Exhibit 10.2

 

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PURCHASE AGREEMENT

 

among

 

 

Extra Space Storage LP

 

ESS Statutory Trust III,

 

 

and

 

 

Merrill Lynch International

 

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Dated as of July 27, 2005

 

 

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PURCHASE AGREEMENT

($15,000,000 Trust Preferred Securities)

 

THIS PURCHASE AGREEMENT, dated as of July 27, 2005, (this “Purchase Agreement”),
is entered into among Extra Space Storage LP, a Delaware limited partnership
(the “Company”), ESS Statutory Trust III, a Delaware statutory trust (the
“Trust”, and together with the Company, the “Sellers”), Merrill Lynch
International (“MLI”) or its assignee (the “Purchaser”).

 

W I T N E S S E T H :

 

WHEREAS, the Sellers propose to issue and sell 40,000 Preferred Securities of
the Trust, having a stated liquidation amount of $1,000 per security (the
“Preferred Securities”);

 

WHEREAS, the entire proceeds from the sale of the Preferred Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the “Common Securities”), and will be used by the Trust
to purchase $41,238,000 in principal amount of the unsecured junior subordinated
notes of the Company (the “Junior Subordinated Notes”);

 

WHEREAS, the Preferred Securities and the Common Securities for the Trust will
be issued pursuant to the Amended and Restated Trust Agreement (the “Trust
Agreement”), dated as of the Closing Date, among the Company, as depositor,
JPMorgan Chase Bank, National Association, a national banking association, as
property trustee (in such capacity, the “Property Trustee”), Chase Bank USA,
National Association, a national banking association, as Delaware trustee (in
such capacity, the “Delaware Trustee”), the Administrative Trustees named
therein (in such capacities, the “Administrative Trustees”) and the holders from
time to time of undivided beneficial interests in the assets of the Trust; and

 

WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior
Subordinated Indenture, dated as of the Closing Date (the “Indenture”), between
the Company and JPMorgan Chase Bank, National Association, a national banking
association, as indenture trustee (in such capacity, the “Indenture Trustee”).

 

NOW, THEREFORE, in consideration of the mutual agreements and subject to the
terms and conditions herein set forth, the parties hereto agree as follows:

 

1. Definitions. The Preferred Securities, the Common Securities and the Junior
Subordinated Notes are collectively referred to herein as the “Securities.” This
Purchase Agreement, the Indenture, the Trust Agreement and the Securities are
collectively referred to herein as the “Operative Documents.” All other
capitalized terms used but not defined in this Purchase Agreement shall have the
respective meanings ascribed thereto in the Indenture.

 

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2. Purchase and Sale of the Preferred Securities.

 

(a) The Sellers agree to sell to the Purchaser, and the Purchaser agrees to
purchase the preferred securities for an aggregate amount equal to $15,000,000
(the “Purchase Price”). The Purchaser shall be responsible for the rating agency
costs and expenses. The Trust shall use the Purchase Price, together with the
proceeds from the sale of the Common Securities, to purchase the Junior
Subordinated Notes from the Company.

 

(b) Delivery or transfer of, and payment for, the Preferred Securities shall be
made at 11:00 A.M. Eastern Standard time (11:00 A.M. New York time), on July 27,
2005, (such date and time of delivery and payment for the Preferred Securities
being herein called the “Closing Date”). The Preferred Securities shall be
transferred and delivered to the Purchaser against the payment of the Purchase
Price to the Sellers made by wire transfer in immediately available funds on the
Closing Date to a U.S. account designated in writing by the Company at least two
business days prior to the Closing Date.

 

(c) Delivery of the Preferred Securities shall be made at such location, and in
such names and denominations, as the Purchaser shall designate in writing at
least two business days in advance of the Closing Date. The Company and the
Trust agree to have the Preferred Securities available for inspection and
checking by the Purchaser not later than 2:00 P.M., Eastern Standard time, on
the business day prior to the Closing Date. The closing for the purchase and
sale of the Preferred Securities shall occur at the offices of DLA Piper Rudnick
Gray Cary US LLP, 1221 S. Mopac Expressway, Suite 400, Austin, Texas 78746 or
such other place as the parties hereto shall agree.

 

3. Conditions. The obligations of the parties under this Purchase Agreement are
subject to the following conditions:

 

(a) The representations and warranties contained herein shall be accurate as of
the date of delivery of the Preferred Securities.

 

(b) Latham & Watkins LLP and Nelson Christensen & Helsten, P.C., special counsel
for the Company and the Trust (collectively, the “Company Counsel”), shall each
have delivered an opinion, dated the Closing Date, addressed to the Purchaser,
Cohen Bros. & Company and JPMorgan Chase Bank, National Association, in
substantially the form set out in Annex A-I and Annex A-II hereto, respectively,
and the Company shall have furnished to the Purchaser the opinion of the
Company’s General Counsel or a certificate signed by the Company’s general
partner, dated the Closing Date, addressed to the Purchaser, in substantially
the form set out in Annex A-III hereto. In rendering their opinions, the Company
Counsel may rely as to factual matters upon certificates or other documents
furnished by officers, directors, partners and trustees of the Company and the
Trust and by government officials (provided, however, that copies of any such
certificates or documents are delivered to the Purchaser) and by and upon such
other documents as such counsel may, in their reasonable opinions, deem
appropriate as a basis for the Company Counsel’s opinion. The Company Counsel
may specify the jurisdictions in which they are admitted to practice and that
they are not admitted to practice in any other jurisdiction and are not experts
in the

 

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law of any other jurisdiction. If the Company Counsel are not admitted to
practice in the State of New York, the opinions of the Company Counsel may
assume, for purposes of the opinions, that the laws of the State of New York are
substantively identical, in all respects material to the opinions, to the
internal laws of the state in which such counsel are admitted to practice. Such
Company Counsel opinions shall not state that they are to be governed or
qualified by, or that they are otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).

 

(c) The Purchaser and the Sellers shall have been furnished the opinion of DLA
Piper Rudnick Gray Cary US LLP, special tax counsel for the Purchaser, dated the
Closing Date, addressed to the Purchaser and JPMorgan Chase Bank, National
Association, in substantially the form set out in Annex B hereto.

 

(d) The Purchaser shall have received the opinion of Richards, Layton & Finger,
P.A., special Delaware counsel for the Delaware Trustee, dated the Closing Date,
addressed to the Purchaser, JPMorgan Chase Bank, National Association, the
Delaware Trustee and the Company, in substantially the form set out in Annex C
hereto.

 

(e) The Purchaser shall have received the opinion of Gardere Wynne Sewell LLP,
special counsel for the Property Trustee and the Indenture Trustee, dated the
Closing Date, addressed to the Purchaser, in substantially the form set out in
Annex D hereto.

 

(f) The Purchaser shall have received the opinion of Richards, Layton & Finger,
P.A., special Delaware counsel for the Delaware Trustee, dated the Closing Date,
addressed to the Purchaser and JPMorgan Chase Bank, National Association, in
substantially the form set out in Annex E hereto.

 

(g) The Company shall have furnished to the Purchaser a certificate of the
Company, signed by the general partner of the Company, and the Trust shall have
furnished to the Purchaser a certificate of the Trust, signed by an
Administrative Trustee of the Trust, in each case dated the Closing Date, and,
in the case of the Company, as to (i) and (ii) below and, in the case of the
Trust, as to (i) below.

