Contract

Dated May 27, 2002




SUBSCRIPTION AGREEMENT WITH RESPECT TO SECURITIES
TO BE ISSUED BY SHURGARD SELF STORAGE S.C. A.

XX XXXXX, XXX XXXXX, LAGAE &
XXXXXX
LINKLATERS & ALLIANCE
Xxxxxxxxxxxxxxx 00
0000 Xxxxxxxx


Telephone: x00 0 000 00 00
Facsimile: x00 0 000 00 00




SUBSCRIPTION AGREEMENT
BETWEEN:
(1)
Shurgard Storage Centers Inc., a company organized and existing under
the laws of Washington, having its registered xxxxxx xx Xxxxxx Xxxxxx 0000,
Xxxxx 000, 00000 Xxxxxxx XX, XXX,


represented for the purposes of this Subscription Agreement by Xxxxxxx X.
Xxxx,


hereinafter referred to as the "Subscriber";



AND:
(2)
Shurgard Self Storage S.C.A., a company organized and existing under
the laws of Belgium, having its registered office at Xxxx xx
Xxxxxxxx/Xxxxxxxxxxx 00, 0000 Xxxxxxxx, Xxxxxxx,


represented for the purposes of this Subscription Agreement by European
Self Storage SA represented by Xxxxxxx Metdepenninghen,


hereinafter referred to as the "Issuer";
WHEREAS
1. The Issuer has the intention to issue Bonds under the Terms and Conditions attached as
Annex 1.
2. Under certain circumstances as set forth below, the Issuer has the intention to proceed to a
capital increase.
3. Under the terms and conditions set forth below, the Subscriber is willing to irrevocably
undertake (i) to subscribe to the above issuance of Bonds by the Issuer, and to fully pay up
these Bonds, and (ii) to subscribe to the shares to be issued as set forth in Section 7
herein, and to fully pay up these shares by a contribution of receivables held against the
Issuer.
 

NOW, THEREFORE, the parties have agreed as follows:
 

1 DEFINITIONS - INTERPRETATIONS
 

1.1 For the purposes of this Subscription Agreement, the following terms shall have the
meanings specified or referred to in this Clause 1.1:
 

"Additional Commitment" has the meaning set out in Clause 2.3.
 

"Bond Request" has the meaning set out in Clause 2.1.
 

"Capital Request" has the meaning set out in Clause 4.1.
 

"Commitment Fee" has the meaning set out in Clause 1.1.
 

"Computation Notice" has the meaning set out in Clause 1.2.
 

"Expense Reimbursement" has the meaning set out in Clause 1.4.
 

"Final Commitment" has the meaning set out in Clause 2.2.
 

"Initial Commitment" has the meaning set out in Clause 2.1.
 

"Issuer" means Shurgard Self Storage S.C.A., a "societe en commandite par actions /
commanditaire vennootschap op aandelen" organised under the laws of Belgium,
having its registered office at Xxxx xx Xxxxxxxx/Xxxxxxxxxxx 00, 0000 Xxxxxxxx, and
registered with the Register of Commerce of Brussels under the number 587.679.
 

"Joint Venture Agreement" means the joint-venture agreement entered into by
amongst others the Issuer and the Subscriber, dated October 8, 1999.
 

"Objection Notice" has the meaning set out in Clause 1.2.
 

"Parties" means the parties mentioned above as well as any other person who may in
the future become a party to this Subscription Agreement.
 

"Share Subscription Undertaking" has the meaning sets out in Clause 4.1
 

"Structuring Fee" has the meaning set out in Clause 1.3.
 

"Subscription Agreement" means the present agreement together with the Annexes
as the same may be amended, modified and/or restated from time to time.
 

"Unused Fee" has the meaning set out in Clause 1.2.
 

