UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9 )*
Public Storage Properties XVI, Inc.
(Name of Issuer)
Common Stock Series A
(Title of Class of Securities)
744616 10 3
(CUSIP Number)
David Goldberg, 701 Western Avenue, Suite 200, Glendale,
California 91201-2397, 818/244-8080, ext. 529
---------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 9, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement [ ]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
CUSIP No. 744616 10 3
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Public Storage, Inc.
2 Check the Appropriate Box if a Member of a Group*
a. [ ]
b. [ ]
3 SEC Use Only
4 Source of Funds*
WC, BK
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
California
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7 Sole Voting Power
632,798
8 Shared Voting Power
N/A
9 Sole Dispositive Power
632,050
10 Shared Dispositive Power
N/A
11 Aggregate Amount Beneficially Owned by Each Reporting
Person
632,798
12 Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares* [ ]
13 Percent of Class Represented by Amount in Row (11)
21.36%
14 Type of Reporting Person*
CO
The Statement on Schedule 13D dated November 21, 1995, as
amended and restated by Amendment No. 1 dated March 18, 1996 and
Amendment No. 2 dated April 8, 1996 and amended by Amendment No. 3
dated May 16, 1996, Amendment No. 4 dated July 12, 1996, Amendment
No. 5 dated August 12, 1996, Amendment No. 6 dated September 5,
1996, Amendment No. 7 dated September 18, 1996 and Amendment No. 8
dated October 28, 1996 (the "Schedule 13D") filed by Public Storage,
Inc. (the "Reporting Person"), relating to the Common Stock Series A,
par value $.01 per share (the "Common Stock Series A" or the "Series A
Shares"), of Public Storage Properties XVI, Inc., a California
corporation (the "Issuer"), is amended by this Amendment No. 9 as set
forth below. Defined terms that are not defined herein have the
meanings assigned to those terms in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration
The 565,650 Series A Shares acquired by the Reporting Person
(as of April 9, 1997) other than in the merger of Public Storage
Management, Inc. into the Reporting Person were purchased for
an aggregate cost (including fees) of approximately $9,366,601,
with funds obtained from the Reporting Person's working capital or
borrowed under the Reporting Person's Credit Agreement by and among
the Reporting Person, Wells Fargo Bank, National Association, as agent,
and the financial institutions party thereto dated as of May 22, 1995
(incorporated by reference from the Reporting Person's quarterly report
on Form 10-Q for the quarterly period ended June 30, 1995), all of
which borrowings have since been repaid.
Item 4. Purpose of Transaction
The Reporting Person and the Issuer have entered into an
Agreement and Plan of Reorganization dated as of April 9, 1997 (the
"Merger Agreement") providing for the merger of the Issuer with and
into the Reporting Person, which is subject to certain conditions (as
described below). Upon the merger, each Series A Share (other than
Series A Shares held by the Reporting Person or by holders of Series A
Shares of the Issuer ("Series A Shareholders") who have properly
exercised dissenters' rights under California law ("Dissenting Shares"))
would be converted into the right to receive cash, the Reporting
Person's common stock or a combination of the two, as follows: (i) with
respect to a certain number of Series A Shares (not to exceed 20% of the
Series A Shares, less any Dissenting Shares), upon a shareholder's
election, $20.76 in cash, subject to reduction as described below or
(ii) that number (subject to rounding) of shares of the Reporting
Person's common stock determined by dividing $20.76, subject to
reduction as described below, by the average of the per share closing
prices on the New York Stock Exchange of the Reporting Person's common
stock during the 20 consecutive trading days ending on the fifth trading
day prior to the special meeting of the shareholders of the Issuer. The
consideration paid by the Reporting Person to the Series A Shareholders
in the merger will be reduced by the amount of cash distributions
required to be paid to the Series A Shareholders by the Issuer prior
to completion of the merger (estimated at $.73 per share) in order to
satisfy the Issuer's REIT distribution requirements ("Required REIT
Distributions"). The consideration received by the Series A
Shareholders in the merger, however, along with any Required REIT
Distributions, will not be less than $20.76 per Series A Share, which
amount represents the interest of the Series A Shareholders in the
market value of the Issuer's real estate assets at March 17, 1997 (based
on an independent appraisal) and the interest of the Series A
Shareholders in the estimated net asset value of its other assets at
June 30, 1997. Additional distributions would be made to the Series A
Shareholders to cause the Issuer's estimated net asset value allocable
to the Series A Shareholders as of the date of the merger to be
substantially equivalent to $20.76 per share. Upon the merger, each
share of the Issuer's Common Stock Series B and Common Stock Series C
would be converted into the right to receive $11.82 in the Reporting
Person's common stock (valued as in the case of the Series A Shares)
plus (i) any additional distributions equal to the amount by which the
Issuer's estimated net asset value allocable to the holders of the
Issuer's Common Stock Series B and Common Stock Series C as of the date
of the merger exceeds $11.82 per share and (ii) any Required REIT
Distributions payable to the holders of the Issuer's Common Stock
Series B (estimated at $.73 per share). There are 1,180,793.2 shares of
the Issuer's Common Stock Series B and Common Stock Series C. The
Series A Shares and the shares of the Issuer's Common Stock Series B and
Common Stock Series C held by the Reporting Person will be cancelled in
the merger. The merger is subject to (among other things) approval by
the Issuer's shareholders and the Reporting Person's Board of Directors
and receipt of a satisfactory fairness opinion by the Issuer. The
Reporting Person believes that the conditions to the merger will be
satisfied, although there can be no assurance.
For further information regarding the merger, see the Merger
Agreement which is filed as Exhibit 5 hereto and is incorporated herein
by this reference.
Item 5. Interest in Securities of the Issuer
As of April 9, 1997, the Reporting Person beneficially owned
632,798 Series A Shares, representing approximately 21.36% of the
2,962,348 Series A Shares outstanding. The Reporting Person has the
sole power to vote all of these shares, has the sole power to dispose
of 632,050 of those shares, and has no power to dispose of 748 of
these shares.
Item 7. Material to be Filed as Exhibits
(Exhibits 1 through 4 are listed in the Schedule 13D)
Exhibit 5 - Agreement and Plan of Reorganization dated as of
April 9, 1997 by and among the Reporting Person, the Issuer, Public
Storage Properties XVII, Inc., Public Storage Properties XVIII, Inc. and
Public Storage Properties XIX, Inc.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in
this statement is true, complete and correct.
Dated: April 17, 1997 PUBLIC STORAGE, INC.
By: /s/ SARAH HASS
-------------------------
Sarah Hass
Vice President
Exhibit 5
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is entered
into as of this 9th day of April, 1997, by and among PUBLIC STORAGE, INC.,
a California corporation ("PSI"), PUBLIC STORAGE PROPERTIES XVI, INC., a
California corporation ("PSP16"), PUBLIC STORAGE PROPERTIES XVII, INC., a
California corporation ("PSP17"), PUBLIC STORAGE PROPERTIES XVIII, INC., a
California corporation ("PSP18") and PUBLIC STORAGE PROPERTIES XIX, INC.,
a California corporation ("PSP19").
A. The parties intend that this Agreement shall constitute a Plan
of Reorganization for purposes of Section 368(a) of the Internal Revenue
Code of 1986, as amended. The Plan of Reorganization provides for the
mergers of PSP16, PSP17, PSP18 and PSP19 with and into PSI in accordance
with the applicable provisions of the General Corporation Law of
California (the "GCLC") and the Agreements of Merger substantially in the
form attached hereto as Exhibit A ("Merger Agreements").
B. The Boards of Directors of PSI, PSP16, PSP17, PSP18 and PSP19
believe that it is in the best interests of such corporations and their
respective shareholders to enter into and complete this Agreement and they
have approved this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, the parties agree as follows:
1. Adoption of Plan. The parties hereby adopt the Plan of
Reorganization hereinafter set forth.
2. The Merger.
2.1 Completion of the Merger. At the Effective Time (as
defined below), PSP16, PSP17, PSP18 and PSP19 will be merged with and into
PSI (the "Mergers") in accordance with the terms, conditions and
provisions of this Agreement and the Merger Agreements. The Mergers shall
become effective at the time at which the Merger Agreements, together with
the requisite Officers' Certificates of PSI, PSP16, PSP17, PSP18 and PSP19
are filed with the California Secretary of State in accordance with the
GCLC (the "Effective Time"). PSI, PSP16, PSP17, PSP18 and PSP19 are
sometimes collectively referred to herein as the "Constituent
Corporations" and PSI, as the surviving corporation of the Mergers, is
sometimes referred to herein as the "Surviving Corporation." The merger
of PSP16 into PSI, the merger of PSP17 into PSI, the merger of PSP18 into
PSI and the merger of PSP19 into PSI are not conditioned on each other.
2.2 Effect of the Merger. At the Effective Time:
2.2.1 Constituent Corporations. The separate corporate
existence of PSP16, PSP17, PSP18 and PSP19 shall cease and the Surviving
Corporation shall thereupon succeed, without other transfer, to all the
rights and property of PSP16, PSP17, PSP18 and PSP19 and shall be subject
to all the debts and liabilities of PSP16, PSP17, PSP18 and PSP19 in the
same manner as if the Surviving Corporation had itself incurred them; all
rights of creditors and all liens upon the property of each of the
Constituent Corporations shall be preserved unimpaired, provided that such
liens upon property of PSP16, PSP17, PSP18 and PSP19 shall be limited to
the property affected thereby immediately prior to the Effective Time; and
any action or proceeding pending by or against PSP16, PSP17, PSP18 and
PSP19 may be prosecuted to judgment, which shall bind the Surviving
Corporation, or the Surviving Corporation may be proceeded against or
substituted in its place.
2.2.2 Articles and Bylaws. The Articles of
Incorporation and the Bylaws of PSI, as then amended, shall continue to be
the Articles of Incorporation and the Bylaws of the Surviving Corporation
until changed as provided by law and their respective provisions.
2.2.3 Officers and Directors. The officers and
directors of PSI shall continue as officers and directors of the Surviving
Corporation until their successors are elected and qualified as provided
by law and in accordance with the Articles of Incorporation and Bylaws of
the Surviving Corporation.
2.3 Conversion of Common Stock Series A. The manner of
converting the outstanding shares of (i) Common Stock Series A ($.01 par
value) of PSP16 (the "PSP16 Shares"), (ii) Common Stock Series A ($.01 par
value) of PSP17 (the "PSP17 Shares"), (iii) Common Stock Series A ($.01
par value) of PSP18 (the "PSP18 Shares") and (iv) Common Stock Series A
($.01 par value) of PSP19 (the "PSP19 Shares") into cash and/or shares of
Common Stock ($.10 par value) of PSI (the "PSI Shares") shall be as
follows:
2.3.1 Cash Election. At the Effective Time, subject to
Sections 2.6 and 6.8 hereof, each PSP16 Share, PSP17 Share, PSP18 Share
and PSP19 Share as to which a cash election has been made in accordance
with the provisions of Section 2.5 hereof and has not been revoked,
relinquished or lost pursuant to Section 2.5 hereof (the "Cash Election
Shares") shall be converted into and shall represent the right to receive
$20.76, $19.63, $20.38 and $16.72, respectively, in cash (the "Cash
Election Price"). As soon as practicable after the Effective Time, the
registered holders of Cash Election Shares shall be paid the cash to which
they are entitled hereunder in respect of such Cash Election Shares.
2.3.2 Share Exchange. At the Effective Time, subject
to Sections 2.4, 2.5, 2.7 and 6.8 hereof, each PSP16 Share, PSP17 Share,
PSP18 Share and PSP19 Share (other than Cash Election Shares and PSP16,
PSP17, PSP18 and PSP19 Shares owned by PSI) shall be converted into that
number of PSI Shares equal to, rounded to the nearest thousandth, the
quotient (the "Conversion Number") derived by dividing $20.76, $19.63,
$20.38 and $16.72, respectively, by the average of the per share closing
prices on the New York Stock Exchange, Inc. (the "NYSE") of PSI Shares
during the 20 consecutive trading days ending on the fifth trading day
prior to the meeting of shareholders of PSP16, PSP17, PSP18 and PSP19,
respectively, provided for in Section 6.2 hereof. If, prior to the
Effective Time, PSI should split or combine the PSI Shares, or pay a stock
dividend, the Conversion Number will be appropriately adjusted to reflect
such action.