 

(i) the representations and warranties in this Purchase Agreement are true and
correct in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company and the Trust have in all
material respects complied with all the agreements and satisfied all the
conditions on either of their part to be performed or satisfied at or prior to
the Closing Date; and

 

(ii) since the date of the latest Financial Statements (as defined below), there
has been no material adverse change in the condition (financial or other),
earnings, business or assets of the Company and its subsidiaries, whether or not
arising from transactions occurring in the ordinary course of business (a
“Material Adverse Change”).

 

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(h) Subsequent to the execution of this Purchase Agreement, there shall not have
been any change, or any development involving a prospective change, in or
affecting the condition (financial or other), earnings, business or assets of
the Company and its subsidiaries, whether or not occurring in the ordinary
course of business, the effect of which is, in the Purchaser’s reasonable
judgment, so material and adverse as to make it impractical or inadvisable to
proceed with the purchase of the Preferred securities.

 

(i) Prior to the Closing Date, the Company and the Trust shall have furnished to
the Purchaser and its counsel such further information, certificates and
documents as the Purchaser or its counsel may reasonably request.

 

If any of the conditions specified in this Section 3 shall not have been
fulfilled when and as provided in this Purchase Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Purchase Agreement shall not be reasonably satisfactory in form and substance to
the Purchaser or its counsel, this Purchase Agreement and all the Purchaser’s
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by the Purchaser. Notice of such cancellation shall be given to the Company
and the Trust in writing or by telephone or facsimile confirmed in writing.

 

Each certificate signed by any trustee of the Trust or any officer or partner of
the Company and delivered to the Purchaser or the Purchaser’s counsel in
connection with the Operative Documents and the transactions contemplated hereby
and thereby shall be deemed to be a representation and warranty of the Trust
and/or the Company, as the case may be, and not by such trustee, officer or
partner in any individual capacity.

 

4. Representations and Warranties of the Company and the Trust. The Company and
the Trust jointly and severally represent and warrant to, and agree with the
Purchaser, as follows:

 

(a) Neither the Company nor the Trust, nor any of their “Affiliates” (as defined
in Rule 501(b) of Regulation D (“Regulation D”) under the Securities Act (as
defined below)), nor any person acting on its or their behalf, has, directly or
indirectly, made offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of any of the
Securities under the Securities Act of 1933, as amended (the “Securities Act”).

 

(b) Neither the Company nor the Trust, nor any of their Affiliates, nor any
person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of any of the Securities.

 

(c) The Securities (i) are not and have not been listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or quoted on a U.S. automated inter-dealer
quotation system and (ii) assuming the Purchaser is a “Qualified Purchaser” as
such term is defined in Section 2(a)(51) of the Investment Company Act of 1940,
as amended (the “Investment

 

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Company Act”), are not of an open-end investment company, unit investment trust
or face-amount certificate company that are, or are required to be, registered
under Section 8 of the Investment Company Act, and the Securities otherwise
satisfy the eligibility requirements of Rule 144A(d)(3) promulgated pursuant to
the Securities Act (“Rule 144A(d)(3)”).

 

(d) Neither the Company nor the Trust, nor any of their Affiliates, nor any
person acting on its or their behalf, has engaged, or will engage, in any
“directed selling efforts” within the meaning of Regulation S under the
Securities Act with respect to the Securities.

 

(e) Assuming the Purchaser is a “Qualified Purchaser” as such term is defined in
Section 2(a)(51) of the Investment Company Act, neither the Company nor the
Trust is, and, immediately following consummation of the transactions
contemplated hereby and the application of the net proceeds therefrom, will not
be, an “investment company” or an entity “controlled” by an “investment
company,” in each case within the meaning of section 3(a) of the Investment
Company Act.

 

(f) Neither the Company nor the Trust has paid or agreed to pay to any person
any compensation for soliciting another to purchase any of the Securities,
except for the Preferred Securities Commission and/or the sales commission in
the aggregate amount of $1,200,000, the which Company has agreed to pay as set
forth in the Flow of Funds Memorandum of even date herewith.

 

(g) The Trust has been duly created and is validly existing in good standing as
a statutory trust under the Delaware Statutory Trust Act, 12 Del. C. §3801, et
seq. (the “Statutory Trust Act”) with all requisite power and authority to own
property and to conduct the business it transacts and proposes to transact and
to enter into and perform its obligations under the Operative Documents to which
it is a party. The Trust is duly qualified to transact business as a foreign
entity and is in good standing in each jurisdiction in which such qualification
is necessary, except where the failure to so qualify or be in good standing
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business or assets of the Trust, whether or not occurring
in the ordinary course of business. The Trust is not a party to or otherwise
bound by any agreement other than the Operative Documents.

 

(h) The Trust Agreement has been duly authorized by the Company and, on the
Closing Date specified in Section 2(b), will have been duly executed and
delivered by the Company and the Administrative Trustees of the Trust, and,
assuming due authorization, execution and delivery by the Property Trustee and
the Delaware Trustee, will be a legal, valid and binding obligation of the
Company and the Administrative Trustees, enforceable against them in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar law,
affecting creditors’ rights generally and to general principles of equity. Each
of the Administrative Trustees of the Trust is an employee of the Company and
has been duly authorized by the Company to execute and deliver the Trust
Agreement.

 

(i) The Indenture has been duly authorized by the Company and, on the Closing
Date, will have been duly executed and delivered by the Company, and, assuming

 

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due authorization, execution and delivery by the Indenture Trustee, will be a
legal, valid and binding obligation of the Company enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and to general principles of
equity.

 

(j) The Preferred Securities and the Common Securities have been duly authorized
by the Trust and, when issued and delivered against payment therefor on the
Closing Date in accordance with this Purchase Agreement, in the case of the
Preferred Securities, and in accordance with the Common Securities Subscription
Agreement, in the case of the Common Securities, will be validly issued, fully
paid and non-assessable and will represent undivided beneficial interests in the
assets of the Trust entitled to the benefits of the Trust Agreement, enforceable
against the Trust in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally
and to general principles of equity. The issuance of the Securities is not
subject to any preemptive or other similar rights. On the Closing Date, all of
the issued and outstanding Common Securities will be directly or indirectly
owned by the Company free and clear of any pledge, security interest, claim,
lien or other encumbrance of any kind (each, a “Lien”).

 

(k) The Junior Subordinated Notes have been duly authorized by the Company and,
on the Closing Date, will have been duly executed and delivered to the Indenture
Trustee for authentication in accordance with the Indenture and, when
authenticated in the manner provided for in the Indenture and delivered to the
Trust against payment therefor in accordance with the Junior Subordinated Note
Purchase Agreement, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy
insolvency and similar laws affecting creditors’ rights generally and to general
principles of equity.

 

(l) This Purchase Agreement has been duly authorized, executed and delivered by
the Company and the Trust.

