Document:

Amended and Restated Agreement and Plan of Merger

 Exhibit 10.23 
  
 AMENDED AND RESTATED 
 AGREEMENT AND PLAN OF MERGER 
  
 By and Among 
  
 SHURGARD STORAGE CENTERS, INC.

 (“Shurgard”) 
  
 SSCI MINNESOTA CORPORATION 
 (“Merger Subsidiary”) 
  
 and

  
 TWO S PROPERTIES, INC. 
 THREE S PROPERTIES, INC. 
 SUPERIOR
STORAGE I, LLC 
 SUPERIOR STORAGE II, LLC 
 SUPERIOR WOODBURY, LLC 
 (collectively, the “Companies”) 
  
 and 
  
 THE REVOCABLE TRUST OF GERALD A. SCHWALBACH 
 THE REVOCABLE TRUST OF PATRICK L. STOTESBERY 
 (collectively, the
“Trusts”) 
  
 and 
  
 GERALD A. SCHWALBACH 
 PATRICK L. STOTESBERY 
  
 June 30, 2003 

 CONTENTS 
  

							
	 ARTICLE I DEFINITIONS
	  	2
		
	 ARTICLE II THE MERGER
	  	12
			
	           2.1
	  	The Merger	  	12
			
	           2.2
	  	The Closing	  	13
			
	           2.3
	  	Effective Date and Time	  	13
			
	           2.4
	  	Articles of Incorporation of the Surviving Corporation	  	13
			
	           2.5
	  	Bylaws of the Surviving Corporation	  	13
			
	           2.6
	  	Directors and Officers	  	14
			
	           2.7
	  	Conversion of Shares	  	14
			
	           2.8
	  	Issuance of Shurgard Common Stock; Exchange of Certificates	  	14
			
	           2.9
	  	Shareholder and Member Consents; Dissenters’ Rights	  	16
			
	           2.10
	  	Unrelated Assets	  	17
			
	           2.11
	  	Closing Balance Sheets	  	18
			
	           2.12
	  	Additional Shares	  	20
			
	           2.13
	  	Registration Rights Agreement	  	21
			
	           2.14
	  	Anti-Dilution Provisions	  	21
		
	 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANIES AND THE TRUSTS
	  	22
			
	           3.1
	  	Organization; Qualification; Good Standing	  	22
			
	           3.2
	  	Subsidiaries	  	22
			
	           3.3
	  	Capitalization	  	23
				
	 	  	3.3.1	  	Authorized Capital	  	23

  

 -i- 

							
	 	  	3.3.2	  	Other Rights	  	24
			
	           3.4
	  	Authorization and Enforceability	  	25
			
	           3.5
	  	Consents; Noncontravention	  	25
			
	           3.6
	  	Financial Statements; Obligations	  	26
			
	           3.7
	  	Absence of Certain Changes or Events	  	27
			
	           3.8
	  	Books and Records	  	28
			
	           3.9
	  	Contracts	  	29
				
	 	  	3.9.1	  	Identification of Contracts	  	29
				
	 	  	3.9.2	  	General Contract Matters	  	29
				
	 	  	3.9.3	  	Forms of Rental Agreement	  	30
			
	           3.10
	  	Real Property	  	30
				
	 	  	3.10.1	  	Properties	  	30
				
	 	  	3.10.2	  	Condition of Properties	  	30
				
	 	  	3.10.3	  	Improvements	  	31
				
	 	  	3.10.4	  	Governmental Approvals; Compliance with Laws	  	31
				
	 	  	3.10.5	  	Third Party Rights to Properties	  	32
			
	           3.11
	  	Intellectual Property	  	32
			
	           3.12
	  	Taxes	  	33
			
	           3.13
	  	Labor Matters; Employees	  	36
			
	           3.14
	  	Employee Benefit Plans	  	36
				
	 	  	3.14.1	  	Employee Benefit Plan Listing	  	36
				
	 	  	3.14.3	  	Documents Provided	  	36
				
	 	  	3.14.3	  	Multiemployer, Defined Benefit and Money Purchase Pension Plans and Multiple Employer Welfare Arrangements	  	37

  

 -ii- 

							
	 	  	3.14.4	  	Post-Termination Welfare Benefits	  	37
			
	           3.15
	  	Insurance	  	37
			
	           3.16
	  	Compliance with Laws	  	38
			
	           3.17
	  	Licenses and Authorizations	  	39
			
	           3.18
	  	Legal Proceedings; Orders	  	39
			
	           3.19
	  	Environmental Matters	  	39
			
	           3.20
	  	Certain Payments	  	40
			
	           3.21
	  	Brokers or Finders	  	40
			
	           3.22
	  	Relationships with Related Persons	  	40
			
	           3.23
	  	Assets of the Business	  	41
		
	 ARTICLE IV REPRESENTATION AND WARRANTIES OF THE TRUSTS
	  	41
			
	           4.1
	  	Authority	  	41
			
	           4.2
	  	Consents; Noncontravention	  	42
			
	           4.3
	  	Ownership of Shares	  	42
			
	           4.4
	  	Claims Against the Company	  	42
			
	           4.5
	  	Sophistication; Accreditation	  	42
		
	 ARTICLE V REPRESENTATIONS AND WARRANTIES OF SHURGARD
	  	46
			
	           5.1
	  	Organization; Qualification; Good Standing	  	46
			
	           5.2
	  	Capitalization	  	47
				
	 	  	5.2.1	  	Authorized Capital	  	47
				
	 	  	5.2.2	  	Other Rights	  	47
			
	           5.3
	  	Authorization and Enforceability	  	48
			
	           5.4
	  	Issuance of Shurgard Common Stock	  	48

  

 -iii- 

					
	           5.5
	  	Consents; Noncontravention	  	49
			
	           5.6
	  	Shurgard SEC Filings; Financial Statements; Liabilities	  	49
			
	           5.7
	  	Absence of Changes	  	50
			
	           5.8
	  	Real Property Improvements	  	50
			
	           5.9
	  	Intellectual Property	  	51
			
	           5.10
	  	Environmental Matters	  	51
			
	           5.11
	  	Taxes	  	52
			
	           5.12
	  	Compliance with Laws	  	53
			
	           5.13
	  	Certain Payments	  	53
			
	           5.14
	  	Relationships with Related Persons	  	53
			
	           5.15
	  	REIT Status	  	54
			
	           5.16
	  	Legal Proceedings	  	54
			
	           5.17
	  	Brokers or Finders	  	54
			
	           5.18
	  	Continuity of Business	  	54
		
	 ARTICLE VI COVENANTS
	  	54
			
	           6.1
	  	Access	  	54
			
	           6.2
	  	Confidentiality	  	55
			
	           6.3
	  	Conduct of Business of Companies	  	55
			
	           6.4
	  	Conduct of Business of Shurgard	  	56
			
	           6.5
	  	No Solicitation	  	57
			
	           6.6
	  	Third Party Consents	  	58
			
	           6.7
	  	Expenses	  	58
			
	           6.8
	  	Further Actions	  	58
			
	           6.9
	  	Regulatory Approvals	  	58

  

 -iv- 

					
	           6.10
	  	Certain Notifications	  	59
			
	           6.11
	  	NYSE Listing Application	  	59
			
	           6.12
	  	Employee Matters	  	59
			
	           6.13
	  	Tax Free Reorganization	  	60
			
	           6.14
	  	Shurgard Non-Compete	  	60
			
	           6.15
	  	Schwalbach and Stotesbery Non-Compete	  	60
		
	 ARTICLE VII CLOSING CONDITIONS
	  	61
			
	           7.1
	  	Conditions to Obligations of Shurgard, Merger Subsidiary, the Companies and the Owners	  	61
			
	           7.2
	  	Conditions to Obligations of Shurgard and Merger Subsidiary	  	61
			
	           7.3
	  	Conditions to Obligations of the Trusts and Companies	  	62
		
	 ARTICLE VIII TERMINATION
	  	62
			
	           8.1
	  	Termination	  	62
			
	           8.2
	  	Effect of Termination	  	63
		
	 ARTICLE IX INDEMNIFICATION
	  	63
			
	           9.1
	  	Survival	  	63
			
	           9.2
	  	Indemnification by Trusts	  	64
			
	           9.3
	  	Indemnification by Shurgard	  	65
			
	           9.4
	  	Limitations on Amount	  	66
			
	           9.5
	  	Procedure for Third Party Claims	  	66
		
	 ARTICLE X GENERAL PROVISIONS
	  	67
			
	           10.1
	  	Amendment and Modification	  	67
			
	           10.2
	  	Tax Matters	  	68
			
	           10.3
	  	Obligations of Schwalbach and Stotesbery	  	68

  

 -v- 

					
	           10.4
	  	Waiver of Compliance; Consents	  	69
			
	           10.5
	  	Notices	  	69
			
	           10.6
	  	Assignment	  	70
			
	           10.7
	  	Governing Law	  	70
			
	           10.8
	  	Counterparts	  	70
			
	           10.9
	  	Interpretation	  	70
			
	           10.10
	  	Publicity	  	71
			
	           10.11
	  	Entire Agreement	  	71
			
	           10.12
	  	Severability	  	71
			
	           10.13
	  	Specific Performance	  	72

  

 -vi- 

 AMENDED AND RESTATED 
 AGREEMENT AND PLAN OF MERGER 
  
 AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of June 30, 2003 (this “Agreement”), by and among Shurgard Storage Centers, Inc., a Washington corporation (“Shurgard”), SSCI Minnesota
Corporation, a Washington corporation and a wholly-owned subsidiary of Shurgard (the “Merger Subsidiary”); Two S Properties, Inc., a Minnesota corporation (“Two S”), Three S Properties, Inc., a Minnesota corporation
(“Three S” and, together with Two S, the “Corporations”), Superior Storage I, LLC, a Minnesota limited liability company (“Superior I”), Superior Storage II, LLC, a Minnesota limited liability
company (“Superior II”), Superior Woodbury, LLC, a Minnesota limited liability company (“Superior Woodbury” and, together with Superior I and Superior II, the “LLCs” and, together with the
Corporations, Superior I and Superior II, the “Companies”); Gerald A. Schwalbach (“Schwalbach”); the Revocable Trust of Gerald A. Schwalbach dated December 23, 1998 (the “Schwalbach Trust”); Patrick
L. Stotesbery (“Stotesbery”) and the Revocable Trust of Patrick L. Stotesbery dated January 27, 1999 (the “Stotesbery Trust” and, together with the Schwalbach Trust, the “Trusts”). The Companies,
Shurgard, Schwalbach, Stotesbery and the Trusts shall collectively be referred to herein as the “Parties.” 
  
 RECITALS 
  
 A. The Parties hereto desire to consummate a merger whereby the Companies will be merged with and into the Merger Subsidiary (the
“Merger”), all upon the terms and subject to the conditions set forth in this Agreement and in accordance with the Washington Business Corporation Act, as amended (the “WBCA”), the Washington Limited Liability
Company Act (the “WLLCA”), as amended, the Minnesota Business Corporation Act, as amended (the “MBCA”) and the Minnesota Limited Liability Company Act, as amended (the “MLLCA”), whereby the Owners
will receive shares of Shurgard Class A Common Stock (“Shurgard Common Stock”) at Closing in accordance with this Agreement; 
  
 B. The respective boards of directors of Shurgard and the Merger Subsidiary have reviewed the terms of the Merger and have determined that the Merger is
in best interest of their respective shareholders, and Shurgard has approved the Merger as the sole shareholder of Merger Subsidiary; 
  
 C. The respective boards of directors of the Corporations and the respective boards of governors of the LLCs have reviewed the terms of the Merger and
have determined that the Merger is in the best interest of their respective Owners; 

 D. For Federal Income Tax purposes, it is intended that the Merger of the Corporations will qualify as a
reorganization within the meaning of Section 368(a) of the Code; 
  
 E. It is anticipated that concurrently with the execution of this Agreement, the Owners, in their capacities as shareholders of the Corporations, will consent to the Merger as authorized under Section 302A.441 of the MBCA without a meeting
of the shareholders, and the Owners, in their capacities as members of the LLCs, will consent to the Merger as authorized in Section 322B.35 of the MLLCA without a meeting of the members. 
  
 F. The Owners have required, as a condition to their willingness to enter into this Agreement, that Shurgard enter into a
Registration Rights Agreement (the “Registration Rights Agreement”) with the Owners, substantially in the form attached hereto as Exhibit A, concurrently with the execution and delivery of this Agreement; 

 
 G. No vote of the shareholders of Shurgard is required under the WBCA to
enter into this Agreement or to consummate the transactions contemplated hereby; and 
  
 H. Shurgard, the Merger Subsidiary, the Companies and the Trusts desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe various conditions to the Merger.

  
 I. This Amended and Restated Agreement and Plan of Merger
amends, restates and supercedes in its entirety that certain Agreement and Plan of Merger, dated March 10, 2003, by and among the parties hereto. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements herein contained, the Parties agree as follows:

  
 ARTICLE I 
 DEFINITIONS 
  
 For purposes of this Agreement, unless otherwise defined herein, capitalized terms and terms listed herein shall have the following meanings: 

 
 “Affiliate” of any Person shall mean any other Person
that, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such Person. “Control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. 
  

 2 

 “Agreement” shall have the meaning as given in the Preamble hereto. 
  
 “April 30, 2002 Pro Forma Balance Sheets” shall have the
meaning set forth in Section 2.11(a). 
  
 “Articles of
Merger” shall have the meaning set forth in Section 2.3. 
  
 “Authorization” shall mean any consent, license, permit, grant, authorization, certificate, endorsement, qualification or approval of any Governmental Entity that is used in or necessary to (a) the ownership, operation or
conduct of the business of any Person, or (b) permit any Person to own or lease its properties. 
  
 “Business” shall mean the business and operations of the Companies with respect to the ownership, development and operation of the
Properties and the liabilities related thereto or arising therefrom, but shall exclude the business and operations of the Companies with respect to the ownership, development and operation of the Unrelated Assets and the liabilities related thereto
or arising therefrom. 
  
 “Business Day” shall
mean a day other than a Saturday, a Sunday, or a day on which banks in New York, New York are permitted or required by law to close. 
  
 “Business Employees” shall mean all employees of the Companies and/or Superior Management, other than the employees of the Company and/or
Superior Management located at the headquarters of the Companies in Minnetonka, Minnesota or employed in the operation of the Unrelated Assets. 
  
 “Claims” shall mean any civil, criminal or administrative claim, demand, cause of action, suit, proceeding, arbitration, hearing or
investigation. 
  
 “CERCLA” shall mean the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended. 
  
 “Closing” shall mean the consummation of the Merger under this Agreement. 
  
 “Closing Date” shall mean the date referred to in Section 2.2. 
  
 “COBRA” shall mean the health care continuation provisions
of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (currently reflected in Part 6 of Subtitle B of Title I of ERISA and Section 4980B(f) of the Code and the regulations thereunder). 
  
 “Code” shall mean the Internal Revenue Code of 1986, as
amended, and all regulations promulgated thereunder. 
  
 “Companies” shall mean, collectively, the Corporations and the LLCs. 
  

 3 

 “Companies Disclosure Schedule” shall mean a document dated the date of this Agreement
referring specifically to the representations and warranties in this Agreement and delivered by the Companies to Shurgard. The Companies Disclosure Schedule consists of the Companies Disclosure Schedule referred to in the Agreement and Plan of
Merger dated March 10, 2003 by and among the parties, amended and restated in include additional information as of the date of this Agreement. 
  
 “Companies Intellectual Property” shall have the meaning set forth in Section 3.11(a). 
  
 “Confidential Information” shall mean all confidential and
proprietary information of the Companies and the Owners, including information concerning the business, financial condition, operations, assets and liabilities of the Companies or the Owners. 
  
 “Contract” shall mean all contracts, agreements, licenses,
obligations, promises, instruments and other undertakings and arrangements, including purchase orders, sales orders, sale and distribution agreements, supply and processing agreements and all other agreements relating primarily or exclusively to the
operation of the Business, other than leases, rental and/or occupancy agreements for storage units entered into in the ordinary course of business. 
  
 “Contribution Notes” shall have the meaning set forth in Section 2.10(c). 
  
 “Corporation Certificates” shall mean the certificates representing the shares of Corporation Stock.

  
 “Corporations” shall mean, collectively, Two
S and Three S. 
  
 “Corporation Stock” shall
mean, collectively, all issued and outstanding shares of Two S Stock and Three S Stock. 
  
 “Deductible” shall have the meaning set forth in Section 9.4(a) 
  
 “Dissenting Interests” shall have the meaning set forth in Section 2.9. 
  
 “DOJ” shall mean the United States Department of Justice. 
  
 “Effective Date” shall have the meaning as given in Section
2.3. 
  
 “Effective Time” shall have the meaning
as given in Section 2.3. 
  
 “Employee Benefit
Plan” shall mean any retirement, pension, profit sharing, deferred compensation, stock bonus, savings, bonus, incentive, cafeteria, medical, dental, vision, hospitalization, life insurance, accidental death and dismemberment, medical
expense reimbursement, dependent care assistance, tuition reimbursement, disability, sick pay, holiday, vacation, severance, stock option, restricted stock, phantom stock, stock appreciation rights, fringe benefit or other employee benefit plan,
fund, policy, program, 
  

 4 

 contract, arrangement or payroll practice of any kind (including any “employee benefit plan”, as defined in
Section 3(3) of ERISA) (a) sponsored, maintained or contributed to by any of the Companies, Superior Management or any ERISA Affiliate or to which any of the Companies, Superior Management or any ERISA Affiliate is a party, (b) covering or
benefiting any current or former officer, employee, agent, director or independent contractor of any of the Companies, Superior Management or any ERISA Affiliate (or any dependent or beneficiary of any such individual), or (c) with respect to which
any of the Companies, Superior Management or any ERISA Affiliate has (or could have) any obligation or liability. 
  
 “Encumbrance” shall mean any lien, mortgage, deed of trust, pledge, security interest, charge, equitable interest, right of first
refusal, community property interest, covenant, option, title defect, restriction, exception or other adverse interest or encumbrance of any kind or nature whatsoever, whether or not perfected, including, without limitation, any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of ownership. 
  
 “Engel” shall mean Greg Engel. 
  
 “Environment” shall mean soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins and wetlands), subsurface waters,
groundwaters, drinking water supply, sediments, air (including outdoor and indoor air), plant and animal life, and any other environmental medium or natural resource. 
  
 “Environmental, Health, and Safety Liabilities” shall mean any Losses or other responsibility (including
financial) arising from or under any Environmental Law or Occupational Safety and Health Law and consisting of or relating to any environmental, health, or safety matters or conditions, including any Remedial Action relating thereto. 
  
 “Environmental Law” shall mean any Law or common law,
whether existing as of Closing or at any time prior thereto, relating to the protection of human health, safety or the Environment. 
  
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and all regulations promulgated thereunder.

  
 “ERISA Affiliate” shall mean any corporation,
partnership, limited liability company, sole proprietorship, joint venture, trade, business or other entity or organization that, together with any Person, is treated as a single employer under Section 414(b), (c) or (m) of the Code. 
  
 “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended, and all regulations promulgated thereunder. 
  
 “Executive Officers of Shurgard” shall mean those officers designated as executive officers by Shurgard for purposes of Section 16a-4(f) of the Exchange Act. 
  

 5 

 “Federal Income Taxes” shall mean any income and employment imposed under the Code, plus
any interest, penalties or additions to tax imposed under the Code with respect to such taxes. 
  
 “Final Closing Balance Sheets” shall have the meaning set forth in Section 2.11(c). 
  
 “Financial Statements” shall have the meaning set forth in Section 3.6(a). 
  
 “GAAP” shall mean generally accepted accounting principles established by the American Institute of
Certified Public Accountants. 
  
 “Governmental
Entity” shall mean a federal, state, provincial, local, county or municipal government, governmental, regulatory or administrative agency, department, commission, board, bureau, or other authority or instrumentality, domestic or foreign,
including, without limitation, any body exercising or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature. 
  
 “Gross Revenue” shall have the meaning set forth in Section
2.12(a). 
  
 “Gross Revenue Notice” shall have
the meaning set forth in Section 2.12(c). 
  
 “Gross
Revenue Report” shall have the meaning set forth in Section 2.12(b). 
  
 “Hazardous Activity” shall mean the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, disposal,
treatment or use (including any withdrawal or other use of groundwater) of Hazardous Materials. 
  
 “Hazardous Materials” shall mean any toxic or hazardous materials or substances, including asbestos, polychlorinated biphenyls,
contaminants, pollutants, chemicals, flammable explosives, radioactive materials, petroleum and petroleum products and any chemicals, materials, substances or wastes that are regulated, designated, defined or included in any definition under any
Environmental Law as hazardous, radioactive, infections or toxic. 
  
 “HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as amended. 
  
 “Identified Employees” shall mean those Business Employees which have been identified in writing by Shurgard that will be employed by
Shurgard following the Effective Date. 
  
 “Indebtedness” shall mean all outstanding indebtedness for borrowed money owed by the Companies to the Owners or any Affiliates of the Owners, one or more of the other Companies, banks or other financial institutions.

  
 “Indemnified Parties” shall have the meaning
set forth in Section 9.5(a). 
  

 6 

 “Indemnifying Parties” shall have the meaning set forth in Section 9.5(a). 

 
 “Interim Balance Sheets” shall have the meaning set forth
in Section 3.6. 
  
 “IRS” shall mean the United
States Internal Revenue Service. 
  
 “Knowledge of the
Companies” shall mean, with respect to a particular fact or other matter, that either Schwalbach, Stotesbery or Engel had (a) actual knowledge thereof or (b) acting as a reasonable operator of self-storage facilities, should have had such
knowledge; provided that “Knowledge of the Companies” will not include an exposure or risk to the Properties or the Business if the exposure or risk is: (i) inherent to the operation of self-storage facilities in the manner
consistent with industry practices, or (ii) one which Shurgard has related to the operation of its self-storage facilities in the manner in which it operates such facilities, unless, in either of such cases, Schwalbach, Stotesbery or Engel have
actual knowledge that such exposure or risk exists and has specific application to the Business or one or more of the Properties. Nothing in this provision shall require the Companies, Schwalbach, Stotesbery or Engel to consult with third parties
(other than employees of the Companies) regarding the content of any of the representations, warranties and covenants contained in this Agreement unless Schwalbach, Stotesbery or Engel have actual knowledge of a particular fact or matter with
respect to which a reasonable operator of self-storage facilities would consult with a third party and such consultation could not reasonably be expected to have an adverse effect on the Business or the Properties. 
  
 “Knowledge of Shurgard” shall mean, with respect to a
particular fact or other matter, that any of the Executive Officers of Shurgard had (a) actual knowledge thereof or (b) acting as a reasonable executive officer within the scope of his or her responsibilities, should have had such knowledge;
provided that “Knowledge of Shurgard” will not include an exposure or risk to Shurgard’s business or properties if the exposure or risk is inherent to the operation of self-storage facilities in the manner consistent with
industry practices, unless any such Executive Officer has actual knowledge that such exposure or risk exists and has specific application to Shurgard. 
  
 “Law” shall mean any domestic or foreign, statute, ordinance or other law, rule, regulation or binding interpretation of any Governmental
Entity and any decree, injunction, judgment, order, ruling or assessment entered by any Governmental Entity. 
  
 “LLCs” shall mean, collectively, Superior I, Superior II and Superior Woodbury. 
  
 “LLC Membership Interests” shall mean, collectively, all
issued and outstanding Superior I Membership Interests, Superior II Membership Interests and Superior Woodbury Membership Interests. 
  
 “LLC Membership Interest Assignment” shall mean the assignment of the LLC Membership Interests in connection with the Merger. 

 

 7 

 “Losses” shall have the meaning set forth in Section 9.2(a). 
  
 “MBCA” shall have the meaning set forth in the Recitals
hereto. 
  
 “Merger” shall have the meaning set
forth in the Recitals hereto. 
  
 “Merger
Subsidiary” shall have the meaning set forth in the Preamble hereto. 
  
 “Merger Subsidiary Common Stock” shall have the meaning set forth in Section 5.2. 
  
 “Minnesota Secretary” shall have the meaning set forth in Section 2.3. 
  
 “MLLCA” shall have the meaning as given in the Recitals hereto. 
  
 “NBS” shall mean NBS Associates Limited Partnership, a
Minnesota limited partnership. 
  
 “NDLC” shall
mean NDLC Limited Partnership, a Minnesota limited partnership. 
  
 “Occupational Safety and Health Law” shall mean any Law designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards. 
  
 “Order” shall mean any award, decision, injunction,
restraining order, judgment, decree, writ, order, rule or verdict entered, issued, made or rendered by any court, administrative agency or other Governmental Entity or by any arbitrator. 
  
 “Organizational Documents” shall mean the articles of organization pursuant to which any of the LLCs was
formed and any operating agreement or bylaws pursuant to which any such LLC may be governed. 
  
 “Owners” shall mean NDLC, NBS and the Trusts. 
  
 “Owners Indemnified Parties” shall have the meaning set forth in Section 9.3. 
  
 “Parties” shall mean Shurgard, the Companies, Schwalbach, Stotesbery and the Trusts. 
  
 “Permitted Indebtedness” shall mean the Indebtedness of the
Companies set forth on Schedule B that will not be repaid prior to the Effective Time. 
  
 “Person” shall mean any individual, partnership, joint venture, corporation, trust, limited liability company, unincorporated organization, Governmental Entity and any other entity. 
  
 “Post-Closing Notice” shall have the meaning set forth in
Section 2.11(c). 
  

 8 

 “Preliminary Closing Balance Sheets” shall have the meaning set forth in Section
2.11(a). 
  
 “Proceeding” shall mean any action,
arbitration, hearing, audit, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving any Governmental Entity or arbitrator.

  
 “Property” or “Properties”
shall have the meaning set forth in Section 3.10.1. 
  
 “Recapitalization” shall have the meaning set forth in Section 2.10(c). 
  
 “Registration Rights Agreement” shall have the meaning set forth in Section 2.13. 
  
 “REIT” shall mean a real estate investment trust, within the
meaning of Section 856 of the Code. 
  
 “Related
Person” shall have the meaning set forth in Section 3.22. 
  
 “Release” shall mean any releasing, spilling, emitting, leaking, pumping, escaping, dumping, injecting, depositing, disposing, discharging, dispersing or leaching into the Environment, whether intentional or unintentional.

  
 “Remedial Action” shall mean any action
required by any Governmental Entity or necessary to obtain compliance with any Environmental Law to (a) investigate, monitor, cleanup, remove, remediate, treat, dispose or in any other way address any Hazardous Materials, (b) prevent the Release of
any Hazardous Materials, or (c) perform pre-remedial studies and investigations or post-remedial monitoring and care. 
  
 “Schwalbach” shall mean Gerald A. Schwalbach. 
  
 “Schwalbach Trust” shall mean the Revocable Trust of Gerald A. Schwalbach created under agreement dated December 23, 1998. 
  
 “SEC” shall mean the United States Securities and Exchange
Commission. 
  
 “Securities Act” shall mean the
Securities Act of 1933, as amended, and all regulations promulgated thereunder. 
  
 “Shurgard” shall mean Shurgard Storage Centers, Inc., a Washington corporation. 
  
 “Shurgard Common Stock” shall mean Shurgard’s Class A Common Stock, par value $.001 per share. 
  
 “Shurgard Disclosure Schedule” shall mean a document dated
the date of this Agreement referring specifically to the representations and warranties in this Agreement and 
  

 9 

 delivered by Shurgard to the Owners. The Shurgard Disclosure Schedule consists of the Shurgard Disclosure Schedule
referred to in the Agreement and Plan of Merger dated March 10, 2003 by and among the parties, amended and restated in include additional information as of the date of this Agreement. 
  
 “Shurgard Employee Benefit Plans” shall have the meaning set forth in Section 6.12(a). 
  
 “Shurgard Indemnified Parties” shall have the meaning as set
forth in Section 9.2. 
  
