate with the Arbiter and to cause the Arbiter to resolve any
dispute no later than ten (10) calendar days after matters in dispute are
submitted to the Arbiter for determination. In performing its duties hereunder,
it is understood and agreed that the Arbiter will be functioning as an expert
and not as a mediator or arbitrator. The fees and disbursements of the Arbiter
shall be split evenly between SAM and the Contributee.

6.7 Rule 3-05 Audit. SAM acknowledges that under Rule 3-05 of Regulation S-X,
SST II is required to provide certain information in connection with reports SST
II is required to file with the Securities and Exchange Commission. Accordingly,
SAM agrees to (a) allow SST II and SST II’s representatives, at SST II’s sole
cost and expense, to perform an audit of SAM’s operations and/or the operations
of the Business to the extent required under Rule 3-05 of Regulation S-X (a
“Rule 3-05 Audit”), (b) make available to SST II and SST II’s representatives
for inspection and audit at SAM’s offices of SAM’s books and records relating
solely to SAM’s operations and/or the operations of the Business that are
reasonably requested by SST II for any full or partial years necessary to
complete the Rule 3-05 Audit, and (c) sign a customary management representation
letter with respect to the Rule 3-05 Audit to be provided by SST II’s
independent auditors. In connection with the foregoing, SST II shall give SAM no
less than three (3) Business Days’ prior written notice of SST II’s plans to
inspect and audit such books and records. Notwithstanding the foregoing, SAM
shall not be required to (i) prepare or compile any materials, (ii) incur any
third part costs or expenses in connection with the Rule 3-05 Audit,
(iii) provide any books, records, or materials that are not within the
possession or control of SAM or any of its Affiliates, or (iv) make any
representations or warranties with respect to such information beyond a
customary management representation letter signed by SAM requested by any
accounting firm engaged by SST II to deliver its auditors report with respect to
the Rule 3-05 Audit. SAM’s obligations under this Section 6.7 shall survive the
Closing for a period of twelve (12) months following the Closing Date. Any Rule
3-05 Audit shall be completed as soon as reasonably possible and SST II and SST
II’s representatives shall use commercially reasonable best efforts not to
interfere with SAM’s ability to conduct its business. Upon written request by
SAM, copies of all Rule 3-05 Audits shall be promptly provided to SAM at no cost
to SAM.

ARTICLE 7

INDEMNIFICATION

7.1 Contributor Indemnification. From and after the Closing, subject to the
limitations and other provisions of this Article 7, SAM agrees to indemnify,
defend, and hold Contributee, SST II, and each of their respective Affiliates,
and their respective officers, directors, stockholders, partners, managers, and
members and their respective heirs, legatees, devisees, executors,
administrators, trustees, personal representatives, successors and assigns
(each, a “Contributee Indemnified Party”), harmless from and against any and all
Losses incurred by any Contributee Indemnified Party relating to:

(a) the breach of any representation or warranty made by SAM or SS OP Holdings
and contained in Article 3;

 

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(b) the breach or failure to perform any covenant or agreement made or
undertaken by SAM or SS OP Holdings in this Agreement;

(c) the Excluded Assets; and

(d) the Excluded Liabilities.

7.2 Contributee Indemnification. From and after the Closing, subject to the
limitations and other provisions of this Article 7, Contributee and SST II
jointly and severally agree to indemnify, defend and hold SAM, SS OP Holdings,
and their respective officers, directors, stockholders, partners, managers, and
members and their respective heirs, legatees, devisees, executors,
administrators, trustees, personal representatives, successors and assigns
(each, a “Contributor Indemnified Party”), harmless from and against any and all
Losses incurred by any Contributor Indemnified Party relating to:

(a) the breach by Contributee or SST II of any representation or warranty made
by Contributee or SST II and contained in Article 4;

(b) the breach or failure to perform any covenant or agreement made or
undertaken by Contributee or SST II in this Agreement;

(c) the Contributed Assets; and

(d) the Assumed Liabilities.

7.3 Indemnifying Procedures.

(a) Upon receipt by a Contributor Indemnified Party or a Contributee Indemnified
Party, as the case may be (the “Indemnified Party”), of notice from a Third
Party of any action, suit, proceeding, claim, demand or assessment against such
Indemnified Party that might give rise to a claim for Losses under this Article
7, the Indemnified Party shall promptly give written notice thereof to the
Contributee, on the one hand, or SAM, on the other hand, as the case may be (the
“Indemnifying Party”), indicating in reasonable detail the nature of such claim
and the basis therefor, including (i) a copy of all papers served with respect
to any such action, and (ii) the Indemnified Party’s best estimate of the amount
of Losses that may arise from any such action; provided, however, that failure
to give such notice shall not affect the indemnification provided hereunder
except to the extent the Indemnifying Party shall have been prejudiced as a
result of such failure. The Indemnifying Party will have thirty (30) days after
such notice is given (the “Notice Period”) to notify the Indemnified Party
(i) whether or not it disputes the liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to such claim or demand, and
(ii) whether or not it desires, at the cost and expense of the Indemnifying
Party, to defend the Indemnified Party with respect to the Third Party claim;
provided, however, that, upon notice thereof to the Indemnifying Party, any
Indemnified Party is hereby authorized, but is not obligated, prior to the
Notice Period, to file any motion, answer or other pleading that it reasonably
shall deem necessary or appropriate to protect its interests or those of the
Indemnifying Party. If the Indemnifying Party notifies the Indemnified Party
within the Notice Period that it desires to defend the Indemnified Party against
the Third Party claim, the Indemnifying Party will have the right to control the
defense of such matter by all appropriate proceedings and with counsel of its
own choosing, at its sole cost and expense, and to compromise or settle such
matter; provided, however, that the Indemnifying Party will not agree to the
entry of any judgment or enter into any settlement or compromise with respect to
such matter without the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld, delayed or conditioned), unless the
terms of such settlement shall contain as an unconditional term thereof a full
and complete release of the Indemnified Party by the Third Party. If the
Indemnified Party desires to participate in any such defense,