2.4 No Fractional Shares. Notwithstanding any other term or
provision of this Agreement, no fractional PSI Shares and no certificates
or script therefor, or other evidence of ownership thereof, will be issued
in the Mergers. In lieu of any such fractional share interests, each
holder of PSP16, PSP17, PSP18 and PSP19 Shares who would otherwise be
entitled to such fractional share will, upon surrender of the certificate
representing such PSP16, PSP17, PSP18 and PSP19 Shares, receive a whole
PSI Share if such fractional share to which such holder would otherwise
have been entitled is .5 of an PSI Share or more, and such fractional
share shall be disregarded if it represents less than .5 of an PSI Share;
provided, however, that, such fractional share shall not be disregarded if
such fractional share to which such holder would otherwise have been
entitled represents .5 of 1% or more of the total number of PSI Shares
such holder is entitled to receive in the Mergers. In such event, such
holder shall be paid an amount in cash (without interest), rounded to the
nearest $.01, determined by multiplying (i) the per share closing price on
the NYSE of the PSI Shares at the Effective Time by (ii) the fractional
interest.
2.5 Procedure for Cash Election. At the time of the mailing
of the Combined Proxy Statement and Prospectus provided for in Section 6.5
hereof, PSI will send to each holder of record of PSP16, PSP17, PSP18 and
PSP19 Shares at the record date for PSP16, PSP17, PSP18 and PSP19 meetings
of shareholders referred to in Section 6.2 hereof a cash election form
(the "Form of Election") providing such holder with the option to elect to
receive the Cash Election Price with respect to all or any portion of such
holder's PSP16, PSP17, PSP18 or PSP19 Shares. Any such election to
receive the cash payment contemplated by Section 2.3.1 hereof shall have
been properly made only if American Stock Transfer & Trust Company (the
"Depositary") shall have received at its designated office, by 5:00 p.m.,
New York time, on the last business day preceding the day of such meeting
of shareholders, a Form of Election properly completed and accompanied by
certificates for the shares to which such Form of Election relates (or an
appropriate guarantee of delivery in a form and on terms satisfactory to
PSI), as set forth in such Form of Election. Any Form of Election may be
revoked by the person submitting the same to the Depositary only by
written notice received by the Depositary prior to 5:00 p.m., New York
time, on the last business day before the day of the meeting of
shareholders referred to in Section 6.2 hereof. In addition, all Forms of
Election shall automatically be revoked if the Depositary is notified in
writing by the parties hereto that the Mergers have been abandoned. If a
Form of Election is revoked pursuant to this Section 2.5, the certificate
or certificates or any guarantee of delivery in respect of the PSP16,
PSP17, PSP18 and PSP19 Shares to which such Form of Election relates shall
be promptly returned to the person submitting the same to the Depositary.
The Depositary may determine whether or not elections to receive cash have
been properly made or revoked pursuant to this Section 2.5, and any such
determination shall be conclusive and binding. If the Depositary
determines that any election to receive cash was not properly or timely
made, the PSP16, PSP17, PSP18 and PSP19 Shares covered thereby shall not
be treated as Cash Election Shares, and shall be converted in the Mergers
as provided in Section 2.3.2 hereof. The Depositary may, with the
agreement of PSI, PSP16, PSP17, PSP18 and PSP19, establish such
procedures, not inconsistent with this Section 2.5, as may be necessary
or desirable to implement this Section 2.5.
2.6 Procedure for Proration.
2.6.1 No Proration of PSP16 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares (as defined below) of
PSP16 is 20% or less than the number of PSP16 Shares outstanding as of the
record date for the meeting of shareholders of PSP16 referred to in
Section 6.2, then each Cash Election Share of PSP16 shall be converted in
the Mergers into the right to receive the Cash Election Price for PSP16
Shares.
2.6.2 No Proration of PSP17 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares (as defined below) of
PSP17 is 20% or less than the number of PSP17 Shares outstanding as of the
record date for the meeting of shareholders of PSP17 referred to in
Section 6.2, then each Cash Election Share of PSP17 shall be converted in
the Mergers into the right to receive the Cash Election Price for PSP17
Shares.
2.6.3 No Proration of PSP18 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares (as defined below) of
PSP18 is 20% or less than the number of PSP18 Shares outstanding as of the
record date for the meeting of shareholders of PSP18 referred to in
Section 6.2, then each Cash Election Share of PSP18 shall be converted in
the Mergers into the right to receive the Cash Election Price for PSP18
Shares.
2.6.4 No Proration of PSP19 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares (as defined below) of
PSP19 is 20% or less than the number of PSP19 Shares outstanding as of the
record date for the meeting of shareholders of PSP19 referred to in
Section 6.2, then each Cash Election Share of PSP19 shall be converted in
the Mergers into the right to receive the Cash Election Price for PSP19
Shares.
2.6.5 Proration of PSP16 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares of PSP16 exceeds 20%,
then each Cash Election Share of PSP16 shall be converted in the Mergers
into the right to receive cash or into PSI Shares as follows: the number
of Cash Election Shares of PSP16 owned by a holder of PSP16 Shares that
shall be converted into the right to receive the Cash Election Price for
PSP16 Shares shall equal the number obtained by multiplying (i) (A) 20% of
outstanding PSP16 Shares less (B) the number of Dissenting Shares (as
hereinafter defined) of PSP16, if any, by (ii) a fraction of which the
numerator shall be the number of Cash Election Shares owned by such holder
and the denominator shall be the aggregate number of Cash Election Shares
of PSP16. The balance of such Cash Election Shares shall be converted
into PSI Shares in accordance with the provisions of Section 2.3.2 hereof.
Notwithstanding the foregoing, PSI, in its sole discretion, may allow Cash
Election Shares of PSP16 to receive the Cash Election Price for PSP16
Shares even if the aggregate number of Cash Election Shares and Dissenting
Shares of PSP16 exceeds 20% (but not 50%) of the number of PSP16 Shares
outstanding as of the record date for the meeting of shareholders of PSP16
referred to in Section 6.2.
2.6.6 Proration of PSP17 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares of PSP17 exceeds 20%,
then each Cash Election Share of PSP17 shall be converted in the Mergers
into the right to receive cash or into PSI Shares as follows: the number
of Cash Election Shares of PSP17 owned by a holder of PSP17 Shares that
shall be converted into the right to receive the Cash Election Price for
PSP17 Shares shall equal the number obtained by multiplying (i) (A) 20% of
outstanding PSP17 Shares less (B) the number of Dissenting Shares (as
hereinafter defined) of PSP17, if any, by (ii) a fraction of which the
numerator shall be the number of Cash Election Shares owned by such holder
and the denominator shall be the aggregate number of Cash Election Shares
of PSP17. The balance of such Cash Election Shares shall be converted
into PSI Shares in accordance with the provisions of Section 2.3.2 hereof.
Notwithstanding the foregoing, PSI, in its sole discretion, may allow Cash
Election Shares of PSP17 to receive the Cash Election Price for PSP17
Shares even if the aggregate number of Cash Election Shares and Dissenting
Shares of PSP17 exceeds 20% (but not 50%) of the number of PSP17 Shares
outstanding as of the record date for the meeting of shareholders of PSP17
referred to in Section 6.2.
2.6.7 Proration of PSP18 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares of PSP18 exceeds 20%,
then each Cash Election Share of PSP18 shall be converted in the Mergers
into the right to receive cash or into PSI Shares as follows: the number
of Cash Election Shares of PSP18 owned by a holder of PSP18 Shares that
shall be converted into the right to receive the Cash Election Price for
PSP18 Shares shall equal the number obtained by multiplying (i) (A) 20% of
outstanding PSP18 Shares less (B) the number of Dissenting Shares (as
hereinafter defined) of PSP18, if any, by (ii) a fraction of which the
numerator shall be the number of Cash Election Shares owned by such holder
and the denominator shall be the aggregate number of Cash Election Shares
of PSP18. The balance of such Cash Election Shares shall be converted
into PSI Shares in accordance with the provisions of Section 2.3.2 hereof.
Notwithstanding the foregoing, PSI, in its sole discretion, may allow Cash
Election Shares of PSP18 to receive the Cash Election Price for PSP18
Shares even if the aggregate number of Cash Election Shares and Dissenting
Shares of PSP18 exceeds 20% (but not 50%) of the number of PSP18 Shares
outstanding as of the record date for the meeting of shareholders of PSP18
referred to in Section 6.2.
2.6.8 Proration of PSP19 Shares. If the aggregate
number of Cash Election Shares and Dissenting Shares of PSP19 exceeds 20%,
then each Cash Election Share of PSP19 shall be converted in the Mergers
into the right to receive cash or into PSI Shares as follows: the number
of Cash Election Shares of PSP19 owned by a holder of PSP19 Shares that
shall be converted into the right to receive the Cash Election Price for
PSP19 Shares shall equal the number obtained by multiplying (i) (A) 20% of
outstanding PSP19 Shares less (B) the number of Dissenting Shares (as
hereinafter defined) of PSP19, if any, by (ii) a fraction of which the
numerator shall be the number of Cash Election Shares owned by such holder
and the denominator shall be the aggregate number of Cash Election Shares
of PSP19. The balance of such Cash Election Shares shall be converted
into PSI Shares in accordance with the provisions of Section 2.3.2 hereof.
Notwithstanding the foregoing, PSI, in its sole discretion, may allow Cash
Election Shares of PSP19 to receive the Cash Election Price for PSP19
Shares even if the aggregate number of Cash Election Shares and Dissenting
Shares of PSP19 exceeds 20% (but not 50%) of the number of PSP19 Shares
outstanding as of the record date for the meeting of shareholders of PSP19
referred to in Section 6.2.
2.7 Dissenting Shares. PSP16, PSP17, PSP18 and PSP19 Shares
held by a holder who has demanded and perfected his right to an appraisal
of such shares in accordance with Section 1300 et seq. of the GCLC and who
has not effectively withdrawn or lost his right to appraisal ("Dissenting
Shares") shall not be converted into or represent the right to receive
cash and/or PSI Shares, but the holder thereof shall be entitled only to
such rights as are granted by Section 1300 et seq. of the GCLC. Each
holder of Dissenting Shares who becomes entitled to payment for PSP16,
PSP17, PSP18 or PSP19 Shares pursuant to these provisions of the GCLC
shall receive payment therefor from the Surviving Corporation in
accordance therewith. If any holder of PSP16, PSP17, PSP18 or PSP19
Shares who demands appraisal in accordance with Section 1300 et seq. of
the GCLC shall effectively withdraw with the consent of the Surviving
Corporation or lose (through failure to perfect or otherwise) his right to
appraisal with respect to PSP16, PSP17, PSP18 or PSP19 Shares, such PSP16,
PSP17, PSP18 or PSP19 Shares shall automatically be converted into the
right to receive PSI Shares pursuant to Section 2.3.2 hereof.
2.8 PSI Shares Unaffected. The Mergers shall effect no
change in any of the outstanding PSI Shares and no outstanding PSI Shares
shall be converted or exchanged as a result of the Mergers, and no cash
shall be exchangeable, and no securities shall be issuable, with respect
thereto.
2.9 Cancellation of Shares Held or Owned by Parties. At the
Effective Time, any PSP16, PSP17, PSP18 and PSP19 Shares owned by PSI
shall be cancelled and retired and no shares shall be issuable, and no
cash shall be exchangeable, with respect thereto.