 “Shurgard Intellectual
Property” shall have the meaning set forth in Section 5.9. 
  
 “Shurgard Material Adverse Effect” means an event, circumstance, change or effect that is or could reasonably be expected to be materially adverse, individually or in the aggregate, to the business, properties, assets,
liabilities, revenues, income, results of operation, condition (financial or otherwise) or prospects of Shurgard and its subsidiaries, considered as a whole, other than any event, change, circumstance or effect (i) relating to the economy or
securities markets in general, (ii) inherent to the operation of self-storage facilities in a manner consistent with industry practices or (iii) resulting from the execution of this Agreement, the announcement of this Agreement and the transactions
contemplated hereby. 
  
 “Shurgard Real Property”
shall have the meaning set forth in Section 5.10. 
  
 “Shurgard SEC Filings” shall have the meaning set forth in Section 5.6(a). 
  
 “Shurgard Shareholder Form” shall have the meaning set forth in Section 2.8(b). 
  
 “Stotesbery” shall mean Patrick L. Stotesbery. 

 
 “Stotesbery Trust” shall mean the Revocable Trust of
Patrick L. Stotesbery created under agreement dated January 27, 1999. 
  
 “Superior I” shall mean Superior Storage I, LLC, a Minnesota limited liability company. 
  
 “Superior I Membership Interests” shall have the meaning set forth in Section 3.3.1(c). 
  
 “Superior II” shall mean Superior Storage II, LLC, a
Minnesota limited liability company. 
  
 “Superior II
Membership Interests” shall have the meaning set forth in Section 3.3.1(d). 
  

 10 

 “Superior Management” shall mean Superior Management, LLC, a Minnesota limited liability
company. 
  
 “Superior Woodbury” shall mean
Superior Woodbury, LLC, a Minnesota limited liability company. 
  
 “Superior Woodbury Membership Interests” shall have the meaning set forth in Section 3.3.1(e). 
  
 “Surviving Corporation” shall have the meaning set forth in Section 2.1. 
  
 “Tax” (and, in the plural, “Taxes”) shall have the meaning set forth in Section 3.12(a).

  
 “Tax Returns” shall have the meaning set
forth in Section 3.12(b). 
  
 “Three S” shall
mean Three S Properties, Inc., a Minnesota corporation. 
  
 “Three S Stock” shall have the meaning set forth in Section 3.3.1(b). 
  
 “Third Party Accountants” shall have the meaning set forth in Section 2.11(d). 
  
 “Third Party Claim” shall have the meaning set forth in
Section 9.5(a). 
  
 “Transition Agreement” shall
have the meaning set forth in Section 2.10(d). 
  
 “Trusts” shall mean the Schwalbach Trust and the Stotesbery Trust. 
  
 “Two S” shall mean Two S Properties, Inc., a Minnesota corporation. 
  
 “Two S Stock” shall have the meaning set forth in Section 3.3.1(a). 
  
 “Unrelated Assets” shall have the meaning set forth in Section 2.10(a). 
  
 “Unrelated Assets Transfer” shall have the meaning set forth
in Section 2.10(a). 
  
 “Washington Secretary”
shall have the meaning set forth in Section 2.3. 
  
 “WBCA” shall have the meaning set forth in the Recitals hereto. 
  
 “WLLCA” shall have the meaning set forth in the Recitals hereto. 
  

 11 

 ARTICLE II 
 THE MERGER 
  
 2.1 The Merger

  
 (a) Upon the terms and subject to the conditions hereof
and in accordance with the WBCA, the WLLCA, the MBCA and the MLLCA, the Companies shall be merged with and into the Merger Subsidiary at the Effective Time of the Merger. Following the Merger, the separate corporate and company existence of the
Companies shall cease and the Merger Subsidiary shall continue as the surviving corporation (the “Surviving Corporation”) and shall succeed to and assume all the rights and obligations of the Companies in accordance with the WBCA,
the WLLCA, MBCA and the MLLCA. 
  
 (b) The Merger shall have the
effects set forth herein and in Section 23B.11.060 of the WBCA, Section 302A.641 of the MBCA, Section 25.15.415 of the WLLCA and Section 322B.75 of the MLLCA. If at any time after the Effective Time, the Merger Subsidiary as the Surviving
Corporation shall consider or be advised that any further assignments or assurances in law or otherwise are necessary or desirable to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation, all rights, title and interests in
all real estate and other property and all privileges, powers and franchises of the Companies and the Merger Subsidiary, the Surviving Corporation and its proper officers and directors, in the name and on behalf of the Companies and the Merger
Subsidiary, shall execute and deliver all such proper deeds, assignments and assurances in law and do all things necessary and proper to vest, perfect or confirm title to such property or rights in the Surviving Corporation and otherwise to carry
out the purpose of this Agreement, and the proper officers and directors of the Surviving Corporation are fully authorized in the name of the Companies and the Merger Subsidiary or otherwise to take any and all such action. 
  
 (c) Except as otherwise required by the IRS pursuant to a determination (as
defined in Section 1313 of the Code) or otherwise, or by applicable law, the Parties shall not take a position on any Tax Returns inconsistent with the treatment of the Merger for Tax purposes (i) with respect to the Corporations as a reorganization
within the meaning of Section 368(a)(l)(A) of the Code and (ii) with respect to the LLCs as a taxable acquisition of the LLCs’ assets. 
  
 (d) With respect to the Merger of the LLCs, the Parties hereto will use commercially reasonable efforts to agree as to the allocation of the value of the
Shurgard Common Stock, allocable to the Owners of the LLCs pursuant to Exhibit D as of the Closing Date, among the classes of assets of the LLCs. Such allocation shall be in accordance with Section 1060 of the Code and shall be modified by
the Parties after the Effective Time as necessary to reflect the amounts set forth on the Final Closing Balance Sheets or any additional shares of Shurgard Common Stock issued pursuant to Section 2.12 of this Agreement. The Parties hereto shall
report, act and file Tax Returns consistent with such allocation, unless required to do otherwise by applicable Law. 
  

 12 

 2.2 The Closing 
  
 Subject to the terms and conditions of this Agreement, the closing of the Merger shall take place on the earliest practicable business day (the
“Closing Date”) after the satisfaction or waiver of the conditions set forth in Article VII at 10 a.m. local time at the offices of Perkins Coie LLP, 1201 Third Avenue, 48th Floor, Seattle, Washington, or such other date, time or location as Shurgard and the Trusts shall agree. 
  
 2.3 Effective Date and Time 
  
 On the Closing Date and subject to the terms and conditions hereof, articles
of merger substantially in the form of Exhibit B complying with the applicable provisions of the WBCA and WLLCA and in such form and executed in such manner as required by the Secretary of State of the State of Washington (the
“Washington Secretary”) shall be delivered for filing with the Washington Secretary, and articles of merger substantially in the form of Exhibit C complying with the applicable provisions of the MBCA and the MLLCA and in such
form and executed in such manner as required by the Secretary of State of the State of Minnesota (the “Minnesota Secretary”) shall be delivered for filing with the Minnesota Secretary (all such articles of merger, collectively, the
“Articles of Merger”). The Merger shall become effective at 11:59 p.m. (the “Effective Time”) on the date (the “Effective Date”) that the Articles of Merger shall have been accepted for filing by the
Washington Secretary and the Minnesota Secretary. If either the Washington Secretary or the Minnesota Secretary requires any changes in the Articles of Merger as a condition to the filing of the Articles of Merger or the issuance of a certificate to
the effect that the Merger is effective, Shurgard and the Companies will execute any necessary revisions incorporating such changes, provided such changes are not inconsistent with and do not result in any material change in the terms of this
Agreement. 
  
 2.4 Articles of Incorporation of the Surviving Corporation

  
 At the Effective Time, the articles of incorporation of
the Merger Subsidiary as in effect immediately prior to the Effective Time shall be the articles of incorporation of the Surviving Corporation. Thereafter, the articles of incorporation may be amended or repealed in accordance with their terms and
as provided by Law. 
  
 2.5 Bylaws of the Surviving Corporation 

 
 At the Effective Time, the bylaws of the Merger Subsidiary as in effect
immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation. Thereafter, the bylaws may be amended or repealed in accordance with their terms and the articles of incorporation of the Surviving Corporation and as provided
by Law. 
  

 13 

 2.6 Directors and Officers 
  
 At the Effective Time, the directors and officers of the Merger Subsidiary shall continue in office as the directors and
officers of the Surviving Corporation, and such directors and officers shall hold office in accordance with and subject to the articles of incorporation and bylaws of the Surviving Corporation. 
  
 2.7 Conversion of Shares 
  
 As of the Effective Time, by virtue of the Merger and without any action on
the part of Shurgard, the Merger Subsidiary, the Companies or the holders of any shares of capital stock of the Corporations or the holders of any units of ownership interest in the LLCs: 
  
 (a) Each share of common stock, par value $0.001 per share, of Merger
Subsidiary that is issued and outstanding immediately prior to the Effective Time shall remain outstanding, unchanged by the reason of the Merger, as one fully paid and nonassessable share of common stock, par value $0.001 per share of the Surviving
Corporation. 
  
 (b) All shares of any class of capital stock of
either of the Corporations held in the treasury of such Corporation immediately prior to the Effective Time, if any, shall be cancelled and extinguished as of the Effective Time, without any conversion thereof and no amount or other consideration
shall be delivered or deliverable in exchange therefor. 
  
 (c)
All issued and outstanding shares of the capital stock of the Corporations and all issued and outstanding membership interests of the LLCs shall be converted into an aggregate of 3,050,000 shares of Shurgard Common Stock, allocated among the
Companies as set forth on Exhibit D. 
  
 (d) No later than
five (5) days prior to the Closing, the Companies shall deliver to Shurgard a copy of Schedule A which shall set forth the name of each Owner and (i) the Corporation Stock and LLC Membership Interests to be owned by each such Owner, following
the Unrelated Assets Transfer, the payment of the Indebtedness (other than the Permitted Indebtedness), the receipt of the Contribution Notes and the Recapitalization, and (ii) the aggregate number of shares of Shurgard Common Stock to which each
such Owner shall be entitled pursuant to the Merger and this Section 2.7. 
  
 2.8 Issuance of Shurgard Common Stock; Exchange of Certificates 
  
 (a) The shares of Shurgard Common Stock that each Owner shall be entitled to receive pursuant to the Merger in exchange for Corporation Stock or LLC Membership Interests shall be deemed to have been issued and
outstanding at the Effective Time. Until the Corporation Certificates and/or the LLC Membership Interest Assignments of an Owner are surrendered for exchange, the Corporation Stock and LLC Membership Interests shall, after the Effective Time,
represent for all purposes only the right to receive a 
  

 14 

 certificate or certificates evidencing the number of shares of Shurgard Common Stock into which the Corporation Stock or
LLC Membership Interests of such Owner shall have been converted pursuant to Section 2.7, the cash value of any fraction of a share of Shurgard Common Stock as provided in Section 2.8(d) and any dividends or distributions as provided in Section
2.8(e). 
  
 (b) Shurgard has furnished each Owner with a form
setting forth the information and certifications customarily required by its transfer agent prior to the issuance and delivery of stock certificates representing Shurgard Common Stock, such form to be as set forth in Exhibit E (the “Shurgard
Shareholder Form”). At the Closing, each Owner shall deliver to Shurgard the Corporation Certificates representing all of the issued and outstanding shares of the capital stock of the Corporations owned by such Owner and the LLC Membership
Interest Assignments relating to all of the issued and outstanding membership interests in the LLCs owned by such Owner, as well as the applicable Shurgard Shareholder Forms. Each Corporation Certificate shall be duly endorsed for transfer by such
Owner or accompanied by stock powers or assignments in blank duly executed by such Owner. Each LLC Membership Interest Assignment and Shurgard Shareholder Form shall be duly executed by such Owner. The failure by any Owner or Owners to comply with
this Section 2.8(b) shall not affect the Closing or the effectiveness of the Merger. 
  
 (c) Immediately following the Effective Time, Shurgard shall pay or deliver to each Owner who has fully complied with Section 2.8(b), (i) one or more certificates (in such denominations as specified by such Owner no
later than five (5) days prior to the Closing Date) representing the number of whole shares of Shurgard Common Stock into which the Corporation Stock and the LLC Membership Interests owned by such Owner shall have been converted pursuant to Section
2.7, (ii) the amount of cash in lieu of fractional shares pursuant to Section 2.8(d) and (iii) any dividends or other distributions to which such holder is entitled pursuant to Section 2.8(e) with respect to such shares of Shurgard Common Stock. All
Corporation Stock and LLC Membership Interests owned by the same Owner shall be aggregated in determining the total number of shares of Shurgard Common Stock and cash in lieu of fractional shares to be received by such Owner pursuant to Section 2.7.
Any Owner who has not fully complied with Section 2.8(b) shall not be entitled to receive the certificates representing shares of Shurgard Common Stock, cash in lieu or fractional shares or dividends as provided in this Section 2.8(c) until such
Owner has so complied. 
  
 (d) No fractional shares of Shurgard
Common Stock and no certificates or scrip therefor, or other evidence of ownership thereof, shall be issued in connection with the Merger, no dividend or other distribution of Shurgard shall relate to any fractional share and such fractional share
interests shall not entitle the owner thereof to vote or to any rights of a shareholder of Shurgard. Any fractional share of Shurgard Common Stock which would otherwise be issued to an Owner under Section 2.8(c) shall not be issued but rather (in
lieu of such fractional share) Shurgard shall pay to such Owner an amount of cash (without interest) determined by multiplying such fractional share by the closing price of Shurgard Common Stock on the New York Stock Exchange on the Effective Date.
In the alternative, all of the 
  

 15 

 Owners may advise Shurgard in writing prior to the Closing that they have transferred among themselves the fractional
shares for which they otherwise would be entitled to receive cash under this Section 2.8(d), and Shurgard will recognize such transfers and issue Shurgard Common Stock in the Merger in whole shares as set forth in such written advice. 
  
 (e) The Owners will be entitled to dividends or other distributions
pertaining to the shares of Shurgard Common Stock into which their Corporation Stock and LLC Membership Interests have been converted pursuant to Section 2.7 that become payable to Persons who are holders of record of Shurgard Common Stock as of a
record date on or after the Effective Date, but only after they have surrendered their Corporation Certificates or delivered their LLC Membership Interest Assignments and furnished the appropriate Shurgard Shareholder Forms as contemplated in
Section 2.8(a). The Owners will not be entitled, however, to dividends or other distributions that become payable before or after the Effective Date to Persons who were holders of record of Shurgard Common Stock as of a record date that is prior to
the Effective Date. 
  
 (f) In the event that any Corporation
Certificates shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Owner claiming such certificate to be lost, stolen or destroyed, Shurgard shall issue in exchange for such lost, stolen or destroyed
certificate the shares of Shurgard Common Stock that such Owner is entitled to receive pursuant to Section 2.7; provided, however, that Shurgard may in its discretion, and as a condition precedent to the issuance thereof, require such Owner to
provide Shurgard with an indemnity agreement and/or bond against any claim that may be made against Shurgard with respect to the certificate alleged to have been lost, stolen or destroyed. 
  
 (g) All certificates evidencing shares of Shurgard Common Stock that are
issued in exchange for Corporation Stock and LLC Membership Interests in accordance with the terms of this Agreement, together with any cash paid for fractional shares pursuant to Section 2.7(d), shall be deemed to have been issued in full
satisfaction of all rights pertaining to the Corporation Stock represented by the surrendered Corporation Certificates and LLC Membership Interests conveyed by the LLC Membership Interest Assignments. 
  
 2.9 Shareholder and Member Consents; Dissenters’ Rights 
  
 Simultaneously with the execution of this Agreement, the Owners are
executing written consents in lieu of meetings of shareholders of the Corporations and in lieu of meetings of members of the LLCs. As a part of such written consents, all Owners will approve the Merger and, as a result, will not exercise any
dissenters’ rights under Sections 302A.471 and 302A.473 of the MBCA or Sections 322B.383 and 322B.386 of the MLLCA. Neither of the Trusts shall take any action to rescind, reconsider, revoke, alter or otherwise change the action taken by the
shareholders and members pursuant to such written consents. Shurgard is entering into this Agreement in reliance on the simultaneous execution of such written consents and the effectiveness of such written consents for shareholder and member
approval under Minnesota law. Each of the Trusts agrees that in the event of the Trust’s 
  

 16 

 breach of this Section 2.9, Shurgard may be without an adequate remedy at law and, therefore, Shurgard may elect to
institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of this Section 2.9. If Shurgard should institute an action or proceeding seeking specific performance of
this Section 2.9, each Trust hereby waives the claim or defense that Shurgard has an adequate remedy at law and hereby agrees not to assert in any such action or proceeding the claim or defense that such a remedy at law exists. By seeking or
obtaining any such relief, Shurgard will not be precluded from seeking or obtaining any other relief to which it may be entitled, including claims for indemnification under Article IX. 
  
 2.10 Unrelated Assets 
  
 (a) Prior to the Closing, each of the Companies shall transfer, distribute or otherwise dispose (the “Unrelated Assets Transfer”) of all
assets of the Companies (the “Unrelated Assets”), other than (i) the Properties, including the land, the land improvements thereto and the buildings located thereon, (ii) the equipment, furniture and fixtures and other personal
property, whether tangible or intangible, owned by the Companies and physically located on the Properties and used in the operation and maintenance of the Properties, (iii) the leases, rental and/or occupancy agreements with tenants for storage
units located at the Properties, (iv) the Contracts listed on Section 3.9.1 of the Companies Disclosure Schedules, other than (A) the Employee Benefit Plans listed in Section 3.14.1 of the Companies Disclosure Schedules, (B) the insurance Contracts
listed in Section 3.15 of the Companies Disclosure Schedules, (C) the Contracts relating to the Indebtedness (other than the Permitted Indebtedness) referred to in item 25 of Section 3.9.1 of the Companies Disclosure Schedule, (D) the General Ledger
and Customer Account Software License Agreements listed in items 19 and 20 of Section 3.9.1 of the Companies Disclosure Schedule and (E) the advertising agreement with Gruen Marketing, listed in item 28 of Section 3.9.1 of the Companies Disclosure
Schedule, (v) the Companies Intellectual Property listed in Section 3.11 of the Companies Disclosure Schedules, other than (A) the name “Superior Storage” and all variations thereof and all rights with respect thereto, (B) the website URL
www.mnmini.com and (C) the General Ledger and Customer Account Software License Agreements and other off-the-shelf software packages listed in items 1, 2 and 3 under the caption “Computer Software,” (vi) the Authorizations listed in
Section 3.17 of the Companies Disclosure Schedules, (vii) the minute books and company records of the Companies and (viii) the books and records relating to the Properties and other assets of the Companies described in clauses (i) through (vii)
above or used exclusively or primarily in the operations of the Companies with respect to the ownership, development and operation of the Properties, including the Tax Returns of the Companies and the purchase agreements, deeds, surveys, title
commitments and title policies, environmental reports, site plans, construction plans and specifications and other documentation relating to the Properties. 
  
 (b) At or prior to the Closing, the Companies shall pay, or cause to be paid, in full, all outstanding Indebtedness, other than the Permitted
Indebtedness, and shall have furnished Shurgard with satisfactory evidence thereof. 
  

 17 

 (c) At or prior to the Closing, the Companies shall complete the recapitalization, reclassification or
restructuring of the Companies (the “Recapitalization”), which is contemplated by the Companies and the Trusts in order to support and effect the Unrelated Assets Transfer and the payment of the Indebtedness (other than the
Permitted Indebtedness) and shall consist principally of cash contributions by the Owners, the issuance of promissory notes payable to the Companies by the Trusts, Schwalbach and Stotesbery, upon terms reasonably satisfactory to Shurgard (the
“Contribution Notes”), and/or conversion of debt to equity by the Owners on a pro rata basis. The Recapitalization shall not alter the relative percentage ownership interest of each Owner in the Companies. 
  
 (d) At the Closing, Shurgard and the Trusts shall enter into a transition
agreement (the “Transition Agreement”) in the form attached hereto as Exhibit F, for the purpose of (A) permitting Shurgard to use certain of the Unrelated Assets for a limited period of time, not to exceed six (6) months
following the Closing Date, (B) providing for maintenance in Minneapolis by Shurgard of, and access by the Owners to, all present books and records of the Companies, after removal of the books and records relating to the Unrelated Assets, for a
period of seven (7) years following the Closing Date and (C) providing units for storage by the Owners of certain Unrelated Assets and the books and records relating thereto for a period of time, not to exceed two (2) years, following the Closing
Date. 
  
 (e) With respect to an Unrelated Assets Transfer by, or
a Recapitalization of a Corporation, such transaction shall be structured in a manner so as not to have an adverse effect on the Corporation qualifying as an “S” corporation pursuant to Section 1361 of the Code. 
  
 (f) Any Tax incurred as a result of the Unrelated Assets Transfer or the
Recapitalization shall be the responsibility of the Companies and the Owners. 
  
 2.11 Closing Balance Sheets 
  
 (a) Prior to the
execution of this Agreement, the Companies have provided to Shurgard pro forma balance sheets of the Companies relating to the Business as of April 30, 2002, after giving effect to the Unrelated Assets Transfer, the payment in full of the
Indebtedness and the Recapitalization (the “April 30, 2002 Pro Forma Balance Sheets”), which have been reviewed and approved by Shurgard and the Trusts. At least five (5) days prior to the Closing Date, the Owners will prepare and deliver
to Shurgard pro forma balance sheets for the Companies as of the Closing Date (the “Preliminary Closing Balance Sheets”) showing the amounts estimated for all assets and liabilities of the Business as of the Closing Date after
giving effect to the Unrelated Assets Transfer, the payment in full of the Indebtedness (other than the Permitted Indebtedness), the receipt of the Contribution Notes and the Recapitalization. The Preliminary Closing Balance Sheets shall apply the
same methodology as, and shall, in form and substance, be prepared (i) in a manner consistent with the April 30, 2002 Pro Forma Balance Sheets (but showing estimated amounts as of the Closing Date and allowing for the Permitted Indebtedness and the
Contribution Notes) for 
  

 18 

 each type of line item reflected on the April 30, 2002 Pro Forma Balance Sheets, (ii) in accordance with GAAP,
consistently applied in accordance with past practices of the Companies, for each type of line item not set forth on the April 30, 2002 Pro Forma Balance Sheets (other than the Permitted Indebtedness and the Contribution Notes). The Trusts shall
consult with Shurgard during the preparation of the Preliminary Closing Balance Sheets. 
  
 (b) Excluding the Properties, and taking into account the Unrelated Assets Transfer, the Recapitalization, the payment of the Indebtedness (other than the Permitted Indebtedness) and the receipt of the Contribution
Notes, the Trusts shall cause the Companies to retain cash at Closing in such amounts that the aggregate remaining current assets shown on the Preliminary Closing Balance Sheets, including such cash, will equal the aggregate remaining current
liabilities shown on the Preliminary Closing Balance Sheets. 
  
 (c) As soon as practicable after the Effective Date, but in any event not more than sixty (60) days following the Effective Date, the Trusts shall prepare and deliver to Shurgard balance sheets of the Companies relating to the Business as
of the Closing Date after giving effect to the Unrelated Assets Transfer, the payment in full of the Indebtedness (other than the Permitted Indebtedness), the receipt of the Contribution Notes and the Recapitalization (the “Final Closing
Balance Sheets”). The Final Closing Balance Sheets shall apply the same methodology as, and shall, in form and substance, be prepared (i) in a manner consistent with the Preliminary Closing Balance Sheets (but showing actual amounts, rather
than estimated amounts) for each type of line item reflected on the Preliminary Closing Balance Sheets and (ii) in accordance with GAAP, consistently applied in accordance with past practices of the Companies, for each type of line item not set
forth on the Preliminary Closing Balance Sheets. Shurgard and its advisors and accountants shall have fifteen (15) days after receipt to review the Final Closing Balance Sheets. The Final Closing Balance Sheets will become final and binding on the
Parties on the expiration of the time period specified in the preceding sentence, unless Shurgard delivers a written notice (the “Post-Closing Notice”) to the Trusts prior to such date that specifies in reasonable detail the amount
by which, and the reasons why, it thinks particular line items in the Final Closing Balance Sheets either contain mathematical errors or were not prepared in accordance with this Section 2.11. The Post-Closing Notice may not specify any other basis
for disagreement with the Final Closing Balance Sheets, other than as set forth in the preceding sentence. 
  
 (d) If Shurgard delivers a Post-Closing Notice in accordance with this Section 2.11, then the Parties shall, during the fifteen (15) day period beginning
on the receipt by the Trusts of the Post-Closing Notice, seek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Post-Closing Notice. If Shurgard and the Trusts are unable to resolve
all of the objections of Shurgard within such fifteen (15) day period, then Shurgard and the Trusts shall submit such unresolved objections to a regional accounting firm located in Minneapolis, Minnesota that has not previously provided services to
either Party and is mutually acceptable to the Parties (the “Third Party Accountants”). Shurgard and the Trusts shall use reasonable efforts to cause the Third Party Accountants to render a final, binding decision resolving the
matters in dispute within thirty (30) days following the submission of such matters to the Third Party 
  

 19 

 Accountants. The determination of the Third Party Accountants will be final and binding on Shurgard and the Owners, and
judgment may be entered on the determination of the Third Party Accountants in any court having jurisdiction over the Party against which such determination is to be enforced. The fees, costs and expenses of the Third Party Accountants shall be
shared equally by Shurgard and the Trusts. In its report resolving disputed items, the Third Party Accountants may not resolve any disputed item by choosing an amount that is greater than the greater of the amount claimed by Shurgard or set forth in
the Final Closing Balance Sheets or less than the lesser of the amount claimed by Shurgard or set forth in the Final Closing Balance Sheets. 
  
 (e) If the aggregate current assets are greater than the aggregate current liabilities shown on the Final Closing Balance Sheets, as finally determined in
accordance with the provisions of this Section 2.11, Shurgard shall pay the amount of such excess to the Owners, in immediately available funds, within five (5) days after final determination of the Final Closing Balance Sheets. If the aggregate
current assets are less than the aggregate current liabilities shown on the Final Closing Balance Sheets, as finally determined in accordance with the provisions of this Section 2.11, the Owners shall pay the amount of such deficiency to Shurgard,
in immediately available funds, within five (5) days after final determination of the Final Closing Balance Sheets. 
  
 2.12 Additional Shares 
  
 (a) If the Gross Revenue of the Surviving Corporation is at least $14.75 million for any consecutive twelve (12) month period ending on or prior to
December 31, 2005, Shurgard will issue an additional 50,000 shares of Shurgard Common Stock, pro rata to the Owners based on the number of shares of Shurgard Common Stock issued to the Owners in the Merger at the Effective Time. The additional
shares will be issued as soon as practicable after a determination that the required level of Gross Revenue has been attained, but in no event more than thirty (30) days after such determination. If the required level of Gross Revenue is not
attained on or prior to December 31, 2005, no additional shares of Shurgard Common Stock will be issued to the Owners. The term “Gross Revenue” will include all income from whatever source (net of deductions for the write-offs of
uncollectible receivables greater than sixty (60) days old), including, without limitation, rental income, administrative fees charged to new customers, late fees, forfeited security deposits, sales of merchandise, insurance fees, charges for NSF
checks, charges for inventorying of customers’ goods (for delinquent accounts) and rental of space for cell phone towers and billboards, but not including interest income earned on cash balances maintained by the Surviving Corporation following
the Effective Date, as determined in accordance with GAAP, consistently applied in accordance with the past practices of Shurgard. 
  
 (b) The determination of Gross Revenue will be made by Shurgard on a rolling twelve (12) month basis at the end of each month, commencing at the end of
the first full twelve (12) month period immediately following the Effective Date. Shurgard shall present to the Owners, on or before the last day of each month, a written report (the “Gross Revenue Report”) stating the Gross Revenue
for the twelve (12) month period ending on the last day of the preceding month. 
  

