AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF YSI - HART LIMITED PARTNERSHIP (a Delaware Limited Partnership)

Exhibit 10.1

EXECUTION COPY

AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT

OF

YSI - ▇▇▇▇ LIMITED PARTNERSHIP

(a Delaware Limited Partnership)

August 13, 2009

THE PARTNERSHIP INTERESTS IN YSI - ▇▇▇▇ LIMITED PARTNERSHIP (THE “INTERESTS”) ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS AGREEMENT.  THE INTERESTS HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS, IN EACH CASE IN RELIANCE UPON EXEMPTIONS FROM THE REQUIREMENTS OF SUCH LAWS.  NEITHER THE INTERESTS NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT AND ALL APPLICABLE SECURITIES LAWS.

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AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT
OF
YSI - ▇▇▇▇ LIMITED PARTNERSHIP

THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of YSI - ▇▇▇▇ LIMITED PARTNERSHIP, a Delaware limited partnership (the “Partnership”), is entered into as of August 13, 2009 (the “Effective Date”), by and between YSI VENTURE GP LLC, a Delaware limited liability company, as a general partner of the Partnership (“Operator GP”), YSI VENTURE LP LLC, a Delaware limited liability company, as a limited partner of the Partnership (“Operator LP”, and together with Operator GP, the “Operator Partners”), ▇▇▇▇ — YSI INVESTOR GP LLC, a Delaware limited liability company, as a general partner of the Partnership (“Investor GP”), and ▇▇▇▇ — YSI INVESTOR LP LLC, a Delaware limited liability company, as a limited partner of the Partnership (“Investor LP,” and together with Investor GP, the “Investor Partners”).

W I T N E S S E T H:

WHEREAS, the Operator Partners previously formed the Partnership pursuant to the laws of the State of Delaware by the filing of a certificate of limited partnership (the “Certificate of Limited Partnership”) with the Secretary of State of the State of Delaware on August 11, 2009, and pursuant to a Limited Partnership Agreement dated August 11, 2009 (the “Prior Agreement”), with Operator LP owning all of the Financial Rights and Operator GP holding all of the Management Rights; provided, however, that the Partnership has not yet commenced any business operations or activities and has incurred no liabilities or obligations;

WHEREAS, the Partnership acquired the Properties and certain related assets in connection with the formation of the Partnership;

WHEREAS, following such acquisition, and concurrently herewith: (a) Investor LP has agreed to make a Capital Contribution to the Partnership in exchange for the issuance to it of Partnership Interests, including a 50% Capital Ratio and the right to certain preferred returns and other Financial Rights, (b) Operator Partners and Investor LP have agreed to admit Investor GP, as an additional general partner of the Partnership, with various Management Rights but no Financial Rights, and (c) the Partners have agreed to amend and restate the Prior Agreement in its entirety to govern the Partnership in all respects from this point forward so that the Prior Agreement shall be completely superseded and of no further force or effect;

WHEREAS, the Partners desire to continue the Partnership for the purpose of acquiring self storage assets, and to manage, maintain, operate and lease the same, in each case in accordance with the terms set forth herein; and

WHEREAS, the Partners desire to set forth the manner in which the business and affairs of the Partnership shall be managed, and their respective rights, duties and obligations with respect to the Partnership, from this time forward.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree that the Prior Agreement is hereby amended and restated in its entirety, as follows (and that this Amended and Restated Limited Partnership Agreement shall supersede the Prior Agreement and shall govern the Partnership in all respects from this time forward):

ARTICLE I

DEFINITIONS

Section 1.1.            Capitalized Terms.  Except where otherwise specified or if the context otherwise requires, the following terms shall have the meanings set forth below for all purposes of this Agreement:

“Act” shall have the meaning given in Section 2.1.

“Additional Capital Contribution” shall have the meaning given in Section 4.1(c).

“Additional Capital Call Notice” shall have the meaning given in Section 4.1(c).

“Affiliate” shall mean, with respect to any Partner, any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Partner.  The term “control” as used herein (including the terms “controlling,” “controlled by,” and “under common control with”) shall mean the possession, directly or indirectly, of the ability (a) to vote fifty percent (50%) or more of the outstanding voting securities of or voting interests in a Person, or (b) otherwise to direct the management policies of such Person, by contract or otherwise.

“Agreement” shall mean this Amended and Restated Limited Partnership Agreement, including the exhibits and schedules hereto.

“Ancillary Services Agreement” shall have the meaning given in Section 8.7.

“Ancillary Activities” shall have the meaning given in Section 8.7.

“Annual Business Plan” shall have the meaning given in Section 8.1(a).

“Applicable REIT” shall have the meaning given in Section 8.10.

“Authorized Representatives” shall have the meaning given in Section 9.5.

“Bad REIT Asset” shall have the meaning given in Section 8.10.

“Bad REIT Income” shall have the meaning given in Section 8.10.

“Bank Secrecy Act” shall mean the Currency and Foreign Transaction Reporting Act, 31 USC §§5311-5330 and 12 USC §§1818(s), 1829(b) and 1951-1959.

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“Business Day” shall mean any day other than a Saturday, Sunday or a holiday on which national banking associations in Wayne, Pennsylvania or Chicago, Illinois, are closed or are authorized or required to close.

“Capital Account” shall have the meaning given in Section 11.1.

“Capital Contributions” shall mean the amount of money and the agreed fair market value of other property (net of any liabilities secured by such property that the Partnership is deemed to assume, or to which the property remains subject, pursuant to Section 752 of the Code) contributed by a Partner to the Partnership, including initial Capital Contributions and Additional Capital Contributions (but excluding Default Loans).

“Capital Proceeds” shall mean funds of the Partnership or a Subsidiary arising from a Capital Transaction, net of (a) the actual costs incurred by the Partnership or such Subsidiary in consummating the Capital Transaction, (b) any condemnation, insurance or financing proceeds used by the Partnership or any Subsidiary to acquire, repair, replace or redevelop a Property or Properties pursuant to this Agreement or the Annual Business Plan and (c) any indebtedness of such Subsidiary or Property paid and satisfied with the proceeds of such Capital Transaction.

“Capital Ratio” shall mean, with respect to each Property, the percentages in which the Partners participate in, and bear, certain Partnership items.  The Capital Ratios of the Partners are:

As noted throughout this Agreement, the General Partners will have no Capital Ratio, nor a Capital Account or any other Financial Rights in or to the Partnership.

“Capital Transaction” shall mean (a) any sale, exchange, taking by eminent domain, damage, destruction or other disposition of all or any part of the assets of the Partnership or any Subsidiary, other than tangible personal property disposed of in the ordinary course of business; or (b) any financing or refinancing of any Property or Properties (provided that the Partners hereto acknowledge that no such financing or refinancing transactions are contemplated and any such transaction shall constitute a Major Decision).

“Capital Transaction Profits” and “Capital Transaction Losses” mean for each Fiscal Year, an amount equal to the Partnership’s Profits or Losses for such Fiscal Year as determined pursuant to the definition of Net Profits and Net Losses except that such amounts shall be calculated only with respect to items of Partnership income, gain, loss, expense or deduction associated with a Capital Transaction.  Notwithstanding the foregoing, Capital Transaction Profits and Capital Transaction Losses shall be deemed to include any allocable items attributable to paragraph (iii) of the definition of Profits and Loss.

“Certificate of Limited Partnership” shall have the meaning given in the recitals to this Agreement.

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“Code” shall mean the Internal Revenue Code of 1986.

“Competing Partner” shall have the meaning given in Section 3.2.

“Compliance Certificate” shall mean a certificate issued in favor of the Partnership and the Partners wherein the certifying Person:

(a)           certifies that, as of the date of the certificate, the representations and warranties contained in (i) Section 12.1, with respect to a transferee of a direct or indirect interest in Operator Partners’ interests in the Partnership, or (ii) Section 12.2, with respect to a transferee of a direct or indirect interest in Investor Partners’ interests in the Partnership, are true, correct and complete,

(b)           agrees to be bound by the provisions of this Agreement; and

(c)           certifies as to other information reasonably requested by the Partners to the extent necessary to verify compliance with, as applicable, OFAC Laws and Regulations, the Patriot Act, the Bank Secrecy Act, any other law of similar import, and any regulations promulgated under any of them, including whether the transferee is a Financial Institution or an entity majority-owned by a Financial Institution, and if so whether an appropriate anti-money laundering policy and procedure and customer identification program has been adopted.

“Contributing Partner” shall have the meaning given in Section 4.4.

“Contribution Agreement” shall mean that certain Contribution Agreement dated August 6, 2009, as amended by that certain Contribution Agreement dated August 13, 2009, among the Partnership and the Partners pertaining to, among other things, the contribution of the Properties to the Partnership and the admission of the Partners to the Partnership.

“Debt” shall mean all indebtedness for borrowed money, whether secured or unsecured, incurred by the Partnership or any Subsidiary.

“Default Loan” shall have the meaning given in Section 4.4(b).

“Default Rate” shall mean the greater of (a) eighteen percent (18%) per annum, compounded monthly, or (b) a per annum rate equal to the sum of five percent (5%) plus the Prime Rate, as it may change from time to time; provided that in no event shall the Default Rate exceed the highest rate permitted by Governmental Requirements.

“Defaulting Partner” shall mean a Partner the acts or omissions of which result in an Event of Default in accordance with Section 16.1.

“Depreciation” means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Fiscal Year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation,

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amortization, or other cost recovery deduction for such Fiscal Year or other period bears to such beginning adjusted tax basis. In the event that the federal income tax depreciation, amortization, or other cost recovery deduction is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partners or required by the applicable tax laws.

“Dispose,” “Disposing” or “Disposition” shall mean, with respect to any asset (including a Partnership Interest or any portion thereof), a sale, assignment, transfer, lease, conveyance, gift, pledge, granting of an easement or other encumbrance, exchange or other disposition of such asset; provided such term does not refer to the lease by the Partnership or a Subsidiary to a tenant of space at a Property in the ordinary course of business and in accordance with the Annual Business Plan.

“Effective Date” shall have the meaning given in the prelude to this Agreement.

“Emergency Situation Responses” shall mean reasonable actions, in light of the circumstances, taken in direct response to unanticipated emergency situations that create an imminent threat of property damage or personal injury or death in order to maintain value of the Properties or mitigate the threat of such injury or death.

“Encumbrances” shall have the meaning given in Section 13.1(a).

“Entity” shall mean any Person other than a natural person.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

“Event of Default” shall have the meaning given in Section 16.1.

“Excepted YSI Persons” shall mean each “Excepted Holder,” as such term is defined in Section 7.1 of the current Articles of Amendment and Restatement of Declaration of Trust of YSI, a copy of which is attached hereto as Schedule I, regardless of any subsequent amendment to said Section.

“Financial Institution” shall mean a “financial institution” as defined in the Patriot Act, the Bank Secrecy Act, any other law of similar import, or any regulations promulgated under any of them.