2.10 Exchange of Certificates. After the Effective Time,
each holder of a certificate theretofore evidencing outstanding PSP16,
PSP17, PSP18 and PSP19 Shares which were converted into PSI Shares
pursuant hereto, upon surrender of such certificate to The First National
Bank of Boston (the "Exchange Agent") or such other agent or agents as
shall be appointed by the Surviving Corporation, shall be entitled to
receive a certificate representing the number of whole PSI Shares into
which the PSP16, PSP17, PSP18 and PSP19 Shares theretofore represented by
the certificate so surrendered shall have been converted as provided in
Section 2.3.2 hereof and cash payment in lieu of fractional share
interests, if any, as provided in Section 2.4 hereof. As soon as
practicable after the Effective Time, the Exchange Agent will send a
notice and a transmittal form to each holder of PSP16, PSP17, PSP18 and
PSP19 Shares of record at the Effective Time whose stock shall have been
converted into PSI Shares, advising such holder of the effectiveness of
the Mergers and the procedure for surrendering to the Exchange Agent
certificates evidencing PSP16, PSP17, PSP18 and PSP19 Shares in exchange
for certificates evidencing PSI Shares.
2.11 Status Until Surrendered. Until surrendered as provided
in Section 2.10 hereof, each outstanding certificate which, prior to the
Effective Time, represented PSP16, PSP17, PSP18 or PSP19 Shares (other
than Cash Election Shares and Dissenting Shares, if any) will be deemed
for all corporate purposes to evidence ownership of the number of whole
PSI Shares into which the PSP16, PSP17, PSP18 or PSP19 Shares evidenced
thereby were converted. However, until such outstanding certificates
formerly evidencing PSP16, PSP17, PSP18 or PSP19 Shares are so
surrendered, no dividend payable to holders of record of PSI Shares shall
be paid to the holders of such outstanding certificates in respect of
PSP16, PSP17, PSP18 or PSP19 Shares, but upon surrender of such
certificates by such holders there shall be paid to such holders the
amount of any dividends (without interest) theretofore paid with respect
to such whole PSI Shares as of any record date on or subsequent to the
Effective Time and the amount of any cash (without interest) payable to
such holder in lieu of fractional share interests pursuant to Section 2.4
hereof.
2.12 Transfer of Shares. After the Effective Time, there
shall be no further registration of transfers of PSP16, PSP17, PSP18
and PSP19 Shares on the records of PSP16, PSP17, PSP18 and PSP19,
respectively, and, if certificates formerly evidencing such shares are
presented to the Surviving Corporation, they shall be cancelled and
exchanged for certificates evidencing PSI Shares and cash in lieu of
fractional share interests as herein provided.
2.13 Conversion of Common Stock Series B and C. At the
Effective Time, subject to Section 6.8 hereof, each share of (i) Common
Stock Series B and C ($.01 par value) of PSP16, (ii) Common Stock Series B
and C ($.01 par value) of PSP17, (iii) Common Stock Series B and C ($.01
par value) of PSP18 and (iv) Common Stock Series B and C ($.01 par value)
of PSP19 (in each case, other than shares owned by PSI) shall be converted
(or deemed to be converted) into that number of PSI Shares equal to,
rounded to the nearest thousandth, the quotient derived by dividing
$11.82, $10.26, $9.36 and $1.41, respectively, by the average per share
closing prices on the NYSE of PSI Shares during the 20 consecutive trading
days ending on the fifth trading day prior to the meeting of shareholders
of PSP16, PSP17, PSP18 and PSP19, respectively, provided for in Section
6.2 hereof. If, prior to the Effective Time, PSI should split or combine
the PSI Shares, or pay a stock dividend, such conversion number will be
appropriately adjusted to reflect such action. At the Effective Time, any
Common Stock Series B and C of PSP16, PSP17, PSP18 and PSP19 owned by PSI
shall be cancelled and retired and no shares shall be issuable with
respect thereto.
3. Closing.
3.1 Time and Place of Closing. If this Agreement is
approved by the shareholders of PSP16, PSP17, PSP18 or PSP19, a meeting
(the "Closing") shall take place as promptly as practicable thereafter at
which the applicable parties will exchange certificates and other
documents as required by this Agreement. Such Closing shall take place at
such time and place as PSI may designate. The date of the Closing shall
be referred to as the "Closing Date."
3.2 Execution and Filing of Merger Agreement. At or before
the Closing and after shareholder approval of PSP16, PSP17, PSP18 or
PSP19, the applicable parties shall execute and deliver the Merger
Agreements, together with the requisite Officers' Certificates, for filing
with the California Secretary of State. The Merger Agreements, together
with the requisite Officers' Certificates, shall be duly filed with the
California Secretary of State in accordance with the GCLC as soon as
practicable following the Closing.
4. Representations, Warranties and Agreements of PSP16, PSP17,
PSP18 and PSP19.
4.1 Representations, Warranties and Agreements of PSP16.
PSP16 represents, warrants and agrees with PSI that:
4.1.1 Authorization. Subject to approval of this
Agreement by the shareholders of PSP16, (i) the execution, delivery and
performance of this Agreement by PSP16 has been duly authorized and
approved by all necessary corporate action of PSP16, and (ii) PSP16 has
necessary corporate power and authority to enter into this Agreement,
to perform its obligations hereunder and to complete the transactions
contemplated hereby.
4.1.2 Organization and Related Matters. PSP16 is a
corporation duly organized, existing and in good standing under the
laws of the State of California with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as and where now owned, leased, operated or carried on, as
the case may be; and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
carried on by it requires such qualification and where the failure to
so qualify would have a material adverse effect on the business,
properties, results of operations or financial condition of PSP16. PSP16
has no direct or indirect equitable or beneficial interest in any other
corporation other than PSCC, Inc.
4.1.3 Capital Stock. The authorized capital stock of
PSP16 consists solely of (i) 4,983,209 shares of Common Stock Series A
($.01 par value), 2,962,348 of which were issued and outstanding as of
April 9, 1997, (ii) 324,989 shares of Common Stock Series B ($.01 par
value), 259,991.2 of which were issued and outstanding as of April 9, 1997
and (iii) 920,802 shares of Common Stock Series C ($.01 par value), all of
which were issued and outstanding as of April 9, 1997. All of the issued
and outstanding shares of Common Stock Series A, B and C of PSP16 have
been duly and validly authorized and issued, and are fully paid and
nonassessable. There are no options or agreements to which PSP16 is a
party or by which it is bound calling for or requiring the issuance of any
of PSP16's capital stock, except that the shares of Common Stock Series B
and C are convertible into shares of Common Stock Series A in accordance
with PSP16's Articles of Incorporation.
4.1.4 Consents and Approvals; No Violation. Assuming
approval of the Mergers and of this Agreement by the shareholders of
PSP16, neither the execution and delivery of this Agreement nor the
consummation by PSP16 of the transactions contemplated hereby will:
(i) conflict with or result in any breach of any provision of its Articles
of Incorporation or Bylaws; (ii) require any consent, waiver, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (A) in connection with the
applicable requirements, if any, of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) pursuant to the
applicable requirements of the federal securities laws and the rules and
regulations promulgated thereunder, (C) the filing of the Merger
Agreement(s) and Officers' Certificates pursuant to the GCLC and
appropriate documents with the relevant authorities of other states in
which PSP16 is authorized to do business, (D) in connection with any state
or local tax which is attributable to the beneficial ownership of PSP16's
real property, (E) as may be required by any applicable state securities
or takeover laws, or (F) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification,
would not in the aggregate have a material adverse effect on PSP16 or
adversely affect the ability of PSP16 to consummate the transactions
contemplated hereby; (iii) result in a violation or breach of, or
constitute a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, license, mortgage, agreement or other instrument
or obligation to which PSP16 is a party or any of its properties or assets
may be bound, except for such violations, breaches and defaults which,
in the aggregate, would not have a material adverse effect on PSP16 or
adversely affect the ability of PSP16 to consummate the transactions
contemplated hereby; or (iv) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 4.1.4 are duly and timely obtained or made, violate any order,
writ, injunction, decree, statute, rule or regulation applicable to PSP16
or its properties or assets, except for violations which would not in the
aggregate have a material adverse effect on PSP16 or adversely affect the
ability of PSP16 to consummate the transactions contemplated hereby.
4.1.5 Litigation. There is no litigation, proceeding
or governmental investigation which, individually or in the aggregate, is
or may be material and adverse, pending or, to the knowledge of PSP16,
threatened against PSP16 or involving any of its properties or assets.
4.1.6 SEC Reports. Since January 1, 1994, PSP16 has
filed all forms, reports and documents with the Securities and Exchange
Commission ("SEC") required to be filed by it pursuant to the federal
securities laws and the rules and regulations promulgated by the SEC
thereunder, all of which complied in all material respects with all
applicable requirements of the federal securities laws and such rules and
regulations (collectively, the "PSP16 SEC Reports"). None of the PSP16
SEC Reports, including without limitation any financial statements or
schedules included therein, at the time filed contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.1.7 Financial Statements. The financial statements
included in the PSP16 SEC Reports complied as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a
basis consistent with prior periods (except as otherwise noted therein),
and present fairly the financial position of PSP16 as of their respective
dates, and the results of operations of PSP16 for the periods presented
therein (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments).
4.1.8 Absence of Certain Changes or Events. Since
January 1, 1997, the business of PSP16 has been carried on only in the
ordinary and usual course and there has not been any material adverse
change in its business, results of operations or financial condition,
or any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, that would materially and adversely affect
its properties, business or results of operations.
4.1.9 S-4 Registration Statement and Proxy Statement
and Prospectus. None of the information supplied or to be supplied
by PSP16 for inclusion or incorporation by reference in the S-4
Registration Statement or the Combined Proxy Statement and Prospectus
(as such terms are defined in Section 6.5 hereof) will (i) in the case of
the S-4 Registration Statement, at the time it becomes effective and at
the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or (ii) in the
case of the Combined Proxy Statement and Prospectus, at the time of the
mailing of the Combined Proxy Statement and Prospectus and at the time of
the meetings of the shareholders of PSP16, PSP17, PSP18 and PSP19, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
4.1.10 Insurance. All material insurance of PSP16 is
currently in full force and effect and PSP16 has reported all claims
and occurrences to the extent required by such insurance.
4.1.11 Disclosure. The representations and warranties
by PSP16 in this Agreement and any certificate or document delivered by it
pursuant hereto do not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
4.2 Representations, Warranties and Agreements of PSP17.
PSP17 represents, warrants and agrees with PSI that:
4.2.1 Authorization. Subject to approval of this
Agreement by the shareholders of PSP17, (i) the execution, delivery and
performance of this Agreement by PSP17 has been duly authorized and
approved by all necessary corporate action of PSP17, and (ii) PSP17 has
necessary corporate power and authority to enter into this Agreement,
to perform its obligations hereunder and to complete the transactions
contemplated hereby.
4.2.2 Organization and Related Matters. PSP17 is a
corporation duly organized, existing and in good standing under the
laws of the State of California with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as and where now owned, leased, operated or carried on, as
the case may be; and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
carried on by it requires such qualification and where the failure to
so qualify would have a material adverse effect on the business,
properties, results of operations or financial condition of PSP17. PSP17
has no direct or indirect equitable or beneficial interest in any other
corporation other than PSCC, Inc.
4.2.3 Capital Stock. The authorized capital stock of
PSP17 consists solely of (i) 4,983,209 shares of Common Stock Series A
($.01 par value), 2,776,023 of which were issued and outstanding as of
April 9, 1997, (ii) 324,989 shares of Common Stock Series B ($.01 par
value), all of which were issued and outstanding as of April 9, 1997 and
(iii) 920,802 shares of Common Stock Series C ($.01 par value), all of
which were issued and outstanding as of April 9, 1997. All of the issued
and outstanding shares of Common Stock Series A, B and C of PSP17 have
been duly and validly authorized and issued, and are fully paid and
nonassessable. There are no options or agreements to which PSP17 is a
party or by which it is bound calling for or requiring the issuance of any
of PSP17's capital stock, except that the shares of Common Stock Series B
and C are convertible into shares of Common Stock Series A in accordance
with PSP17's Articles of Incorporation.