 20 

 (c) The Trusts shall have a period of thirty (30) days following the release of the audited financial
statements of Shurgard for the period ended December 31, 2005 to review all Gross Revenue Reports. If the Trusts dispute the amount of the Gross Revenue as set forth in one or more of the Gross Revenue Reports, the Trusts shall deliver a written
notice (the “Gross Revenue Notice”) to Shurgard prior to the end of such thirty (30) day period specifying, in reasonable detail, the amount by which, and the reasons why, they believe particular line items in the Gross Revenue
Report(s) either contain mathematical errors or were not prepared in accordance with this Section 2.12. The Gross Revenue Notice may not specify any other basis for disagreement with the Gross Revenue Reports, other than as set forth in the
preceding sentence. If the Trusts deliver a Gross Revenue Notice to Shurgard, the Parties shall follow the dispute resolution procedure set forth in Section 2.11 for a Post Closing Notice. Failure to deliver a Gross Revenue Notice within the thirty
(30) day period set forth above shall constitute a waiver of the Trusts’ right to dispute the Gross Revenue Reports. 
  
 (d) Shurgard shall maintain complete and accurate records of all information necessary to make a determination of Gross Revenue pursuant to this
Agreement. Shurgard shall allow the Owners and their representatives and agents, at any time during regular business hours following reasonable notice to Shurgard, to examine all pertinent records which may apply to or have a bearing on the
calculation of Gross Revenue pursuant to this Agreement. Shurgard shall also provide to the Owners such information and documentation relating to the Gross Revenue Reports, the Gross Revenues and the calculation thereof as may be reasonably
requested by the Owners from time to time. 
  
 (e) The right of
each Owner to receive additional shares of Shurgard Common Stock pursuant to this Section 2.12 may not be assigned or transferred in any manner whatsoever prior to the delivery of certificates representing such shares of Shurgard Common Stock,
except by operation of law. In no event shall any right to receive the additional shares of Shurgard Common Stock pursuant to this Section 2.12 be evidenced by negotiable certificates of any kind. 
  
 2.13 Registration Rights Agreement 
  
 Simultaneously with the execution of this Agreement, Shurgard and the Owners
have entered into a Registration Rights Agreement relating to the registration under the Securities Act for resale of the Shurgard Common Stock to be issued to the Owners on the Effective Date in connection with the Merger and any additional shares
issuable under Section 2.12. 
  
 2.14 Anti-Dilution Provisions 

 
 In the event Shurgard (i) changes (or establishes a record date for
changing) the number of shares of Shurgard Common Stock issued and outstanding prior to the Effective 
  

 21 

 Time as a result of a stock split, stock dividend, stock combination, recapitalization, reclassification, reorganization
or similar transaction with respect to the outstanding shares of Shurgard Common Stock or (ii) pays or makes an extraordinary dividend or distribution in respect of Shurgard Common Stock (other than a distribution referred to in clause (i) of this
sentence) and, in either case, the record date therefor shall be prior to the Effective Date, the total number of shares of Shurgard Common Stock to be issued in connection with the Merger shall be proportionately adjusted. Regular periodic cash
dividends and increases thereon consistent with past practices shall not be considered extraordinary for purposes of the preceding sentence and the issuances of capital stock for cash or in exchange for assets, securities or businesses shall not be
included in the transactions referred to in clause (i) of the preceding sentence. 
  
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
 OF THE COMPANIES AND THE TRUSTS 
  
 Each of the Companies and the Trusts, jointly and severally, represent and warrant to Shurgard that, except as set forth in the corresponding section of
the Companies Disclosure Schedule: 
  
 3.1 Organization; Qualification; Good
Standing 
  
 (a) Each of the Corporations is a corporation
duly organized, validly existing and in good standing under the laws of the State of Minnesota and has the requisite corporate power and authority to own, operate and lease the Properties and to carry on the Business as it is now being conducted.
Each of the Corporations is duly qualified to do business licensed as a foreign corporation and is in good standing in each jurisdiction in which the nature of the Business or the ownership or leasing of the Properties makes such qualification
necessary. 
  
 (b) Each of the LLCs is a limited liability company
duly formed, validly existing and in good standing under the laws of the State of Minnesota and has all requisite power and authority to own, operate and lease the Properties and to carry on the Business as it is now being conducted. Each of the
LLCs is duly qualified to do business licensed as a foreign limited liability company and is in good standing in each jurisdiction in which the nature of the Business or the ownership or leasing of the Properties makes such qualification necessary.

  
 3.2 Subsidiaries 
  
 None of the Companies has any subsidiaries or owns of record or beneficially
any capital stock of or equity interest or investment in any Person, other than a one hundred percent (100%) membership interest in Superior Management, all of which is owned by Superior I as of the date of this Agreement, and all of which will be
transferred in connection with the Unrelated Assets Transfer. 
  

 22 

 3.3 Capitalization 
  
 3.3.1 Authorized Capital 
  
 As of the date of this Agreement: 
  
 (a) The authorized capital stock of Two S consists of 1,000,000 shares of common stock, no par value per share (the “Two S Stock”), of
which 4,705.64 shares are issued and outstanding and are owned of record by the Owners as set forth in Section 3.3.1 of the Companies Disclosure Schedule. No shares of Two S Stock are held in the treasury of Two S. True and correct copies of the
stock records of Two S have been made available to Shurgard or its counsel. All issued and outstanding shares of Two S Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. 
  
 (b) The authorized capital stock of Three S consists of 1,000,000 shares of
common stock, no par value per share (the “Three S Stock”), of which 2,352.82 shares are issued and outstanding and are owned of record by the Owners as set forth in Section 3.3.1 of the Companies Disclosure Schedule. No shares of
Three S Stock are held in the treasury of Three S. True and correct copies of the stock records of Three S have been made available to Shurgard or its counsel. All issued and outstanding shares of Three S Stock are validly issued, fully paid and
nonassessable and are not subject to preemptive rights. 
  
 (c)
The authorized membership interests of Superior I are as determined by the board of governors of Superior I from time to time in accordance with the applicable Organizational Documents and the MLLCA (the “Superior I Membership
Interests”). As of the date of this Agreement, the number of authorized units of Superior I Membership Interests is 1,000, of which 100 units are issued and outstanding and are owned of record by the Owners, as set forth in Section 3.3.1 of
the Companies Disclosure Schedule. All issued and outstanding units of Superior I Membership Interests are validly issued, fully paid and nonassessable and are not subject to preemptive rights. The rights, preferences and privileges of the Superior
I Membership Interests are as stated in the applicable Organizational Documents or as provided by the MLLCA. 
  
 (d) The authorized membership interests of Superior II are as determined by the board of governors of Superior II from time to time in accordance with the
applicable Organizational Documents and the MLLCA (the “Superior II Membership Interests”). As of the date of this Agreement, there are 100 units Superior II Membership Interests issued and outstanding, all which are owned of record
by the Owners as set forth in Section 3.3.1 of the Companies Disclosure Schedule. All issued and outstanding units of Superior II Membership Interests are validly issued, fully paid and nonassessable and are not subject to preemptive rights. The
rights, preferences and privileges of the Superior II Membership Interests are as stated in the applicable Organizational Documents or as provided by the MLLCA. 
  

 23 

 (e) The authorized membership interests of Superior Woodbury are as determined by the board of governors
of Superior Woodbury from time to time in accordance with the applicable Organizational Documents and the MLLCA (the “Superior Woodbury Membership Interests”). As of the date of this Agreement, the number of authorized units of
Superior Woodbury Membership Interests is 1,000, of which 200 units are issued and outstanding and are owned of record by the Owners as set forth in Section 3.3.1 of the Companies Disclosure Schedule. All issued and outstanding units of Superior
Woodbury Membership Interests are validly issued, fully paid and nonassessable and are not subject to preemptive rights. The rights, preferences and privileges of the Superior Woodbury Membership Interests are as stated in the applicable
Organizational Documents or as provided by the MLLCA. 
  
 (f) The
Trusts, NBS and NDLC together own, of record and beneficially, one hundred percent (100%) of the Corporation Stock and the LLC Membership Interests and, immediately prior to the Effective Time, will own, of record and beneficially, one hundred
percent (100%) of the Corporation Stock and one hundred percent (100%) of the LLC Membership Interests. 
  
 3.3.2 Other Rights 
  
 Except as set forth in Section 3.3.1, no shares of capital stock or limited liability company membership interests or other equity or voting securities of
the any of the Companies are reserved for issuance or are outstanding. All Corporation Stock and LLC Membership Interests were offered and sold in compliance with all applicable state and federal securities laws, rules and regulations. Except as set
forth in Section 3.3.1, there are no outstanding or authorized securities, options, warrants, calls, rights, commitments, preemptive rights, rights of first refusal or rights of first offer, agreements, arrangements or undertakings of any kind to
which any of the Companies is a party, or by which any of the Companies is bound, obligating any of the Companies to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock, membership interests or other equity
or voting securities of, or other ownership interests in, any of the Companies or obligating any of the Companies to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. No Person, other than the Owners, holds any interest in the capital stock of the Corporations or membership interests in the LLCs. There are not, as of the date of this Agreement, any registration rights agreements, shareholder
agreements, voting trusts or proxies or other agreements or understandings to which any of the Companies is a party or by which it is bound relating to the voting of any shares of the capital stock or membership interests of any of the Companies or
obligating (contingently or otherwise) any of the Companies to purchase, redeem or otherwise acquire any of its capital stock or membership interest or to pay any dividend or make any other distribution in respect thereof. 
  

 24 

 3.4 Authorization and Enforceability 
  
 (a) Each of the Corporations has all necessary corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by each of the Corporations of this Agreement, and the consummation by each of such Corporations of the transactions contemplated hereby, have been duly and validly
authorized and approved by the board of directors and shareholders of each of the Corporations as required under the MBCA, and no other action of the board of directors and shareholders of either of the Corporations, or other corporate proceeding on
the part of either of the Corporations, is necessary to authorize this Agreement and consummate the transactions contemplated Shareholder hereby. 
  
 (b) Each of the LLCs has all necessary power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery by each of the LLCs of this Agreement, and the consummation by each of such LLCs of the transactions contemplated hereby, have been duly and validly authorized and approved by the board of governors and members of each of
the LLCs as required under the MLLCA, and no other action of the board of governors and members of any of the LLCs, or other proceeding on the part of any of the LLCs, is necessary to authorize this Agreement and consummate the transactions
contemplated hereby. 
  
 (c) This Agreement has been duly and
validly executed and delivered by each of the Companies and, assuming due execution and delivery by the other Parties hereto, constitutes the valid and binding obligation of each of the Companies, enforceable against each of such Companies in
accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, and the relief of debtors and rules of law governing specific performance, injunctive relief, or other equitable remedies. 
  
 3.5 Consents; Noncontravention 
  
 Except (a) for any applicable requirements of the Securities Act, the
Exchange Act and state securities laws, (b) for the filing and recordation of the Articles of Merger as required by applicable Law, and (c) as set forth in this Agreement, the authorization, execution and delivery by Schwalbach, Stotesbery, the
Trusts and the Companies of this Agreement, and the consummation of the transactions contemplated hereby, will not: (i) violate any provision of the articles of incorporation or bylaws of the Corporations or the Organizational Documents of the LLCs;
(ii) violate any Law or Order of any Governmental Entity or any nongovernmental self-regulatory agency to which any of the Companies or any of their respective Properties or assets may be subject; (iii) require any filing with or permit, consent, or
approval to be obtained from any Governmental Entity or any nongovernmental self-regulatory agency to which any of the Companies or any of their respective Properties or assets may be subject; or (iv) to the Knowledge of the Companies, result in any
violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, result in the loss of any benefit under, or give rise to any right of termination, cancellation, increased payments, or acceleration under,
or result in the creation of any Encumbrance on 
  

 25 

 any of the Properties or assets of any of the Companies used in the Business under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, license, franchise, permit, agreement, or other instrument or obligation relating to the Business to which any of the Companies is a party, or by which any of them or any of their respective
Properties or assets used in the Business may be bound. 
  
 3.6 Financial
Statements; Obligations 
  
 (a) The Companies have furnished
true and correct copies of (i) the audited balance sheets of Two S as of December 31, 2001 and 2000, and the related statements of operations, shareholders’ equity and cash flows for the years then ended, including the notes thereto, (ii) the
audited consolidated balance sheets of Superior I and Superior Management as of December 31, 2001 and 2000 and the related consolidated statements of operations and comprehensive loss, members’ deficit and cash flows for the years then ended,
including the notes thereto, (iii) the audited balance sheets of Superior II as of December 31, 2001 and 2000 and the related statements of operations, members’ deficit and cash flows for the year ended December 31, 2001, including the notes
thereto, (iv) the unaudited balance sheets of Superior Woodbury as of December 31, 2001 and 2000 and the related statements of operations for the years then ended and (v) the unaudited balance sheets of Three S as of December 31, 2001 and 2000 and
the related statements of operations and cash flows for the years then ended and (vi) the unaudited balance sheets of each of the Companies at November 30, 2002 (the “Interim Balance Sheets”) and the related statements of operations
for the eleven-month period ended November 30, 2002 (collectively, the “Financial Statements”). To the Knowledge of the Companies, the Financial Statements have been prepared in accordance with GAAP, applied by the Companies on a
consistent basis throughout the periods covered thereby, and present fairly the financial condition of the Companies, taken as a whole, (in the case of Superior I, consolidated with Superior Management except with respect to the interim financial
statements) as of their respective dates and the results of their operations for the periods covered thereby subject, in the case of interim financial statements, to year-end adjustments (which will not, in the aggregate, be material in amount or
effect to the Companies, taken as a whole) and the lack of footnotes and other required presentation items. 
  
 (b) To the Knowledge of the Companies, none of the Companies has any material indebtedness, obligation or liability of any nature (whether accrued,
absolute, contingent or otherwise, and whether due or to become due) relating to the Business or the Properties, other than indebtedness, obligations and liabilities (i) reflected or reserved against in the Interim Balance Sheets or the Final
Closing Balance Sheets as finally determined pursuant to Section 2.11, (ii) incurred in the ordinary course of business, consistent with past practices since the date of the Interim Balance Sheets, (iii) under executory Contracts, excluding
indebtedness, obligations and liabilities resulting from any breach of any executory Contract, or (iv) incurred pursuant to this Agreement. 
  

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 3.7 Absence of Certain Changes or Events 
  
 Except as otherwise contemplated by this Agreement, including the Unrelated Assets Transfer, the Recapitalization, the
payment of the Indebtedness (other than the Permitted Indebtedness) and the receipt of the Contribution Notes, since the date of the Interim Balance Sheets: 
  
 (a) To the Knowledge of the Companies, (i) with respect to the Business, the Companies (taken together) have not suffered any material change in the
business, operations, Properties, prospects, assets, results of operations or condition (financial or otherwise), other than changes (A) relating to the economy in general (B) inherent to the operation of self-storage facilities consistent with
industry practices or (C) resulting from the execution of this Agreement, the announcement of this Agreement and the transactions contemplated herein, and (ii) each of the Companies has conducted its portion of the Business in the ordinary course of
business, consistent with past practices. 
  
 (b) None of the
Companies has (i) made any change in its authorized or issued and outstanding capital stock or membership interests, entered into any agreement with respect to the issuance (including warrants, rights and options) or acquisition of any of its
capital stock or membership interests, or effected any recapitalization, reclassification or similar change, (ii) amended its articles of incorporation or articles of organization, or (iii) effected any change in the accounting policies, practices
or principles with respect to the business of any of the Companies, including with respect to the preparation of Financial Statements, other than with respect to the reporting of items on the Preliminary Closing Balance Sheets and the Final Closing
Balance Sheets as contemplated by Section 2.11. 
  
 (c) With
respect to the Business, other than in accordance with the 2003 budget provided by the Companies to Shurgard, the Companies (taken together), have not (i) committed to make any capital expenditures except for those with an aggregate cost not in
excess of $25,000, (ii) waived or committed to waive any rights, (iii) purchased, leased, sold, exchanged or otherwise disposed of or acquired any assets (other than sales of inventory in the ordinary course of business) for which the aggregate
consideration paid or payable is in excess of $25,000, or (iv) to the Knowledge of the Companies, suffered any Losses, whether or not covered by insurance, in excess of $25,000 in the case of any individual Loss, or $50,000 with respect to the
aggregate of all such Losses. 
  
 (d) With respect to the Business
Employees, neither the Companies nor Superior Management has (i) made or agreed to make any increase in the compensation payable or to become payable to any such employee, except for (A) regularly scheduled increases in compensation payable or
otherwise occurring in the ordinary course of business, consistent with past practices, (B) increases according to the terms of an employment agreement included in Section 3.9 of the Companies’ Disclosure Schedule, (C) retention bonuses in an
amount to be determined by the Trusts, which amount shall be set forth as a liability on the Final Closing Balance Sheets, unless paid prior to the date of the Final Closing Balance Sheets, or (D) bonuses agreed to be funded by Shurgard which will
not be set forth as a liability on the Final Closing Balance Sheets, or (ii) made or agreed to make any material change in any Employee Benefit Plan. 
  

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 (e) With respect to the Business, to the Knowledge of the Companies, each of the Companies, to the extent
consistent with past practice, has used all commercially reasonable efforts to preserve substantially intact the business and operations of the Companies. 
  
 (f) With respect to the Business, to the Knowledge of the Companies, none of the Companies has had any material change in its relations with its Business
Employees or with any vendors or tenants. 
  
 (g) With respect to
the Business, other than in the ordinary course of business consistent with past practice, none of the Companies has (i) made any upward adjustments to, written up or otherwise increased the book value of any of its assets, (ii) reduced, written off
or otherwise decreased the amount of any obligation or liability, other than with respect to the reporting of items on the Preliminary Closing Balance Sheets and the Final Closing Balance Sheets as contemplated by Section 2.11, or (iii) to the
Knowledge of the Companies, mortgaged, pledged or taken any action that may result in the imposition of any Encumbrance on any of its assets. 
  
 (h) With respect to the Business, none of the Companies has terminated or, to the Knowledge of the Companies, received any notice of termination of any
Contract involving a total remaining commitment by or to any of the Companies of at least $10,000. 
  
 (i) To the Knowledge of the Companies, none of the Companies has entered into any Contract to do any of the foregoing. 
  
 3.8 Books and Records 
  
 Each of the Companies has made available to Shurgard and its representatives (or will make available prior to Closing) all
books and records of the Business. The Companies have provided to Shurgard accurate and complete copies of the articles of incorporation and bylaws of the Corporations and the Organizational Documents of the LLCs. To the Knowledge of the Companies,
(i) such books and records of the Business are accurate and complete in all material respects and (ii) have been maintained in accordance with reasonable business practices, including the maintenance of a reasonable system of internal controls.
Specifically, and not in limitation of the foregoing, to the Knowledge of the Companies, the minute books of the Companies, all of which have been made available to Shurgard, contain accurate and complete records, in all material respects, of all
meetings held and formal action taken by the shareholders, members or other holders of ownership interests and by the boards of directors, boards of governors or other governing bodies of any of the Companies. The stock transfer records and
membership interest transfer records, if any, of each of the Companies have been made available to Shurgard and accurately and completely reflect all issuances and transfers of capital stock and membership interests of the Companies. 
  

 28 

 3.9 Contracts 
  
 3.9.1 Identification of Contracts 
  
 To the Knowledge of the Companies, Section 3.9.1 of the Companies Disclosure Schedule sets forth all Contracts of the specific types set forth below which
are currently in effect and to which any of the Companies or Superior Management is a party. Accurate and complete copies of the Contracts set forth on Section 3.9.1 of the Companies Disclosure Schedule have been delivered to Shurgard: 

 
 (a) each Contract (or group of related Contracts) that involve aggregate
expenditures or receipts by the Companies during the remainder of its term in excess of $25,000; 
  
 (b) each Contract (or group of related Contracts) under which any of the Companies has created, incurred, assumed or guaranteed (or may create, incur,
assume or guarantee) indebtedness involving more than $25,000 or under which any of the Companies has imposed a material Encumbrance on any of its assets, excluding Contracts relating to the Indebtedness (other than Contracts relating to or
evidencing the Permitted Indebtedness); 
  
 (c) each Contract of
any of the Companies relating to the protection of the confidentiality or Intellectual Property of such Company or which precludes the other party to the Contract from competing with such Company; 
  
 (d) each Contract with any of the Business Employees in the nature of an
employment agreement, bonus agreement, profit sharing agreement, option agreement, deferred compensation agreement or severance agreement; 
  
 (e) each joint venture, partnership and other Contract (however named) involving a sharing of profits, losses, costs or liabilities by any of the
Companies with any other Person; 
  
 (f) each Contract containing
covenants that in any way purport to restrict the business activity of any of the Companies, or limit the freedom of any of the Companies to engage in any line of business or to compete with any Person; 
  
 (g) each Contract relating to security for any of the Properties; and

  
 (h) any other Contract that is material to the Business or
Properties. 
  
 3.9.2 General Contract Matters 

 
 With respect to each Contract set forth in Section 3.9.1 of the Companies
Disclosure Schedule, to the Knowledge of the Companies, (a) each such Contract is legal, valid, binding, enforceable against any other party to such Contract in accordance with its terms and is in full force and effect; (b) neither the Companies nor
any other party to such Contract 
  

 29 

 is, in any material respect, in breach of, or default under, such Contract, and no event has occurred which, with notice
or lapse of time, would constitute a breach of or default under such Contract or permit termination, modification, or acceleration of such Contract; (c) neither the Companies nor any other party to such Contract has repudiated any provision of such
Contract, and (d) none of the Companies is a party to any verbal Contract which, if reduced to written form, would be required to be listed in Schedule 3.9.1 of the Companies Disclosure Schedule under the terms of Section 3.9.1. 
  
 3.9.3 Forms of Rental Agreement 
  
 The Companies have furnished to Shurgard a true and complete copy of each
form of customer lease, rental or occupancy agreement provided by the Companies to managers for use in the Business for new customers for the calendar years 2001, 2002 and 2003. 
  
 3.10 Real Property 
  
 3.10.1 Properties 
  
 Section 3.10.1 of the Companies Disclosure Schedule sets forth an accurate and complete list, organized under the name of each of the Companies, of all
real property owned by the Companies in Minnesota (each parcel of real property, a “Property,” and collectively, the “Properties”). To the Knowledge of the Companies, none of the Companies (i) leases any of the
Properties to any third party, other than the lease of rental of storage units in the ordinary course of business, (ii) leases any real property from any third party in the conduct of the Business, or (iii) uses or occupies any other real property
in the conduct of the Business. Each of the Companies has provided to Shurgard copies of the purchase agreements by which each of such Companies acquired the Properties and copies of all title insurance policies and surveys relating to the
Properties which are in the possession of, or reasonably available to, the Companies. The Companies have made available, or will make available to Shurgard prior to Closing, copies of site plans and construction plans and specifications relating to
the Properties which are in the possession of, or reasonably available to, the Companies. 
  
 3.10.2 Condition of Properties 
  
 (a) To the Knowledge of the Companies, access to and egress from each Property is available and provided by public streets or appurtenant easements, and there is no plan by any Governmental Entity to change the highway or road system in the
vicinity of any Property which would restrict or otherwise adversely affect public access to such Property. 
  
 (b) To the Knowledge of the Companies, (i) all water, sewer, gas, electric, telephone, drainage and other utility facilities required by Law for the
present use and operation of each Property are operational and connected to public utility lines or, in the case of private wells and septic systems, the same are on land owned or leased by each of the related Companies, (ii) such utility services
are adequate for the use and operation of the 
  

 30 

 Property as it is presently used and operated, (iii) none of the Companies is in default of any obligation to any utility
service provider with respect to any of the Properties, (iv) no other utility facilities are necessary to operate the Property as it is currently operated, (v) no fees, connection charges or assessments are due and payable for the installation,
operation or use of any sewer, drainage, water run off or dry well facilities at the Property, and (vi) each of the Companies has complied, in all material respects, with all obligations owed to any Governmental Entity or private party with respect
to the installation, operation or use of any sewer, drainage, water run off or dry well facilities relating to the Property. 
  
 (c) To the Knowledge of Companies, (i) none of the Companies has received any notice of any condemnation action with respect to any of the Properties and
(ii) there is no threatened eminent domain or similar proceeding, or private purchase in lieu of such proceeding, which would affect any of the Properties. 
  
 (d) To the Knowledge of the Companies, none of the Properties were designed to retain quantities of surface or storm water in excess of what is permitted
by Law. 
  
 3.10.3 Improvements 
  
 (a) To the Knowledge of the Companies, (i) all of the improvements on each
Property, including signs located on or adjacent to such Property, are in good condition and repair (subject only to ordinary wear and tear), free of material infestation and free of material physical, mechanical, structural, design and construction
defects, (ii) all water, electric, sewer, plumbing, heating, ventilating, gas and air conditioning servicing such improvements are in good condition and repair (subject only to ordinary wear and tear) and are free of material defects. 
  
 (b) Except for minor matters which, in the aggregate among all of the
Properties total less than $100,000, to the actual Knowledge of the Companies, the improvements to each Property were designed and constructed to satisfy the requirements of the local building code and any local, state or federal requirements,
including any seismic standards contained therein, in effect at the time of such design and construction. 
  
 3.10.4 Governmental Approvals; Compliance with Laws 
  
 (a) To the Knowledge of the Companies, (i) each of the Companies has received all necessary approvals of any Governmental Entity (including certificates
of occupancy, permits and licenses) required in connection with the ownership and operation of each Property, and each Property is being operated and maintained in material compliance with applicable Law, as well as all private covenants and
conditions affecting such Property, (ii) each of the Companies has provided Shurgard with true and correct copies of all certificates of occupancy, zoning letters and business licenses affecting any Property which are in the possession of, or
reasonably available to, the Companies, and (iii) neither the zoning, nor any other right to construct, use or operate any Property is in any way dependent on or related to any real estate, other than such Property. 
  

 31 

 (b) To the Knowledge of the Companies, (i) each of the Companies has complied, in all material respects,
with all applicable Laws, including Environmental Laws and Occupational Health and Safety Laws, relating to the construction of the improvements on each Property, (ii) none of the Companies has received any notice that any of the Properties does not
comply with such Laws, (iii) each of the Companies has complied, in all material respects, with all Orders and other written agreements with any Governmental Entity or private party relating to the construction of the improvements on each Property,
and (iv) each of the Properties has been subdivided from contiguous properties and constitutes a separate and distinct tax parcel or parcels on the roles of the applicable taxing authorities. 
  
 3.10.5 Third Party Rights to Properties 
  
 (a) To the Knowledge of the Companies, except as set forth in title policies
provided to, and/or title commitments received by, Shurgard in connection with the transactions contemplated by this Agreement, (i) there are no Encumbrances or other agreements to which any of the Companies is a party which relates to any Property
or to which any Property is subject that in any material way adversely affects the title to or the use or operation of any Property, (ii) one or more of the Companies holds good and marketable fee simple title to each Property, subject to matters of
record. 
  
 (b) None of the Companies has granted to any Person
any option or other right to purchase all or any portion of any Property. 
  
 (c) None of the Companies has assigned, pledged or granted any security interest with respect to any of the leases covering any portion of any Property, the rents payable thereunder or any security deposit given in
connection therewith, except in connection with the Indebtedness. To the Knowledge of the Companies, no lease covering any portion of any Property, rents payable thereunder or security deposit given in connection with any lease is subject to any
lien, security interest or adverse claim by any non-lessee third party, except in connection with the Indebtedness. 
  
 (d) To the Knowledge of the Companies, (i) the Properties are being operated in accordance with the terms of the rental agreements between the Companies
and the tenants, (ii) each of the rental agreements between the Companies and the tenants entered into during the calendar years 2001, 2002 and 2003 is legal, valid, binding, enforceable against such tenant in accordance with its terms and is in
full force and effect and (iii) no tenants are in material default, which default is continuing and not in the process of being cured, of their rental agreements for matters other than non-payment of rent. 
  
