LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                            STORAGE PORTFOLIO I LLC

                     (A Delaware Limited Liability Company)

              THESE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED
                 UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
          NOR PURSUANT TO THE PROVISIONS OF ANY STATE SECURITIES ACT.

      CERTAIN RESTRICTIONS ON TRANSFERS OF INTERESTS ARE SET FORTH HEREIN.

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                               TABLE OF CONTENTS

ARTICLE I.................................................................7

ARTICLE II...............................................................16

        SECTION 2.1. NAME AND FORMATION..................................16
        SECTION 2.2. PRINCIPAL PLACE OF BUSINESS.........................16
        SECTION 2.3. ASSUMED NAME CERTIFICATE............................16
        SECTION 2.4. REGISTERED OFFICE AND REGISTERED AGENT..............16
        SECTION 2.5. TERM................................................17
        SECTION 2.6. REGISTRATION........................................17
        SECTION 2.7. PURPOSE, POWERS AND CHARACTER OF THE BUSINESS OF THE
             COMPANY.....................................................17
        SECTION 2.8. ADMISSION OF MEMBERS................................18

ARTICLE III..............................................................18

        SECTION 3.1. CAPITAL OF COMPANY..................................18
        SECTION 3.2. EXPENDITURES ON BEHALF OF THE COMPANY...............18
        SECTION 3.3. CAPITAL CONTRIBUTIONS...............................18
        SECTION 3.4. CAPITAL CONTRIBUTIONS FOR UNANTICIPATED NEEDS.......19
        SECTION 3.5. COMPANY CAPITAL.....................................21
        SECTION 3.6. LIABILITY OF MEMBERS................................22
        SECTION 3.7. LOANS BY MEMBERS OR AFFILIATES......................22
        SECTION 3.8. CAPITAL ACCOUNTS....................................22
        SECTION 3.9. CAPITOL RATIOS......................................23

ARTICLE IV...............................................................23

        SECTION 4.1. MANAGER'S POWERS AND RESPONSIBILITIES...............23
        SECTION 4.2. ACTIONS REQUIRING CONSENT OF ALL MEMBERS............25
        SECTION 4.3. OPERATION IN ACCORDANCE WITH PLANS..................27
        SECTION 4.4. ERISA MATTERS.......................................27
        SECTION 4.5. UBTI MATTERS; REIT REQUIREMENTS.....................27
        SECTION 4.6. CONTRACTS WITH AFFILIATES...........................29
        SECTION 4.7. EMPLOYEES AND CONTRACTORS...........................30
        SECTION 4.8. FINANCING...........................................30
        SECTION 4.9. COMPENSATION AND EXPENSE REIMBURSEMENT..............30
        SECTION 4.10. CONTINUED INVOLVEMENT REQUIREMENTS.................31
        SECTION 4.11. OPERATING BUDGET...................................31
        SECTION 4.12. INSURANCE PROGRAM..................................33
        SECTION 4.13. DELEGATION OF AUTHORITY............................33
        SECTION 4.14. LIABILITY OF THE MANAGER...........................33
        SECTION 4.15. INDEMNIFICATION....................................35
        SECTION 4.16. RIGHTS OF COMPETITION..............................36
        SECTION 4.17. RESIGNATION AND REMOVAL............................37


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ARTICLE V................................................................37

        SECTION 5.1. PLACE OF MEETINGS...................................37
        SECTION 5.2. MEETINGS OF MEMBERS.................................37
        SECTION 5.3. NOTICE OF MEETINGS OF MEMBERS.......................37
        SECTION 5.4. QUORUM..............................................37
        SECTION 5.5. VOTING ON MATTERS...................................38
        SECTION 5.6. LIST OF MEMBERS ENTITLED TO VOTE....................38
        SECTION 5.7. REGISTERED MEMBERS..................................38
        SECTION 5.8. ACTIONS WITH OR WITHOUT A MEETING AND TELEPHONE
             MEETINGS....................................................38
        SECTION 5.9. LIMITATIONS ON POWERS OF MEMBERS....................38

ARTICLE VI...............................................................39

        SECTION 6.1. BOOKS AND RECORDS...................................39
        SECTION 6.2. ACCOUNTING BASIS FOR TAX REPORTING PURPOSES; FISCAL
             YEAR........................................................40
        SECTION 6.3. REPORTS.............................................40
        SECTION 6.4. RETURNS AND OTHER ELECTIONS.........................41
        SECTION 6.5. TAX MATTERS PARTNER.................................41
        SECTION 6.6. ACCOUNTANTS.........................................42
        SECTION 6.7. ANNUAL APPRAISALS...................................42
        SECTION 6.8. ENVIRONMENTAL INVESTIGATIONS........................42

ARTICLE VII..............................................................42

        SECTION 7.1. OPERATING DISTRIBUTIONS.............................42
        SECTION 7.2. ALLOCATION OF PROFITS, LOSSES AND DISTRIBUTIVE
             SHARES OF TAX ITEMS.........................................43
        SECTION 7.3. CODE SECTION 704(B) AND 514(C)(9)(E) ALLOCATIONS....46
        SECTION 7.4. RESTRICTED DISTRIBUTIONS............................46
        SECTION 7.5. AMORTIZATION AND ALLOCATION OF ORGANIZATION AND
             START-UP EXPENSES...........................................46

ARTICLE VIII.............................................................47

ARTICLE IX...............................................................47

        SECTION 9.1. RESTRICTIONS ON TRANSFER OF INTEREST OF AND
             IN A MEMBER.................................................47
        SECTION 9.2. [RESERVED]..........................................48
        SECTION 9.3. CONVERSION OPTION...................................48
        SECTION 9.4. MARKETING RIGHT.....................................52
        SECTION 9.5. INSOLVENCY OF A MEMBER..............................57
        SECTION 9.6. ASSIGNEES...........................................60
        SECTION 9.7. SUBSTITUTED MEMBERS.................................60
        SECTION 9.8. MANAGEMENT PENDING SALE CLOSING.....................61


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ARTICLE X................................................................61

        SECTION 10.1. ACQUISITION OF INTEREST FOR INVESTMENT.............61
        SECTION 10.2. ACCESS TO INFORMATION..............................61
        SECTION 10.3. NO REGISTRATION....................................61
        SECTION 10.4. NO OBLIGATION TO REGISTER..........................62
        SECTION 10.5. SUITABILITY OF INVESTMENT..........................62
        SECTION 10.6. ACCREDITATION......................................62
        SECTION 10.7. REPRESENTATIONS AND WARRANTIES REGARDING
             MEMBERS.....................................................62
        SECTION 10.8. FINANCIAL STATEMENTS AND OTHER DOCUMENTS...........63
        SECTION 10.9. UBTI...............................................63
        SECTION 10.10. ERISA.............................................64
        SECTION 10.11. NO BROKERS........................................64
        SECTION 10.12. YEAR 2000 COMPLIANCE..............................64
        SECTION 10.13. QUALIFIED ORGANIZATION STATUS.....................64
        SECTION 10.14. PARTNERSHIP ALLOCATIONS...........................65
ARTICLE XI...............................................................65

        SECTION 11.1. EVENTS OF DEFAULT..................................65
        SECTION 11.2. REMEDIES...........................................66
        SECTION 11.3. EVENTS OF DISSOLUTION..............................68
        SECTION 11.4. LIQUIDATION; SALE OF SUBSTANTIALLY ALL OF THE
             ASSETS......................................................69
        SECTION 11.5. DISTRIBUTIONS IN KIND..............................70
        SECTION 11.6. DATE OF TERMINATION................................70
        SECTION 11.7. WAIVER OF PARTITION................................71
        SECTION 11.8. ARTICLES OF TERMINATION............................71

ARTICLE XII..............................................................71

        SECTION 12.1. NOTICE.............................................71
        SECTION 12.2. APPLICATION OF DELAWARE LAW........................71
        SECTION 12.3. JURISDICTION AND VENUE; WAIVER OF JURY TRIAL.......72
        SECTION 12.4. NO PARTNERSHIP.....................................72
        SECTION 12.5. EFFECT OF AGREEMENT................................72
        SECTION 12.6. ENTIRE AGREEMENT...................................72
        SECTION 12.7. AMENDMENT..........................................72
        SECTION 12.8. COUNTERPARTS.......................................73
        SECTION 12.9. SEVERABILITY.......................................73
        SECTION 12.10. CAPTIONS..........................................73
        SECTION 12.11. INTERPRETATION....................................73
        SECTION 12.12. ADDITIONAL DOCUMENTS AND ACTS.....................73
        SECTION 12.13. CONFIDENTIALITY...................................74
        SECTION 12.14. CREDITORS NOT BENEFITED...........................75
        SECTION 12.15. INVOLVEMENT OF THE COMPANY IN CERTAIN
             PROCEEDINGS.................................................75

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        SECTION 12.16. DISPUTE RESOLUTION AND ARBITRATION................75
        SECTION 12.17. SECTIONS..........................................77
        SECTION 12.18  NO WAIVER.........................................77
        SECTION 12.19. ADDITIONAL REMEDIES...............................77
        SECTION 12.20. U.S. DOLLARS......................................78
        SECTION 12.21. APPROVALS.........................................78
        SECTION 12.22. LIMITATION ON LIABILITY OF MEMBERS................78

EXHIBITS AND SCHEDULES...................................................80


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EXHIBITS


Exhibit A          Form of Contribution Agreement
Exhibit B          Form of Property Management Agreement
Exhibit C          Form of Purchase Agreement (Net No Gain)
Exhibit D          Form of Purchase Agreement (Gain)
Exhibit E          Investor Pension Trusts
Exhibit F          REIT Shares Amount Conditions



SCHEDULES


Schedule 1         Members' Names, Addresses, Primary Contact Person,
                       Capital Ratios
Schedule 3.2       Expenditures on Behalf of the Company
Schedule 4.5       Income From Other Than Rental of Storage Units
Schedule 4.9(a)    Manager Expenses
Schedule 4.9(b)    Member Expenses
Schedule 4.11      Initial Operating Budget
Schedule 4.12      Insurance Program
Schedule 4.16(a)   Excluded Original Properties
Schedule 4.16(b)   Development Properties
Schedule 6.3       Monthly Reports




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                               LIMITED LIABILITY
                               COMPANY AGREEMENT
                                       OF
                            STORAGE PORTFOLIO I LLC

     THIS LIMITED LIABILITY COMPANY AGREEMENT (this "AGREEMENT") of STORAGE
PORTFOLIO I LLC, a Delaware limited liability company (the "Company"), dated as
of May 13, 1999, by and between SUSA PARTNERSHIP, L.P., a Tennessee limited
partnership ("Storage"), as a Member and the Manager and FREAM No. 18 LLC, a
Delaware limited liability company ("Investor"), as a Member of the Company.

     WHEREAS, the Members enter into this Agreement for the purpose of
acquiring, owning and managing certain self-storage facilities (the
"Properties") and engaging in such other business activity or activities as the
Members may determine are necessary or appropriate to accomplish the foregoing;
and

     WHEREAS, for such purpose, the Members desire to operate a limited
liability company subject to the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual promises made herein, the
 parties hereto, intending to be legally bound, hereby agree as follows:



                                   ARTICLE I

                                  DEFINITIONS
                                  -----------

     As used in this Agreement, each term set out below shall, unless the
context otherwise requires, have the meaning specified in the Article.

     "ACT" means the Delaware Limited Liability Company Act, as amended from
time to time.

     "ADDITIONAL CAPITAL CONTRIBUTION" means, with respect to any Member, any
amount contributed, required to be contributed or deemed to have been
contributed to the capital of the Company by any Member pursuant to Section 3.4.

     "ADJUSTED CAPITAL ACCOUNT" means a Member's Capital Account balance
increased by such Member's obligation to restore a deficit balance in its
Capital Account, including any deemed obligation pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and
decreased by the amounts described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6).

     "AFFILIATE" means, with respect to any Member, any Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with

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the Person to whom reference is made. The term "control" as used herein
(including the terms "controlling," "controlled by," and "under common control
with") means the possession, directly or indirectly, of the ability (a) to vote
ten percent (10%) or more of the outstanding voting securities of or voting
interest in a Person, or (b) otherwise to direct the management policies of such
Person, by contract or otherwise.

     "AGREEMENT" means this Limited Liability Company Agreement, as amended,
restated or supplemented from time to time.

     "BUSINESS DAY" means any day other than a Saturday, Sunday or a holiday on
which national banking associations in New York, New York are closed.

     "CAPITAL ACCOUNT" means, with respect to any Member, the account maintained
for such Member in accordance with Section 3.8.

     "CAPITAL CALL NOTICE" has the meaning assigned to it in Section 3.4(a).

     "CAPITAL CONTRIBUTIONS" means, with respect to any Member, the total of all
capital contributions made by that Member and, with respect to all of the
Members collectively, it means the total of all capital contributions made by
all of the Members, in all cases pursuant to Sections 3.3 and 3.4.

     "CAPITAL EXPENDITURES AGREEMENT" means that Capital Expenditures
Reimbursement Agreement of even date herewith between Storage and the Company.

     "CAPITAL PROCEEDS" means, with respect to any capital transaction (as
defined under generally accepted accounting principles), the following: (a) in
the case of a sale or disposition of all or any portion of the Properties of the
Company, an amount equal to the excess of the gross cash proceeds payable to or
received by the Company in exchange for such Properties less the Disposition
Cost of such Properties relating to such sale or disposition, (b) in the event
of casualty or condemnation involving all or any portion of the Properties, an
amount equal to the excess of the gross cash proceeds payable to or received by
the Company as a result of such casualty or condemnation less the Disposition
Cost of such Properties relating to such casualty or condemnation, and (c) in
the case of the re-financing of any mortgage loan encumbering the Properties, an
amount equal to the excess of the net proceeds of the new mortgage loan (net of
any costs of the refinancing) over the then unpaid principal amount of the
mortgage loan or loans then being refinanced thereby.

     "CAPITAL RATIO" means, with respect to any Member at any time, the Capital
Ratio assigned to such Member as set forth under the column of the same name on
Schedule 1.

     "CASH AMOUNT" with respect to any Membership Interest to be purchased,
means an amount, in cash, equal to the amount of cash that would be available
for distribution to the applicable Member of the Company if the Company sold all
of its assets for cash at a purchase price equal to the Fair Market Value of the
Properties, and all of such cash was paid or distributed in the following order:

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          (a)  first, to creditors other than Members and their Affiliates, in
               the order of priority provided by law;

          (b)  then, to the Members and their respective Affiliates for any fees
               or other compensation or unreimbursed costs or expenses owing to
               the Members or their respective Affiliates in accordance with the
               terms of this Agreement, and then to repayment of any loans (with
               interest) made by any Member to the Company in accordance with
               the terms of this Agreement;

          (c)  then, to reserves that the Members deem reasonably necessary for
               any contingent or unforeseen liabilities or obligations of the
               Company;

          (d)  then, to the Members in accordance with Section 7.6.

     If the purchasing Member and the selling Member are unable to agree on the
Cash Amount within thirty (30) days after Manager's actual receipt of the
Conversion Notice or Marketing Notice, or within thirty (30) days after an
Insolvent Member's receipt of the Purchase Notice, the Cash Amount shall be
determined by a nationally recognized "Big Five" accounting firm selected by the
purchasing Member and selling Member, or if they cannot agree to such
appointment within fifteen (15) days after receipt of such notice, then by a Big
Five accounting firm selected at random after eliminating any such accounting
firms that have performed any material services for the Company or any Member
during the preceding three years. The accounting firm so appointed shall
determine the Cash Amount for the Membership Interest to be sold as provided
herein. The fees and expenses of such accounting firm shall be borne equally by
the purchasing Member and the selling Member.

     "CERTIFICATE OF ORGANIZATION" means the certificate of organization of the
Company filed with the Office of the Delaware Secretary of State in accordance
with the Act.

     "CHANGE OF CONTROL OF STORAGE OR STORAGE REIT" means any of the following:
(i) the sale of all or substantially all of Storage's or Storage REIT's assets
(other than (a) a sale or conveyance in which Storage or Storage REIT continues
as a holding company of an entity or entities that conduct the business or
businesses formerly conducted by Storage or Storage REIT, or (b) any transaction
undertaken for the purpose of reorganizing Storage or Storage REIT or
reincorporating Storage or Storage REIT under the laws of another jurisdiction
if such transaction does not materially affect the beneficial ownership of
Storage's or Storage REIT's securities, unless, in each of case (a) or (b),
immediately following and as a direct result of such transaction, two or more of
the Senior Managers (as defined below) no longer serve as executive officers of
the surviving entity); (ii) the merger or consolidation of Storage or Storage
REIT with any other entity, other than a merger or consolidation which would
result in the voting securities of Storage or Storage REIT outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 51% of the combined voting power of the voting securities of
Storage, Storage REIT or such surviving entity outstanding immediately after
such merger or consolidation; (iii) the transfer by the shareholders of Storage
REIT to any "Person" or "Group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) of an

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aggregate of 51% or more of the beneficial ownership (within the meaning of Rule
13d-3 of the Securities Exchange Act of 1934) of the issued and outstanding
voting securities of Storage REIT; or (iv) the transfer by the general partner
of Storage to any "Person" or "Group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) of an aggregate of 51% or more
of the beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934) of the issued and outstanding general partnership
interests of Storage. Notwithstanding the foregoing, a Change of Control of
Storage or Storage REIT shall not occur if, regardless of the form of the
transaction, any two of the following executive officers of Storage REIT remain
as executive officers of the surviving entity in substantially similar or more
senior positions: (i) Dean Jernigan, (ii) Karl Haas or (iii) Christopher Marr
(the "Senior Managers").

     "CODE" means the Internal Revenue Code of 1986, as amended from time to
time, together with all rules and regulations promulgated thereunder and
interpretations thereof by the Internal Revenue Service, or any successor
federal statute.

     "COMPANY" means Storage Portfolio I LLC, a Delaware limited liability
company.

     "COMPANY MINIMUM GAIN" shall have the meaning for partnership minimum gain
set forth in Treasury Regulations Section 1.704-2(b)(2), and any Member's share
of Company Minimum Gain shall be determined in accordance with Treasury
Regulations Section 1.704-2(g)(1).

     "CONSUMER PRICE INDEX" shall mean the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, U.S. City Average, all items, (1982-84=100), or any
successor or replacement index thereto. If the Consumer Price Index shall, after
the date hereof, be converted to a different standard reference base or shall
otherwise be revised, any determination hereunder which uses the Consumer Price
Index shall be made with the use of such conversion factor, formula or table for
converting the Index as may be published by the Bureau of Labor Statistics, or,
if said Bureau shall not publish the same, then with the use of such conversion
factor, formula or table as may be published by Prentice Hall, Inc., or, failing
such publication, by any other nationally recognized publisher of similar
statistical information. If the Consumer Price Index shall cease to be
published, then for the purpose of this Agreement there shall be substituted for
the Consumer Price Index such other similar index as the Manager shall
reasonably determine which measures changes in the relative purchasing power of
United States currency over the term of this Agreement.

     "CONTRIBUTION AGREEMENT" means that Contribution Agreement between the
Company and Storage, in substantially the form attached hereto as Exhibit A.

     "CONVERSION NOTICE" has the meaning assigned to it in Section 9.3(a).

     "DISPOSE," "DISPOSING" OR "DISPOSITION" (whether the first letter of such
word is capitalized or is in lower case type) means, with respect to any asset
(including, without limitation, a Membership Interest or any portion thereof), a
sale, assignment, transfer,

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conveyance, gift, pledge, encumbrance, exchange or other disposition of such
asset; provided, however, such term does not refer to the lease of self-storage
units within the Properties in the ordinary course of the self-storage facility
business of the Company.

     "DISPOSITION COST" refers to items paid or payable in cash and, in the case
of a sale, disposition or condemnation of or casualty involving all or any
portion of the Properties, means the sum of (a) all costs and expenses paid or
payable in cash by the Company in connection with such sale, disposition,
condemnation or casualty (including, without limitation, costs incurred by the
Manager and its Affiliates and properly allocated to the Company in accordance
with the terms of this Agreement), (b) all amounts required to be paid to any
lender in connection with such sale, disposition, condemnation, or casualty, (c)
any other amounts which the Members, collectively, reasonably determine are
required or advisable to pay to any person not a Member as a result of or in
connection with such sale, disposition, condemnation or casualty, and (d) in the
case of a condemnation or casualty involving all or any portion of the
Properties, all costs and expenses of restoration actually paid by the Company.

     "DISTRIBUTABLE CASH FLOW" means, for any period, the amount by which the
Net Cash Flow for such period exceeds the Reserve Deduction for that period.

     "ENTITY" (whether the first letter of the word is capitalized or in lower
case type) means any Person other than a natural person.

     "FAIR MARKET VALUE" means with respect to the value of the Properties for
purposes of Sections 9.3, 9.4 or 9.5, the gross fair market value of the
Properties as determined by the unanimous agreement of the Members, or, if the
Members fail to agree on such a value, the fair market value of the Properties
as determined by the following appraisal method:

          (e)  Within five (5) days of the event triggering the valuation
               process, each Member shall choose an independent appraiser with
               at least ten years experience in the appraisal and valuation of
               commercial real estate (the "Members' Appraisers") to value the
               Properties;

          (f)  within thirty (30) days following its appointments, each
               Members' Appraiser shall determine the gross fair market value
               of the Properties, without taking into account any liabilities
               associated with such Properties, and shall deliver to the
               Members and the Manager its written report as to such fair
               market value;

          (g)  if the highest valuation in such reports differs from the lowest
               valuation in such reports by 5% or less, then the value of the
               Properties shall be equal to the average of such highest and
               lowest valuations;

          (h)  if the highest valuation differs from the lowest valuation by
               more than 5%, then the Members' Appraisers shall jointly select
               another independent appraiser with at least ten years
               experience in the appraisal and valuation

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               of commercial real estate (the "Independent Appraiser") to value
               the Properties;

          (i)  within twenty-five (25) days following its appointment, the
               Independent Appraiser shall determine the fair market value of
               the Properties, without taking into account any liabilities
               associated with such Properties, and shall deliver to the
               Members and Manager its written report as to such fair market
               value;

          (j)  if the fair market value of the Properties as determined by the
               Independent Appraiser is within 5% of the average of the
               valuations determined by the other two appraisers, the value of
               the Properties shall be determined by averaging all three values.
               Otherwise, the value of the Properties shall be determined by
               calculating the average of the two numerically closest values
               determined by the three appraisers.