 

(m) Neither the issue and sale of the Common Securities, the Preferred
Securities or the Junior Subordinated Notes, nor the purchase of the Junior
Subordinated Notes by the Trust, nor the execution and delivery of and
compliance with the Operative Documents by the Company or the Trust, nor the
consummation of the transactions contemplated herein or therein, (i) will
conflict with or constitute a violation or breach of (A) the Trust Agreement or
the charter or bylaws or other organizational documents of the Company or any
subsidiary of the Company or (B) any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, governmental authority,
agency or instrumentality or court, domestic or foreign, having jurisdiction
over the Trust or the Company or any of its subsidiaries or their respective
properties or assets (collectively, the “Governmental Entities”), or (ii) will
conflict with or constitute a violation or breach of, or a default or Repayment
Event (as defined below) under, or result in the creation or imposition of any
Lien upon any property or assets of the Trust, the Company or any of the
Company’s subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which (A) the Trust,
the Company or any of its subsidiaries

 

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is a party or by which it or any of them may be bound, or (B) to which any of
the property or assets of any of them is subject, or any judgment, order or
decree of any court, Governmental Entity or arbitrator, except, in the case of
this clause (ii) and clause (i)(B) above, for such conflicts, breaches,
violations, defaults, Repayment Events (as defined below) or Liens which (X)
would not, singly or in the aggregate, adversely affect the consummation of the
transactions contemplated by the Operative Documents and (Y) would not, singly
or in the aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business, liabilities and assets of the Company and its
subsidiaries taken as a whole, whether or not occurring in the ordinary course
of business (a “Material Adverse Effect”). As used herein, a “Repayment Event”
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Trust or the Company or any of its subsidiaries
prior to its scheduled maturity.

 

(n) The Company has been duly formed and is validly existing as a partnership in
good standing under the laws of Delaware, with all requisite power and authority
to own, lease and operate its properties and conduct the business it transacts
and proposes to transact, and is duly qualified to transact business and is in
good standing in each jurisdiction where the nature of its activities requires
such qualification, except where the failure of the Company to be so qualified
would not, singly or in the aggregate, have a Material Adverse Effect.

 

(o) The Company has no subsidiaries that are material to its business, financial
condition or earnings other than those subsidiaries listed in Schedule A
attached hereto (collectively, the “Significant Subsidiaries”). Each Significant
Subsidiary has been duly formed and is validly existing and in good standing
under the laws of the jurisdiction in which it is chartered or organized, with
all requisite power and authority to own, lease and operate its properties and
conduct the business it transacts and proposes to transact. Each Significant
Subsidiary is duly qualified to transact business and is in good standing in
each jurisdiction where the nature of its activities requires such
qualification, except where the failure to be so qualified would not, singly or
in the aggregate, have a Material Adverse Effect.

 

(p) Each of the Trust, the Company and each of the Company’s subsidiaries hold
all necessary approvals, authorizations, orders, licenses, consents,
registrations, qualifications, certificates and permits (collectively, the
“Governmental Licenses”) of and from Governmental Entities necessary to conduct
their respective businesses as now being conducted, and neither the Trust, the
Company nor any of the Company’s subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Government
License, except where the failure to be so licensed or approved or the receipt
of an unfavorable decision, ruling or finding, would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity or the failure
of such Governmental Licenses to be in full force and effect, would not, singly
or in the aggregate, have a Material Adverse Effect; and the Company and its
subsidiaries are in compliance with all applicable laws, rules,

 

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regulations, judgments, orders, decrees and consents, except where the failure
to be in compliance would not, singly or in the aggregate, have a Material
Adverse Effect.

 

(q) All of the issued and outstanding shares of capital stock or other ownership
interest, as the case may be, of the Company and each of its subsidiaries are
validly issued, fully paid and non-assessable; all of the issued and outstanding
capital stock or other ownership interests of each subsidiary of the Company is
owned by the Company, directly or through subsidiaries, free and clear of any
Lien, claim or equitable right; and none of the issued and outstanding capital
stock or other ownership interests of the Company or any subsidiary was issued
in violation of any preemptive or similar rights arising by operation of law,
under the charter or by-laws or other organizational documents of such entity or
under any agreement to which the Company or any of its subsidiaries is a party.

 

(r) Neither the Company nor any of its subsidiaries is (i) in violation of its
respective charter or by-laws or similar organizational documents or (ii) in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Company or any such
subsidiary is a party or by which it or any of them may be bound or to which any
of the property or assets of any of them is subject, except, in the case of
clause (ii), where such violation or default would not, singly or in the
aggregate, have a Material Adverse Effect.

 

(s) There is no action, suit or proceeding before or by any Governmental Entity,
arbitrator or court, domestic or foreign, now pending or, to the knowledge of
the general partner of the Company or the administrative trustees of the Trust,
threatened against or affecting the Trust or the Company or any of the Company’s
subsidiaries, except for such actions, suits or proceedings that, if adversely
determined, would not, singly or in the aggregate, adversely affect the
consummation of the transactions contemplated by the Operative Documents or have
a Material Adverse Effect.

 

(t) The accountants of Extra Space Storage, Inc. (the “Parent”), a Maryland
corporation, who audited and reviewed the Financial Statements (as defined
below) are independent public accountants of Parent within the meaning of the
Securities Act, and the rules and regulations of the Securities and Exchange
Commission (the “Commission”) thereunder.

 

(u) The audited consolidated financial statements (including the notes thereto)
and schedules of Parent, and its consolidated subsidiaries for the fiscal year
ended December 31, 2004, and interim Financial Statements dated March 31, 2005
(the “Financial Statements”) provided to the Purchaser are the most recent
available consolidated financial statements of Parent and its consolidated
subsidiaries, respectively, and fairly present in all material respects, in
accordance with U.S. generally accepted accounting principles, the financial
position of Parent and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the dates and for the
periods therein specified. Such consolidated financial statements and schedules
have been prepared in accordance with U.S.

 

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generally accepted accounting principles (“GAAP”) consistently applied
throughout the periods involved (except as otherwise noted therein).

 

(v) None of the Trust, the Company nor any of its subsidiaries has any
liability, whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due, including any liability for
taxes (and there is no past or present fact, situation, circumstance, condition
or other basis for any present or future action, suit, proceeding, hearing,
charge, complaint, claim or demand against the Company or its subsidiaries that
could give rise to any such liability), except for (i) liabilities set forth in
the Financial Statements, (ii) normal fluctuations in the amount of the
liabilities referred to in clause (i) above occurring in the ordinary course of
business of the Trust, the Company and all of its subsidiaries since the date of
the most recent balance sheet included in such Financial Statements and (iii)
liabilities that would not, singly or in the aggregate, have a Material Adverse
Effect.

 

(w) Since the date of the Financial Statements, there has not been any Material
Adverse Change.

 

(x) The documents of Parent filed with the Commission in accordance with the
Exchange Act, from and including the commencement of the fiscal year covered by
the Company’s most recent Annual Report on Form 10-K, at the time they were or
hereafter are filed by Parent with the Commission (collectively, the “1934 Act
Reports”), complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder (the “1934 Act Regulations”), and, at the date of this Purchase
Agreement and on the Closing Date, do not and will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and other than such
instruments, agreements, contracts and other documents as are filed as exhibits
to Parent’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K, there are no instruments, agreements, contracts or
documents of a character described in Item 601 of Regulation S-K promulgated by
the Commission to which Parent or any of its subsidiaries is a party. Parent is
in compliance with all currently applicable requirements of the Exchange Act
that were added by the Sarbanes-Oxley Act of 2002, except where such
noncompliance would not, singly or in the aggregate, have a Material Adverse
Effect.