 

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it may do so at its sole cost and expense, and in a manner so as not to
unreasonably interfere with the defense of such matter by the Indemnifying
Party. If the Indemnifying Party fails to respond to the Indemnified Party
within the Notice Period, elects not to defend the Indemnified Party, or after
electing to defend fails to commence or reasonably pursue such defense, then the
Indemnified Party shall have the right, but not the obligation, to undertake or
continue the defense of, and to compromise or settle (exercising reasonable
business judgment), the matter; provided, however, that any such compromise or
settlement consists solely of money damages to be borne by the Indemnifying
Party and otherwise shall be reasonably satisfactory to the Indemnifying Party
and shall contain as an unconditional term thereof a full and complete release
of the Indemnifying Party by the Third Party in form and substance reasonably
satisfactory to the Indemnifying Party. Payments to the Indemnified Party for
Losses for Third Party claims which are otherwise covered by the indemnification
obligations herein shall not be required except to the extent that the
Indemnified Party has expended or simultaneously with such payment will expend,
out-of-pocket sums. If the Indemnifying Party has assumed the defense of a Third
Party claim, it shall reasonably proceed with such defense and promptly notify
the Indemnified Party if it proposes to compromise or settle such Third Party
claim in accordance with this Section 7.3. In any event in which the
Indemnifying Party has assumed the defense of a Third Party claim, the
Indemnified Party and its counsel shall cooperate with the Indemnifying Party
and its counsel; provided, however, that the foregoing shall not prevent the
Indemnified Party from taking the position that it is entitled to
indemnification hereunder.

(b) In the event any Indemnified Party should have an indemnification claim
against any Indemnifying Party under a Transaction Document that does not
involve a claim by a Third Party, the Indemnified Party, as quickly as is
practicable (but in any event within thirty (30) days after first becoming aware
of an indemnification claim) and by the most expeditious means available
(promptly confirmed in writing), shall deliver notice of such claim to the
Indemnifying Party indicating in reasonable detail the nature of such claim and
the basis therefor, including the Indemnified Party’s best estimate of the
amount of Losses that may arise from any such claim. The failure by any
Indemnified Party to so notify the Indemnifying Party shall relieve the
Indemnifying Party from any liability that it may have to such Indemnified Party
to the extent that the Indemnifying Party has been prejudiced by such failure.

(c) SST II and the Contributee shall, as well as their respective directors,
officers, partners, and employees and the Contributee’s attorneys, accountants
and agents to, at the request of SAM, cooperate with SAM as may be reasonably
required in connection with the investigation and defense of any Third Party
claim, Action or investigation relating to SAM’s business, the Excluded Assets
or the Excluded Liabilities that is brought against SAM or any of its Affiliates
relating in any way to the Business at any time on or after the Closing.
Likewise, SAM shall, and shall instruct its directors, managers, officers,
employees, attorneys, accountants and agents to, at Contributee’s request,
cooperate with Contributee as may be reasonably required in connection with the
investigation and defense of any Third Party claim, Action, or investigation
relating to the Contributed Assets or the Assumed Liabilities that is brought
against Contributee or SST II or any of their respective Affiliates at any time
on or after the Closing.

7.4 Survival.

(a) All covenants, agreements, representations and warranties of any Party under
this Agreement, subject to the limitations specified in Section 7.4(b), (c) and
(d), shall survive the Closing, and any indemnification claim asserted in
accordance with Section 7.3 prior to the expiration of the applicable survival
period shall continue in effect with respect to such claim until such claim
shall have been finally resolved or settled.

(b) Except as otherwise provided in Section 7.4(d) or (e), the obligations of
the Contributor under Section 7.1(a) shall survive the Closing until the
expiration of twelve (12) consecutive months after the Closing Date, with
respect to claims made by Contributee Indemnified Parties by notice in writing
to SAM, received on or before such last day.

 

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(c) Except as otherwise provided in Section 7.4(d) or (e), the obligations of
the Contributee and SST II under Section 7.2(a) shall survive the Closing until
the expiration of twelve (12) consecutive months after the Closing Date, with
respect to claims made by Contributor Indemnified Parties by notice in writing
to the Contributee, received on or before such last day.

(d) Notwithstanding the provisions of Section 7.4(a), 7.4(b) and 7.4(c), the
obligations of:

(i) SAM in accordance with Section 7.1(a) with respect to the warranties and
representations contained in Section 3.1, Section 3.2, Section 3.8(a), the third
sentence of Section 3.11, and Section 3.12 (the “Fundamental Representations”)
shall survive the Closing for a period of three (3) years;

(ii) SAM in accordance with Section 7.1(b), (c) and (d) with respect to any
covenants and agreements to be performed and complied with following the Closing
and with respect to the Excluded Assets and the Excluded Liabilities, in each
case, shall survive the Closing indefinitely;

(iii) Contributee and SST II in accordance with Section 7.2(a) with respect to
the warranties and representations contained in Section 4.1, Section 4.2 and
Section 4.4 shall survive the Closing for a period of three (3) years; and

(iv) Contributee and SST II in accordance with Section 7.2(b), (c) and (d) with
respect to any covenants and agreements to be performed and complied with
following the Closing and with respect to the Contributed Assets and the Assumed
Liabilities, in each case, shall survive the Closing indefinitely.

(e) The limitations under Sections 7.4(b) and (c) shall not apply in respect of
claims for Fraud.