 3.11 Intellectual Property 
  
 (a) To the Knowledge of the Companies, (i) Section 3.11 of the Companies
Disclosure contains a complete list, organized by Company, of all of the trade names, assumed names, trademarks, trademark applications, service marks, copyrights, computer software and other intellectual property rights owned by the Companies and
used 
  

 32 

 in the operation of the Business or otherwise used by the Companies in the operation of the Business (the
“Companies Intellectual Property”), (ii) the Companies own or have a valid right to use all of the Companies Intellectual Property, (iii) none of the Companies is a party to or bound by any options, licenses or agreements with
respect to the use or ownership of the Companies Intellectual Property, (iv) there are no Claims (and there have been no Claims since January 1, 2000) to the effect that the use of the Companies Intellectual Property by the Companies infringes on
the intellectual property rights of any other Person, or that any of the Companies Intellectual Property is invalid. 
  
 (b) To the Knowledge of the Companies, none of the Business Employees is obligated under any contract (including licenses, covenants or commitments of any
nature) or other agreement, or subject to any Order, that would interfere with the use of such employee’s best efforts to promote the interests of the Business or that would conflict with Business as now conducted. 
  
 (c) To the Knowledge of the Companies, each of the Companies has taken
reasonable measures to protect the value (and, to the extent applicable, the confidentiality) of all Companies Intellectual Property. 
  
 3.12 Taxes 
  
 (a) For purposes of this Agreement, the term “Taxes,” means (i) any and all federal, state, local and foreign taxes, assessments and
other governmental charges, duties, impositions and liabilities, including, without limitation, taxes based upon or measured by gross receipts, income, profits, sales, use, business and occupation, value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts, and (ii) any liability for taxes of a predecessor entity; and the term “Tax”
means any one of the foregoing Taxes. 
  
 (b) Each of the
Companies has timely filed or caused to be timely filed all reports, returns, declarations, claims for refund, information returns, statements or other similar documents, including any schedules or attachments thereto, and including any amendment
thereof with respect to any Taxes (“Tax Returns”) that such Companies were required to file, except to the extent that such failure to file or delay in filing is not material to the Business. All such Tax Returns were correct and
complete in all material respects and have been prepared and completed in material compliance with applicable Law. No such Tax Returns are currently the subject of audit or examination, nor has any of the Companies been notified in writing of any
request for an audit or examination. None of the Companies is currently the beneficiary of any extension of time within which to file any Tax Return and, to the Knowledge of the Companies, none of the Companies has waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency. Each of the Companies has timely withheld from employee salaries, or wages or other compensation (whether or not paid in cash) and other amounts
paid to creditors, independent contractors and other third parties and paid over to the 
  

 33 

 appropriate Governmental Entity all amounts required to be so withheld and paid over for all periods under all applicable
Tax or other Laws, except where such failure to withhold or pay over would not be material to the Business. 
  
 (c) There is no material dispute, claim or proposed adjustment concerning any Tax liability of any of the Companies either (i) claimed or raised by any
Governmental Entity in writing or (ii) to the Knowledge of the Companies, based upon personal contact with any agent of such Governmental Entity. None of the Companies is a party to any pending action, investigation, proceeding, audit, claim or
assessment by or before the IRS or any other Governmental Entity. None of the Companies has been notified in writing or, to the Knowledge of the Companies, otherwise that they are the subject of any pending, proposed or threatened action,
investigation, proceeding, audit, claim or assessment by or before the IRS or any other Governmental Entity. There are no material claims for assessment, deficiency or collection of Taxes which have not been satisfied. The IRS has not audited any
Tax Return of any of the Companies since January 1, 1996. 
  
 (d)
No power of attorney has been granted by any of the Companies, their shareholders or their Affiliates with respect to any matter relating to Taxes of any of the Companies. 
  
 (e) There are no Tax liens of any kind upon any property or assets of any of the Companies, except for inchoate liens for
Taxes not yet due and payable. 
  
 (f) Each of the Companies has
provided to Shurgard complete copies of its Federal Income Tax Returns filed for the years ended December 31, 1999, 2000 and 2001. 
  
 (g) None of the Companies, Superior Management or any ERISA Affiliate has made any payment or payments, is not obligated to make any payment or payments
and is not a party to (or a participating employer in) any agreement or Employee Benefit Plan that could obligate it, the Surviving Corporation or Shurgard to make any payment or payments that would constitute an “excess parachute
payment,” as defined in Section 280G of the Code (or any similar provision of state, local or foreign law) or that would otherwise not be deductible under Section 162 or Section 404 of the Code. 
  
 (h) None of the Companies is a party to any Tax allocation, Tax sharing,
express or implied Tax indemnity agreement or similar agreement. 
  
 (i) None of the Companies has requested or received a ruling from any Taxing authority or signed a closing agreement with any Taxing authority. 
  
 (j) To the Knowledge of the Companies, since January 1, 1996, no claim has been made by a Taxing authority in a jurisdiction where the Companies do not
file Tax Returns that any of the Companies is or may be subject to taxation by such jurisdiction. 
  

 34 

 (k) The unpaid Taxes of each of the Companies, as of the Closing Date, do not exceed the reserve for Tax
liability set forth on the face of the Final Closing Balance Sheets (other than (i) any reserve for deferred Taxes established to reflect timing differences between book and tax income and (ii) with respect to real estate taxes, as contemplated by
Section 2.11(a)). 
  
 (l) Neither of the Corporations is a party
to any joint venture, partnership or other contact which is treated as a partnership for Federal Income Tax purposes. 
  
 (m) None of the LLCs has filed a Tax Return characterizing or an election to be characterized or treated as other than a partnership for federal, state or
local income tax purposes. No LLC constitutes a “publicly traded partnership” as defined in Section 7704(b) of the Code. Other than the Organizational Documents, there are no written agreements that govern the allocation and treatment of
Tax items for the LLCs. 
  
 (n) Neither of the Corporations has
been a party to a distribution to which Section 355(d) or (e) of the Code applies. 
  
 (o) None of the Companies currently has or has ever had a permanent establishment in any foreign country, as defined in any applicable Tax treaty or convention between the United States and such foreign country, and
none of the Companies has engaged in a trade or business within, or derived any income from, any state, local or foreign jurisdiction, other than those for which Tax Returns have been duly filed by the Companies. 
  
 (p) No election has been made with respect to Taxes of any of the Companies
pursuant to Sections 704, 754 or 856(1) of the Code or Treasury Regulations Section 301.7701-3. 
  
 (q) Each of the Corporations has made a valid election, effective as of such Corporation’s respective original date of its incorporation to be
treated as an “S” corporation within the meaning of Section 1361(a) of the Code and any comparable provision of state or local law. For federal and applicable state and local income tax purposes, each of the Corporations has properly
qualified as an “S” corporation since the effective date of such election through the date of this Agreement, and will properly qualify as an “S” corporation through and until the Closing Date in all jurisdictions in which it is
subject to Tax. 
  
 (r) Neither of the Corporations, nor any
qualified subchapter S subsidiary of any of the Companies has, in the past ten (10) years, (A) acquired assets from another corporation in a transaction in which the tax basis of the acquired assets was determined, in whole or in part, by reference
to the tax basis of the acquired assets (or any other property) in the hands of the transferor or (B) acquired any stock of any corporation which is a qualified subchapter S subsidiary. 
  

 35 

 (s) Neither of the Corporations has or has acquired any accumulated earnings and profits (as defined in
Section 312 of the Code) attributable to C corporation tax periods as of the Closing Date. 
  
 (t) None of the Companies holds any asset as inventory as described in Section 1221(a)(1) of the Code. 
  
 (u) As of the Effective Time, no Company will have any interest in or will have any outstanding loans to any subsidiary or other Person. 
  
 3.13 Labor Matters; Employees 
  
 (a) To the Knowledge of the Companies, none of the Companies has ever been a
party to any collective bargaining agreement or similar agreement with any labor union or employee organization. To the Knowledge of the Companies with respect to the Business Employees, (i) the Companies are in material compliance with all
applicable Laws respecting employment and employment practices, terms and conditions of employment, wages and hours and Occupational Safety and Health Laws, (ii) the Companies are not engaged in any unfair labor practices, (iii) there is no Claim
against any of the Companies pending or threatened before the Equal Employment Opportunity Commission or equivalent state agency, (iv) there is no unfair labor practice Claim against any of the Companies pending or threatened before the National
Labor Relations Board and (v) there are no labor disputes, strikes, slowdowns or stoppage pending or threatened against the Companies. 
  
 (b) The Companies have provided to Shurgard an accurate and complete list of the following information as of December 31, 2002 for each of the Business
Employees, including each Business Employee on leave of absence or layoff status: (i) name, (ii) job title and (iii) current compensation paid or payable and any change in compensation made during most recent fiscal year of the Companies.

  
 3.14 Employee Benefit Plans 
  
 3.14.1 Employee Benefit Plan Listing 
  
 Schedule 3.14.1 contains a complete and accurate list of all Employee
Benefit Plans. To the Knowledge of the Companies, none of the Companies, Superior Management or any ERISA Affiliate has any agreement, arrangement, commitment or obligation to create, enter into or contribute to any additional Employee Benefit Plan,
or to modify or amend any existing Employee Benefit Plan. 
  
 3.14.3 Documents Provided 
  
 The Companies and
Superior Management have delivered to Shurgard true, correct and complete copies (or, in the case of unwritten Employee Benefit Plans, descriptions) of all Employee Benefit Plans set forth in Section 3.14.1 of the Companies Disclosure Schedule (and
all amendments thereto), along with, to the extent applicable to the particular Employee 
  

 36 

 Benefit Plan, copies of the following: (a) all annual reports (Form 5500 series), including any related schedules and
audit reports, filed with respect to such Employee Benefit Plan; (b) the most recent summary plan description prepared for such Employee Benefit Plan; (c) all trust agreements, investment management agreements, annuity contracts, insurance
contracts, bonds, indemnification agreements and service provider agreements relating to all Employee Benefit Plans, (d) the most recent determination letter issued by the IRS with respect to such Employee Benefit Plan that is an ERISA Pension
Benefit Plan, as defined in Section 3(2) of ERISA and (e) all coverage, nondiscrimination, top heavy and Code Section 415 tests performed with respect to such ERISA Pension Benefit Plan since inception. 
  

	 	3.14.3 	Multiemployer, Defined Benefit and Money Purchase Pension Plans and Multiple Employer Welfare Arrangements 

  
 None of the Companies, Superior Management or any ERISA Affiliate sponsors,
maintains or contributes to, or has ever sponsored, maintained or contributed to (or been obligated to sponsor, maintain or contribute to) (a) a multiemployer plan as defined in Section 3(37) or Section 4001(a)(3) of ERISA or 414(f) of the Code, (b)
a multiple employer plan within the meaning of Section 4063 or 4064 of ERISA or Section 413(c) of the Code, (c) an employee benefit plan, fund, program, contract or arrangement that is subject to Section 412 of the Code, Section 302 of ERISA or
Title IV of ERISA, or (d) a multiple employer welfare arrangement as defined in Section 3(40) of ERISA. 
  
 3.14.4 Post-Termination Welfare Benefits 
  
 None of the Companies, Superior Management or any ERISA Affiliate has any obligation under any Employee Benefit Plan or otherwise to provide life or
health insurance benefits to former employees of the Companies, Superior Management, the ERISA Affiliates or any other Person, except as required by COBRA or applicable state continuation coverage requirements. 
  
 3.15 Insurance 
  
 (a) To the Knowledge of the Companies, Section 3.15 of the Companies Disclosure Schedule sets forth a list of all current
insurance policies to which any of the Companies is a party and which relate to the Business or under which the Business or any of the Properties, or any director of the Companies (relating to liability in such director’s capacity as a
director) is covered. The Companies have provided to Shurgard a copy of all such insurance policies. 
  
 (b) The Companies are not parties to and do not have (i) any self- insurance arrangement affecting the Business or any of the Properties, (ii) to the
Knowledge of the Companies, any Contract (other than an insurance policy, or Contracts containing defense, indemnification and hold harmless provisions which are normal and customary for such Contracts and entered into in the ordinary course of
business), for the transfer or sharing of any risk by any of the Companies with respect to the Business and (iii) to the Knowledge 
  

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 of the Companies, any obligations to third parties with respect to insurance (other than such obligations under leases
and service agreements set forth in Section 3.9.1 of the Companies Disclosure Schedule) with respect to the Business or the Properties. 
  
 (c) With respect to the Business, to the Knowledge of the Companies, Section 3.15 of the Companies Disclosure Schedule sets forth, by year, for the
current policy year and each of the three (3) preceding policy years (i) a summary of the loss experience under each policy and (ii) a statement describing each Claim under an insurance policy for an amount in excess of $10,000, that sets forth (A)
the name of the claimant, (B) a description of the policy by insurer, type of insurance, and period of coverage, and (C) the amount and a brief description of the Claim. 
  
 (d) To the Knowledge of the Companies, all insurance policies set forth in Section 3.15 of the Companies Disclosure Schedule
(i) are in full force and effect, (ii) are issued by insurers that are licensed in Minnesota, (iii) are sufficient for compliance with all Laws and Contracts which require insurance coverage in connection with the Business to which any of the
Companies is a party or by which any of the Companies is bound. 
  
 (e) With respect to the Business, to the Knowledge of the Companies, none of the Companies has received (i) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (ii) any notice of cancellation
or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder. 
  
 (f) Each of the Companies has paid through the date of this Agreement, and
will continue to pay through the Closing Date, as and when due all premiums which relate to the Business or any of the Properties and which are due under each insurance policy issued to any of the Companies. 
  
 (g) To the Knowledge of the Companies, each of the Companies has given timely
notice to the insurer of all Claims pending under the insurance policies issued to any of such Companies which relate to the Business or any of the Properties. 
  

3.16 Compliance with Laws 
  
 (a) To the Knowledge of the Companies, the Companies are, and at all times have been, in material compliance with all Laws that are or were applicable to
the Business or the ownership, operation or use of the Properties or other assets relating to the Business. 
  
 (b) To the Knowledge of the Companies, none of the Companies has received any notice or other communication (whether oral or written) from any
Governmental Entity or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any Law relating to the Business, which condition has not been previously remedied or rectified by any of such
Companies. 
  

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 3.17 Licenses and Authorizations 
  
 To the Knowledge of the Companies, Section 3.17 of the Companies Disclosure Schedule sets forth an accurate and complete
list of each material Authorization held by the Companies that relates to the Business. To the Knowledge of the Companies, (i) each such Authorization is valid and in full force and effect, (ii) each of the Companies is in material compliance with
all the terms and requirements of each Authorization identified in Section 3.17 of the Companies Disclosure Schedule, and (iii) none of the Companies has received any notice from any Governmental Entity or any other Person regarding (A) any actual,
alleged, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to, or any violation of or failure to comply with any term or requirement of, any Authorization listed in Section 3.17 of the Companies
Disclosure Schedule. 
  
 3.18 Legal Proceedings; Orders 
  
 (a) There is no pending Proceeding (i) that has been commenced by or against
any of the Companies that relates to or may affect the Business or any of the Properties or other assets owned or used by the Companies in connection with the Business, or (ii) that challenges, or may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement. To the Knowledge of the Companies, (A) no such Proceeding has been threatened, and (B) no event has occurred or circumstance exists that is reasonably
likely to give rise to or serve as a basis for the commencement of any such Proceeding. 
  
 (b) None of the Companies is subject to any Order that relates to the Business or any of the Properties or other assets owned or used by the Companies in connection with the Business. 
  
 3.19 Environmental Matters 
  
 (a) To the Knowledge of the Companies, there has not been any Hazardous
Activity on, in, under or affecting any of the Properties or any real property formerly leased or owned by the Companies (other than the Unrelated Assets), or by any means controlled by the Companies, except as in material compliance with
Environmental Law. 
  
 (b) To the Knowledge of the Companies, the
Properties and the Business are in material compliance with applicable Environmental Law, and the Companies have, and are in material compliance with, all Authorizations necessary for the Business under all applicable Environmental Law. 

 
 (c) To the Knowledge of the Companies, none of the Companies has received
any written or oral notice from any Governmental Entity or any other Person, and there is no pending or threatened Proceeding relating to the Business that (i) alleges a violation of any Environmental Law by the Companies, (ii) alleges that any of
the 
  

 39 

 Companies is a liable party or a potentially responsible party under CERCLA, or any other Environmental Law, (iii) has
resulted in or could result in the attachment of an environmental lien on any of the Properties or (iv) alleges that any of the Companies is liable for any contamination or damages to the Environment, contamination of the Properties, property damage
or personal injury based on their activities or the activities of their predecessors or third parties (whether at the Properties or elsewhere, other than with respect to the Unrelated Assets) involving Hazardous Materials, whether arising under the
Environmental Law, common law principles, or other legal standards. 
  
 (d) To the Knowledge of the Companies, none of the Companies is currently subject to or has incurred in the last three (3) years, any material Environmental, Health and Safety Liabilities, including without limitation, liabilities with
regard to any Property or any real property formerly leased or owned by the Companies (other than the Unrelated Assets) or to the conduct of the Business. 
  
 3.20 Certain Payments 
  
 To the Knowledge of the Companies, none of the Companies nor any director, officer, agent, or employee of any of the Companies, nor any other Person
associated with or acting for or on behalf of any of the Companies with respect to the Business, has directly or indirectly made any contribution, gift, bribe, rebate, payoff, influence payment, kick-back, or other payment to any Person, private or
public, regardless of form, whether in money, property, or services (a) to obtain favorable treatment in securing business, (b) to pay for favorable treatment for business secured, or (c) to obtain special concessions or for special concessions
already obtained. 
  
 3.21 Brokers or Finders 
  
 Other than Lehman Brothers, none of the Companies nor any Person acting on
behalf of any of the Companies has directly or indirectly incurred, nor will incur as a result of any action taken by or on behalf of any of the Companies, any liability for brokerage or finders’ fees or agents’ commissions or any similar
fees, charges or payments in connection with this Agreement, or any transaction contemplated hereby. 
  
 3.22 Relationships with Related Persons 
  
 None of the Companies nor any Related Person of any of the Companies owns (of record or as a beneficial owner) an equity interest or any other financial or profit interest in a Person (other than less than five
percent (5%) of the outstanding capital stock of a publicly traded corporation) that has (a) had business dealings or a material financial interest in any transaction with any of the Companies relating to the Business since January 1, 1998, or (b)
engaged in competition with any of the Companies in the Business. 
  

 40 

 “Related Person” shall mean: 
  
 (a) with respect to a particular individual (i) each member of such
individual’s Family (as defined below), (ii) any Affiliate of such individual or of one or more members of such individual’s Family and (iii) any Person with respect to which such individual or one or more members of such individual’s
Family serves as a director, officer, partner, member, executor or trustee (or in a similar capacity) of such specified Person; and 
  
 (b) with respect to a specified Person other than an individual, (i) any Affiliate of such specified Person and (ii) any Person that serves as a director,
officer, partner, member, executor, or trustee (or in a similar capacity) of such specified Person; provided that none of the Companies or Owners shall be deemed to be a related Person of any other Owner or any other Company. 
  
 (c) for purposes of this definition, the “Family” of an
individual includes (i) the individual, (ii) the individual’s spouse, (iii) any lineal ancestor or lineal descendant of the individual or (iv) a trust for the benefit of any of the foregoing. 
  
 3.23 Assets of the Business 
  
 The Properties and other assets remaining in the Companies as of the Closing
Date, after giving effect to the Unrelated Assets Transfer, the Recapitalization, the payment of the Indebtedness (other than the Permitted Indebtedness) and the receipt of the Contribution Notes shall constitute all of the assets and properties
used by the Companies to operate the Business currently and during the last fiscal year other than (i) inventory or obsolete equipment disposed of in the ordinary course of business and (ii) the assets used in the management of the Business and
located at the headquarters of the Companies. 
  
 ARTICLE IV

 REPRESENTATION AND WARRANTIES OF THE TRUSTS 
  
 Each of the Trusts, with respect to itself and not jointly with respect to any other Trust, represents and warrants to
Shurgard that, except as set forth in the corresponding section of the Companies Disclosure Schedule: 
  
 4.1 Authority 
  
 Each of
the Trusts has the necessary power or capacity (as the case may be) and authority to execute and deliver this Agreement and the Registration Rights Agreement, to make the representations, warranties and covenants herein and to perform the
obligations hereunder and thereunder. Each of this Agreement and the Registration Rights Agreement has been duly executed and delivered by the Trusts and, assuming due execution and delivery by the other Parties hereto, is a legal, valid and binding
obligation of such Trust, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, and the relief of debtors and rules of law governing specific performance, injunctive relief, or other
equitable remedies. 
  

 41 

 4.2 Consents; Noncontravention 
  
 Except (a) for any applicable requirements of the Securities Act, the Exchange Act and state securities laws, (b) for the
filing and recordation of the Articles of Merger as required by applicable Law, and (c) as set forth in this Agreement, the execution, delivery and performance of this Agreement and the Voting Agreement by such Trust will not (i) constitute a
violation (with or without the giving of notice or lapse of time or both) of any provision of any Law or Order applicable to such Trust, (ii) require any consent, approval or authorization of, or notice to, any Person or Government Entity, (iii)
result in a default under, an acceleration or termination of, or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which such
Trust is a party or by which such Trust is bound or (iv) result in the creation or imposition of any Encumbrance on any of the Corporation Stock or LLC Membership Interests held by such Trust. 
  
 4.3 Ownership of Shares 
  
 As of the date hereof, each of the Schwalbach Trust and NBS owns, beneficially and of record, the Corporation Stock and LLC
Membership Interests set forth on Section 3.3.1 of the Companies’ Disclosure Schedule, which as of the Effective Time will be free and clear of any Encumbrance. As of the date hereof, each of the Stotesbery Trust and NDLC owns, beneficially and
of record, the Corporation Stock and LLC Membership Interests set forth on Section 3.3.1 of the Companies’ Disclosure Schedule, which as of the Effective Time will be free and clear of any Encumbrance. As of the Effective Time, each of the
Schwalbach Trust and NBS will own, beneficially and of record, the Corporation Stock and LLC Membership Interests set forth on Schedule A, free and clear of any Encumbrance. As of the Effective Time, each of the Stotesbery Trust and NDLC will own,
beneficially and of record, the Corporation Stock and the LLC Membership Interests set forth on Schedule A, free and clear of any Encumbrance. 
  
 4.4 Claims Against the Company 
  
 Neither the Schwalbach Trust, NBS or Schwalbach has any past, present or contemplated Claims again any of the Companies. Neither the Stotesbery Trust,
NDLC or Stotesbery has any past, present or contemplated Claims against any of the Companies. 
  
 4.5 Sophistication; Accreditation 
  
 (a) The Schwalbach Trust represents and warrants to Shurgard for itself and for NBS as follows: 
  
 (i) Such Owner is in a financial position to hold the Shurgard Common Stock for an indefinite period of time and is able to bear the economic risk and
withstand a complete loss of his, her or its investment in the Shurgard Common Stock. 
  

 42 

 (ii) Such Owner acknowledges that it has received and had the opportunity to review to such Owner’s
satisfaction the materials disseminated by the Companies in connection with the written consent of shareholders and members to approve the Merger and the transactions contemplated thereby, including the Shurgard SEC Filings. 
  
 (iii) Such Owner has obtained, to the extent that it deems necessary,
professional advice with respect to the risks inherent in acquiring the Shurgard Common Stock, the financial condition of Shurgard and the suitability of an investment in the Shurgard Common Stock in light of such Owner’s financial condition
and investment needs. 
  
 (iv) Such Owner, either alone or with
the assistance of his, her or its professional advisors, is a sophisticated investor, is able to fend for himself, herself or itself in the transactions contemplated by this Agreement relating to the Shurgard Common Stock and has such knowledge and
experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of the prospective investment in the Shurgard Common Stock. 
  
 (v) Such Owner is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act.

  
 (vi) The Shurgard Common Stock is being acquired by such Owner
for investment for his, her or its respective account, not as a nominee or agent, and not with a view to the distribution of any part thereof; such Owner has no present intention of selling, granting any participation in or otherwise distributing
any of the Shurgard Common Stock in a manner contrary to the Securities Act or to any applicable state securities or Blue Sky law, nor does such Owner have any contract, undertaking, agreement or arrangement with any person or entity to sell,
transfer or grant a participation to such person or entity with respect to any of the Shurgard Common Stock. 
  
 (vii) Such Owner acknowledges that the Shurgard Common Stock has not been and will not prior to issuance be registered under the Securities Act and that
the Shurgard Common Stock is characterized under the Securities Act as “restricted securities” and, therefore, cannot be sold or transferred until such sale or transfer is registered under the Securities Act as provided in this Agreement
or an exemption from such registration is available. 
  
 (viii)
Such Owner has been advised that the Shurgard Common Stock is being issued in the Merger pursuant to exemptions from applicable federal and state securities laws, and that Shurgard’s reliance on such exemptions is predicated in part on such
Owner’s representations contained herein. 
  

 43 

 (ix) For purposes of the application of state securities laws, each Owner is a resident of the state of
Minnesota. 
  
 (x) Such Owner understands that certificates or
other instruments representing the Shurgard Common Stock being issued in the Merger will bear legends substantially similar to the following, in addition to any other legends required by federal or state laws: 
  
 THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (ii) THIS CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION, OR (iii) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. 
  
 Such Owner agrees that, in order to ensure and enforce compliance with the restrictions imposed by applicable law and those referred to in the foregoing legends, or
elsewhere herein, Shurgard may issue appropriate “stop transfer” instructions to its transfer agent, if any, with respect to any certificate or other instrument representing the shares of Shurgard Common Stock being issued in the Merger.

  
 (b) The Stotesbery Trust represents and warrants to Shurgard
for itself and for NDLC as follows: 
  
 (i) Such Owner is in a
financial position to hold the Shurgard Common Stock for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of his, her or its investment in the Shurgard Common Stock. 
  
 (ii) Such Owner acknowledges that it has received and had the opportunity to
review to such Owner’s satisfaction the materials disseminated by the Companies in connection with the written consent of shareholders and members to approve the Merger and the transactions contemplated thereby, including the Shurgard SEC
Filings. 
  
 (iii) Such Owner has obtained, to the extent that it
deems necessary, professional advice with respect to the risks inherent in acquiring the Shurgard Common Stock, the financial condition of Shurgard and the suitability of an investment in the Shurgard Common Stock in light of such Owner’s
financial condition and investment needs. 
  

 44 

 (iv) Such Owner, either alone or with the assistance of his, her or its professional advisors, is a
sophisticated investor, is able to fend for himself, herself or itself in the transactions contemplated by this Agreement relating to the Shurgard Common Stock and has such knowledge and experience in financial and business matters that he, she or
it is capable of evaluating the merits and risks of the prospective investment in the Shurgard Common Stock. 
  
 (v) The Stotesbery Trust is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act. NDLC in not an
“accredited investor” under Rule 501(a) of Regulation D, but each of the equity owners of NDLC, if not an “accredited investors,” has appointed Stotesbery as his or her “purchaser representative” as defined in Rule
501(h) of Regulation D under the Securities Act, Stotesbery qualifies as a “purchaser representative” under such Rule 501(h) and Stotesbery hereby agrees to act as “purchaser representative” in connection with the Merger.

  
 (vi) The Shurgard Common Stock is being acquired by such Owner
for investment for his, her or its respective account, not as a nominee or agent, and not with a view to the distribution of any part thereof; such Owner has no present intention of selling, granting any participation in or otherwise distributing
any of the Shurgard Common Stock in a manner contrary to the Securities Act or to any applicable state securities or Blue Sky law, nor does such Owner have any contract, undertaking, agreement or arrangement with any person or entity to sell,
transfer or grant a participation to such person or entity with respect to any of the Shurgard Common Stock. 
  
 (vii) Such Owner acknowledges that the Shurgard Common Stock has not been and will not prior to issuance be registered under the Securities Act and that
the Shurgard Common Stock is characterized under the Securities Act as “restricted securities” and, therefore, cannot be sold or transferred until such sale or transfer is registered under the Securities Act as provided in this Agreement
or an exemption from such registration is available. 
  