1.2 Subject to Clause 1.1. of this Subscription Agreement and unless otherwise defined
herein, the defined terms (i.e., the terms with a capital letter as first letter) used in this
Subscription Agreement shall have the same meaning as defined in the Terms and
Conditions attached hereto as Annex 1.
 

1.3 Interpretation
 

1.3.1 The titles and headings included in this Subscription 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 Subscription Agreement.
 

1.3.2 The Annexes to this Subscription Agreement form an integral part thereof and
any reference to this Subscription Agreement includes the Annexes and vice
versa.
 

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

1.3.4 The words "include", "includes", including" and all forms and derivations
thereof shall mean including but not limited to.
 

1.3.5 All terms defined in this Subscription Agreement shall have the same
meaning regardless of whether they are used in the singular or plural number.
 

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

2 IRREVOCABLE UNDERTAKING TO SUBSCRIBE TO THE BONDS
 

2.1 The Subscriber hereby irrevocably undertakes to subscribe to the Bonds which may
be issued from time to time by the Issuer pursuant to the Terms and Conditions
attached as Annex 1 and to the attached minutes resolution of the Board of Managers
of the Issuer (Annex 2) and to fully pay up these Bonds at the Issue Price for an
amount of maximum USD 50,000,000 (the "Initial Commitment"), if so requested in
writing by the Issuer (the "Bond Request").
 

2.2 Notwithstanding the above, if the Issuer issues Bonds for an amount of at least USD
40,000,000 within 12 months of the date of this Subscription Agreement, the Issuer
shall have the right to increase the amount of the Initial Commitment of the Subscriber
provided for in Clause 2.1 to an amount of maximum USD 75,000,000 (the "Final
Commitment"). If the Issuer decides to exercise this right, it shall so notify the
Subscriber of the amount of the Final Commitment within 30 days of the end of the
above 12 month period at the latest.
 

2.3 The Subscriber hereby irrevocably undertakes to accept the Additional Bonds which
may be issued from time to time by the Issuer in payment of the Interests pursuant to
the Terms and Conditions attached as Annex 1 and to the attached minutes resolution
of the Board of Managers of the Issuer (Annex 2) (the "Additional Commitment"), if so
requested in writing by the Issuer.
 

Except as otherwise provided herein, the Additional Bonds and the Additional
Commitment are subject to all provisions of this Subscription Agreement applicable to
the Bonds and the Initial Commitment and Final Commitment.
 

It is specifically provided that the Additional Commitment is an undertaking which is
taken in addition to the Initial Commitment and Final Commitment and is, therefore,
not taken into account for the computation of the maximum amount of the Bonds
which must be subscribed by the Subscriber under the Initial Commitment and Final
Commitment.
 

2.4 The Bond Request (substantially in the form attached as Annex 3) must contain the
following information:
 

2.4.1 the principal amount of the Bonds to be issued;
 

2.4.2 the number of Bonds to be issued;
 

2.4.3 the date of this issuance and the date on which these Bonds shall be paid
up.
 

2.5 The Bond Request shall be notified to the Subscriber at least 10 days before these
Bonds are to be issued and paid up.
 

2.6 Each issuance of Bonds by the Issuer shall amount to a minimum of USD 5,000,000.
The issuance of Additional Bonds is not subject to this minimum amount, as
Additional Bonds may be issued for any amount required to pay the Interest, even if
less than USD 5,000,000.
 

2.7 The subscription commitments provided for in this Clause 2.1 and 2.2 shall
automatically terminate two years after the date of this Subscription Agreement.
 

2.8 The Subscriber hereby irrevocably undertakes to co-operate with the Issuer to
implement the formalities required to proceed with this issuance of Bonds and the
paying up of such Bonds as reasonably requested by the Issuer.
 

3 USE OF PROCEEDS
 

The Issuer shall use the proceeds from the issuance of the Bonds to fund corporate or store
operations, property acquisitions, new property development, or other general corporate
purposes.
 