 

(y) No labor dispute with the employees of the Trust, the Company or any of its
subsidiaries exists or, to the knowledge of the administrative trustees of the
Trust or the general partner of the Company, is imminent, except those which
would not, singly or in the aggregate, have a Material Adverse Effect.

 

(z) No filing with, or authorization, approval, consent, license, order,
registration qualification or decree of, any Governmental Entity, other than
those that have been obtained or will be timely made or obtained, is necessary
or required for the performance by the Trust or the Company of their respective
obligations under the Operative

 

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Documents, as applicable, or the consummation by the Trust and the Company of
the transactions contemplated by the Operative Documents.

 

(aa) Each of the Trust, the Company and each subsidiary of the Company has good
and marketable title to all of its respective real and personal properties, in
each case free and clear of all Liens and defects, except for those defects in
title and Liens that would not, singly or in the aggregate, have a Material
Adverse Effect; and all of the leases and subleases under which the Trust, the
Company or any subsidiary of the Company holds properties are in full force and
effect, except where the failure of such leases and subleases to be in full
force and effect would not, singly or in the aggregate, have a Material Adverse
Effect, and none of the Trust, the Company or any subsidiary of the Company has
any notice of any claim of any sort that has been asserted by anyone adverse to
the rights of the Trust, the Company or any subsidiary of the Company under any
such leases or subleases, or affecting or questioning the rights of such entity
to the continued possession of the leased or subleased premises under any such
lease or sublease, except for such claims that would not, singly or in the
aggregate, have a Material Adverse Effect.

 

(bb) [Intentionally Omitted]

 

(cc) Commencing with its taxable year ended December 31, 2004, Parent has been,
and upon the completion of the transactions contemplated hereby, Parent will
continue to be, organized and operated in conformity with the requirements for
qualification and taxation as a real estate investment trust (a “REIT”) under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
“Code”), and Parent’s proposed method of operation will enable it to continue to
meet the requirements for qualification and taxation as a REIT under Sections
856 through 860 of the Code, and no actions have been taken (or not taken which
are required to be taken) which would reasonably be expected to cause such
qualification to be lost. Parent expects to continue to be organized and to
operate in a manner so as to qualify as a REIT in the taxable year ending
December 31, 2004 and succeeding taxable years.

 

(dd) The Company and each of the Significant Subsidiaries have timely and duly
filed all Tax Returns required to be filed by them, and all such Tax Returns are
true, correct and complete, except for such failures to timely file or
inaccuracies that would not, singly or in the aggregate, have a Material Adverse
Effect. The Company and each of the Significant Subsidiaries have timely and
duly paid in full all material Taxes required to be paid by them (whether or not
such amounts are shown as due on any Tax Return). There are no federal, state,
or other Tax audits or deficiency assessments proposed or pending with respect
to the Company or any of the Significant Subsidiaries, and no such audits or
assessments are, to the knowledge of the general partner of the Company or the
administrative trustees of the Trust, threatened, except for such audits or
assessments that would not, singly or in the aggregate, have a Material Adverse
Effect. As used herein, the terms “Tax” or “Taxes” mean (i) all federal, state,
local, and foreign taxes, and other assessments of a similar nature (whether
imposed directly or through withholding), including any interest, additions to
tax, or penalties applicable thereto, imposed by any Governmental Entity, and
(ii) all liabilities in respect of such amounts arising as a result of being a
member of any affiliated,

 

     11     

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consolidated, combined, unitary or similar group, as a successor to another
person or by contract. As used herein, the term “Tax Returns” means all federal,
state, local, and foreign Tax returns, declarations, statements, reports,
schedules, forms, and information returns and any amendments thereto filed or
required to be filed with any Governmental Entity.

 

(ee) To the knowledge of the administrative trustees of the Trust and the
general partner of the Company, there are no rulemaking or similar proceedings
before the United States Internal Revenue Service or comparable federal, state,
local or foreign government bodies which involve or affect the Company or any
subsidiary, which, if the subject of an action unfavorable to the Company or any
subsidiary, could result in a Material Adverse Effect.

 

(ff) The books, records and accounts of the Company and its subsidiaries
accurately and fairly reflect, in all material respects, the transactions in,
and dispositions of, the assets of and the results of operations of, the Company
and its subsidiaries. The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in accordance with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

 

(gg) The Company and the Significant Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts in all material respects as are customary in the businesses in which
they are engaged or propose to engage after giving effect to the transactions
contemplated hereby including but not limited to, real or personal property
owned or leased against theft, damage, destruction, act of vandalism and all
other risks customarily insured against. All policies of insurance and fidelity
or surety bonds insuring the Company or any of the Significant Subsidiaries or
the Company’s or Significant Subsidiaries’ respective businesses, assets,
employees, officers, partners and directors are in full force and effect, except
where the failure of such policies to be in full force and effect would not,
singly or in the aggregate, have a Material Adverse Effect. The Company and each
of the subsidiaries are in compliance with the terms of such policies and
instruments, except where the failure to be in compliance would not, singly or
in the aggregate, have a Material Adverse Effect. Neither the Company nor any
Significant Subsidiary has reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Averse Effect. Within the past
twelve months, neither the Company nor any Significant Subsidiary has been
denied any insurance coverage which it has sought or for which it has applied.

 

(hh) Except as would not, singly or in the aggregate, have a Material Adverse
Effect, the Company and its subsidiaries or, to the knowledge of the
administrative

 

     12     

--------------------------------------------------------------------------------

trustees of the Trust or the general partner of the Company, any person acting
on behalf of the Company and its subsidiaries including, without limitation, any
director, officer, agent or employee of the Company or its subsidiaries has not,
directly or indirectly, while acting on behalf of the Company and its
subsidiaries (i) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; or (ii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended.

 

(ii) Neither the Company nor any of its Significant Subsidiaries have violated,
or received written notice of any violation with respect to any applicable
Environmental Law (as defined below), the violation of which would result in a
Material Adverse Change. “Environmental Law” means any federal, state or local
environmental law, statute, ordinance, rule or regulation, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”), the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101-5127, the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. §§ 6901-6992k, the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§
11001-11050, the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2692, the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y, the
Clean Air Act, 42 U.S.C. §§ 7401-7642, the Clean Water Act (Federal Water
Pollution Control Act), 33 U.S.C. §§ 1251-1387, the Safe Drinking Water Act, 42
U.S.C. §§ 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C. §§
651-678, and any analogous state laws, as any of the above may be amended from
time to time and in the regulations promulgated pursuant to each of the
foregoing (including environmental statutes and laws not specifically defined
herein).

 

5. Representations and Warranties of the Purchaser: MLI represents and warrants
to, and agrees with, the Company and the Trust as follows:

 

(a) The Purchaser is aware that the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to “U.S. persons” (as defined in Regulation S under the
Securities Act) except in accordance with Rule 903 of Regulation S under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act.

 

(b) The Purchaser is an “accredited investor,” as such term is defined in Rule
501(a) of Regulation D under the Securities Act.