“Financial Rights” shall mean the right to receive distributions of funds and allocations of income, gain, loss, deduction and credit.

“Financing Documents” shall mean documents executed by the Partnership or a Subsidiary in connection with any financing or loan transaction.

“Fiscal Year” shall mean each fiscal year of the Partnership as provided in Section 10.2 or any portion of such period, but solely to the extent such shorter period is necessary to allocate Profits, Losses, and other items of Partnership income, gain, loss, or deduction pursuant to Article XI consistent with Sections 706 and 704(b) of the Code.

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“General Partners” shall mean, collectively, at any time, the Persons who are general partners in the Partnership as provided in this Agreement and under the Act, such Persons being, on the date of this Agreement, Operator GP and Investor GP, as more fully described in Schedule II (or such Persons’ respective successors), and at any time thereafter those Persons admitted as a general partner in the Partnership in accordance with this Agreement in substitution of such Persons and any other Person admitted as an additional general partner in the Partnership, in each case in accordance with this Agreement and the Act, each in its capacity as a general partner in the Partnership.

“Governmental Authority” shall mean the United States of America, any of the several states, any county or municipality in which a Property is located, and any agency, authority, court, department, commission, board, bureau or instrumentality of any of them.

“Government Lists” shall mean (a) the SDN List, (b) the Denied Persons List and the Entity List maintained by the United States Department of Commerce, (c) the List of Terrorists and List of Disbarred Parties maintained by the United States Department of State, (d) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the OFAC Laws and Regulations, (e) any other similar list maintained by the United States Department of State, the United States Department of Commerce or any other Governmental Authority or pursuant to any Executive Order of the President of the United States of America, and (f) any list or qualification of “Designated Nationals” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, as all such Government Lists may be updated from time to time.

“Governmental Requirements” shall mean, collectively, all applicable laws, statutes, ordinances, regulations, tariffs, judicial or administrative orders, and procedural requirements imposed by any Governmental Authority regulating or affecting the applicable Person or Property.

“Gross Asset Value” means with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(i)            The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by agreement of the General Partners except as otherwise provided in Section 4.1(b) with respect to the Operator Initial Contribution;

(ii)           The Gross Asset Values of all Partnership assets shall be adjusted, in the discretion of the General Partners, to equal their respective gross fair market values (taking Code Section 7701(g) into account), as determined by agreement of the General Partners as of the following times:  (A) the acquisition of, or increase in, the Partnership Interest of any new or existing Partner; (B) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property with respect to a Partnership Interest; (C) the liquidation of the Partnership within the meaning of Regulations §1.704-1(b)(2)(ii)(g);

(iii)          The Gross Asset Value of any item of Partnership assets distributed to any Partner shall be adjusted to equal the gross fair market value (taking Code Section 7701(g) into account) of such asset on the date of distribution as determined by agreement of the General Partners;

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(iv)          The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations §1.704-1(b)(2)(iv)(m); and

(v)           If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses.

“▇▇▇▇▇▇▇” shall mean ▇▇▇▇▇▇▇ Capital Management LLC, an Iowa limited liability company.

“Indemnified Parties” shall mean (a) the Partners, their respective Affiliates and any officer, partner, member, shareholder, director, manager, or other agent of or advisor to any of them, (b) any Person who serves at the request of the Partnership or any Partner as an officer, director, trustee, manager or agent of the Partnership, any Subsidiary or any Entity in which the Partnership has an interest as an owner, security holder, creditor or otherwise, and (c) each Authorized Representative, and “Indemnified Party” shall mean any one of them.

“Information” shall have the meaning given in Section 18.13.

“Insolvent Partner” shall mean any Partner (a) who has voluntarily initiated proceedings of any nature under the Federal Bankruptcy Code, or any similar state or federal law for the relief of debtors; (b) who has made a general assignment for the benefit of creditors, (c) against whom an involuntary proceeding under the Federal Bankruptcy Code, or any similar federal or state law for the relief of debtors, has been initiated, and (i) with respect to such proceeding an order for relief has been entered under the Bankruptcy Code (or comparable order under any similar federal or state law), or (ii) which proceeding is not dismissed or discharged within sixty (60) days after the filing thereof; (d) who has admitted in writing its inability to pay its debts as they mature; or (e) all or any substantial part of whose assets, or whose interest in the Partnership or any part thereof, has been the subject of attachment or other judicial seizure.

“Insolvent GP” shall have the meaning given in Section 13.7.

“Investor Accrual” shall have the meaning given in Section 5.2(b).

“Investor GP” shall have the meaning given in the prelude to this Agreement.

“Investor LP” shall have the meaning given in the prelude to this Agreement.

“Investor Partners” shall have the meaning given in the prelude to this Agreement.

“Investor Preferred Return” shall have the meaning given in Section 5.2(b).

“Investor 12% Return” shall mean a nominal return to Investor LP of 12.0% per year, on a cumulative basis, compounded monthly, on all of Investor LP’s Unreturned Capital Contributions, and on the cumulative unpaid Investor Accrual, from time to time outstanding, based on all distributions made to such Partner from the Partnership (except to the extent certain

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distributions are expressly excluded in calculating such return, as otherwise provided in Section 13.4).  For the purpose of further certainty, Operator Partners acknowledge that, in order to achieve the Investor 12% Return at any time, Investor LP also must have received, by such time, the payment of the outstanding principal balance of, and all accrued and unpaid interest on, any outstanding Default Loans made by Investor LP (the Partners acknowledging that Default Loans are not Capital Contributions and must be repaid in full before further payments of or returns on Capital Contributions).

“Investor 13% Return” shall mean a nominal return to Investor LP of 13.0% per year, on a cumulative basis, compounded monthly, on all of Investor LP’s Unreturned Capital Contributions, and on the cumulative unpaid Investor Accrual, from time to time outstanding, based on all distributions made to such Partner from the Partnership.  For the purpose of further certainty, Operator Partners acknowledge that, in order to achieve the Investor 13% Return at any time, Investor LP also must have received, by such time, the payment of the outstanding principal balance of, and all accrued and unpaid interest on, any outstanding Default Loans made by Investor LP (the Partners acknowledging that Default Loans are not Capital Contributions and must be repaid in full before further payments of or returns on Capital Contributions).

“Investor 14% Return” shall mean a nominal return to Investor LP of 14.0% per year, on a cumulative basis, compounded monthly, on all of Investor LP’s Unreturned Capital Contributions, and on the cumulative unpaid Investor Accrual, from time to time outstanding, based on all distributions made to such Partner from the Partnership.  For the purpose of further certainty, Operator Partners acknowledge that, in order to achieve the Investor 14% Return at any time, Investor LP also must have received, by such time, the payment of the outstanding principal balance of, and all accrued and unpaid interest on, any outstanding Default Loans made by Investor LP (the Partners acknowledging that Default Loans are not Capital Contributions and must be repaid in full before further payments of or returns on Capital Contributions).

“Investor Unilateral Marketing Notice” shall have the meaning given in Section 13.4.

“Investor Unilateral Marketing Right” shall have the meaning given in Section 13.4.

“Key Persons” shall mean, collectively, both ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇.

“Limited Partners” shall mean, collectively, at any time, the Persons who are limited partners in the Partnership as provided in this Agreement and under the Act, such Persons being, on the date of this Agreement, Operator LP and Investor LP, as more fully described in Schedule II (or such Persons’ respective successors), and at any time thereafter those Persons admitted as a limited partner in the Partnership in accordance with this Agreement in substitution of such Persons and any other Person admitted as an additional limited partner in the Partnership, in each case in accordance with this Agreement and the Act, each in its capacity as a limited partner in the Partnership.

“Lockout Period” shall mean the period beginning on the Effective Date and ending on the date that is the third anniversary of the Effective Date.

“Loss” or “Losses” shall mean any and all losses, liabilities, costs, claims, damages, judgments, fines, penalties or expenses (including expenses of investigation and attorneys’ fees

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and expenses in connection with any action, suit or proceeding, whether involving a third party claim or a claim solely between the Partners).

“Major Decisions” shall mean the matters set forth in Section 7.2(a).

“Major Dispute” shall have the meaning given in Section 7.3(a).

“Management Rights” shall mean the right of a Partner to participate in the management of the Partnership to the extent herein expressly provided.

“Marketing Notice” shall have the meaning given in Section 13.3(a).

“Marketing Right” shall have the meaning given in Section 13.3(a).

“Marketing Right Offer” shall have the meaning given in Section 13.3(a).

“Marketing Right Offer Price” shall have the meaning given in Section 13.3(a).

“Non-Compete Period 1” shall mean the period beginning on the Effective Date and ending on the earlier of (i) the date that is ninety (90) days after the date Investor Partners cease to be Partners of the Partnership or (ii) the date that is ninety (90) days after the date Operator Partners cease to be Partners of the Partnership. “Non-Compete Period 2” shall mean the period beginning on the Effective Date and ending on the earlier of (i) the date that Investor Partners cease to be Partners of the Partnership or (ii) the date that Operator Partners cease to be Partners of the Partnership.

“Non-Compete Restrictive Area” shall mean the areas within certain distances from each Property (as measured by a radius around each Property), as more fully provided for in Schedule III.

“Non-Controllable Items” shall mean costs that are outside of the reasonable control of Operator GP, including insurance, taxes, assessments, utility costs and snow removal costs.

“Non-Triggering Partner” shall have the meaning given in Section 13.3(b).

“Notice of Major Dispute” shall have the meaning given in Section 7.3(a).

“OFAC” shall mean the Office of Foreign Assets Control, United States Department of the Treasury, or any other office, agency or department that succeeds to the duties of OFAC.

“OFAC Laws And Regulations” shall mean (a) any lists, laws, rules, sanctions and regulations maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation, including the Trading with the Enemy Act, 50 U.S.C. App. § 1 et seq., the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., the Iraq Sanctions Act, Pub. L. 101-513, Title V, §§ 586 to 586J, 104 Stat. 2047, the National Emergencies Act, 50 U.S.C. §§ 1601 et seq., the Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. 104-132, 110 Stat. 1214-1319, the United Nations Participation Act, 22 U.S.C. § 287c, the International Security and Development ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇.▇.▇. § ▇▇▇▇▇▇-▇, the Nuclear

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Proliferation Prevention Act of 1994, Pub. L. 103-236, 108 Stat. 507, the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. §§ 1901 et seq., the Iran and Libya Sanctions Act of 1996, Pub. L. 104-172, 110 Stat. 1541, the Cuban Democracy Act, 22 U.S.C. §§ 6001 et seq., the Cuban Liberty and Democratic Solidarity Act, 22 U.S.C. §§ 6021-91, and the Foreign Operations, Export Financing and Related Programs Appropriations ▇▇▇, ▇▇▇▇, Pub. L. 104-208, 110 Stat. 3009-172 and all amendments thereto; (b) all regulations, executive orders, or administrative orders of any kind issued under these statutes; (c) any other applicable civil or criminal federal or state laws, regulations, or orders that (i) limit the use of and/or seek the forfeiture of proceeds from illegal transactions; (ii) limit commercial transactions with designated countries or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests of the United States; or (iii) are designed to disrupt the flow of funds to terrorist organizations; and (d) any other civil or criminal federal or state laws, regulations, or orders of similar import.