 (viii)
Such Owner has been advised that the Shurgard Common Stock is being issued in the Merger pursuant to exemptions from applicable federal and state securities laws, and that Shurgard’s reliance on such exemptions is predicated in part on such
Owner’s representations contained herein. 
  
 (ix) For
purposes of the application of state securities laws, each Owner is a resident of the state of Minnesota. 
  

 45 

 (x) Such Owner understands that certificates or other instruments representing the Shurgard Common Stock
being issued in the Merger will bear legends substantially similar to the following, in addition to any other legends required by federal or state laws: 
  
 THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE
STATE LAW, AND NO INTEREST THEREIN MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (ii) THIS
CORPORATION RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THIS CORPORATION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (iii) THIS CORPORATION OTHERWISE SATISFIES ITSELF THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION. 
  
 Such Owner agrees that, in order to
ensure and enforce compliance with the restrictions imposed by applicable law and those referred to in the foregoing legends, or elsewhere herein, Shurgard may issue appropriate “stop transfer” instructions to its transfer agent, if any,
with respect to any certificate or other instrument representing the shares of Shurgard Common Stock being issued in the Merger. 
  
 (c) Notwithstanding the representations made by the Owners in Sections 4.5(a) and (b) and the restrictions set forth in Section 1.7 of the Registration
Rights Agreement, the Owners, collectively, may transfer up to 200,000 shares of Shurgard Common Stock in a private transaction that otherwise complies with the requirements of Section 4.5. 
  
 ARTICLE V 
 REPRESENTATIONS AND WARRANTIES OF SHURGARD 
  
 Shurgard represents and warrants to the Owners that, except as set forth in the corresponding section of the Shurgard Disclosure Schedule: 
  
 5.1 Organization; Qualification; Good Standing 
  
 Each of Shurgard and the Merger Subsidiary is a corporation duly organized
and validly existing under the laws of the State of Washington and has the requisite corporate power and authority to own, operate and lease its properties and assets and to carry on its business as it is now being conducted. Each of Shurgard and
the Merger Subsidiary is duly qualified to do business licensed as a foreign corporation and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification
necessary, except where the failure to be so qualified would not have a Shurgard Material Adverse Effect. 
  

 46 

 5.2 Capitalization 
  
 5.2.1 Authorized Capital 
  
 (a) As of March 7, 2003, the authorized capital stock of Shurgard consisted of (i) 120,000,000 shares of Shurgard Common Stock, of which there were
35,960,040 shares issued and outstanding, (ii) 500,000 shares of Class B Common Stock, with a par value of $0.001 per share, of which there were no shares issued and outstanding, (iii) 160,000,000 shares of Excess Stock, of which there were no
shares issued and outstanding and (iv) 40,000,000 shares of Preferred Stock, of which 2,800,000 shares were designated Series A Junior Participating Preferred Stock, none of which were issued and outstanding, 2,000,000 shares were designated 8.80%
Series B Cumulative Redeemable Preferred Stock, none of which were issued and outstanding, 2,000,000 shares were designated 8.70% Series C Cumulative Redeemable Preferred Stock, all of which were issued and outstanding and 3,450,000 shares were
designated 8.75% Series D Cumulative Redeemable Preferred Stock, all of which were issued and outstanding. 
  
 (b) The authorized capital stock of Merger Subsidiary consists of 50,000 shares of common stock, par value $0.001 per share (“Merger Subsidiary
Common Stock”), 1,000 of which are issued and outstanding and owned by Shurgard. 
  
 (c) All issued and outstanding shares of Shurgard Common Stock and Merger Subsidiary Common Stock are validly issued, fully paid, nonassessable and free of preemptive rights. 
  
 5.2.2 Other Rights 
  
 Except as set forth in Section 5.2.1, no shares of capital stock or other
equity or voting securities of Shurgard are reserved for issuance or are outstanding. All shares of Shurgard Common Stock were offered and sold in compliance with all applicable state and federal securities laws, rules and regulations. Except as set
forth in Section 5.2.1, there are no outstanding or authorized securities, options, warrants, calls, rights, commitments, preemptive rights, rights of first refusal or rights of first offer, agreements, arrangements or undertakings of any kind to
which Shurgard is a party, or by which it is bound, obligating Shurgard to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other equity or voting securities of Shurgard or obligating Shurgard to
issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are not, as of the date of this Agreement, any registration rights agreements, shareholder agreements,
voting trusts or proxies or other agreements or understandings to which Shurgard is a party or by which it is bound relating to the voting of any shares of the capital stock of Shurgard or obligating (contingently or otherwise) Shurgard to purchase,
redeem or otherwise acquire any of its capital stock or to pay any dividend or make any other distribution in respect thereof. 
  

 47 

 5.3 Authorization and Enforceability 
  
 (a) Shurgard has all necessary corporate power and authority to execute and deliver this Agreement and the Registration
Rights Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Shurgard of this Agreement and the Registration Rights Agreement, and the consummation by Shurgard of the transactions contemplated
hereby and thereby have been duly and validly authorized and approved by the board of directors of Shurgard, and no other action of the board of directors or shareholders of Shurgard, or other corporate proceeding on the part of Shurgard, is
necessary to authorize this Agreement and the Registration Rights Agreement and consummate the transactions contemplated hereby and thereby. 
  
 (b) Each of this Agreement and the Registration Rights Agreement has been duly and validly executed and delivered by Shurgard and, assuming due execution
and delivery by the other Parties hereto, constitutes the valid and binding obligation of Shurgard, enforceable against Shurgard in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, and the relief
of debtors and rules of law governing specific performance, injunctive relief, or other equitable remedies. 
  
 (c) Merger Subsidiary has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by Merger Subsidiary of this Agreement, and the consummation by Merger Subsidiary of the transactions contemplated hereby, have been duly and validly authorized and approved by the board of directors
of Merger Subsidiary and by Shurgard as the sole shareholder of Merger Subsidiary, and no other action of board of directors or shareholders of Merger Subsidiary, or other corporate proceeding on the part of Merger Subsidiary, is necessary to
authorize this Agreement and consummate the transactions contemplated hereby. 
  
 (d) This Agreement has been duly and validly executed and delivered by Merger Subsidiary and, assuming due execution and delivery by the other Parties hereto, constitutes the valid and binding obligation of Merger
Subsidiary, enforceable against Merger Subsidiary in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, and the relief of debtors and rules of law governing specific performance, injunctive relief,
or other equitable remedies. 
  
 5.4 Issuance of Shurgard Common Stock

  
 The shares of Shurgard Common Stock to be issued and
delivered in the Merger pursuant to Article II, including the additional shares, if any, to be issued pursuant to Section 2.12: (a) have been duly authorized and, when issued and delivered to the Owners in connection with the Merger, will be validly
issued, fully paid and nonassessable and free of any preemptive or similar rights, and (b) shall be duly listed for trading on the NYSE, subject only to official notice of issuance. 
  

 48 

 5.5 Consents; Noncontravention 
  
 Except for (a) any applicable requirements of the Securities Act, the Exchange Act, and state securities laws and the NYSE
and (b) the filing and recordation of the Articles of Merger as required by applicable Law, the authorization, execution and delivery by Shurgard and Merger Subsidiary of this Agreement, and the consummation of the transactions contemplated hereby
will not: (i) violate any provision of the articles of incorporation or bylaws of Shurgard or Merger Subsidiary; (ii) violate any Law or Order of any Governmental Entity or any nongovernmental self-regulatory agency to which Shurgard or any of its
subsidiaries or any of their respective properties or assets may be subject; (iii) require any filing with or permit, consent, or approval to be obtained from any Governmental Entity or any nongovernmental self-regulatory agency to which Shurgard or
any of its subsidiaries or any of their respective properties or assets may be subject; or (iv) result in any violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, result in the loss of any
benefit under, or give rise to any right of termination, cancellation, increased payments, or acceleration under, or result in the creation of any Encumbrance on any of the properties or assets of Shurgard or any of its subsidiaries under, any of
the terms, conditions, or provisions of any note, bond, mortgage, indenture, license, franchise, permit, agreement, or other instrument or obligation to which Shurgard or any of its subsidiaries is a party, or by which any of them or any of their
respective properties or assets may be bound. 
  
 5.6 Shurgard SEC Filings;
Financial Statements; Liabilities 
  
 (a) Shurgard has timely
filed all forms, reports, registration statements, prospectuses and documents required to be filed by it with the SEC under the Securities Act or the Exchange Act since January 1, 2001 (such forms, reports, registration statements, prospectuses and
documents, together with any amendments thereto, are referred to as the “Shurgard SEC Filings”). As of their respective dates, the Shurgard SEC Filings (i) were prepared in accordance with and complied as to form in all material
respects with the applicable requirements of the Securities Act and the Exchange Act, as the case may be, and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they were made, not misleading. The audited financial statements and unaudited interim financial statements included or incorporated by reference in the Shurgard SEC Filings
(A) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC), subject,
in the case of unaudited interim financial statements, to the absence of notes and to year-end adjustments, (B) complied as of their respective dates in all material respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, and (C) fairly present the consolidated financial position of Shurgard and its consolidated subsidiaries as of the dates thereof and the results of operations, cash flows, and changes in
shareholders’ equity for the periods set forth therein, except as otherwise noted therein (subject, in the case of unaudited statements, to normal and recurring year-end adjustments that were not and are not expected to have a Shurgard Material
Adverse Effect). 
  

 49 

 (b) Except as and to the extent set forth on the consolidated balance sheet of Shurgard and its
consolidated subsidiaries as of December 31, 2002, including the notes thereto, neither Shurgard nor any of its consolidated subsidiaries has any indebtedness, liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise, and whether due or to become due) except for indebtedness, liabilities and obligations (i) incurred since December 31, 2002 which would not, individually or in the aggregate, have a Shurgard Material Adverse Effect or (ii) incurred
pursuant to this Agreement. 
  
 5.7 Absence of Changes 
  
 Since December 31, 2002: 
  
 (a) Shurgard has conducted its business in the ordinary course of business,
consistent with past practice, and there has not been: (i) any changes, events or conditions with respect to Shurgard that has had a Shurgard Material Adverse Effect; (ii) any amendment of any material term of any outstanding equity security of
Shurgard; (iii) any Losses to the properties or assets of Shurgard or its subsidiaries whether or not covered by insurance, which would result in a Shurgard Material Adverse Effect; or (iv) any change in accounting methods, principles or practices
by Shurgard affecting its assets, liabilities or business. 
  
 (b)
To the Knowledge of Shurgard, Shurgard has not had any material change in its relations with its employees, vendors or tenants, in each case considered as a whole. 
  
 (c) Other than in the ordinary course of business consistent with past practice, Shurgard has not (i) made any upward
adjustments to, written up or otherwise increased the book value of any of its assets, (ii) reduced, written off or otherwise decreased the amount of any obligation or liability or (iii) to the Knowledge Shurgard, mortgaged, pledged or taken any
action that may result in the imposition of any Encumbrance on any of its assets. 
  
 5.8 Real Property Improvements 
  
 To the
Knowledge of Shurgard, other than amounts for maintenance and capital expenditures described in the Shurgard SEC Filings, (i) all of the improvements on the Shurgard Real Property (other than real property formerly leased or owned by Shurgard),
including signs located on or adjacent to such Shurgard Real Property, are in good condition and repair (subject only to ordinary wear and tear), free of infestation and free of physical, mechanical, structural, design and construction defects, (ii)
all water, electric, sewer, plumbing, heating, ventilating, gas and air conditioning servicing such improvements are in good condition and repair (subject only to ordinary wear and tear) and are free of defects, except as would not have a Shurgard
Material Adverse Effect. 
  

 50 

 5.9 Intellectual Property 
  
 To the Knowledge of Shurgard, Shurgard and its subsidiaries own or have a valid right to use all patents, trademarks,
trademark registrations, service marks, service mark registrations, trade names, copyrights, licenses, inventions, trade secrets and other intellectual property rights owned by Shurgard and its subsidiaries or otherwise used by Shurgard or its
subsidiaries in the operation of their respective businesses (the “Shurgard Intellectual Property”). To the Knowledge of Shurgard, there are no Claims to the effect that the use of the Shurgard Intellectual Property by Shurgard or
its subsidiaries infringes on the intellectual property rights of any other Person, or that any of the Shurgard Intellectual Property is invalid, which Claim, if determined adversely to the Shurgard, would have a Shurgard Material Adverse Effect. To
the Knowledge of Shurgard, Shurgard and its subsidiaries have taken reasonable measures to protect the value (and to the extent applicable, the confidentiality of) all Shurgard Intellectual Property, except where the failure to do so would have a
Shurgard Material Adverse Effect. 
  
 5.10 Environmental Matters

  
 (a) To the Knowledge of Shurgard, there has not been any
Hazardous Activity on, in, under or affecting any real property currently or formerly leased or owned or by any means controlled by Shurgard or its subsidiaries (the “Shurgard Real Property”), except as in compliance with
Environmental Law or as would not have a Shurgard Material Adverse Effect. 
  
 (b) To the Knowledge of Shurgard, the Shurgard Real Property and the operations of Shurgard and its subsidiaries with respect to the Shurgard Real Property are in compliance with applicable Environmental Law, and
Shurgard and its subsidiaries have, and are in compliance with, all Authorizations necessary to operate under all applicable Environmental Law, except as would not have a Shurgard Material Adverse Effect. 
  
 (c) To the Knowledge of Shurgard, except as set forth in the environmental
site assessments obtained by Shurgard in the ordinary course of business, neither Shurgard nor its subsidiaries has received any written or oral notice from any Governmental Entity or any other Person and, there is no pending or threatened
Proceeding that (i) alleges a violation of any Environmental Law by Shurgard or its subsidiaries (ii) alleges that Shurgard or its subsidiaries is a liable party or a potentially responsible party under CERCLA, or any other Environmental Law, (iii)
has resulted in or could result in the attachment of an environmental lien on any of the Shurgard Real Property, or (iv) alleges that Shurgard or its subsidiaries are liable for any contamination of or damage to the Environment, contamination of the
Shurgard Real Property, property damage, or personal injury based on their activities or the activities of their predecessors or third parties (whether at the Shurgard Real Property or elsewhere) involving Hazardous Materials, whether arising under
the Environmental Law, common law principles, or other legal standards. 
  

 51 

 (d) To the Knowledge of Shurgard, Shurgard is not currently subject to or has not incurred in the last
three (3) years, any Environmental, Health and Safety Liabilities, including without limitation, liabilities with regard to any real property currently lease or owned or any real property formerly leased or owned by Shurgard, except as would not
have a Shurgard Material Adverse Effect. 
  
 5.11 Taxes 
  
 (a) Shurgard and each of its subsidiaries have timely filed all Tax Returns
required to be filed, which Tax Returns are complete and correct, and neither Shurgard nor any subsidiary is in default in the payment of any Taxes which were payable pursuant to said Tax Returns or any assessments with respect thereto, except where
such failure to file or default in payment would not have a Shurgard Material Adverse Effect. With respect to such Tax Returns, Shurgard is not subject to any audit or examination in which either (i) Shurgard’s ongoing qualification as a REIT
pursuant to the Code and any corresponding state Tax authority is in question or dispute or (ii) there is any issue which, if decided against Shurgard, would result in a Shurgard Material Adverse Effect. To the Knowledge of Shurgard, each of
Shurgard and its subsidiaries has timely withheld from employee salaries, or wages or other compensation (whether or not paid in cash) and other amounts paid to creditors, independent contractors and other third parties and paid over to the
appropriate Governmental Entity all amounts required to be so withheld and paid over for all periods under all applicable Tax or other Laws, other than such amounts as would not constitute a Shurgard Material Adverse Effect. 
  
 (b) There is no dispute, claim or proposed adjustment concerning any Tax
liability of any of Shurgard or its subsidiaries either (i) claimed or raised by any Governmental Entity in writing or (ii) to the Knowledge of Shurgard, based upon personal contact with any agent of such Governmental Entity, which in either case
would have a Shurgard Material Adverse Effect. None of Shurgard or its subsidiaries is a party to any pending action, investigation, proceeding, audit, claim or assessment by or before the IRS or any other Governmental Entity in which either (A)
Shurgard’s ongoing qualification as a REIT pursuant to the Code or any corresponding state Tax authority is in question or dispute or, (B) there is any issue which, if decided against Shurgard, would result in a Shurgard Material Adverse
Effect. To the Knowledge of Shurgard, none of Shurgard or its subsidiaries has been notified that they are the subject of any pending, proposed or threatened action, investigation, proceeding, audit, claim or assessment before the IRS or any other
Governmental Entity in which either (1) Shurgard’s ongoing qualification as a REIT pursuant to the Code or any corresponding state Tax authority is in question or dispute or, (2) there is any issue which, if decided against Shurgard, would
result in a Shurgard Material Adverse Effect. There are no material claims for assessment, deficiency or collection of Taxes which have not been satisfied. The IRS has not audited any Tax Return of Shurgard since January 1, 1996. 
  

 52 

 (c) To the Knowledge of Shurgard, since January 1, 1996, no claim has been made by a Taxing authority in
a jurisdiction where Shurgard and its subsidiaries do not file Tax Returns that any of Shurgard or its subsidiaries is or may be subject to taxation by such jurisdiction, except to the extent that such claim or the filing of such Tax Returns would
not have a Shurgard Material Adverse Effect. 
  
 5.12 Compliance with Laws

  
 (a) To the Knowledge of Shurgard, Shurgard is and at all
times has been in compliance with all Laws that are or were applicable to Shurgard or to the conduct or operation of its business or the ownership, operation or use of any of its assets, except as would not have a Shurgard Material Adverse Effect.

  
 (b) To the Knowledge of Shurgard, Shurgard has not received
any notice or other communication (whether oral or written) from any Governmental Entity or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any Law, which condition has not been
previously remedied or rectified by Shurgard, except as would not have a Shurgard Material Adverse Effect. 
  
 5.13 Certain Payments 
  
 To the Knowledge of Shurgard, neither Shurgard, nor any director, officer, agent, or employee of Shurgard, nor any other Person associated with or acting for or on behalf of Shurgard has directly or indirectly made any contribution, gift,
bribe, rebate, payoff, influence payment, kick-back, or other payment to any Person, private or public, regardless of form, whether in money, property, or services (a) to obtain favorable treatment in securing business, (b) to pay for favorable
treatment for business secured, or (c) to obtain special concessions or for special concessions already obtained, for or in respect of Shurgard. 
  
 5.14 Relationships with Related Persons 
  
 To the Knowledge of Shurgard, (i) since January 1, 2002, none of the Executive Officers has received any perquisites or other personal benefits from
Shurgard, (ii) since January 1, 2002, none of the Executive Officers or directors of Shurgard or any of their immediate family has any direct or indirect interest in any transaction or series of transactions, or currently proposed transaction to
which Shurgard or any of its subsidiaries was or is to be a party, (iii) since January 1, 2000, none of the non-employee directors of Shurgard nor any Family Member of such directors has received in any fiscal year any compensation from Shurgard in
excess of $60,000 other than as an employee or director, (iv) since January 1, 2000, no Family Member of the non-employee directors of Shurgard has been an executive officer of Shurgard, (v) no member of the immediate family of an Executive Officer
is or has been an employee of Shurgard since January 1, 2003, and (vi) none of the Executive Officers or directors of Shurgard is an executive officer or more than 10% equity owner of any entity that made payment to or received payments from
Shurgard since January 1, 2002. 
  

 53 

 5.15 REIT Status 
  
 Shurgard was organized as and has qualified as a REIT under Sections 856 through 858 of the Code for each of its taxable years ended December 31, 1995
through December 31, 2002, and Shurgard will continue to qualify as a REIT under the Code up to and as of the Effective Time. 
  
 5.16 Legal Proceedings 
  
 (a) There are no Proceedings pending against Shurgard or its subsidiaries, or to which Shurgard, its subsidiaries or any of their respective properties is
subject, that (i) are required to be described in the Shurgard SEC Filings but are not described as required or (ii) challenge, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement. To the Knowledge of Shurgard, (A) no such Proceeding has been threatened, and (B) no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any
such Proceeding. 
  
 (b) Neither Shurgard or its subsidiaries is
subject to any Order that relates to the business of Shurgard or its subsidiaries, or any of the assets owned or used by Shurgard or its subsidiaries and that, in any case, would have a Shurgard Material Adverse Effect. 
  
 5.17 Brokers or Finders 
  
 Neither Shurgard nor any Person acting on behalf of Shurgard has directly or indirectly incurred, nor will incur as a result
of any action taken by or on behalf of Shurgard, any liability for brokerage or finders’ fees or agents’ commissions or any similar fees, charges or payments in connection with this Agreement, or any transaction contemplated hereby.

  
 5.18 Continuity of Business 
  
 Shurgard intends to continue the historic business of the Corporations
within the meaning of IRS regulation §1.368-l(d). 
  
 ARTICLE VI 
 COVENANTS 
  
 6.1 Access 
  
 From the date of this Agreement through the Closing Date, the Owners shall (a) give Shurgard full access, during normal business hours and upon reasonable
notice, to all Properties and other facilities of the Companies relating to the Business, (b) furnish Shurgard with all documents and information relating to the Business as may be reasonably requested by Shurgard, (iii) permit Shurgard to review
all of the books and records and Contracts of the Companies relating to the Business as may be reasonably requested by Shurgard, and (iv) fully cooperate with Shurgard in their investigation and examination of the Properties and the Business.

  

 54 

 6.2 Confidentiality 
  
 In the event that the Closing under this Agreement shall not occur, the Confidentiality Agreements dated September 23, 2002 and December 16, 2002, by and
between Shurgard and the Companies shall survive the termination of this Agreement and shall remain in full force and effect. 
  
 6.3 Conduct of Business of Companies 
  
 Except as provided in or contemplated by this Agreement, including the Unrelated Assets Transfer, the Recapitalization, the payment of the Indebtedness,
(other than the Permitted Indebtedness) and the receipt of the Contribution Notes unless Shurgard shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date of this
Agreement until the Effective Time, each of the Companies will conduct the Business, to the extent commercially reasonable, according to its ordinary and usual course of business and consistent with past practice, and each of the Companies will use
its commercially reasonable efforts to preserve the Business substantially intact, to keep available the services of its key Business Employees and to maintain satisfactory relationships with licensors, licensees, suppliers, contractors,
distributors, customers and others having material business relationships with the Business. The Trusts will promptly advise Shurgard of any material change in the present or planned business, properties, liabilities, results of operations or
financial condition of the Business. The Companies will, prior to distributing or otherwise circulating any notices, directives or other communications directed to all or groups of tenants or vendors which relate to the transactions contemplated
hereby or to the operation of the Business after the Closing, consult with Shurgard and give Shurgard reasonable opportunity to comment thereon. The Companies will provide Shurgard with copies of written communications (or a summary of the general
theme of any oral communications) to all Business Employees or groups of Business Employees which relate to the transactions contemplated hereby or to the operation of the Business after Closing. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in or contemplated by this Agreement, from the date of this Agreement until the Effective Time, none of the Companies, without the prior written consent of Shurgard (such consent not to be unreasonably
withheld, conditioned or delayed), will, except as contemplated in this Agreement, including the Unrelated Assets Transfer, the Recapitalization, the payment of Indebtedness (other than the Permitted Indebtedness) and the receipt of the Contribution
Notes: 
  
 (a) (i) make any change in its authorized or issued
and outstanding capital stock or membership interests, enter into any agreement with respect to the issuance (including warrants, rights and options) or acquisition of any of its capital stock or membership interests, or effected any
recapitalization, reclassification or similar change, (ii) amend the articles of incorporation or articles of organization of any of the Companies or 
  

 55 

 (iii) effect any material change in the accounting policies, practices or principles with respect to the business of any
of the Companies, including with respect to the preparation of Financial Statements, other than with respect to the reporting of items on the Preliminary Closing Balance Sheets and the Final Closing Balance Sheets as contemplated by Section 2.11.

  
 (b) other than in the ordinary course of business, consistent
with past practices, or in accordance with the 2003 budget provided by the Companies to Shurgard, (i) commit to make any capital expenditures, (ii) waive or commit to waive any rights, or (iii) purchase, lease, sell, exchange or otherwise dispose of
or acquire any assets. 
  
 (c) (i) make or agree to make any
increase in the compensation payable or to become payable to any Business Employee, except for (A) regularly scheduled increases in compensation payable or otherwise occurring in the ordinary course of business, consistent with past practices, (B)
increases according to the terms of an employment agreement disclosed in Section 3.9 of the Companies Disclosure Schedule, (C) retention bonuses in an aggregate amount to be determined by the Trusts, which amount shall be set forth as a liability on
the Final Closing Balance Sheets, unless paid prior to the date of the Final Closing Balance Sheets or (D) bonuses agreed to be funded by Shurgard which will not be set forth as a liability or the Final Closing Balance Sheets or (ii) make or agree
to make any material change in any Employee Benefit Plan. 
  
 (d)
other than in the ordinary course of business consistent with past practices, (i) make any upward adjustments to, write up or otherwise increase the book value of any of its assets or (ii) reduce, write off or otherwise decrease the amount of any of
its obligations or liabilities, or (iii) mortgage, pledge or take any action that may result in the imposition of any Encumbrance on any of its assets. 
  
 (e) terminate any Contract involving a total remaining commitment by or to any of the Companies of more than $10,000. 
  
 (f) agree or consent, whether in writing or otherwise, to do any of the
foregoing. 
  
 6.4 Conduct of Business of Shurgard 
  
 Except as provided in or contemplated by this Agreement, from the date of
this Agreement until the Effective Time, Shurgard will continue to engage in the self-storage business, and no other business except related businesses of a nature currently operated by Shurgard as described in the Shurgard SEC Filings, and use its
commercially reasonable efforts to preserve substantially intact its business organization, to keep available the services of its key employees and to maintain satisfactory relationships with licensors, licensees, suppliers, contractors,
distributors, customers and others having material business relationships with it. Shurgard will promptly advise the Companies of any material change in the business, properties, liabilities, results of operations or financial condition of Shurgard

  

 56 

 during such period. Without limiting the generality of the foregoing, and except as otherwise expressly provided in or
contemplated by this Agreement, from the date of this Agreement until the Effective Time, Shurgard will not, without the prior written consent of the Trusts (such consent not to be unreasonably withheld or delayed): 
  
 (a) except as set forth in Section 6.4 of the Shurgard Disclosure Schedule,
issue any shares of Shurgard Common Stock for cash, the gross proceeds of which would exceed $70 million, unless the offering price of such Shurgard Common Stock equals or exceeds $31.00 per share; 
  
 (b) amend its articles of incorporation; 
  
 (c) alter or revise its accounting principles, procedures, methods or
practices in any material respect, except as required by applicable Law or by a change in GAAP and concurred with by Shurgard’s independent public accountants; 
  
 (d) other than in the ordinary course of business consistent with past practice, (i) make any upward adjustment, write up or
otherwise increase the book value of any of its assets, or (ii) reduce, write off or otherwise decrease the amount of any of its obligations or liabilities; 
  
 (e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation or other reorganization or sell all or substantially all of its
assets; 
  
 (f) knowingly take any action that would result in a
failure to maintain the trading of Shurgard Common Stock on the NYSE; or 
  
 (g) agree or consent, whether in writing or otherwise, to do any of the foregoing. 
  