4.2.4 Consents and Approvals; No Violation. Assuming
approval of the Mergers and of this Agreement by the shareholders of
PSP17, neither the execution and delivery of this Agreement nor the
consummation by PSP17 of the transactions contemplated hereby will:
(i) conflict with or result in any breach of any provision of its Articles
of Incorporation or Bylaws; (ii) require any consent, waiver, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (A) in connection with the
applicable requirements, if any, of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) pursuant to the
applicable requirements of the federal securities laws and the rules and
regulations promulgated thereunder, (C) the filing of the Merger
Agreement(s) and Officers' Certificates pursuant to the GCLC and
appropriate documents with the relevant authorities of other states in
which PSP17 is authorized to do business, (D) in connection with any state
or local tax which is attributable to the beneficial ownership of PSP17's
real property, (E) as may be required by any applicable state securities
or takeover laws, or (F) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification,
would not in the aggregate have a material adverse effect on PSP17 or
adversely affect the ability of PSP17 to consummate the transactions
contemplated hereby; (iii) result in a violation or breach of, or
constitute a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, license, mortgage, agreement or other instrument
or obligation to which PSP17 is a party or any of its properties or assets
may be bound, except for such violations, breaches and defaults which, in
the aggregate, would not have a material adverse effect on PSP17 or
adversely affect the ability of PSP17 to consummate the transactions
contemplated hereby; or (iv) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 4.1.4 are duly and timely obtained or made, violate any order,
writ, injunction, decree, statute, rule or regulation applicable to PSP17
or its properties or assets, except for violations which would not in the
aggregate have a material adverse effect on PSP17 or adversely affect the
ability of PSP17 to consummate the transactions contemplated hereby.
4.2.5 Litigation. There is no litigation, proceeding
or governmental investigation which, individually or in the aggregate, is
or may be material and adverse, pending or, to the knowledge of PSP17,
threatened against PSP17 or involving any of its properties or assets.
4.2.6 SEC Reports. Since January 1, 1994, PSP17 has
filed all forms, reports and documents with the Securities and Exchange
Commission ("SEC") required to be filed by it pursuant to the federal
securities laws and the rules and regulations promulgated by the SEC
thereunder, all of which complied in all material respects with all
applicable requirements of the federal securities laws and such rules and
regulations (collectively, the "PSP17 SEC Reports"). None of the PSP17
SEC Reports, including without limitation any financial statements or
schedules included therein, at the time filed contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.2.7 Financial Statements. The financial statements
included in the PSP17 SEC Reports complied as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a
basis consistent with prior periods (except as otherwise noted therein),
and present fairly the financial position of PSP17 as of their respective
dates, and the results of operations of PSP17 for the periods presented
therein (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments).
4.2.8 Absence of Certain Changes or Events. Since
January 1, 1997, the business of PSP17 has been carried on only in the
ordinary and usual course and there has not been any material adverse
change in its business, results of operations or financial condition,
or any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, that would materially and adversely affect
its properties, business or results of operations.
4.2.9 S-4 Registration Statement and Combined Proxy
Statement and Prospectus. None of the information supplied or to be
supplied by PSP17 for inclusion or incorporation by reference in the S-4
Registration Statement or the Combined Proxy Statement and Prospectus (as
such terms are defined in Section 6.5 hereof) will (i) in the case of the
S-4 Registration Statement, at the time it becomes effective and at the
Effective Time, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (ii) in the case
of the Combined Proxy Statement and Prospectus, at the time of the mailing
of the Combined Proxy Statement and Prospectus and at the time of the
meetings of the shareholders of PSP17, PSP16, PSP18 and PSP19, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
4.2.10 Insurance. All material insurance of PSP17 is
currently in full force and effect and PSP17 has reported all claims
and occurrences to the extent required by such insurance.
4.2.11 Disclosure. The representations and warranties
by PSP17 in this Agreement and any certificate or document delivered by it
pursuant hereto do not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
4.3 Representations, Warranties and Agreements of PSP18.
PSP18 represents, warrants and agrees with PSI that:
4.3.1 Authorization. Subject to approval of this
Agreement by the shareholders of PSP18, (i) the execution, delivery
and performance of this Agreement by PSP18 has been duly authorized and
approved by all necessary corporate action of PSP18, and (ii) PSP18 has
necessary corporate power and authority to enter into this Agreement,
to perform its obligations hereunder and to complete the transactions
contemplated hereby.
4.3.2 Organization and Related Matters. PSP18 is a
corporation duly organized, existing and in good standing under the
laws of the State of California with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as and where now owned, leased, operated or carried on, as
the case may be; and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
carried on by it requires such qualification and where the failure to
so qualify would have a material adverse effect on the business,
properties, results of operations or financial condition of PSP18. PSP18
has no direct or indirect equitable or beneficial interest in any other
corporation other than PSCC, Inc.
4.3.3 Capital Stock. The authorized capital stock of
PSP18 consists solely of (i) 4,983,209 shares of Common Stock Series A
($.01 par value), 2,775,900 of which were issued and outstanding as of
April 9, 1997, (ii) 324,989 shares of Common Stock Series B ($.01 par
value), all of which were issued and outstanding as of April 9, 1997 and
(iii) 920,802 shares of Common Stock Series C ($.01 par value), all of
which were issued and outstanding as of April 9, 1997. All of the issued
and outstanding shares of Common Stock Series A, B and C of PSP18 have
been duly and validly authorized and issued, and are fully paid and
nonassessable. There are no options or agreements to which PSP18 is a
party or by which it is bound calling for or requiring the issuance of any
of PSP18's capital stock, except that the shares of Common Stock Series B
and C are convertible into shares of Common Stock Series A in accordance
with PSP18's Articles of Incorporation.
4.3.4 Consents and Approvals; No Violation. Assuming
approval of the Mergers and of this Agreement by the shareholders of
PSP18, neither the execution and delivery of this Agreement nor the
consummation by PSP18 of the transactions contemplated hereby will:
(i) conflict with or result in any breach of any provision of its Articles
of Incorporation or Bylaws; (ii) require any consent, waiver, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (A) in connection with the
applicable requirements, if any, of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) pursuant to the
applicable requirements of the federal securities laws and the rules and
regulations promulgated thereunder, (C) the filing of the Merger
Agreement(s) and Officers' Certificates pursuant to the GCLC and
appropriate documents with the relevant authorities of other states in
which PSP18 is authorized to do business, (D) in connection with any state
or local tax which is attributable to the beneficial ownership of PSP18's
real property, (E) as may be required by any applicable state securities
or takeover laws, or (F) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification,
would not in the aggregate have a material adverse effect on PSP18 or
adversely affect the ability of PSP18 to consummate the transactions
contemplated hereby; (iii) result in a violation or breach of, or
constitute a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, license, mortgage, agreement or other instrument
or obligation to which PSP18 is a party or any of its properties or assets
may be bound, except for such violations, breaches and defaults which,
in the aggregate, would not have a material adverse effect on PSP18 or
adversely affect the ability of PSP18 to consummate the transactions
contemplated hereby; or (iv) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 4.1.4 are duly and timely obtained or made, violate any order,
writ, injunction, decree, statute, rule or regulation applicable to PSP18
or its properties or assets, except for violations which would not in the
aggregate have a material adverse effect on PSP18 or adversely affect the
ability of PSP18 to consummate the transactions contemplated hereby.
4.3.5 Litigation. There is no litigation, proceeding
or governmental investigation which, individually or in the aggregate, is
or may be material and adverse, pending or, to the knowledge of PSP18,
threatened against PSP18 or involving any of its properties or assets.
4.3.6 SEC Reports. Since January 1, 1994, PSP18 has
filed all forms, reports and documents with the Securities and Exchange
Commission ("SEC") required to be filed by it pursuant to the federal
securities laws and the rules and regulations promulgated by the SEC
thereunder, all of which complied in all material respects with all
applicable requirements of the federal securities laws and such rules and
regulations (collectively, the "PSP18 SEC Reports"). None of the PSP18
SEC Reports, including without limitation any financial statements or
schedules included therein, at the time filed contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.3.7 Financial Statements. The financial statements
included in the PSP18 SEC Reports complied as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a
basis consistent with prior periods (except as otherwise noted therein),
and present fairly the financial position of PSP18 as of their respective
dates, and the results of operations of PSP18 for the periods presented
therein (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments).
4.3.8 Absence of Certain Changes or Events. Since
January 1, 1997, the business of PSP18 has been carried on only in the
ordinary and usual course and there has not been any material adverse
change in its business, results of operations or financial condition,
or any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, that would materially and adversely affect
its properties, business or results of operations.
4.3.9 S-4 Registration Statement and Combined Proxy
Statement and Prospectus. None of the information supplied or to be
supplied by PSP18 for inclusion or incorporation by reference in the S-4
Registration Statement or the Combined Proxy Statement and Prospectus (as
such terms are defined in Section 6.5 hereof) will (i) in the case of the
S-4 Registration Statement, at the time it becomes effective and at the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (ii) in the case
of the Combined Proxy Statement and Prospectus, at the time of the mailing
of the Combined Proxy Statement and Prospectus and at the time of the
meetings of the shareholders of PSP18, PSP16, PSP17 and PSP19, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
4.3.10 Insurance. All material insurance of PSP18 is
currently in full force and effect and PSP18 has reported all claims
and occurrences to the extent required by such insurance.
4.3.11 Disclosure. The representations and warranties
by PSP18 in this Agreement and any certificate or document delivered by it
pursuant hereto do not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
4.4 Representations, Warranties and Agreements of PSP19.
PSP19 represents, warrants and agrees with PSI that:
4.4.1 Authorization. Subject to approval of this
Agreement by the shareholders of PSP19, (i) the execution, delivery
and performance of this Agreement by PSP19 has been duly authorized and
approved by all necessary corporate action of PSP19, and (ii) PSP19 has
necessary corporate power and authority to enter into this Agreement,
to perform its obligations hereunder and to complete the transactions
contemplated hereby.
4.4.2 Organization and Related Matters. PSP19 is a
corporation duly organized, existing and in good standing under the
laws of the State of California with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as and where now owned, leased, operated or carried on, as
the case may be; and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
carried on by it requires such qualification and where the failure to
so qualify would have a material adverse effect on the business,
properties, results of operations or financial condition of PSP19. PSP19
has no direct or indirect equitable or beneficial interest in any other
corporation other than PSCC, Inc.
4.4.3 Capital Stock. The authorized capital stock of
PSP19 consists solely of (i) 4,343,310 shares of Common Stock Series A
($.01 par value), 3,023,371 of which were issued and outstanding as of
April 9, 1997, (ii) 283,224 shares of Common Stock Series B ($.01 par
value), all of which were issued and outstanding as of April 9, 1997 and
(iii) 802,466 shares of Common Stock Series C ($.01 par value), all of
which were issued and outstanding as of April 9, 1997. All of the issued
and outstanding shares of Common Stock Series A, B and C of PSP19 have
been duly and validly authorized and issued, and are fully paid and
nonassessable. There are no options or agreements to which PSP19 is a
party or by which it is bound calling for or requiring the issuance of any
of PSP19's capital stock, except that the shares of Common Stock Series B
and C are convertible into shares of Common Stock Series A in accordance
with PSP19's Articles of Incorporation.