7.5 Limitations. Notwithstanding anything to the contrary contained in this
Agreement or in any other Transaction Document:

(a) Other than with respect to any claim for breach of a Fundamental
Representation, the Contributee Indemnified Parties shall not be entitled to
indemnification pursuant to Section 7.1(a) with respect to any claim for
indemnification unless and until the amount of Losses (excluding costs and
expenses of the Contributee Indemnified Parties incurred in connection with
making such claim under this Agreement) incurred by the Contributee Indemnified
Party for any individual occurrence exceeds $50,000 (the “Per-Claim Basket” and
any such Losses disregarded pursuant to this Section 7.5(a), an “Ineligible
Loss”), after which, subject to Section 7.5(b), the Contributee Indemnified
Parties shall be entitled to indemnification for such Losses with respect to
such occurrence and not only those in excess of the Per-Claim Basket.

(b) Other than with respect to any claim for breach of a Fundamental
Representation, the Contributee Indemnified Parties shall not be entitled to
indemnification pursuant to Section 7.1(a) with respect to any claim for
indemnification unless and until the aggregate amount of Losses (excluding
(x) Ineligible Losses and (y) costs and expenses of the Contributee Indemnified
Parties incurred in connection with making such claims under this Agreement)
incurred by the Contributee Indemnified Parties exceeds $1,150,000 (the “Basket
Amount”), after which the Contributee Indemnified Parties shall only be entitled
to indemnification for such Losses to the extent such Losses exceed the Basket
Amount.

 

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(c) Other than with respect to any claim for breach of a Fundamental
Representation, the aggregate amount of Losses for which the Contributee
Indemnified Parties shall be entitled to indemnification pursuant to
Section 7.1(a) will not exceed $11,500,000 the “Cap”); provided, however, that,
notwithstanding the foregoing or anything else to the contrary, (i) in no event
shall SAM have any Liability under Section 7.1(a) in excess of the Cap and
(ii) the aggregate Liability of SAM and SS OP Holdings in respect of claims for
indemnification pursuant to this Agreement (including under any provision of
this Article 7) will not exceed the Contribution Value.

(d) If SAM or SS OP Holdings breaches any representation or warranty for which
indemnification may be provided under Section 7.1(a), then, solely for purposes
of calculating the dollar amount of Losses for which any Contributee Indemnified
Party is entitled to indemnification for such breach, each of such
representations and warranties that contain any qualification as to “material,”
“Material Adverse Effect” and similar qualifiers will be deemed and interpreted
to be a representation or warranty made without such qualification. If
Contributee or SST II breaches any representation or warranty for which
indemnification may be provided under Section 7.2(a), then, solely for purposes
of calculating the dollar amount of Losses for which any Contributor Indemnified
Party is entitled to indemnification for such breach, each of such
representations and warranties that contain any qualification as to “material,”
“Material Adverse Effect” and similar qualifiers will be deemed and interpreted
to be a representation or warranty made without such qualification.

(e) The amount of any Loss for which indemnification is provided under this
Article 7 shall be net of (i) any amounts recovered by the Indemnified Party
pursuant to any indemnification by, or indemnification agreement with, any Third
Party, (ii) third party insurance proceeds (for the avoidance of doubt, not
including self-insurance or insurance with a captive insurance Affiliate) or
other sources of reimbursement received, which shall be an offset against such
Loss, and (iii) an amount equal to the present value of the Tax benefits
available to the Indemnified Party attributable to such Loss. The Indemnified
Party shall use commercially reasonable efforts to seek recovery from all such
sources to minimize any Loss for which indemnification is provided under this
Article 7. If the amount to be netted hereunder from any payment required under
this Article 7 is determined after payment by the Indemnifying Party of any
amount otherwise required to be paid to an Indemnified Party pursuant to this
Article 7, the Indemnified Party shall repay to the Indemnifying Party, promptly
after such determination, any amount that the Indemnifying Party would not have
had to pay pursuant to this Article 7 had such determination been made at the
time of such payment.

7.6 Exclusive Remedy. The Parties acknowledge and agree that the remedies
provided for in this Agreement and the other Transaction Documents shall be the
Parties’ sole and exclusive remedies with respect to the subject matter of this
Agreement and of the other Transaction Documents, other than for a claim of
Fraud and further that nothing in this Agreement shall operate to limit the
rights of the Parties to seek equitable remedies (including injunctive relief or
specific performance). No amount shall be recoverable under this Agreement by
any Indemnified Party to the extent such Party has asserted a claim and received
indemnification for such Loss under any Transaction Document other than this
Agreement or under applicable Law. It is the Parties’ intention that the
indemnification provisions set forth in this Agreement shall control and
determine the Parties’ respective rights and obligations concerning any claims
with respect to the Contributed Assets, the Excluded Assets, the Assumed
Liabilities or the Excluded Liabilities.

 

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7.7 Nature of Damages. Notwithstanding anything to the contrary contained in
this Agreement or any other Transaction Document, in no event shall any
Indemnifying Party be liable to any Indemnified Party for any consequential,
punitive, exemplary indirect, incidental or other similar damages, including
lost profits, loss of enterprise value, diminution in value of any business,
damage to reputation or loss of goodwill, or any damages calculated based on a
multiple of profits, revenue or any other financial metric, except to the extent
such damages are finally and actually paid by the Indemnified Party to an
unaffiliated Third Party in connection with a claim against the Indemnified
Party.

7.8 Method of Payment. All amounts due and payable from an Indemnifying Party to
an Indemnified Party shall be made by wire transfer of immediately available
funds within five (5) Business Days following final determination of a claim
pursuant to Section 7.3, provided, however, that at SAM’s sole discretion, any
amount payable to a Contributee Indemnified Party pursuant to this Article 7 may
be satisfied in cash, OP Units or both. In the event that SAM elects to satisfy
or settle any claim for indemnification hereunder pursuant to the proviso of the
foregoing sentence, then the Contributee Indemnified Parties shall receive a
number of OP Units (as equitably adjusted from time to time in respect of any
conversion, split, combination, recapitalization or the like affecting the OP
Units) equal to the quotient obtained by dividing (a) the sum of (i) the amount
of Losses indemnifiable by SAM hereunder and elected by SAM to be paid in OP
Units, minus (ii) the amount of Losses indemnifiable by SAM hereunder and
elected by SAM to be paid in cash, by (b) the then-current value of the OP
Units, determined as provided in Schedule 7.8 (as equitably adjusted from time
to time in respect of any conversion, split, combination, recapitalization or
the like affecting the OP Units).

