Exhibit 10.44

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

 

THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE (hereinafter “Agreement”) is made
and entered into as of the 16th day of September, 2004, by and among Shurgard
Storage Centers, Inc., a Washington corporation (“Shurgard”); Gerald A.
Schwalbach (“Schwalbach”), as trustee of the Revocable Trust of Gerald A.
Schwalbach dated December 23, 1998 (the “Schwalbach Trust”); Patrick L.
Stotesbery (“Stotesbery”), as trustee of the Revocable Trust of Patrick L.
Stotesbery dated January 27, 1999 (the “Stotesbery Trust” and, together with the
Schwalbach Trust, the “Trusts”); NBS Associates Limited Partnership (“NBS”) and
NDLC Limited Partnership (“NDLC”). Shurgard, the Trusts, NBS and NDLC shall
collectively be referred to herein as the “Parties.” The Trusts, NBS and NDLC
shall collectively be referred to herein as the “Sellers” and individually as a
“Seller.”

 

RECITALS

 

A. The Parties, along with others, entered into an Amended and Restated
Agreement and Plan of Merger, dated as of June 30,2003 (hereinafter, the “Merger
Agreement”).

 

B. In conjunction with the Merger Agreement, the Parties entered into a
registration rights agreement, dated as of June 30, 2003 (hereinafter the
“Registration Rights Agreement”).

 

C. The Sellers have asserted that Shurgard breached certain agreements,
covenants, representations and warranties in the Merger Agreement and certain
agreements and covenants in the Registration Rights Agreement and made certain
misstatements and omissions in connection with the issuance of Shurgard Common
Stock.

 

D. Shurgard has asserted that the Sellers have breached certain representations
and warranties in the Merger Agreement relating to the condition of the roofs at
certain of the facilities acquired by Shurgard pursuant to the Merger Agreement.

 

E. The Parties desire to resolve the alleged breaches pursuant to this
Agreement.

 

F. The Parties deem settlement of these claims to be in their best interests.
The Parties desire to avoid the expense, inconvenience and distraction of
litigation and have entered into this Agreement for such purposes.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants
and agreements contained herein, and of other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties
mutually agree as follows:

 

1. Distribution of Additional Shares of Shurgard Common Stock. Within five
business days following the execution of this Agreement, Shurgard shall deliver
to each of the Sellers one or more certificates representing, in the aggregate,
50,000 shares of Shurgard Common Stock (“Additional Shares”). Such Additional
Shares shall be issued to the Sellers pro rata based on the number of shares of
Shurgard Common Stock issued to the Sellers in the

 

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Merger at the Effective Time. Each of the Sellers (i) acknowledges that the
Additional Shares have not be been registered under the Federal and State
securities laws in reliance upon exemptions from registration thereunder; and
(ii) makes the representations and warranties set forth in Section 4.5 of the
Merger Agreement with respect to the Additional Shares, with the exception that
Stotesbery is now a resident of the State of California.

 

2. Registration Statement. The Parties hereby agree that, except as otherwise
set forth in this Section 2, the Registration Rights Agreement is hereby
terminated in its entirety, together with the rights and obligations of the
parties thereunder. Without limiting the generality of the foregoing, (a)
Shurgard is relieved of its obligations under Sections 1.2(a) and 1.2(c) of the
Registration Rights Agreement to use its best efforts to keep the Registration
Statement (as defined in the Registration Rights Agreement) effective through
the end of the Effectiveness Period (as defined in the Registration Rights
Agreement); (b) the Sellers are relieved of their obligations under Section
1.2(b) to notify Shurgard of their intent to sell shares of Shurgard common
stock and (c) Shurgard’s right to prohibit or suspend offers or sales of shares
of Shurgard common stock owned by the Sellers is terminated. Notwithstanding the
foregoing, Sections 1.5, Sections 3.1 through 3.8 and Section 3.10 shall survive
and not be terminated and the rights and obligations of the parties thereunder
shall continue following execution of this Agreement.