     "FINANCING DOCUMENTS" means documents executed by the Company in connection
with any financing or loan transaction, including the assumption by the Company
of any existing financing or loan, with respect to any Property or group of
Properties.

     "FISCAL YEAR" means each fiscal year of the Company as provided in Section
6.2.

     "FRANCHISE LEASES" has the meaning assigned to it in Section 4.6.

     "INSOLVENT MEMBER" means any Member (A) who has voluntarily initiated
proceedings of any nature under the federal Bankruptcy Code, or any similar
state or federal law for the relief of debtors; (B) who has made a general
assignment for the benefit of creditors, (C) against whom a proceeding under the
federal Bankruptcy Code, or any similar federal or state law for the relief of
debtors, has been initiated, which proceeding is not dismissed or discharged
within sixty (60) days after the filing thereof; (D) who has admitted in writing
its inability to pay its debts as they mature; or (E) all or any substantial
part of whose assets, or whose interest in the Company or any part thereof, have
been the subject of attachment or other judicial seizure, which remains
undismissed or undischarged for a period of sixty (60) days after the levy
thereof.

     "INSOLVENCY OPTION" has the meaning assigned to it in Section 9.5(b).

     "INSURANCE PROGRAM" has the meaning assigned to it in Section 4.12.

     "INVESTOR" means FREAM No. 18 LLC, a Delaware limited liability company.

     "LETTER AGREEMENT" means the Letter Agreement between Investor and Storage,
dated April 1, 1999.

     "MANAGER" means Storage or any person that is elected to act as Manager of
the Company as provided herein.

     "MANAGER EXPENSES" has the meaning assigned to it in Section 4.9.

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     "MARKET PRICE" means the mean average closing price per share of the REIT
Shares, as reported by the Wall Street Journal, Final Edition, for the thirty
(30) consecutive trading days immediately preceding the relevant valuation date,
or, if the REIT Shares have not traded for at least thirty (30) consecutive
trading days, then the average as aforesaid of the days on which the REIT Shares
have traded over the thirty (30) consecutive trading days preceding the relevant
valuation date; provided, however, that such average closing price shall be
appropriately adjusted to take into account any splits, combinations,
reclassifications or other similar changes in Storage REIT's capitalization that
occurred during such period.

     "MARKETING NOTICE" has the meaning assigned to it in Section 9.4(a).

     "MARKETING RIGHT" has the meaning assigned to it in Section 9.4(a).

     "MEMBERS" means, collectively, at any time, the persons who are members of
the Company as provided in this Agreement and under the Act, such persons being,
on the date of this Agreement, the persons listed as Members on Schedule 1 of
this Agreement (or such persons' respective successors), and at any time
thereafter those persons (except for any thereof who cease to be members of the
Company) and any other person admitted as an additional member to the Company in
accordance with this Agreement and the Act, each in its capacity as a member of
the Company.

     "MEMBER" means any one of such Members.

     "MEMBER DEFAULT DAMAGES" shall mean any liquidated damages owed by Storage
to the Company pursuant to the Contribution Agreement or Purchase Agreements.

     "MEMBER EXPENSES" has the meaning assigned to it in Section 4.9.

     "MEMBER NONRECOURSE DEBT" shall have the meaning for partner nonrecourse
debt set forth in Treasury Regulations Section 1.704-2(b)(4).

     "MEMBER NONRECOURSE DEBT MINIMUM GAIN" shall have the meaning for partner
nonrecourse debt minimum gain set forth in Treasury Regulations Section
1.704-2(i)(2).

     "MEMBERSHIP INTEREST" means, at any particular time, the entire limited
liability company interest of a Member in the Company at that time, including
the rights and obligations of such Member under this Agreement and the Act.

     "NET CASH FLOW" means for any period the amount equal to:

          (a)  all cash receipts of the Company other than Capital Proceeds,
               including, without limitation, amounts withdrawn from Reserves,
               decreased by

          (b)  disbursements of the Company for operating expenses (including,
               without limitation, amounts paid or payable under the Property
               Management Agreement), expenditures for capital investments and
               reinvestments, and principal payments on indebtedness, interest
               and other expenses, required

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               or elected to be made in connection with any financing,
               refinancing, sale or other event to the extent such principal,
               interest and other expenses are not properly included in the
               determination of Capital Proceeds.

     "NONRECOURSE DEDUCTIONS" shall have the meaning set forth in Treasury
Regulations Section 1.704-2(b)(1).

     "NON-TRIGGERING MEMBER" has the meaning assigned to it in Section 9.4(b).

     "OPERATING BUDGET" has the meaning assigned to it in Section 4.11.

     "OPTIONAL FUNDING NOTICE" has the meaning assigned to it in Section 3.4(b).

     "ORIGINAL PROPERTIES" means those self-storage facilities (including,
without limitation, all land, improvements and other property, and all fixtures
and personal property, comprising each such property, respectively) to be
transferred to the Company pursuant to the Contribution Agreement and the
Purchase Agreements.

     "PERSON" (whether the initial letter of the word is capitalized or in lower
case type) means any individual, corporation, sole proprietorship, partnership,
limited liability company, association, trust, joint venture, or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.

     "PERSONAL REPRESENTATIVE" has the meaning assigned to it in Section 9.5(a).

     "PROPERTIES" means, collectively, the following: the Original Properties;
any future self-storage facilities which may be owned from time to time by the
Company; and any other real and personal property which is owned by the Company
at any time. The term "Property" shall refer to any of the Properties in the
singular.

     "PROPERTY ACQUISITION EXPENSES" has the meaning assigned to it in Section
3.3.

     "PROPERTY MANAGEMENT AGREEMENT" means that certain Property Management
Agreement to be entered into by and between the Company and Storage or its
Affiliate, in substantially the form attached as Exhibit B.

     "PROPERTY MANAGER" means Storage or its Affiliate designated to manage the
Properties pursuant to the Property Management Agreement.

     "PURCHASE AGREEMENTS" means, collectively, that Purchase and Sale Agreement
dated May 13, 1999 by and between the Company and Storage, in the form attached
as Exhibit C, and that Purchase and Sale Agreement dated May 13, 1999 by and
between the Company and Storage, in the form attached as Exhibit D.

     "PURCHASE NOTICE" has the meaning assigned to it in Section 9.5(b).

                                 14

<PAGE>

     "REGULATORY ALLOCATIONS" has the meaning assigned to it in Section 7.2(f).

     "REIT REQUIREMENTS" has the meaning assigned to it in Section 4.5(b).

     "REIT SHARE" means a common share of beneficial interest in Storage REIT.

     "REIT SHARES AMOUNT" means for purposes of determining the number of REIT
Shares payable in lieu of any Cash Amount, the number of REIT Shares determined
by dividing the Cash Amount being utilized in such calculation by an amount
equal to 97% of the Market Price. Any fractional number of REIT Shares shall be
rounded down to the nearest full share, and cash will be issued in lieu of any
fractional REIT Shares based upon the Market Price.

     "RESERVES" means, at any time, the total amount of the reasonable reserves
established and maintained by the Company at that time, in amounts reasonably
determined in the annual Operating Budget or otherwise approved by all of the
Members to be adequate and appropriate for current and future operating and
working capital and for capital expenditures and other costs and expenses
incident to the Company's business.

     "RESERVE DEDUCTION" means, with respect to any period, the amount set aside
in that period to be added to Reserves, as determined in the annual Operating
Budget for that period or as otherwise approved by all the Members.

     "SECURED INDEBTEDNESS" means the approximately $93,600,000 of non-recourse,
secured cross-collateralized indebtedness incurred in connection with the
purchase of the Original Properties.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SPECIFIED CAPITAL EXPENDITURES" means those potential capital expenditures
set forth on Exhibit A to the Capital Expenditures Agreement.

     "STORAGE" means SUSA Partnership, L.P., a Tennessee limited partnership.

     "STORAGE REIT" means Storage USA, Inc., a Tennessee corporation.

     "TREASURY REGULATIONS" means the Income Tax Regulations promulgated under
the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

     "TRIGGERING MEMBER" has the meaning assigned to it in Section 9.4(a).

     "VALUATION DATE" means the date on which the Company finally determines the
Fair Market Value of the Properties pursuant to Sections 9.3 or 9.4.

                                15

<PAGE>

                                ARTICLE II

                          FORMATION OF THE COMPANY
                          ------------------------

     SECTION 2.1. NAME AND FORMATION.

     The name of the Company is Storage Portfolio I LLC. The Certificate of
Organization of the Company was filed on behalf of the Company with the Delaware
Secretary of State pursuant to the Act by an authorized person on March 30,
1999, and the Company was formed as a Delaware limited liability company
pursuant to the Act. The rights and liabilities of the Members shall be as
provided in the Act, except as otherwise set forth herein. In the event that any
provision in this Agreement conflicts with the Act, such provision in this
Agreement shall control and govern to the extent permitted by applicable law.

     SECTION 2.2. PRINCIPAL PLACE OF BUSINESS.

     The principal place of business of the Company shall be c/o SUSA
Partnership, L.P., 165 Madison Avenue, Suite 1300, Memphis, Tennessee, 38103, or
such other address as may be designated from time to time by all the Members, or
by the Investor if the Investor has assumed the duties of the Manager pursuant
to Section 11.2.

     SECTION 2.3. ASSUMED NAME CERTIFICATE.

     The Company shall do business under the name set forth in Section 2.1 above
or under any name determined under the Property Management Agreement, or under
any other name or names which the Members shall agree upon from time to time. If
the Company does business under a name other than that set forth under Section
2.1 or under the Property Management Agreement, the Manager shall file or cause
to be filed an assumed name or fictitious name certificate or any other document
as required by applicable law in appropriate jurisdictions and the Members shall
execute such certificates, documents or other writings as may be reasonably
requested by the Manager in connection therewith.

     SECTION 2.4. REGISTERED OFFICE AND REGISTERED AGENT.

     The registered office of the Company in the State of Delaware shall be c/o
The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
The agent for service of process on the Company pursuant to the Act shall be The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. The
Manager may, from time to time upon notice to each Member and without amending
this Agreement, change the Company's registered agent and the address of its
registered office.

                                   16

<PAGE>

     SECTION 2.5. TERM.

     The Company shall commence to exist on the date of the filing of the
Certificate of Organization with the Secretary of State of Delaware and shall
have perpetual existence, unless terminated in accordance with the provisions of
this Agreement or the Act.

     SECTION 2.6. REGISTRATION.

     The Manager shall cause the Company to register to do business as a foreign
limited liability company in any jurisdiction where the Company will conduct its
business and where such registration is required.

     SECTION 2.7 PURPOSE, POWERS AND CHARACTER OF THE BUSINESS OF THE COMPANY.

     The purposes, powers and character of the business of the Company shall be
as follows:

          (a)  to acquire, hold and manage the Properties and any other real or
               personal property and make any improvements thereon;

          (b)  to enter into the Property Management Agreement;

          (c)  to own, operate, manage, maintain, repair and otherwise deal with
               the Properties and any other property owned by the Company and to
               carry on any other business which may be favorable to an owner of
               self-storage facilities;

          (d)  to acquire, hold, use, lease, own, develop, improve and otherwise
               deal with all or any portion of the Properties;

          (e)  to mortgage, sell, lease, assign, transfer, exchange or otherwise
               encumber or dispose of all of the Properties of the Company, or
               any portion thereof or interest therein, including in connection
               with the Secured Indebtedness;

          (f)  to obtain temporary or permanent financing in the form of
               acquisition loans, construction loans, participating loans,
               working capital loans, and intermediate and long-term debt for
               the purposes recited in this Section 2.7;

          (g)  to make any investment and expenditure, to borrow money and to
               take any and all other actions which are incidental or reasonably
               related to any of the purposes recited in this Section 2.7;

          (h)  to do any other act or activity, and carry on any business,
               related directly or indirectly to ownership in real property or
               interests therein; and

                                  17

<PAGE>

           (i) to do any and all things necessary or desirable to carry out the
               foregoing activities and any other activity contemplated by this
               Agreement or the Act.

     SECTION 2.8. ADMISSION OF MEMBERS.

     Upon the execution of this Agreement, Storage and the Investor shall be
admitted to the Company as Members. The Members shall constitute a single class
or group of Members of the Company for all purposes of the Act, unless otherwise
explicitly provided herein. The Manager shall notify the Members of changes in
Schedule 1, which shall constitute the record list of the Members for all
purposes of this Agreement. Additional Members may be admitted at such time and
upon such terms and conditions as may be determined by the written act or
consent of all of the Members pursuant to Article 9.

                                   ARTICLE III

                                    CAPITAL
                                    -------

     SECTION 3.1. CAPITAL OF COMPANY.

     The capital of the Company shall be the aggregate amount of cash and the
fair market value of property contributed to the Company in the manner
hereinafter set forth in this Article 3.

     SECTION 3.2. EXPENDITURES ON BEHALF OF THE COMPANY.

     Investor and Storage acknowledge that prior to the date of this Agreement
and thereafter, each has made and may make the expenditures set forth on
Schedule 3.2 on behalf of the Company. If the transactions contemplated by the
Contribution Agreement and the Purchase Agreements do not close on or before the
Closing Dates specified therein, then liability for the expenditures set forth
on Schedule 3.2 shall be governed by the terms of the Letter Agreement. If such
closings occur, the Members shall be reimbursed for such expenditures as
provided in Section 4.9.

     SECTION 3.3. CAPITAL CONTRIBUTIONS.

           (a) From time to time, upon five (5) Business Days advance written
               notice by the Manager, Investor and Storage shall contribute, but
               not before the closing of the Contribution Agreement and the
               Purchase Agreements, to the capital of the Company, in proportion
               to their Capital Ratios, an aggregate cash amount equal to,
               without duplication, the expenses of the Company necessary to
               borrow the Secured Indebtedness (including any commitment fees
               associated with the Secured Indebtedness and any amounts to be
               paid to third parties in connection with any "rate lock" or

                                       18

<PAGE>

               other interest rate risk management instrument entered into in
               connection with the Secured Indebtedness), to consummate the
               acquisition of the Properties pursuant to the Contribution
               Agreement and the Purchase Agreements, and to reimburse the
               Members as contemplated by Section 4.9 (collectively, the
               "PROPERTY ACQUISITION EXPENSES"). An estimate of the Property
               Acquisition Expenses is set forth on Schedule 3.2, which shall be
               updated and replaced from time to time with the unanimous consent
               of the Members.

           (b) In the event that the Company is required to close under the
               Contribution Agreement, Storage shall contribute certain
               properties, pursuant to the terms and conditions of the
               Contribution Agreement. The Members agree that the properties
               contributed by Storage pursuant to the Contribution Agreement
               have an aggregate fair market value of $12,600,000 at the time of
               the contribution.

           (c) In the event that the Company is required to close under the
               Purchase Agreements, at the time of such closings, Investor shall
               contribute to the capital of the Company a cash amount equal to
               the amount required to fund such closings under the Purchase
               Agreements, but not exceeding $37,800,000.

           (d) In the event that the Company is required to pay damages, costs
               or expenses as a result of the Company's default under the
               Contribution Agreement or the Purchase Agreements, upon five (5)
               days' written notice from the Manager, Storage and Investor shall
               contribute to the capital of the Company, in proportion to their
               Capital Ratios, an aggregate cash amount equal to the total of
               all such damages, costs and expenses owed by the Company.

     SECTION 3.4. CAPITAL CONTRIBUTIONS FOR UNANTICIPATED NEEDS.

           (a) If the Company requires additional funds beyond funds made
               available pursuant to Section 3.2 and 3.3 to meet its existing
               obligations or to conduct its business in accordance with the
               approved Operating Budget, and such funds are not available from
               third party sources to which the Members agree, the Manager
               promptly shall give written notice (a "CAPITAL CALL NOTICE") to
               the Members indicating the amount required by the Company and the
               purpose for which such funds are required. Within ten (10)
               business days of receipt of such Capital Call Notice, each Member
               shall give notice to the Manager indicating whether or not it
               agrees to make an Additional Capital Contribution to the Company
               in an amount equal to its pro rata share, based upon Capital
               Ratios, of the required funds. If both parties elect to make such
               Additional Capital Contributions in the amount of their pro rata
               share of the required

                                       19

<PAGE>

               funds, then each Member shall make such capital contributions
               within five (5) business days of the last such election.

           (b) If either Member does not so elect to make such Additional
               Capital Contributions, then neither Member shall make such
               capital contributions, and either Member may at any time
               thereafter as long as the Company continues to require such
               additional funds indicated in the Capital Call Notice and without
               the requirement that the Manager deliver another Capital Call
               Notice with respect to such required funds, give written notice
               (an "OPTIONAL FUNDING NOTICE") to the other that it is prepared
               to make all or a portion of the required funds available to the
               Company and stating the terms on which the Member is prepared to
               provide funds, including the rate, priority of return, any
               disproportionate dilution of the non-contributing Member and
               whether the Member requires that the other Member provide a
               portion of the funds. Any Member receiving an Optional Funding
               Notice shall elect either (i) to permit the Company to accept
               funds on the terms proposed in such Optional Funding Notice, in
               which event such Member shall also have the right to provide up
               to its pro rata share, based on Capital Ratios, of such funds on
               such terms as set forth below, or (ii) to offer to provide the
               required funds on terms more favorable to the Company (e.g., at a
               lower rate of interest or return). Any such response shall be
               delivered to the Member which delivered the Optional Funding
               Notice within fifteen (15) days after receipt thereof and shall
               state (i) if the Member delivering such notice offers to provide
               the funds on terms more favorable to the Company, the terms on
               which the Member delivering such notice is prepared to make the
               required funds available to the Company or (ii) if such Member is
               permitting the Company to accept funds on the terms proposed in
               the Optional Funding Notice, the extent to which such Member will
               provide any portion of such funds on such terms. If a Member
               fails to respond to an Optional Funding Notice within fifteen
               (15) days after receipt thereof, it shall be deemed to have
               agreed to permit the Company to accept funds on the terms
               proposed in the Optional Funding Notice. If the Member receiving
               an Optional Funding Notice offers to provide the required funds
               on terms more favorable to the Company, the Company shall accept
               funds on such terms. In either event, each Member shall be
               entitled to provide up to its pro rata share, based on Capital
               Ratios, of the required funds by contributing such funds to the
               Company not later than thirty (30) days after the later of the
               Optional Funding Notice or the election by the Member who
               received it to provide funds on terms more favorable to the
               Company. If the Members provide the required funds on a pro rata
               basis, then no Member's Membership Interest shall be diluted.
               Each Member acknowledges that the failure to participate in any
               funding pursuant to this Section 3.4 may result in a dilution of
               its interest and rights in the Company. If funds are provided
               pursuant to this Section 3.4, this Agreement shall be amended as

                                       20

<PAGE>

               required to implement the terms and conditions on which the
               Members have agreed to provide new funds to the Company. No
               Member shall be obligated to provide funds pursuant to this
               Section 3.4. Notwithstanding anything to the contrary in this
               Section 3.4, without the prior written consent of all of the
               Members, no Member shall be entitled to require the Company to
               accept funds, and the Company shall not accept funds, until the
               Investor shall have determined to its reasonable satisfaction
               that the terms on which such funds are provided do not cause the
               Company's allocations to fail to comply with the requirements of
               Code Section 514(c)(9)(E) and the Treasury Regulations
               promulgated thereunder.

           (c) If a Member makes a payment directly to a creditor or another
               Member in satisfaction of any indebtedness of the Company
               pursuant to any indemnity, guaranty or contribution obligation of
               such Member in respect of Company indebtedness, or if any
               collateral interest granted by such Member to such creditor or
               other Member to secure any such indebtedness shall be foreclosed
               and the proceeds of such foreclosure shall be applied to reduce
               or satisfy such indebtedness and any foreclosure-related
               expenses, such Member shall be deemed to have made an Additional
               Capital Contribution equal to such amount, and shall receive a
               credit to its Capital Account in the amount thereof.

           (d) Notwithstanding any actual or implied provision to the contrary
               in this Section 3.4, no Member shall be liable to make any
               Additional Capital Contribution to the Company and no Member
               shall have any obligation to make a payment of an amount due the
               Company by another Member.

     SECTION 3.5. COMPANY CAPITAL.

           (a) Expect as may be otherwise specifically provided in this
               Agreement, no Member shall be paid interest on any Capital
               Contribution to the Company.

           (b) No Member shall have the right to withdraw all or any part of its
               Capital Contribution or to receive any return on any portion of
               its Capital Contribution except as may be otherwise specifically
               provided in this Agreement.

           (c) When the Company is to return to any Member all or part of its
               Capital Contribution or make any other distribution (whether in
               liquidation or otherwise) to any Member, no Member shall have the
               right to receive property other than cash. No distribution in
               kind shall be made to any Member without the prior written
               approval of all the Members.

                                       21

<PAGE>

           (d) All Capital Contributions must be made in cash unless, and only
               to the extent, expressly provided otherwise herein, in any
               Contribution Agreement or Purchase Agreement or in a written
               instrument of approval or consent signed by all of the Members.


     SECTION 3.6. LIABILITY OF MEMBERS.