7.9 Tax Treatment of Indemnity Payments. Any payments made to any Party pursuant
to this Article 7 shall constitute an adjustment of the Contribution Value for
income tax purposes and shall be treated as such by the Contributor and the
Contributee on their Tax Returns to the extent permitted by applicable Law.

ARTICLE 8

GENERAL

8.1 Schedules; Exhibits; Integration. Each schedule and exhibit delivered
pursuant to the terms of this Agreement shall be in writing and shall constitute
a part of this Agreement. This Agreement (and such schedules and exhibits),
together with the other Transaction Documents, constitutes the entire agreement
among the Parties pertaining to the subject matter hereof and supersedes all
prior agreements and understandings of the Parties in connection therewith.

8.2 Interpretation. For all purposes of the Transaction Documents, except as
otherwise specifically stated therein:

(a) the terms defined in Article 9 have the meanings assigned to them in Article
9 and include the plural as well as the singular;

(b) all accounting terms not otherwise defined herein have the meanings assigned
under GAAP;

(c) pronouns of either gender or neuter shall include, as appropriate, the other
pronoun forms;

(d) words defined as one part of speech (such as a noun) include a corresponding
meaning when used as another part of speech (such as a verb);

 

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(e) the words “include” and “including” shall be without limitation and shall be
construed to mean “include, but not be limited to” or “including, without
limitation;”

(f) references to exhibits, schedules, Articles, Sections and paragraphs shall
be references to the exhibits, schedules, Articles, Sections and paragraphs of
this Agreement;

(g) the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision;

(h) references to “writing” or comparable expressions includes a reference to
facsimile transmission, email or comparable means of communication; and

(i) any Law defined or referred to in this Agreement or in any agreement or
instrument that is referred to herein means such Law as from time to time
amended, modified or supplemented, including (in the case of statutes) by
succession of comparable successor Laws and the related regulations and
published interpretations thereof; provided that for purposes of any of the
representations or warranties contained in this Agreement that are made as of a
specific date or dates, references to any Law shall be deemed to refer to such
Law, as amended, modified and/or supplemented and to regulations thereunder, and
published interpretations thereof, in each case as of such specified date or
dates.

8.3 Submission to Jurisdiction; Governing Law; Waiver of Jury Trial. The Parties
(a) hereby irrevocably and unconditionally submit to the jurisdiction of the
state and federal courts located in Wilmington, Delaware for the purpose of any
Action arising out of or based upon any of the Transaction Documents (“Covered
Matters”), (b) agree not to commence any Action arising out of, or based upon,
any Covered Matters except in the state courts or federal courts located in
Wilmington, Delaware, and (c) hereby waive, and agree not to assert, by way of
motion, as a defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is
brought in an inconvenient forum, that the venue of the Action is improper or
that this Agreement or the subject matter of any Covered Matter may not be
enforced in or by such court. All Covered Matters shall be governed by,
interpreted and construed in accordance with the Laws of the State of Delaware
without regard to conflict of law principles that would result in the
application of any Law other than the Law of the State of Delaware. Each Party
hereby waives, to the fullest extent permitted by applicable Law, any right it
may have to a trial by jury in respect of any Covered Matter. Each Party hereto
(i) certifies that no representative, agent or attorney of any other Party has
represented, expressly or otherwise, that such Party would not, in the event of
any Covered Matter, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other Parties have been induced to enter into this Agreement by,
among other things, the mutual waiver and certifications in this Section 8.3.

8.4 Amendment; Waiver. Subject to compliance with applicable Law, the provisions
of this Agreement may not be amended, modified, or supplemented without the
prior written consent of SAM, SS OP Holdings, the Contributee, and SST II. No
waiver by any of the Parties of any of the provisions of this Agreement shall be
effective unless explicitly set forth in writing and executed by the party
sought to be charged with such waiver. No waiver by any of the Parties any
default, misrepresentation or breach of representation, warranty, covenant or
other agreement hereunder, whether intentional or not, shall be deemed to extend
to any prior or subsequent default, misrepresentation or breach or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.

8.5 Specific Performance. The Parties agree that irreparable damage would occur
if any provision of this Agreement were not performed in accordance with the
terms hereof and that the Parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically the
performance of the terms and provisions hereof in any federal or state court
located in Wilmington, Delaware in addition to any other remedy to which they
are entitled at law or in equity. Any requirements for the securing or posting
of any bond with such remedy are hereby waived.

 

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8.6 Time of the Essence. Time is of the essence with regard to all obligations
under this Agreement.

8.7 Assignment. No Transaction Document or any rights or obligations under any
of them are assignable without the prior written consent of all of the Parties.

8.8 Headings. The descriptive headings of the articles, sections and subsections
of this Agreement are for convenience only and do not constitute a part of this
Agreement.

8.9 Recitals. The recitals are fully incorporated into this Agreement by
reference.

8.10 Parties in Interest. This Agreement shall be binding upon, and inure to the
benefit of, each Party, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement. Nothing in this Agreement is
intended to relieve or discharge the obligation of any third Person to any Party
to this Agreement.