 

3. No Admission of Liability. The Parties acknowledge this Agreement is the
result of good faith negotiations and compromises. Nothing in this Agreement is
intended to or shall constitute an admission of liability by any Party to
another, and all such liability is expressly denied.

 

4. Release by Shurgard. Shurgard, on behalf of itself and its Affiliates, does
hereby absolutely and unconditionally release and forever discharge each Seller
and their respective Affiliates, predecessors, successors and assigns, and their
respective past and present officers, partners, trustees, employees, agents and
representatives, or their respective marital communities, of and from any and
all claims, causes of action, damages, costs, losses and expenses of any kind,
nature or description, whether arising at law or in equity, including claims
under federal or state securities laws, or other federal or state statutes, or
common law or otherwise, whether contingent or fixed, known or unknown,
suspected or unsuspected, liquidated or unliquidated, whether based in contract,
tort or other theory of recovery and whether for compensation, court costs,
attorney’s fees or punitive damages, which Shurgard or its Affiliates or any of
them has had, now has, or claims to have, now or in the future, against the
Sellers, their respective Affiliates or any of them relating to, arising or
resulting from, or in connection with the Merger Agreement, the Registration
Rights Agreement, any schedule or exhibit thereto, any other documents executed
in connection therewith and/or any transaction contemplated thereby, other than
(i) any claims relating to a breach of Section 1.5 of the Registration Rights
Agreement with respect to which this release does not apply and (ii) any claims
relating to a breach of Sections 6.15 and Article IX as it applies to Sections
3.1, 3.2, 3.3, 3.4, 4.1, 4.3, 4.4, 4.5, Section 3.12 and Sections 9.2(a)(iii),
(iv), (v), (vi) and (vii), which shall continue to be effective in accordance
with Article IX (including, specifically, the deductible, the limitations on
amount and the claims procedures set forth in Sections 9.4 and 9.5,
respectively) and with respect to which this release does not apply.

 

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5. Release by Sellers. Each Seller, on behalf of itself and its Affiliates, does
hereby absolutely and unconditionally release and forever discharge Shurgard and
its Affiliates, predecessors, successors and assigns, and its past and present
officers, directors, shareholders, employees, agents and representatives, or
their respective marital communities, of and from any and all claims, causes of
action, damages, costs, losses and expenses of any kind, nature or description,
whether arising at law or in equity, including claims under federal or state
securities laws, or other federal or state statutes, or common law or otherwise,
whether contingent or fixed, known or unknown, suspected or unsuspected,
liquidated or unliquidated, whether based in contract, tort or other theory of
recovery and whether for compensation, court costs, attorney’s fees or punitive
damages, which the Sellers, their respective Affiliates or any of them has had,
now has, or claims to have, now or in the future, against Shurgard or its
Affiliates relating to, arising or resulting from, or in connection with the
Merger Agreement, the Registration Rights Agreement, any schedule or exhibit
thereto, any other documents executed in connection therewith and/or any
transaction contemplated thereby, other than (i) any claims relating to a breach
of Section 1.5 of the Registration Rights Agreement with respect to which this
release does not apply, and (ii) any claims relating to a breach of Article IX
as it applies to Sections 5.1, 5.2, 5.3 and 5.4, which shall continue to be
effective in accordance with Article IX (including, specifically, the
deductible, the limitations on amount and the claims procedures set forth in
Sections 9.4 and 9.5, respectively) and with respect to which this release does
not apply. In connection with this release, Shurgard shall not have any
liability to the Sellers if, after the date of this Agreement, Rule 144 is
unavailable for the Sellers because of Shurgard’s failure to satisfy Rule
144(c). In addition, Shurgard’s obligation to issue 50,000 shares of Shurgard
Common Stock under Section 2.12 of the Merger Agreement is hereby terminated in
its entirety.