“Operating Budget” shall have the meaning given in Section 8.1(a).

“Operating Cash” shall mean, with respect to any period for which such calculation is being made, the positive difference of: (a) Operating Revenues; minus (b) the sum of the following (without duplication): (i) all cash expenditures made or to be made by the Partnership or any Subsidiary during such period (including all operating and capital expenditures), excluding any amounts paid out of Reserves, as provided in the Operating Budget or otherwise approved by the General Partners, (ii) all interest, scheduled or required principal payments (including loan amortization or satisfaction, if applicable) and other debt and escrow and reserve account payments and deposits (including prepayment of any debt) made during such period by the Partnership on account of or with respect to the Partnership’s or any Subsidiary’s indebtedness for money borrowed (other than Default Loans), if any, and (iii) the amount of any Reserves (including Reserves for working capital, operating deficits and capital) established or increased during such period, as provided in the Operating Budget or otherwise approved by the General Partners.

“Operating Profits” and “Operating Losses” means all Net Profits and Net Losses, respectively, of the Partnership but calculated by excluding any amount included in the calculation of Capital Transaction Profits and Capital Transaction Losses.

“Operating Revenues” shall mean, with respect to the Partnership or any Subsidiary, as applicable, and for any period, the operating revenues of the Partnership or such Subsidiary arising from the ownership and operation of the Properties during such period, including rental income under space leases and income derived from Ancillary Activities, but specifically excluding, without limitation, (a) Capital Proceeds, (b) Capital Contributions made by the Partners, (c) loans, advances or contributions of capital made by the Partnership to a Subsidiary, and (d) tenant security deposits until the Partnership or any Subsidiary becomes entitled to such deposit in accordance with the applicable tenant lease.

“Operator Accrual” shall have the meaning given in Section 5.2(e).

“Operator Contributions to Pay Investor Accrual” shall have the meaning given in Section 5.2(d).

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“Operator GP” shall have the meaning given in the prelude to this Agreement.

“Operator LP” shall have the meaning given in the prelude to this Agreement.

“Operator Initial Contribution” shall have the meaning given in Section 4.1(b).

“Operator Partners” shall have the meaning given in the prelude to this Agreement.

“Operator Preferred Return” shall have the meaning given in Section 5.2(e).

“Operator Take Out Notice” shall have the meaning given in Section 13.5.

“Operator Take Out Right” shall have the meaning given in Section 13.5.

“Partner” shall mean any one of the Partners.

“Partners” shall mean, collectively, at any time, the Persons who are partners in the Partnership as provided in this Agreement and under the Act, such Persons being, on the date of this Agreement, the Operator GP, Operator LP, Investor GP, and Investor LP, as more fully described in Schedule II (or such Persons’ respective successors), and at any time thereafter those Persons admitted as a partner in the Partnership in accordance with this Agreement in substitution of such Persons and any other Person admitted as an additional partner in the Partnership, in each case in accordance with this Agreement and the Act, each in its capacity as a partner in the Partnership.

“Partnership” shall have the meaning given in the prelude of this Agreement.

“Partnership Interests” shall mean all of the rights and interests of whatsoever nature of the Partners in the Partnership, including each Partner’s respective Management Rights and Financial Rights, provided that the General Partners shall not have any Financial Rights and the Limited Partners shall have only the very limited Management Rights, if any, expressly set forth in this Agreement or mandated by the Act.

“Passive Interest Holders” shall mean, collectively with respect to any Person, any other Person who holds a direct or indirect ownership interest in such Person, only through an interest in a U.S. Publicly Traded or Pension Entity or only through a non-controlling limited partnership, limited liability or corporate equity interest, as applicable.

“Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26, 2001), as the same may be amended from time to time, and corresponding provisions of future similar laws.

“Payment Default” shall have the meaning given in Section 4.4.

“Payments of Operator Accrual” shall have the meaning given in Section 5.2(g).

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

“Personal Representative” shall have the meaning given in Section 13.7(a).

“Prime Rate” shall mean the highest prime rate (or base rate) reported in the Money Rates column or section of The Wall Street Journal published on the second Business Day of each month as having been the rate in effect for corporate loans at large United States money center commercial banks (whether or not such rate has actually been charged by any such bank) as of the first Business Day of such month for which such rate is published.  The Prime Rate shall change monthly and shall be effective for the entire calendar month.  If The Wall Street Journal ceases publication of the Prime Rate, the “Prime Rate” shall mean the prime rate (or base rate) announced by JPMorgan Chase & Co., New York, New York, or its successors or another money center bank selected by Investor GP, in its reasonable discretion (whether or not such rate has actually been charged by such bank).  If such bank discontinues the practice of announcing the Prime Rate, the “Prime Rate” shall mean the highest rate charged by such bank on short-term, unsecured loans to its most creditworthy large corporate borrowers.

“Prior Agreement” shall have the meaning given in the recitals to this Agreement.

“Profits” and “Losses” mean, for each Fiscal Year, an amount equal to the Partnership’s taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

(i)            Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be added to such taxable income or loss;

(ii)           Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulation §1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be subtracted from such taxable income or loss;

(iii)          In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraphs (ii), (iii), or (iv) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

(iv)          Gain or loss resulting from any disposition of Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such Property differs from its Gross Asset Value;

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(v)           In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year, computed in accordance with the definition of Depreciation; and

(vi)          To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) is required, pursuant to Regulations §1.704-(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses.

Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 11.4 shall not be taken into account in computing Profits or Losses.

The amounts of the items of Partnership income, gain, loss or deduction available to be specially allocated pursuant to Section 11.4 shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above.

“Prohibited Person” shall mean (a) a person who (i) has been determined by competent authority to be subject to the prohibitions in any of the OFAC Laws and Regulations or (ii) is on any of the Government Lists, (b) a person who is a “designated national,” “specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” “specially designated narcotics trafficker,” or “blocked person” within the definitions set forth in the Foreign Assets Control Regulations contained in 31 C.F.R., Subtitle B, Chapter V (the “OFAC Regulations”) or who otherwise appears on the list of Specially Designated Nationals and Blocked Persons, Appendix A to the OFAC Regulations; (c) the government, including any political subdivision, agency, instrumentality, or national thereof, of any country against which the United States maintains economic sanctions or embargos; (d) a person who is described in section 1 of Executive Order 13224 - Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001; (e) a Person owned or controlled by any of the Person listed in clauses (a) through (d) above; or (f) a Person who has been (i) convicted of an offense or (ii) determined by a Governmental Authority to be subject to criminal or civil penalties, under any other civil or criminal federal or state law, regulation, or order of similar import to those set forth in clauses (a) through (d) above, as each such law, regulation, or order has been or may be amended, adjusted, or modified or revised from time to time.

“Property” shall mean any one of the Properties of the Partnership.

“Properties” shall mean the Partnership’s direct and indirect interests in real property listed in Schedule IV and legally described in the Contribution Agreement, together with all buildings, structures and improvements located thereon, fixtures contained therein, appurtenances attached thereto and all personal property related thereto.

“Property Management Agreement” shall have the meaning given in Section 8.6.

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“Redemption Notice” shall have the meaning given in Section 13.3(a).

“Redemption Price” shall have the meaning given in Section 13.3(h).

“Redemption Right” shall have the meaning given in Section 13.3(a).

“Removal Remedies” shall have the meaning given in Section 7.5(a).

“Removal Remedies Charge” shall have the meaning given in Section 7.5(b).

“Reserves” shall mean, at any time, the total amount of the reasonable reserves established and maintained by the Partnership or its Subsidiaries, as applicable, at that time, in amounts reasonably determined in the annual Operating Budget or otherwise approved by the General Partners to be adequate and appropriate for current and future operating and working capital and for capital expenditures and other costs and expenses incident to the Partnership’s business.

“Response Period” shall have the meaning given in Section 13.3(a).

“Sale Period” shall have the meaning given in Section 13.3(c).

“Securities Act” shall mean the U.S. Securities Act of 1933.

“SDN List” shall mean the Specially Designated Nationals and Blocked Persons Lists maintained by OFAC, as such list is amended from time to time.

“Solvent GP” shall have the meaning given in Section 13.7.

“Subsidiary” shall mean an Entity that is wholly owned, directly or indirectly, by the Partnership.

“Subsidiary Agreement” shall have the meaning given in Section 2.4(b).

“Target Account” shall mean, with respect to any Partner for any Fiscal Year or other period, an amount equal to the hypothetical distribution such Partner would receive if all assets of the Partnership, including cash at the end of such period: (a) were sold for cash equal to their Gross Asset Value (taking into account any adjustments to Gross Asset Value for such period); (b) all liabilities allocable to such assets were then due and were satisfied according to their terms; (c) all minimum gain chargebacks required by this Agreement and the Treasury Regulations were made; (d) and all obligations of Partners to contribute additional capital to the Partnership pursuant to this Agreement were satisfied; and (e) all remaining proceeds from such sale were distributed to the Partners pursuant to Section 5.3.

“Tax Returns” shall have the meaning given in Section 10.4.

“Terrorism Law Offense” shall mean any violation of the applicable civil and criminal laws of any Governmental Authority, or that would be a civil or criminal violation if committed within the jurisdiction of the United States of America or any of the several states, and relating to

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terrorism or the laundering of monetary instruments, including any offense under (a) the criminal laws against terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy Act, (d) the Money Laundering Control Act of 1986, (e) the Patriot Act, or (f) a civil violation of the International Emergency Economic Powers Act.  “Terrorism Law Offense” also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Terrorism Law Offense.

“Transfer” shall have the meaning given in Section 13.1(a)

“Treasury Regulations” shall mean the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Triggering Partner” shall have the meaning given in Section 13.3(a).

“TRS” shall have the meaning given in Section 2.4(d).

“Unpermitted Transfer” shall mean a Transfer or Encumbrance by or with respect to a Partner that is not permitted by the terms of this Agreement and to which the non-transferring General Partners have not otherwise consented.  For purposes of greater certainty, the Partners agree that any YSI Change in Control shall be an Unpermitted Transfer in all cases.

“Unreturned Capital Contributions” shall mean, with respect to any Partner, at any particular time, the total amount of Capital Contributions made by such Partner, pursuant to and in accordance with the provisions of this Agreement, less the amount of such Capital Contributions repaid to such Partner with distributions made pursuant to and in accordance with the provisions of this Agreement.

“U.S. GAAP” shall mean generally accepted accounting principles in the United States of America, as in effect from time to time, or International Financial Reporting Standards, if adopted by ▇▇▇▇▇▇▇ or YSI and approved by the General Partners.