4.4.4 Consents and Approvals; No Violation. Assuming
approval of the Mergers and of this Agreement by the shareholders of
PSP19, neither the execution and delivery of this Agreement nor the
consummation by PSP19 of the transactions contemplated hereby will:
(i) conflict with or result in any breach of any provision of its Articles
of Incorporation or Bylaws; (ii) require any consent, waiver, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (A) in connection with the
applicable requirements, if any, of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) pursuant to the
applicable requirements of the federal securities laws and the rules
and regulations promulgated thereunder, (C) the filing of the Merger
Agreement(s) and Officers' Certificates pursuant to the GCLC and
appropriate documents with the relevant authorities of other states in
which PSP19 is authorized to do business, (D) in connection with any state
or local tax which is attributable to the beneficial ownership of PSP19's
real property, (E) as may be required by any applicable state securities
or takeover laws, or (F) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification,
would not in the aggregate have a material adverse effect on PSP19 or
adversely affect the ability of PSP19 to consummate the transactions
contemplated hereby; (iii) result in a violation or breach of, or
constitute a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, license, mortgage, agreement or other instrument
or obligation to which PSP19 is a party or any of its properties or assets
may be bound, except for such violations, breaches and defaults which,
in the aggregate, would not have a material adverse effect on PSP19 or
adversely affect the ability of PSP19 to consummate the transactions
contemplated hereby; or (iv) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 4.1.4 are duly and timely obtained or made, violate any order,
writ, injunction, decree, statute, rule or regulation applicable to PSP19
or its properties or assets, except for violations which would not in the
aggregate have a material adverse effect on PSP19 or adversely affect the
ability of PSP19 to consummate the transactions contemplated hereby.
4.4.5 Litigation. There is no litigation, proceeding
or governmental investigation which, individually or in the aggregate, is
or may be material and adverse, pending or, to the knowledge of PSP19,
threatened against PSP19 or involving any of its properties or assets.
4.4.6 SEC Reports. Since January 1, 1994, PSP19 has
filed all forms, reports and documents with the Securities and Exchange
Commission ("SEC") required to be filed by it pursuant to the federal
securities laws and the rules and regulations promulgated by the SEC
thereunder, all of which complied in all material respects with all
applicable requirements of the federal securities laws and such rules and
regulations (collectively, the "PSP19 SEC Reports"). None of the PSP19
SEC Reports, including without limitation any financial statements or
schedules included therein, at the time filed contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
4.4.7 Financial Statements. The financial statements
included in the PSP19 SEC Reports complied as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a
basis consistent with prior periods (except as otherwise noted therein),
and present fairly the financial position of PSP19 as of their respective
dates, and the results of operations of PSP19 for the periods presented
therein (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments).
4.4.8 Absence of Certain Changes or Events. Since
January 1, 1997, the business of PSP19 has been carried on only in the
ordinary and usual course and there has not been any material adverse
change in its business, results of operations or financial condition,
or any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, that would materially and adversely affect
its properties, business or results of operations.
4.4.9 S-4 Registration Statement and Combined Proxy
Statement and Prospectus. None of the information supplied or to be
supplied by PSP19 for inclusion or incorporation by reference in the S-4
Registration Statement or the Combined Proxy Statement and Prospectus (as
such terms are defined in Section 6.5 hereof) will (i) in the case of the
S-4 Registration Statement, at the time it becomes effective and at the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (ii) in the case
of the Combined Proxy Statement and Prospectus, at the time of the mailing
of the Combined Proxy Statement and Prospectus and at the time of the
meetings of the shareholders of PSP19, PSP16, PSP17 and PSP18, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
4.4.10 Insurance. All material insurance of PSP19 is
currently in full force and effect and PSP19 has reported all claims
and occurrences to the extent required by such insurance.
4.4.11 Disclosure. The representations and warranties
by PSP19 in this Agreement and any certificate or document delivered by it
pursuant hereto do not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
5. Representations, Warranties and Agreements of PSI. PSI hereby
represents, warrants and agrees with PSP16, PSP17, PSP18 and PSP19 that:
5.1 Authorization. The execution, delivery and performance
of this Agreement by PSI have been duly authorized and approved by all
necessary corporate action of PSI, and PSI has all necessary corporate
power and authority to enter into this Agreement, to perform its
obligations hereunder and to complete the transactions contemplated
hereby.
5.2 Organization and Related Matters. PSI is a corporation
duly organized, existing and in good standing under the laws of the State
of California, with all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as and where
now owned, leased, operated or carried on, as the case may be; and is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the property owned, leased or operated by it
or the nature of the business carried on by it requires such qualification
and where the failure to so qualify would have a material adverse effect
on the business, properties, results of operations or financial condition
of PSI.
5.3 Capital Stock. The authorized capital stock of PSI
consists solely of (i) 200,000,000 shares of Common Stock ($.10 par
value), 93,041,461 of which were issued and outstanding as of March 31,
1997, (ii) 7,000,000 shares of Class B Common Stock ($.10 par value),
all of which were issued and outstanding as of March 31, 1997,
(iii) 50,000,000 shares of Preferred Stock ($.10 par value), 13,396,764
of which were issued and outstanding as of March 31, 1997 and
(iv) 200,000,000 shares of Equity Stock ($.01 par value), none of which
were issued and outstanding at March 31, 1997. All of the issued and
outstanding shares of Common Stock, Class B Common Stock and Preferred
Stock of PSI have been duly and validly authorized and issued, and are
fully paid and nonassessable. The issuance of the PSI Shares in the
Mergers has been duly and validly authorized and, when issued and
delivered as provided in this Agreement, the PSI Shares will have
been duly and validly issued, fully paid and nonassessable; and the
shareholders of PSI have no preemptive rights with respect to any shares
of capital stock of PSI.
5.4 Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement nor the consummation by PSI of
the transactions contemplated hereby will: (i) conflict with or result in
any breach of any provision of its Articles of Incorporation or Bylaws;
(ii) require any consent, waiver, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
except (A) in connection with the applicable requirements, if any, of the
HSR Act, (B) pursuant to the applicable requirements of the federal
securities laws and the rules and regulations promulgated thereunder, (C)
the filing of the Merger Agreements and Officers' Certificates pursuant to
the GCLC and appropriate documents with the relevant authorities of other
states in which PSI is authorized to do business, (D) in connection with
any state or local tax which is attributable to the beneficial ownership
of the real property of PSP16, PSP17, PSP18 and PSP19, (E) as may be
required by any applicable state securities or takeover laws, or (F) where
the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not in the aggregate have a
material adverse effect on PSI or adversely affect the ability of PSI
to consummate the transactions contemplated hereby; (iii) result in a
violation or breach of, or constitute a default (or give rise to any right
of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, license, mortgage, agreement or
other instrument or obligation to which PSI is a party or any of its
properties or assets may be bound, except for such violations, breaches
and defaults which, in the aggregate, would not have a material adverse
effect on PSI or adversely affect the ability of PSI to consummate the
transactions contemplated hereby; or (iv) assuming the consents,
approvals, authorizations or permits and filings or notifications referred
to in this Section 5.4 are duly and timely obtained or made, violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
PSI or its properties or assets, except for violations which would not in
the aggregate have a material adverse effect on PSI or adversely affect
the ability of PSI to consummate the transactions contemplated hereby.
5.5 Litigation. There is no litigation, proceeding or
governmental investigation which, individually or in the aggregate, is or
may be material and adverse, pending or, to the knowledge of PSI,
threatened against PSI or involving any of its properties or assets.
5.6 SEC Reports. Since January 1, 1994, PSI has filed all
forms, reports and documents with the SEC required to be filed by it
pursuant to the federal securities laws and the rules and regulations
promulgated by the SEC thereunder, all of which complied in all material
respects with all applicable requirements of the federal securities laws
and such rules and regulations (collectively, the "PSI SEC Reports").
None of the PSI SEC Reports, including without limitation any financial
statements or schedules included therein, at the time filed contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
5.7 Financial Statements. The financial statements included
in PSI's SEC Reports complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent
with prior periods (except as otherwise noted therein), and present fairly
the financial position of PSI as of their respective dates, and the
results of operations of PSI for the periods presented therein (subject,
in the case of the unaudited interim financial statements, to normal
year-end adjustments).
5.8 Absence of Certain Changes or Events. Since January 1,
1997, the business of PSI has been carried on only in the ordinary and
usual course and there has not been any material adverse change in its
business, results of operations or financial condition, or any damage or
destruction in the nature of a casualty loss, whether covered by insurance
or not, that would materially and adversely affect its properties,
business or results of operations.
5.9 S-4 Registration Statement and Combined Proxy Statement
and Prospectus. None of the information supplied or to be supplied by PSI
for inclusion or incorporation by reference in the S-4 Registration
Statement or the Combined Proxy Statement and Prospectus (as those terms
are defined in Section 6.5 hereof) will (i) in the case of the S-4
Registration Statement, at the time it becomes effective and at the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or (ii) in the case
of the Combined Proxy Statement and Prospectus, at the time of the mailing
of the Combined Proxy Statement and Prospectus and at the time of the
meetings of the shareholders of PSP16, PSP17, PSP18 and PSP19, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
5.10 Insurance. All material insurance of PSI is currently
in full force and effect and PSI has reported all claims and occurrences
to the extent required by such insurance.
5.11 Disclosure. The representations and warranties by PSI
in this Agreement and any certificate or document delivered by it pursuant
hereto do not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
6. Covenants and Agreements.
6.1 Ordinary Course. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the
Effective Time, each of PSI, PSP16, PSP17, PSP18 and PSP19 will carry on
its business in the ordinary course in substantially the same manner as
heretofore conducted and use all reasonable efforts to: (a) preserve
intact its present business, organization and goodwill, (b) maintain all
permits, licenses and authorizations required by applicable laws, and (c)
keep available the services of its present employees and preserve its
relationships with customers, suppliers, lenders, lessors, governmental
entities and others having business or regulatory dealings with it.
PSP16, PSP17, PSP18 and PSP19 will not issue any capital stock or debt
securities convertible into capital stock. PSI, PSP16, PSP17, PSP18 and
PSP19 will promptly notify the others of any event or occurrence not in
the ordinary and usual course of business or which may have a material
adverse effect on the properties or financial condition of such party.
6.2 Meetings of Shareholders. PSP16, PSP17, PSP18 and PSP19
will take all action necessary in accordance with applicable law to
convene a meeting of its shareholders as promptly as practicable to
consider and vote upon approval of this Agreement, it being understood
that the principal terms of the Agreement must be approved by (i) in the
case of PSP16, the affirmative vote of a majority of the outstanding
shares of Common Stock Series A, B and C of PSP16, counted together as a
single class with the shares of Common Stock Series B and C voted with the
holders of a majority of the unaffiliated shares of Common Stock Series A;
(ii) in the case of PSP17, the affirmative vote of a majority of the
outstanding shares of Common Stock Series A, B and C of PSP17, counted
together as a single class with the shares of Common Stock Series B and C
voted with the holders of a majority of the unaffiliated shares of Common
Stock Series A; (iii) in the case of PSP18, the affirmative vote of a
majority of the outstanding shares of Common Stock Series A, B and C of
PSP18, counted together as a single class with the shares of Common Stock
Series B and C voted with the holders of a majority of the unaffiliated
shares of Common Stock Series A; and (iv) in the case of PSP19, the
affirmative vote of a majority of the outstanding shares of Common Stock
Series A, B and C of PSP19, counted together as a single class with the
shares of Common Stock Series B and C voted with the holders of a majority
of the unaffiliated shares of Common Stock Series A.
6.3 Tax Reporting. Each of PSI, PSP16, PSP17, PSP18 and
PSP19 agrees to report the Mergers for federal and state income tax
purposes, as a reorganization of the type described in Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended.
6.4 Acquisition Proposals. PSP16, PSP17, PSP18 and PSP19
will not initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal with respect to a merger,
consolidation, share exchange or similar transaction involving PSP16,
PSP17, PSP18 or PSP19, or any purchase of all or any significant portion
of either of their assets, or any equity interest in either of them, other
than the transactions contemplated hereby (an "Acquisition Proposal"), or
engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating
to an Acquisition Proposal; provided, however, that the respective Board
of Directors on behalf of PSP16, PSP17, PSP18 or PSP19 may furnish or
cause to be furnished information and may participate in such discussions
and negotiations through its representatives with persons who have sought
the same if the failure to provide such information or participate in such
negotiations and discussions might cause the members of the Board of
Directors of PSP16, PSP17, PSP18 or PSP19 to breach their fiduciary duty
to the shareholders of the respective corporation under applicable law as
advised by counsel. PSP16, PSP17, PSP18 and PSP19 will notify PSI
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with PSP16, PSP17, PSP18 or PSP19, and
will keep PSI informed of the status and terms of any such proposals and
any such negotiations or discussions.