1 FEES
 

1.1 Commitment Fee
The Issuer shall pay in cash to the Subscriber on the Date of this Subscription
Agreement an amount equal to 50 basis points of the Initial Commitment of USD
50,000,000.
If the Issuer exercises its right under Clause 2.2, the Issuer shall also pay in cash to
the Subscriber an amount equal to 50 basis points of the difference between the
amount of the Final Commitment and the Initial Commitment of USD 50,000,000. This
amount shall be paid within five business days after the Issuer has notified the
Subscriber of its decision to increase the Initial Commitment of the Subscriber
pursuant to Clause 2.2.
 

1.2 Unused Fee
The Issuer shall pay to the Subscriber an amount equal to 100 basis points (1.0%) of
the undrawn amount of the Initial Commitment or of the Final Commitment (if
applicable), payable in cash in arrears on a quarterly basis. This fee shall be
calculated on a pro rata basis on the basis of actual days in the quarter and a 360day
year. The Issuer shall provide the Subscriber with a computation of such fee within five
business days of the closing of each quarter (i.e., the 31 March, the 30 June, the 30
September and the 31 December of each year) (the "Computation Notice"). This
computation shall be deemed to be correct if the Subscriber did not object in writing in
a motivated way within five business days of the receipt of the Computation Notice (the
"Objection Notice"). In case an Objection Notice has been notified to the Issuer within
the above five business day period, the Parties shall determine the final computation of
said fees by mutual consent. These fees shall be paid (i) within five business days of
the expiration of the above five business day period if no Objection Notice has been
notified by the Subscriber during this period, or (ii) within five business days of the
determination of these fees by mutual consent of the Parties if an Objection Notice
has been notified within the above five business day period.
 

1.3 Structuring Fee
The Issuer shall pay in cash to the Subscriber on the Date of this Subscription
Agreement an amount equal to 1.5% of the Initial Commitment of USD 50,000,000.
As the case may be, the Issuer shall also pay in cash to the Subscriber an amount
equal to 1.5% of the difference between the amount of the Final Commitment and the
Initial Commitment of USD 50,000,000. This amount shall be paid within five business
days after the Issuer has notified its decision to increase the Initial Commitment of the
Subscriber pursuant to Clause 2.2.
 

1.4 Expense Reimbursement
The Issuer shall reimburse the Subscriber for reasonable legal, due diligence, and
administrative expenses, related to arranging, structuring, and closing this issuance of
the Bonds. These fees are capped at USD 250,000.
 

2 MINIMUM AMOUNT OF BONDS TO BE ISSUED
 

It is specifically provided that the Issuer shall not be required to issue any Bonds pursuant to
this Subscription Agreement. The Commitment Fee, Structuring Fee, and Unused Fee shall
still apply if no Bonds are issued by the Issuer.
 

3 LEVERAGE
 

The Issuer may borrow additional debt amounts up to a maximum ratio of USD1.35 additional
debt for every USD1 face value of the Bonds (excluding Additional Bonds) issued pursuant to
this Subscription Agreement. "Additional debt" shall mean debt in excess of the Euro 300
million on the Credit Suisse First Boston credit facility or its replacement.
 

4 IRREVOCABLE UNDERTAKING TO SUBSCRIBE TO THE CAPITAL
INCREASE
 

4.1 The Subscriber hereby irrevocably undertakes to subscribe to any capital increase in
the Issuer which will take place before the Redemption Date (as the case may be,
extended pursuant to the Terms and Conditions) pursuant to the provisions hereafter
(the "Share Subscription Undertaking") if so requested in writing by the Issuer (the
"Capital Request").
The Share Subscription Undertaking of the Subscriber pursuant to Clause 4.1 is
subject to the condition that the Issuer has launched an IPO on a regulated stock
market, and the shares the Subscriber receives being freely tradable, without lock up
provisions of any kind.
 