“U.S. Publicly-Traded or Pension Entity” shall mean either (i) a Person (other than an individual) whose securities are listed on a national securities exchange in the United States of America or quoted on an automated quotation system in the United States of America or a wholly-owned subsidiary of any such Person, or (ii) an “employee pension benefit plan” or “pension plan”, as such terms are defined in Section 3(2) of ERISA.

“Written Purchase Offer” shall have the meaning given in Section 13.3(a).

“YSI” shall mean U-Store-It Trust, a Maryland real estate investment trust, which is the general partner of YSI LP.

“YSI LP” shall mean U-Store-It, L.P., a Delaware limited partnership, which is the parent Entity of both Operator Partners.

“YSI Change in Control” shall mean the occurrence of any one or more of the following events at any time:

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(a)           Any Person (as defined in Section 3(a)(9) of the 1934 Act, which shall include a “group” as defined in Section 13(d)(3) of the ▇▇▇▇ ▇▇▇) acquires more than fifty percent (50% ) of the outstanding voting shares of YSI;

(b)           Persons who, at the date of measurement, either (i) have not been on the Board of Trustees of YSI for the then prior twelve (12) months or (ii) joined such Board within the then prior twelve (12) months but were not nominated by such Board, then constitute a majority of the Trustees on such Board;

(c)           If, during any 16-month period, both of the Key Persons either (i) leave YSI or (ii) are not actively involved in the day-to-day operations and management of YSI.  For purposes of greater certainty, the provisions of this clause (f) shall be deemed to apply if one Key Person leaves and the other ceases his active involvement during any 16-month period, and regardless of whether such events occur at the same or different times during such period;

(d)           If (i) Excepted YSI Persons own, collectively, more than thirty-five percent (35%) of the outstanding voting shares of YSI, or (ii) any Excepted YSI Person joins the Board of Trustees of YSI, or (iii) any Excepted Person becomes part of the senior management team at YSI (i.e. holds the office of senior vice president or an equivalent or higher office on the corporate structure chart of YSI (including the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Investment Officer, all other Senior Vice Presidents and Executive Vice Presidents and the President of YSI);

(e)           YSI loses its REIT status;

(f)            YSI is delisted from a major stock exchange; or

(g)           YSI’s stock price falls below $1 per share for any 20 consecutive day trading period.

Section 1.2.            Rules of Interpretation.

(a)           The use of the masculine, feminine or neuter gender or the singular or plural form of words herein shall not limit any provision of this Agreement.  The use of the term “including” or “include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively.  Underscored references to Articles, Sections, clauses or Exhibits shall refer to those portions of this Agreement, and any underscored reference to a clause shall, unless otherwise identified, refer to the appropriate clause within the same Section in which such reference occurs.  The use of the terms “hereunder,” “hereof,” “hereto” and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section or clause of, or Exhibit to, this Agreement.  All references in this Agreement to dollar amounts shall refer to United States currency.

(b)           Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement), other contractual instruments and organizational documents shall mean such agreements, instruments and documents as the same may be amended and/or modified from time to time in accordance with the terms thereof, and (ii) references to any

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statute or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such statute or regulation.

(c)           Except where the provision specifically provides otherwise: (i) whenever in this Agreement there is a reference to the term “Partners,” “General Partners,” or “Limited Partners,” in the plural form, then all of such partners shall be required to act together, unanimously, and not alone; provided, however, that at any time when there is just one General Partner or just one Limited Partner, such plural form shall refer to just that one Partner acting alone; and (ii) whenever the term “Partner,” “General Partner,” or “Limited Partner,” in the singular form, is used in this Agreement, then only one, or the specific one, Partner shall be required to act.

ARTICLE II

FORMATION OF LIMITED PARTNERSHIP

Section 2.1.            Formation.  The Partnership was formed by the filing of the Certificate of Limited Partnership pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act (the “Act”).  To the extent permitted by the Act, the provisions of this Agreement shall override the provisions of the Act in the event of any inconsistency between them.  The Partners hereby adopt and ratify the Certificate of Limited Partnership and all acts taken in connection with such formation and filing.

Section 2.2.            Name and Offices.

(a)           The name of the Partnership shall be “YSI - ▇▇▇▇ Limited Partnership.”  The Partnership shall do business under such name, or under any other name or names which the General Partners shall agree upon from time to time.  If the Partnership does business under a name other than YSI - ▇▇▇▇ Limited Partnership, Operator GP shall file or cause to be filed an assumed name or fictitious name certificate or any other document as required by Governmental Requirements in appropriate jurisdictions and the Partners shall execute such certificates, documents or other writings as may be reasonably requested by Operator GP in connection therewith.

(b)           The address of the registered office of the Partnership in the State of Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.  The name of its registered agent at that address is The Corporation Trust Company.  The General Partners, may, from time to time, and without amending this Agreement, change the Partnership’s registered agent and the address of its registered office.

(c)           The Partnership’s principal office shall be located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address as may be designated from time to time by the General Partners.

(d)           Operator GP shall cause the Partnership and each Subsidiary to register to do business as a foreign Entity in any jurisdiction where the Partnership or such Subsidiary will conduct its business and where such registration is required.

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Section 2.3.            Business of the Partnership.  The purpose of the Partnership shall be to own, operate, manage, maintain, repair and otherwise deal with, directly or through its Subsidiaries, the Properties and any other property owned by the Partnership and to carry on any other business which may be favorable to an owner of such Properties.  Without limiting the generality of the foregoing, subject to the terms and conditions of this Agreement, including the approval of the General Partners, if and to the extent required under this Agreement, the Partnership is hereby authorized, directly or through its Subsidiaries, to engage in the following activities:

(a)           to negotiate, execute, deliver and perform the Property Management Agreement and the Ancillary Services Agreement, and all documents, agreements, certificates and financing statements contemplated thereby or related thereto;

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

(c)           to sell, lease, assign, transfer, exchange or otherwise encumber or dispose of all of the Properties of the Partnership, or any portion thereof or interest therein;

(d)           to obtain temporary or permanent financing in the form of acquisition loans, construction loans, participating loans, working capital loans, and intermediate and long-term debt for the purposes recited in this Section 2.3;

(e)           to make any investment and expenditure, to borrow money and to take any and all other actions which are incidental or reasonably related to any of the purposes recited in this Section 2.3;

(f)            to pay, collect, compromise, litigate, arbitrate or otherwise adjust or settle any and all other claims or demands of or against the Partnership or hold such proceeds against the payment of contingent liabilities;

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

(h)           to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies under the Act that are incidental to and necessary, suitable or desirable for the accomplishment of the purposes specified in this Section 2.3.

Section 2.4.            Subsidiaries.

(a)           Upon approval by the General Partners, title to any Property may be held by a Subsidiary.  It shall be Operator GP’s duty and responsibility to duly form and maintain each Subsidiary, to cause each Subsidiary to be and remain in good standing in its state of organization and qualified to do business in each jurisdiction in which it owns property, and to obtain appropriate employer and/or tax identification numbers (to the extent required) for the Subsidiary.

(b)           The type of Entity chosen for each Subsidiary will be approved by the General Partners.  The governing document or agreement (the “Subsidiary Agreement”) for each

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Subsidiary shall be in a form approved by the General Partners.  The business, affairs, administration and termination of each Subsidiary shall be governed by this Agreement and by the applicable Subsidiary Agreement and, in the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of any Subsidiary Agreement, the terms and conditions of this Agreement shall govern and control, except to the extent (a) a term or condition in a Subsidiary Agreement is required by the applicable governing law of the Subsidiary or Subsidiary Agreement or (b) it is expressly provided in the Subsidiary Agreement that a conflicting term or condition in such Subsidiary Agreement shall govern and control over this Agreement.

(c)           Each Subsidiary Agreement shall limit the liability of the Partnership and each Partner to the extent permitted by the governing law of the Subsidiary Agreement.  The debts, obligations and liabilities of each Subsidiary, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Subsidiary, and neither the Partnership nor any Partner shall be obligated personally for any such debt, obligation or liability solely by reason of its beneficial ownership interest such Subsidiary.

(d)           Without limiting the generality of the foregoing, the Partners agree that the Partnership shall form and maintain a corporate Subsidiary that qualifies as a so-called “taxable REIT subsidiary” under Section 856(l) of the Code (a “TRS”), the sole purpose and business of which Subsidiary shall be to conduct the Ancillary Activities pursuant to and in accordance with the Ancillary Services Agreement.  Although Persons that are affiliated with Operator Partners will serve as the officers and directors of the TRS, the activities of the TRS shall be managed, approved and directed in accordance with Article VII and any other applicable provisions of this Agreement (and Operator GP shall be responsible for directing such officers and directors to act in accordance with such requirements of this Agreement).  All revenue, expenses, profits, losses and other economic attributes of the TRS shall accrue to the benefit of the Partnership, as the sole shareholder of the TRS, subject to the provisions of the Ancillary Services Agreement

Section 2.5.            Term.  The term of the Partnership commenced on the date of the filing of the Certificate of Limited Partnership in the office of the Secretary of State of the State of Delaware and shall continue until the Partnership is dissolved and liquidated in accordance with Section 17.2 and a Cancellation of the Certificate of Limited Partnership has been filed pursuant to Section 17.4.

Section 2.6.            Admission of Partners.

(a)           Operator GP, Operator LP, Investor GP and Investor LP have been admitted as Partners in the Partnership.  As of the Effective Date, Operator GP, Operator LP, Investor GP and Investor LP are the only Partners in the Partnership.  Operator GP shall notify the Partners of changes in Schedule II, which shall constitute the record list of the Partners for all purposes of this Agreement.

(b)           Additional Partners may be admitted at such time and upon such terms and conditions as may be determined subject to and in accordance with the provisions of Article XIII.

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ARTICLE III

NON-COMPETITION

Section 3.1.            Restrictive Covenants.

(a)           Each Operator Partner covenants and agrees that, during Non-Compete Period 1, neither Operator Partner will, itself, nor will it permit YSI, YSI LP or any other Affiliate of any of them, directly or indirectly, to (i) develop or otherwise start up any new self-storage facility or self-storage business anywhere within a Non-Compete Restrictive Area, (ii) provide advice or financial assistance to any Person who is developing or otherwise starting up any new self-storage facility or self-storage business anywhere within a Non-Compete Restrictive Area, or (iii) otherwise participate in the development or start up of any new self-storage facility or self-storage business, anywhere within a Non-Compete Restrictive Area.