8.11 Notices. Any notice or other communication hereunder must be given in
writing and either (a) delivered in Person, (b) transmitted by electronic mail
or facsimile, (c) transmitted by telefax or telecommunications mechanism,
provided that receipt is confirmed and any notice so given is also mailed as
provided in the following clause (d), or (d) mailed by certified or registered
mail, postage prepaid, return receipt requested as follows:

If to SAM or SS OP Holdings, addressed to:

SmartStop Asset Management, LLC

10 Terrace Road

Ladera Ranch, CA 92694

Attention: H. Michael Schwartz

Email: hms@sam.com

With a copy (which shall not constitute notice) to:

Latham & Watkins LLP

650 Town Center Drive, 20th Floor

Costa Mesa, California 92626

Attention: William Cernius

Email: William.Cernius@LW.com

If to the Contributee or SST II, addressed to:

Strategic Storage Trust II, Inc.

10 Terrace Road

Ladera Ranch, CA 92694

Attention: H. Michael Schwartz

Email: hms@sam.com

 

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With a copy (which shall not constitute notice) to:

Nelson Mullins Riley & Scarborough LLP

201 17th Street NW, Suite 1700

Atlanta, GA 30363

Attention: Michael K. Rafter, Esq.

Email: mike.rafter@nelsonmullins.com

or to such other address or to such other Person as each Party shall have last
designated by such notice to the other Parties. Each such notice or other
communication shall be effective (i) when delivered in Person, (ii) if given by
telecommunication, when transmitted to the applicable number so specified in (or
pursuant to) this Section 8.11 and an appropriate confirmation is received, and
(iii) if given by mail, three (3) Business Days after delivery or the first
attempted delivery.

8.12 Expenses. Except as otherwise set forth in this Agreement, each of SAM and
Contributee shall pay its own expenses incident to the negotiation, preparation
and performance of this Agreement and the transactions contemplated hereby,
including, but not limited to, the fees, expenses and disbursements of its
accountants and counsel and, to the extent required hereunder, the fees and
expenses of securing third party consents and approvals required to be obtained
by it.

8.13 Representation By Counsel; Interpretation. Each of SAM, SS OP Holdings, the
Contributee, and SST II acknowledges that each Party to this Agreement has been
represented by counsel in connection with this Agreement and the transactions
contemplated by this Agreement. Accordingly, any rule of Law or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the Party that drafted it has no application and is expressly
waived. The provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of the Contributee and SAM.

8.14 Severability. If any provision of this Agreement is determined to be
invalid, illegal or unenforceable by any Governmental Entity, the remaining
provisions of this Agreement shall remain in full force and effect; provided
that the essential terms and conditions of this Agreement for all Parties remain
valid, binding and enforceable. In the event of any such determination, the
Parties agree to negotiate in good faith to modify this Agreement to fulfill as
closely as possible the original intents and purposes hereof. To the extent
permitted by Law, the Parties hereby to the same extent waive any provision of
Law that renders any provision hereof prohibited or unenforceable in any
respect.

8.15 Counterparts. This Agreement may be executed in any number of counterparts,
any of which may be executed and transmitted by facsimile, and each of which
shall be deemed an original of this Agreement, and all of which, when taken
together, shall be deemed to constitute one and the same Agreement.

8.16 Attorney-Client Privilege. SST II and the Contributee acknowledge that
Latham & Watkins LLP (“Prior Company Counsel”) has represented Contributor and
their respective officers, employees and directors in one or more matters
relating to Transaction Documents or the transactions contemplated thereby. SST
II and Contributee agree that any attorney-client privilege, attorney
work-product protection or the expectation of client confidence with respect to
such representation, including all communications among Prior Company Counsel
and the Contributor in preparation for, and negotiation and consummation of, the
transactions contemplated by the Transaction Documents, shall survive the
Closing and shall remain in effect unless or until otherwise waived. SST II and
the Contributee agree that all such rights shall continue to reside with the
Contributor, shall not pass to or be claimed or used by SST II or the
Contributee and shall be excluded from the Contributed Assets. SST II and the
Contributee further acknowledge that any advice given to or communication with
the Contributor shall not be subject to any joint privilege and shall be owned
solely by the Contributor.

 

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ARTICLE 9

DEFINITIONS

For all purposes of the Transaction Documents, except as otherwise expressly
provided or unless the context in which a term is used clearly requires
otherwise:

“ABEO Amount” has the meaning as set forth in Section 6.6(c).

“Accrued Business Employee Obligations” has the meaning as set forth in
Section 5.3(c).

“Action” means any action, complaint, petition, suit or other legal proceeding,
whether civil or criminal, in law or in equity, or before any arbitrator or
Governmental Entity.

“Adjustment Amount” or “Adjustment Amounts” has the meaning set forth in
Section 6.6(b).

“Administrative Services Agreement” means that certain agreement of even date
herewith among SAM, SS OP Holdings, SST II, and the Contributee, providing for
the performance of various administrative services by the Contributee or SAM,
respectively, substantially in the form as set forth in Exhibit E hereto.

“Affiliate” means with respect to any Person, any other Person that controls, is
controlled by or is under common control with such Person. For purposes of this
definition, “control” (including, with its correlative meanings, the terms
“controlling,” “controlled by,” and “under common control with”) as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through ownership of voting securities or equity interests, by Contract or
otherwise.

“Agreement” has the meaning as set forth in the introductory paragraph.

“Arbiter” has the meaning as set forth in Section 6.6(d).

“Assigned Contracts” has the meaning as set forth in Section 1.5.

“Assignment of Contracts Agreement” has the meaning as set forth in
Section 2.2(c).

“Assignment of Domain Names” means an assignment in substantially the form
attached to the Agreement as Exhibit C assigning and transferring the Domain
Names identified therein to the assignee named therein, as amended from time to
time.

“Assignment of Trademarks” means an assignment in substantially the form
attached to the Agreement as Exhibit D assigning and transferring the trademarks
identified therein to the assignee named therein, as amended from time to time.

“Assumed Liabilities” has the meaning as set forth in Section 1.3.

“Basket Amount” has the meaning as set forth in Section 7.5(b).

“Bill of Sale and Assumption Agreement” has the meaning as set forth in
Section 2.2(a).