4.2 The capital increase pursuant to the Capital Request shall be effected by a
contribution in kind by the Subscriber of receivables arising out of the outstanding
Bonds held by the Subscriber against the Issuer including the principal and accrued
and unpaid interest. Each share shall be subscribed at a price equal to 80% of the
trading price of the shares of the Issuer as measured by the average of the official
exchange closing price for these shares on the 20 trading days preceding the capital
increase, except that if the closing price the day before the capital increase is lower
than such 20 day trading average, then each share shall be subscribed at a price
equal to 80% of the closing price on the day before the capital increase. The
Subscriber undertakes to take all necessary steps to this effect, including if
applicable, a positive vote at the Bondholders' meeting held in accordance with article
568 of the BCC.
 

4.3 The Capital Request (substantially in the form attached as Annex 4) must contain the
following information:
 

4.3.1 the amount of the envisaged capital increase; and
 

4.3.2 the date and place of the extraordinary shareholders' meeting or Board of
Managers to be held to proceed with said capital increase.
 

4.4 The shares to be issued through such a capital increase shall be of the largest class
of ordinary common stock issued by the Issuer during the above mentioned IPO.
 

4.5 The above capital increase needs to be approved by an extraordinary shareholders'
meeting of the Issuer held in the presence of a Belgian notary public or by the Board of
Managers of the Issuer in accordance with articles 603 and following of the BCC.. In
accordance with articles 601 and 602 BCC, the statutory auditor and the Board of
Managers of the Issuer need to submit their respective reports to this extraordinary
shareholders' meeting or Board of Managers. In addition, if the capital increase results
in an issuance of shares under par value, the requirements of article 582 BCC need
also to be complied with.
 

4.6 The Subscriber shall be notified of the Capital Request at least 20 days before the
above extraordinary shareholders' meeting or the Board of Managers is to be held and
no more than 30 days before this meeting.
 

4.7 The Subscriber hereby irrevocably undertakes to co-operate with the Issuer to
implement the formalities required to proceed with this capital increase as reasonably
requested by the Issuer.
 

4.8 Bonds can only be transferred in accordance with the Terms and Conditions and if the
transferee agrees in writing to the Share Subscription Undertaking set out in this
Clause.
 

5 MINIMUM AMOUNT OF SHARES TO BE ISSUED
 

It is specifically provided that the Issuer shall not be required to issue any shares pursuant to
this Subscription Agreement.
 

6 MISCELLANEOUS
 

6.1 Expenses
Save as otherwise provided herein, the Issuer shall bear the expenses incurred in
connection with the preparation of this Subscription Agreement and the transactions
contemplated hereby, including, without limitation, legal and auditing fees and
expenses.
 

6.2 Press Announcements
All public announcements, releases, statements and communications by any of the
Parties to third persons (excluding the employees of either Party and customers)
relating to this Subscription Agreement shall be made only at such time and in such
manner as may be prior agreed upon in writing by the Parties, unless otherwise
required by law or contract. To the greatest extent practicable, the Parties shall
discuss with each other the form, timing and substance of such announcements,
releases, statements and communications prior to the dissemination thereof.
 

6.3 Notices
All notices, requests, claims, demands and other communications hereunder shall be
delivered to the Parties in person or sent to the addresses set forth in the first pages of
this Subscription Agreement hereof by first class courier or by registered letter,
postage prepaid and return receipt requested, or by telefax as follows:
 

If to the Subscriber:
To: Shurgard Storage Centers Inc.
Xxxxxx Xxxxxx 0000, Xxxxx 000
00000-0000 Xxxxxxx
XXX
Attn: Xx. Xxxxxxx Xxxx
Telefax: 00 1-206 652.37.60

If to the Issuer:
To: Shurgard Self Storage S.C.A.
Xxxx xx Xxxxxxxx/Xxxxxxxxxxx 00
0000 Xxxxxxxx
Xxxxxxx
Attn: Xx. Xxxxxxx Metdepenninghen
Telefax 00 32 2 229 56 55

Each change of address by a Party shall be notified to the other Parties in accordance
with the provisions of this Article 6.3.
 