     No Member, in such capacity or as a Manager, shall (i) be liable for the
debts, liabilities, contracts or any other obligation of the Company, except to
the extent expressly provided herein or in the Act, (ii) be liable for the debts
or liabilities of any other Member, (iii) be required to contribute to the
capital of, or loan, the Company any funds other than as expressly required in
this Agreement, (iv) be liable for the return of all or any portion of the
Capital Contributions of any Member, or (v) except as otherwise expressly
provided herein, have any priority over any other Member as to the return of its
contributions to capital or as to compensation by way of income.

     SECTION 3.7. LOANS BY MEMBERS OR AFFILIATES.

     Any Member or Affiliate may (but shall not be obligated to) at any time
loan money or guarantee a loan to the Company to finance Company operations, to
finance or refinance any assets of the Company, to pay the debts and obligations
of the Company, or for any other Company purpose; provided, however, that unless
a loan or guarantee is specifically permitted pursuant to this Agreement, such
Member or Affiliate must first obtain the prior written approval of all of the
Members for such loan or guarantee. Except as otherwise provided herein or in
any other agreement between the Company and some or all of the Members which has
been approved by all of the Members, if any Member or its Affiliate lends funds
or guarantees a loan of funds to the Company, such Member or Affiliate shall be
entitled to receive interest on such loan, or a fee for guaranteeing any such
loan, at an interest rate or fee to be agreed upon by such Member or Affiliate
and all of the Members.

     SECTION 3.8. CAPITAL ACCOUNTS.

     A separate capital account (each, a "CAPITAL ACCOUNT") shall be maintained
for each Member in accordance with the rules of Treasury Regulations Section
1.704-1(b)(2)(iv), and this Section 3.8 shall be interpreted and applied in a
manner consistent therewith. Whenever the Company would be permitted to adjust
the Capital Accounts of the Members pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(f) to reflect revaluations of Company property, the Company
shall so adjust the Capital Accounts of the Members. In the event that the
Capital Accounts of the Members are adjusted pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(f) to reflect revaluations of Company property, (i)
the Capital Accounts of the Members shall be adjusted in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of
depreciation, depletion, amortization and gain or loss, as computed for book
purposes, with respect to such property, (ii) the Members' distributive shares
of depreciation, depletion, amortization and gain or loss, as computed for tax
purposes, with respect to such

                                       22

<PAGE>

property shall be determined so as to take account of the variation between the
adjusted tax basis and book value of such property in the same manner as under
Code Section 704(c) and (iii) the amount of upward and/or downward adjustments
the book value of the Company property shall be treated as income, gain,
deduction and/or loss for purposes of applying the allocation provisions of
Section 7.2. In the event that Code Section 704(c) applies to Company property,
the Capital Accounts of the Members shall be adjusted in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of
depreciation, depletion, amortization and gain and loss, as computed for book
purposes, with respect to such property. If, pursuant to the Capital
Expenditures Agreement or the Contribution Agreement, Storage is required to pay
to the Company cash for capital expenditures or remedial work relating to the
properties contributed to the Company pursuant to the Contribution Agreement,
Storage's Capital Account shall be decreased to reflect a negative adjustment
(in the amount of such payment) to the value of such properties as of the
contribution date and increased by an amount equal to such payment. If, pursuant
to the Capital Expenditures Agreement, the Company is required to repay to
Storage cash that Storage had previously paid to the Company for capital
expenditures relating to the properties contributed to the Company pursuant to
the Contribution Agreement, Storage's Capital Account shall be increased to
reflect a positive adjustment (in the amount of such repayment) to the value of
such properties as of the contribution date and decreased by an amount equal to
such repayment.

SECTION 3.9. CAPITAL RATIOS.

     The Capital Ratio of each Member is set forth opposite its respective name
on Schedule 1, attached hereto and hereby made a part of this Agreement. The
Capital Ratios set forth on Schedule 1 may be amended from time to time by the
unanimous written consent of the Members.


                                   ARTICLE IV

                        RIGHTS AND POWERS OF THE MANAGER
                        --------------------------------

     SECTION 4.1. MANAGER'S POWERS AND RESPONSIBILITIES.

     The Manager of the Company shall be Storage or such other person as may be
appointed to serve as Manager from time to time by agreement of all of the
Members or pursuant to the Investor's rights under Article XI. The Manager shall
manage the affairs of the Company as provided herein and shall carry out the
duties of the Manager, as such duties are described in the Act. Without
limiting the foregoing (but subject to and limited by the provisions of this
Agreement, including Section 4.2), the Manager shall have full power and
authority to do the following to the extent necessary for the conduct of the
Company's business:

              (a) to supervise or arrange for the supervision of day-to-day
                  operations of the Company;

                                       23

<PAGE>

              (b) to institute, prosecute, defend or settle any legal,
                  arbitration or administrative actions or proceedings on behalf
                  of or against the Company, subject to the provisions of
                  Section 4.2(r);

              (c) retain attorneys, consultants and other independent
                  contractors to the extent such professional services are
                  required to carry on the business of the Company;

              (d) to collect all rents and other repayments due and owing to the
                  Company;

              (e) to incur normal operating expenses of, and to pay the
                  obligations of, the Company, and to enter into, perform and
                  carry out contracts and agreements on behalf of the Company
                  for the conduct of the Company's business;

              (f) subject to Investor's rights under Section 4.6, to perform, or
                  cause to be performed, all of the Company's obligations, and
                  to exercise or cause to be exercised all of Company's rights
                  under any agreement (including, without limitation, the
                  Financing Documents and any limited liability company
                  agreement, partnership agreement, joint venture agreement,
                  shareholder's agreement or other similar agreement) to which
                  the Company or any nominee of the Company is a party;

              (g) to pay all taxes, assessments, rents and other impositions
                  applicable to Company assets and undertake when appropriate
                  any action or proceeding seeking to reduce such taxes,
                  assessments, rents or other imposition;

              (h) to obtain, maintain or cancel any type of insurance coverage
                  on the Properties or other assets of the Company, including
                  any commercially reasonable and customary insurance to protect
                  the Manager against liability from third parties in such
                  amounts as are reasonably necessary and appropriate;

              (i) to open or maintain bank accounts for the deposit of Company
                  funds, provided that withdrawals may be made only upon the
                  Manager's signature or any other signature that all of the
                  Members designate;

              (j) to prepare and file tax returns on behalf of the Company in
                  any federal, state, local or foreign tax jurisdiction which
                  may apply;

              (k) to do any and all acts which may be necessary or desirable for
                  the proper management and maintenance of the Properties,
                  including any matters provided for in the Property Management
                  Agreement;

              (l) to execute and deliver such documents on behalf of the Company
                  as it reasonably deems necessary or desirable in connection
                  with the foregoing provisions; and

                                       24

<PAGE>

              (m) to do any act which is necessary or desirable to carry out any
                  of the foregoing.

     SECTION 4.2. ACTIONS REQUIRING CONSENT OF ALL MEMBERS.

     Notwithstanding the foregoing provisions of Section 4.1, unless the action
is provided for in the Operating Budget, is otherwise expressly permitted
pursuant to the terms of this Agreement (including Section 4.11) or the Manager
has obtained the written consent of all of the Members, the Manager shall not
cause the Company to do, nor shall the Manager have the power or authority to
cause or permit the Company to do, any of the following:

              (a) to purchase or acquire, or contract or commit to purchase or
                  acquire, any property or asset;

              (b) except in accordance with the provisions of Section 9.3, 9.4
                  or 9.5, to Dispose of all or any portion of, or any estate or
                  interest in, the Properties (other than leasehold interests to
                  third parties granted in the ordinary course of business) or
                  assets of the Company, including its goodwill;

              (c) to enter into any contract; provided, however, that the
                  Manager shall have the authority to enter into the Property
                  Management Agreement without obtaining the written consent of
                  the Members;

              (d) to borrow any money or enter into any financing, refinancing
                  or loan transaction, including the Secured Indebtedness, or
                  grant a security interest in all or any portion of the
                  Properties or amend the terms and conditions of any existing
                  financing or make elections with respect to interest periods,
                  interest rates, prepayment or other material provisions under
                  any financing;

              (e) to lease any Property of the Company, except to third parties
                  in the ordinary course of the Company's business or in
                  accordance with the Property Management Agreement or the
                  Franchise Leases;

              (f) to enter into, or amend, any contract between the Company and
                  a Member or an Affiliate of a Member;

              (g) to hire any employee for the Company;

              (h) to enter into any agreement restricting the Company or any
                  Member or Affiliate from competing with the business of any
                  Person in any manner;

              (i) to enter into any agreement for, or to consummate, any merger,
                  consolidation, recapitalization, reorganization,
                  reconstitution or any similar rearrangement of the Company or
                  any of its equity, assets or liabilities;

                                       25

<PAGE>

              (j) to admit any Person to the Company as an additional or
                  substitute Member;

              (k) to commit the Company to an assignment for the benefit of
                  creditors, commence (as the debtor) a case in bankruptcy, or
                  commence (as the debtor) any proceeding under any other
                  insolvency law, or consent to or acquiesce in the commencement
                  of any such proceeding against the Company, or admit or
                  confess the insolvency or bankruptcy of the Company;

              (l) to settle any uninsured legal, arbitration or administrative
                  claim or proceeding asserted or brought against the Company,
                  or confess a judgment against the Company, at a cost to the
                  Company in excess of the lesser of $100,000 or the amount
                  therefor expressly provided in the Operating Budget as a
                  separate line item specifically identifying the particular
                  claim or proceeding;

              (m) to dissolve or wind up the Company or cause or permit the
                  termination of its existence;

              (n) to change the name of the Company;

              (o) to commit the Company to any capital or operating expenditures
                  in excess of the Operating Budget except as otherwise
                  specified in Section 4.11;

              (p) seek or consent to any material change in the zoning or other
                  land use regulations affecting any Properties or any permits
                  or approvals granted thereunder;

              (q) rebuild or reconstruct the improvements on any Properties if
                  they are substantially damaged by a fire or other casualty;

              (r) file or defend lawsuits or other proceedings, except for (1)
                  actions to recover rents (including the imposition and
                  execution of liens on tenants' property), (2) actions to
                  recover possession of the Properties and claims of tenants in
                  the ordinary course of business, (3) the defense by insurers
                  of insured claims or (4) other actions in the ordinary course
                  of business of operating an individual Property; provided,
                  however, that with respect to any such lawsuit or proceeding
                  involving a claim or series of related claims against the
                  Company totaling more than $250,000, the Manager shall give
                  the Members prompt notice of such lawsuit or proceeding and
                  all Members shall have the opportunity to consult with the
                  Manager regarding the Company's defense of the action;

              (s) change the Company's accounting methods, either for financial
                  or tax reporting purposes; or

                                       26

<PAGE>

              (t) to do any act in contravention of this Agreement.

     SECTION 4.3. OPERATION IN ACCORDANCE WITH PLANS.

     The Manager shall exercise reasonable efforts to cause the Company to be
operated in compliance with the Operating Budget and to maintain in effect the
insurance required by the Insurance Program.

     SECTION 4.4. ERISA MATTERS.

     The Company shall use its best efforts to conduct its affairs so as to
constitute a "real estate operating company" as defined in the regulations
promulgated under the Employee Retirement Income Security Act of 1974 ("ERISA"),
as amended from time to time, at 29 C.F.R. 2510.3-101. For purposes of
determining that the Company so qualifies, the annual valuation period of the
Company for purposes of such regulation shall be the ninety (90)-day period
commencing each December 1. As long as Storage (or an Affiliate of Storage) is
the Manager, the Manager shall, if requested by the Investor, exercise diligent
efforts to obtain from any lender, tenant or other party with which the Company
does business such certificate or other evidence as the Investor may request in
order to determine that the transaction with such party does not constitute a
non-exempt prohibited transaction for purposes of ERISA.

     SECTION 4.5. UBTI MATTERS; REIT REQUIREMENTS.

          (a)     UBTI Matters. Storage acknowledges that it has been advised
                  that certain indirect investors in the Investor are qualified
                  organizations within the meaning of Code Section 514(c)(9)(C)
                  which are not generally required to pay federal income tax on
                  interest, certain real property rents and certain other types
                  of income and agrees that the business and affairs of the
                  Company will be managed with a view to minimizing the amount
                  of income of the Company that will constitute unrelated
                  business taxable income ("UBTI") to a qualified organization
                  under Section 511 et seq. of the Code. Storage agrees that,
                  except to the extent that such action would cause Storage REIT
                  to be disqualified as a REIT and would be contrary to Section
                  4.5(b) below, the Investor shall be entitled to exercise any
                  consent, election or other right under this Agreement with a
                  view to avoiding any UBTI to the Investor or any of its
                  members and without regard to whether conducting the business
                  of the Company in such manner will maximize either pre-tax or
                  after-tax profit of the Company to a Member who is not such a
                  qualified organization. Without the prior written consent of
                  the Investor which specifically refers to the requirement of a
                  consent under this Section 4.5, the Company shall not (i)
                  obtain financing from the seller to the Company of the
                  Properties or any individual or entity who bears a
                  relationship described in Code Sections 267(b) or 707(b) to
                  such seller, excluding financing on commercially reasonable
                  terms, (ii) lease any of

                                       27

<PAGE>

               the Properties to such seller or to any individual or entity who
               bears a relationship described in Code Sections 267(b) or 707(b)
               to such seller, excluding leases to such persons if no more than
               25% of the leasable floor space in a building (or complex of
               buildings) is covered by such leases and if the leases are on
               commercially reasonable terms, (iii) obtain any financing where
               the amount of the indebtedness or any other amount payable with
               respect to the financing, or the time for making any payment, is
               dependent upon any revenue, income or profits derived from the
               Properties, (iv) incur any indebtedness which would otherwise be
               treated as "acquisition indebtedness" under Code Section 514(c),
               (v) incur any indebtedness which would constitute "partner
               nonrecourse debt" as defined in Treasury Regulations
               ss.1.704-2(b)(4), (vi) enter into any lease which provides for
               contingent rental payments unless based upon the tenant's gross
               receipts, (vii) enter into any lease or other arrangement
               pursuant to which it receives rents from personal property or
               payment for the performance of services which would constitute
               UBTI, except as provided on Schedule 4.5, (viii) invest or hold,
               directly or through one or more entities, any interest in any
               partnership if at any time it does not comply with Code Section
               514(c)(9)(E) and the Treasury Regulations thereunder, or (ix)
               otherwise engage in any transactions which would result in UBTI
               for the Investor or any of the holders of direct or indirect
               equity interests in the Investor. The provisions of this Section
               4.5(a) shall not be interpreted to interfere with the exercise of
               either party's rights under Sections 9.3, 9.4 or 9.5 of this
               Agreement.

    (b)        REIT Requirements. Each Member understands and acknowledges that
               Storage REIT is the general partner of Storage and that Storage
               REIT has elected to be treated as a real estate investment trust
               ("REIT") under Code Section 856. Each Member further understands
               and acknowledges that in order to maintain its status as a REIT,
               Storage REIT must comply with numerous and complex rules and
               regulations set forth in the Code and the Treasury Regulations,
               many of which are applied on a quarterly and/or annual basis (the
               "REIT REQUIREMENTS"), and that the management and operation of
               the Company may have an effect on the ability of Storage REIT to
               continue to maintain its status as a REIT. Accordingly, the
               Company shall not take any action which (or fail to take any
               actions, the omission of which) would cause Storage REIT to be
               disqualified as a REIT, determined as if the Company were the
               sole investment of Storage REIT. In addition, the business and
               affairs of the Company will be managed with a view to minimizing
               any additional taxes under Code Section 857 or Code Section 4981
               or other potentially adverse consequences under the Code or which
               otherwise could cause Storage REIT to violate the REIT
               Requirements, each determined as if the Company were the sole
               investment of Storage REIT. In addition, any action of the
               Manager on behalf of the Company or any decision of the

                                       28
<PAGE>


               Manager to refrain from acting on behalf of the Company,
               undertaken in the Manager's business judgment that such action or
               omission is necessary to prevent the disqualification of Storage
               REIT as a REIT, determined as if the Company were the sole
               investment of Storage REIT, is expressly authorized under this
               Agreement and is deemed approved by all of the Members. Subject
               to Section 4.5(a) (but taking into account the limitation
               provided therein where such action would cause Storage REIT to be
               disqualified as a REIT and would be contrary to this Section
               4.5(b)), Investor agrees that Storage shall be entitled to
               exercise any consent, election or other right under this
               Agreement with a view (i) to protecting Storage REIT's status as
               a REIT, (ii) to avoid Storage REIT incurring any taxes under
               Section 857 or Section 4981 of the Code or other potentially
               adverse consequences under the Code or (iii) to avoid causing
               Storage REIT to violate the REIT requirements, each determined as
               if the Company were the sole investment of Storage REIT. The
               provisions of this Section 4.5(b) shall not be interpreted to
               interfere with the exercise of either party's rights under
               Sections 9.3, 9.4 or 9.5 of this Agreement.

     To the extent practicable, the Manager shall give the Members three
Business Days' notice of such action or failure to act.

     SECTION 4.6. CONTRACTS WITH AFFILIATES.

     The Company has entered or shall enter into the Contribution Agreement, the
Purchase Agreements and the Capital Expenditures Agreement. The Company shall
enter into the Property Management Agreement with Storage or its Affiliate in
the form approved by the Investor and attached hereto as Exhibit B. Subject to
Investor's prior approval of the terms and form of such leases, the Company
shall enter into leases with Storage USA Franchise Corp. for space at the
Properties for the purpose of selling locks and supplies (the "FRANCHISE
LEASES"). The Company shall enter into the Property Management Agreement and the
Franchise Leases promptly after the acquisition of the Properties. The Investor
shall have the sole and exclusive right to direct in good faith the Company's
actions with regard to such contracts and any other contracts between the
Company and Storage or any Affiliate of Storage, including proposing or
approving on behalf of the Company any amendment or modification of such
contracts, exercising on behalf of the Company any consent, waiver, approval or
election thereunder, enforcing on behalf of the Company any remedies, including
termination thereof and taking any and all other actions under or with respect
to such agreements as owner. Notwithstanding the foregoing, without the consent
of Storage, the Company shall not give notice preventing the automatic renewal
of the Property Management Agreement or terminate the Property Management
Agreement or the Franchise Leases, except pursuant to Article XI or at such time
that Storage is not longer a member of the Company. In any contractual dispute
between Storage or any Affiliate of Storage and the Company commenced while
Storage is a Member, Investor shall indemnify the Company against any and all
losses, damages, costs or expenses (including, without limitation, attorneys'
fees) incurred by the Company or owed by the Company to Storage or any Affiliate
of Storage pursuant to a final, non-appealable judgment or

                                       29

<PAGE>

arbitration award. If the Company is the prevailing party in such dispute
pursuant to a final, non-appealable judgment or arbitration award, in lieu of
payment by Storage or such Affiliate of any losses, damages, costs or expenses
awarded to Company in such dispute, Investor and the Company agree that Storage
shall pay to the Company an amount equal to such losses, damages, costs or
expenses which the Company is entitled to receive from Storage or its Affiliate,
multiplied by the inverse of Investor's Capital Ratio (the "Member Dispute
Damages"). If Storage or Investor is no longer a Member at the time such dispute
is concluded, the parties shall make such payments to one another as shall be
necessary to reproduce as nearly as practicable the economic effects on each of
them that would have been produced pursuant to the preceding two sentences if
both had remained members until such conclusion. Except as otherwise expressly
provided herein, the Company shall not enter into any other contracts with a
Member or any Affiliate of a Member or modify, amend or terminate the
Contribution Agreement, the Purchase Agreements, the Capital Expenditures
Agreement, the Franchise Leases or the Property Management Agreement or any
other agreement between the Company and a Member or an Affiliate of a Member
without the specific prior written approval of all the Members.

     SECTION 4.7. EMPLOYEES AND CONTRACTORS.

     The Company shall conduct its business exclusively through independent
contractors and shall not hire any employees. The Manager shall supervise and
administer all services rendered to the Company by independent contractors. If
the Property Management Agreement shall be terminated, the Manager shall select
qualified contractors approved by the Investor which are unaffiliated with any
Member to perform the management, leasing and other services required by the
Company.

     SECTION 4.8. FINANCING.


     The Manager at its option our upon request by a Member shall use diligent
efforts to identify favorable financing for the Company. After the Members have
approved financing for the Company, the Manager shall use diligent efforts to
close such financing and to enter into all incidental arrangements relating
thereto, including satisfying the requirements of prospective lenders, and
entering into interest rate protection agreements and other ancillary
arrangements approved by the Members. The Manager shall not enter into any
arrangements for financing or pay any commitment or application or other fees
for financing without the prior written approval of the Members. The Manager
acknowledges that any Member may elect not to approve financing which would
adversely affect the Company's ability to dispose of the Properties or which
might require the Company to pay a prepayment premium at a time at which any
Member may desire to liquidate its interest in the Company.


     SECTION 4.9. COMPENSATION AND EXPENSE REIMBURSEMENT.

    (a)        The Manager shall not receive any compensation for serving as
               Manager. The Company, however, shall reimburse the Manager or its
               reasonable, out-of-pocket expenses paid to third parties for
               those items listed on

                                       30

<PAGE>

               Schedule 4.9(a) and incurred in carrying out its duties as
               Manager (the "MANAGER EXPENSES").

    (b)        The Company shall reimburse the Members for their reasonable
               out-of-pocket costs and expenses paid to third parties incurred
               by them (i) in negotiating this Agreement and in facilitating the
               Company's purchase and financing the Properties, including,
               without limitation, the expenses described in the Letter
               Agreement, fees of third-party attorneys and consultants, all of
               which costs and expenses are set forth or estimated on Schedule
               3.2, and (ii) for those items listed on Schedule 4.9(b) and
               incurred in administering their investments in the Company
               (collectively, the "MEMBER EXPENSES").

    SECTION 4.10.  CONTINUED INVOLVEMENT REQUIREMENTS.