“Bonus Liabilities” has the meaning as set forth in Section 5.3(c).

 

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“Business” has the meaning as set forth in the Recitals.

“Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking and other deposit gathering institutions in the Borough of
Manhattan, City and State of New York are authorized or required by applicable
Law to be closed.

“Business Employee” means a US Continuing Employee or a Canadian Employee.

“Canadian Employee” has the meaning set forth in Section 5.3(b).

“Canadian Plan” has the meaning as set forth in Section 3.14(a).

“Cap” has the meaning as set forth in Section 7.5(c).

“Cash Consideration” has the meaning as set forth in Section 1.4.

“Class A-1 OP Units” has the meaning set forth in Section 1.4.

“Class A-2 OP Units” has the meaning set forth in Section 1.4.

“Closing” has the meaning as set forth in Section 2.1.

“Closing Date” has the meaning as set forth in Section 2.1.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.

“Code” means the Internal Revenue Code of 1986.

“Contract” means any binding agreement or contract, including any understanding,
arrangement, instrument, note, guaranty, indemnity, representation, warranty,
deed, lease, assignment, power of attorney, certificate, purchase order, work
order, insurance policy, benefit plan, commitment, covenant, assurance or
obligation of any kind or nature.

“Contributed Assets” has the meaning as set forth in Section 1.1.

“Contributee” has the meaning as set forth in the introductory paragraph of this
Agreement.

“Contributee Indemnified Party” has the meaning as set forth in Section 7.1.

“Contribution Value” has the meaning as set forth in Section 1.4.

“Contributor” has the meaning as set forth in the introductory paragraph to this
Agreement.

“Contributor Consents” has the meaning as set forth in Section 3.4.

“Contributor Indemnified Party” has the meaning as set forth in Section 7.2.

“Copyrights” means copyrights, whether registered or unregistered, in published
works and unpublished works, and pending applications to register the same.

“Covered Matters” has the meaning as set forth in Section 8.3.

 

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“D&O Indemnified Parties” has the meaning as set forth in Section 6.3(a).

“Domain Names” means Internet domain names.

“Employee Plan” means each (i) employee benefit plan (as defined in Section 3(3)
of ERISA), (ii) nonqualified deferred compensation plan (as defined in
Section 409A of the Code), or (iii) employment, severance, change-in-control,
bonus, incentive, equity compensation, health, welfare, or fringe benefit,
retirement, and any other compensatory or employee benefit plan, contract or
arrangement of any kind (whether or not subject to ERISA, written or oral,
qualified or nonqualified, funded or unfunded, foreign or domestic, currently
effective or terminated), under which any present or former employee,
independent contractor, officer or director of SSA or any SSA Subsidiary has any
present or future right to benefits, or with respect to which SSA or any SSA
Subsidiary could reasonably be expected to have any Liability.

“Encumbrance” means any lien, encumbrance, security interest, charge, mortgage,
deed of trust, deed to secure debt, option, pledge or restriction (whether on
voting, sale, transfer, disposition or otherwise) on transfer of title.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” shall mean any other corporation or trade or business that
would be treated as a single employer with SAM, SS OP Holdings, SSA or any SSA
Subsidiary under Code Section 414 or Section 4001(a)(14) or 4001(b) of ERISA.

“Excluded Assets” has the meaning as set forth in Section 1.2.

“Excluded Liabilities” has the meaning as set forth in Section 1.3.

“Existing Debt” has the meaning as set forth in Section 1.4.

“Fraud” means an act, committed by or on behalf of a Party, with intent to
deceive another Party to enter into this Agreement, and requires (i) a false
representation of material fact made in this Agreement (with respect to (a) SAM
and SS OP Holdings, the making of the representations expressly set forth in
Article 3, and (b) the Contributee and SST II, the making of the representations
expressly set forth in Article 4), (ii) with actual knowledge (as opposed to
constructive, imputed or implied knowledge) that such representation is false,
(iii) with an intention to induce the Party to whom such representation is made
to act or refrain from acting in reliance upon it, (iv) causing that Party, in
justifiable or reasonable reliance upon such false representation and with
ignorance to the falsity of such representation, to take or refrain from taking
action, (v) causing such Party to suffer damage by reason of such reliance and
(vi) compliance with any other applicable legal requirements for asserting a
claim of fraud (including, pleading with particularity).

“Fundamental Representations” has the meaning as set forth in Section 7.4(d)(i).

“GAAP” means United States generally accepted accounting principles.

“Governmental Entity” means any government or any agency, bureau, board,
commission, court, department, official, political subdivision, tribunal or
other instrumentality in each case of any government, whether federal,
provincial, state or local, domestic or foreign.

“Indemnified Party” has the meaning as set forth in Section 7.3(a).

 

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“Indemnifying Party” has the meaning as set forth in Section 7.3(a).

“Ineligible Loss” has the meaning as set forth in Section 7.5(a).

“Intellectual Property” means any Marks, Patents, Copyrights, Trade Secrets,
Software or Domain Names.

“IRS” means the Internal Revenue Service or any successor entity.

“Key Employees” means the individuals listed on Schedule 2.2(h).

“Key Person Agreements” has the meaning set forth in Section 2.2(h).

“Knowledge” or “to the knowledge” of any Party means (a) in the case of SST II,
the actual knowledge of the individuals listed in Schedule 9.1(a), (b) in the
case of the Contributee, the actual knowledge of the individuals listed in
Schedule 9.1(b), and (c) in the case of SAM, the actual knowledge of the
individuals listed in Schedule 9.1(c).

“Law” means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity, and any Order.

“Liability” means all indebtedness, obligations and other liabilities of a
Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due), including those arising under any Law, Action,
investigation, inquiry or Order and those arising under any Contract.

“Loss” or “Losses” means any and all costs, expenses, direct losses or damages,
fines, penalties or Liabilities (including interest which may be imposed or
incurred in connection therewith, court costs, litigation expenses, reasonable
attorneys’ fees and costs).