(b)           In addition to the provisions of subsection (a) above, each Operator Partner covenants and agrees that, during Non-Compete Period 2,  if Operator LP, Operator GP, YSI, YSI LP or any other Affiliate of any of them intends to (i) acquire, directly or indirectly, an existing self-storage facility or self-storage business anywhere within a Non-Compete Restrictive Area, (ii) provide debt or equity financing to any Person who is acquiring any existing self-storage facility or self-storage business anywhere within a Non-Compete Restrictive Area, or (iii) otherwise participate in the acquisition or financing of any existing self-storage facility or self-storage business, anywhere within a Non-Compete Restrictive Area, then, in any such case, prior to entering into a binding agreement with respect to such existing facility or business, Operator Partners shall (A) offer, or cause such participating Affiliate(s) to offer, to Investor Partners the right to participate in such transaction on such terms and conditions as the parties may agree on, and, in connection therewith, to furnish to Investor Partners all of the material documents and information concerning the subject property and transaction, and (B) proceed diligently and in good faith, for a period of not less than fifteen (15) business days following the making of such offer and delivery of such documents and information, to negotiate with, and attempt to enter into a letter of intent to invest along with, Investor Partners (or their designated Affiliate(s)) in such transaction.  If, for any reason, other than the failure of Operator Partners to make such offer or otherwise comply with the provisions of clause (A) above, the Partners (or their Affiliates) have not entered into a letter of intent for such transaction within such 15-day period, then Operator Partners (and/or their Affiliates) shall be entitled to proceed with such transaction without the investment or other participation of Investor Partners (or their Affiliates) and free from any rights that Investor Partners (or their Affiliates) might have with respect thereto.

(c)           Each Investor Partner covenants and agrees that, during Non-Compete Period 2, neither Investor Partner will, itself, nor will it permit ▇▇▇▇▇▇▇ America Real Estate Trust, L.P., directly or indirectly, to (i) develop or otherwise start up any new self-storage facility or self-storage business anywhere within a Non-Compete Restrictive Area, (ii) provide advice or financial assistance to any Person who is developing or otherwise starting up any new self-storage facility or self-storage business anywhere within a Non-Compete Restrictive Area, or (iii) otherwise participate in the development or start up of any new self-storage facility or self-storage business, anywhere within a Non-Compete Restrictive Area.

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Section 3.2.            Remedies.

(a)           Each Partner agrees that the scope and time periods contained in this Article have been carefully considered and specifically agreed to as being reasonable and necessary.  If any of the Partners shall at any time breach, violate or fail to comply fully with any of the terms, provisions or conditions of this Article (the “Competing Partner”), the Partnership and/or any other Partners that are not Competing Partners, shall be entitled to equitable relief by way of injunction (in addition to, but not in substitution for, any and all other relief to which the Partnership, or such other Partners, may be entitled either in law or in equity) to restrain such breach or violation or to require compliance fully with the terms, provisions or conditions of this Article.  In any such proceedings, the Competing Partners agree not to contest the validity of the provisions of Section 3.1.  Each Competing Partner further agrees to reimburse the Partnership for any cost of enforcing the provisions of this Article, including reasonable attorney’s fee and court costs.

(b)           If a court or other body of authority and competent jurisdiction determines that the covenants contained in this Article are unenforceable, in whole or in part, due to the duration or scope of the restrictions or limitations imposed therein or for any other reason, then the court is hereby authorized and directed to make such modifications thereto as are necessary to render said covenants enforceable to the maximum extent permitted under applicable law, that being the intention of the Partners.

ARTICLE IV

CAPITAL CONTRIBUTIONS; FINANCING

Section 4.1.            Capital Contributions.

(a)           Each Partner shall make Capital Contributions from time to time in accordance with this Section 4.1.  All Capital Contributions shall be made in cash unless otherwise expressly provided in this Agreement or approved by the General Partners.

(b)           On or prior to the date of this Agreement: (i) Operator LP previously made an initial Capital Contribution to the Partnership of $101,898,637.90, consisting of  (A) an in-kind Capital Contribution of fee simple title to all of the Properties, free and clear of all liens, subject to the terms and conditions of the Contribution Agreement, at a value of $102,245,714.00, which has been agreed on among the Partners, less (B) net proration credits of $1,232,872.98 in accordance with the Contribution Agreement,  plus (C) a cash contribution of $885,796.88 constituting 100% of the initial closing costs pertaining to the transfer of the Properties to the Partnership, as more fully provided in Section 18.21  (collectively, the “Operator Initial Contribution”); the Gross Asset Value of each such asset comprising the Operator Initial Contribution and the liabilities of the Operator LP assumed by the Partnership are as set forth in the Contribution Agreement, and such Gross Asset Values are reproduced in Schedule IV attached hereto; (ii) (A) Investor LP will make a cash contribution of $50,949,318.95  to the Partnership in exchange for its Partnership Interests (which amount is equal to fifty percent (50%) of the amount of Operator LP’s prior net contribution, as described in clause (i) above), and (B) the Partnership will distribute such amount to Operator LP; and, based on such

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contribution and distribution, each Limited Partner shall be deemed to have made a net Capital Contribution of $50,949,318.95; and (iii) each Limited Partner shall contribute an additional $49,617.67 to pay certain additional formation and closing costs, so that, after such contributions, each Limited Partner shall have made an aggregate net initial Capital Contribution of  $50,998,936.62.    In the event that a second closing occurs pertaining to the Tranche II Locations (as such term is defined in the Contribution Agreement): (A) Operator LP will make an in-kind Capital Contribution of fee simple title to the Tranche II Locations, free and clear of all liens, subject to the terms and condition of the Contribution Agreement, and the General Partners shall amend Schedule IV of this Agreement accordingly; (B) the Gross Asset Value of each such asset comprising the Tranche II Locations and the liabilities of Operator LP to be assumed by the Partnership will be as set forth in the Contribution Agreement, and such Gross Asset Values will be reflected in the amended Schedule IV of this Agreement; (C) Investor LP will contribute an amount equal to fifty percent (50%) of the agreed Gross Asset Value of the contributed Tranche II Locations (less net prorations required under the Contribution Agreement), and such amount will be distributed to Operator LP; (D) the Limited Partners will also each contribute to the Partnership fifty percent (50%) of all Partnership expenses incurred in connection with the second closing with respect to the Tranche II Locations, as described in Section 18.21 (provided that Operator LP’s share of same will be deducted from the funds otherwise to be distributed to it pursuant to clause (C) above).  The obligation of the Limited Partners to make Capital Contributions is not a “revolving” commitment, and the repayment or return of Capital Contributions to the Partners shall not create any obligation or commitment to readvance or recontribute such Capital Contributions so repaid or returned, except to the extent expressly provided herein.  The General Partners shall not be required to make any Capital Contributions and will have no Financial Rights in the Partnership.

(c)           If (i) clearly specified as such in the approved Annual Business Plan and Operating Budget then in effect (and not just inferred from a possible or actual shortfall in projected income), or (ii) the General Partners, in their sole discretion, otherwise determine (which determination shall constitute a Major Decision), that additional capital shall be required by the Partnership to fund its business operations or for any other Partnership purpose, whether or not in the ordinary course of business, then, in either such case, the General Partners may request that each Limited Partner make such additional Capital Contributions (each, an “Additional Capital Contribution”) to fund the amount required, by delivering written notice to all Limited Partners (an “Additional Capital Call Notice”), identifying such amount and providing a reasonably detailed explanation of the reason that the Additional Capital Contributions are needed.  Each Limited Partner shall, within eleven (11) Business Days after receipt of an Additional Capital Call Notice, contribute its pro rata share (based upon its Capital Ratio) of the amount of the applicable Additional Capital Contribution specified in the Additional Capital Call Notice.  For purposes of further certainty, the Partners agree that any Capital Contribution approved as part of the approval of an Annual Business Plan shall require the delivery of a further notice to the Limited Partners, prior to the actual required funding of such Capital Contribution, and shall provide for the right of the Limited Partners to have eleven (11) Business Days to fund such Capital Contribution, as more fully provided in the prior sentence.  In lieu of requesting Additional Capital Contributions for any amount required by the Partnership, the General Partners may obtain, or cause a Subsidiary to obtain, financing to cover any shortfall on terms approved by the General Partners.

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Section 4.2.            No Additional Capital Contributions.  Other than pursuant to this Article IV, no Partner shall be required to lend any funds to the Partnership or to make any Capital Contributions to the Partnership.

Section 4.3.            Partnership Capital.  Operator GP shall cause the Partnership’s books and records to contain entries indicating the type and amount of Capital Contributions made to the Partnership by each Partner and, if applicable, the return thereon.  No Partner shall have the right to withdraw all or any part of its Capital Contribution or to receive any return on or of any portion of its Capital Contribution except as specifically provided in this Agreement.

Section 4.4.            Defaulting Partners.  If at any time any Limited Partner fails to make all or any portion of any required Capital Contribution on the date specified therefor in accordance with Section 4.1 and such failure shall continue beyond ten (10) Business Days from the date such Capital Contribution is due (each, a “Payment Default”), the Limited Partner failing to pay such amounts shall be deemed to be a Defaulting Partner under Article XVI.  In addition, without limiting any other remedies that may be available pursuant to Article XVI, upon the occurrence of any Payment Default, the non-defaulting Limited Partner (the “Contributing Partner”) may, upon written notice to the Defaulting Partner and the Partnership, exercise one of the following rights or remedies:

(a)           Request a refund of its share of the applicable Capital Contribution within ten (10) days after the Payment Default by the Defaulting Partner, in which case the Partnership shall immediately refund such amount to the Contributing Partner; or

(b)           Cause the Partnership to retain the Contributing Partner’s share of such requested Capital Contribution and, at its option, elect to contribute to the Partnership the Defaulting Partner’s share of such requested Capital Contribution, in which case all amounts contributed by the Contributing Partner (including both the Contributing Partner’s and, if it elects to contribute such amount, the Defaulting Partner’s portion thereof) shall be deemed to be a loan by the Contributing Partner to the Partnership (a “Default Loan”).  The making of a Default Loan by a Contributing Partner shall not constitute a cure of the breach by the Defaulting Partner of its obligations pursuant to this Article IV.  Each Default Loan (i) shall be a loan by the Contributing Partner to the Partnership, (ii) shall accrue interest at the Default Rate, and (iii) shall be repaid, along with all accrued and unpaid interest, on a priority basis from Operating Cash and Capital Proceeds (with all costs associated with the Default Loan being the responsibility of the Defaulting Partner except that the repayment of principal and interest shall be a Partnership obligation).  The Capital Account of the Contributing Partner shall not be credited with the amount of any Capital Contribution designated as a Default Loan.  The repayment of a Default Loan and payment or reimbursement of any interest or expenses thereunder shall not constitute a return of Capital Contributions, shall not reduce the Contributing Partner’s Capital Account, and shall not be considered for purposes of determining the rate of return hereunder; provided, however, that all such Default Loans made by Investor LP, if any, must be repaid to Investor LP, together with all accrued and unpaid interest thereon, in order for Investor LP to receive its Investor 12% Return,  Investor 13% Return, or Investor 14% Return, as applicable, and as more fully provided in the definitions of such returns set forth in Section 1.1.

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In the event that the Contributing Partner does not exercise either of the foregoing within ten (10) days after the Payment Default by the Defaulting Partner, the Contributing Partner will be deemed to have elected to exercise its right (A) to treat the amount contributed by it as a Default Loan, and (B) not to contribute the Defaulting Partner’s share of the requested Capital Contributions.