6.5 Registration and Proxy Statements. PSP16, PSP17, PSP18
and PSP19 will promptly prepare and file with the SEC a combined
preliminary proxy statement in connection with the vote of shareholders of
PSP16, PSP17, PSP18 and PSP19 with respect to the Mergers. PSI will, as
promptly as practicable, prepare and file with the SEC a registration
statement on Form S-4 (the "S-4 Registration Statement"), containing a
combined proxy statement/prospectus, in connection with the registration
under the Securities Act of 1933, as amended (the "Securities Act") of the
PSI Shares to be issued to holders of PSP16, PSP17, PSP18 and PSP19 Shares
in the Mergers (such combined proxy statement/prospectus, together with
any amendments thereof or supplements thereto, in each case in the form or
forms to be mailed to the shareholders of PSP16, PSP17, PSP18 and PSP19,
being herein called the "Combined Proxy Statement and Prospectus"). PSI,
PSP16, PSP17, PSP18 and PSP19 will use their best efforts to have or cause
the S-4 Registration Statement to be declared effective as promptly as
practicable, and also will take any other action required to be taken
under federal or state securities laws, and PSP16, PSP17, PSP18 and PSP19
will each use its best efforts to cause the Combined Proxy Statement and
Prospectus to be mailed to its respective shareholders at the earliest
practicable date. PSP16, PSP17, PSP18 and PSP19 agree that if at any time
prior to the Effective Time any event with respect to PSP16, PSP17, PSP18
and PSP19, respectively, should occur which is required to be described
in an amendment of, or a supplement to, the Combined Proxy Statement and
Prospectus or the S-4 Registration Statement, such event shall be so
described, and such amendment or supplement shall be promptly filed with
the SEC and, as required by law, disseminated to the shareholders of
PSP16, PSP17, PSP18 and PSP19 and (ii) the Combined Proxy Statement and
Prospectus will (with respect to PSP16, PSP17, PSP18 and PSP19) comply
as to form in all material respects with the requirements of the federal
securities laws. PSI agrees that (i) if at any time prior to the
Effective Time any event with respect to PSI should occur which is
required to be described in an amendment of, or a supplement to, the
Combined Proxy Statement and Prospectus or the S-4 Registration Statement,
such event shall be so described, and such amendment or supplement shall
be promptly filed with the SEC and, as required by law, disseminated to
the shareholders of PSP16, PSP17, PSP18 and PSP19 and (ii) the Combined
Proxy Statement and Prospectus will (with respect to PSI) comply as to
form in all material respects with the requirements of the federal
securities laws.
6.6 Best Efforts. Each of PSI, PSP16, PSP17, PSP18 and
PSP19 shall: (i) promptly make its respective filings and thereafter make
any other required submissions under all applicable laws with respect to
the Mergers and the other transactions contemplated hereby; and (ii) use
its best efforts to promptly take, or cause to be taken, all other actions
and do, or cause to be done, all other things necessary, proper or
appropriate to consummate and make effective the transactions contemplated
by this Agreement as soon as practicable.
6.7 Registration and Listing of PSI Shares. PSI will use
its best efforts to register the PSI Shares under the applicable
provisions of the Securities Act and to cause the PSI Shares to be listed
for trading on the NYSE upon official notice of issuance.
6.8 Distributions.
6.8.1 PSP16 Distributions. PSP16 will not, at any time
prior to the Effective Time, declare or pay any cash distribution on its
capital stock or make any other distribution of assets to its
shareholders, except (i) regular quarterly dividends on its Common Stock
at a quarterly rate not in excess of $.27 per share, (ii) distributions to
shareholders of record immediately prior to the Effective Time in
an aggregate amount equal to the amount by which the estimated Net
Asset Value of PSP16 (as defined below) allocable to the respective
shareholders as of the Effective Time exceeds $20.76 per share in the case
of the PSP16 Shares and $11.82 per share in the case of the PSP16 Common
Stock Series B and C and (iii) pre-Mergers cash distributions required to
satisfy PSP16's REIT distribution requirements (the number of PSI Shares
issued in the Mergers and the amount receivable upon Cash Elections would
be reduced on a pro rata basis in an aggregate amount equal to such
additional distributions). For this purpose, the Net Asset Value of PSP16
is the sum of (a) the fair market value of PSP16's real estate assets as
determined by appraisal by Charles R. Wilson & Associates, Inc. as of
March 17, 1997, and (b) the book value of PSP16's non-real estate assets
as of the date of determination, and less (c) PSP16's liabilities as of
the date of determination. The determination of book value and
liabilities shall be from PSP16's financial statements prepared in
accordance with generally accepted accounting principles on a basis
consistent with prior periods.
6.8.2 PSP17 Distributions. PSP17 will not, at any time
prior to the Effective Time, declare or pay any cash distribution on its
capital stock or make any other distribution of assets to its
shareholders, except (i) regular quarterly dividends on its Common Stock
at a quarterly rate not in excess of $.31 per share, (ii) distributions to
shareholders of record immediately prior to the Effective Time in
an aggregate amount equal to the amount by which the estimated Net
Asset Value of PSP17 (as defined below) allocable to the respective
shareholders as of the Effective Time exceeds $19.63 per share in the case
of the PSP17 Shares and $10.26 per share in the case of the PSP17 Common
Stock Series B and C and (iii) pre-Mergers cash distributions required to
satisfy PSP17's REIT distribution requirements (the number of PSI Shares
issued in the Mergers and the amount receivable upon Cash Elections would
be reduced on a pro rata basis in an aggregate amount equal to such
additional distributions). For this purpose, the Net Asset Value of PSP17
is the sum of (a) the fair market value of PSP17's real estate assets as
determined by appraisal by Charles R. Wilson & Associates, Inc. as of
March 17, 1997, and (b) the book value of PSP17's non-real estate assets
as of the date of determination, and less (c) PSP17's liabilities as of
the date of determination. The determination of book value and
liabilities shall be from PSP17's financial statements prepared in
accordance with generally accepted accounting principles on a basis
consistent with prior periods.
6.8.3 PSP18 Distributions. PSP18 will not, at any time
prior to the Effective Time, declare or pay any cash distribution on its
capital stock or make any other distribution of assets to its
shareholders, except (i) regular quarterly dividends on its Common Stock
at a quarterly rate not in excess of $.30 per share, (ii) distributions to
shareholders of record immediately prior to the Effective Time in
an aggregate amount equal to the amount by which the estimated Net
Asset Value of PSP18 (as defined below) allocable to the respective
shareholders as of the Effective Time exceeds $20.38 per share in the case
of the PSP18 Shares and $9.36 per share in the case of the PSP18 Common
Stock Series B and C and (iii) pre-Mergers cash distributions required to
satisfy PSP18's REIT distribution requirements (the number of PSI Shares
issued in the Mergers and the amount receivable upon Cash Elections would
be reduced on a pro rata basis in an aggregate amount equal to such
additional distributions). For this purpose, the Net Asset Value of PSP18
is the sum of (a) the fair market value of PSP18's real estate assets as
determined by appraisal by Charles R. Wilson & Associates, Inc. as of
March 17, 1997, and (b) the book value of PSP18's non-real estate assets
as of the date of determination, and less (c) PSP18's liabilities as of
the date of determination. The determination of book value and
liabilities shall be from PSP18's financial statements prepared in
accordance with generally accepted accounting principles on a basis
consistent with prior periods.
6.8.4 PSP19 Distributions. PSP19 will not, at any time
prior to the Effective Time, declare or pay any cash distribution on its
capital stock or make any other distribution of assets to its
shareholders, except (i) regular quarterly dividends on its Common Stock
at a quarterly rate not in excess of $.18 per share, (ii) distributions to
shareholders of record immediately prior to the Effective Time in
an aggregate amount equal to the amount by which the estimated Net
Asset Value of PSP19 (as defined below) allocable to the respective
shareholders as of the Effective Time exceeds $16.72 per share in the case
of the PSP19 Shares and $1.41 per share in the case of the PSP19 Common
Stock Series B and C and (iii) pre-Mergers cash distributions required to
satisfy PSP19's REIT distribution requirements (the number of PSI Shares
issued in the Mergers and the amount receivable upon Cash Elections would
be reduced on a pro rata basis in an aggregate amount equal to such
additional distributions). For this purpose, the Net Asset Value of PSP19
is the sum of (a) the fair market value of PSP19's real estate assets as
determined by appraisal by Charles R. Wilson & Associates, Inc. as of
March 17, 1997, and (b) the book value of PSP19's non-real estate assets
as of the date of determination, and less (c) PSP19's liabilities as of
the date of determination. The determination of book value and
liabilities shall be from PSP19's financial statements prepared in
accordance with generally accepted accounting principles on a basis
consistent with prior periods.
7. Conditions.
7.1 Conditions to Each Party's Obligations. The respective
obligations of each party to consummate the transactions contemplated by
this Agreement are subject to the fulfillment at or prior to the Closing
of each of the following conditions, any or all of which may be waived in
whole or in part, to the extent permitted by applicable law:
7.1.1 PSP16, PSP17, PSP18 and PSP19 Shareholder
Approval. This Agreement and the transactions contemplated hereby
shall have been duly approved by the shareholders of PSP16, PSP17,
PSP18 and PSP19 as contemplated by Section 6.2.
7.1.2 Governmental and Regulatory Consents. All
filings required to be made prior to the Effective Time with, and
all consents, approvals, permits and authorizations required to be
obtained prior to the Effective Time from, governmental and regulatory
authorities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
(including the expiration of the waiting period requirements of the
HSR Act) shall have been made or obtained (as the case may be) without
material restrictions, except where the failure to obtain such consents,
approvals, permits and authorizations could not reasonably be expected to
have a material adverse effect on PSI, PSP16, PSP17, PSP18 or PSP19.
7.1.3 Litigation. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, judgment,
decree, injunction or other order (whether temporary, preliminary or
permanent) or taken any action which prohibits the consummation of the
transactions contemplated by this Agreement; provided, however, that the
party invoking this condition shall use its best efforts to have any such
judgment, decree, injunction or other order vacated.
7.1.4 Registration Statement. The S-4 Registration
Statement shall have been declared effective and no stop order suspending
effectiveness shall have been issued, no action, suit, proceeding or
investigation by the SEC to suspend the effectiveness thereof shall have
been initiated and be continuing, and all necessary approvals under
federal and state securities laws relating to the issuance or trading of
the PSI Shares shall have been received.
7.1.5 Listing of PSI Shares on NYSE. The PSI Shares
shall have been approved for listing on the NYSE upon official notice
of issuance.
7.1.6 Fairness Opinion. The Boards of Directors of
PSP16, PSP17, PSP18 and PSP19 shall have received the opinion of Robert A.
Stanger & Co., Inc. in form and substance satisfactory to them to
the effect that the consideration to be received by the shareholders
of PSP16, PSP17, PSP18 and PSP19 in the Mergers is fair to such
shareholders from a financial point of view, and such opinion shall
not have been withdrawn or revoked.
7.1.7 Tax Opinion. The Boards of Directors of PSI,
PSP16, PSP17, PSP18 and PSP19 shall have received a legal opinion of Hogan
& Hartson that the Merger will qualify as a tax-free reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended.
7.1.8 PSI Board Approval. This Agreement and the
transactions contemplated hereby shall have been duly approved by the
Board of Directors of PSI.
7.2 Conditions to Obligations of PSI. The obligations of
PSI to consummate the transactions contemplated by this Agreement are
subject to the fulfillment at or prior to the Closing of the following
conditions, which may be waived in whole or in part by PSI to the extent
permitted by applicable law:
7.2.1 Accuracy of Representations; Performance of
Agreements. Each of the representations and warranties of PSP16, PSP17,
PSP18 and PSP19 contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date as if made at and as
of the Closing Date (except to the extent they relate to a particular
date) and PSP16, PSP17, PSP18 and PSP19 shall have performed or complied
with all agreements and covenants required by this Agreement to be
performed or complied with by it at or prior to the Closing.