“Mark” means any brand name, logos, service mark, trademark, trade name, or
trade dress, together with the goodwill connected with the use of and symbolized
by, and all registrations or application for registration of, any of the
foregoing.

“Material Adverse Effect” means, (i) with respect to the Business, any event,
change, condition or occurrence that has or could reasonably be expected to have
a material adverse impact or effect on the Contributed Assets, the Assumed
Liabilities or the Business, taken as a whole; provided that “Material Adverse
Effect” shall neither be deemed to include the impact or effect of, nor shall
there be taken into account in determining whether there has been a “Material
Adverse Effect”: (a) changes in Laws or interpretations thereof or binding
directives of Governmental Entities, (b) the announcement of this Agreement and
the transactions contemplated hereby or the taking of any action contemplated by
the Transaction Documents or any of them, (c) changes in GAAP or the
interpretations thereof, (d) compliance with, and performance of, this Agreement
and the transactions contemplated by this Agreement, (e) changes affecting
general economic conditions or the industry in which SAM operates, including
competition in any geographic areas in which SAM operates, (f) the failure of
SAM to meet projections of earnings, revenues or other financial measures
(whether such projections were made by SAM or any independent Third Parties),
(g) general political, economic, financial or capital market conditions
(including interest rates), (h) national or international political or social
conditions, including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national emergency or war, or
the occurrence of any military or terrorist attack within or upon the United
States, or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, equipment or personnel of the United
States, or (i) changes in financial, banking, or securities markets (including
any disruption thereof and any decline in the price of any security or any
market index), and (ii) with respect to SAM, SS OP Holdings, SST II or the
Contributee, a material adverse effect on the ability of such Person, in a
timely manner, to enter into, to perform its obligations under, or to consummate
the transactions contemplated by, this Agreement.

 

 

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“Non-Compete Cancellation Event” means the occurrence of any of the following:
(i) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act is or becomes the “beneficial owner” (as defined in rule 13d-3
under the Exchange Act), directly or indirectly, of securities of SST II
representing a majority of the voting power of SST II’s then outstanding
securities, (ii) a change in the composition of the board of directors of SST II
occurs such that the individuals who, as of immediately after the Closing,
constitute the board of directors of SST II cease for any reason to constitute
at least a majority of the board of directors of SST II, other than in the case
of any individual who becomes a member of the board of directors of SST II
subsequent to the Closing whose election or nomination for election by SST II’s
equityholders was approved by a vote of at least a majority of those individuals
who were former members of the board of directors of SST II, (iii) a
reorganization, merger or consolidation, sale or other disposition of all or
substantially all of the assets of SST II or other transaction is consummated
(other than a transaction between SST II or one of its Affiliates, on the one
hand, and any entity that is, at the time of such transaction, sponsored or
advised by SAM or SST II or their Affiliates, on the other hand), unless, in
each case, immediately following such transaction or disposition, the
individuals and entities who were the beneficial owners of the voting securities
of SST II immediately prior to the transaction or disposition beneficially own,
directly or indirectly, a majority of the voting power of the then outstanding
voting securities of the surviving entity in the transaction or disposition
(including an entity which as a result of such transaction owns SST II or all or
substantially all of its assets), or (iv) H. Michael Schwartz is removed either
as a member of the board of directors or as an executive officer of SST II for
any reason other than for Cause (as that term is defined in SST II’s Executive
Severance and Change of Control Plan in existence as of the date of this
Agreement).

“Notice Period” has the meaning as set forth in Section 7.3(a).

“OP Units” has the meaning as set forth in Section 1.4.

“Operating Partnership” has the meaning as set forth in the introductory
paragraph of this Agreement.

“Operating Partnership Agreement” means that certain Third Amended and Restated
Limited Partnership Agreement of Strategic Storage Operating Partnership II,
L.P. entered into concurrently herewith.

“Order” means any decree, injunction, judgment, order, ruling, assessment or
writ of a Governmental Entity or arbitration award.

“Organizational Documents” means the articles of incorporation, certificate of
incorporation, charter, bylaws, articles of formation or organization,
certificate of formation or organization, regulations, operating agreement,
limited liability company agreement, certificate of limited partnership,
partnership agreement, and all other similar documents, instruments, or
certificates executed, adopted, or filed in connection with the creation,
formation, or organization of a Person, including any amendments thereto.

“Parties” has the meaning as set forth in the introductory paragraph.

“Party” has the meaning as set forth in the introductory paragraph.

“Patents” means all patents and patent applications.

 

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“Per-Claim Basket” has the meaning as set forth in Section 7.5(a).

“Permit” means any license, permit, franchise, certificate of authority,
approval, registration, or authorization, or any waiver of the foregoing,
required to be issued by any Governmental Entity.

“Permitted Encumbrance” means (i) mechanics, materialmen’s and similar
Encumbrances with respect to any amounts not yet due and payable or which are
being contested in good faith through (if then appropriate) appropriate
proceedings, (ii) Encumbrances for Taxes not yet delinquent or which are being
contested in good faith through (if then appropriate) appropriate proceedings,
(iii) Encumbrances on real property (including easements, covenants, rights of
way and similar restrictions of record) that (A) would be disclosed by a
physical inspection of such real property, or (B) do not materially interfere
with the present uses of such real property, and (iv) to the extent terminated
in connection with the payment of Existing Debt, Encumbrances securing payment,
or any other obligations, of the Contributor, SSA or any SSA Subsidiary with
respect to such Existing Debt.