Section 4.5.            Loans by Partners or Affiliates.  Any Partner or Affiliate may (but shall not be obligated to) at any time lend money or guarantee a loan to the Partnership to finance Partnership operations, to finance or refinance any assets of the Partnership, to pay the debts and obligations of the Partnership, or for any other Partnership purpose; provided that, unless a loan or guarantee is specifically permitted pursuant to this Agreement, such Partner or Affiliate must first obtain the prior written approval of the General Partners for such loan or guarantee.  Except as otherwise provided herein or in any other agreement approved by the General Partners, if any Partner or its Affiliate lends funds to the Partnership, such Partner or Affiliate shall be entitled to receive interest on such loan at an interest rate to be agreed upon by such Partner or Affiliate and the General Partners, on behalf of the Partnership.

Section 4.6.            Financing.  The Partners anticipate and have agreed that the Partnership shall remain free from mortgage debt or other loan facilities, and any financing of the Partnership’s activities or encumbering of its assets shall be and require a Major Decision.

Section 4.7.            Operator Contributions to Pay Investor Accrual.  Operator LP shall have the right to make Operator Contributions to Pay Investor Accrual pursuant to Section 5.2(d), and such Capital Contributions shall be afforded the same treatment as any other Capital Contributions, except for certain restricted and/or subordinate rights to distributions set forth in Section 5.2.

ARTICLE V

DISTRIBUTIONS

Section 5.1.            Distributions in General.  To the maximum extent permitted by the Act and except as otherwise provided in this Article V, the Partnership shall distribute all Operating Cash to the Limited Partners by the tenth (10th) day of each month and shall distribute Capital Proceeds to the Limited Partners as soon as reasonably practicable after its receipt of such amounts unless reinvestment of such Capital Proceeds has been approved by the General Partners.  The Partners acknowledge that the distribution of Operating Cash by the tenth (10th) day of each month may not include all accounting adjustments required to accurately or finally reflect Operating Cash available for distribution at such time.  Accordingly, (a) Operator GP shall and, at its option, Investor GP may, review the calculation of the Operating Cash distributed each calendar month against the monthly financial statements for the prior month on which such distribution was based, and the distribution for the following month shall take into account any accounting adjustment in the original distribution, and (b) Operator GP shall not be in breach of this Agreement if it makes an inaccurate monthly distribution, so long as such inaccuracy is not the result of the bad faith of Operator GP (or its Affiliate) and is remedied by Operator GP by adjusting such distribution as part of, or before, the payment of the following monthly distribution.  To the maximum extent permitted by the Act, the Partnership may make additional

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distributions to Limited Partners at any time.  The General Partners shall not be entitled to receive any distributions, and will have no Financial Rights in the Partnership.

Section 5.2.            Distributions of Operating Cash.  Distributions of Operating Cash shall be made in the following order and priority:

(a)           First, to the Limited Partners, pro rata and pari passu, in repayment of all outstanding principal and accrued interest on the Partners’ Default Loans, until each Default Loan has been repaid in full, and without regard to when such Default Loans were made or mature.

(b)           Second, to Investor LP, until Investor LP has received a nominal preferred return of 9.0% per year, on a cumulative basis, compounded monthly on the last day of each calendar month, on all such Partner’s Unreturned Capital Contributions (the “Investor Preferred Return”).  To the extent that Investor LP does not receive the full amount of its accrued Investor Preferred Return as of the last day of any calendar month, then the amount of the unpaid Investor Preferred Return (the “Investor Accrual”) will accrue and be entitled to a return thereon equal to the Investor Preferred Return.

(c)           Third, to Investor LP, until Investor LP has received a nominal preferred return of 9.0% per year, on a cumulative basis, compounded monthly on the last day of each calendar month, on all such Partner’s Investor Accrual.

(d)           Fourth, to Investor LP, until Investor LP has received any then outstanding Investor Accrual.  For purposes of further certainty, Operator Partners confirm that, in addition to the Investor Preferred Return payable pursuant to subsection (b) and the compounded return on the Investor Accrual payable pursuant to subsection (c), the Investor Accrual will be fully paid pursuant to this subsection (d) before any amounts are paid to Operator LP in accordance with the provisions of subsections (e), (f) and (g) below.  Notwithstanding the foregoing, Operator LP shall have the right, but not the obligation, on not less than three (3) Business Days’ prior written notice to the other Partners, to make additional Capital Contributions to the Partnership, at any time, to pay all (or any part) of the then outstanding Investor Accrual (“Operator Contributions to Pay Investor Accrual”), in which event, promptly following the funding of such contributions to the Partnership, the amount so contributed shall be distributed by the Partnership to Investor LP as a payment of the Investor Accrual.

(e)           Fifth, to Operator LP, until Operator LP has received a nominal preferred return of 9.0% per year, on a cumulative basis, compounded monthly on the last day of each calendar month, on all such Partner’s Unreturned Capital Contributions (“Operator Preferred Return”), but not on the portion of such Partner’s Unreturned Capital Contributions that constitutes Operator Contributions to Pay Investor Accrual, except to the extent and at the time permitted under subsection (k) below.  To the extent that Operator LP does not receive the full amount of its accrued Operator Preferred Return as of the last day of any calendar month, then the amount of the unpaid Operator Preferred Return (the “Operator Accrual”) will accrue and be entitled to a return thereon equal to the Operator Preferred Return; provided, however, that the Operator Accrual (as compounded under subsection (f) below) shall not exceed Five Million Dollars ($5,000,000), in the aggregate, over the life of the Partnership (and any amount in excess of

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$5,000,000 shall not be considered Operator Accrual for any purpose under this Agreement, and Operator LP shall have no rights to receive any portion thereof or return thereon).  The amount of Operator Accrual shall be reviewed and calculated annually promptly following the delivery of the annual financial statements pursuant to Section 10.3 hereof and shall be calculated by the General Partners based on such annual financial statements of the Partnership.  The amount of Operator Accrual so determined will be the amount that is applied against the $5,000,000.00 cap for the purpose of the limitations provided in this Section 5.2(e); provided, however, that such annual calculation shall not affect the maximum amount of Operator Accrual (as compounded under subsection (f) below) that may be actually paid to Operator LP.

(f)            Sixth, to Operator LP, until Operator LP has received a nominal preferred return of 9.0% per year, on a cumulative basis, compounded monthly on the last day of each calendar month, on all such Partner’s Operator Accrual.

(g)           Seventh, to Operator LP, until Operator LP has received any then outstanding Operator Accrual.  For purposes of further certainty, Investor Partners confirm that the Operator Accrual will be fully paid pursuant to this subsection (g) (all such payments being referred to as the “Payments of Operator Accrual”) before any further amounts are paid to Investor LP in accordance with the provisions of subsection (j) below.

(h)           Eighth, to Operator LP, until Operator LP has received a nominal preferred return of 9.0% per year, on a cumulative basis, compounded monthly on the last day of each calendar month, on all such Partner’s Operator Contributions to Pay Investor Accrual, subject, however, to the provisions of subsection (k) below.

(i)            Ninth, to Operator LP, until Operator LP has received any then outstanding Operator Contributions to Pay Investor Accrual, subject, however, to the provisions of subsection (k) below.

(j)            Finally, 50% to Investor LP and 50% to Operator LP.

(k)           Notwithstanding anything set forth in this Section 5.2 to the contrary, no distributions shall be made to pay any return of or return on any Operator Contributions to Pay Investor Accrual unless and until, and shall only be paid for so long as (i) Investor LP has no Unreturned Capital Contributions, (ii) there are no outstanding Default Loans owned to Investor LP and (iii) Investor LP has received its Investor 12% Return (whether due to distributions of Operating Cash, Capital Proceeds, or both).

Section 5.3.            Distributions of Capital Proceeds.  Distributions of Capital Proceeds shall be made in the following order and priority:

(a)           First, to the Limited Partners, pro rata and pari passu, in repayment of all outstanding principal and accrued interest on the Partners’ Default Loans, until each Default Loan has been repaid in full, and without regard to when such Default Loans were made or mature.

(b)           Second, to Investor LP, until Investor LP has received cumulative distributions, whether from Capital Proceeds or Operating Cash, of (A) all of its Unreturned Capital

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Contributions, plus (B) the Investor 12% Return.  For purposes of calculating the Investor 12% Return under this subsection (b), Investor LP shall be deemed to have received any payment of the Removal Remedies Charge (to the extent actually received by Investor LP) as a distribution from the Partnership, subject, however, to the provisions of Section 13.4 to the contrary.

(c)           Third, 100% to Operator LP.

Section 5.4.            Clawback Against Payments of Operator Accrual.

(a)           In the event that upon the sale of, or other Capital Transaction pertaining to, the last Property or Properties owned by the Partnership, there are insufficient Capital Proceeds to distribute to Investor LP to achieve the Investor 12% Return, then Operator LP shall immediately contribute to the Partnership for concurrent distribution to Investor LP an amount equal to the lesser of: (i) the amount that when distributed to Investor LP will cause Investor LP to achieve the Investor 12% Return or (ii) the aggregate amount of the Payments of Operator Accrual, if any, received by Operator LP.  For the purposes of further certainty, Investor Partners confirm that any payment required under clause (ii) of the preceding sentence cannot in any event exceed $5,000,000 due to the cap established in Section 5.2(e).

(b)           Operator LP’s obligation to make the payment(s) described in subsection (a) above shall be fully guaranteed by YSI and YSI LP, by their execution of the guaranty attached hereto after the signature page (which guaranty shall also cover Operator LP’s liability under Section 7.4 of the Contribution Agreement).

Section 5.5.            Distributions in Kind.  No distributions of assets other than cash shall be made without the consent of the General Partners.  If assets other than cash are distributed, such assets shall be deemed to be equal to their fair market value as reasonably determined by the General Partners (net of any liabilities securing such distributed assets that the recipient Partners are considered to assume or take subject to under Section 752 of the Code).  Any gain or loss associated with such assets shall be allocated to the Partners’ Capital Accounts in accordance with Article XI and adjustments to Capital Accounts in respect of distributions of such assets shall reflect its fair market value in accordance with Section 1.704-1(b)(2)(iv)(e) of the Treasury Regulations.

Section 5.6.            Distributions upon Dissolution and Termination.  Upon dissolution and termination of the Partnership, the final distribution of the Partnership’s assets shall be made pursuant to the provisions of Section 17.2.

Section 5.7.            Limitation on Distributions.  Notwithstanding any provision to the contrary in this Agreement, the Partnership shall not knowingly make any distribution that would violate Section 17-607 of the Act or other Governmental Requirements.