 6.5 No Solicitation 
  
 From the date hereof until the Effective Time or the earlier termination of this Agreement, the Trusts shall not, and shall cause each of the Companies
and their respective officers, directors, employees, representatives, agents, or Affiliates (including, but not limited to any investment banker, attorney, or accountant retained by any of the Trusts or Companies), not to, directly or indirectly,
solicit, initiate, participate in or knowingly encourage in any way discussions or negotiations with, or knowingly provide any nonpublic information to, any corporation, partnership, person, or other entity or group (other than Shurgard or any
Affiliate or agent of Shurgard) concerning any proposed merger, share exchange, sale of material assets or other business combination transaction, or otherwise attempt to make or implement or knowingly encourage any such transaction. The Trusts will
promptly notify Shurgard if the Companies receive any proposal or inquiry with respect to any of the foregoing transactions and identify the party making any such proposal or inquiry. Notwithstanding the foregoing, the Owners and the Companies shall
be permitted to (a) complete the Unrelated Assets Transfer and Recapitalization as contemplated by this Agreement or (b) otherwise sell or dispose of the Unrelated Assets. 
  

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 6.6 Third Party Consents 
  

Each of the Companies will, at its own cost and expense, use all commercially reasonable efforts to obtain all approvals and consents of all third
parties necessary on the part of the Companies to promptly consummate the transactions contemplated hereby. Shurgard will cooperate with the Companies in connection with obtaining such approvals and consents. Shurgard will, at its own cost and
expense, use all commercially reasonable efforts to obtain all approvals and consents of all third parties necessary on the part of Shurgard to promptly consummate the transactions contemplated hereby. The Owners and the Companies will cooperate
with Shurgard in connection with obtaining such approvals and consents. 
  
 6.7
Expenses 
  
 Whether or not the Merger is consummated, each
party will pay all costs and expenses incurred by such party in connection with this Agreement or the transactions contemplated hereby, including, without limitation, all legal, accounting, investment banking, broker, financial advisory, consulting
and all other fees and expenses of third parties. In the event that the Merger is consummated, all expenses incurred by any of the Companies will be reflected in the Preliminary Closing Balance Sheets and the Final Closing Balance Sheets unless paid
prior to the date of the Final Closing Balance Sheets. Notwithstanding the foregoing, all costs and expenses related to surveys, environmental reports and title commitments and/or title insurance relating to the Properties shall be borne by
Shurgard. 
  
 6.8 Further Actions 
  
 Subject to the terms and conditions herein provided and without being
required to waive any conditions herein (whether absolute, discretionary, or otherwise), each of the Parties hereto agrees to use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable to consummate and make effective the transactions contemplated by this Agreement. In case at any time after the Effective Time any further action is necessary to carry out the purposes of this Agreement, the
proper officers and directors of each Party to this Agreement shall take all such necessary action. 
  
 6.9 Regulatory Approvals 
  
 The Companies, the Trusts and Shurgard each agree to use commercially reasonable efforts to take, or cause to be taken, all appropriate action, and do, or cause to be done, all things as may be necessary under federal or state securities
laws, and will file as soon as reasonably practicable and, if appropriate, use commercially reasonable efforts to have 
  

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 declared effective or approved all documents and notifications with the SEC and other Governmental Entities that they
deem necessary or appropriate for, the consummation of the Merger or any of the other transactions contemplated hereby, and each Party shall give the other information reasonably requested by such other Party pertaining to it and its Affiliates to
enable such other Party to take such actions. 
  
 6.10 Certain Notifications

  
 Each of the Companies and the Trusts shall promptly
notify Shurgard in writing of the occurrence of any event that will or could reasonably be expected to result in the failure by any of the Companies or the Trusts to satisfy any of the conditions specified in Section 7.1 or 7.2. Shurgard shall
promptly notify the Trusts in writing of the occurrence of any event that will or could reasonably be expected to result in the failure by Shurgard to satisfy any of the conditions specified in Section 7.1 or 7.3. 
  
 6.11 NYSE Listing Application 
  
 Shurgard shall promptly prepare and submit to the NYSE a listing application
for the Shurgard Common Stock to be issued in the Merger pursuant to Article II of this Agreement, and shall use commercially reasonable best efforts to obtain, prior to the Effective Time, approval for the listing of such Shurgard Common Stock,
subject only to official notice to the NYSE of issuance. The Trusts shall cooperate with Shurgard in such listing application. 
  
 6.12 Employee Matters 
  
 (a) From and after the Effective Time, Shurgard shall employ all of the Identified Employees on terms substantially consistent with Shurgard’s
current employment practices and shall make available to all Identified Employees all “employee benefit plans” (as defined in Section 3(3) of ERISA) sponsored or maintained or contributed to by Shurgard or any ERISA Affiliate of Shurgard
(the “Shurgard Employee Benefit Plans”). 
  
 (b)
With respect to any Shurgard Employee Benefit Plans in which the Identified Employees may be eligible to participate after the Effective Time, Shurgard shall, or shall cause the Surviving Corporation to, (i) waive any limitations as to pre-existing
conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Identified Employees under such Shurgard Employee Benefit Plans (provided, however, that no such waiver shall apply to a
pre-existing condition, exclusion or waiting period applicable to any Identified Employee to the extent that he or she was, as of the Effective Time, excluded from participation or coverage in an Employee Benefit Plan of the Companies by nature of
such pre-existing condition, exclusion or waiting period), and (ii) recognize all service of the Identified Employees with the Companies, for all purposes (including eligibility and vesting) other than benefit accrual, in any such Shurgard Employee
Benefit Plans (other than the Employee Stock Ownership Plan of Shurgard). 
  

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 6.13 Tax Free Reorganization 
  
 Prior to the Effective Time, each Party shall use its reasonable best efforts to cause the Merger of the Corporations into
the Surviving Corporation to qualify as a reorganization within the meaning of the provisions of Section 368 of the Code (“368 Reorganization”) and shall not knowingly take any action that would cause the Merger not to so qualify.
Shurgard shall not knowingly take or knowingly cause the Surviving Corporation to take any action following the Effective Time that would cause the Merger not to qualify as a 368 Reorganization. 
  
 6.14 Shurgard Non-Compete 
  
 In the event that the Closing under this Agreement shall not occur, Shurgard
shall not, prior to January 20, 2005 (a) hire any of the employees of the Companies or Superior Management or (b) directly or indirectly (i) develop any self-storage facilities in the Twin Cities metropolitan area or (ii) solicit, initiate or
encourage any party to consider or discuss with Shurgard any interest in or other transaction relating to any self-storage facilities in the Twin Cities metropolitan area, whether directly or indirectly, through a sale of assets, merger, purchase of
equity interest, business combination, joint venture, management contract, financing transaction, lease or otherwise. 
  
 6.15 Schwalbach and Stotesbery Non-Compete 
  
 (a) For a period of two (2) years after the Effective Date, neither of Schwalbach nor Stotesbery, whether alone or through any Affiliate, shall engage in,
be employed by, perform services for, participate in the ownership, management, control or operation of, or otherwise be connected with, either directly or indirectly, the self storage business or any self storage facility (including without
limitation the acquisition, ownership, development, operation and/or disposition of self storage facilities) in the State of Minnesota, other than (i) as a shareholder of Shurgard or (ii) through the ownership of less than 2% of the outstanding
securities of a publicly traded company. 
  
 (b) In the event of a
breach of Section 6.15(a) by Schwalbach or Stotesbery, Shurgard shall be entitled, in addition to any remedies they might have under this Agreement or at Law, to injunctive and other equitable relief, including specific performance, to prevent or
curtail any threatened or actual breach of Section 6.15(a) by Schwalbach or Stotesbery. 
  

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 ARTICLE VII 
 CLOSING CONDITIONS 
  
 7.1 Conditions to
Obligations of Shurgard, Merger Subsidiary, the Companies and the Owners 
  
 The respective obligations of each Party to consummate the Merger shall be subject to the fulfillment at or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part, to
the extent permitted by applicable Law: 
  
 (a) None of Shurgard,
Merger Subsidiary, the Companies or the Owners shall be subject to any final order, decree, or injunction of a court of competent jurisdiction within the United States that is then in effect and has the effect of making the Merger illegal or
otherwise prohibiting the consummation of the Merger; provided that each of the Parties shall have used all commercially reasonable efforts to prevent the entry of any such order, decree or injunction. 
  
 (b) The shares of Shurgard Common Stock to be delivered pursuant to this
Agreement shall have been duly authorized for listing on the NYSE, subject only to official notice of issuance. 
  
 (c) All Authorizations, consents, approvals, exemptions and filings required by any Governmental Entities or any other Person in connection with the
Merger and the transactions contemplated hereby shall have been made or obtained and the Parties shall have received satisfactory evidence thereof. 
  
 7.2 Conditions to Obligations of Shurgard and Merger Subsidiary 
  
 The respective obligations of Shurgard and Merger Subsidiary to consummate the Merger shall be subject to the fulfillment at or prior to the Closing of
the following additional conditions, any or all of which may be waived by Shurgard, in whole or in part, to the extent permitted by applicable Law: 
  
 (a) Each of the representations and warranties of the Trusts and the Companies contained in this Agreement shall be true and correct as of the Closing as
though such representations and warranties were made at such time, except that those representations and warranties that address matters only as of the date hereof or another particular date shall remain true and correct as of such date, and except
in any case for any inaccuracies of representations and warranties that, individually and in the aggregate, have not had a material adverse effect on the business, results of operations, financial condition or prospects of the Companies, taken as a
whole. Shurgard shall have received a certificate to the foregoing effect signed by the Trusts and an authorized officer of the Companies. 
  
 (b) The Trusts and the Companies shall have performed and complied in all material respects with all covenants required by this Agreement to be performed
or complied with by them on or prior to the Closing, and Shurgard shall have received a certificate to such effect signed by the Trusts and an authorized officer of the Companies. 
  

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 (c) Briggs and Morgan, P.A. counsel for the Owners and the Companies, shall have delivered to Shurgard a
written opinion, dated the Closing Date, in substantially the form of the attached Exhibit G. 
  
 7.3 Conditions to Obligations of the Trusts and Companies 
  
 The obligation of the Trusts and the Companies to consummate the Merger shall be subject to the fulfillment at or prior to the Closing of the following
additional conditions, any or all of which may be waived by the Owner and the Companies, in whole or in part, to the extent permitted by applicable Law: 
  
 (a) Each of the representations and warranties of Shurgard and the Merger Subsidiary contained in this Agreement, shall be true and correct as of the
Closing as though such representations and warranties were made at such time, except that those representations and warranties that address matters only as of a particular date shall remain true and correct as of such date, and except in any case
for any inaccuracies of representations and warranties that, individually or in the aggregate, have not had a Shurgard Material Adverse Effect. The Companies and the Trusts shall have received a certificate to the foregoing effect signed by the
President or other authorized officer of Shurgard. 
  
 (b)
Shurgard and Merger Subsidiary shall have performed and complied in all material respects with all covenants required by this Agreement to be performed or complied with by them on or prior to the Closing, and the Owners shall have received a
certificate to such effect signed by the President or other authorized officer of Shurgard. 
  
 (c) Shurgard shall continue to qualify as a REIT under Sections 856 through 858 of the Code. 
  
 (d) Perkins Coie LLP, counsel for Shurgard, shall have delivered to the Owners a written opinion, dated the Closing Date, in substantially the form of the
attached Exhibit H. 
  
 ARTICLE VIII 
 TERMINATION 
  
 8.1 Termination 
  
 This Agreement may be terminated at any time prior to the Effective Time only: 
  
 (a) by mutual written consent of Shurgard and the Companies; 
  
 (b) by either Shurgard or the Companies if the Merger shall not have been consummated on or before June 30, 2003; provided,
however, that the right to terminate this 
  

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 Agreement under this subsection (b) shall not be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur on or before such date; 
  
 (c) by either the Shurgard or the Companies, if there shall be any Law that makes consummation of the Merger illegal or if any Order enjoining Shurgard or
the Companies from consummating the Merger is entered and such Order shall become final and nonappealable; provided, however, that the party seeking to terminate this Agreement pursuant to this subsection (c) shall have used all commercially
reasonable efforts to remove such Order; 
  
 (d) by the Companies,
in the event of a material breach by Shurgard of any representation, warranty or agreement contained herein that has not been cured, or reasonable efforts to cure such breach have not been taken, within thirty (30) days of receipt by Shurgard of
notice of such breach or if such breach is not curable by June 30, 2003; or 
  
 (e) by Shurgard, in the event of a material breach by the Companies or the Trusts of any representation, warranty or agreement contained herein that has not been cured, or reasonable efforts to cure such breach have
not been taken, within thirty (30) days of receipt by Shurgard of notice of such breach or it such breach is not curable by June 30, 2003. 
  
 8.2 Effect of Termination 
  
 Except as provided in the next sentence of this Section 8.2, in the event of the termination of this Agreement pursuant to provision of Section 8.1, the
obligations of the Parties to consummate the Merger will expire, and none of the Parties will have any further obligations under this Agreement except pursuant to Sections 6.2, 6.7, 6.14 and 10.10. Nothing herein shall relieve any party from
liability for the willful breach of any of its representations, warranties, covenants or agreements set forth in this Agreement. 
  
 ARTICLE IX 
 INDEMNIFICATION

  
 9.1 Survival 
  
 (a) All representations and warranties contained in this Agreement or in any
certificate delivered pursuant to this Agreement shall survive the Effective Time until the second anniversary of the Effective Time; provided, however, that (i) the representations and warranties of the Trusts and the Companies set forth in
Sections 3.1, 3.2, 3.3, 3.4, and of the Trusts set forth in Sections 4.1, 4.3, 4.4 and 4.5 shall survive indefinitely, (ii) the representations and warranties of Shurgard set forth in Sections 5.1, 5.2, 5.3 and 5.4 shall survive indefinitely, (iii)
the representations and warranties of the Trusts and the Companies set forth in Section 3.12 shall survive until the expiration of the applicable statute of limitations, and (iv) any claim relating to fraud shall survive the Effective Time
indefinitely. 
  

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 The covenants and agreements contained in this Agreement shall survive the Closing and shall continue until all
obligations with respect thereto shall have been performed or satisfied or shall have been terminated in accordance with their terms. Without limiting the generality of the foregoing, the indemnification obligations set forth in Section 9.2(a) (v),
(vi) and (vii) shall survive and continue indefinitely and the indemnification obligations set forth in Sections 9.2(a)(iii) and (iv) shall survive and continue for the applicable statute of limitations. 
  
 (b) The indemnification obligations contained in this Article IX shall
terminate on the expiration of the applicable survival periods set forth in Section 9.1(a); provided, however, that such indemnification obligations shall not terminate with respect to a particular matter as to which, before the expiration of such
survival period, the Party seeking indemnification has made a claim by delivering written notice of such claim to the other Party or Parties, which notice shall specify in reasonable detail the nature and amount of such claim, shall state the basis
on which such claim is made and shall include, if applicable, supporting documentation. 
  
 9.2 Indemnification by Trusts 
  
 (a) Subject to
Sections 9.1 and 9.4, from and after the Effective Time, each of the Trusts, jointly and severally, shall indemnify, defend and hold Shurgard, the Surviving Corporation and their Affiliates (the “Shurgard Indemnified Parties”)
harmless from and against, and shall reimburse the Shurgard Indemnified Parties for, any and all losses, obligations, deficiencies, damages, liabilities, claims, judgments, orders, awards, fines, penalties, and costs or expenses (including, without
limitation, the amount of any settlement entered into pursuant hereto, and all reasonable legal, accounting and other expenses) (“Losses”) arising out of, based on or in connection with: 
  

	 	(i)	any inaccuracy in any representation or breach of any warranty made by the Companies or the Trusts in this Agreement or in any certificate delivered pursuant hereto (except
representations and warranties made by the Trusts in Article IV); 

  

	 	(ii)	any failure by any of the Companies or the Trusts to perform or comply with any covenant or agreement in this Agreement; 

  

	 	(iii)	any liability of any of the Companies or Superior Management for Federal Income Taxes assessed during, attributable to or arising out of a taxable period of the Companies or
Superior Management ending on or prior to the Effective Time (for any taxable period that includes but does not end on the Effective Time, that portion of such liabilities for the period up to the Effective Time); 

  

	 	(iv)	without limiting the generality of the indemnification based on Section 9.2(a)(iii), any liability of the Shurgard Indemnified Parties, for 

  

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 Federal Income Taxes attributable to or arising out of any inaccuracy in any representation or breach of
any warranty made by the Companies or the Trusts in Section 3.12 or Section 2.10(e); 
  

	 	(v)	any liability of the Companies or Superior Management (i) to any of their employees, past or present, excluding any amounts owed for payroll taxes due on behalf of any such
employees which are governed by 9.2(a)(iii), other than liabilities of the Surviving Corporation to the Identified Employees arising after the Effective Time, or (ii) arising out of or in connection with any Employee Benefit Plan;

  

	 	(vi)	any liability of any nature whatsoever arising out of the operation or ownership of any real property included in the Unrelated Assets or otherwise attributable to or related to the
Unrelated Assets, including any liability of any nature whatsoever of Superior Management and including any liability arising from the Unrelated Assets Transfer, the repayment of Indebtedness or the Recapitalization, other than liability relating to
the Permitted Indebtedness; and 

  

	 	(vii)	any liability to Lehman Brothers incurred in connection with the transactions contemplated by this Agreement. 

  
 (b) Subject to Sections 9.1 and 9.4, from and after the Effective Time, each
of the Trusts, severally and not jointly, shall indemnify, defend and hold the Shurgard Indemnified Parties harmless from and against, and shall reimburse the Shurgard Indemnified Parties for any and all Losses arising out of, based on or in
connection with any inaccuracy in any representation or breach of any warranty made by such Trust in Article IV of this Agreement. 
  
 (c) For purposes of determining the amount of any Losses for this Section 9.2 only, losses, obligations, deficiencies, damages, liabilities, claims,
judgments, orders, awards, fines, penalties, and costs or expenses (including, without limitation, the amount of any settlement entered into pursuant hereto, and all reasonable legal, accounting and other expenses) arising from breaches of
representations and warranties contained in any particular Section of Article III that are qualified as to materiality shall be deemed to be material only at such time as they exceed $100,000 in the aggregate for that particular Section, at which
time, the entire amount of such losses, obligations, deficiencies, damages, liabilities, claims, judgments, orders, awards, fines, penalties, and costs or expenses (including, without limitation, the amount of any settlement entered into pursuant
hereto, and all reasonable legal, accounting and other expenses) shall be counted as Losses. 
  
 9.3 Indemnification by Shurgard 
  
 Shurgard shall indemnify, defend and hold the Owners and their heirs, personal representatives, successors and assigns (the “Owners Indemnified Parties”) harmless from 
  

 65 

 and against, and shall reimburse the Owners Indemnified Parties, for, any and all Losses arising out of, based on or in
connection with (a) any inaccuracy in any representation or breach of any warranty made by Shurgard in this Agreement or in any certificate delivered pursuant hereto, or (b) any failure by Shurgard to perform or comply with any covenant or agreement
in this Agreement. 
  
 9.4 Limitations on Amount 
  
 (a) The Shurgard Indemnified Parties shall not be entitled to receive any
indemnification payment with respect to any claims for indemnification under Section 9.2 until the aggregate Losses for which such Shurgard Indemnified Parties would be otherwise entitled to receive indemnification exceed $250,000 (the
“Deductible”), and then only to the extent that such aggregate Losses exceed the Deductible. Notwithstanding the foregoing, Losses incurred by Shurgard Indemnified Parties arising out of or with respect to matters set forth in
Section 9.2(a) (v), (vi) and (vii) shall not be subject to the Deductible, but shall instead be indemnified by the Trusts from the first dollar incurred. 
  
 (b) The aggregate amount for which the Trusts shall be liable for indemnification pursuant to Section 9.2 shall not exceed $10,000,000; provided, however,
that the limitation set forth in this Section 9.4(b) shall not apply to any right to indemnification based on (i) Section 9.2(a)(iii) or (iv) which shall, instead, be governed by Section 9.4(c) or (ii) based on Sections 9.2(a)(v), (vi) or (vii), or
based on fraud which shall have no limitation. 
  
 (c) The
aggregate amount for which the Trusts shall be liable for indemnification pursuant to Section 9.2(a)(iii) and (iv) shall not exceed $40,000,000. 
  
 9.5 Procedure for Third Party Claims 
  
 (a) The Shurgard Indemnified Parties and the Owners Indemnified Parties, as applicable (the “Indemnified Parties”) agree to give prompt
notice to the other Parties (the “Indemnifying Parties”) of the assertion of any claim by third party or the commencement of any suit, action or proceeding by a third party (a “Third Party Claim”) in respect of
which indemnity may be sought under this Article IX; provided, that the failure to give such notice shall not affect the rights of the Indemnified Parties except to the extent the Indemnifying Parties are materially prejudiced by such failure. The
notice shall state the information then available regarding the amount and nature of such claim, liability or expense and shall specify the provision or provisions of this Agreement under which the liability or obligation is asserted. 
  
 (b) If the Indemnifying Parties admit that the Indemnified Parties are
entitled to indemnification with respect to such claim, then the Indemnifying Parties shall have the right, on written notice given to Indemnified Parties within thirty (30) days after receipt of the notice from the Indemnified Parties of any Third
Party Claim, to assume the defense or handling of such Third Party Claim, at the Indemnifying Parties sole expense, 
  

 66 

 with counsel reasonably acceptable to the Indemnified Parties in connection with conducting the defense or handling of
such Third Party Claim, and the Indemnifying Parties shall defend or handle the same in consultation with the Indemnified Parties, shall keep Indemnified Parties timely apprised of the status of such Third Party Claim and shall not, without the
prior written consent of the Indemnified Parties, directly or indirectly assume any position or take any action that would impose any obligation of any kind on or restrict the actions of the Indemnified Parties in any material respect. The
Indemnifying Parties shall not, without the prior written consent of the Indemnified Parties, which consent shall not be unreasonably withheld, conditioned or delayed, agree to a settlement of any Third Party Claim that could directly or indirectly
lead to liability or create any financial or other obligation on the part of the Indemnified Parties for which the Indemnified Parties are not entitled to indemnification hereunder. The Indemnified Parties shall cooperate with the Indemnifying
Parties and shall be entitled to participate in the defense or handling of such Third Party Claim with its own counsel and at its own expense. Notwithstanding the foregoing, in the event the Indemnifying Parties fail to conduct the defense or
handling of any Third Party Claim in good faith after having assumed such defense or handling, then the provisions of Section 9.5(c) shall govern. 
  
 (c) If the Indemnifying Parties do not give written notice to the Indemnified Parties, within thirty (30) days after receipt of the notice from the
Indemnified Parties of any Third Party Claim, of their election to assume the defense or handling of such Third Party Claim, then the Indemnified Parties may, at the Indemnifying Parties’ expense, select counsel in connection with conducting
the defense or handling of such Third Party Claim and defend or handle such Third Party Claim in such manner as it may deem appropriate, provided, however, that the Indemnified Parties shall keep the indemnifying party timely apprised of the status
of such Third Party Claim and shall not settle such Third Party Claim without the prior written consent of the Indemnifying Parties which consent shall not be unreasonably withheld, conditioned or delayed. If the Indemnified Parties defend or handle
such Third Party Claim, the Indemnifying Parties shall cooperate with the Indemnified Parties and shall be entitled to participate in the defense or handling of such Third Party Claim with its own counsel and at their own expense. 
  
 ARTICLE X 
 GENERAL PROVISIONS 
  
 10.1 Amendment and Modification 
  
 Subject to
applicable Law, this Agreement may be amended, modified or supplemented only by written agreement of Shurgard, Merger Subsidiary, the Companies and the Trusts at any time prior to the Effective Time with respect to any of the terms contained herein.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties hereto. 
  

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 10.2 Tax Matters 
  
 The following provisions shall govern the allocation of responsibility as between the Companies and Shurgard for certain Tax matters following the
Closing. 
  
 (a) The Parties acknowledge that the subchapter S
election currently in effect for the Corporations will be terminated as of the consummation of the Merger. The income of the LLCs and the Corporations for the period commencing January 1, 2003 and ending as of the date of the Closing will be
included in the Tax Returns of the Companies. The income generated by Surviving Corporation following the date of Closing will be included in the Shurgard Tax Returns. 
  
 (b) The Trusts shall prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Companies for all
periods ending on or prior to the Closing Date which are filed after the Closing Date and shall pay all Taxes due with respect to such Tax Returns, to the extent such Taxes are not included in or are in excess of the amounts reserved therefor on the
Final Closing Balance Sheets, as finally determined in accordance with Section 2.11. The Trusts shall permit Shurgard to review and comment on each such Tax Return described in the preceding sentence prior to filing. To the extent required by
applicable law, the Owners shall include any income, gain, loss, deduction or other tax items for such periods on their Tax Returns in a manner consistent with the Schedule K-1s prepared for the Owners for such periods. 
  
 10.3 Obligations of Schwalbach and Stotesbery 
  
 (a) Schwalbach formed and currently controls the Schwalbach Trust and will
obtain substantial benefits from the consummation of the Merger. Accordingly, the obligations of the Schwalbach Trust, including the obligations set forth in Article IX, shall be the joint and several obligations of Schwalbach and the Schwalbach
Trust; provided, however, that with respect to obligations of the Schwalbach Trust other than those set forth in Article IX, the obligations of Schwalbach under this Agreement shall be limited to the amount of any assets removed from the Schwalbach
Trust after the date of this Agreement and prior to the Effective Date. 
  
 (b) Stotesbery formed and currently controls the Stotesbery Trust and will obtain substantial benefits from the consummation of the Merger. Accordingly, the obligations of the Stotesbery Trust, including the obligations set forth in Article
IX, shall be the joint and several obligations of Stotesbery and the Stotesbery Trust; provided, however, that with respect to obligations of the Stotesbery Trust other than those set forth in Article IX, the obligations of Stotesbery under this
Agreement shall be limited to the amount of any assets removed from the Stotesbery Trust after the date of this Agreement and prior to the Effective Date. 
  

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 10.4 Waiver of Compliance; Consents 
  
 Any failure of Shurgard or Merger Subsidiary on the one hand, or the Companies and the Owners on the other hand, to comply
with any obligation, covenant, agreement, or condition herein may be waived by the Companies and the Trusts or Shurgard, respectively, only by a written instrument signed by an officer of the Party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement, or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf
of any Party hereto, such consent shall be given in writing. Merger Subsidiary agrees that any consent or waiver of compliance given by Shurgard hereunder shall be conclusively binding upon Merger Subsidiary, whether or not given expressly on their
behalf. 
  
 10.5 Notices 
  
 All notices and other communications hereunder shall be in writing and shall
be deemed given when delivered personally by commercial courier service or otherwise, or by telecopier, or three (3) days after such notice is mailed by registered or certified mail (return receipt requested) to the Parties at the following
addresses (or at such other address for a Party as shall be specified by like notice): 
  
 (a) if to Shurgard or Merger Subsidiary or, after the Closing, to the Companies, to: 
  
 Shurgard Storage Centers, Inc. 
 1155 Valley Street 
 Suite 400 
 Seattle, WA 98109-4426 
 Attention: General Counsel 
 FAX: (206)624-1645 
  
 With a copy to: 
  
 Perkins Coie LLP 
 1201 Third Avenue 
 40th Floor 
 Seattle, WA 98101 
 Attention: Michael E. Stansbury 
 FAX: (206)583-8500 
  
 and 
  

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 (b) If to the Owners or, prior to the Closing, the Companies, to: 
  
 Gerald A. Schwalbach 
 Patrick L. Stotesbery 
 601 Carlson Parkway 
 Suite 350 
 Minnetonka, MN 55305 
 FAX: (952) 404-3399 
  
 with a copy to:

  
 Briggs and Morgan P.A. 
 2200 IDS Center 
 80 South 8th Street 
 Minneapolis, MN 55402 
 Attention: Brian D. Wenger, Esq. 
 FAX: (612) 977-8650 
  
 10.6 Assignment 
  
 This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assigned by any of the Parties hereto without the prior written consent of the other Parties. This Agreement is not intended to confer
upon any other person, except the Parties hereto, any rights or remedies hereunder, and no third person shall be a third party beneficiary of this Agreement. 
  
 10.7 Governing Law 
  
 This Agreement shall be governed by the laws of the State of Washington, without regard to conflicts of law principles. 
  