 

(c) Neither the Purchaser, nor any of the Purchaser’s Affiliates, nor any person
acting on the Purchaser’s or the Purchaser’s Affiliate’s behalf has, directly or
indirectly, made offer, or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of any of the
Securities under the Securities Act

 

(d) Neither the Purchaser, nor any of the Purchaser’s Affiliates, nor any person
acting on the Purchaser’s or the Purchaser’s Affiliate’s behalf has engaged, or
will

 

     13     

--------------------------------------------------------------------------------

engage, in any form of “general solicitation or general advertising” (within the
meaning of Regulation D under the Securities Act) in connection with any offer
or sale of the Preferred Securities.

 

(e) The Purchaser understands and acknowledges that (i) no public market exists
for any of the Securities and that it is unlikely that a public market will ever
exist for the Securities, (ii) the Purchaser is purchasing the Securities for
its own account, for investment and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act or
other applicable securities laws, subject to any requirement of law that the
disposition of its property be at all times within its control and subject to
its ability to resell such Securities pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption therefrom or in a
transaction not subject thereto, and the Purchaser agrees to the legends and
transfer restrictions applicable to the Securities contained in the Indenture,
and (iii) the Purchaser has had the opportunity to ask questions of and receive
answers and request additional information from, the Company and is aware that
it may be required to bear the economic risk of an investment in the Securities.

 

(f) The Purchaser is a company with limited liability duly incorporated, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized with all requisite (i) power and authority to execute, deliver and
perform the Operative Documents to which it is a party, to make the
representations and warranties specified herein and therein and to consummate
the transactions contemplated herein and (ii) right and power to purchase the
Securities.

 

(g) This Purchase Agreement has been duly authorized, executed and delivered by
the Purchaser and no filing with, or authorization, approval, consent, license,
order registration, qualification or decree of, any governmental body, agency or
court having jurisdiction over the Purchaser, other than those that have been
made or obtained, is necessary or required for the performance by the Purchaser
of its obligations under this Purchase Agreement or to consummate the
transactions contemplated herein.

 

(h) The Purchaser is a “Qualified Purchaser” as such term is defined in Section
2(a)(51) of the Investment Company Act.

 

6. Covenants and Agreements of the Company and the Trust. The Company and the
Trust jointly and severally agree with the Purchaser as follows:

 

(a) During the period from the date of this Agreement to the Closing Date, the
Company and the Trust shall use their reasonable efforts and take all action
reasonably necessary or appropriate to cause their representations and
warranties contained in Section 4 hereof to be true as of the Closing Date,
after giving effect to the transactions contemplated by this Purchase Agreement,
as if made on and as of the Closing Date.

 

(b) The Company and the Trust will arrange for the qualification of the
Preferred Securities for sale under the laws of such jurisdictions as the
Purchaser may designate in writing at least two business days prior to the
Closing Date and will maintain

 

     14     

--------------------------------------------------------------------------------

such qualifications in effect so long as required for the sale of the Preferred
Securities. The Company or the Trust, as the case may be, will promptly advise
the Purchaser of the receipt by the Company or the Trust, as the case may be, of
any notification with respect to the suspension of the qualification of the
Preferred Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.

 

(c) Neither the Company nor the Trust will, nor will either of them permit any
of its Affiliates to, nor will either of them permit any person acting on its or
their behalf (other than the Purchaser) to, resell any Preferred Securities that
have been acquired by any of them.

 

(d) Neither the Company nor the Trust will, nor will either of them permit any
of their Affiliates or any person acting on their behalf to, engage in any
“directed selling efforts” within the meaning of Regulation S under the
Securities Act with respect to the Securities.

 

(e) Neither the Company nor the Trust will, nor will either of them permit any
of their Affiliates or any person acting on their behalf to, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of any of the
Securities under the Securities Act.

 

(f) Neither the Company nor the Trust will, nor will either of them permit any
of its Affiliates or any person acting on their behalf to, engage in any form of
“general solicitation or general advertising” (within the meaning of Regulation
D) in connection with any offer or sale of the any of the Securities.

 

(g) So long as any of the Securities are outstanding, (i) the Securities shall
not be listed on a national securities exchange registered under section 6 of
the Exchange Act or quoted in a U.S. automated inter-dealer quotation system and
(ii) neither the Company nor the Trust shall be an open-end investment company,
unit investment trust or face-amount certificate company that is, or is required
to be, registered under section 8 of the Investment Company Act, and, the
Securities shall otherwise satisfy the eligibility requirements of Rule
144A(d)(3)

 

(h) So long as any of the Securities are outstanding, each of the Company and
the Trust shall furnish to (i) the holders, and subsequent holders of the
Preferred Securities, (ii) Taberna Capital Management, LLC (at 450 Park Avenue,
23rd Floor, New York, New York 10022, or such other address as designated by
Taberna Capital Management, LLC) and (iii) any beneficial owner of the
Securities reasonably identified to the Company and the Trust (which
identification may be made by either such beneficial owner or by Cohen Bros.), a
duly completed and executed certificate in the form attached hereto as Annex F,
including the financial statements referenced in such Annex, which certificate
and financial statements shall be so furnished by the Company and the Trust not
later than sixty (60) days after the end of each of the first three fiscal
quarters of each fiscal year of the Company and not later than one hundred
twenty (120) days after the end of each fiscal year of the Company.

 

     15     

--------------------------------------------------------------------------------

(i) So long as any of the Securities are outstanding, each of the Company and
the Trust will, during any period in which Parent is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act, provide to each holder
of the Securities and to each prospective purchaser (as designated by such
holder) of the Securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under the
Securities Act.

 

(j) Neither the Company nor the Trust will, until one hundred eighty (180) days
following the Closing Date, without the Purchaser’s prior written consent,
offer, sell, contract to sell, grant any option to purchase or otherwise dispose
of, directly or indirectly, (i) any Preferred Securities or other securities
substantially similar to the Preferred Securities other than as contemplated by
this Purchase Agreement or (ii) any other securities convertible into, or
exercisable or exchangeable for, any Preferred Securities or other securities
substantially similar to the Preferred Securities.

 

(k) Parent will use its reasonable efforts to meet the requirements to qualify
as a REIT under Sections 856 through 860 of the Code, for the taxable year
ending December 31, 2005 and succeeding taxable years.

 

(l) The Company shall not identify the Purchaser or Cohen Bros. & Company in a
press release or any other public statement without the consent of Purchaser or
Cohen Bros. & Company, as applicable, except as required by law.

 

7. Payment of Expenses. The Company, as depositor of the Trust, agrees to pay
all costs and expenses incident to the performance of the obligations of the
Company and the Trust under this Purchase Agreement, whether or not the
transactions contemplated herein are consummated or this Purchase Agreement is
terminated, including all costs and expenses incident to (i) the authorization,
issuance, sale and delivery of the Preferred Securities and any taxes payable in
connection therewith; (ii) the fees and expenses of qualifying the Preferred
Securities under the securities laws of the several jurisdictions as provided in
Section 6(b); (iii) the fees and expenses of the counsel, the accountants and
any other experts or advisors retained by the Company or the Trust; (iv) the
fees and all reasonable expenses of the Property Trustee, the Delaware Trustee,
the Indenture Trustee and any other trustee or paying agent appointed under the
Operative Documents, including the fees and disbursements of counsel for such
trustees, which fees shall not exceed a $2,000 acceptance fee, $3,500 for the
fees and expenses of Richards, Layton & Finger, P.A., special Delaware counsel
retained by the Delaware Trustee in connection with the Closing, and $4,000 in
administrative fees annually; and (v) $20,000 for the fees and expenses of DLA
Piper Rudnick Gray Cary US LLP, special counsel retained by the Purchaser.