Section 5.8.            Distributions in the Case of Transfers.  In the event that either the Operator LP or Investor LP transfers all or a portion of its Partnership Interest in accordance with the terms of this Agreement, the Partner’s transferee shall succeed to the distribution rights associated with the transferred Partnership Interest or portion thereof and references in this Agreement to distributions to the Operator LP or Investor LP shall be construed as references to distributions

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with respect to the transferred Partnership Interest or portion thereof of the Operator LP or Investor LP, as the case may be.

Section 5.9.            Setoff Right.  To the extent that any Limited Partner would otherwise be entitled to a distribution of funds from the Partnership at any time (whether a distribution of Operating Cash or Capital Proceeds, or a payment on a Default Loan), but such Limited Partner also then has a debt or other monetary obligation of any kind due and owing to the Partnership, including as a result of any indemnity or other similar obligation of such Limited Partner, then, in such case, the Partnership shall have the right to set off against such distribution the amount of such debt or other monetary obligation, thereby reducing such distribution by such amount.

ARTICLE VI

PARTNERS

Section 6.1.            Registered Partners.  The Partnership may treat the holder of record of any Partnership Interest as the holder in fact of the Partnership Interest for all purposes and, accordingly, is not bound to recognize any equitable or other claim to or interest in the Partnership Interest on the part of any other Person, whether or not it has express or other notice of the claim or interest, except as expressly provided by this Agreement or the laws of the State of Delaware.

Section 6.2.            Limited Liability of Partners.

(a)           The General Partners shall only be liable for the debts and other obligations of the Partnership to the extent mandated by the Act.  No Limited Partner shall (i) be liable for the debts, liabilities, contracts or any other obligation of the Partnership, except to the extent expressly provided herein or mandated by the Act, (ii) be liable for the debts or liabilities of any other Partner, (iii) be required to contribute to the capital of, or loan, the Partnership any funds other than as expressly required in this Agreement, (iv) be liable, except as mandated by the Act, for the return of all or any portion of the Capital Contributions of any Partner, or (v) except as otherwise expressly provided herein, have any priority over any other Partner as to the return of its contributions to capital or as to compensation by way of income.  Except as expressly mandated by the Act or this Agreement, all debts, obligations and liabilities of the Partnership, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Partnership, and no Partner shall be obligated personally for any such debt, obligation or liability of the Partnership solely by reason of being a Partner.

(b)           Except as expressly mandated by the Act, a Limited Partner shall not have any liability in excess of (i) the amount it has contributed to the Partnership and (ii) the amount of any distributions wrongfully distributed to it.

Section 6.3.            Limitation on Partner Actions.  Except as expressly authorized by this Agreement, no Partner shall, directly or indirectly, do any of the following without the written consent or approval of the General Partners: (a) withdraw from the Partnership, (b) voluntarily dissolve, terminate or liquidate the Partnership, (c) petition a court for the dissolution, termination or liquidation of the Partnership, or (d) cause any property of the Partnership to be subject to the

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authority of any court, trustee or receiver (including suits for partition and bankruptcy, insolvency and similar proceedings).  Except as otherwise expressly provided in this Agreement or mandated by the Act, no Limited Partner, in any capacity, may (i) act for or on behalf of the Partnership or take part in the operation, management or control of the Partnership’s business, (ii) transact any business in the name of the Partnership, or (iii) have the authority or power to sign documents for or otherwise bind the Partnership; provided that such restrictions shall not apply to any action taken by a General Partner just because it is an Affiliate of a Limited Partner.

Section 6.4.            Actions of the Partners.  Any action, vote, consent, determination or other decision required to be made by the General Partners pursuant to this Agreement shall require the approval of all the General Partners, except as otherwise set forth or authorized herein; if required, such approval shall be obtained in accordance with the procedures set forth in Section 9.5.  Any action, vote, consent, determination or other decision to be made by the Partners pursuant to the Act (notwithstanding any provision hereof to the contrary) shall require the approval of the General Partners.

ARTICLE VII

MANAGEMENT OF THE PARTNERSHIP

Section 7.1.            Powers and Responsibilities.  Operator GP shall have the duty, responsibility, power and authority to manage and administer the day-to-day business and affairs of the Partnership and the Properties in accordance with the Annual Business Plans and Operating Budgets and in order to implement the Major Decisions of the General Partners.  Operator GP shall regularly report to the other Partners as to the status of and compliance with the Annual Business Plan and Major Decisions as well as the other business affairs of the Partnership.  Operator GP shall conduct the ordinary and usual business affairs of the Partnership as provided in this Agreement (including Section 7.4).  Without limiting the foregoing (but subject to and limited by the provisions of this Agreement, including Section 7.2), Operator GP shall have full power and authority to conduct the Partnership’s day-to-day business in the ordinary course, including to take actions that are not Major Decisions or prohibited under Section 6.3 or otherwise hereunder, and to do each of the following to the extent necessary for the conduct of the Partnership’s business:

(a)           to supervise or arrange for the supervision of day-to-day operations of the Partnership and its Subsidiaries;

(b)           to institute, prosecute, defend or settle any legal, arbitration or administrative actions or proceedings on behalf of or against the Partnership or a Subsidiary, subject to the provisions of Section 7.2(a)(x) and Section 7.2(a)(xiv); provided that with respect to any such action or proceeding involving a claim or series of related claims against the Partnership or its Subsidiaries totaling more than $50,000 and not covered by insurance, Operator GP shall give the other Partners prompt written notice of such lawsuit or proceeding, and Investor GP shall have the opportunity to consult with Operator GP regarding the Partnership’s or such Subsidiary’s defense of the action;

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(c)           retain attorneys, consultants and other independent contractors to the extent such professional services are required to carry on the business of the Partnership and its Subsidiaries, and provided that retention of attorneys shall require the approval of Investor GP, which approval shall not be unreasonably withheld or delayed and shall be deemed given if not expressly denied in writing by Investor GP within five (5) business days after Investor GP’s receipt of a request for such approval from Operator GP;

(d)           to enter into or renew lease agreements for the lease of space to tenants in each of the Properties substantially in a form of lease agreements that are entered into in the ordinary course of business;

(e)           to collect all rents and other payments due and owing to the Partnership and the Subsidiaries, including the institution of enforcement and collection activities and related auction proceedings undertaken in the ordinary course of business;

(f)            to modify and terminate leases in the ordinary course of business and generally consistent with the Annual Business Plan;

(g)           to incur normal operating expenses of, and to pay the obligations of, the Partnership and its Subsidiaries, and to enter into, perform and carry out contracts and agreements on behalf of the Partnership or its Subsidiaries for the conduct of the Partnership’s business;

(h)           to obtain and maintain insurance coverage for the Properties and other assets of the Partnership and its Subsidiaries, in such amounts and with such coverages as set forth in the Annual Business Plan;

(i)            Subject to Investor GP’s rights under Section 8.4, to perform, or cause to be performed, all of the obligations of the Partnership and the Subsidiaries, and to exercise or cause to be exercised all rights of the Partnership or the Subsidiaries, under any agreement (including the Financing Documents and any limited liability company agreement, partnership agreement, joint venture agreement, shareholder’s agreement or other similar agreement) to which the Partnership, any Subsidiary or any nominee of the Partnership or a Subsidiary is a party;

(j)            to cause the Partnership and the Subsidiaries to pay all taxes, assessments, rents and other impositions applicable to assets of the Partnership and the Subsidiaries and undertake when appropriate any action or proceeding seeking to reduce such taxes, assessments, rents or other imposition;

(k)           to open and maintain bank accounts for the Partnership, provided that transfers, withdrawals or drafts from any such bank accounts shall require Operator GP’s signature or instructions or any other signature that the General Partners designate;

(l)            to coordinate the preparation and filing of tax returns on behalf of the Partnership and the Subsidiaries in each federal, state, local or foreign tax jurisdiction in which such filings are required;

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(m)          to do any and all acts which may be necessary or desirable for the proper management and maintenance of the Properties, including any matters provided for in the Property Management Agreement or the Ancillary Services Agreement, subject to the restrictions and limitations set forth therein;

(n)           to apply for, renew and maintain licenses, permits and any documents necessary to maintain the good standing of the Partnership (excluding any new or modified licenses or permits that would materially change the use or operation of any Property);

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

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

No Partner shall be required to devote a particular amount of time to the Partnership’s business, but the Operator GP shall devote sufficient time and effort to the Partnership’s business and operation as is necessary to perform its duties hereunder.  All costs and expenses incurred by the Partners that are directly related to the conduct of the Partnership’s and the Subsidiaries’ business shall be borne by the Partnership and the Subsidiaries to the extent provided in the Operating Budget and this Agreement.  While the Partners may incur costs and expenses in connection with the conduct of the Partnership’s and Subsidiaries’ business, none of them shall be obligated to do so using its own funds, it being understood specifically that the obligations of Operator GP to expend money on behalf of the Partnership is subject to the availability of Partnership funds therefor.

Section 7.2.            Major Decisions.

(a)           Notwithstanding any contrary provision contained herein, no Partner shall cause the Partnership or permit a Subsidiary to take any of the following actions (each, a “Major Decision”) without the approval of the General Partners, and the General Partners may direct Operator GP to cause the Partnership or any Subsidiary to take any of the following actions:

(i)            adopt or amend any approved Annual Business Plan or Operating Budget (or any update thereto);

(ii)           purchase or acquire, or contract or commit to purchase or acquire, any property or asset other than customary inventory and other similar equipment or assets used in the ordinary course of business;

(iii)          borrow any money or enter into any financing, refinancing or loan transaction, including any Financing Document, or grant a security interest in any Subsidiary or in all or any portion of the Properties or amend the terms and conditions of any financing or make elections with respect to interest periods, interest rates, prepayment or other material provisions under any financing (and the Partners hereby reaffirm their intent under Section 4.6);

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(iv)          lease any space in any Property, other than leases made in the ordinary course of business and in a manner generally consistent with the Annual Business Plan;

(v)           enter into any listing/leasing agreement not substantially in a form approved by the General Partners;

(vi)          enter into any property management agreement or ancillary services agreement not substantially in a form approved by the General Partners (but, for the avoidance of doubt, the form of the Property Management Agreement and Ancillary Services Agreement entered into on or about the Effective Date is hereby approved by the General Partners);

(vii)         enter into any construction management agreement not substantially in a form approved by the General Partners;

(viii)        make any change order that requires the approval of an owner to the terms of a construction management agreement;

(ix)           enter into, or amend, any contract between the Partnership or a Subsidiary, on the one hand, and an Operator Partner, or an Affiliate of an Operator Partner, on the other hand, except as provided in Section 8.4;