 

6. Confidentiality. The Parties agree that the terms of this Agreement are not
to be, and will not be, disseminated or otherwise published in any manner to any
third party. Notwithstanding the foregoing, disclosure to a third party may
occur, to the minimum extent necessary, under any one or more of the following
circumstances:

 

  (a) Insofar as disclosure is necessary to carry out and effectuate the terms
of this Agreement; or

 

  (b) Insofar as disclosure is necessary to a Party’s independent accountants
for tax or audit purposes; or

 

  (c) Insofar as disclosure is required by court order or subpoena or requested
by any governmental agency in the course of any formal or informal
investigation;

 

  (d) Insofar as disclosure is required by Law or the rules of the New York
Stock Exchange; or

 

  (e) Insofar as disclosure is made to a person’s spouse or legal advisors.

 

7. Representations. The Parties represent and warrant that, in entering into
this Agreement, no statements, representations, duress, coercion, promises or
warranties were made by the Parties or their representatives to influence,
induce or cause the other to enter into this Agreement, other than such
statements and representations specifically recited in this

 

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Agreement. The Parties represent and warrant that they have relied on their own
judgment, and have had the opportunity to seek advice of counsel, regarding the
terms of this Agreement. The Parties acknowledge that they enter into this
Agreement freely and voluntarily upon their own information and investigation.

 

8. Waiver. Any failure by any Party to comply with any of the obligations,
agreements or covenants contained in this Agreement may be waived only in
writing, but not in any other manner, by the Party or Parties against whom or
with respect to which enforcement of the waiver is sought.

 

9. Governing Law. This Agreement shall be governed by the internal laws of the
State of Washington, without regard to the conflicts of laws provisions of such
state.

 

10. Headings. The headings and captions used in this Agreement are for
convenience only and shall not constitute a part of this Agreement.

 

11. Amendment. The Parties hereto may amend, modify or supplement this Agreement
only by a written instrument signed by all of the Parties.

 

12. Counterparts. This Agreement maybe executed in counterparts, each of which
shall be deemed an original but all of which taken together shall constitute but
one and the same document.

 

13. Further Assurances. The Parties agree to execute any other documents and
take any other actions as may be reasonably necessary to further the purposes
of, or to carry out the intent of, this Agreement.

 

14. Binding Effect. This Agreement shall inure to the benefit of, and shall be
binding upon, each of the Parties hereto.

 

15. Definitions. Any term not defined in this Agreement shall have the
definition ascribed to it in the Merger Agreement.

 

16. Entire Agreement. This Agreement sets forth the entire understanding of the
Parties with respect to the subject matter hereof.

 

17. Attorney’s Fees. If there is a breach of this Agreement, the breaching Party
shall be responsible for all costs and expenses, including reasonable attorney’s
fees and costs, associated with the enforcement of any provision of this
Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, we have set our hands intending to be legally bound hereby.

 

        SHURGARD STORAGE CENTERS, INC.            

By:

 

/s/ Charles K. Barbo

           

Name:

 

Charles K. Barbo

           

Title:

 

Chairman/CEO

        Revocable Trust of Patrick L. Stotesbery Created under Agreement dated
January 27, 1999            

By:

 

/s/ Patrick L. Stotesbery

               

Patrick L. Stotesbery, Trustee

        Revocable Trust of Gerald A. Schwalbach Created under Agreement dated
December 23, 1998            

By:

 

/s/ Gerald A. Schwalbach

               

Gerald A. Schwalbach, Trustee

        NDLC LIMITED PARTNERSHIP            

By:

 

/s/ Patrick L. Stotesbery

           

Name:

 

Patrick L. Stotesbery

           

Title:

  Trustee of the Revocable Trust of Patrick L. Stotesbery, the general partner  
      NBS ASSOCIATES LIMITED PARTNERSHIP            

By:

 

/s/ Gerald A. Schwalbach

           

Name:

 

Gerald A. Schwalbach

           

Title:

 

President of G.A.S. Eight, Inc. the general partner

 

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