     The Company shall not enter into any agreement or other arrangement with
any third party requiring the continued ownership, control, employment, or other
involvement with the Company or the Properties of Storage or any Affiliate of
Storage without the specific prior written consent of the Investor. To the
extent that the Company does enter into any such agreement or arrangement,
Storage covenants not to take any action or refrain from taking any action which
would constitute a breach of such requirement or which would trigger any such
right or obligation.

     SECTION 4.11. OPERATING BUDGET.

    (a)        The Members have approved the initial operating budget for the
               Company (collectively, the "OPERATING BUDGET") for the partial
               calendar year ending December 31, 1999. The initial Operating
               Budget is more fully described on Schedule 4.11. The Operating
               Budget for subsequent calendar years shall include, but not be
               limited to, anticipated revenues, occupancies, rate increases,
               capital improvements, financing needs, salaries and all other
               operating expenditures of the Company, and shall separately set
               forth all capital expenditures, identifying those items that are
               Specified Capital Expenditures. No later than November 30 of each
               calendar year, the Manager will present a proposed Operating
               Budget for the following year to all of the Members for their
               consideration and approval, which approval shall not be
               unreasonably withheld or delayed. Following delivery of a
               proposed Operating Budget, the Members shall approve and
               disapprove the Operating Budget no later than twenty (20) days
               after the date on which Manager has met with, or attempted in
               good faith to meet with, each Member to discuss the proposed
               Operating Budget. To be effective, any notice which disapproves a
               proposed Operating Budget must contain specific line-item
               objections thereto in reasonable detail. Any Member who fails to
               provide any such written notice within the

                                       31

<PAGE>


               twenty-day period, shall be deemed to have (i) approved of all
               items other than capital expenditure items included in the
               Operating Budget as submitted and (ii) disapproved of the capital
               expenditures items included in the Operating Budget as submitted.
               Each Member shall review the Operating Budget as submitted. Each
               Member shall review the Operating Budget on a line-by-line basis.
               If a Member disapproves (or is deemed to disapprove) or raises
               any objections to any line items contained in the proposed
               Operating Budget or any revisions thereto, until otherwise
               mutually agreed, the undisputed portions of the proposed
               Operating Budget shall be deemed to be adopted and approved. For
               all items except capital expenditure items, the item
               corresponding to a disputed item and contained in the Operating
               Budget for the preceding calendar year shall be substituted in
               lieu of the disputed portions of the Operating Budget. In each
               instance where portions of the Operating Budget for the preceding
               calendar year are deemed to be part of the Operating Budget in
               effect until a new Operating Budget is approved, the items
               contained in the Operating Budget for the preceding calendar year
               shall be automatically increased by a percentage equal to the
               percent of increase in the Consumer Price Index during the
               preceding calendar year, except for interest, taxes and
               insurance, which shall be increased based on actual increases, if
               any, in cost. If, notwithstanding such increase, the Members do
               not reach agreement as to a mutually acceptable Operating Budget
               within thirty (30) days after delivery of an objection by a
               Member (or the deemed disapproval by a Member), the disputed line
               items of the Operating Budget shall be submitted to and resolved
               by arbitration in accordance with Section 12.16 of this
               Agreement.

    (b)        Notwithstanding the foregoing, with respect to each Property and
               without the consent of the Members, the Manager shall have the
               right, in its reasonable discretion, to expend up to the greater
               of (i) 10% or (ii) $6,000 more than the amount budgeted for each
               operating expense line item (exclusive of capital expenditure
               items) for each Property for any Fiscal Year, not to exceed in
               the aggregate a maximum of the greater of (i) 5% of the total
               operating budget or (ii) $30,000 for each Property for any Fiscal
               Year.

    (c)        The Manager shall have the right, from time to time during each
               calendar year, to submit a revision to the Operating Budget to
               the Members for approval. The Members will review all proposed
               revisions to the Operating Budget on a line by line basis in the
               same manner as the Operating Budget. Following delivery of any
               proposed revision to an Operating Budget, each Member shall be
               required to approve or disapprove such proposed revision to the
               Operating Budget no later than twenty (20) days after the date on
               which the Manager has met with, or attempted in good faith to
               meet with, each Member regarding the proposed revision. To be
               effective, any notice which disapproves proposed revisions to the
               Operating Budget must contain specific line item objections
               thereto in reasonable detail. If a Member fails

                                       32

<PAGE>

               to provide such written notice to Manager of any specific
               objections to proposed revisions to the Operating Budget within
               such twenty (20) day period, such proposed revisions shall be
               deemed to have (i) approved as submitted if they are items other
               than capital expenditure items and (ii) disapproved as submitted
               if they are capital expenditure items. If a Member shall
               disapprove (or be deemed to disapprove) or raise any objections
               to any items contained in revisions to the Operating Budget,
               Manager shall continue to use all reasonable efforts to comply
               with the Operating Budget in accordance with the foregoing
               provisions until a proposed revision has been approved. If no
               revision is approved before the expiration of thirty (30) days
               after any revision is submitted to the Members for approval such
               disapproval shall be resolved by arbitration in accordance with
               Section 12.16 of this Agreement.


    (d)        The Manager shall not be deemed to have made any guarantee or
               warranty of the fiscal estimations set forth in the Operating
               Budget. The parties acknowledge that the Operating Budget is
               intended to set forth objectives and goals based on the Manager's
               best judgment of the facts and circumstances known by the Manager
               at the time of preparation.

     SECTION 4.12. INSURANCE PROGRAM.

     "Insurance Program" means the program for insurance described in Schedule
4.12. It is the understanding of the Members that Storage shall include the
Company in Storage's insurance program. The Manager shall exercise its best
efforts to ensure that the Insurance Program continues to meet or exceed the
minimum standards set forth on Schedule 4.12, and the Manager shall obtain
Investor's prior written consent before making any modifications to the
Company's insurance program that would cause the program to no longer meet or
exceed the minimum standards set forth on Schedule 4.12.

     SECTION 4.13. DELEGATION OF AUTHORITY.

     The Manager may from time to time delegate in writing to one or more
Members or other Persons such authority as the Manager may deem advisable.

     SECTION 4.14. LIABILITY OF THE MANAGER.

     It is the intent of this Section 4.14 to restrict the nature of the
Manager's duties and liabilities hereunder to the maximum extent permitted under
applicable law. Neither the Company nor any Member shall have any claim against
the Manager by reason of any act or omission of such Manager performed by the
Manager in the good faith belief that it was acting within the scope of its
authority under this Agreement unless such act or omission involves the
Manager's bad faith, gross negligence, willful misconduct or fraud. Further, the
Manager shall have no liability hereunder for failing to act if such act
required the consent of some or all of the

                                       33

<PAGE>

Members and the required consent to such action was requested by Manager but not
granted. However, the Manager will be liable to the Company for failing to do
any thing specifically required of it by this Agreement and for any act taken
without the consent or approval of the Members when such consent is required,
provided such failure to do anything specifically required of it by this
Agreement or act taken without the required consent or approval of Members (a)
involves the Manager's bad faith, gross negligence, willful misconduct or fraud,
or (b) resulted in actual, material damage to the Company or a Member. Any
amendment, modification or repeal of this Section 4.14 or any provision in this
Section 4.14 shall be prospective only and shall not in any way affect the
limitations on the Manager's liability to the Company and the Members under this
Section 4.14 as in effect immediately prior to such amendment, modification or
repeal with respect to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when claims relating to such
matters may arise or be asserted. In furtherance of this limitation of liability
and duties of the Manager, but not by way of limitation, the following
provisions shall apply:

    (a)        Subject to the limitations set forth in Section 4.16, it will not
               constitute a breach of fiduciary or other duty for the Manager to
               engage in activities of the type conducted by the Company, even
               if in direct competition with the Company, including without
               limitation, the purchase, sale and leasing of self-storage
               facilities or the purchase and sale of any real property;

    (b)        It will not constitute a breach of fiduciary or other duty for
               the Manager to resolve any conflicts of interest related to any
               REIT Requirements, subject to the parameters set forth in Section
               4.5(b) hereof;

    (c)        It will not constitute a breach of fiduciary or other duty for
               the Manager to engage, as attorneys, accountants and other
               advisors on behalf of the Company, persons who may also be
               retained from time to time by the Manager or its Affiliates, or
               any of their respective officers, directors or shareholders
               (including without limitation engaging the auditors for Storage
               to audit and certify the financial statements of the Company in
               accordance with Section 6.3(a) hereof), and such persons may be
               engaged by both the Company and the Manager or its Affiliates
               with respect to any matter; provided, however, that unless
               approved by all the Members after full disclosure of any conflict
               of interest, such persons may not be engaged with respect to any
               matter in which the interest of the Company and the Manager or
               any of its Affiliates may conflict. The Manager shall not be
               responsible for any misconduct or negligence on the part of any
               such attorney, accountant or other advisor;

    (d)        It will not constitute a breach of fiduciary or other duty for a
               Manager, or an Affiliate of a Manager, to contract or enter into
               any agreement or arrangement with the Company with respect to any
               aspect of the operations of the Company if approved by all of the
               Members after full disclosure; and

                                       34

<PAGE>


    (e)        It will not constitute a breach of fiduciary or other duty for
               the Manager to devote time to other matters not related to the
               operations of the Company, as long as the Manager devotes such
               time and attention to the business and affairs of the Company as
               is necessary to reasonably conduct the business and affairs of
               the Company as set forth herein.

    (f)        It will not constitute a breach of fiduciary or other duty for
               the Manager to lend funds to the Company to the extent permitted
               hereunder, including, without limitation, pursuant to Section
               3.4.

     SECTION 4.15. INDEMNIFICATION.

     The following provisions shall apply to the indemnification of the Members
and persons or entities affiliated with the Members:

    (a)        "Indemnified Parties" means the Members, any officer, director,
               manager or other agent of a Member, any direct or indirect holder
               of equity in the Members, Storage REIT, Fidelity Real Estate
               Partners III Corp. ("FREP"), any entity controlling, controlled
               by or under common control with FREP, any entity controlling
               controlled by or under common control with Storage REIT, any
               investment manager for any holder of equity in any Member, each
               of the officers, directors and employees of any of the preceding
               persons or entities, and any other person who serves at the
               request of any of the preceding persons or entities as an
               officer, director, trustee, manager or agent of any entity in
               which the Company has an interest as an owner, security holder,
               creditor or otherwise.

    (b)        Except as otherwise required by applicable law or specifically
               provided in this Agreement, and subject to Section 4.14, no
               Indemnified Party shall be liable to the Company or any person or
               entity holding an equity interest in the Company for any loss
               suffered by the Company or such person or entity which arises out
               of any action or inaction of any Indemnified Party as long as
               such Indemnified Party acted in good faith and in a manner
               reasonably believed to be in, or not opposed to, the best
               interests of the Company and which action or inaction does not
               constitute a material breach of this Agreement.

    (c)        The Company shall indemnify, to the extent of its assets, each
               Indemnified Party against all liabilities, losses and expenses
               incurred by any of them in connection with any matter relating to
               the Company or any entity in which the Company has any interest
               as an owner, security holder, creditor or otherwise, including
               but not limited to amounts paid in satisfaction of judgments,
               settlements, fines, penalties and counsel fees reasonably
               incurred in connection with the defense or disposition of any
               action, suit or other proceeding, whether civil or criminal,
               pending or threatened, before

                                       35

<PAGE>

               any court or administrative or legislative body, in which such
               Indemnified Party may be or may have been involved as a party or
               otherwise or with which such Indemnified Party may be or may have
               been threatened. Notwithstanding the foregoing, indemnification
               shall not be paid to any Indemnified Party with respect to any
               matter as to which such Indemnified Party shall have been finally
               adjudicated to have committed an act or omission involving
               willful misconduct, fraud, gross negligence or bad faith or
               material breach of this Agreement.

    (d)        Amounts required to be paid by the Company to an Indemnified
               Party pursuant to this Section 4.15 in reimbursement of
               judgments, settlements, fines, penalties, counsel fees and other
               costs actually incurred by such Indemnified Party shall be paid
               together with interest thereon at the "base rate" announced by
               BankBoston, N.A. (or if such rate is no longer available, at such
               other comparable prime or base lending rate announced from time
               to time by an institutional lender selected by the Indemnified
               Party) plus five percent (5%) per annum from the later of (i) the
               date such amounts were paid by the Indemnified Party or (ii) the
               date on which the Company received notice of such payment.

    SECTION 4.16.  RIGHTS OF COMPETITION.

     Each Member or Manager, in its individual capacity or otherwise, and their
respective principals and Affiliates, shall be free to engage in, conduct or
participate in any business or activity whatsoever, including, without
limitation, the purchase, sale and lease of self-storage facilities, without any
accountability, liability, or obligation whatsoever to the Company or to any
other Member. Any competing business or activity of a Member or a Manager may be
undertaken with or without notice to or participation therein by any other
Member. Each Member and the Company hereby waives any right or claim it may have
against any Member or Manager with respect to any competing business or activity
or the income or profits therefrom. Notwithstanding the foregoing, Storage
agrees that, for so long as both Storage and Investor are Members of the
Company, neither Storage nor its Affiliates shall initiate directly or
indirectly the development of any new self-storage facilities within a three
mile radius of any of the Original Properties, except that the limitation shall
apply only within a one and one-half mile radius of the Original Properties,
listed on Schedule 4.16(a). If Storage or an Affiliate of Storage desires to
develop a new self-storage facility within the prohibited radius, Storage shall
obtain the prior written consent of Investor, which consent may be withheld in
Investor's sole discretion. The foregoing restrictions do not apply to any
development already planned by Storage or one of its Affiliates as of the date
of this Agreement, which development projects are set forth on Schedule 4.16(b).

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<PAGE>


     SECTION 4.17. RESIGNATION AND REMOVAL.

     The Manager may resign (i) at any time after giving all of the Members at
least ninety (90) days' prior written notice of its intention to do so, which
notice shall set out the effective date of the resignation, or (ii) upon the
termination or non-renewal of the Property Management Agreement. The Manager may
be removed by the Members only after the Property Management Agreement is no
longer in effect or as otherwise permitted pursuant to Article XI of this
Agreement. Upon such resignation or removal, a replacement Manager shall be
appointed by all of the Members or by Investor pursuant to Article XI.

                                   ARTICLE V

                              MEETINGS OF MEMBERS
                              -------------------

     SECTION 5.1. PLACE OF MEETINGS.

     All meetings of the Members shall be held at the principal office of the
Company or at such other place within or without the State of Delaware as may be
determined by all of the Members and set forth in the respective notice or
waivers of notice of such meeting.

     SECTION 5.2. MEETINGS OF MEMBERS.

     Meetings of the Members shall be held at least quarterly and may be called
by the Manager or any Member. The Manager will hold meetings with the Members to
review and discuss the Company and Property performance from time to time to
time as reasonably requested by any Member. The President of the Manager shall
serve as chairperson of the meetings unless all the Members determine otherwise.

     SECTION 5.3. NOTICE OF MEETINGS OF MEMBERS.

     Written or printed notice stating the place, day and hour of the meeting
shall be delivered not later than fourteen (14) nor earlier than sixty (60) days
before the date of the meeting, either personally or by mail, by or at the
direction of the Manager or Member calling the meeting, to each Member of record
entitled to vote at such meeting. Notice of any meeting may be waived by the
Members.

     SECTION 5.4. QUORUM.

     All of the Members shall constitute a quorum at all meetings of the
Members, except as otherwise required by law. Once a quorum is present at the
meeting of the Members, the subsequent withdrawal from the meeting of any Member
prior to adjournment or the refusal of any Member to vote shall not affect the
presence of a quorum at the meeting. If, however, such quorum shall not be
present at any meeting of the Members, the Members entitled to vote at such

                                       37

<PAGE>
meeting shall have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until all of the Members shall be
present or represented.

     SECTION 5.5 VOTING ON MATTERS.

     At any meeting of the Members at which a quorum is present, the vote of all
of the Members shall be the act of the Members.

     SECTION 5.6. LIST OF MEMBERS ENTITLED TO VOTE.

     The Manager shall make, at least five (5) days before each meeting of
Members, a complete list of the Members entitled to vote at such meeting, or any
adjournment of such meeting, arranged in alphabetical order, with the address of
and the Capital Ratio held by each, which list, for a period of five (5) days
prior to such meeting, shall be kept on file at the principal office of the
Company and shall be subject to inspection by any Member at any time during
usual business hours. Such list also shall be produced and kept open at the time
and place of the meeting and shall be subject to inspection of any Member during
the whole time of the meeting. However, failure to comply with the requirements
of this Section shall not affect the validity of any action taken at such
meeting.

     SECTION 5.7. REGISTERED MEMBERS.

     The Company shall be entitled to treat the holder of record of any
Membership Interest as the holder in fact of such Membership Interest for all
purposes, and accordingly shall not be bound to recognize any equitable or other
claim to, or interest in, such Membership Interest on the part of any other
person, whether or not it shall have express or other notice of such claim or
interest, except as expressly provided by this Agreement or by applicable law.

     SECTION 5.8. ACTIONS WITH OR WITHOUT A MEETING AND TELEPHONE MEETINGS.

     Notwithstanding any provision contained in this Article, all actions of the
Members provided for herein shall be taken either at a meeting and evidenced by
written minutes thereof executed by an authorized Member or by written consent
without a meeting. Any meeting of the Members may be held by means of a
telephone conference. Any action which may be taken by the Members without a
meeting shall be effective only if the written consent (or consents) sets forth
the action so taken, and is signed by all of the Members.

     SECTION 5.9. LIMITATIONS ON POWERS OF MEMBERS.

     Except as expressly authorized by this Agreement, no Member shall, directly
or indirectly, do any of the following without the written consent or approval
of all of the other Members: (i) withdraw from the Company, (ii) voluntarily
dissolve, terminate or liquidate the

                                   38

<PAGE>

Company, (iii) petition a court for the dissolution, termination or liquidation
of the Company, or (iv) cause any property of the Company to be subject to the
authority of any court, trustee or receiver (including suits for partition and
bankruptcy, insolvency and similar proceedings). Except for approvals of Members
or matters to be determined by Members as provided in this Agreement, no Member,
in such capacity, may (A) act for or on behalf of the Company or take part in
the operation, management or control of the Company's business, (B) transact any
business in the name of the Company, or (C) have the authority or power to sign
documents for or otherwise bind the Company; provided, however, such restriction
shall not apply to any action taken by a Member who is the Manager and takes
such action in its capacity as Manager.

                                   ARTICLE VI

                               BOOKS AND RECORDS
                               -----------------

     SECTION 6.1. BOOKS AND RECORDS.

     At all times during the existence of the Company, the Manager shall keep or
cause to be kept at the Company's principal office true and complete books of
account, prepared on a consistent basis from year to year, including: (a) a
current list of the full name and business address of each Member, (b) a copy of
the Certificate of Organization and all certificates of amendment thereto, (c)
copies of the Company's federal, state and local income tax returns and reports
for the most recent five (5) years, (d) copies of the Agreement and any
financial statements of the Company for the five most recent years, and (e) all
documents and information required under the Act. The books of the Company shall
be kept on the accrual method of accounting (used for federal income tax
purposes) in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv) (i.e., on the so-called "Section 704(b) book basis" which
takes into account the book value, rather than the adjusted tax basis, of
Company assets where there is a difference). Such books and records shall be
available for examination and copying (and the Company will, at its expense,
make such copies and deliver them to any Member who requests them at reasonable
intervals) at such office by any Member and its duly authorized representatives.
Such documents may also be examined at the Company's office by any potential
transferee of a Membership Interest or any portion thereof where a Member
authorizes such proposed transferee to examine the same in a writing addressed
to the Manager and copies of which are sent to all other Members and such
proposed transferee has executed and delivered to the Company a confidentiality
agreement substantially identical to the provisions set forth in Section 12.13.
Any Member, at its own expense, may cause an audit of the books and records of
the Company during regular business hours and shall furnish a written report
thereof to the other Members. The Manager shall promptly furnish to the Members
such other information bearing on the financial condition and operations of the
Company or the status of the Properties as any Member from time to time may
reasonably request.

                                  39

<PAGE>

     SECTION 6.2. ACCOUNTING BASIS FOR TAX REPORTING PURPOSES; FISCAL YEAR.

     The books and records of the Company shall be kept on the accrual method of
reporting for tax and financial reporting purposes. The Fiscal Year ("FISCAL
YEAR") of the Company shall be the same as the taxable year of the Investor,
which taxable year currently ends on December 31. The Investor shall promptly
advise the Manager of any change in its taxable year.

     SECTION 6.3. REPORTS.

          (a)  Not later than sixty (60) days after the end of each Fiscal Year,
               the Manager shall cause the Company to prepare and send to each
               Member an unaudited statement of operations, balance sheet,
               statement of cash flows, statement of changes in Members' equity
               for that Fiscal Year, schedule of capital expenditures
               (indicating items which are Specified Capital Expenditures) and
               calculation of capital expenditures per rentable square foot of
               the Properties for that Fiscal Year. Not later than seventy-five
               (75) days after the end of each Fiscal Year, the Manager shall
               cause the Company to prepare and send to each Member a draft of
               each federal and, if applicable, state and local income tax
               return of the Company for that Fiscal Year, together with such
               other tax information as shall be reasonably necessary for the
               preparation by each Member of its federal, state and local income
               tax returns. Not later than ninety (90) days after the end of
               each Fiscal Year, the Manager shall cause the Company to prepare
               and send to each Member a statement of operations, a balance
               sheet, a statement of cash flows and a statement of changes in
               Members' equity (which financial statements shall be audited and
               certified by the auditors for Storage).

          (b)  Not later than twenty (20) days after the end of each month, the
               Manager shall cause the Company to prepare and send to each
               Member the items listed in Schedule 6.3 in the forms attached to
               that Schedule. The Manager will promptly provide any additional
               information that any Member may reasonably request so that it may
               fully understand the financial performance of the Company and the
               Properties. All such financial statements and other information
               shall be certified as accurate in all material respects by the
               Manager.