(x)            file, defend or settle any lawsuits or other legal, arbitration or administrative claim or proceeding asserted or brought by or against or otherwise involving the Partnership or a Subsidiary, or confess a judgment against the Partnership or a Subsidiary, unless same is (i) for collection of tenant receivables or other amounts payable to the Partnership or a Subsidiary under leases or other occupancy agreements, or by vendors or suppliers, or to enforce a right or remedy for a non-monetary breach or default under such leases, occupancy agreements or the agreements with such suppliers and vendors, all to the extent incurred in the ordinary course of business, (ii) at a cost to the Partnership or a Subsidiary equal to or less than the amount expressly provided in the Operating Budget as a separate line item specifically identifying the particular claim or proceeding, or (iii) if no amount is provided therefor in the Operating Budget, equal to or less than $10,000.00.  For purposes of clause (iii) above, the amount of a claim shall be considered the largest loss that may be incurred by the Partnership or a Subsidiary, net of costs that will be paid by insurance, as reasonably determined by the General Partners;

(xi)           obtain and maintain insurance coverage for the Properties and other assets of the Partnership and its Subsidiaries, including any insurance to protect the Partners against liability from third parties, in addition to or different from those set forth in the Annual Business Plan;

(xii)          commit the Partnership or a Subsidiary to any capital or operating expenditures in excess of the Operating Budget or in any other manner not contemplated by the Annual Business Plan, except as set forth in Sections 8.1(c) and (d);

(xiii)         rebuild or reconstruct the improvements on any Property if they are substantially (i.e. more than 25% of the gross leasable area of the buildings located on a Property or

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more than 25% of the value of such Property) damaged by a fire or other casualty; provided, however, that even if the decision to rebuild or reconstruct is not a Major Decision, the manner of rebuilding and reconstruction of any Property always shall be a Major Decision in any case;

(xiv)        obtain any new, or modify any existing, licenses, permits or other public or private entitlements that would materially change the use or operation of any Property;

(xv)         enter into any construction or renovation contract (unless the economic terms of such contract are specifically covered in an Annual Business Plan and Operating Budget);

(xvi)        make any change of the Partnership’s auditor;

(xvii)       change the name of the Partnership;

(xviii)      require or permit any Partner to make any Additional Capital Contribution;

(xix)         consolidate or merge with or into any other Entity, or purchase or otherwise acquire all or substantially all of the assets or any stock or shares of any class of any Entity, or otherwise engage in any recapitalization, joint venture or other business combination;

(xx)          except in accordance with the provisions of Section 13.3, Dispose of all or any portion of, or any estate or interest in, any Property or Properties or any other asset (including goodwill) of the Partnership or any Subsidiary;

(xxi)         remove or replace a General Partner (except as permitted pursuant to Section 13.1(f),  13.7(b) or 16.2, and as more fully provided in Section 7.5); or

(xxii)        dissolve or liquidate, in whole or in part, make an assignment for the benefit of any creditor, file or otherwise initiate on behalf of the Partnership or any Subsidiary a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or any trustee for the Partnership or for a substantial part of its property, commence any proceeding under any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereinafter in effect, consent or acquiesce in the filing of (or invoke or cause any person to file) any such petition, application or proceeding, or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Partnership or any Subsidiary or any substantial part of its property, or admit the Partnership’s inability to pay its debts generally as they become due or authorize any of the foregoing to be done or taken on behalf of the Partnership or any Subsidiary, or consent to or acquiesce in (i) the filing or other initiation of an involuntary petition for relief against the Partnership or any Subsidiary under any Chapter of the Bankruptcy Code, or (ii) the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) for the Partnership or any Subsidiary of all or substantially all of its respective assets.

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(b)           Except as otherwise provided in this Agreement, no action shall be taken, sum expended, decision made or obligation incurred by the Partnership or any Subsidiary with respect to a matter that is a Major Decision, unless such matter has been approved in writing by the General Partners.  The General Partners shall be deemed to have approved, and no additional approval shall be required hereunder with respect to, any action or expenditure specifically set forth in the Annual Business Plan and Operating Budget approved by the General Partners.

(c)           Approval of the General Partners may be obtained by written approval at a meeting of the General Partners’ Authorized Representatives duly called pursuant to Section 9.5, or by written consent of such Authorized Representatives, without a meeting.  Each General Partner shall use reasonable efforts to cause its Authorized Representatives to respond to any written request for written consent to a Major Decision within five (5) Business Days after the date of such request.  If all of a General Partner’s Authorized Representatives fail to respond to such written request within such five (5) Business Day period (or such other period agreed to in writing by the General Partners), such failure shall be deemed a disapproval of the requested Major Decision by such General Partner and its Authorized Representatives.

Section 7.3.            Major Dispute.

(a)           In the event that the General Partners cannot agree upon a proposed Major Decision during the Lockout Period, then either General Partner may, within fifteen (15) days of the failure to agree upon the proposed Major Decision, provide written notice (the “Notice of Major Dispute”) to the other General Partner that specifies such proposed Major Decision (such disagreement, a “Major Dispute”).  Within fifteen (15) days following delivery of such Notice of Major Dispute, the General Partners shall promptly meet and make a good faith effort to come to an agreement regarding the resolution of the Major Dispute.  If the General Partners are unable to resolve a Major Dispute during the Lockout Period, then neither the General Partners nor the Partnership shall take any action with regard to the subject matter of the Major Dispute until after the end of the Lockout Period (at which time, Section 7.3(b) shall govern).

(b)           If, at any time after the end of the Lockout Period, any Major Decision cannot be reached by the General Partners and, in the reasonable belief of either General Partner, the resolution of such Major Decision has a material impact as to the overall business or strategy of the Partnership, then Operator GP or Investor GP, as the case may be, may provide a Notice of Major Dispute as contemplated in the paragraph above to the other General Partner.  Within fifteen (15) days following delivery of such Notice of Major Dispute, the General Partners shall promptly meet and make a good faith effort to come to an agreement regarding the resolution of the Major Dispute within fifteen (15) days after their meeting.  If the General Partners are unable to resolve the Major Dispute within such 15-day period, then either General Partner may exercise the Marketing Right pursuant to Section 13.3.  If any Major Dispute arises and a Notice of Major Dispute is given at least thirty (30) days before the end of the Lockout Period, and such Major Dispute is not resolved by the end of the Lockout Period, then either General Partner may exercise the Marketing Right at any time after the end of the Lockout Period (and before the Major Dispute is resolved) without the requirement for further notice or a waiting period under this subsection (b).

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(c)           In order to be effective, any Notice of Major Dispute delivered pursuant to this Section 7.3 must contain a description of the Major Decision on which the Partners have been unable to agree and must contain the following language in BOLD PRINT on the face of the Notice of Major Dispute:

THIS NOTICE IS GIVEN PURSUANT TO THE TERMS OF THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF YSI - ▇▇▇▇ LIMITED PARTNERSHIP IN ORDER TO ADVISE A PARTNER THAT A MAJOR DISPUTE EXISTS UNDER SUCH AGREEMENT.

Section 7.4.            Standard of Care.

(a)           Each General Partner, in managing the business or affairs of the Partnership, will discharge its duties provided in this Agreement:

(i)            in a manner it believes in good faith to represent the care an ordinarily prudent person in a like position would exercise under similar circumstances;

(ii)           in good faith reliance on the provisions of this Agreement;

(iii)          without intentional misconduct or a knowing violation of law; and

(iv)          without engaging in any transaction for which it receives a personal benefit in violation or breach of any provision of this Agreement.

Notwithstanding the foregoing, but subject to the provisions of clause (C) below: (A) a General Partner does not violate a duty or obligation under this Agreement or under Governmental Requirements merely because the General Partner’s conduct furthers the interest of a Limited Partner that is an Affiliate of such General Partner, (B) without limiting the foregoing clause (A), a General Partner has no duty or obligation to consider any interest of or affecting the Partnership, any Partner or any other Person (including in connection with the making or approval of, or consent to, any Major Decisions), except as may be otherwise provided herein, and (C) Operator GP recognizes its duties to the Partnership (because of its responsibility for overseeing the day-to-day activities of the Partnership and carrying out Major Decisions) and, accordingly, agrees that (i) it shall devote such time and attention to the business and affairs of the Partnership as is necessary to reasonably conduct such business and affairs and (ii) shall act in a manner it believes in good faith to be in the best interest of the Partnership (subject to the constraints established in the approved Annual Business Plans and Operating Budgets) except regarding the making or approval of, or consent to, Major Decisions, regarding which Operator GP may act in its sole discretion.

(b)           Except for any implied contractual covenant of good faith and fair dealing under applicable Delaware law, no Limited Partner has any other duty to the Partnership, any Partner, or any other Person.

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Section 7.5.            Resignation and Removal.

(a)           No General Partner may resign as a general partner of the Partnership without the prior written consent of the other General Partner.  However, on thirty (30) days prior written notice from a General Partner (which 30-day period may run concurrently with any other notice or grace period), the other General Partner may be removed pursuant to Sections 13.1(f), 13.7(b) or 16.2.  Upon any resignation by or removal of a General Partner, and without limiting its other rights and remedies for a breach of this Agreement, the remaining General Partner may: (i) appoint a replacement General Partner or assume the role of sole General Partner of the Partnership (with all authority of both the Operator GP and Investor GP); (ii) terminate all or any of the Property Management Agreement, Ancillary Services Agreement, and/or other agreements between the Partnership and the Affiliates of the removed or resigned General Partner, and appoint a new property manager or Ancillary Activity service provider (or other Person to replace the removed Affiliate), in which case the remaining General Partner may allocate any future amounts payable under such agreements, including property management fees or and amounts payable under the Ancillary Services Agreement for Ancillary Activities to the new property manager and/or service provider (or other Person to replace the removed Affiliate), as the case may be (or the remaining General Partner may pay other compensation to such replacements as reasonably determined to be appropriate by the remaining General Partner); (iii) where Investor GP is the remaining General Partner, exercise the Investor Unilateral Marketing Right in accordance with Section 13.4; and/or (iv) where Operator GP is the remaining General Partner, exercise the Redemption Right provided to Operator Partners under and in accordance with Section 13.5 (the rights and remedies of Investor GP set forth in this Section 7.5(a) being collectively referred to as the “Removal Remedies”).

(b)           In addition to the foregoing rights and remedies, in the event Investor Partner exercises any of its Removal Remedies as a result of an Event of Default by the Operator Partners under Section 16.1(c) (i.e., upon a YSI Change in Control), then Operator LP shall pay to Investor LP an amount (the “Removal Remedies Charge”) equal to:

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The Removal Remedies Charge shall be due and payable either (i) concurrently with the closing of the sale of Properties pursuant to the Investor Unilateral Marketing Right or (ii) within ten (10) days after Investor GP exercises its other Removal Remedies as a result of a YSI Change in Control.

Section 7.6.            Compensation and Expenses.  The General Partners shall not receive any compensation for serving as general partners of the Partnership.

Section 7.7.            Delegation of Authority.  The General Partners may from time to time delegate in writing to one or more other Persons such authority as the General Partners may deem advisable.

Section 7.8.            Notification of YSI Change in Control.  Operator GP shall deliver prompt written notice to Investor GP of the occurrence of any event that constitutes a YSI Change in Control (provided that the failure to deliver such notice shall not affect Investor Partners’ remedies arising from a YSI Change in Control).