STORAGE USA, INC.
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September 7, 2001
Security Capital Group Incorporated
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Ladies and Gentlemen:
Reference is made to that certain Strategic Alliance Agreement dated
as of March 19, 1996 (as amended, the "Strategic Alliance Agreement") by and
among Storage USA, Inc., a Tennessee corporation (the "Company"), SUSA
Partnership, L.P., a Tennessee limited partnership (the "Operating
Partnership"), Storage USA Trust, a Maryland real estate investment trust and a
wholly owned subsidiary of the Company (the "Trust"), Security Capital U.S.
Realty, a Luxembourg corporation ("USREALTY"), and Security Capital Holdings
S.A., a Luxembourg corporation and a wholly owned subsidiary of USREALTY
("Buyer"), and to which Security Capital Group Incorporated (both as to itself
and as successor to all the rights of USREALTY and Buyer under the Strategic
Alliance Agreement, "Security Capital") has become party as a result of the
transactions between Security Capital, USREALTY and Buyer and the consent
granted by the Company pursuant to that certain letter agreement dated July 7,
2000. The term "parties" as used in this agreement shall mean in all cases the
Company, the Operating Partnership, the Trust, and Security Capital. Terms used
herein but not defined shall have the meanings given to them in the Strategic
Alliance Agreement.
This will confirm our modification of the restrictions on your
actions during the Standstill Period and any Standstill Extension Term pursuant
to Section 5.2 of the Strategic Alliance Agreement to the extent, but only to
the extent, necessary to permit Security Capital to engage in further
discussions with a Special Committee of the Company's Board of Directors (the
"Special Committee") and its representatives concerning Group's intentions with
respect to its investment in the Company and as to whether it is advisable for
the Company to receive a proposal from Security Capital with respect to an
extraordinary transaction which Security Capital would otherwise be prohibited
from making by the terms of the Strategic Alliance Agreement. This letter also
confirms your modification to the term "Early Termination Event" in Section
5.1 of the Strategic Alliance Agreement to the extent, but only to the extent,
necessary to permit the Special Committee and its advisors to respond to any
unsolicited inquiries from any third party with respect to a Covered
Transaction. It is explicitly understood and agreed that unless extended in a
writing signed by both the Company and Security Capital, the modifications
granted in this paragraph shall terminate 30 days from the date hereof.
It is also explicitly understood and agreed, and the modification
granted in the first sentence of the immediately preceding paragraph is given by
the Company on the express condition, that nothing contained herein or in such
discussions shall be deemed to permit Security Capital to make a proposal,
directly or indirectly, to the Company to effect or relating to or concerning a
Covered Transaction between Security Capital and the Company or to in any other
way waive any of the provisions of the Strategic Alliance Agreement, but that
those provisions otherwise shall remain in effect, modified only to the extent
provided in the preceding paragraph.
For the avoidance of doubt, the parties hereto agree that (i) the
actions of the Board of Directors of the Company authorizing and forming the
Special Committee of the Board of Directors, any actions taken by the
Company or the Special Committee or any of their respective agents or
representatives prior to the execution hereof in accordance with such
authorization, any actions taken by the parties hereto authorized by such
authorization or the related resolutions and any contacts, discussions or
negotiations between the parties and/or their affiliates or representatives, in
each case prior to the execution hereof, and (ii) the negotiation and entering
into of this letter agreement, shall not, in any event, constitute an "Early
Termination Event" under Section 5.1 of the Strategic Alliance Agreement or
constitute a violation or attempted violation by any of the parties of any
provision of the Strategic Alliance Agreement (including, without limitation,
Sections 2.2, 5.1 and 5.2 thereof), or of any provision of the Company's Charter
or Amended and Restated Bylaws, and each of the parties hereto hereby
irrevocably waives any claim against any of the other parties, its directors,
officers, employees, and representatives, or their affiliates because of any
such contacts, actions, discussions or negotiations to the extent permitted
hereby.
[SIGNATURE PAGES FOLLOW]
We understand that in accordance with applicable law and
regulations, this letter will be publicly disclosed and filed as part of an
amendment to your Schedule 13D with respect to your ownership of Company stock.
Likewise, you understand that we intend to file a copy of this letter with a
Form 8-K announcing the signing of this agreement.
Very truly yours,
STORAGE USA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:Chairman of the Board, CEO and President
SUSA PARTNERSHIP, L.P.
By: Storage USA, Inc., General Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:Chairman of the Board, CEO and President
STORAGE USA TRUST
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:Chairman of the Board of Trustees,
CEO and President
Agreed to and accepted by:
SECURITY CAPITAL GROUP INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and Secretary