7.2.2 Certificate of Officers. PSI shall have received
such certificates of officers of PSP16, PSP17, PSP18 and PSP19 as PSI may
reasonably request in connection with the Closing, including upon request
a certificate satisfactory to it of the Chief Executive Officer and the
Chief Financial Officer of PSP16, PSP17, PSP18 and PSP19, to the effect
that, to the best of their knowledge, all representations and warranties
of PSP16, PSP17, PSP18 and PSP19 contained in this Agreement are true and
correct in all material respects at and as of the Closing Date as if made
at and as of the Closing Date, and PSP16, PSP17, PSP18 and PSP19 have
performed or complied with all agreements and covenants required by this
Agreement to be performed or complied with by them at or prior to the
Closing.
7.2.3 Title to Properties; Environmental Audits. PSI
in its sole discretion shall be satisfied as to the status of title to
(including the existence and effect of liens and encumbrances), and the
results of an environmental audit of, each of the real properties owned by
PSP16, PSP17, PSP18 and PSP19.
7.2.4 Trading Price of PSI Shares. The average of the
per share closing prices of the PSI Shares on the NYSE during the
20 consecutive trading days ending on the fifth trading day prior to the
meeting of shareholders of PSP16, PSP17, PSP18 and PSP19 provided for in
Section 6.2 hereof (the "Average PSI Share Price") shall be not less than
$26.
7.2.5 Dissenting Shares. The number of Dissenting
Shares shall be less than 5% of the outstanding PSP16 Shares in the case
of PSP16, less than 5% of the outstanding PSP17 Shares in the case of
PSP17, less than 5% of the outstanding PSP18 Shares in the case of PSP18
and less than 5% of the outstanding PSP19 Shares in the case of PSP19.
7.3 Conditions to Obligations of PSP16, PSP17, PSP18 and
PSP19. The obligations of PSP16, PSP17, PSP18 and PSP19 to consummate the
transactions contemplated by this Agreement are subject to the fulfillment
at or prior to the Closing of the following conditions, which may be
waived in whole or in part by PSP16, PSP17, PSP18 and PSP19 to the extent
permitted by applicable law.
7.3.1 Accuracy of Representations; Performance of
Agreements. Each of the representations and warranties of PSI contained
in this Agreement shall be true and correct in all material respects at
and as of the Closing Date as if made at and as of the Closing Date
(except to the extent they relate to a particular date) and PSI shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
it at or prior to the Closing.
7.3.2 Certificate of Officers. PSP16, PSP17, PSP18 and
PSP19 shall have received such certificates of officers of PSI as PSP16,
PSP17, PSP18 and PSP19 may reasonably request in connection with the
Closing, including upon request a certificate satisfactory to them of the
Chief Executive Officer and the Chief Financial Officer of PSI, to the
effect that, to the best of their knowledge, all representations and
warranties of PSI contained in this Agreement are true and correct in all
material respects at and as of the Closing Date as if made at and as of
the Closing Date, and PSI has performed or complied with all agreements
and covenants required by this Agreement to be performed or complied with
by it at or prior to the Closing.
7.4 Separate Mergers. The merger of PSP16 into PSI, the
merger of PSP17 into PSI, the merger of PSP18 into PSI and the merger
of PSP19 into PSI are not conditioned on the others. If the conditions to
one of the Mergers are satisfied or waived, such merger will be
consummated on the terms provided in this Agreement, notwithstanding that
the conditions to the other Merger have not been satisfied or waived.
8. Termination.
8.1 Termination by Mutual Consent. This Agreement may be
terminated and the Mergers may be abandoned at any time prior to the
Effective Time, before or after shareholder approval, by the mutual
written consent of PSI, PSP16, PSP17, PSP18 or PSP19.
8.2 Termination by PSI, PSP16, PSP17, PSP18 or PSP19. This
Agreement may be terminated and the Mergers may be abandoned by action of
the Board of Directors of PSI, PSP16, PSP17, PSP18 or PSP19 if (i) the
Mergers shall not have been consummated by March 31, 1998 (provided that
the right to terminate this Agreement under this Section 8.2(i) shall not
be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of or resulted in the failure of the
Mergers to occur on or before such date); (ii) any court of competent
jurisdiction in the United States or some other governmental body or
regulatory authority shall have issued an order, decree or ruling or taken
any other action permanently restraining, enjoining or otherwise
prohibiting the Mergers and such order, decree, ruling or other action
shall have become final and nonappealable; or (iii) (A) the shareholders
of PSP16, in the case of the merger of PSP16 into PSI, (B) the
shareholders of PSP17, in the case of the merger of PSP17 into PSI, (C)
the shareholders of PSP18, in the case of the merger of PSP18 into PSI or
(D) the shareholders of PSP19, in the case of the merger of PSP19 into
PSI, shall have failed to approve this Agreement and the transactions
contemplated hereby at their respective meetings of shareholders.
8.3 Termination by PSI. This Agreement may be terminated by
PSI, and the Mergers may be abandoned at any time prior to the Effective
Time, as to the defaulting party if (i) PSP16, PSP17, PSP18 or PSP19 shall
have failed to comply in any material respect with any of the covenants,
conditions or agreements contained in this Agreement to be complied with
or performed by such party at or prior to such date of termination, which
failure to comply has not been cured within five business days following
notice to such party of such failure to comply, or (ii) any representation
or warranty of PSP16, PSP17, PSP18 or PSP19 contained in this Agreement
shall not be true in all material respects when made, which inaccuracy or
breach (if capable of cure) has not been cured within five business days
following notice to such party of the inaccuracy or breach, or on and as
of the Closing as if made on and as of the Closing Date.
8.4 Termination by PSP16, PSP17, PSP18 or PSP19. This
Agreement may be terminated by PSP16, PSP17, PSP18 or PSP19 and the
Mergers may be abandoned at any time prior to the Effective Time, before
or after shareholder approval, if (i) PSI shall have failed to comply in
any material respect with any of the covenants, conditions or agreements
contained in this Agreement to be complied with or performed by PSI at or
prior to such date of termination, which failure to comply has not been
cured within five business days following notice to PSI of such failure to
comply, or (ii) any representation or warranty of PSI contained in this
Agreement shall not be true in all material respects when made, which
inaccuracy or beach (if capable of cure) has not been cured within five
business days following notice to PSI of the inaccuracy or breach, or on
and as of the Closing as if made on and as of the Closing Date.
8.5 Effect of Termination and Abandonment. In the event of
termination of this Agreement and abandonment of the Mergers pursuant to
this Section 8, no party (or any directors, officers, employees, agents or
representatives of any party) shall have any liability or further
obligation to any other party or any person who controls a party within
the meaning of the Securities Act, except as provided in Section 9.1 and
except that nothing herein will relieve any party from liability for any
breach of this Agreement.
9. Miscellaneous.
9.1 Payment of Expenses. If the Mergers are consummated,
the Surviving Corporation shall pay all the expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of
the transactions contemplated hereby. If the Mergers are not consummated,
each of PSI, PSP16, PSP17, PSP18 and PSP19 shall pay its own expenses,
except that any expenses incurred in connection with the printing of the
S-4 Registration Statement and the Combined Proxy Statement and
Prospectus, the real estate appraisals and environmental audits of the
properties of PSP16, PSP17, PSP18 and PSP19 and preparation for real
estate closings, and any filing fees under the HSR Act, the Securities Act
and the Securities Exchange Act of 1934, as amended shall be paid 50% by
PSI and the balance by PSP16, PSP17, PSP18 and PSP19 in equal shares.
9.2 Survival of Representations, Warranties and Covenants.
The respective representations and warranties of PSI, PSP16, PSP17, PSP18
and PSP19 contained herein or in any certificate or document delivered
pursuant hereto shall expire with and be terminated and extinguished by
the effectiveness of the Mergers and shall not survive the Effective Time.
The sole right and remedy arising from a misrepresentation or breach of
warranty, or from the failure of any of the conditions to be met, shall be
the termination of this Agreement by the other party. This Section 9.2
shall not limit any covenant or agreement of the parties, which by its
terms contemplates performance after the Effective Time.
9.3 Modification or Amendment. The parties may modify or
amend this Agreement by written agreement authorized by the Boards of
Directors and executed and delivered by officers of the respective
parties; provided, however, that after approval of this Agreement by the
shareholders of a party, no amendment shall be made which changes any
of the principal terms of the Mergers or this Agreement, without the
approval of such shareholders.
9.4 Waiver of Conditions. The conditions to each of the
parties' obligations to consummate the Mergers are for the sole benefit of
such party and may be waived by such party in whole or in part to the
extent permitted by applicable law.
9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
giving effect to the principles of conflict of laws thereof.
9.6 Interpretation. This Agreement has been negotiated by
the parties and is to be interpreted according to its fair meaning as if
the parties had prepared it together and not strictly for or against any
party. Each of the capitalized terms defined in this Agreement shall, for
all purposes of this Agreement (and whether defined in the plural and used
in the singular, or vice versa), have the respective meaning assigned to
such term in the Section in which such meaning is set forth. References
in this Agreement to "parties" or a "party" refer to parties to this
Agreement unless expressly indicated otherwise. At each place in this
Agreement where the context so requires, the masculine, feminine or neuter
gender includes the others and the singular or plural number includes the
other. "Including" means "including without limitation."
9.7 Headings. The descriptive headings contained in the
Sections and subsections of this Agreement are for convenience of
reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.8 Parties in Interest. This Agreement, and the rights,
interests and obligations created by this Agreement, shall bind and inure
to the benefit of the parties and their respective successors and
permitted assigns, and shall confer no right, benefit or interest upon any
other person, including shareholders of the respective parties.
9.9 Notices. All notices or other communications required
or permitted under this Agreement shall be in writing and shall be
delivered personally or sent by U.S. mail, postage prepaid, addressed as
follows or such other address as the party to be notified has furnished in
writing by a notice given in accordance with this Section 9.9:
If to PSI:
Public Storage, Inc.
701 Western Avenue, Suite 200
Glendale, California 91201-2397
Attention: Harvey Lenkin
President
If to PSP16:
Public Storage Properties XVI, Inc.
701 Western Avenue, Suite 200
Glendale, California 91201-2397
Attention: B. Wayne Hughes
Chief Executive Officer
If to PSP17:
Public Storage Properties XVII, Inc.
701 Western Avenue, Suite 200
Glendale, California 91201-2397
Attention: B. Wayne Hughes
Chief Executive Officer
If to PSP18:
Public Storage Properties XVIII, Inc.
701 Western Avenue, Suite 200
Glendale, California 91201-2397
Attention: B. Wayne Hughes
Chief Executive Officer
If to PSP19:
Public Storage Properties XIX, Inc.
701 Western Avenue, Suite 200
Glendale, California 91201-2397
Attention: B. Wayne Hughes
Chief Executive Officer
Any such notice or communication shall be deemed given as of the date of
delivery, if delivered personally, or on the second day after deposit with
the U.S. Postal Service, if sent by U.S. mail.
9.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but
all of which shall be considered one and the same agreement.
9.11 Assignment. No rights, interests or obligations of
either party under this Agreement may be assigned or delegated without the
prior written consent of the other party.
9.12 Entire Agreement. This Agreement, including the Merger
Agreement, embodies the entire agreement and understanding between the
parties pertaining to the subject matter hereof, and supersedes all prior
agreements, understandings, negotiations, representations and discussions,
whether written or oral.
9.13 Severable Provisions. If any of the provisions of this
Agreement may be determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions, and any partially enforceable
provisions to the extent enforceable, shall nevertheless be binding and
enforceable.