 

If the sale of the Preferred Securities provided for in this Purchase Agreement
is not consummated because any condition set forth in Section 3 hereof to be
satisfied by either the Company or the Trust is not satisfied, because this
Purchase Agreement is terminated pursuant to Section 9 (other than pursuant to
Section 9(iii) or 9(v)) or because of any failure, refusal or inability on the
part of the Company or the Trust to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder other

 

     16     

--------------------------------------------------------------------------------

than by reason of a default by the Purchaser, the Company will reimburse the
Purchaser upon demand for all reasonable out-of-pocket expenses (including the
fees and expenses of each of the Purchaser’s counsel specified in subparagraphs
(iv) and (v) of the immediately preceding paragraph) that shall have been
incurred by the Purchaser in connection with the proposed purchase and sale of
the Preferred Securities. The Company shall not in any event be liable to the
Purchaser for the loss of anticipated profits from the transactions contemplated
by this Purchase Agreement.

 

8. Indemnification. (a) The Sellers agree, jointly and severally, to indemnify
and hold harmless the Purchaser, Taberna Capital Management, LLC, Cohen Bros. &
Company, and Merrill Lynch & Co. (collectively, the “Purchaser Indemnified
Parties”) and the Purchaser Indemnified Parties’ respective directors, officers,
employees and agents and each person, if any, who controls the Purchaser
Indemnified Parties within the meaning of the Securities Act or the Exchange Act
against any out-of-pocket losses, claims, damages or liabilities, joint or
several (collectively, “Losses”), to which the Purchaser Indemnified Parties may
become subject, under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
Losses (or actions in respect thereof) arise out of or are connected with the
execution and delivery by Sellers, and the consummation thereby of the
transactions contemplated by, this Purchase Agreement or any other Operative
Document. Sellers agree, jointly and severally, to reimburse the Purchaser
Indemnified Parties for any legal or other expenses reasonably incurred by the
Purchaser Indemnified Parties in connection with investigating or defending any
such Losses or action arising out of or being connected with the execution and
delivery by the Sellers, and the consummation by the Sellers of the transactions
contemplated by, this Purchase Agreement or the other Operative Documents. This
indemnity agreement will be in addition to any liability that any of the Sellers
may otherwise have.

 

(b) The Company agrees to indemnify the Trust against all Losses whatsoever due
from the Trust under paragraph (a) above.

 

(c) Promptly after receipt by an Indemnified Party under this Section 8 of
notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, promptly notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve the indemnifying party from liability under paragraph (a) above unless
and to the extent that such failure results in the forfeiture by the
indemnifying party of material rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any Indemnified
Party other than the indemnification obligation provided in paragraph (a) above.
Purchaser shall be entitled to appoint counsel to represent the Indemnified
Party in any action for which indemnification is sought. An indemnifying party
may participate at its own expense in the defense of any such action; provided,
that counsel to the indemnifying party shall not (except with the consent of the
Indemnified Party) also be counsel to the Indemnified Party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising

 

     17     

--------------------------------------------------------------------------------

out of the same general allegations or circumstances. An indemnifying party will
not, without the prior written consent of the Indemnified Parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Indemnified Parties
are actual or potential parties to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such claim, action,
suit or proceeding.

 

(d) In no event shall any indemnifying party or parties be liable for Losses in
the nature of consequential damages, punitive damages, lost profits, damage to
reputation or the like, but rather Losses indemnifiable hereunder shall be
limited to out-of-pocket Losses and to an aggregate limit equal to the Purchase
Price.

 

9. Termination; Representations and Indemnities to Survive. This Purchase
Agreement shall be subject to termination in the reasonable discretion of the
Purchaser, by notice given to the Company and the Trust prior to delivery of and
payment for the Preferred Securities, if prior to such time (i) a downgrading
shall have occurred in the rating accorded the Company’s debt securities or
preferred stock by any “nationally recognized statistical rating organization,”
as that term is used by the Commission in Rule 15c3-1(c)(2)(vi)(F) under the
Exchange Act, or such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
the Company’s debt securities or preferred stock, (ii) the Trust shall be unable
to sell and deliver to the Purchaser at least $15,000,000 stated liquidation
value of Preferred Securities, (iii) a suspension or material limitation in
trading in securities generally shall have occurred on the New York Stock
Exchange, (iv) a suspension or material limitation in trading in any of the
Company’s securities shall have occurred on the exchange or quotation system
upon which the Company’ securities are traded, if any, or (v) there shall have
occurred any outbreak or escalation of hostilities, or declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the Purchaser’s reasonable
judgment, impracticable or inadvisable to proceed with the offering or delivery
of the Preferred Securities. The respective agreements, representations,
warranties, indemnities and other statements of the Company and the Trust or
their respective officers, partners or trustees and of the Purchaser set forth
in or made pursuant to this Purchase Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Purchaser,
the Company or the Trust or any of the their respective officers, directors,
partners, trustees or controlling persons, and will survive delivery of and
payment for the Preferred Securities for a period of five (5) years after the
Closing Date. The provisions of Sections 7 and 8 shall survive the termination
or cancellation of this Purchase Agreement.

 

10. Amendments. This Purchase Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement by
each of the parties hereto.

 

     18     

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11. Notices.

 

(a) Any communication shall be given by letter or facsimile, in the case of
notices to the Trust, to it at:

 

ESS Statutory Trust III

c/o Extra Space Storage LP

2795 East Cottonwood Parkway, Suite 400

Salt Lake City, UT 84121

Facsimile: 801-562-5579

Attention: Dean Anderson

 

in the case of notices to the Company, to it at:

 

Extra Space Storage LP

2795 East Cottonwood Parkway, Suite 400

Salt Lake City, UT 84121

Facsimile: 801-562-5579

Attention: Dean Anderson

 

with a copy to:

 

Latham & Watkins LLP

12636 High Bluff Drive, Suite 300

San Diego, CA 92130

Facsimile: 858-523-5450

Attention: Craig M. Garner

 

and in the case of notices to the Purchaser, to it at:

 

Merrill Lynch International

c/o Cohen Bros. & Company

1818 Market Street

Philadelphia, Pennsylvania 19103

Facsimile: (215) 861-7898

Attention: Asset Backed Securities

 

with a copy to:

 

DLA Piper Rudnick Gray Cary US LLP

1221 S. Mopac Expressway, Suite 400

Austin, TX 78746

Facsimile: (512) 457-7001

Attention: David B. Jones

 

     19     

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which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument. This Purchase Agreement may be
executed by any one or more of the parties hereto by facsimile.

 

     21     

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of the date
first written above.