 10.8 Counterparts 
  
 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. The counterparts to this Agreement may be executed and delivered by facsimile and the recipient may rely upon such facsimile as if it were an original. 
  
 10.9 Interpretation 
  
 The Table of Contents, article and section headings contained in this Agreement are inserted for reference purposes only and
shall not affect the meaning or interpretation of this Agreement. This Agreement shall be construed without regard to any presumption or other rule requiring the resolution of any ambiguity regarding the interpretation or construction hereof against
the Party causing this Agreement to be drafted. 
  

 70 

 10.10 Publicity 
  
 Upon execution of this Agreement, the Parties shall jointly issue a press release, as agreed upon by them. The Parties intend that all future statements
or communications to the public or press regarding this Agreement or the Merger will be mutually agreed upon by them, except as provided in the following sentence. None of the Parties shall, without such mutual agreement or the prior consent of the
others, file any documents or issue any statement or communication to the public or to the press regarding this Agreement, or any of the terms, conditions, or other matters with respect to this Agreement, except as required by Law or the rules of
the NYSE and then only (a) upon the advice of such Party’s legal counsel; (b) to the extent required by Law or the rules of the NYSE; and (c) following prior notice to, and consultation with, the other Party (which notice shall include a copy
of the proposed statement or communication to be issued to the press or public). The foregoing shall not restrict Shurgard’s or the Companies’ communications with their employees or customers in the ordinary course of business. 

 
 10.11 Entire Agreement 
  
 This Agreement, including the exhibits and schedules hereto, embodies the
entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and the understandings between the Parties with respect to such subject matter, including the
Term Sheet dated January 20, 2003 by and between Shurgard and the Trusts, but excluding the Confidentiality Agreement between Shurgard and the Companies dated December 16, 2002 and the Confidentiality Agreements between the Companies and Shurgard
dated September 23, 2002 and December 16, 2002, which Confidentiality Agreements shall terminate on the Effective Date, only upon the Closing of the transactions contemplated hereby. 
  
 10.12 Severability 
  
 If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any
Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as
closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the fullest extent possible. 
  

 71 

 10.13 Specific Performance 
  
 The Parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed
in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at Law or in equity. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 72 

 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement and Plan of Merger as of the
date first above written. 
  

			
	SHURGARD STORAGE CENTERS, INC.
		
	 By:
	 	 /s/ Harrell Beck

	 Name:
	 	Harrell Beck
	 Title:
	 	Senior Vice President
	
	SSCI MINNESOTA CORPORATION
		
	 By:
	 	 /s/ Harrell Beck

	 Name:
	 	Harrell Beck
	 Title:
	 	Senior Vice President
	
	TWO S PROPERTIES, INC.
		
	 By:
	 	  

	 Name:
	 	Gerald A. Schwalbach
	 Title:
	 	Chairman
	
	THREE S PROPERTIES, INC.
		
	 By:
	 	  

	 Name:
	 	Gerald A. Schwalbach
	 Title:
	 	Chairman
	
	SUPERIOR STORAGE I, LLC
		
	 By:
	 	  

	 Name:
	 	Gerald A. Schwalbach
	 Title:
	 	Chairman

  
 [Signature Page to Amended and Restated Merger Agreement] 

			
	SUPERIOR STORAGE II, LLC.
		
	 By:
	 	 /s/ Gerald A. Schwalbach

	 Name:
	 	Gerald A. Schwalbach
	 Title:
	 	Chairman
	
	SUPERIOR WOODBURY, LLC.
		
	 By:
	 	 /s/ Gerald A. Schwalbach

	 Name:
	 	Gerald A. Schwalbach
	 Title:
	 	Chairman
	
	Revocable Trust of Patrick C. Stotesbery Created under Agreement dated January 27, 1999
		
	 By:
	 	 /s/ Patrick L. Stotesbery

	 	 	Patrick L. Stotesbery, Trustee
	
	Revocable Trust of Gerald A. Schwalbach Created under Agreement dated December 23, 1998
		
	 By:
	 	 /s/ Gerald A. Schwalbach

	 	 	Gerald A. Schwalbach, Trustee
	
	 /s/ Gerald A. Schwalbach

	 Gerald A. Schwalbach, individually

	
	  

 Patrick L. Stotesbery, individually

  
 [Signature
Page to Amended and Restated Merger Agreement] 

			
	SUPERIOR STORAGE II, LLC.
		
	 By:
	 	  

	 Name:
	 	Gerald A. Schwalbach
	 Title:
	 	Chairman
	
	SUPERIOR WOODBURY, LLC.
		
	 By:
	 	  

	 Name:
	 	Gerald A. Schwalbach
	 Title:
	 	Chairman
	
	Revocable Trust of Patrick C. Stotesbery Created under Agreement dated January 27, 1999
		
	 By:
	 	 /s/ Patrick L. Stotesbery

	 	 	Patrick L. Stotesbery, Trustee
	
	Revocable Trust of Gerald A. Schwalbach Created under Agreement dated December 23, 1998
		
	 By:
	 	  

	 	 	Gerald A. Schwalbach, Trustee
	
	  

 Gerald A. Schwalbach, individually

	
	 /s/ Patrick L. Stotesbery

	 Patrick L. Stotesbery, individually

  
 [Signature
Page to Amended and Restated Merger Agreement]Securities Purchase Agreement dated June 11, 2003

 Exhibit 10.26 
  
 11 June 2003 
  

  
 SECURITIES PURCHASE AGREEMENT 

 

  
 SSC BENELUX INC. 
  
 as Buyer 
  
 REIB EUROPE
OPERATOR LIMITED 
  
 and 
  
 REIB INTERNATIONAL HOLDINGS LIMITED 
  
 as Seller 

 CONTENTS 
  

					
	 CLAUSE

	  	PAGE

			
	 1.
	  	Interpretation	  	3
			
	 2.
	  	Sale And Purchase	  	5
			
	 3.
	  	Purchase Price And Payment	  	6
			
	 4.
	  	Conditions Precedent	  	7
			
	 5.
	  	Closing	  	8
			
	 6.
	  	Representations And Warranties Of The Buyer - Indemnification - Limitations	  	9
			
	 7.
	  	Representations And Warranties Of The Seller - Indemnification - Limitations	  	10
			
	 8.
	  	Claims	  	11
			
	 9.
	  	Assumption Of Liabilities	  	11
			
	 10.
	  	Covenants	  	12
			
	 11.
	  	Miscellaneous Provisions	  	12
			
	 12.
	  	Governing Law And Jurisdiction	  	14

  
 Schedule 1 -    WAIVER LETTERS 
  

 - 2 - 

 SECURITIES PURCHASE AGREEMENT 
  
 BETWEEN: 
  

	1.	REIB EUROPE OPERATOR LIMITED, a company incorporated in England, having its principal office at Winchester House, 1 Great Winchester Street, London EC2N 2DB, U.K. (“REIB
GP”); 

  

	2.	REIB INTERNATIONAL HOLDINGS LIMITED, a company incorporated in England, having its principal office at Winchester House, 1 Great Winchester Street, London EC2N 2DB, U.K. (“REIB
LLP”) 

  
 (REIB GP and REIB LLP are
hereinafter together referred to as the “Seller” or the “Sellers”); 
  
 AND 
  

	3.	SSC BENELUX INC., a company organized and existing under the laws of the State of Washington, USA, having its registered office at 1155 Valley Street, Suite 400, Seattle, Washington
98109-4426, USA (the “Buyer”). 

  
 WHEREAS: 
  

	A.	Shurgard Self Storage SCA (previously named SSC Benelux & Co. S.C.A.) is a Belgian company (société en commandite par actions) having its registered office
at Quai du Commerce 48, 1000 Brussels, Belgium, registered with the commercial registry of Brussels under n° 587.679 (the “Company”). 

  

	B.	Each of the Sellers and the Buyer hold equity participations in the Company. The Sellers and the Buyer are parties to a Joint Venture Agreement, dated 8 October 1999, as amended by
an addendum, dated July 31, 2000 and an addendum, dated 24 April, 2003, with respect to the Company (the “Joint Venture Agreement”). 

  

	C.	The Sellers have agreed to sell their respective participations in the Company to the Buyer and the Buyer has agreed to purchase such participations from each of the Sellers, on the
terms of and subject to the conditions set out in this Agreement. 

  
 NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS: 
  

	1.	INTERPRETATION 

  

	1.1	Unless otherwise defined herein, capitalised terms used in this Agreement shall have the meaning given thereto in the Joint Venture Agreement. 

  

 - 3 - 

	1.2	In addition, the following terms shall have the following meaning: 

  

			
	 “Agreement”:
	  	the present agreement and the schedules thereto;
		
	 “Breach of Representations”:
	  	means, in respect of any representations and warranties contained in the Clauses 6.1 and 7.1, that all or part of the facts stated therein are not true and accurate;
		
	 “Company Code”:
	  	the Belgian company code, enacted by the law of 7 May 1999, as amended from time to time;
		
	 “Closing”:
	  	the consummation of the sale and purchase of the Securities in accordance with this Agreement;
		
	 “Closing Date”:
	  	the date set for Closing pursuant to Clause 5.1;
		
	 “Conditions”:
	  	the conditions precedent set out in Clause 4.2;
		
	 “New Profit Certificates”:
	  	has the meaning set out in the Undertaking to Subscribe;
		
	 “Purchase Price”:
	  	the purchase price for the Securities, as set out in Clause 3.1, adjusted, as the case may be, in accordance with Clause 3.2;
		
	 “Right of First Offer”:
	  	the right of first offer provided for or referred to in the clauses 4.4.2 and 4.6.5 of the Joint Venture Agreement, clause 4.5 of the Undertaking to Subscribe and clause 11.1 of the articles
of association of the Company;
		
	 “GP Securities”:
	  	7 General Partner Interests (referred to in the Company’s articles of association as “actions commanditées”) which are being sold by REIB GP to the Buyer under
this Agreement;
		
	 “LLP Securities”:
	  	52,615 Profit Certificates (referred to in the Company’s articles of association as “Parts Bénéficiaires”) and 5,225 New Profit Certificates (referred to
in the Company’s articles of association as “Nouvelles Parts Bénéficiaires”) in the Company which are being sold by REIB LLP to the Buyer under this Agreement;
		
	 “Securities”:
	  	GP Securities and LLP Securities;
		
	 “Shurgard Stock”:
	  	common or preferred stock of Shurgard Storage Centers, Inc. to be listed on the New York Stock Exchange;
		
	 “Third-Party Right”:
	  	any mortgage, charge, pledge, lien, right of usufruct, option, restriction, right of first refusal, right of pre-emption, easement, third-party right or interest, other encumbrance or
security interest of any kind; and
		
	 “Undertaking to Subscribe”:
	  	the agreement with respect to the undertaking to subscribe to New Profit Certificates entered into between the parties, among others, on 27 February 2001.

  

 - 4 - 

	1.3	Interpretation 

  

	 	1.3.1	The titles and headings included in this Agreement are for convenience only and do not express in any way the intended understanding of the parties. They shall not be taken into
account in the interpretation of the provisions of this Agreement. 

  

	 	1.3.2	The words “herein”, “hereof”, “hereunder”, “hereby”, “hereto”, “herewith” and words of similar import shall refer to this
Agreement as a whole and not to any particular clause, paragraph or other subdivision. 

  

	 	1.3.3	The words “include”, “includes”, “including” and all forms and derivations thereof shall mean including but not limited to. 

 

	 	1.3.4	All periods of time set out in this Agreement shall be calculated from midnight to midnight. They shall start on the day following the day on which the event triggering the relevant
period of time has occurred. The expiration date shall be included in the period of time. If the expiration date is a Saturday, a Sunday or a bank holiday in Belgium, London or the USA, the expiration date shall be postponed until the next business
day. Unless otherwise provided herein, all periods of time shall be calculated in calendar days. All periods of time consisting of a number of months (or years) shall be calculated from the day in the month (or year) when the triggering event has
occurred until the eve of the same day in the following month(s) (or year(s)) (“de quantième à veille de quantième” / “ van de zoveelste tot de dag vóór de zoveelste”).

  

	 	1.3.5	Unless otherwise provided herein, all references to a fixed time of a day shall mean Brussels time. 

  

	2.	SALE AND PURCHASE 

  

	2.1	Sale and purchase 

  

	 	2.1.1	Subject to the terms and conditions of this Agreement (including in particular the Conditions), REIB GP hereby sells to the Buyer the GP Securities, and the Buyer hereby purchases
all of the GP Securities from REIB GP. 

  

	 	2.1.2	Subject to the terms and conditions of this Agreement (including in particular the Conditions), REIB LLP hereby sells to the Buyer the LLP Securities, and the Buyer hereby purchases
all of the LLP Securities from REIB LLP. 

  

 - 5 - 

	2.2	Waiver of the Right of First Offer 

  
 The Parties acknowledge that the other Partners (as defined in the Joint Venture Agreement) have duly waived their respective Right of First Offer and the
waiver letters are attached to this Agreement in Schedule 1. 
  

	2.3	Transfer of title 

  
 Title to the Securities shall pass, and the Purchase Price shall be paid, on Closing. 
  

	2.4	Sale free and clear 

  
 The Securities are sold with all rights, together with the obligations identified in Clause 9.1, attaching or accruing to the Securities now or after the
date of this Agreement, including the right to any dividend declared on or after the date of this Agreement, and free from any and all Third-Party Rights. 
  

	2.5	All Securities 

  
 The sale contemplated hereunder is indivisible and shall be valid only if it applies to all of the Securities. No partial enforcement of this Agreement
shall be allowed. 
  

	3.	PURCHASE PRICE AND PAYMENT 

  

	3.1	Payment 

  
 Buyer shall pay the Sellers the Purchase Price for the Securities of EUR 57,250,000 (fifty seven million two hundred and fifty thousand euro) in cash, payable as follows: 
  

	 	(a)	€4,790 (four thousand seven hundred and ninety euro) to REIB GP for 7 General Partner Interests; and 

  

	 	(b)	€57,245,210 (fifty seven million two hundred and forty five thousand two hundred and ten euro) to REIB LLP for 52,615 Profit Certificates and 5,225 New Profit Certificates.

  
 The Purchase Price shall be paid by the Buyer
on Closing by wire transfer to the bank accounts of each of the Sellers, the details of which shall be communicated to the Buyer by each of the Sellers prior to Closing. 
  

	3.2	In the event that the Company makes an equity call on the New Profit Certificates (i.e. the request to pay-in, partially or fully, the New Profit Certificates) prior to the Closing
Date, the part of the Purchase Price payable to REIB LLP will be increased by the amount paid by REIB LLP to the Company for the New Profit Certificates. 

  

	3.3	The Buyer shall only be liable for the payment of the Purchase Price in accordance with this Agreement, and shall have no liability for the actual allocation of the Purchase Price
among the Sellers. 

  

 - 6 - 

	4.	CONDITIONS PRECEDENT 

  

	4.1	Sale conditional 

  
 The Closing of the sale of the Securities is subject to the satisfaction, on or before the date set out in Clause 4.6, of the Conditions set out in Clause
4.2. 
  

	4.2	Conditions 

  

	 	4.2.1	No prohibition. No order of any court or any governmental agency having jurisdiction over any party hereto shall have the effect of prohibiting or restraining the
consummation of the sale and purchase of the Securities pursuant to this Agreement and no legal action or governmental investigation shall be pending which may reasonably be expected to result in such order or which otherwise challenges the sale of
the Securities. 

  

	 	4.2.2	Waiver of Right of First Offer. The other Partners shall have duly waived their Right of First Offer. 

  

	 	4.2.3	Access to Equity Markets. Shurgard Storage Centers, Inc. shall have been able to access the U.S. public equity markets to finance the Purchase Price through the issuance of
Shurgard Stock and shall have received or shall be entitled to receive without contingency, net proceeds therefrom at least equal to the Purchase Price by no later than June 20, 2003. 

  

	4.3	Waiver 

  
 The Conditions cannot be waived otherwise than with the unanimous written consent of all parties hereto. 
  

	4.4	Satisfaction 

  

	 	4.4.1	Reasonable endeavours. The parties undertake to use all reasonable endeavours, and to co-operate in good faith with each other, to achieve satisfaction of the Conditions as
soon as possible. 

  

	 	4.4.2	Notice of progress. Each party undertakes to the other parties to inform them in writing forthwith upon it becoming aware of the satisfaction of any Condition. If at any time
a party becomes aware of anything that may prevent or delay the satisfaction of any Condition, it shall immediately inform the other parties and the parties shall then co-operate to ensure that, to the extent possible, the Condition is satisfied.

  

	4.5	No retroactive effect 

  
 Notwithstanding Article 1179 of the Civil Code, the fulfilment of the Conditions shall have no retroactive effect. 
  

	4.6	Failure 

  
 The Conditions shall be deemed to have failed if they have not all been fulfilled (or waived pursuant to Clause 4.3) by 6:00 PM (Brussels time) on 27 June 2003, in which 
  

 - 7 - 

 case (unless the parties mutually consent to the extension of this Condition) this agreement shall be
terminated and the parties shall cease to have any rights or obligations hereunder, provided that (a) Clause 11.2 and 11.3 shall survive for 3 years as of the signatory date hereof, and (b) any rights accrued on or before such date hereunder
including the provisions of Clause 12 shall survive termination. 
  

	5.	CLOSING 

  

	5.1	Closing Date 

  
 Subject to the satisfaction (or, as the case may be, waiver pursuant to Clause 4.3) of all Conditions, the sale and purchase of the Securities shall be
consummated on 27 June 2003. The Closing Date may be extended by mutual consent of the parties to 31 July 2003. The Closing shall take place at the offices of Linklaters DeBandt, Brussels or such other place in Brussels as the Seller and the Buyer
may agree. 
  

	5.2	Obligations in relation to Closing 

  
 Each party undertakes to perform diligently and in good faith all such actions and execute all such documents as the other parties may reasonably direct
it to in order to perfect the sale and purchase of the Securities and the execution of this Agreement. 
  

	5.3	Action taken upon Closing 

  

	 	5.3.1	On Closing, the parties or their duly authorized attorneys-in-fact shall exchange the following documents and take the following actions: 

  

	 	(a)	the Buyer shall pay the Purchase Price in the manner set out in Clause 3; 

  

	 	(b)	each of the Sellers shall deliver to the Buyer an acknowledgement of receipt of the part of the Purchase Price due to it; 

  

	 	(c)	upon receipt of acknowledgment of payment by the Buyer, each of the Sellers and the Buyer shall record the transfer of the Securities and sign a declaration of transfer in
respectively the share register and the profit certificates register of the Company; and 

  

	 	(d)	REIB GP shall deliver a resignation letter from its representative on the Board of Managers of the Company. 

  

	 	5.3.2	Promptly after Closing, the Buyer shall (i) convene and thereafter hold a Partners Meeting to acknowledge the resignation of the former Manager and grant provisional discharge to
REIB GP, (ii) arrange for the publication in the Moniteur belge of the transfer of the GP Securities and resignation of the former Manager pursuant to this Agreement and (iii) amend Clause 9 of the Articles of Association of the Company to
delete the reference to REIB GP being an “actionnaire commandite”. 

  

 - 8 - 

	6.	REPRESENTATIONS AND WARRANTIES OF THE BUYER - INDEMNIFICATION - LIMITATIONS 

  

	6.1	Representations and warranties 

  
 The Buyer represents and warrants to the Sellers that the representations and warranties set out hereafter are true and accurate as at the date of this
Agreement: 
  

	 	6.1.1	Incorporation and existence. The Buyer is a company duly incorporated and existing under the laws of the State of Washington (USA). 

  

	 	6.1.2	Power and authority. Subject to satisfaction of the Conditions, the Buyer has the right, power and authority, and has taken all action required, to sign and perform its
obligations under this Agreement and all the documents which are to be signed at Closing. 

  

	 	6.1.3	Validity of the Agreement. The entry by the Buyer into, and performance of obligations under, this Agreement does not, and its ownership of the Securities will not, conflict
with any law or regulation, judgement or court order, or contract or agreement by which the Buyer is bound. 

  

	 	6.1.4	Financial condition. The Buyer has the financial means (subject to satisfaction of the condition set forth in Clause 4.3) to pay the Purchase Price in the manner provided for
in this Agreement. 

  

	 	6.1.5	Legal proceedings. There are, to the best knowledge of the Buyer, no actions, proceedings or claims pending, the adverse determination of which may impair the validity or
enforceability of this Agreement or any of its principal terms, materially adversely affect the financial condition of the Buyer or otherwise negatively affect the Buyer’s ability to perform its obligations under this Agreement.

  

	6.2	Updating of Representations to Closing 

  
 The Buyer warrants to the Sellers that the representations and warranties set out in Clause 6.1 shall be true and accurate on the Closing Date, as if they
had been repeated on that day. 
  

	6.3	Indemnification 

  
 Subject to the limitations set out in Clause 6.4, the Buyer agrees and undertakes to indemnify and hold harmless each of the Sellers for any damages
suffered by such Seller as a result of any Breach of Representations. 
  

	6.4	Limitation of Buyer’s liability 

  

	 	6.4.1	Time limitations. The Buyer shall have no obligation to indemnify the Sellers in respect of any claim unless it is given by the Sellers to the Buyer in accordance with Clause
8.1 within two years following the Closing Date. 

  

 - 9 - 

	 	6.4.2	Fraud and intentional misconduct. None of the limitations contained in this Clause 6 shall apply in case of fraud or intentional misrepresentations or misconduct
(“dol” / “bedrog”) by the Buyer. 

  

	7.	REPRESENTATIONS AND WARRANTIES OF THE SELLER - INDEMNIFICATION - LIMITATIONS 

  

	7.1	Representations and warranties 

  
 Each of the Sellers severally, and not jointly and severally, represents and warrants to the Buyer that the representations and warranties set out
hereafter are true and accurate as at the date of this Agreement: 
  

	 	7.1.1	Incorporation and existence. REIB GP and REIB LLP are companies duly incorporated and existing under the Laws of England. 

  

	 	7.1.2	Power and authority. Subject to satisfaction of the Conditions, REIB GP and REIB LLP have the right, power and authority, and have taken all action required, to sign and
perform their obligations under this Agreement and all the documents which are to be signed at Closing. 

  

	 	7.1.3	Validity of the Agreement. The entry by each of the Sellers into, and performance of obligations under, this Agreement does not conflict with any law or regulation, judgement
or court order, or contract or agreement by which that Seller is bound. 

  

	 	7.1.4	Legal proceedings. There are, to the best knowledge of the each of the Sellers, no actions, proceedings or claims pending, the adverse determination of which may impair the
validity or enforceability of this Agreement or any of its principal terms or which otherwise negatively affects that Seller’s ability to perform its obligations under this Agreement. 

  

	 	7.1.5	Securities. Each Seller is on the date hereof the lawful holder and registered owner of the Securities mentioned in Clause 2.1. The Securities are in registered form and all
are duly registered in the name of that Seller in respectively the share register and the profit certificates register. 

  

	 	7.1.6	Securities paid-up. All of the Securities are fully paid-up, except for the New Profit Certificates, for which no payment has been made as of the date of this Agreement.

  

	 	7.1.7	Agreements. There are no agreements, arrangements or obligations other than the Articles of Association of the Company, the Joint Venture Agreement and the Undertaking to
Subscribe which affect the voting or distribution rights attached to the Securities, or which could prevent or affect the transfer of title to the Buyer of the Securities. 

  

	 	7.1.8	Third-party right. There is no Third-Party Right and there is no agreement, arrangement or obligation to create a Third-Party Right in relation to any of the Securities,
other than those set out in the articles of association of the Company and the Joint Venture Agreement. 

  

 - 10 - 

	7.2	Updating of Representations to Closing 

  
 Each of the Sellers warrants to the Buyer that the representations and warranties set out in Clause 7.1 shall be true and accurate on the Closing Date, as
if they had been repeated on that day. 
  

	7.3	Indemnification 

  
 Subject to the limitations set out in Clause 7.4, each of the Sellers agrees and undertakes to indemnify and hold harmless the Buyer for any damages
suffered by the Buyer as a result of any Breach of Representations of that Seller, it being understood that this indemnification undertaking is not joint and several. 
  

	7.4	Limitation of Seller’s liability 

  

	 	7.4.1	Time limitations. No Seller shall have any obligation to indemnify the Buyer in respect of any claim unless notice of such claim is given by the Buyer to the relevant Seller
in accordance with Clause 8.1: 

  

	 	(a)	in the case of any claim for Breach of Representations in respect of ownership of the Securities as set out in the Clauses 7.1.5 and 7.1.8, within five years following the Closing
Date; and 

  

	 	(b)	in the case of any claim for any other Breach of Representations, within two years following the Closing Date. 

  

	 	7.4.2	Fraud and intentional misconduct. None of the limitations contained in this Clause 7 shall apply in case of fraud or intentional misrepresentations or misconduct
(“dol” / “bedrog”) by the Sellers. 

  

	8.	CLAIMS 

  

	8.1	Notification of claims 

  
 In order to make a claim against the other party, the party making the claim shall give a notice of such claim to the other party within the time limits
provided in the Clauses 6.4.1 or 7.4.1, setting out the legal and factual basis of the claim, together with, if practicable, a first estimate of the amount of the damages suffered. 
  

	8.2	Disagreement on a claim 

  
 If the relevant Seller and the Buyer are unable to reach an agreement on the amount payable within sixty days following notification of a claim pursuant
to Clause 8.1, the matter shall be decided in accordance with Clause 12 (Arbitration). 
  

	9.	ASSUMPTION OF LIABILITIES 

  

	9.1	General 

  

	 	9.1.1	The Buyer, as successor of the Securities, shall as from Closing, assume all rights and obligations of the Sellers under the Joint Venture Agreement, the Undertaking to Subscribe
and the articles of association of the Company, to the 

  

 - 11 - 

 extent that the Securities are acquired by the Buyer, it being understood that the Buyer shall only
assume liability in respect of facts, actions, omissions or events taking place or arising after Closing. 
  

	 	9.1.2	The Buyer’s assumption of liability with respect to the GP Securities acquired from REIB GP pursuant to this Agreement shall be limited to claims or legal liability arising
from facts, actions, omissions or events taking place or arising after Closing. REIB GP shall remain liable and shall hold the Buyer harmless after the Closing Date from any claims or liabilities arising from facts, actions, omissions or events
occurring prior to the Closing Date. 

  

	10.	COVENANTS 

  

	10.1	Voting 

  
 Conditional upon and from such time that the Conditions are satisfied until Closing, REIB GP undertakes in favour of the Buyer that its representative on the Board of Managers of the Company shall vote in favour of
the approval of the transfer of Partner Interests and/or Profit Certificates to the Buyer; shall also vote with the Buyer on all other matters submitted to the Board of Managers of the Company from such time that the Conditions are satisfied until
Closing, provided that, in the reasonable opinion of REIB GP, such vote is not contrary to the interests of the Company. 
  

	10.2	Covenants in Joint Venture Agreement 

  
 The Sellers undertake to be bound by the terms of article 7.3 of the Joint Venture Agreement. 
  

	10.3	Co-operation 

  
 The parties shall do and execute, or arrange for the doing and execution of, all acts, documents and things necessary to give effect to this Agreement.

  

	10.4	Notice to the Company 

  
 The Buyer shall, on Closing, notify the Company of its acquisition of the Securities, in accordance with Article 632 § 2 of the Company Code.

  

	10.5	Joint and several liability between the Sellers 

  
 Except as otherwise provided herein, all undertakings and other obligations of REIB GP and REIB LLP under this Agreement shall be joint and several
(“solidaire et indivisible” / “hoofdelijk en ondeelbaar”) between REIB GP and REIB LLP. The joint and several liability of REIB GP and REIB LLP shall not extend to any other person or entity affiliated to any of the
Sellers. 
  

	11.	MISCELLANEOUS PROVISIONS 

  

	11.1	Announcements 

  

	 	11.1.l	No public announcement, communication or circular concerning the transaction referred to in this Agreement may be made at any time (before or after Closing) by any party without
having first obtained the written consent of the other parties who must not unreasonably refuse, withhold or delay the giving of consent. 