          (c)  As long as Storage (or an affiliate of Storage) is the Manager,
               the Manager will report to Investor, with each monthly report
               provided pursuant to Section 6.3(b), both the outstanding
               principal amount and any accrued, but unpaid, interest with
               respect to any indebtedness of the Company (broken down by
               creditor), all calculated as of the first day of such calendar
               month and done on a basis consistent with federal income tax
               accounting rules. The Manager will also indicate the portion of
               any indebtedness which is

                                          40

<PAGE>



               nonrecourse and/or recourse within the meaning of Code Section
               752 and the portion of each such type of indebtedness allocable
               to each Member.

          (d)  The Manager also agrees to provide Investor with all other
               information, including, but not limited to, taxable income and
               loss of the Company, the basis of property of the Company, and
               the highest amount of acquisition indebtedness in the twelve-
               month period preceding any sale or disposition of property of the
               Company, which Investor believes it needs to calculate any UBTI
               under Code Sections 511 et seq.

     SECTION 6.4. RETURNS AND OTHER ELECTIONS.

     The Manager shall cause the preparation and timely filing of all tax
returns required to be filed by the Company pursuant to the Code and all other
tax returns deemed necessary and required in each jurisdiction in which the
Company does business. The Members agree that the Company will be taxed as a
partnership, and the Manager shall use all reasonable efforts to insure that the
Company is treated as a partnership for tax purposes. Within seventy-five (75)
days after the end of each Fiscal Year, and in any event, at least fifteen (15)
days prior to the filing thereof, the Manager shall cause a draft of the
Company's tax return to be delivered to the Members for their approval. The
Members shall approve or disapprove of the Company's tax return no later than
ten (10) days after the date on which the draft tax return is delivered to the
Members by providing written notice to the Manager. To be effective, any notice
which disapproves a draft tax return must contain specific line item objections
thereto in reasonable detail. Any Member who fails to provide any such written
notice within the ten-day period shall be deemed to have approved the tax return
as submitted. The Manager shall have the right to cause the Company to withhold
and pay to any applicable governmental tax collecting authority or agency any
federal or state income or other tax required or permitted to be withheld by the
Company pursuant to any applicable law. Any such withheld amount shall be deemed
to have been distributed or paid to the Member with respect to whom such amounts
have been withheld.

     SECTION 6.5. TAX MATTERS PARTNER.

     The Manager shall be the "tax matters partner" of the Company pursuant to
Section 6231(a)(7) of the Code. The Manager shall take such action as may be
necessary to cause each Member to become a "notice partner" within the meaning
of Section 6231(a)(8) of the Code. The Manager shall inform each Member of all
significant matters that may come to its attention in its capacity as "tax
matters partner" by giving notice thereof within five (5) Business Days after
the Manager becomes aware thereof and, within that time, shall forward to each
Member copies of all significant written communications it may receive in that
capacity. The tax matters partner shall keep the Members fully apprised of any
action required to be taken or which may be taken by the tax matters partner for
the Company and shall not take any such action in contravention of Section 4.5.
With regard to any matter which could result in any direct or indirect holder of
an equity interest in the Investor being allocated income of the Company which
would constitute UBTI or in any manner affect the taxation of any direct or
indirect holder of any

                                      41

<PAGE>

equity interest in the Investor with respect to any income, the tax matters
partner shall take such actions or omit to take such actions as the Investor may
direct, except to the extent that such action or the omission of such action
would cause Storage REIT to be disqualified as a REIT and would be contrary to
Section 4.5(b) hereof.

     SECTION 6.6. ACCOUNTANTS.

     The Company shall retain a firm of independent certified public accountants
satisfactory to the Members to perform the functions specified in this
Agreement. The Members hereby approve PricewaterhouseCoopers, LLP as the initial
accountants for the Company.

     SECTION 6.7. ANNUAL APPRAISALS.

     The Investor shall have the right from time to time, but in no event more
frequently then once in any twelve month period, unless there has been an Event
of Default on the part of Storage, to require that each Property be appraised by
an independent appraiser who is qualified to appraise properties of the type of
the Properties and is otherwise approved by Investor. The cost of any such
appraisals shall be born solely by Investor.

     SECTION 6.8. ENVIRONMENTAL INVESTIGATIONS.

     Manager shall promptly notify Investor if Manager becomes actually aware of
any discharge of contaminants at any Property or any other circumstances or
condition which indicates that any Property is not in compliance with all
applicable environmental laws and regulations. Manager shall require Property
Manager to notify Manager of any such discharges, circumstances or conditions of
which the Property Manager becomes actually aware. If Investor reasonably
determines, on the basis of such notice, that it is appropriate to undertake
investigations regarding the compliance of any Property and the activities at
the Property with applicable environmental laws, or the existence of and
potential for contamination, Investor may require that the Company conduct such
investigation. The results of any such investigation shall be provided to
Investor promptly after receipt by the Company.

                             ARTICLE VII

                     ALLOCATIONS AND DISTRIBUTIONS
                     -----------------------------

     SECTION 7.1. OPERATING DISTRIBUTIONS.

     Except as otherwise provided in Section 7.6 regarding liquidation proceeds,
Distributable Cash Flow and Capital Proceeds, if any, shall be distributed no
later than 45 days after the end of each fiscal quarter to each Member pro rata
in accordance with their respective Capital Ratios. All Member Default Damages
by the Company pursuant to the Contribution Agreement or the Purchase
Agreements, all Member Dispute Damages and all distributions received by the

                                 42

<PAGE>

Company pursuant to the Capital Expenditures Agreement shall be distributed to
the Members no later than two (2) Business Days after receipt by the Company.

     SECTION 7.2. ALLOCATION OF PROFITS, LOSSES AND DISTRIBUTIVE SHARES OF
                  TAX ITEMS.

          (a)  Allocation of Net Income. After giving effect to the special
               allocations set forth in Section 7.2(d) through 7.2(f), net
               income for any Fiscal Year or portion thereof shall be allocated
               among the Members in the following order and priority:

               (1)  First, to each Member until the aggregate allocations of net
                    income to each Member pursuant to this Section 7.2(a)(1) for
                    all Fiscal Years or portions thereof are equal to the
                    aggregate allocations of net loss to each Member pursuant to
                    Section 7.2(c) for all Fiscal Years or portions thereof, in
                    the reverse order of, and in proportion to, the prior
                    allocations of net loss to the Members pursuant to Section
                    7.2(c); and

               (2)  Thereafter, to the Members, pro rata in accordance with
                    their respective Capital Ratios.

          (b)  Allocation of Net Loss. After giving effect to the special
               allocations set forth in Sections 7.2(d) through 7.2(f) and
               subject to Section 7.2(c), net loss shall be allocated to the
               Members, pro rata in accordance with their respective Capital
               Ratios.

          (c)  Loss Limitation. Net loss allocated pursuant to Section 7.2(b)
               shall not exceed the maximum amount of net loss that can be
               allocated without causing or increasing a deficit balance in a
               Member's Adjusted Capital Account. In the event that one but not
               both of the Members would have a deficit balance in its Adjusted
               Capital Account as a consequence of an allocation of net loss
               pursuant to Section 7.2(b) in excess of the amount, if any,
               permitted under the first sentence of this Section 7.2(c), the
               limitation set forth in this Section 7.2(c) shall be applied by
               allocating 100% of the remaining net loss to the other Member
               until the Adjusted Capital Account of such other Member is zero.

          (d)  Minimum Gain Chargebacks and Nonrecourse Deductions.

               (1)  Company Minimum Gain Chargeback. Notwithstanding any other
                    provision of this Agreement, in the event there is a net
                    decrease in Company Minimum Gain during a Fiscal Year, the
                    Members shall be allocated items of income and gain in
                    accordance with Treasury Regulations Section 1.704-2(f).
                    This Section 7.2(d)(1) is intended to comply with the
                    minimum gain chargeback requirement of

                                          43

<PAGE>

                    Treasury Regulations Section 1.704-2(f) and shall be
                    interpreted and applied in a manner consistent therewith.

               (2)  Nonrecourse Deductions. Notwithstanding any other provision
                    of this Agreement, Nonrecourse Deductions shall be allocated
                    to the Members pro rata in accordance with their respective
                    Capital Ratios. This Section 7.2(d)(2) is intended to comply
                    with Treasury Regulations Section 1.704-2(e) and shall be
                    interpreted and applied in a manner consistent therewith.

               (3)  Member Nonrecourse Debt. Notwithstanding any other provision
                    of this Agreement, to the extent required by Treasury
                    Regulations Section 1.704-2(i), any items of income, gain,
                    loss or deduction of the Company that are attributable to a
                    nonrecourse debt of the Company that constitutes Member
                    Nonrecourse Debt (including chargebacks of Member
                    Nonrecourse Debt Minimum Gain) shall be allocated in
                    accordance with the provisions of Treasury Regulations
                    Section 1.704-2(i). This Section 7.2(d)(3) is intended to
                    satisfy the requirements of Treasury Regulations Section
                    1.704-2(i) (including the partner nonrecourse debt minimum
                    gain chargeback requirement) and shall be interpreted and
                    applied in a manner consistent therewith.

          (e)  Qualified Income Offset. Any Member who unexpectedly receives an
               adjustment, allocation or distribution described in Treasury
               Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) that
               causes or increases a deficit balance in its Capital Account in
               excess of any obligation to restore a deficit balance in its
               Capital Account (including any deemed deficit restoration
               obligation pursuant to the penultimate sentences of Treasury
               Regulations Section 1.704-2(g)(1) and (i)(5), and adjusted as
               provided in Treasury Regulations Section 1.704-1(b) (2)(ii)(d))
               shall be allocated items of income and gain in an amount and a
               manner sufficient to eliminate, to the extent required by the
               Treasury Regulations, such excess deficit balance as quickly as
               possible. This Section 7.2(e) is intended to comply with the
               alternate test for economic effect set forth in Treasury
               Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
               and applied in a manner consistent therewith.

          (f)  Curative Allocations. The allocations set forth in Section 7.2(d)
               and 7.2(e) (the "Regulatory Allocations") are intended to comply
               with the requirements of Treasury Regulations Section 1.704-1(b)
               and 1.704-2. Notwithstanding any other provisions of this Section
               7.2 (other than the Regulatory Allocations), the Regulatory
               Allocations shall be taken into account as provided for in the
               following two sentences. Income, gain, loss and deduction shall
               be reallocated to the extent that such reallocation causes the
               net aggregate amount of allocations of income, gain, deduction

                                        44

<PAGE>

               and loss to each Member to be equal to or more closely
               approximate the net aggregate amount of such items that would
               have been allocated to each such Member if the Regulatory
               Allocations had not occurred; provided, however, that such
               reallocations shall be made only if and to the extent they are
               consistent with the requirements of Code Section 514(c)(9)(E)
               and Treasury Regulations Section 1.514(c)-2. This Section 7.2(f)
               shall be interpreted and applied in such a manner and to such
               extent as it reasonably necessary to eliminate, as quickly as
               possible but consistent with the requirements of Code Section
               514(c)(9)(E), permanent economic distortions that would otherwise
               occur as a consequence of the Regulatory Allocations in the
               absence of this Section 7.2(f).

          (g)  Other Allocation Provisions. In the event it becomes necessary
               to make any other elections or decisions relating to the
               allocations of Company items of income, gain, loss, deduction or
               credit, as long as Storage (or an affiliate of Storage) is the
               Manager, the Manager shall call such elections or decisions to
               the attention of Investor and if any such matter could result in
               Investor (or any direct or indirect investors in Investor) being
               subject to tax on any income of the Company or affect the manner
               in which Investor (or any direct or indirect investors in
               Investor) is taxed on any such income, then Investor shall be
               entitled to make such elections or decisions in such manner as
               Investor determines to be necessary in order to comply with
               requirements of Code Section 514(c)(9)(E) and otherwise reflect
               the purpose and intention of this Agreement.

          (h)  Distributions of Nonrecourse Liability Proceeds. If, during a
               Fiscal Year, the Company makes a distribution to any Member that
               is allocable to the proceeds of any nonrecourse liability of the
               Company that is allocable to an increase in Company Minimum Gain
               pursuant to Treasury Regulations Section 1.704-2(h), then the
               Company shall elect, to the extent permitted by Treasury
               Regulations Section 1.704-2(h)(3), to treat such distribution as
               a distribution that is not allocable to an increase in Company
               Minimum Gain.

          (i)  Information as to Allocation of Debt. As long as Storage (or an
               affiliate of Storage) is the Manager, the Manager will report to
               Investor, with each monthly report provided pursuant to Section
               6.3, both the outstanding principal amount and any accrued, but
               unpaid, interest with respect to any indebtedness of the Company
               (broken down by creditor), all calculated as of the first day of
               such calendar month and done on a basis consistent with federal
               income tax accounting rules. The Manager will also indicate the
               portion of any indebtedness which is nonrecourse and/or recourse
               within the meaning of Code Section 752 and the portion of each
               such type of indebtedness allocable to each Member. Storage
               agrees that indebtedness of the Company shall be allocated among
               the Members, as reasonably approved by Investor, under Code
               Section 752, and Investor shall have

                                         45

<PAGE>

               sole authority in its reasonable discretion as to all allocations
               and/or decisions under Code Section 752, it being understood that
               it is the intention of the Members to allocate as much debt as
               possible to Storage to the extent that Investor is satisfied that
               there is an adequate basis for such position under applicable
               authority. The Manager also agrees to provide Investor with all
               other information, including, but not limited to, taxable income
               and loss of the Company, the basis of property of the Company,
               and the highest amount of acquisition indebtedness in the twelve-
               month period preceding any sale or disposition of property of the
               Company, which Investor believes it needs to calculate any UBTI
               under Code Sections 511 et seq.

     SECTION 7.3. CODE SECTION 704(B) AND 514(C)(9)(E) ALLOCATIONS.

     The allocation provisions contained in this Article VII are intended to
comply with Code Section 704(b) and the Treasury Regulations promulgated
thereunder, and shall be interpreted and applied in a manner consistent
therewith. Further, it is the intention of the Members that this Agreement
provide for allocations to comply with the requirements of Code Section
514(c)(9)(E) and the Treasury Regulations promulgated thereunder, and the
Members agree that all interpretations of this Agreement shall be made
accordingly.

     SECTION 7.4. RESTRICTED DISTRIBUTIONS.

     Notwithstanding any provision to the contrary contained in this Agreement,
the Company, and the Manager on behalf of the Company, shall not make a
distribution to any Member on account of its Membership Interest to the extent
(if any) that such distribution would violate Section 18-607 of the Act or other
applicable law.

     SECTION 7.5. AMORTIZATION AND ALLOCATION OF ORGANIZATION AND START-UP
                  EXPENSES.

     The Company shall elect to amortize the following over a period of 60
calendar months: (i) all organization expenses in accordance with the provisions
of Section 709(b) of the Code; and (ii) all start-up expenses in accordance with
the provisions of Section 195 of the Code. Subject to the terms of the Letter
Agreement, the Company shall pay all of its own legal fees and expenses (if any)
relating to the preparation of this Agreement, all third-party costs incurred by
its Members relating to its due diligence and its entering into this Agreement,
and all costs relating to the incurrence of the Secured Indebtedness.

     SECTION 7.6 DISTRIBUTIONS UPON LIQUIDATION.

     In the event the Company (or any Member's interest therein) is "liquidated"
within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), then
any distributions shall be made pursuant to this Section 7.6 to the Members (or
such Member, as appropriate) in

                                   46

<PAGE>

accordance with their positive Capital Account balances in compliance with
Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2). Any distributions made
pursuant to this Section 7.6 shall be made by the end of the Company's taxable
year in which the liquidation occurs (or, if later, within 90 days after the
date of the liquidation).

     SECTION 7.7 NO DEFICIT RESTORATION BY MEMBERS.

     No Member shall be required to contribute capital to the Company to restore
a deficit balance in its Capital Account upon liquidation or otherwise.

     SECTION 7.8 WITHHOLDING.

     If the Company is required by law or regulation to withhold and pay to any
taxing or other governmental authority any amount otherwise distributable to a
Member, the Company shall be entitled to withhold such amount and the amount so
withheld shall for all purposes of this Agreement be treated as if distributed
to such Member.

                              ARTICLE VIII

                               [RESERVED]
                               ----------

                              ARTICLE IX

                  TRANSFERABILITY OF MEMBERSHIP INTERESTS
                  ---------------------------------------

     SECTION 9.1. RESTRICTIONS ON TRANSFER OF INTEREST OF AND IN A MEMBER.

          (a)  Except as otherwise set forth in this Article IX, unless all of
               the Members consent (which consent shall be in the sole
               discretion of each Member), no Member shall withdraw or retire
               from the Company, substitute any person in its stead or sell,
               exchange, transfer, give, assign, pledge, hypothecate, mortgage
               or dispose of all or any portion of or interest in its
               Membership Interest, and any such prohibited sale, exchange,
               transfer, gift, assignment, pledge, hypothecation, mortgage or
               disposition shall be void.

          (b)  Notwithstanding anything to the contrary contained herein, any
               holder of a direct or indirect interest in a Member shall be
               permitted to transfer all or any portion of its direct or
               indirect interest in such Member without the consent of any other
               Member, provided, that, if there is a Change of Control of
               Storage or Storage REIT, Investor shall have the rights described
               in Section 9.4 hereof.

                                          47

<PAGE>


     (c)  Notwithstanding anything to the contrary contained herein, unless all
          of the Members consent (which consent shall be in the sole discretion
          of each Member), no Member may sell, transfer or assign all or any
          portion of its Membership Interest if such sale, transfer or
          assignment.

          (1)  would cause the Company top lose its status as a partnership for
               federal income tax purposes;

          (2)  would violate any federal securities laws or any applicable state
               securities laws (including suitability standards);

          (3)  would cause Storage REIT to be disqualified as a REIT; or

          (4)  would cause the Company to qualify as a "publicly traded
               partnership," as that term is defined in the Code.

     (d)  Notwithstanding anything to the contrary contained herein, a Member
          may sell, exchange, transfer, give or assign all or any portion of or
          interest in its Membership Interest to any wholly owned subsidiary
          of such Member without complying with Section 9.1(a), provided that
          transferring Member shall remain liable for all of its acquired
          interest in the Company.


SECTION 9.2.[RESERVED]


SECTION 9.3. CONVERSION OPTION.

     (a)  At any time on or after the third anniversary of the effective date of
          this Agreement and prior to the fourth anniversary of the effective
          date of this Agreement, Investor may request that Storage purchase
          all, but not less than all, of Investor's Membership Interest by
          giving written notice (a "CONVERSION NOTICE") to Storage. Within sixty
          (60) days after Storage's actual receipt of the Conversion Notice, the
          Company shall establish the Fair Market Value of the Properties and
          calculate the Cash Amount. Within two(2)Business Days after the
          Valuation Date, the Company shall notify Investor of the Cash Amount
          and the REIT Shares Amount and shall provide Investor with all
          information necessary to review and understand the calculations of
          such amounts. The Investor may rescind its Conversion Notice by
          delivering a notice of rescission to Storage within two (2) Business
          Days of its receipt of such information, in which event the Investor
          shall reimburse the Company for any and all costs and expenses
          incurred by the Company in connection with the determination of the
          Fair Market Value of the Properties. The Investor



                                    48

<PAGE>

          shall be permitted to rescind only one Conversion Notice pursuant to
          this subsection (a) during any twelve-month period.

     (b)  Storage shall have seven (7) Business Days after the Valuation Date to
          determine, in its sole discretion, whether it will elect to (1)
          purchase Investor's Membership Interest in exchange for the Cash
          Amount or (2) market the Properties for sale to a third party.  In the
          alternative, Storage REIT may elect within such period of time to
          purchase Investor's Membership Interest for the REIT Shares Amount. If
          Storage or Storage REIT fails to respond within such time, Storage
          will be deemed to have elected to market the Properties for sale to a
          third party pursuant to Section 9.3(d). If Storage REIT elects to
          purchase Investor's Membership Interest for the REIT Shares Amount and
          if the Market Price calculated as of the Valuation Date differs by
          more than five percent (5%) from the Market Price calculated as of the
          date Investor issued the Conversion Notice.  Investor shall have an
          additional right to rescind its Conversion Notice by delivering notice
          of rescission to Storage within five (5) Business Days of its receipt
          of notice of Storage REIT's election to purchase Investor's
          Membership Interest pursuant to this Section 9.3(b); provided,
          however, that if Storage elects within five (5) Business Days of its
          receipt of Investor's notice of rescission delivered pursuant to this
          subsection (b) to purchase Investor's Membership Interest for the Cash
          Amount, then Investor shall not have the right to rescind its
          Conversion Notice. No rescission pursuant to this subsection (b) shall
          have any effect on Investor's right to exercise its option under
          Section 9.3(a) at any date thereafter.

     (c)  If Storage or Storage REIT elects to purchase Investor's
          Membership Interest pursuant to Section 9.3(b), subject to Investor's
          rescission right set forth in Section 9.3(b) above and in accordance
          with and subject to the other provisions of this Section 9.3,
          Storage or Storage REIT shall be irrevocably obligated to purchase
          and Investor shall be irrevocably obligated to sell Investor's
          Membership Interest with sixty (60) days from the election date.