9.14 Further Action. If at any time after the Effective
Time, the Surviving Corporation shall determine that any assignments,
transfers, deeds or other assurances are necessary or desirable to
vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to any property or rights of PSP16, PSP17, PSP18 or
PSP19, the officers of any Constituent Corporation are fully authorized in
the name of PSP16, PSP17, PSP18 or PSP19 or otherwise to execute and
deliver such documents and do all things necessary and proper to vest,
perfect or confirm title to such property or rights in the Surviving
Corporation.
IN WITNESS WHEREOF, the parties have entered into this Agreement as
of the date first above written.
PUBLIC STORAGE, INC.
By: /s/ HARVEY LENKIN
----------------------------
Harvey Lenkin
President
PUBLIC STORAGE PROPERTIES XVI, INC.
By: /s/ B. WAYNE HUGHES
----------------------------
B. Wayne Hughes
Chief Executive Officer
PUBLIC STORAGE PROPERTIES XVII, INC.
By: /s/ B. WAYNE HUGHES
----------------------------
B. Wayne Hughes
Chief Executive Officer
PUBLIC STORAGE PROPERTIES XVIII, INC.
By: /s/ B. WAYNE HUGHES
----------------------------
B. Wayne Hughes
Chief Executive Officer
PUBLIC STORAGE PROPERTIES XIX, INC.
By: /s/ B. WAYNE HUGHES
----------------------------
B. Wayne Hughes
Chief Executive Officer
<PAGE>
Exhibit A
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER ("Agreement") is entered into as of this
_____ day of _______________, 1997, by and between PUBLIC STORAGE, INC.,
a California corporation ("PSI"), and [PUBLIC STORAGE PROPERTIES XVI,
INC., a California corporation ("PSP16"), PUBLIC STORAGE PROPERTIES
XVII, INC., a California corporation ("PSP17"), PUBLIC STORAGE
PROPERTIES XVIII, INC., a California corporation ("PSP18") and PUBLIC
STORAGE PROPERTIES XIX, INC., a California corporation ("PSP19")], with
reference to the following:
A. PSI was incorporated in 1980 under the laws of California,
and on the date hereof its authorized capital stock consists of
200,000,000 shares of Common Stock, $.10 par value (the "PSI Shares"),
___________ of which are issued and outstanding, 7,000,000 shares of
Class B Common Stock, $.10 par value, all of which are issued and
outstanding, 50,000,000 shares of Preferred Stock, $.01 par value,
___________ of which are issued and outstanding and 200,000,000
shares of Equity Stock, $.01 par value, none of which are issued and
outstanding.
B. __________ was incorporated in 1990 under the laws of
California, and on the date hereof has outstanding __________ shares of
Common Stock Series A, $.01 par value (the "_____ Shares"), _________
shares of Common Stock Series B and _________ shares of Common Stock
Series C.
C. PSI, PSP16, PSP17, PSP18 and PSP19 have entered into an
Agreement and Plan of Reorganization dated as of _______________, 1997
(the "Plan"), setting forth certain representations, warranties,
conditions and agreements pertaining to the Merger (as defined below).
D. The Boards of Directors of PSI and __________ have approved
the Plan and this Agreement of Merger, and the requisite shareholder
approval has been obtained.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
1.1 The Merger. At the Effective Time (as defined below),
__________ will be merged with and into PSI (the "Merger") and PSI
shall be the surviving corporation. PSI and __________ are sometimes
collectively referred to herein as the "Constituent Corporations" and
PSI, as the surviving corporation of the Merger, is sometimes referred
to herein as the "Surviving Corporation."
1.2 Effective Time. The Merger shall become effective at
the time at which this Agreement, together with the requisite Officers'
Certificates of PSI and __________, are filed with the California
Secretary of State (the "Effective Time").
1.3 Effect of the Merger. At the Effective Time:
(a) The separate corporate existence of __________
shall cease and the Surviving Corporation shall thereupon succeed,
without other transfer, to all the rights and property of __________ and
shall be subject to all the debts and liabilities of __________ in the
same manner as if the Surviving Corporation had itself incurred them;
all rights of creditors and all liens upon the property of each of the
Constituent Corporations shall be preserved unimpaired, provided that
such liens upon property of __________ shall be limited to the property
affected thereby immediately prior to the Effective Time; and any action
or proceeding pending by or against __________ may be prosecuted to
judgment, which shall bind the Surviving Corporation, or the Surviving
Corporation may be proceeded against or substituted in its place.
(b) The Articles of Incorporation and the Bylaws of
PSI, as then amended, shall continue to be the Articles of Incorporation
and the Bylaws of the Surviving Corporation until changed as provided by
law and their respective provisions.
(c) The directors of PSI shall continue as directors
of the Surviving Corporation until their successors are elected and
qualified as provided by law and in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation.
ARTICLE II
2.1 Conversion of __________ Shares. The manner of
converting the outstanding __________ Shares into cash and/or PSI Shares
shall be as follows:
(a) At the Effective Time, subject to Section 2.6 of
the Plan, each __________ Share as to which a cash election has been
made in accordance with the provisions of Section 2.5 of the Plan and
has not been revoked, relinquished or lost pursuant to Section 2.5 of
the Plan (the "Cash Election Shares") shall be converted into and shall
represent the right to receive $_______ in cash (the "Cash Election
Price"). As soon as practicable after the Effective Time, the
registered holders of Cash Election Shares shall be paid the cash to
which they are entitled hereunder in respect of such Cash Election
Shares.
(b) At the Effective Time, subject to Sections 2.4,
2.5 and 2.7 of the Plan, each __________ Share (other than Cash Election
Shares and __________ Shares owned by PSI) shall be converted into
______ PSI Shares.
2.2 No Fractional Shares. Notwithstanding any other term
or provision of this Agreement or the Plan, no fractional PSI Shares
and no certificates or script therefor, or other evidence of ownership
thereof, will be issued in the Merger. In lieu of any such fractional
share interests, each holder of __________ Shares who would otherwise
be entitled to such fractional share will, upon surrender of the
certificate representing such __________ shares, receive a whole PSI
Share if such fractional share to which such holder would otherwise have
been entitled is .5 of an PSI Share or more, and such fractional share
shall be disregarded if it represents less than .5 of an PSI Share;
provided, however, that, such fractional share shall not be disregarded
if such fractional share to which such holder would otherwise have been
entitled represents .5 of 1% or more of the total number of PSI Shares
such holder is entitled to receive in the Merger. In such event, such
holder shall be paid an amount in cash (without interest), rounded to
the nearest $.01, determined by multiplying (i) the per share closing
price on the New York Stock Exchange, Inc. of the PSI Shares at the
Effective Time by (ii) the fractional interest.
2.3 Dissenting Shares. __________ Shares held by a holder
who has demanded and perfected his right to an appraisal of such shares
in accordance with Section 1300 et seq. of the General Corporation Law
of California (the "GCLC") and who has not effectively withdrawn or lost
his right to appraisal ("Dissenting Shares") shall not be converted into
or represent the right to receive cash and/or PSI Shares, but the holder
thereof shall be entitled only to such rights as are granted by Section
1300 et seq. of the GCLC. Each holder of Dissenting Shares who becomes
entitled to payment for __________ Shares pursuant to these provisions
of the GCLC shall receive payment therefor from the Surviving
Corporation in accordance therewith. If any holder of __________ Shares
who demands appraisal in accordance with Section 1300 et seq. of the
GCLC shall effectively withdraw with the consent of the Surviving
Corporation or lose (through failure to perfect or otherwise) his right
to appraisal with respect to __________ Shares, such __________ Shares
shall automatically be converted into the right to receive PSI Shares
pursuant to Section 2.1(b) hereof.
2.4 PSI Shares Unaffected. The Merger shall effect no
change in any of the outstanding PSI Shares and no outstanding PSI
Shares shall be converted or exchanged as a result of the Merger, and
no cash shall be exchangeable and no securities shall be issuable, with
respect thereto.
2.5 Cancellation of Shares Held or Owned by Parties. At
the Effective Time, any __________ Shares owned by PSI shall be
cancelled and retired and no shares shall be issuable, and no cash
shall be exchangeable, with respect thereto.
2.6 Exchange of Certificates. After the Effective Time,
each holder of a certificate theretofore evidencing outstanding
__________ Shares which were converted into PSI Shares pursuant hereto,
upon surrender of such certificate to First National Bank of Boston (the
"Exchange Agent") or such other agent or agents as shall be appointed by
the Surviving Corporation, shall be entitled to receive a certificate
representing the number of whole PSI Shares into which the __________
Shares theretofore represented by the certificate so surrendered shall
have been converted and cash payment in lieu of fractional share
interests, if any. As soon as practicable after the Effective Time, the
Exchange Agent will send a notice and a transmittal form to each holder
of __________ Shares of record at the Effective Time whose stock shall
have been converted into PSI Shares, advising such holder of the
effectiveness of the Merger and the procedure for surrendering to the
Exchange Agent certificates evidencing __________ Shares in exchange for
certificates evidencing PSI Shares.
2.7 Status Until Surrendered. Until surrendered as
provided in Section 2.6 hereof, each outstanding certificate which,
prior to the Effective Time, represented __________ Shares (other than
Cash Election Shares and Dissenting Shares, if any) will be deemed for
all corporate purposes to evidence ownership of the number of whole
PSI Shares into which the __________ Shares evidenced thereby were
converted. However, until such outstanding certificates formerly
evidencing __________ Shares are so surrendered, no dividend payable to
holders of record of PSI Shares shall be paid to the holders of such
outstanding certificates in respect of __________ Shares, but upon
surrender of such certificates by such holders there shall be paid to
such holders the amount of any dividends (without interest) theretofore
paid with respect to such whole PSI Shares as of any record date on or
subsequent to the Effective Time and the amount of any cash (without
interest) payable to such holder in lieu of fractional share interests.
2.8 Transfer of Shares. After the Effective Time, there
shall be no further registration of transfers of __________ Shares on
the records of __________ and, if certificates formerly evidencing such
shares are presented to the Surviving Corporation, they shall be
cancelled and exchanged for certificates evidencing PSI Shares and
cash in lieu of fractional share interests as herein provided.
2.9 Conversion of Common Stock Series B and C. At the
Effective Time, each share of Common Stock Series B (other than shares
owned by PSI) shall be converted into ______ PSI Shares and each share
of Common Stock Series C (other than shares owned by PSI) shall be
converted into ______ PSI Shares.
ARTICLE III
3.1 Headings. The descriptive headings contained in the
Sections of this Agreement are for convenience of reference only and
shall not affect in any way the meaning or interpretation of this
Agreement.
3.2 Parties in Interest. This Agreement, and the rights,
interests and obligations created by this Agreement, shall bind and
inure to the benefit of the parties and their respective successors and
permitted assigns.
3.3 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original,
but all of which shall be considered one and the same agreement.
3.4 Further Action. If at any time after the Effective
Time, the Surviving Corporation shall determine that any assignments,
transfers, deeds or other assurances are necessary or desirable to vest,
perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to any property or rights of __________, the officers
of either Constituent Corporation are fully authorized in the name of
__________ or otherwise to execute and deliver such documents and do all
things necessary and proper to vest, perfect or confirm title to such
property or rights in the Surviving Corporation.
3.5 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California,
without giving effect to the principles of conflict of laws thereof.
3.6 Abandonment of Merger. The Constituent Corporations
have the power to abandon the Merger by mutual written consent prior to
the filing of this Agreement with the California Secretary of State.
IN WITNESS WHEREOF, the parties have entered into this Agreement
as of the date first above written.
PUBLIC STORAGE, INC.
By: ___________________________
Harvey Lenkin
President
By: ___________________________
Obren B. Gerich
Assistant Secretary
[PUBLIC STORAGE PROPERTIES XVI, INC.,
PUBLIC STORAGE PROPERTIES XVII, INC.,
PUBLIC STORAGE PROPERTIES XVIII, INC.,
or
PUBLIC STORAGE PROPERTIES XIX, INC.]
By: ___________________________
Harvey Lenkin
President
By: ___________________________
Obren B. Gerich
Secretary