“Permitted Transfer” means (1) a Transfer or all or a portion of the OP Units to
any Affiliate of SAM or SS OP Holdings, or any of their respective current or
former employees; (2) a Transfer of all or a portion of the OP Units to any
Person established and held for the direct or indirect benefit of a holder of
the OP Units (including pursuant to a Transfer permitted by clause (4) below) or
his or her respective family members, provided that any such Transfer shall not
involve a disposition for value other than equity interests in any such Person;
(3) a Transfer of all or a portion of the OP Units to SAM, a member or economic
interest owner of SAM or parent or subsidiary of SAM in accordance with
applicable securities laws; or (4) a Transfer of all or a portion of the OP
Units as required by applicable Law or Order.

“Person” means an association, a corporation, an individual, a limited liability
company, a partnership (whether general or limited), a trust (whether inter
vivos or testamentary) or any other entity or organization, whether organized
for profit or not for profit, and including a Governmental Entity.

“Personal Property” means machinery, computer programs, computer software,
tools, motor vehicles, office equipment, inventories, supplies, plant, spare
parts, and other tangible or intangible personal property, excluding, however,
furniture, fixtures, and equipment, and Contracts, Permits or Intellectual
Property.

“Positive True-Up Amount” has the meaning as set forth in Section 6.6(c).

“PTO” has the meaning as set forth in Section 3.16(d).

“PTO Liabilities” has the meaning as set forth in Section 5.3(c).

“Real Property” has the meaning as set forth in Section 3.10(a).

“Redemption of Limited Partner Interest Agreement” means that certain Redemption
of Limited Partner Interest Agreement, dated of even date herewith by and among
SST II, SST II Advisor, and the Contributee, as the same may be amended.

“Registration Rights Agreement” means that certain Registration Rights
Agreement, dated of even date herewith, by and among SST II and SS OP Holdings,
as the same may be amended.

“Regulation D” has the meaning as set forth in Section 3.19(a).

“REIT” means a “real estate investment trust” within the meaning of Code
Section 856.

 

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“REIT Shares” means shares of common stock, par value $0.001 per share, in SST
II (or successor entity, as the case may be), the terms and conditions of which
are set forth in the charter of SST II filed with the State Department of
Assessments and Taxation of Maryland, as amended, supplemented, or restated from
time to time.

“Rule 3-05 Audit” has the meaning as set forth in Section 6.7.

“SAM” has the meaning as set forth in the introductory paragraph of this
Agreement.

“SAM Financial Statements” has the meaning as set forth in Section 3.6(a).

“Securities Act” means the Securities Act of 1933, as amended.

“Self Storage Programs” means the self storage-focused programs advised or
sponsored by SST II, including SST IV and SSGT II, as well as any future self
storage-focused programs so advised or sponsored.

“Software” means computer software or middleware.

“SS OP Holdings” has the meaning as set forth in the introductory paragraph of
this Agreement.

“SSA Contracts” has the meaning as set forth in Section 3.13.

“SSA Subsidiary” and “SSA Subsidiaries” have the meaning as set forth in the
Recitals.

“SSGT II” has the meaning as set forth in the Recitals.

“SST II” has the meaning as set forth in the introductory paragraph of this
Agreement.

“SST II Advisor” means Strategic Storage Advisor II, LLC.

“SST II Required Third Party Consents” has the meaning as set forth in
Section 4.3.

“SST IV” has the meaning as set forth in the Recitals.

“Tax” means any gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
escheatment or unclaimed property, assessable payment under Code Section 4980H,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not, and including any obligations to
indemnify or otherwise assume or succeed to the Tax liability of any other
Person, including pursuant to any tax sharing agreement or any other contract
relating to the sharing or payment of any such tax, pursuant to operation of Law
or otherwise.

“Tax Return” means any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Taxing
Authority in connection with the determination, assessment, collection, or
payment of any Tax or in connection with the administration, implementation, or
enforcement of or compliance with any Law relating to any Tax, including any
amendment thereof.

 

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“Taxing Authority” means the IRS or any other Governmental Entity responsible
for the administration of any Tax.

“Third Party” means any Person other than any Party.

“Trademark License Agreement” means that certain Trademark and Domain Names
License Agreement by and between Contributee and SAM, dated as of June 28, 2019.

“Trade Secrets” means all know-how, trade secrets or other proprietary
information.

“Transaction Documents” means this Agreement, the Bill of Sale and Assumption
Agreement, the Assignment of Domain Names, the Assignment of Trademarks, the
Assignment of Contracts Agreement, the Redemption of Limited Partner Interest
Agreement, the Key Person Agreements, the Registration Rights Agreement, the
Operating Partnership Agreement, and any amendments to any of them.

“Transfer” has the meaning as set forth in Section 6.5.

“Transfer Date” has the meaning as set forth in Section 5.3(a).

“TriNet” means TriNet Group, Inc.

“True-Up Statement” has the meaning as set forth in Section 6.6(a).

“US Continuing Employee” has the meaning as set forth in Section 5.3(a).

“US Plan” has the meaning as set forth in Section 3.14(a).

[Remainder of page left intentionally blank]

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.

 

CONTRIBUTOR:            SAM:   SMARTSTOP ASSET MANAGEMENT, LLC   a Delaware
limited liability company   By:  

/s/ H. Michael Schwartz

    H. Michael Schwartz     Chief Executive Officer   SS OP HOLDINGS:  
SMARTSTOP OP HOLDINGS, LLC   a Delaware limited liability company   By:  

/s/ H. Michael Schwartz

    H. Michael Schwartz     Chief Executive Officer

 

[Signature page to Contribution Agreement]

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SST II: STRATEGIC STORAGE TRUST II, INC. a Maryland corporation By:  

/s/ Michael S. McClure

  Michael S. McClure   President CONTRIBUTEE/OPERATING PARTNERSHIP: STRATEGIC
STORAGE OPERATING PARTNERSHIP II, L.P. a Delaware limited partnership for itself
and as general partner of the Contributee By:   STRATEGIC STORAGE TRUST II, INC.
  Its General Partner   By:  

/s/ Michael S. McClure

    Michael S. McClure     President

 

[Signature page to Contribution Agreement]