     (d)  If neither Storage nor Storage REIT elects to purchase Investor's
          Membership Interest pursuant to Section 9.3(b), then Investor may,
          without the further consent of Storage, market or cause the Manager
          to market the Properties with the intention of selling the Properties
          to a third party and dissolving and liquidating the Company.
          Investor agrees to exercise reasonable efforts to keep Storage
          informed of the status of the marketing process, and each party agrees
          to reasonably cooperate with the other in bringing about a sale of the
          Properties as provided herein.  All costs associated with the
          marketing and sale of the Properties under this Section 9.3 shall be
          divided among the Members in proportion to their Capital Ratios.
          Investor, or the Manager if so directed by Investor, shall,


                                       49

<PAGE>

          in a commercially reasonable and reasonably effective manner, market
          all of the Properties in a single portfolio sale or, with Investor's
          approval, in pools of assets or individually, and may secure the
          services of a third party to assist Investor (or the Manager) with the
          marketing of the Properties; provided, however, that if the proposed
          sale price to be accepted by Investor for the Properties (including
          the amount of any indebtedness or other liabilities to be assumed by
          the  purchaser) is less that ninety-five percent (95%) of the Fair
          Market Value on the Valuation Date, then (A) Storage shall have the
          option to purchase the Properties for a cash amount equal to the
          proposed sale price, or (B) Storage shall have the option to purchase
          Investor's Membership Interest for cash, with the amount of such cash
          calculated in the same manner as the Cash Amount, substituting the
          proposed sale price for Fair Market Value, or (C)(i) if such purchase
          is consummated prior to the fourth anniversary of the effective date
          of this Agreement, Storage REIT may elect to purchase Investor's
          Membership Interest for REIT Shares, with the number of REIT Shares
          calculated in the same manner as the REIT Shares Amount, substituting
          the cash amount calculated pursuant to the preceding clause and using
          the date on which Storage REIT notifies  Investor of its election to
          purchase Investor's Membership Interest for REIT Shares as the
          valuation date for purposes of computing the Market Price used in
`         calculating the REIT Shares Amount and for purposes of determining
          whether Investor may exercise its rescission right or (ii) if such
          purchase is consummated on or after the fourth anniversary of the
          effective date of this Agreement, Storage REIT may offer to purchase
          Investor's Membership Interest for REIT shares, the price and terms
          of any such offer to be acceptable to Investor in its sole
          discretion. If Storage REIT elects pursuant to clause (C)(i) of the
          preceding sentence to purchase Investor's Membership Interest in
          exchange for REIT Shares and if the Market Price calculated as of the
          Valuation Date differs by more than five percent (5%) from the Market
          Price calculated as of the date Investor issued the Conversion Notice,
          Investor shall have the right to rescind its Conversion Notice by
          delivering  notice of rescission to Storage within five (5) Business
          Days of its receipt of notice of Storage REIT's election to purchase
          Investor's Membership Interest pursuant to this Section 9.3(b);
          provided, however, that if Storage elects within five (5) Business
          Days of its receipt of Investor's notice of rescission to purchase
          Investor's Membership Interest for the Cash Amount, then Investor
          shall not have the right to rescind its Conversion Notice.  No
          rescission pursuant to this subsection (d) shall have any effect on
          Investor's  right to exercise its option under Section 9.3(a) at any
          date thereafter.

     e)   It shall be a condition precedent of Investor's obligation to sell its
          membership Interest to Storage REIT in exchange for REIT Shares and of
          Storage REIT's obligation to purchase Investor's Membership Interest
          for

                                         50

<PAGE>

          REIT Shares, that the conditions set forth on Exhibit F shall have
          been satisfied by Storage REIT as of the closing date.  If Storage
          REIT elects to purchase or Investor agrees to sell Investor's
          Membership Interest in exchange for REIT Shares, Storage REIT shall
          exercise diligent efforts to perform its obligations under this
          Section 9.3.  If the conditions set forth on Exhibit F are not
          satisfied as of the closing date, the closing date shall be entered
          for up to 30 days in order to allow Storage REIT to satisfy those
          conditions or to purchase Investor's Membership Interest in exchange
          for the Cash Amount.  Investor shall be entitled to receive, in cash,
          interest on the applicable Cash Amount during such extension period at
          a rate of 15% per annum.

     (f)  If Storage elects to purchase Investor's Membership for the Cash
          Amount pursuant to this Section 9.3, the entire amount shall be
          payable in cash, by wire transfer or other immediately available
          funds, at the closing of such sale.  If Storage REIT elects to
          purchase Investor's Membership Interest for the REIT Shares Amount
          pursuant to this Section 9.3, Storage REIT shall deliver to Investor
          certificates representing the REIT Shares Amount at the closing of
          such sale. At the closing of any sale of Investor's Membership
          Interest pursuant to this Section 9.3, Investor shall assign and
          deliver its Membership Interest to Storage or Storage REIT, as the
          case may be, free and clear of all encumbrances and claims pursuant to
          such documents or transfer as shall be reasonably requested by Storage
          or Storage REIT. Any transfer or similar taxes and other expenses
          related to the sale of Investor's Membership Interest to Storage or
          Storage REIT shall be divided equally between Storage or Storage REIT
          and Investor.  Investor shall provide Storage or Storage REIT with
          such evidence of Investor's authority to sell hereunder and such tax
          lien waivers and similar instruments as Storage or Storage REIT may
          reasonably request.  If Storage or Storage REIT defaults on its
          obligation to purchase Investor's Membership Interest pursuant to this
          Section 9.3, Investor shall be entitled as its sole remedy for such
          default to liquidated damages equal to 2% of the Fair Market Value and
          to market the Properties on such terms and conditions as it determines
          in its sole discretion. If Investor defaults on its obligation to sell
          its Membership Interest pursuant to this Section 9.3, Storage or
          Storage REIT, as applicable, shall be entitled as its sole remedy for
          such default to liquidated damages equal to 2% of the Fair Market
          Value and to market the Properties on such terms and conditions as it
          determines in its sole discretion. Storage, Storage REIT and Investor
          agree that the amount of damages incurred by any of them as a result
          of a default pursuant to this Section 9.3 would be impracticable to
          calculate and that the remedies provided in this subsection (f) are a
          reasonable approximation of such damages.

     (g)  If Storage REIT purchases Investor's Membership Interest for REIT
          shares and the closing date for such purchase is delayed pursuant to


                                       51

<PAGE>

          subsection (e) then simultaneously with Investor's Receipt of the
          first dividend paid by Storage REIT with respect to such REIT Shares,
          Investor shall pay to Storage REIT a cash amount equal to the product
          of (A) the per share amount of the first dividend paid by Storage
          REIT with respect to such REIT Shares, multiplied by (B) the number of
          such REIT Shares multiplied by (C) a fraction, the numerator of which
          is the number of days during the period commencing on the date on
          which the closing of the purchase pursuant to this Section 9.3 was
          originally scheduled and running through the day immediately prior to
          the day on which the purchase actually closed (inclusive), provided,
          that if a record date for a dividend with respect to REIT shares
          occurs during such period, the numerator so calculated shall be
          reduced by the number of days during the period from the date on which
          such closing was originally scheduled and running through such record
          (inclusive), and the denominator of which is the number of days during
          the period commencing the day after the record date for the last
          dividend paid by Storage REIT prior to the date of such closing and
          running through the record date of the first dividend paid by Storage
          REIT with respect to such REIT Shares (inclusive). Investor agrees
          that Storage REIT may instruct its dividend paying agent to deduct
          such amount from such dividend payment and pay it directly to Storage
          REIT.

     (h)  In connection with the marketing of the Properties pursuant to
          Section 9.3(d) hereof, the Investor may, by giving written notice to
          Storage, elect to become an additional Manager of the Company,
          whereupon Investor shall be admitted as an additional Manager. In such
          event, Storage shall execute such amendments to this Agreement
          and execute and file such amendments to the Certificate of
          Organization as may be required to effect the admission of Investor as
          an additional Manager of the Company. Investor agrees that so long as
          Storage remains the Manager and no Event of Default by Storage shall
          have occurred under Section 11.1, Investor's rights as an additional
          Manager to act on behalf of the Company shall extend only to such
          matters as are reasonably required to facilitate the marketing and
          sale of the Properties.  If within ten (10) days' written notice from
          Investor, Storage fails to take all reasonably necessary action to
          admit Investor as an additional Manager or to take all reasonably
          necessary action to market the Properties, Storage agrees that
          Investor shall be appointed Storage's attorney-in-fact, with full
          power of substitution, to execute and deliver any such amendments and
          other instruments as may be required in such circumstances.

SECTION 9.4. MARKETING RIGHT.

     (a)  At any time on or after the fourth anniversary of the effective date
          of this Agreement, each Member shall have the right (the "MARKETING


                                      52

<PAGE>

          RIGHT") to market or require the Manager to market all of the
          Properties for Disposition for the purposes of dissolving and
          liquidating the Company upon such Disposition.  A Member may exercise
          its Marketing Right by sending the Manager a written notice (the
          "MARKETING NOTICE") which states that the Member (the "TRIGGERING
          MEMBER") has exercised its Marketing Right.  If there is a Change of
          Control of Storage or Storage REIT before the fourth anniversary of
          the effective date of this Agreement, Storage or Storage REIT, as
          applicable shall promptly notify Investor of the occurrence of such
          Change of Control.  Investor may exercise its Marketing Right by
          providing the Marketing Notice to the Manager and to Storage within
          thirty (30) days after the effective date of Change of Control of
          Storage REIT (or, if later, within thirty (30) days after receipt of
          notice of such Change of Control from Storage or Storage REIT). Within
          (60) days after the Manager's actual receipt of the Marketing Notice,
          the Company shall establish the Fair Market Value of the Properties.
          Within two (2) Business Days after the Valuation Date, the Company
          shall notify the Triggering Member of the Cash Amount and the REIT
          Shares Amount and shall provide the Triggering Member with all
          information necessary to review and understand the calculations of
          such amounts.  The Triggering Member may rescind its Marketing Notice
          by delivering a notice of rescission to the Manager within two (2)
          Business Days of its receipt of such information, in which event the
          Triggering Member shall reimburse the Company for any and all costs
          and expenses incurred by the Company in connection with the
          determination of the Fair Market Value of the Properties. Storage and
          Investor shall each be permitted to rescind only one Marketing Notice
          pursuant to this subsection (a) during any twelve-month period.

     (b)  Any Member who has not elected to exercise its Marketing Right (a
          "NON-TRIGGERING MEMBER") shall have sever (7) Business Days after the
          Valuation Date to elect, in its sole discretion, to purchase the after
          the Triggering Member's Membership Interest in exchange for the Cash
          Amount. If Storage is a Non-Triggering Member, it may elect to
          purchase the Triggering Member's Membership Interest for the Cash
          Amount or Storage REIT may offer to purchase such Membership Interest
          for REIT Shares. The price and terms of any offer to purchase for REIT
          Shares pursuant to this Section 9.4 must be acceptable to Investor
          in its sole discretion. If Investor and Storage REIT do not agree on
          such terms within ten (10) Business Days after the Valuation Date,
          Investor, or the Manager at the direction of Investor, shall market
          the Properties as provided in Section 9.4(d) below, unless Storage
          elects within two (2) Business Days to purchase Investor's
          Membership Interest for the Cash Amount.

     (c)  If a Non-Triggering Member (which term shall include Storage REIT for
          purposes of Sections 9.4(c),(d), and (f) elects to purchase the
          Triggering


                                      53

<PAGE>

          Member's Membership Interest pursuant to Section 9.4(b), such Non-
          Triggering Member shall be irrevocably obligated to purchase and the
          Triggering Member shall be irrevocably obligated to sell, in
          accordance with and subject to the provisions of this Section 9.4, the
          Triggering Member's Membership Interest within (60) days from the
          election date.

      (d) If (i) no Non-Triggering Member elects to purchase the Triggering
          Member's Membership Interest pursuant to Section 9.4(b) or (ii)
          Storage REIT offers to purchase Investor's Membership Interest for
          REIT Shares, and Investor and Storage REIT do not agree on such terms
          within ten (10) Business Days after the Valuation Date and Storage
          does not elect within the next two (2) Business Days to purchase
          Investor's Membership Interest for the Cash Amount, then the
          Triggering Member may, without the further consent of the
          Non-Triggering Member, market or cause the Manager to market the
          Properties with the intention of selling the Properties to a third
          party and liquidating the Company. The Triggering Member agrees to
          exercise reasonable efforts to keep the Non-Triggering Member informed
          of the status of the marketing process, and each party agrees to
          reasonably cooperate with the other in bringing about a sale of the
          Properties as provided herein. All costs associated with the marketing
          and sale of the Properties under Section 9.4 shall be divided among
          the Members in proportion to their Capital Ratios. The Triggering
          Member, or the Manager if so directed, shall, in a commercially
          reasonable and reasonably effective manner, market all of the
          Properties in a single portfolio sale or, with each Member's approval,
          in pools of assets or individually, and may secure the services of a
          third party to assist the Triggering Member and Manager with the
          marketing of the Properties; provided, however, that if the proposed
          sale price to be accepted by the Triggering Member for the Properties
          (including the amount of any indebtedness or other liabilities to be
          assumed by the purchaser) is less than ninety-five (95%) of the Fair
          Market Value on the Valuation Date, then (A) the Non-Triggering Member
          shall have the option to purchase the Properties for a cash amount
          equal to the proposed sale price, or (B) if Storage is the
          Non-Triggering Member, (i) Storage shall have the option to purchase
          Investor's Membership Interest for cash, with the amount of such cash
          calculated in the same manner as the Cash Amount, substituting the
          proposed sale price for Fair Market Value, or (ii) Storage REIT may
          offer to purchase Investor's Membership Interest for REIT Shares, with
          the number of REIT Shares and all other terms of any such purchase for
          REIT Shares remaining subject to Investor's approval in its sole
          discretion.

     (e)  Investor's obligation to sell its Membership Interest to Storage REIT
          in exchange for REIT Shares and of Storage REIT's obligation to
          purchase Investor's Membership Interest for REIT Shares, shall be
          subject to


                                       54

<PAGE>

          satisfaction by Storage REIT on the closing date of the terms agreed
          upon by Investor pursuant to Section 9.4(b) or Section 9.4(d) above,
          as applicable, and of the terms set forth on Exhibit F. If such terms
          and conditions are not satisfied as of the closing date, the closing
          date shall be extended for up to thirty (30) days in order to allow
          Storage REIT to satisfy those conditions or to purchase Investor's
          Membership Interest in exchange for the Cash Amount. Investor shall be
          entitled to receive, in cash, interest on the applicable Cash Amount
          during such extension period at a rate of 15% per annum.

      (f) If the Triggering Member's Membership Interest is purchased for
          the Cash Amount pursuant to this Section 9.4, that entire amount shall
          be payable in cash, by wire transfer or other immediately available
          funds, at the closing of such sale. If Investor agrees to sell
          Investor's Membership Interest for REIT Shares pursuant to this
          Section 9.4, Storage REIT shall deliver to Investor certificates
          representing such REIT Shares at the closing of such sale. At the
          closing of any sale of a Triggering Member's Membership Interest
          pursuant to this Section 9.4, the Triggering Member shall assign and
          deliver its Membership Interest to the purchaser free and clear of all
          encumbrances and claims pursuant to such documents of transfer as
          shall be reasonably requested by the purchaser. Any transfer or
          similar taxes and other expenses related to the sale of the Triggering
          Member's Membership Interest to the Non-Triggering Member shall be
          divided equally between the Triggering Member and Non-Triggering
          Member. The Triggering Member shall provide the Non-Triggering Member
          with such evidence of the Triggering Member's authority to sell
          hereunder and such tax lien waivers and similar instruments as the
          Non-Triggering Member may reasonably request. If the Non-Triggering
          Member defaults on its obligation to purchase the Triggering Member's
          Membership Interest pursuant to this Section 9.4, the Triggering
          Member shall be entitled as its sole remedy to damages equal to 2% of
          the Fair Market Value, and the Triggering Member shall market the
          Properties on such terms and conditions as it determines in its sole
          discretion. If the Triggering Member defaults on its obligation to
          sell its Membership Interest pursuant to this Section 9.4, the
          Non-Triggering Member shall be entitled as its sole remedy to damages
          equal to 2% of the Fair Market Value, and the Non-Triggering Member
          shall be entitled to market the Properties on such terms and
          conditions as its determines in its sole discretion. Storage, Storage
          REIT and Investor agree that the amount of damages incurred by any of
          them as a result of a default pursuant to this Section 9.4 would be
          impracticable to calculate and that the remedies provided in this
          subsection (f) are a reasonable approximation of such damages.

     (g)  If Storage REIT purchases Investor's Membership Interest for REIT
          Shares and the closing date for such purchase is delayed pursuant to

                                     55

<PAGE>


          subsection (e), then simultaneously with Investor's receipt of the
          first dividend paid by Storage REIT with respect to such REIT Shares,
          Investor shall pay to Storage REIT a cash amount equal to the product
          of (A) the per share amount of the first dividend paid by Storage REIT
          with respect to such REIT Shares, multiplied by (B) the number of such
          REIT Shares multiplied by (C) a fraction, the numerator of which is
          the number of days during the period commencing on the date on which
          the closing of the purchase pursuant to this Section 9.4 was
          originally scheduled and running through the day immediately prior to
          the day on which the purchase actually closed (inclusive), provided,
          that if a record date for a dividend with respect to REIT shares
          occurs during such period, the numerator so calculated shall be
          reduced by the number of days during the period from the date on which
          such closing was originally scheduled and running through such record
          date (inclusive), and the denominator of which is the number of days
          during the period commencing the day after the record date for the
          last dividend pair by Storage REIT prior to the date of such closing
          and running through the record date of the first dividend paid by
          Storage REIT with respect to such REIT Shares (inclusive). Investor
          agrees that Storage REIT may instruct its dividend paying agent to
          deduct such amount from such dividend payment and pay it directly to
          Storage REIT.

     (h)  If Investor is the Triggering Member and elects to market the
          Properties pursuant to Section 9.4(d) hereof, the Investor may, by
          giving written notice to Storage, elect to become an additional
          Manager of the Company, whereupon Investor shall be admitted as an
          additional Manager. In such event, Storage shall execute such
          amendments to this Agreement and execute and file such amendments
          to the Certificate of Organization as may be required to effect the
          admission of Investor as an additional Manager of the Company.
          Investor agrees that so long as Storage remains the Manager and no
          Event of Default by Storage shall have occurred under Section 11.1,
          Investor's rights as an additional Manager to act on behalf of the
          Company shall extend only to such matters as are reasonably required
          to facilitate the marketing and sale of the Properties. If within ten
          (10) days' written notice from Investor, Storage fails to take all
          reasonably necessary action to admit Investor as an additional Manager
          or to take all reasonably necessary action to market the Properties
          pursuant to this Section 9.4, Storage agrees that Investor shall be
          appointed Storage's attorney-in-fact, with full power of substitution,
          to execute and deliver any such amendments and other instruments as
          may be required in such circumstances. If Storage is the Triggering
          Member and within ten (10) days' written notice from Storage,
          Investor fails to take all reasonably necessary action to market the
          Properties pursuant to this Section 9.4, Investor agrees that Storage
          shall be appointed Investor's attorney-in-fact, with full power of
          substitution, to execute and deliver any such


                                       56


<PAGE>

          amendments and other instruments as may be required in such
          circumstances.


SECTION 9.5. INSOLVENCY OF A MEMBER.

     (a)  If a Member becomes an Insolvent Member, the personal representative,
          trustee or receiver of its estate (the "PERSONAL REPRESENTATIVE")
          shall have only such rights of that Member as are necessary for the
          purpose of settling or managing its estate and such power as the
          Member possessed, if any, to assign all or any part of its interest
          and to join with such assignee in satisfying conditions precedent to
          such assignee's becoming a substituted Member. It shall not have any
          rights of a Member to grant or withhold consents, or any other rights
          except for those specified in the preceding sentence.

     (b)  If a Member becomes an Insolvent Member, the other Member shall have
          the right (the "INSOLVENCY OPTION") to elect at any time during the
          period that such Member remains an Insolvent Member (which election
          may be changed or rescinded at any time prior to the closing of any of
          the following transactions, provided that upon such change or
          rescission, the changing or rescinding Member shall have no further
          right to exercise the Insolvency Option so changed or rescinded (e.g.,
          if the option to market the properties pursuant to clause (2) below is
          changed or rescinded, that option may not be exercised subsequently,
          but the option to purchase the Membership Interest of the Insolvent
          Member would be retained)):

          (1)  to purchase the entire Membership Interest of the Insolvent
               Member for cash equal to the Cash Amount; provided, however,
               that prior to the fourth anniversary of this Agreement, if
               Investor is the Insolvent Member, Storage REIT shall have the
               additional option to purchase Investor's Membership Interest
               for REIT Shares, calculated in the same manner as the REIT shares
               Amount. If the other Member declines to purchase all of the
               Membership Interest of the Insolvent Member in accordance with
               this Section 9.5(b)(1), the option to purchase such Membership
               Interest shall terminate, and the Personal Representative may
               proceed, subject to the terms and provisions of this Agreement,
               to distribute the Membership Interest of such Insolvent Member
               to the successors entitled to receive the same, but such
               distributions will only be effective as to such successors who
               thereupon (by written supplement to this Agreement) become a
               party to this Agreement and who thereby agree to hold all of the
               Membership Interest transferred to such successor subject in all
               respects to the terms and provisions of this Agreement.


                                    57

<PAGE>

                  (2)  to market or require the Manager to market the Properties
                       with the intention of selling them to a third party and
                       liquidating the Company. Such other Member, or the
                       Manager, if directed by such Member, shall, in a
                       commercially reasonable and reasonably effective manner,
                       market all of the Properties in a single portfolio sale
                       or in pools of assets or individually, and may secure the
                       services of a third party to assist the Member and
                       Manager with the marketing of the Properties on such
                       terms and conditions as such Member deems appropriate in
                       good faith.

                  The Insolvency Option shall be exercised by giving notice (the
                  "PURCHASE NOTICE") to the Personal Representative of the
                  Insolvent Member within the period permitted for the exercise
                  of the Insolvency Option. For purposes of this Section 9.5,
                  Storage shall be deemed to be an Insolvent Member if any event
                  occurs with respect to Storage REIT that, if it were a Member,
                  would cause it to become an Insolvent Member.