Any notice, demand or other communication sent by first class courier or by mail shall
be deemed to have been received by the Party to whom it was sent on the day shown
as the day of receipt on the return receipt sent with the same. Any notice, demand or
other communication sent by telefax shall be deemed, in the absence of proof to the
contrary, to have been received by the Party to whom it was sent on the date of
dispatch, provided that the report generated by the sender's telefax machine shows
that all pages of such notice, demand or other communication were properly
transmitted to the recipient's telefax number. For the calculation of a period of time,
such period shall start the next following day after the day on which the event
triggering such period of time has occurred. The expiry date shall be included in the
period of time. If the expiry date is a Saturday, a Sunday or a bank holiday in Belgium,
the expiry date shall be postponed until the next business day in Belgium. Unless
otherwise provided herein, all periods of time shall be calculated in calendar days in
Belgium.

6.4 Severability
If any provision of this Subscription Agreement shall be held invalid or unenforceable in
whole or in part, then such provision shall be ineffective to the extent of such invalidity
or unenforceability, without invalidating the remaining provisions of this Subscription
Agreement. In this event, the Parties shall cooperate to achieve the intended purpose
of such provision, to the extent legally permissible.
 

6.5 Assignment
This Subscription Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and assigns. Except as otherwise expressly
permitted in the Subscription Agreement, the Parties may not, directly or indirectly,
assign or transfer this Subscription Agreement or any right, obligation or interest
herein in whole or in part without the prior written consent of the other Parties in each
instance and unless the assignee or transferee shall have assumed in writing all the
duties and obligations of the transferee. Upon such assignment or transfer, the
transferor shall remain primarily liable hereunder unless otherwise expressly provided
in this Subscription Agreement.
 

6.6 Entire Subscription Agreement
 

6.6.1 This Subscription Agreement (along with the documents referred to therein)
contains the entire Subscription Agreement between the Parties with respect
to the matters to which it refers and contains everything the Parties have
negotiated and agreed upon within the framework of this Subscription
Agreement.
 

6.6.2 It replaces and annuls any agreement, communication, offer, proposal, or
correspondence, oral or written, exchanged or concluded between the
Parties, including the proposal of October 12, 2001 relating to the same
subject matter.
 

6.7 Single Instrument for United States Federal Income Tax Purposes
The parties to this Subscription Agreement intend that the Terms and Conditions of
the Bonds and the Subscription Agreement of even date herewith be treated together
as a single equity interest in of the Issuer for United States federal income tax
purposes.
 

6.8 Applicable Law and Choice of Forum
This Subscription Agreement shall be governed by Belgian law.
To the extent permitted by Belgian Law, any dispute arising out of or in connection
with this Subscription Agreement shall be finally settled by arbitration under the Rules
of Conciliation and Arbitration of the "Centre Belge pour l'Etude et la Pratique de
l'arbitrage national et International" ("CEPANI"), as in force on the Date of this
agreement, by three arbitrators appointed in accordance with said rules.
The place of arbitration shall be Brussels, Belgium, or such other place as the Parties
may agree upon. The language of the arbitration shall be English.
The arbitrators' award shall be final and binding upon the Parties, and the Parties shall
carry out its terms properly.
 

[NEXT PAGE IS SIGNATORY PAGE]
 

Done in Seattle, on 27 May 2002, in two originals. Each party acknowledges receipt of its own
original.
Shurgard Storage Centers Inc.:

By:  /s/ Xxxxxxx X. Xxxx
Name:  Xxxxxxx X. Xxxx
Title: Vice President and Chief Financial Officer





Shurgard Self Storage S.C.A.:

By:  /s/ Xxxxxxx Metdepenninghen
Name:  Xxxxxxx Metdepenninghen
Title: Director







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