 

EXTRA SPACE STORAGE LP

By:

 

ESS Holdings Business Trust I

Its:

 

General Partner

By:

 

/s/ Charles L. Allen

--------------------------------------------------------------------------------

   

Name:

 

CHARLES L. ALLEN

--------------------------------------------------------------------------------

   

Title:

 

TRUSTEE

--------------------------------------------------------------------------------

ESS STATUTORY TRUST III

By:

 

Extra Space Storage LP, as Depositor

By:

 

ESS Holdings Business Trust I

   

By:

 

/s/ Charles L. Allen

--------------------------------------------------------------------------------

       

Name:

 

CHARLES L. ALLEN

--------------------------------------------------------------------------------

       

Title:

 

TRUSTEE

--------------------------------------------------------------------------------

Merrill Lynch International

By:

 

/s/ W. Berry

--------------------------------------------------------------------------------

   

Name:

 

 

--------------------------------------------------------------------------------

   

Title:

 

 

--------------------------------------------------------------------------------

 

     22     

--------------------------------------------------------------------------------

Schedule A

 

Extra Space Storage, LLC, a Delaware limited liability company

Extra Space Properties One LLC, a Delaware limited liability company

Extra Space Properties Four LLC, a Delaware limited liability company

Extra Space Properties Seven LP, a Utah limited partnership

Extra Space Properties Fourteen LLC, a Delaware limited liability company

Extra Space Management, Inc. a Utah limited partnership

ESS SUSA Holdings LLC, a Delaware limited liability company

Extra Space Properties Fifty One LLC, a Delaware limited liability company

Extra Space Properties Fifty Two LLC, a Delaware limited liability company

Extra Space Properties Fifty Three LLC, a Delaware limited liability company

Extra Space Properties Sixty One LLC, a Delaware limited liability company

Extra Space Properties Sixty Two LLC, a Delaware limited liability company

Extra Space Properties Sixty Three LLC, a Delaware limited liability company

Extra Space Properties Sixty Four LLC, a Delaware limited liability company

Extra Space Properties Sixty Five LLC, a Delaware limited liability company

 

     23     

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ANNEX A-I

 

Pursuant to Section 3(b)(i) of the Purchase Agreement, Latham & Watkins LLP,
special counsel for the Company, shall deliver the following opinion:

 

Insert Opinion

--------------------------------------------------------------------------------

ANNEX A-II

 

Pursuant to Section 3(b)(i) of the Purchase Agreement, Nelson Christensen &
Helsten, P.C., special counsel for the Company, shall deliver the following
opinion:

 

Insert Opinion

 

     A-II-1     

--------------------------------------------------------------------------------

ANNEX A-III

 

Pursuant to Section 3(b)(ii) of the Purchase Agreement, General Counsel for the
Company shall deliver an opinion, or the Company shall provide a General
Partner’s Certificate, to the effect that:

 

(i) to the knowledge of such [counsel/general partner], the issuance of the
Preferred Securities and the Common Securities will be free from any contractual
preemptive rights;

 

(ii) to the knowledge of such [counsel/general partner], there is no action,
suit or proceeding currently pending before or by any government, governmental
instrumentality, arbitrator or court, domestic or foreign, that questions the
validity of the Operative Documents or the ability of the Trust or the Company
to enter into, or to issue the Securities pursuant to, the Operative Documents;
and

 

(iii) the execution and delivery by the Trust of the Operative Documents to
which they are a party do not, and the performance by the Trust under such
Operative Documents will not (a) conflict with or violate any provision of the
organizational documents of the Trust, or (b) to the knowledge of such
[counsel/general partner], conflict with or violate any judgment, order, writ,
injunction or decree binding on the Trust, or (c) to the knowledge of such
[counsel/general partner], conflict with or violate any material contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease,
franchise, license or any other agreement or instrument to which the Trust is a
party or by which the Trust or any of its properties may be bound, or (d) to the
knowledge of such [counsel/general partner], result in the creation or
imposition of any material lien, claim, charge, encumbrance or restriction upon
any property or assets of the Trust.

 

In rendering such opinions, such [counsel/general partner] may (A) state that
his opinion is limited to the internal laws of the State of Utah, (B) rely as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers or trustees of the Company and the Trust and public officials and (C)
take customary assumptions and exceptions as to enforceability and other
matters.

 

     A-III-1     

--------------------------------------------------------------------------------

ANNEX B

 

Pursuant to Section 3(c) of the Purchase Agreement, DLA Piper Rudnick Gray Cary
US LLP, special tax counsel for the Purchaser, shall deliver an opinion to the
effect that:

 

Insert Opinion

 

B-1

--------------------------------------------------------------------------------

ANNEX C

 

Pursuant to Section 3(d) of the Purchase Agreement, Richards, Layton & Finger,
P.A., special Delaware counsel for the Delaware Trustee, shall deliver an
opinion to the effect that:

 

(i) the Trust has been duly created and is validly existing in good standing as
a statutory trust under the Delaware Statutory Trust Act, and all filings
required under the laws of the State of Delaware with respect to the creation
and valid existence of the Trust as a statutory trust have been made;

 

(ii) under the Delaware Statutory Trust Act and the Trust Agreement, the Trust
has the trust power and authority (A) to own property and conduct its business,
all as described in the Trust Agreement, (B) to execute and deliver, and to
perform its obligations under, each of the Purchase Agreement, the Common
Securities Subscription Agreement, the Junior Subordinated Note Purchase
Agreement and the Preferred Securities and the Common Securities and (C) to
purchase and hold the Junior Subordinated Notes;

 

(iii) under the Delaware Statutory Trust Act, the certificate attached to the
Trust Agreement as Exhibit C is an appropriate form of certificate to evidence
ownership of the Preferred Securities; the Preferred Securities have been duly
authorized by the Trust Agreement and, when issued and delivered against payment
of the consideration as set forth in the Purchase Agreement, the Preferred
Securities will be validly issued and (subject to the qualifications set forth
in this paragraph) fully paid and nonassessable and will represent undivided
beneficial interests in the assets of the Trust; the holders of the Preferred
Securities will be entitled to the benefits of the Trust Agreement and, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; and such
counsel may note that the holders of the Preferred Securities may be obligated,
pursuant to the Trust Agreement, to (A) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from transfers or
exchanges of Preferred Securities certificates and the issuance of replacement
Preferred Securities certificates and (B) provide security or indemnity in
connection with requests of or directions to the Property Trustee to exercise
its rights and remedies under the Trust Agreement;

 

(iv) the Common Securities have been duly authorized by the Trust Agreement and,
when issued and delivered by the Trust to the Company against payment therefor
as described in the Trust Agreement and the Common Securities Subscription
Agreement, will be validly issued and fully paid and will represent undivided
beneficial interests in the assets of the Trust entitled to the benefits of the
Trust Agreement;

 

C-1

--------------------------------------------------------------------------------

(v) under the Delaware Statutory Trust Act and the Trust Agreement, the issuance
of the Preferred Securities and the Common Securities is not subject to
preemptive or other similar rights;

 

(vi) under the Delaware Statutory Trust Act and the Trust Agreement, the
execution and delivery by the Trust of the Purchase Agreement, the Common
Securities Subscription Agreement and the Junior Subordinated Note Purchase
Agreement, and the performance by the Trust of its obligations thereunder, have
been duly authorized by all necessary trust action on the part of the Trust;

 

(vii) the Trust Agreement constitutes a legal, valid and binding obligation of
the Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms subject, as to enforcement, to the effect
upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance or transfer and
other similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution;

 