              (c) The sales price of each Membership Interest to be sold
                  pursuant to this Section 9.5 shall be equal to the Cash Amount
                  for such Membership Interest. The Cash Amount shall be
                  determined as of a date as near as reasonably practicable to
                  the date of the occurrence of the event which results in the
                  sale of the Membership Interest hereunder and the closing of
                  the sale of the Membership Interest shall occur on the closing
                  date agreed upon the purchasing Member and Insolvent Member or
                  if there is no agreement among them as to the closing date,
                  then on the first Business Day following the day which is
                  thirty (30) days after the date on which the Cash Amount is
                  determined.

              (d) At the closing of any sale of a Membership Interest to be sold
                  on the terms and conditions specified in this Section 9.5, the
                  Insolvent Member shall assign and deliver the Membership
                  Interest to the purchasing Member free and clear of all
                  encumbrances and claims, together with such documents of
                  transfer as shall be reasonably requested by the purchasing
                  Member, and the purchasing Member shall deliver or cause to be
                  delivered to the Insolvent Member the full consideration
                  therefor, payable in cash, by wire transfer or other
                  immediately available funds. Investor's obligation to sell its
                  Membership Interest to Storage REIT in exchange for REIT
                  Shares and of Storage REIT's obligation to purchase Investor's
                  Membership Interest for REIT Shares, shall be subject to
                  satisfaction by Storage REIT on the closing date of conditions
                  set forth on Exhibit F. If the conditions set forth on Exhibit
                  F are not satisfied as of the closing date, the closing date
                  shall be extended for up to thirty (30) days in order to allow
                  Storage REIT to satisfy those conditions or to purchase
                  Investor's Membership Interest in exchange for the Cash
                  Amount. Any transfer or similar taxes involved in such sale
                  shall be paid by the Insolvent Member, and the Insolvent
                  Member shall provide the purchasing Member with such evidence
                  of the

                                       58

<PAGE>

                  Insolvent Member's authority to sell hereunder and such tax
                  lien waivers and similar instruments as the purchasing Member
                  may reasonably request.

             (e)  If Storage is the Insolvent Member, in addition to its other
                  remedies pursuant to this Section 9.5, Investor may elect:

                  (1)  to assume the duties of Manager of the Company, or may
                       elect to transfer a portion of its interest in the
                       Company to an entity controlled by the Investor or
                       persons directly or indirectly owning the Investor, and
                       to designate such entity as a replacement Manager
                       hereunder. If the Investor exercises such right, Storage
                       (or any Affiliate of Storage which is serving as
                       Manager), shall automatically, without need for the
                       execution and delivery of any instrument other than
                       notice by the Investor to Storage that it has exercised
                       such right, cease to be the Manager and Investor or the
                       entity designated by the Investor shall become the sole
                       Manager with all rights and responsibilities of the
                       Manager set forth in this Agreement. Storage shall
                       execute such amendments to this Agreement and execute and
                       file such amendments to the Certificate as may be
                       required to effect such appointment of the Investor (or
                       its designated affiliate) as the Manager and hereby
                       appoints the Investor its attorney-in-fact, with full
                       power of substitution, to execute and deliver any such
                       amendments or other instruments; and/or

                  (2)  cause the Company to immediately terminate the Property
                       Management Agreement; provided, however, that the Company
                       shall promptly engage a new property manager on terms
                       substantially equivalent to those prevailing in the
                       market for similar services at that time, and that
                       provided that Investor is able to engage another
                       management company acceptable to the lenders to the
                       Company, for so long as Storage is a Member of the
                       Company, the Company shall not engage any of the
                       following companies (or any affiliate of or successor in
                       interest to any of the following companies) to manage the
                       Properties, or engage or permit any other entity to
                       manage the Properties under brand names owned or used by
                       any of the following:

                       (A)  Public Storage, Inc.

                       (B)  Sovran Self Storage, Inc.,

                       (C)  Shurgard Storage Centers, Inc., or

                       (D)  AMERCO or U-Haul International, Inc.


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<PAGE>

     SECTION 9.6. ASSIGNEES.

              (a) The Company shall not recognize for any purpose any purported
                  sale, assignment or transfer of all or any fraction of the
                  interest of a Member unless all provisions of this Agreement
                  relating thereto have been satisfied, all costs of such
                  assignment have been paid by the assigning Member, such sale,
                  assignment or transfer is exempt from registration under the
                  Securities Act of 1933, as amended, and any other applicable
                  state or federal securities act, and there is delivered to the
                  Company, upon request of the Manager or any Member, a written
                  opinion of counsel acceptable to the Manager or such
                  requesting Member with respect thereto, and there is filed
                  with the Company a written and dated notification of such
                  sale, assignment or transfer, in form satisfactory to the
                  Manager, executed by both the seller, assignor or transferor
                  and the purchaser, assignee or transferee and such
                  notification (1) contains the acceptance by the purchaser,
                  assignee or transferee of and agreement to be bound by all the
                  terms and provisions of this Agreement and (2) represents that
                  such sale, assignment or transfer was made in accordance with
                  all applicable securities laws and regulations (including
                  suitability standards). Any sale, assignment or transfer shall
                  be recognized by the Company as effective on the date of such
                  notification if the date of such notification is within
                  fifteen (15) days of the date on which such notification is
                  filed with the Company, and otherwise shall be recognized as
                  effective on the date such notification is filed with the
                  Company.

              (b) Any Member who transfers or assigns its entire interest in the
                  Company shall cease to be a Member, except that, unless and
                  until a substituted Member has been admitted into the Company,
                  such assigning Member shall retain the statutory rights of the
                  assignor of a Member's interest under the Act.

              (c) A person who is the assignee of all or any portion of the
                  interest of the Member but does not become a substituted
                  Member, and who desires to make a further assignment of such
                  interest it had acquired, shall be (and its proposed transfer
                  shall be) subject to all the provisions of this Agreement
                  relating to the Disposition of interests to the same extent
                  and in the same manner as any Member desiring to make an
                  assignment of its interest.

     SECTION 9.7. SUBSTITUTED MEMBERS.

     Except as set forth in Section 9.1(d), only upon the unanimous written
consent of all of the Members, which consent shall not be unreasonably withheld,
shall a purchaser, assignee, transferee, or other recipient of all or a portion
of a Membership Interest who was not previously admitted to the Company as a
Member may be admitted as a substituted Member to the extent of its acquired
interest in the Company. In the event that any such Person is admitted to the


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<PAGE>

Company as a substituted Member, the Manager shall have the power and authority
to amend this Agreement to reflect the admission of such Person as a substituted
Member and such Person shall have all the rights, duties and obligations of a
Member under this Agreement. The Manager shall promptly deliver to each Member
(in any permissible manner further described in Section 12.1 hereof) a copy of
any amendments to this Agreement made by the Manager under this Section 9.7).

     SECTION 9.8. MANAGEMENT PENDING SALE CLOSING.

     From and after the date of delivery of a Conversion Notice pursuant to
Section 9.3 or a Marketing Notice pursuant to Section 9.4 and continuing through
the sooner to occur of the applicable closing date or the termination of such
sale right, each Member shall exercise best efforts to insure that the Company
is operated in the ordinary course of business and that no actions are taken by
or on behalf of the Company which are likely to impede the ability of the
Members to consummate the transactions contemplated herein.

                                   ARTICLE X

                 REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
                 ---------------------------------------------

     SECTION 10.1. ACQUISITION OF INTEREST FOR INVESTMENT.

     Each Member hereby represents and warrants to the Company and the other
Member(s) that its acquisition of its Membership Interest is made for its own
account for investment purposes only and not with a view toward the resale or
distribution of such Membership Interest.

     SECTION 10.2. ACCESS TO INFORMATION.

     Each Member has been afforded full opportunity to request any and all
relevant information and ask questions concerning the proposed purposes and
business of the Company, has been provided all information and copies of
documents it has requested and has received answers to such questions to its
full satisfaction. Each Member represents and warrants that such Member has not
relied upon any information relating to the Company other than information
supplied by the Company.

     SECTION 10.3. NO REGISTRATION.

     Each Member recognizes that the Membership Interests have not been
registered under the Securities Act, or applicable state securities laws and are
being sold pursuant to the exemptions from registration offered by Section 4(2)
of such Act and by applicable state law provisions. Each Member recognizes that,
as a consequence, its Membership Interest must be held indefinitely unless it is
subsequently registered under the Securities Act, and applicable state


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<PAGE>

securities laws, or an exemption from such registration is available, so that
each Member must bear the economic risk of investment in its Membership Interest
for an indefinite period of time.

     SECTION 10.4. NO OBLIGATION TO REGISTER.

     Each Member acknowledges that neither the Company nor the Manager is under
any obligation to register the Membership Interests under any securities laws,
and neither of them has any present intention to do so. Each Member understands
that there is no established market for the Membership Interests, and it is
extremely unlikely that any public or private market will develop.

     SECTION 10.5. SUITABILITY OF INVESTMENT.

     Each Member understands the nature of the investment being made and that it
involves a high degree of risk. Each Member recognizes that the Company is a
newly organized entity and has no history of operations or earnings.

     SECTION 10.6. ACCREDITATION.

     Each member represents that it is a sophisticated investor, able and
accustomed to handling sophisticated financial matters for itself, particularly
real estate investments, and that it has a sufficiently high net worth that it
does not anticipate a need for the funds it has invested in the Company in what
it understands to be a highly speculative and illiquid investment. Each Investor
represents that it is an "accredited investor" as defined in Rule 501 under the
Securities Act.

        SECTION 10.7. REPRESENTATIONS AND WARRANTIES REGARDING MEMBERS.

     Each Member represents and warrants to the Manager and the other Members
concerning itself as follows:

              (a) Organization. It is a limited liability company, partnership,
                  corporation, or other entity duly formed, validly existing and
                  in good standing under the laws of the jurisdiction of its
                  organization.

              (b) Authorization. Its execution and delivery of this Agreement,
                  the performance by it of its obligations under this Agreement
                  and the consummation of this transactions contemplated hereby
                  and thereby have been duly authorized by all requisite
                  corporate or other action on its part.

              (c) No Conflicting Agreements. Its execution and delivery of, and
                  its performance and compliance with the terms and provisions
                  of, this Agreement do not violate any of the terms, conditions
                  or provisions of (i)


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<PAGE>

                  its Articles of Incorporation, Certificate of Incorporation,
                  Certificate of Formation or other applicable organizational
                  agreements or governing instruments, (ii) any judgment, order,
                  injunction, decree, regulation or ruling of any court or other
                  governmental authority to which it is subject or by which any
                  of its assets are bound, or (iii) any agreement or contract to
                  which the Member is a party or to which it or its property is
                  subject.

              (d) Approvals. No Authorization, consent, order, approval or
                  license from filing with, or other act by any agency, bureau
                  or department of any federal, state or local government
                  authority or other Person is or will be necessary to permit
                  the valid execution and delivery by it of this Agreement or
                  the performance by it of the obligations to be performed by it
                  under this Agreement, or if any such authorizations, consents,
                  orders, approvals or licenses are required, they have been
                  obtained.

              (e) Primary Contact Person. Each Member represents that the
                  Primary Contact Person listed opposite its name on Schedule 1
                  is authorized to act for and on behalf of such Member in all
                  matters relating to or arising in connection with this
                  Agreement, the Company and the Properties. The Manager is
                  entitled to rely on the actions of the Primary Contact Person
                  until otherwise notified by such Member.

     SECTION 10.8. FINANCIAL STATEMENTS AND OTHER DOCUMENTS.

     Each Member represents and warrants that financial statements of and all
other documents, certificates and statements submitted or delivered by or on
behalf of such Member in connection with the transactions contemplated by this
Agreement are true, complete and correct in all material respects. Each such
financial statement has been prepared in accordance with generally accepted
accounting practices and fairly represents the financial condition of the
subject thereof in all material respects. There has been no material adverse
change in any of such information from the date thereof until the date of this
Agreement.

     SECTION 10.9 UBTI.

     Storage represents and warrants that no portion of the Properties are
leased to the seller of the Properties or to any person who bears a relationship
to the seller of the Properties described in Section 267(b) or 707(b) of the
Code other than as described on Schedule 4.5, and Storage and Investor agree
that there is no plan to lease the Properties to any such party after the
Properties are acquired except as described on Schedule 4.5. To the knowledge of
Storage, no portion of the Properties is, or is planned to be, leased to any of
the pension trusts listed in Exhibit E or any participating employer in the
plans pursuant to which such trusts are maintained, nor is the seller an
affiliate or subsidiary of any of such parties. The Company will not, following
the acquisition of the Properties, have any arrangements in place that will
result in the receipt by the Company of rent from personal property or service
income other than as described in Schedule 4.5.

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<PAGE>

     SECTION 10.10. ERISA.

     As of the date of this Agreement, the date of each transaction contemplated
under this Agreement and during the one (1) year period immediately preceding
any such date, neither Storage nor Storage REIT nor any "affiliate" of any of
them, as such term is defined in Part V(c) of Prohibited Transaction Class
Exemption 84-14, has the authority to (i) appoint or terminate Fidelity
Management Trust Company as investment manager with respect to the assets of any
of the ERISA pension trusts listed in Exhibit E or (ii) negotiate the terms of
the investment management agreement with Fidelity Management Trust Company on
behalf of any such trust.

     SECTION 10.11. NO BROKERS.

     Each Member represents and warrants that it has not dealt with any agent or
broker in connection with the transactions contemplated by this Agreement and
that no agent, broker, or other Person acting pursuant to express or implied
authority of such Member is entitled to a commission or finder's fee, or will be
entitled to recover on any claim against any other Member, the Manager or the
Company for a commission or finder's fee, in connection with the transactions
contemplated by this Agreement, other than Security Capital Markets Group,
Incorporated. Storage shall be responsible for any fees payable to Security
Capital Markets Group, Incorporated in connection with the transactions
contemplated by this Agreement.

     SECTION 10.12. YEAR 2000 COMPLIANCE.

     The Manager shall use its commercially reasonable efforts to be Year 2000
Compliant. As used in this paragraph, the term "Year 2000 Compliant" shall mean
that all software, hardware, equipment, goods or systems utilized by or material
to the physical operations, business operations, or financial reporting of such
property or entity (collectively the "systems") will (i) properly perform date
sensitive functions before, on and after January 1, 2000; (ii) accurately
perform leap year calculations; and (iii) will not cause any other information
technology to fail or generate errors related to any such dates.

     SECTION 10.13. QUALIFIED ORGANIZATION STATUS.

     Storage represents that it is not and agrees that it will not become, or
transfer any portion of its interest in the Company to, a "qualified
organization," within the meaning of Code Section 514(c)(9)(C).

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<PAGE>

     SECTION 10.14 PARTNERSHIP ALLOCATIONS.

     Storage represents and warrants that each allocation provided for in this
Agreement either (i) has substantial economic effect within the meaning of
Treasury Regulations Section 1.704-1(b), or (ii) to the extent that an
allocation cannot have economic effect, is deemed to be in accordance with the
Members' Membership Interests pursuant to Treasury Regulations Section
1.704-1(b)(4), or (iii) if Treasury Regulations Section 1.704-1(b)(4) does not
provide a method for deeming the allocation to be in accordance with the
Members' Membership Interests, otherwise complies with the requirements of
Treasury Regulations Section 1.704-1(b)(4). Storage further represents and
warrants that each allocation attributable to nonrecourse liabilities or Member
nonrecourse debt complies with the requirements of Treasury Regulations Section
1.704-2(e) or 1.704-2(i).

                         ARTICLE XI

        DEFAULTS; LIQUIDATION AND DISSOLUTION OF COMPANY
        ------------------------------------------------

     SECTION 11.1. EVENTS OF DEFAULT.

     The occurrence of any of the events set forth below shall constitute an
"Event of Default" on the part of any Member, if the default remains uncured
after ten (10) days after the non-defaulting Member gives notice of such default
to the defaulting Member; provided, however, that if such default cannot with
diligent efforts be cured within such ten (10)-day period but such Member (or
such Affiliate of such Member) commences such cure within such ten (10)-day
period, thereafter diligently and continuously prosecutes such cure, and such
default is reasonably susceptible to cure within sixty (60) days, such ten
(10)-day period shall be extended for the time reasonably required to effect
such cure, but in no event for more than an additional fifty (50) days (i.e. 60
days total):

          (a)  the occurrence, after the Closing of the Contribution Agreement
               or Purchase Agreements, of any material default on the part of a
               Member or an Affiliate of a Member pursuant to the terms of (i)
               any of the Purchase Agreements or the Contribution Agreement
               (considering, for purposes of determining the materiality of any
               default under the Purchase Agreements or the Contribution
               Agreement, all of such agreements and the transactions
               represented by them as a whole) or (ii) any other material
               agreement between the Company and a Member or an Affiliate of a
               Member, other than the Property Management Agreement, in each
               case without regard to any "grace" or cure period contained in
               the applicable agreement;

          (b)  violation by or on behalf of a Member of the transfer
               restrictions set forth in Article IX;

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<PAGE>

          (c)  the breach or inaccuracy in any material respect of any
               representation, warranty or statement made by or on behalf of a
               Member in this Agreement, or in any certificate or statement
               furnished pursuant thereto;

          (d)  any knowing or intentional act on the part of a Member which
               gives rise to an event or circumstance which would permit any
               lender to the Company to demand repayment of its loan prior to
               maturity;

          (e)  any other material default in the performance of or failure to
               comply with, any other agreements, obligations, or undertakings
               of a Member contained herein (other than the obligations
               described in Sections 3.3, 9.3, and 9.4, for which exclusive
               remedies are otherwise provided therein);

          (f)  without regard to the periods provided for cure above, but
               subject to the applicable cure period set forth in the Property
               Management Agreement, any act or omission that would entitle the
               Company to terminate the Property Management Agreement for Cause
               (as "Cause" is defined in the Property Management Agreement);
               and

          (g)  the delivery by Storage to the Company of a notice of non-renewal
               of the Property Management Agreement.

     SECTION 11.2. REMEDIES.

          (a)  During the continuance of any Event of Default by Storage,
               Investor shall be entitled to:

               (1)  in its sole discretion, assume the duties of Manager
                    hereunder. If the Investor exercises such right, Storage (or
                    any Affiliate of Storage which is serving as Manager), shall
                    automatically, without need for the execution and delivery
                    of any instrument other than notice by the Investor to
                    Storage that it has exercised such right, cease to be the
                    Manager and Investor shall become the sole Manager with all
                    rights and responsibilities of the Manager set forth in this
                    Agreement. Storage shall execute such amendments to this
                    Agreement and execute and file such amendments to the
                    Certificate as may be required to effect such appointment of
                    the Investor (or its designated affiliate) as the Manager
                    and hereby appoints the Investor its attorney-in-fact, with
                    full power of substitution, to execute and deliver any such
                    amendments or other instruments; and/or

               (2)  market or require the Manager to market all of the
                    Properties pursuant to Section 9.4; provided, however, that
                    if Storage defaults before the fourth anniversary of this
                    Agreement, and Investor elects to market or require the
                    Manager to market all of

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<PAGE>

                    the Properties, Storage shall pay to Investor liquidated
                    damages equal to the difference between the cash
                    distribution Storage would have received pursuant to Section
                    11.4(b)(4) upon the sale of the Properties and the amount it
                    would have so received if its Capital Ratio had been
                    reduced by the following amounts as of the date of such
                    calculation:

                    (A)  If the default takes place before the first anniversary
                         of the date of this Agreement, two percentage points
                         (2%);

                    (B)  If the default takes place on or after the first
                         anniversary of the date of this Agreement but before
                         the second anniversary of the date of this Agreement,
                         one and one-half percentage points (1.5%);

                    (C)  If the default takes place on or after the second
                         anniversary of the date of this Agreement but before
                         the third anniversary of the date of this Agreement,
                         one percentage point (1%);

                    (D)  If the default takes place on or after the third
                         anniversary of the date of this Agreement but before
                         the fourth anniversary of the date of this Agreement,
                         one-half of one percentage point (0.5%)

                    and/or

               (3)  cause the Company to immediately terminate the Property
                    Management Agreement; provided, however, that the Investor
                    shall be unilaterally entitled to and shall promptly engage
                    a new property manager on terms substantially equivalent to
                    those prevailing in the market for similar services at that
                    time, and that provided that Investor is able to engage
                    another management company acceptable to the lenders to the
                    Company, for so long as Storage is a Member of the Company,
                    the Company shall not engage any of the following companies
                    (or any affiliate of or successor in interest to any of the
                    following companies) to manage the Properties, or engage or
                    permit any other entity to manage the Properties under brand
                    names owned or used by any of the following:

                    (A)  Public Storage, Inc.

                    (B)  Sovran Self Storage, Inc.,

                    (C)  Shurgard Storage Centers, Inc., or

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<PAGE>

                       (D)  AMERCO OR U-Haul International, Inc.

                  In addition to the above remedies, Investor may recover from
                  Storage any actual damages incurred by Investor as a result of
                  Storage's default under Section 11.1(b), (c), (d) or (e).

                  (4)  During the continuance of any Event of Default by
                       Investor, Storage shall be entitled to require the
                       Manager to market all of the Properties pursuant to
                       Section 9.4; provided, however, that if Investor defaults
                       before the third anniversary of this Agreement, and
                       Storage elects to require the Manger to market all of the
                       Properties, Investor shall pay to Storage liquidated
                       damages equal to the difference between the cash
                       distribution Investor would have received pursuant to
                       Section 11.4(b)(4) upon the sale of the Properties and
                       the amount it would have so received if its Capital Ratio
                       had been reduced by the following amounts as of the date
                       of such calculation:

                       (A)   If the default takes place before the first
                             anniversary of the date of this Agreement, two
                             percentage points (2%);

                       (B)   If the default takes place on or after the first
                             anniversary of the date of this Agreement but
                             before the second anniversary of the date of this
                             Agreement, one and one-half percentage points
                             (1.5%);

                  (5)  If the default takes place on or after the second
                       anniversary of the date of this Agreement but before the
                       third anniversary of the date of this Agreement, one
                       percentage point (1%).