  

 - 12 - 

	 	11.1.2	Where the announcement, communication or circular is required or requested by law or a regulation of a securities exchange, the party required to make it must if practicable first
consult, and take into account the reasonable requirements of, the other parties. 

  

	11.2	Confidentiality of the Agreement 

  
 The terms of this Agreement shall be kept confidential for a period of three (3) years from the date of this Agreement and during such time shall not be
disclosed to any third party except (a) as required or requested by law or securities exchange regulations, (b) as necessary to respond to a request from any administration or authority, (c) as necessary to support a claim or defence in litigation
between the parties hereto, or (d) as otherwise agreed in writing between the parties. 
  

	11.3	Costs 

  
 Save as otherwise provided herein, each party shall bear its own costs relating to the negotiation, preparation and execution and implementation by it of this Agreement and of all other documents ancillary hereto.

  

	11.4	Notices 

  
 All notices to be made in writing under this Agreement shall be given in the English language by registered mail, express courier service or telefax (confirmed by registered mail or express courier service) to the
following addresses or such other addresses as the parties may have designated to each other by notice given in accordance with this Clause: 
  

					
	 If to REIB GP:
	  	Name:	  	REIB Europe Operator Limited
			
	 	  	Address:	  	Winchester House, 1 Great Winchester Street, London EC2N 2DB, U.K.
			
	 	  	Attention:	  	Emma Simmons
			
	 	  	Fax:	  	+44 20 7547 5444
			
	 If to REIB LLP:
	  	Name:	  	REIB International Holdings Limited
			
	 	  	Address:	  	Winchester House, 1 Great Winchester Street, London EC2N 2DB, U.K.
			
	 	  	Attention:	  	Emma Simmons
			
	 	  	Fax:	  	+44 20 7547 5444

  

 - 13 - 

					
	 If to the Buyer:
	  	Name:	  	SSC Benelux Inc
			
	 	  	Address:	  	1155 Valley Street, Suite 400, Seattle, Washington 98109-4426, USA
			
	 	  	Attention:	  	General Counsel
			
	 	  	Fax:	  	+1 206 652 3710

  

	11.5	Other agreements - amendments 

  
 This Agreement supersedes and replaces any and all prior negotiations, arrangements and understandings, whether or not in writing, between the parties
with respect to the subject matter of the Agreement. No variation of this Agreement is valid unless it is in writing and signed by or on behalf of each party. 
  

	11.6	Assignment 

  
 This Agreement shall be binding upon and inure for the benefit of the successors of the parties but may not be assigned. 
  

	11.7	Severability 

  
 If any provision in this Agreement shall be held to be illegal, invalid or unenforceable, in whole or in part, under any applicable law, that provision
shall be deemed not to form part of this Agreement, and the legality, validity or enforceability of the remainder of this Agreement shall not be affected. In such case, each party shall use its best efforts to immediately negotiate in good faith a
valid replacement provision having a similar economic effect. 
  

	12.	GOVERNING LAW AND JURISDICTION 

  

	12.1	This Agreement is governed by and shall be construed and interpreted in accordance with the Laws of Belgium. 

  

	12.2	Any dispute arising from this Agreement shall be submitted for final and binding arbitration to an arbitration tribunal comprised of three arbitrators appointed and deciding in
accordance with the rules of the International Chamber of Commerce. The arbitration procedure shall take place in Brussels, Belgium, and shall be conducted in the English language. 

  

	12.3	This agreement may be executed in any number of counterparts. This has the same effect as if the signatures on the counterparts were on a single copy of this agreement.

  

 - 14 - 

 Done on 11 June 2003, in three originals, each party acknowledging receipt of one such original. 
  

			
	REIB EUROPE OPERATOR LIMITED
	
	 /s/ Emma Simmons

	 Name:
	 	EMMA SIMMONS
	 Title:
	 	DIRECTOR
	
	REIB INTERNATIONAL HOLDINGS LIMITED
	
	 /s/ Emma Simmons

	 Name:
	 	EMMA SIMMONS
	 Title:
	 	DIRECTOR
	
	SSC BENELUX INC.
	
	 [ILLEGIBLE]

	 Name:
	 	 [ILLEGIBLE]

	 Title:
	 	Sr. V.P. Secretary

  

 - 15 - 

 SCHEDULE 1 - WAIVER LETTERS 
  

 - 16 - 

					
	 	  	 	  	        REIB Europe Operator Limited
	 	  	 	  	         Winchester House

	 	  	 	  	         1 Great Winchester Street

	 	  	 	  	         London

	 	  	 	  	         EC2N 2DB

  

					
	 To:
	  	 	  	 
	 AIG Self Storage GP, LLC
	  	 	  	         Telephone: 0207 545 8000

	 1 Chase Manhattan Plaza
	  	 	  	         Fax: 0207 547 5444

	 57th Floor, New York
	  	 	  	 
	 NY 10005, U.S.A.
	  	 	  	 
			
	 AIRE Investments, Sàrl
	  	 	  	 AIG Self Storage LP, LLC

	 33 Boulevard de Prince Henri
	  	 	  	 1 Chase Manhattan Plaza

	 L-1724, Luxembourg
	  	 	  	 57th Floor, New York

	 	  	 	  	 NY 10005, U.S.A.

  
 London, 6th June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us, inter alia, of the intention of: 
  

	(a)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(b)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(c)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proof dated 3rd June, 2003 of the
agreement attached to the Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 

 
 Kind regards, 
  

	
	 /s/    Emma Simmons

	

	 Emma Simmons 
 Director
 REIB Europe Operator
Limited

  
 Copy:
Board of directors of the Company 
  
 Registered in England and
Wales 3847120. Registered office Winchester House, 1 Great Winchester Street London EC2N 2DB 

					
	 	  	 	  	         REIB International Holdings Limited

	 	  	 	  	         Winchester House

	 	  	 	  	         1 Great Winchester Street

	 	  	 	  	         London

	 	  	 	  	         EC2N 2DB

  

					
	 To:
	  	 	  	 
	 AIG Self Storage GP, LLC
	  	 	  	         Telephone: 0207 545 8000

	 1 Chase Manhattan Plaza
	  	 	  	         Fax: 0207 547 5444

	 57th Floor, New York
	  	 	  	 
	 NY 10005, U.S.A.
	  	 	  	 
			
	 AIRE Investments, Sàrl
	  	 	  	 AIG Self Storage LP, LLC

	 33 Boulevard de Prince Henri
	  	 	  	 1 Chase Manhattan Plaza

	 L-1724, Luxembourg
	  	 	  	 57th Floor, New York

	 	  	 	  	 NY 10005, U.S.A.

  
 London, 6th June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us, inter alia, of the intention of: 
  

	(a)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(b)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(c)	AIRE Investments, Sárl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proof dated 3rd June, 2003 of the
agreement attached to the Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 

 
 Kind regards, 
  

	
	 /s/    Emma Simmons

	

	 Emma Simmons
 Director
 REIB International Holdings Limited

  
 Copy: Board of directors of the
Company 
  
 Registered in England and Wales 3834064. Registered
office Winchester House, 1 Great Winchester Street London EC2N 2DB 

 To: 
  

					
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
	  	 	  	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom

			
	 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
	  	 	  	 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

			
	 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	  	 	  	 

  
 London, 6 June, 2003 
  
 Dear Sirs,

  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5 June, 2003 sent to us pursuant to Article 4.4.2.1 of the
Joint Venture Agreement dated 8 October, 1998, as amended, (the “Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  

 1 

 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms
set out in the proofs dated June, 2003 of the agreements attached to the Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with respect to the sales of the Offered Securities to
Shurgard Storage Centers Inc. 
  
 Kind regards, 
  

	
	 /s/ Elizabeth McLoughlin

	 Elizabeth McLoughlin, Vice President

	 AIG Self Storage GP LLC

	
	 /s/ Elizabeth McLoughlin

	 Elizabeth McLoughlin, Vice President

	 AIG Self Storage GP LLC

	
	 /s/ Jeremy Hussey

	 Jeremy Hussey, as Attorney for

	 AIRE Investments Sàrl

  
 Copy: Board of directors of the
Company 
  

 2 

 POWER OF ATTORNEY 
  
 KNOW ALL MEN BY THESE PRESENTS: 
  
 THAT the undersigned AIRE Investments Sàrl, a company organized under the laws of Luxembourg (the “Company”), hereby makes, constitutes and appoints
Jeremy Hussey its true and lawful attorney to sign the attached letter regarding the Transfer of Partnership Interest in Shurgard Self Storage SCA, (the “Transfer Notice”) and the attached letter regarding the Waiver of the Right of First
Offer with respect to the transfer notices of REIB Europe Operator Limited, REIB International Holdings Limited, AIG Self Storage GP, LLC, and AIG Self Storage LP, LLC (the “Waiver Letter”) on behalf of the Company. Said attorney is hereby
authorized to execute both the Transfer Notice and the Waiver Letter with such changes as may reasonably be agreed among the signatories therein. Said attorney shall have full power and authority, including the power of substitution, to do any and
all things necessary, incidental or convenient in the premises, and ratifying and confirming whatever action he or any substitute may do by virtue of the authority hereby conferred. 
  
 IN WITNESS WHEREOF the undersigned has caused this instrument to be executed this fifth day of June, 2003. 
  

			
	 For and on behalf of:

	 AIRE Investments Sàrl

		
	 By:
	 	 [ILLEGIBLE]

		
	 By:
	 	 [ILLEGIBLE]

 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom

		
	 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
	 	 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

		
	 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 

  
 London, 6 June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5 June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  

 1 

 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms
set out in the proofs dated June, 2003 of the agreements attached to the Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with respect to the sales of the Offered Securities to
Shurgard Storage Centers Inc. 
  
 Kind regards, 
  

	
	 /s/ Jeremy Hussey

	 Jeremy Hussey, as Attorney for

	 AIG Self Storage LP LLC

  
 Copy: Board of directors of the
Company 
  

 2 

 POWER OF ATTORNEY 
  
 KNOW ALL MEN BY THESE PRESENTS THAT:- 
  

	 	1.	Reference is made to - 

  

	 	(a)	that certain Joint-Venture Agreement dated 8 October, 1999 (as amended) (“Joint Venture Agreement”) by and among Shurgard Storage Centers Inc. (“Shurgard
Storage”), SSC Benelux Inc. (“SSC Benelux”), Shurope Storage S.A. (“Shurope Storage”), Recom & Co. S.N.C. (“Recom”), E-Parco S.A.R.L. {“E-Parco”), European Self Storage S.A. (“European Self
Storage”), Restructuring Competence S.A. (“Restructuring Competence”), Grana International S.A. (“Grana International”), REIB Europe Operator Limited (“Deutsche Bank GP”), REIB International Holdings Limited
(“Deutsche Bank LLP”), Fremont SE (G.P.) Ventures, L.L.C. (“Fremont G.P.”), Fremont SE (L.L.P.) Ventures, L.L.C. (“Fremont L.L.P.”), AIG Self Storage GP, LLC (“AIG GP”), AIG Self Storage LP, LLC (“AIG
LLP”), SSC General Partner (Guernsey) Limited (“CSFB G.P.”), SSC Partner (Guernsey) Limited (“CSFB L.L.P.”), Deutsche Bank Aktiengesellschaft, London (“Deutsche Bank”), Fremont Investors, Inc. (“Fremont
Investors”), Credit Suisse First Boston (International) Holding AG (“Credit Suisse”), AIG Global Real Estate Investment Corp. (“AIGGRE”), Credit Suisse First Boston (Europe) Limited (“CSFB Europe”) and SSC Benelux
& Co. S.C.A. (“Shurgard”), 

  

	 	(b)	that certain Undertaking to Subscribe dated 27 February 2001 (the “Undertaking to Subscribe”) by and among Shurgard Storage, SSC Benelux, Shurope Storage, Recom, E-Parco,
European Self Storage, Restructuring Competence, Grana International, Deutsche Bank GP, Deutsche Bank LLP, Fremont G.P., Fremont L.L.P., AIG GP, AIG LLP, CSFB G.P., CSFB L.L.P., Deutsche Bank, Fremont Investors, Credit Suisse, AIGGRE, CSFB Europe
and Shurgard, and 

  

	 	(c)	that certain Membership Interest Purchase Agreement dated as of November 22, 2002 by and between AIG LLP and AIRE Investment S.a.r.l., pursuant to which AIRE purchased certain
Shurgard Partner Interests (as defined below) from AIG LLP; 

  

	 	2.	Capitalised terms used in this letter shall have the meanings given thereto in the Joint Venture Agreement and the Undertaking to Subscribe, unless expressly stated otherwise;

  

	 	3.	In connection with the sale of Profit Certificates and New Profit Certificates held by AIG LLP, AIG LLP intends to provide to the existing holders of Shurgard Partner Interests, as
a group, the Sale Notice referred to in Clause 

	 	  	4.4.2.1 of the Joint Venture Agreement (in the form attached hereto as Exhibit A, the “Sale Notice”); 

  

	 	4.	In connection with the delivery by AIG LLP of the Sale Notice to the existing holders of Shurgard Partner Interests, as a group, AIG LLP hereby irrevocably appoints Jeremy Hussey
its attorney-in-fact for the purpose of executing the Sale Notice, together with any and all documents contemplated by the Sale Notice which he may deem necessary to implement the sale of Profit Certificates and New Profit Certificates held by AIG
LLP in accordance with the terms and conditions of the Joint Venture Agreement; 

  

	 	5.	In connection with (a) the sale of Profit Certificates and New Profit Certificates by AIRE, (b) the sale of General Partner Interests held by AIG GP, and (c) the provision by each
of AIRE and AIG GP, respectively, of a Sale Notice to the existing holders of Shurgard Partner Interests (including AIG LLP), as a group, relating to such sale of Profit Certificates, New Profit Certificates and General Partner Interests, AIG LLP
hereby irrevocably appoints Jeremy Hussey its attorney-in-fact for the purpose of executing a Waiver of the Right of First Offer (in the form attached hereto as Exhibit B, the “Waivers”) relating to each such Sale Notice, together with any
and all documents contemplated by such Waivers which he may deem necessary to implement the waiver by AIG LLP of its Right of First Offer in accordance with the terms and conditions of the Joint Venture Agreement; and 

  

	 	6.	Such powers of attorney granted herein shall be deemed to be coupled with an interest, and such power of attorney shall, to the extent permitted by law, survive the dissolution or
bankruptcy of AIG LLP. 

  

			
	AIG SELF STORAGE LP, LLC
		
	By:	 	 /s/ Richard J. D’Alessandri

	 	 	Richard J. D’Alessandri
	 	 	Vice President

 STATE OF NEW YORK         ) 
                                        
           ) SS: 
 COUNTY OF NEW YORK    ) 
  
 On this 4th day of June 2003, before me came Richard D’Alessandri, to me known as the individual who executed the foregoing instrument. 
  

	
	 /s/ Laura M. Barresi

	 Notary Public

	 LAURA M. BARRESI

	 Notary Public, State of New York

	 No.01-BA6009809

	 Qualified in Richmond County

	 Commission Expires [ILLEGIBLE]

 EXHIBIT A 
  
 To: Distribution List 
  
 [·] June, 2003 
  
 Dear Sirs, 
  
 Transfer of Partnership Interest in Shurgard Self Storage SCA 
  
 We refer to the Joint-Venture Agreement dated 8 October, 1999 (as amended) between, among others, yourselves, REIB Europe Operator Limited
(“REIB GP”), REIB International Holdings Limited (“REIB LLP”), AIG Self Storage GP, LLC (“AIG GP”) AIG Self Storage LP, LLC (“AIG LLP”) and AIRE Investments, Sàrl (“AIRE”) (the “Joint
Venture Agreement”) and the Undertaking to Subscribe dated 27 February 2001 between, among others, yourselves, REIB GP, REIB LLP, AIG GP, AIG LLP and AIRE (the “Undertaking to Subscribe”). 
  
 Capitalised terms used in this letter shall have the meaning given thereto in the Joint
Venture Agreement, unless expressly stated otherwise. 
  
 We hereby provide the
Sale Notice referred to in Clause 4.4.2.1 of the Joint Venture Agreement on behalf of: 
  

	(a)	REIB GP and REIB LLP of REIB GP’s intention to sell 7 General Partner Interests and of REIB LLP’s intention to sell 52,615 Profit Certificates and 5,225 New Profit
Certificates (as defined in the Undertaking to subscribe) (together the “REIB Shareholding”); and 

  

	(b)	AIG GP, AIG LLP and AIRE of AIG GP’s intention to sell 4 General Partner Interests, of AIG LLP’s intention to sell 21,922 Profit Certificates and 2,177 New Profit
Certificates and of AIRE’s intention to sell 7,308 Profit Certificates and 726 New Profit Certificates (together the “AIG Shareholding”), 

  

	  	in Shurgard Self Storage SCA (“Shurgard” or the “Company”) to Shurgard Storage Centers Inc. (“Shurgard US”). 

  
 The bona fide offer price for the entire REIB Shareholding is EUR 57,250,000 and the bona
fide offer price for the entire AIG Shareholding is EUR 31,804,559. 
  
 Pursuant
to Clause 4.4.2 of the Joint Venture Agreement, REIB GP and REIB LLP are required to offer existing holders of Shurgard Partner Interests, as a group, an opportunity to purchase all of the REIB Shareholding and AIG GP, AIG LLC and AIRE are required
to offer existing holders of Shurgard Partner Interests, as a group, an opportunity to purchase all of the AIG Shareholding at the same terms and conditions as those offered to Shurgard US by exercising their Offer Right in accordance with the terms
of the Joint Venture Agreement. 
  
 We would request, however, that each of the
existing holders of Shurgard Partner Interests waive such rights and for this purpose we attach forms of the waiver letters which we should be grateful if you would complete, sign and return by fax and by courier to James Roe of Allen & Overy of
One New Change, London, EC4M 9QQ, England (fax number: +44 207 330 9999) as soon as possible. 

 You will find attached, for your information, copies of the draft securities purchase agreements which contain all other
terms and conditions governing the offer of the REIB Shareholding and the AIG Shareholding. Apart from the identity of the parties, the equity participations being sold and the consideration payable, the terms of the two agreements are substantially
the same. 
  
 This Sales Notice and the information contained herein is subject to
the confidentiality undertaking contained in Clause 7.3.1 of the Joint Venture Agreement. 
  
 Yours sincerely, 
  

			
	  

	 	  

	 [        ]
	 	 [        ]

	 REIB Europe Operator Limited
	 	 AIG Self Storage GP, LLC

	 REIB International Holdings Limited
	 	 AIG Self Storage LP, LLC

	 	 	 AIRE Investments, Sàrl

 Distribution List 
  

			
	 Shurgard Storage Centers Inc.
 1155 Valley Street, Suite 400
 Seattle, WA 98190-4426
 USA
 Attn: Mr. Charles K. Barbo
	 	 Grana International S.A.
 Quai due Commerce 48
 1000 Brussels
 Belgium
 Attn: Mr. Patrick Metdepenninghen
           Mr. Ake Fogelberg

		
	 SSC Benelux Inc.
 1155 Valley Street, Suite 400
 Seattle, WA 98190-4426
 USA
 Attn: Mr. Charles K. Barbo
	 	 Deutsche Bank AG, London
 Winchester House
 1 Great Winchester Street
 London EC2N 2DB
 Attn: David Netser
           Emma
Simmons

		
	 Shurope Storage S.A.
 Quai du Commerce 48
 1000 Brussels
 Belgium
 Attn: Mr. Charles K. Barbo
           Mr. Harrell L. Beck
	 	 Fremont SE (G.P.) Ventures, L.L.C.
 C/o Fremont Realty Capital, L.P.
 375 Park Avenue, Suite 3101
 New York, NY 10152
 Attn: Frederick P. Zarrilli

		
	 Recom & Co. S.N.C.
 Quai du Commerce 48
 1000 Brussels
 Belgium
 Attn: Mr. Patrick Metdepenninghen
	 	 Fremont SE (L.P.) Ventures, L.L.C.
 C/o Fremont Realty Capital, L.P.
 375 Park Avenue, Suite 3101
 New York, NY 10152
 Attn: Frederick P. Zarrilli

		
	 E-Parco S.A.R.L.
 Boulevard Royal 4
 2449 Luxembourg
 Luxembourg
 Attn: Halsey S.A.R.L.
	 	 Fremont Group, L.L.C.
 50 Fremont Street Suite 3700
 San Francisco, CA 94105
 Attn: General Counsel

		
	 European Self Storgage S.A.
 Quai due Commerce 48
 1000 Brussels
 Belgium
 Attn: Mr. Patrick Metdepenninghen
	 	 AIG Self Storage LP, LLC
 C/o AIG Global Real Estate Investment
 1 Chase Manhattan Plaza, 57th
Floor
 New York, NY 10005
 Attn: President

		
	 Restructuring Competence S.A.
 Quai du Commerce 48
 1000 Brussels
 Belgium
 Attn: Mr. Patrick Metdepenninghen
	 	 AIG Global Real Estate Investment
 1 Chase Manhattan Plaza, 57th Floor
 New York, NY 10005
 Attn: Kevin Fitzpatrick

		
	 Fremont Investors, Inc.
 50 Fremont Street, Suite 3700
 San Francisco, CA 94105
 Attn: General Counsel
	 	 Fremont Realty Capital, L.P.
 375 Park Avenue, Suite 3101
 New York, NY 10152
 Attn: Frederick P. Zarrilli

			
	 SSC Benelux & Co. S.C.A.
 Quai du Commerce 48
 1000 Brussels
 Belgium
 Attn: Mr. Patrick Metdepenninghen
	 	 SSC Benelux & Co. S.C.A.
 Quai du Commerce 48
 1000 Brussels
 Belgium
 Attn: The Chairman of the Board

 EXHIBIT B 
  
 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom

		
	 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
	 	 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

		
	 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 

  
 [PLACE], [    ]
June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated · June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the “Joint Venture Agreement”), in which you
inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales as set out in the proofs dated · June, 2003 of the agreements attached to the Sale Notice and hereby waive our Right of First Offer (as 

 defined in Article 4.4.2.2 the Joint Venture Agreement) with respect to the sales of the Offered Securities to Shurgard
Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has
been duly authorised by the board meeting dated [DATE]. 
  
 Kind regards,

  
  
  

 [NAME], [TITLE] 
  
 [COMPANY NAME] 
  
 Copy: Board of directors of the Company 

 Grana International SA 
  
 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 10th June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proofs dated 3rd June, 2003 of the
agreements attached to the 
  

 1 

 Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with
respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 
  
 Kind regards, 
  

	
	 /s/ Patrick [ILLEGIBLE]

	 [NAME], [TITLE] Patrick [ILLEGIBLE]

	
	 [COMPANY NAME] Grana International SA

  
 Copy: Board of directors of the
Company 
  

 2 

 European Self Storage [ILLEGIBLE] 
  
 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 10th June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proofs dated 3rd June, 2003 of the
agreements attached to the 
  

 1 

 Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with
respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 
  
 Kind regards, 
  

	
	 /s/ Patrick [ILLEGIBLE]

	 [NAME], [TITLE] Patrick [ILLEGIBLE] Director,

	
	 [COMPANY NAME] European Self Storage [ILLEGIBLE]

  
 Copy: Board of directors of the
Company 
  

 2 

 Recom & Co Inc 
  
 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 10th June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self
Storage SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proofs
dated 3rd June, 2003 of the agreements attached to the 
  

 1 

 Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with
respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 
  
 Kind regards, 
  

	
	 /s/ Patrick [ILLEGIBLE]

	 [NAME], [TITLE] Patrick [ILLEGIBLE]

	
	 [COMPANY NAME] Recom & Co Inc

  
 Copy: Board of directors of the
Company 
  

 2 

 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 San Francisco, California. June 10,
2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proofs dated 3rd June, 2003 of the
agreements attached to the 
  

 1 

 Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with
respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 
  
 Kind regards, 
  

			
	Fremont SE (L.P.) Ventures, L.L.C.
		
	 By:
	 	 [ILLEGIBLE]

	 Its:
	 	 Authorized Signatory

  
 Copy: Board of directors of the
Company 
  

 2 

 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 San Francisco, California. June 10,
2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proofs dated 3rd June, 2003 of the
agreements attached to the 
  

 1 

 Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with
respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 
  
 Kind regards, 
  

			
	Fremont SE (L.P.) II Ventures, L.L.C.
		
	 By:
	 	 [ILLEGIBLE]

	 Its:
	 	 Authorized Signatory

		
	 Copy:
	 	 Board of directors of the Company

  

 2 

 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 San Francisco, California. June 10,
2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”); in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”): and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proofs dated 3rd June, 2003 of the
agreements attached to the 
  

 1 

 Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with
respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 
  
 Kind regards, 
  

			
	Fremont SE (G.P.) Ventures, L.L.C.
		
	 By:
	 	 [ILLEGIBLE]

	 Its:
	 	 President

		
	 Copy:
	 	 Board of directors of the Company

  

 2 

 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 San Francisco, California. June 10,
2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the
“Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates
(“nouvelles parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  

 1 

 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms
set out in the proofs dated 3rd June, 2003 of the agreements attached to the Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with respect to the sales of the Offered Securities to
Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First
Offer has been duly authorised. 
  
 Kind regards, 
  

			
	Fremont SE (G.P.) II Ventures, L.L.C.
		
	 By:
	 	 [ILLEGIBLE]

	 Its:
	 	 President

		
	 Copy:
	 	 Board of directors of the Company

  

 2 

 To: 
  

			
	 REIB Europe Operator Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage GP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.
  
 AIRE Investments, Sàrl
 33 Boulevard de Prince Henri
 L-1724, Luxembourg
	 	 REIB International Holdings Limited
 Winchester House,
 1 Great Winchester Street
 London EC2N2DB
 United Kingdom
  
 AIG Self Storage LP, LLC
 1 Chase Manhattan Plaza
 57th Floor, New York
 NY 10005
 U.S.A.

  
 Seattle, Washington US 
 11 June, 2003 
  
 Dear Sirs, 
  
 Re: Waiver of the Right of First
Offer 
  
 We refer to the Sale Notice dated 5th June, 2003 sent to us
pursuant to Article 4.4.2.1 of the Joint Venture Agreement dated 8 October, 1998, as amended, (the “Joint Venture Agreement”), in which you inform us of the intention of: 
  

	(a)	REIB Europe Operator Limited to sell 7 General Partner Interests; and 

  

	(b)	REIB International Holdings Limited to sell 52,615 Profit Certificates (“parts bénéficiaires”) and 5,225 New Profit Certificates (“nouvelles
parts bénéficiaires”); and 

  

	(c)	AIG Self Storage GP, LLC to sell 4 General Partner Interests; and 

  

	(d)	AIG Self Storage LP, LLC to sell 21,922 Profit Certificates (“parts bénéficiaires”) and 2,177 New Profit Certificates (“nouvelles parts
bénéficiaires”); and 

  

	(e)	AIRE Investments, Sàrl to sell 7,308 Profit Certificates (“parts bénéficiaires”) and 726 New Profit Certificates (“nouvelles parts
bénéficiaires”), 

  
 in Shurgard Self Storage
SCA (“Shurgard” or the “Company”) (together, the “Offered Securities”) to Shurgard Storage Centers Inc. 
  
 We acknowledge the terms and conditions of the intended sales which, we understand, will be substantially on the terms set out in the proofs dated 3rd June, 2003 of the
agreements attached to the 
  

 1 

 Sale Notice and hereby waive our Right of First Offer (as defined in Article 4.4.2.2 the Joint Venture Agreement) with
respect to the sales of the Offered Securities to Shurgard Storage Centers Inc. 
  
 Our decision not to exercise our Right of First Offer has been duly authorised. 
  
 Kind regards, 
  

	
	 /s/ Christine M. McKay

	 Christine M. McKay, Director

	
	Shurope Storage S.A.,

  
 Copy: Board of directors of the
Company 
  

 2

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