(viii) the issuance and sale by the Trust of the Preferred Securities and the
Common Securities, the purchase by the Trust of the Junior Subordinated Notes,
the execution, delivery and performance by the Trust of the Purchase Agreement,
the Common Securities Subscription Agreement and the Junior Subordinated Note
Purchase Agreement, the consummation by the Trust of the transactions
contemplated by the Purchase Agreement and compliance by the Trust with its
obligations thereunder do not violate (i) any of the provisions of the
Certificate of Trust or the Amended and Restated Trust Agreement or (ii) any
applicable Delaware law, rule or regulation;

 

(ix) no filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or Delaware
Governmental Entity or Delaware agency is necessary or required solely in
connection with the issuance and sale by the Trust of the Common Securities or
the Preferred Securities, the purchase by the Trust of the Junior Subordinated
Notes, the execution, delivery and performance by the Trust of the Purchase
Agreement, the Common Securities Subscription Agreement and the Junior
Subordinated Note Purchase Agreement, the consummation by the Trust of the
transactions contemplated by the Purchase Agreement and compliance by the Trust
with its obligations thereunder; and

 

(x) the holders of the Preferred Securities (other than those holders who reside
or are domiciled in the State of Delaware) will have no liability for income
taxes imposed by the State of Delaware solely as a result of their participation
in the Trust and the Trust will not be liable for any income tax imposed by the
State of Delaware.

 

C-2

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In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware, (B) rely as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the Company
and public officials and (C) take customary assumptions and exceptions as to
enforceability and other matters.

 

C-3

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ANNEX D

 

Pursuant to Section 3(e) of the Purchase Agreement, Gardere Wynne Sewell LLP,
special counsel for the Property Trustee and the Indenture Trustee, shall
deliver an opinion to the effect that:

 

(i) JPMorgan Chase Bank, National Association (the “Bank”) is a national banking
association with trust powers, duly and validly existing under the laws of the
United States of America, with corporate power and authority to execute, deliver
and perform its obligations under the Indenture and to authenticate and deliver
the Securities, and is duly eligible and qualified to act as Trustee under the
Indenture pursuant to Section 6.1 thereof and as Property Trustee under the
Trust Agreement pursuant to Section 8.2 thereof;

 

(ii) Each Agreement has been duly authorized, executed and delivered by the Bank
and constitutes the valid and binding obligation of the Bank, enforceable
against it in accordance with its terms except (A) as may be limited by
bankruptcy, fraudulent conveyance, fraudulent transfer, insolvency,
reorganization, liquidation, receivership, moratorium or other similar laws now
or hereafter in effect relating to creditors’ rights generally, and by general
equitable principles, regardless of whether considered in a proceeding in equity
or at law and (B) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought;

 

(iii) Neither the execution or delivery by the Bank of the Agreements, the
authentication and delivery of the Securities by the Trustee pursuant to the
terms of the Agreements, respectively, nor the performance by the Bank of its
obligations under the Agreements (A) requires the consent or approval of, the
giving of notice to or the registration or filing with, any governmental
authority or agency under any existing law of the United States of America
governing the banking or trust powers of the Bank or (B) violates or conflicts
with the Articles of Association or By-laws of the Bank or any law or regulation
of the State of New York or the United States of America governing the banking
or trust powers of the Bank;

 

(iv) the Securities have been authenticated and delivered by a duly authorized
officer of the Bank.

 

In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York and the laws of the United States
of America, (B) rely as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of JPMorgan Chase Bank, National
Association, the Company and public officials, and (C) make customary
assumptions and exceptions as to enforceability and other matters.

 

D-1

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ANNEX E

 

Pursuant to Section 3(f) of the Purchase Agreement, Richards, Layton & Finger,
P.A. counsel for the Delaware Trustee, shall deliver an opinion to the effect
that:

 

(i) Chase Bank USA, National Association is duly formed and validly existing as
a national banking association under the federal laws of the United States of
America with trust powers and with its principal place of business in the State
of Delaware;

 

(ii) Chase Bank USA, National Association has the corporate power and authority
to execute, deliver and perform its obligations under, and has taken all
necessary corporate action to authorize the execution, delivery and performance
of, the Trust Agreement and to consummate the transactions contemplated thereby;

 

(iii) The Trust Agreement has been duly authorized, executed and delivered by
Chase Bank USA, National Association and constitutes a legal, valid and binding
obligation of Chase Bank USA, National Association, and is enforceable against
Chase Bank USA, National Association, in accordance with its terms subject as to
enforcement, to the effect upon the Trust Agreement of (i) applicable
bankruptcy, insolvency, reorganization, moratorium, receivership, fraudulent
conveyance or transfer and similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity, including applicable
law relating to fiduciary duties (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution;

 

(iv) The execution, delivery and performance by Chase Bank USA, National
Association of the Trust Agreement do not conflict with or result in a violation
of (A) articles of association or by-laws of Chase Bank USA, National
Association or (B) any law or regulation of the State of Delaware or the United
States of America governing the trust powers of Chase Bank USA, National
Association or, to our knowledge, without independent investigation, of any
indenture, mortgage, bank credit agreement, note or bond purchase agreement,
long-term lease, license or other agreement or instrument to which Chase Bank
USA, National Association is a party or by which it is bound or, to our
knowledge, without independent investigation, of any judgment or order
applicable to Chase Bank USA, National Association; and

 

(v) No approval, authorization or other action by, or filing with, any
Governmental Entity of the State of Delaware or the United States of America
governing the trust powers of Chase Bank USA, National Association is required
in connection with the execution and delivery by Chase Bank USA, National
Association of the Trust Agreement or the performance by Chase

 

E-1

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Bank USA, National Association of its obligations thereunder, except for the
filing of the Certificate of Trust with the Secretary of State of the State of
Delaware, which Certificate of Trust has been filed with the Secretary of State
of the State of Delaware.

 

In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and the federal laws of the United
States governing the trust powers of Chase Bank USA, National Association, (B)
rely as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials and (C) take customary
assumptions and exceptions.

 

E-2

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General Partner’s Financial Certificate

 

The undersigned, the trustee of the general partner of Extra Space Storage LP
(the “Company”) hereby certifies, pursuant to Section 6(h) of the Purchase
Agreement, dated as of July 27, 2005, among the Company, ESS Statutory Trust III
(the “Trust”), and Merrill Lynch International, that, as of [date], 20     :

 

FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of Parent and its consolidated subsidiaries for the three
years ended [date], 20    .]

 

[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of Parent and its consolidated subsidiaries for the year ended
[date], 20    ] for the fiscal quarter ended [date, 20    .]

 

The financial statements fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles (“GAAP”), the financial
position of the Company and its consolidated subsidiaries, and the results of
operations and changes in financial condition as of the date, and for the
[         quarter interim] [annual] period ended [date], 20    , and such
financial statements have been prepared in accordance with GAAP consistently
applied throughout the period involved (expect as otherwise noted therein).

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IN WITNESS WHEREOF, the undersigned has executed this General Partner’s
Financial Certificate as of this              day of                 , 20    .

 

Extra Space Storage LP By:   ESS Holdings Business Trust I Its:   General
Partner

By:

 

 

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Name:

 

 

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Extra Space Storage LP

2795 East Cottonwood Parkway, Suite 400

Salt Lake City, UT 84121