                  In addition to the above remedies, Storage may recover from
                  Investor any actual damages incurred by Storage as a result of
                  Investor's default under Section 11.1(b), (c), (d) or (e).

              (b) The remedies provided in this Section 11.2 shall be the
                  exclusive remedies of the parties with respect to an Event of
                  Default; provided, however, that unless otherwise expressly
                  provided herein, this Agreement shall not limit the rights of
                  any Member under any of the agreements referred to in Sections
                  11.1(a) and (f).


     SECTION 11.3. EVENTS OF DISSOLUTION.

              (a) The Company shall be dissolved upon the happening of any of
                  the following events:

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<PAGE>

                  (1)  upon the unanimous written agreement of all of the
                       Members;

                  (2)  upon the failure of the Company to obtain the Secured
                       Indebtedness on or before June 30, 1999;

                  (3)  upon the failure of the Company and Storage close on the
                       Contribution Agreement or the Purchase Agreements on or
                       before the respective closing dates set forth therein;

                  (4)  upon the sale of all of the Properties pursuant to the
                       Conversion Option as described in Section 9.3, pursuant
                       to the Marketing Right as described in Section 9.4 or
                       pursuant to Section 11.2;

                  (5)  upon the entry of a judgment, order or decree of a court
                       of competent jurisdiction adjudicating the Company to be
                       a bankrupt and the expiration without appeal of the
                       period, if any, allowed by applicable law in which to
                       appeal therefrom; or

                  (6)  upon the entry of a decree of judicial dissolution under
                       Section 44 of the Act or any successor or similar
                       provision of applicable law.

              (b) The events set forth in Section 11.3 (a) constitute the only
                  situations or events on which a dissolution of the Company
                  shall occur.

              (c) Dissolution of the Company shall be effective as of the day on
                  which the event occurs giving rise to the dissolution, but the
                  Company shall not terminate until there has been a winding up
                  of the Company's business and affairs and the assets of the
                  Company have been distributed as provided in Section 11.4.

     SECTION 11.4. LIQUIDATION; SALE OF SUBSTANTIALLY ALL OF THE ASSETS.

              (a) Subject to the restrictions and limitations contained in this
                  Agreement, upon dissolution of the Company the Manager may
                  cause any part or all of the Company assets to be sold in such
                  manner as the Manager shall determine in an effort to obtain
                  the best prices for such assets (provided, however, that with
                  the approval of all of the Members the Manager may distribute
                  Company assets in kind to the Members on the basis approved by
                  the Members). During the liquidation period, the Manager shall
                  have the right to continue to operate and otherwise to deal
                  with Company property to the same extent the Manager has such
                  right prior to dissolution of the Company. In the event that
                  the Manager had dissolved, withdrawn or becomes bankrupt or
                  legally incapacitated, all of the Members may, within thirty
                  (30) days after any such occurrence, appoint a person to

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<PAGE>


                  perform the functions of the Manager in liquidating the assets
                  of the Company and winding up its affairs.

              (b) In settling accounts after dissolution, the assets of the
                  Company shall be paid or distributed in the following order:

                  (1)  first, to creditors other than Members and their
                       Affiliates, in the order of priority provided by law;

                  (2)  then, to the Members and their respective Affiliates for
                       any fees or other compensation or any unreimbursed costs
                       and expenses owing to the Members or their respective
                       Affiliates in accordance with the terms of this
                       Agreement, and then to the repayment of any loans (with
                       interest) made by any Member to the Company in accordance
                       with the terms of this Agreement;

                  (3)  then, to reserves as the Members deem reasonably
                       necessary for any contingent or unforeseen liabilities or
                       obligations of the Company. Such reserves may be paid
                       over by the Manager to a bank, to be held in escrow for
                       the purpose of paying any contingent or unforeseen
                       liabilities or obligations and, at the expiration of such
                       period as the Members may deem advisable, such reserves
                       shall be distributed to the Members, pursuant to clause
                       (4); and

                  (4)  then, to the Members in accordance with Section 7.6.

     Notwithstanding the foregoing, no distributions shall be made pursuant to
this Section 11.4 before giving effect to the allocations of profits, losses and
other items, pursuant to Section 7.2.

     SECTION 11.5. DISTRIBUTIONS IN KIND.

     If any assets of the Company are distributed in kind pursuant to this
Agreement (which shall be done only with the approval of all of the Members),
such assets shall be distributed to the Members in the same proportions of value
as the Members would have been entitled to receive as cash distributions if such
property had been sold for cash at its fair market value and the net proceeds
thereof distributed to the Members.

     SECTION 11.6. DATE OF TERMINATION.

     The Company shall be terminated when all the cash or property available for
application and distribution under Section 11.4 hereof shall have been applied
and distributed in accordance therewith and Articles of Termination shall have
been filed pursuant to Section 11.8 hereof.

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<PAGE>


     SECTION 11.7. WAIVER OF PARTITION.


     Each Member hereby irrevocably waives any right or power it may possess now
or hereafter to compel a partition or sale of any assets of the Company or to
compel a dissolution of the Company other than as expressly set forth in this
Agreement.

     SECTION 11.8. ARTICLES OF TERMINATION.

     Upon the dissolution and the completion and winding up of the Company, the
Manager shall cause to be filed with the Office of the Secretary of State of the
State of Delaware, Articles of Termination, pursuant to the requirements of the
Act, canceling the Certificate of Organization.

                                  ARTICLE XII

                                 MISCELLANEOUS
                                 -------------

     SECTION 12.1. NOTICE.

     Any notice, demand or other communication required or permitted to be given
under this Agreement shall be in writing and shall be given to the Members at
their respective addresses and to the Primary Contact Person set forth on
Schedule 1 attached hereto or at such other address as any Member may hereafter
designate in a notice duly given to all the other Members, as its address for
receipt of notices hereunder. Such notices may be delivered by hand, by
electronic facsimile ("fax"), by overnight delivery service, by telegram or may
be mailed by U.S. certified or registered mail, return receipt requested.

     All notices which are hand-delivered or given by telegram or fax shall be
deemed given on the date of delivery. All notices which are mailed by U.S.
certified or registered mail, return receipt requested, shall be deemed to have
been given on the third business day after being deposited in the United States
mails, proper postage prepaid. All notices which are sent by overnight delivery
shall be deemed given on Business Day after being deposited with such courier.

     SECTION 12.2. APPLICATION OF DELAWARE LAW.

     This Agreement and the application or interpretation hereof shall be
governed exclusively by, and construed exclusively in accordance with, the laws
of the State of Delaware, and specifically the Act, without regard to principles
of conflicts of laws.

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<PAGE>


     SECTION 12.3. JURISDICTION AND VENUE; WAIVER OF JURY TRIAL.

     The provisions of this Section 12.3 shall apply to the extent that the
provisions of Section 12.16 are inapplicable. Any process against any Member in,
or in connection with, any suit, action of proceeding arising out of or relating
to this Agreement or any Member's performance hereof may be served personally
or, to the extent permitted by law, by certified mail at that Member's address
for receipt of notices hereunder with the same effect as though served on such
Members personally. Each Member hereby irrevocably submits in any suit, action
or proceeding arising out of or relating to this Agreement or any Member's
performance hereof or rights or obligations hereunder to the jurisdiction of the
federal and state courts of the State of Delaware and waives any and all
objections to the jurisdiction of, or venue in, such court that such Member may
have under applicable laws. Each of the parties hereto waives trial by jury in
any litigation, suit or proceeding between them in any court with respect to, in
connection with or arising out of this Agreement, or the validity,
interpretation, or enforcement thereof.

     SECTION 12.4. NO PARTNERSHIP.

     The Members intend that the Company not constitute or be deemed to be a
partnership (including, without limitation, a limited partnership) or joint
venture, and that no Member or Manager constitute or be deemed to be a partner,
agent or joint venturer of any other Member or Manager, for any purposes other
than federal and state income tax purposes, and this Agreement shall not be
construed, interpreted or applied to suggest otherwise.

     SECTION 12.5. EFFECT OF AGREEMENT.

     This Agreement shall be binding upon all Members and the Manager and their
respective assigns and successors.

     SECTION 12.6. ENTIRE AGREEMENT.

     This Agreement and the Schedules and Exhibits hereto, if any, together with
all other contracts and agreements which either are referred to herein or bear
even date herewith, contain all of the understandings and agreements of
whatsoever kind and nature existing between the Members with respect to the
subject matter hereof and thereof and supersede all prior agreements and
undertakings with respect thereto.

     SECTION 12.7. AMENDMENT.

     Except as otherwise expressly set forth in this Agreement, this Agreement
may be amended, supplemented or restated only by a written agreement executed by
each of the Members. Notwithstanding anything to the contrary in this Section
12.7, the Certificate of Organization and this Agreement may be amended,
supplemented or restated, for the following purposes only be the Manager without
the necessity of obtaining the written consent of any of the

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<PAGE>

Members: the change of the registered agent, the address of the registered agent
or the address of the principal place of business of the Company.

     SECTION 12.8. COUNTERPARTS.

     This Agreement may be executed in counterparts, each of which shall be
deemed to be an original and shall be binding upon the Member who executed the
same, but all of such counterparts together shall constitute one and the same
agreement.

     SECTION 12.9. SEVERABILITY.

     Every provision hereof is intended to be severable and to be enforced to
the fullest extent permitted by applicable law, and if any term or provision
hereof is illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not affect the validity of the remainder of this Agreement.

     SECTION 12.10. CAPTIONS.

     The title and captions contained herein are for convenience of reference
only and shall not be deemed part of the context of this Agreement.

     SECTION 12.11. INTERPRETATION.

     Where the context so indicates, the masculine shall include feminine and
neuter, the singular shall include the plural and the plural shall include the
singular. The term "including" wherever it appears in this Agreement is not
limiting and means "including without limitation." Unless otherwise expressly
provided herein, references to agreements (including this Agreement) and other
contractual instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of this Agreement. This Agreement
is the result of negotiations among and have been reviewed by counsel to the
other parties thereto and are the products of all parties. Accordingly, it shall
not be construed against any party merely because of such party's involvement in
its preparation.

     SECTION 12.12. ADDITIONAL DOCUMENTS AND ACTS.

     In connection with this Agreement, as well as all transactions contemplated
by this Agreement, the Members agree to execute such additional documents and
papers, and to perform and do such additional acts, as may be necessary and
proper to effectuate and carry out all of the provisions of this Agreement.

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<PAGE>

     SECTION 12.13. CONFIDENTIALITY.

              (a) The provisions of this Agreement and of any other agreement
                  relating to the Company or its Properties to which the Company
                  or any Member is a party, the identity of any person with whom
                  the Company may be holding discussions with respect to any
                  investment, acquisition, Disposition, or other transaction or
                  in whom the Company may invest directly or indirectly, and all
                  other business, financial or other information relating
                  directly to the business or affairs of the Company or the
                  relative or absolute rights or interests of any of the Members
                  (collectively, the "INFORMATION") that has not been publicly
                  disclosed with the consent of all of the Members is
                  confidential and proprietary information of the Company the
                  disclosure of which could cause irreparable harm to the
                  Company and the Members. Accordingly, each Member represents
                  that it has not, and agrees that it will not and that it will
                  direct its shareholders, directors, officers, agents, advisors
                  (including, without limitation, any appraiser selected by or
                  on behalf of it, or by or on behalf of any appraiser selected
                  by it) and Affiliates not to, disclose to any person (except
                  to the extent, if any, it is required by applicable law to
                  make disclosure to a court or governmental authority) any
                  Information or confirm any statement made by any other person
                  regarding Information unless all of the Members consent
                  thereto or until the Company has publicly disclosed the
                  Information and has notified each Member that it has done so.


              (b) The covenants and agreements contained in this Section will
                  continue to bind all Members and other parties to this
                  Agreement after they cease to be Members or hold any interest
                  in the Company and will survive the termination of the
                  Company.

              (c) Notwithstanding any contrary provision in this Section, any
                  Member may, without breach of the covenants set forth in this
                  Section and without notice to or consent of the Manager,
                  disclose any Information to any potential transferee of a
                  Membership Interest if such transferee executes and delivers
                  to the Company a written confidentiality agreement in which it
                  agrees to be bound by the terms and provisions of this
                  Section 12.13 on the same basis and in the same manner as
                  would apply if it were a Member of the Company who had signed
                  this Agreement. The parties agree that if this Section 12.13
                  is breached the remedy at law may be inadequate, and
                  therefore, in addition to any other remedy to which a party
                  may be entitled, the non-breaching party shall be entitled to
                  an injunction or injunctions to prevent breaches of this
                  Section 12.13 and/or to compel specific performance of this
                  Section 12.13.

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<PAGE>


     SECTION 12.14. CREDITORS NOT BENEFITED.

     No creditor of the Company or other Person not a Member shall have any
right or benefit under or in respect of this Agreement (and, without limiting
the generality of the foregoing, no such Person shall have any right to enforce
any obligation of any Member to make capital contributions or loans or to pursue
any other right or remedy hereunder or in respect hereof or at law or in
equity), it being understood and agreed that the provisions of this Agreement
shall be solely for the benefit of, and may be enforced solely by, the Members
and the Company and their respective successors and assigns. None of the rights
or obligations of the Members herein set forth to make capital contributions or
loans to the Company shall be deemed an asset of the Company for any purpose by
any creditor or other third party, nor may such rights or obligations be sold,
transferred or assigned by the Company or pledged or encumbered by the Company
to secure any debt or other obligation of the Company or of any of the Members.
In addition, it is the intent of the parties hereto that no distribution to any
Member shall be deemed a return of money or other property in violation of the
Act.

     SECTION 12.15. INVOLVEMENT OF THE COMPANY IN CERTAIN PROCEEDINGS.

     If any Member or any Affiliate of a Member becomes involved in legal
proceedings unrelated to the business of the Company in which the Company is
called upon to provide information, the Member will indemnify, defend and hold
harmless the Company against all costs and expenses (including, without
limitation, fees and expenses of attorneys and other advisors) paid or incurred
by the Company in preparing or producing the required information or in
resisting any request for production or obtaining a protective order limiting
the availability of the information provided by the Company or in otherwise
protecting its interests.

     SECTION 12.16. DISPUTE RESOLUTION AND ARBITRATION.

          (a) Any claim, action, dispute or controversy of any kind arising out
              of or relating to this Agreement or concerning any aspect of
              performance by any Member under the terms of this Agreement,
              except those matters identified in Section 4 of the Capital
              Expenditures Reimbursement Agreement and Section 20(a) of the
              Property Management Agreement (which matters shall be resolved
              pursuant to the procedures set forth in the Capital Expenditures
              Reimbursement Agreement or the Property Management Agreement, as
              applicable) ("DISPUTE") shall be resolved by mandatory and binding
              arbitration administered by the American Arbitration Association
              (the "AAA") pursuant to the Federal Arbitration Act (Title 9 of
              the United States Code) in accordance with this Agreement and the
              then-applicable Commercial Arbitration Rules of the AAA. The
              Members acknowledge and agree that the transactions evidenced and
              contemplated hereby involve "commerce" as contemplated in Section
              2 of the Federal Arbitration Act. If Title 9 of the United States
              Code is inapplicable to any such Dispute for any reason, such

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<PAGE>

              arbitration shall be conducted pursuant to the Massachusetts
              Uniform Arbitration Act, this Agreement and the then-applicable
              Commercial Arbitration Rules of the AAA. To the extent that any
              inconsistency exists between this Agreement and the foregoing
              statutes or rules, this Agreement shall control. Judgment upon the
              award rendered by the arbitrator acting pursuant to this Agreement
              may be entered in, and enforced by, any court having jurisdiction
              absent manifest disregard by such arbitrator of applicable law;
              provided, however, that the arbitrator shall not amend, supplement
              or reform in any manner any of the rights or obligations of any
              Member hereunder or the enforceability of any of the terms or
              provisions of this Agreement. Any arbitration proceedings under
              this Agreement shall be conducted in Boston, Massachusetts before
              a single arbitrator who has no direct or indirect relationship
              with any Member or any Member's Affiliate and who has recognized
              expertise in the fields of commercial real estate investment and
              limited liability company and partnership law and practice.

          (b) Upon the request of any Member who is a party to such Dispute set
              out in a written notice delivered in accordance with Section 12.1
              hereof or to the other Members who are parties to such Dispute,
              whether made before or after the institution of any legal
              proceeding, but prior to the expiration of the statutory time
              period within which any Member must respond upon receipt of valid
              service of process in order to avoid a default judgment, any
              Dispute shall be resolved by mandatory and binding arbitration in
              accordance with the terms of this Agreement. Within ten (10) days
              after a Member's receipt of such notice, the Members who are
              parties to the Dispute shall agree upon a qualified arbitrator. If
              the Members cannot agree within such 10-day period, an arbitrator
              shall be appointed by the AAA. If a replacement arbitrator is
              necessary for any reason, such replacement arbitrator shall be
              appointed by the AAA.

          (c) Any Member may bring summary proceedings (including, without
              limitation, a plea in abatement or motion to stay further
              proceedings) in court to compel arbitration of any Dispute in
              accordance with this Agreement.

          (d) All statutes of limitation that would otherwise be applicable
              shall apply to any arbitration proceeding. Any attorney-client
              privilege and other protection against disclosure of privileged or
              confidential information (including, without limitation, any
              protection afforded the work-product of any attorney) that could
              otherwise be claimed by any Member shall be available to, and may
              be claimed by, any such Member in any arbitration proceeding. No
              Member waives any attorney-client privilege or any other
              protection against disclosure of privileged or confidential
              information by reason of anything contained in, or done pursuant
              to, the arbitration provisions of this Agreement.

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<PAGE>

          (e) The arbitration shall be conducted and concluded as soon as is
              reasonably practicable, based on a schedule established by the
              arbitrator. Any arbitration award shall be based on and
              accompanied by findings of fact and conclusions of law, shall be
              conclusive as to the facts so found and shall be confirmable by
              any court having jurisdiction over the Dispute, provided that such
              award, findings and conclusions are not in manifest disregard of
              applicable law.

          (f) Each Member shall bear its own expenses of the arbitration,
              including, without limitation, fees and expenses of counsel
              incident to any mediation or arbitration. The fees and expenses of
              the arbitrator and the AAA shall be borne equally by the Members.
              The arbitrator shall have the power and authority to award
              expenses to the prevailing Member if the arbitrator elects to do
              so.

          (g) In order for an arbitration award to be conclusive, binding and
              enforceable under this Agreement, the arbitration must follow the
              procedures set forth in the portions of this Agreement relating
              to such arbitration and any award or determination shall not be in
              manifest disregard of applicable law. The obligation to arbitrate
              any Dispute shall be binding upon the successors and assigns of
              each of the Members.

     SECTION 12.17. SECTIONS.

     Unless the context requires otherwise, all references in this Agreement to
Sections or Articles shall be deemed to mean and refer to Sections or Articles
of this Agreement.

     SECTION 12.18. NO WAIVER.

     No waiver, express or implied, by any Member of any obligation of, or any
breach or default by any other Member in the performance by the other Member of
its obligations, hereunder shall be (i) binding or enforceable except to the
extent (if any) set out in a writing signed by the Member sought to be charged
thereby or (ii) deemed or construed to be a waiver of any other breach or
default under this Agreement. Failure on the part of any Member to complain of
any act or omission of any other Member, or to declare such other Member in
default irrespective of how long such failure continues, shall not constitute a
waiver hereunder. No notice to or demand on a defaulting Member shall entitle
such defaulting Member to any other or further notice or demand in similar or
other circumstances.

     SECTION 12.19. ADDITIONAL REMEDIES.

     Unless the context requires otherwise, the rights and remedies of the
Members hereunder shall not be mutually exclusive so that the exercise of one or
more of the rights or remedies hereunder shall not preclude the exercise of any
other.

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<PAGE>

     SECTION 12.20. U.S. DOLLARS.

     All references in this Agreement to dollar amounts shall refer to United
States currency.

     SECTION 12.21. APPROVALS.

     Except where otherwise expressly stated in this Agreement, all approval,
consent and other similar rights of the Manager or of the Members pursuant to
this Agreement (i) shall be set out in a writing signed by the person whose
approval, consent or exercise of any other right is required and (ii) may be
exercised by such parties, and such approvals and consents may be granted or
denied by such parties, in their sole and absolute discretion.

     SECTION 12.22. LIMITATION ON LIABILITY OF MEMBERS.

     The liability of each Member hereunder shall be limited solely to the
interest of such Member in the Company. The Members agree not to seek to recover
against any person or entity other than the other Members with respect to any
claim or circumstance arising out of or relating to the Company or the
Properties and not to seek to recover on any claim against such other Member
against any asset other than such Member's interest in the Company.

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<PAGE>

     IN WITNESS WHEREOF, this Agreement has been executed as of the date set
forth above.

                                             SUSA PARTNERSHIP, L.P., as a Member
                                             and as Manager

                                             By STORAGE USA, INC., Its General
                                             Partner

                                             By:
                                                 /s/ Dean Jernigan
                                             -----------------------------------
                                             Name:   Dean Jernigan
                                             Title:  Chief Executive Officer

                                             FREAM No. 18 LLC,
                                             a Delaware limited liability
                                             company

                                             By: Fidelity Management Trust
                                                 Company, as agent and not
                                                 individually

                                             By:  /s/ Thomas P. Lavin
                                                 -------------------------------
                                                        Thomas P. Lavin
                                                        Vice President

                                             Storage USA, Inc. joins this
                                             Agreement for purposes of
                                             consenting to Sections 9.3, 9.4
                                             and 9.5 herein.

                                             STORAGE USA, INC.

                                             By:  /s/ Dean Jernigan
                                                --------------------------------
                                             Name:    Dean Jernigan
                                             Title:   Chief Executive Officer

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