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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 28, 1999
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PS Business Parks, Inc.
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(Exact name of registrant as specified in its charter)
California 1-10709 95-4300881
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
701 Western Avenue, Glendale, California 91201-2397
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (818) 244-8080
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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On May 15, 1998, the Securities and Exchange Commission (the "Commission")
declared effective the Registration Statement on Form S-3 (No. 333-50463) (the
"Registration Statement") of PS Business Parks, Inc. (the "Company"), which
permits the Company to issue an aggregate of $500,000,000 of preferred stock,
depositary shares, equity stock, common stock and warrants. (The prospectus
dated May 15, 1998 included in the Registration Statement is referred to as the
"Prospectus").
The Company will be filing with the Commission on April 29, 1999 a
supplement to the Prospectus, dated April 28, 1999, relating to the issuance and
sale of up to 2,300,000 Depositary Shares Each Representing 1/1,000 of a share
of 9 1/4% Cumulative Preferred Stock, Series A, $.01 par value per share (the
"Prospectus Supplement"). In connection with the filing of the Prospectus
Supplement with the Commission, the Company is filing certain exhibits as part
of this Form 8-K. See "Item 7. Financial Statements and Exhibits."
Item 7. Financial Statements and Exhibits
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(c) Exhibits.
Exhibit 1.1 - Underwriting Agreement relating to the Company's
Depositary Shares Representing Shares of the Company's
9 1/4% Cumulative Preferred Stock, Series A (the
"Preferred Stock").
Exhibit 3.1 - Certificate of Determination for the Preferred Stock.
Exhibit 4.1 - Deposit Agreement Relating to the Depositary Shares.
Exhibit 5.1 - Opinion of David Goldberg as to the validity of the
Depositary Shares.
Exhibit 23.1 - Consent of Ernst & Young LLP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PS BUSINESS PARKS, INC.
By: /s/ SARAH HASS
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Sarah Hass
Vice President
Date: April 28, 1999
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EXHIBIT 1.1
PS Business Parks, Inc.
2,000,000 Depositary Shares
Each Representing 1/1,000 of a Share of
9 1/4% Cumulative Preferred Stock, Series A
Liquidation Preference Equivalent to
$25.00 Per Depositary Share
Underwriting Agreement
New York, New York
April 28, 1999
Salomon Smith Barney Inc.
As Representatives of the several Underwriters,
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
PS Business Parks, Inc., a real estate investment trust ("REIT") and a
California corporation (the "Company"), proposes to sell to the several
underwriters named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, an aggregate of 2,000,000
shares (the "Firm Shares") of its Depositary Shares (the "Depositary Shares")
each representing 1/1,000th of a share of 9 1/4% Cumulative Preferred Stock,
Series A, stated value $25.00 per share (the "Preferred Stock"). The Company
also proposes to sell to the Underwriters up to an additional 300,000 shares
(the "Additional Shares") of Depositary Shares. The Firm Shares and the
Additional Shares are collectively referred to as the "Shares".
The shares of Preferred Stock represented by the Shares (the "Preferred
Shares") will, when issued, be deposited by the Company against delivery of
Depositary Receipts (the "Depositary Receipts") to be issued by American Stock
Transfer & Trust Company, as Depositary (the "Depositary"), under a Deposit
Agreement (the "Deposit Agreement") among the Company, the Depositary and the
holders from time to time of the Depositary Receipts issued thereunder. Each
Depositary Receipt will represent one or more Depositary Shares.
The Company wishes to confirm as follows its agreement with you and the
other several Underwriters on whose behalf you are acting, in connection with
the several purchases of the Shares by the Underwriters.
The terms which follow, when used in this Agreement, shall have the
meanings indicated:
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"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Commission" shall mean the United States Securities and Exchange Commis-
sion.
"Effective Date" shall mean each date that the Registration Statement and
any post-effective amendment or amendments thereto became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus or
preliminary prospectus supplement relating to the Shares and the Preferred
Shares, in each case filed pursuant to Rule 424(b).
"Prospectus" shall mean the prospectus and any Prospectus Supplement
relating to the Shares that is first filed pursuant to Rule 424(b) after the
Execution Time.
"Registration Statement" shall mean the Registration Statement referred to
in Section 4(a) above, including exhibits and financial statements, as amended
at the Execution Time and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended.
"Rule 424" refers to such rule under the Act.
"amend," "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
1. Agreements to Sell and Purchase.
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(a) On the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and conditions of
this Agreement, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $24.2125 per share (the "purchase price per
share"), the
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number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares increased as set forth in
Section 9 hereof).
(b) The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein
contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right to purchase from the Company, at the
purchase price per share, pursuant to an option (the "over-allotment
option") which may be exercised at any time and from time to time prior to
9:00 P.M., New York City time, on the 30th day after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the American Stock
Exchange is open for trading), up to an aggregate of 300,000 Additional
Shares. Additional Shares may be purchased only for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number
of Additional Shares (subject to such adjustments as you may determine in
order to avoid fractional shares) which bears the same proportion to the
number of Additional Shares to be purchased by the Underwriters as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares increased as set forth in
Section 9 hereof) bears to the aggregate number of Firm Shares.
2. Terms of Public Offering.
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The Company has been advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon after this
Agreement has been entered into and the Registration Statement (as defined
herein), and, if necessary, any post-effective amendment to the Registration
Statement, has become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
3. Delivery of the Shares and Payment Therefor.
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Delivery to the Underwriters of and payment for the Firm Shares shall be
made at the office of Salomon Smith Barney Inc., 388 Greenwich Street, New York,
NY 10013, at 10:00 A.M., New York City time, on April 30, 1999 (the "Closing
Date"). The place of closing for the Firm Shares and the Closing Date may be
varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the aforementioned office of
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Salomon Smith Barney Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than three nor later than ten business days after
the giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 P.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor by wire transfer of immediately available funds to the order of
the Company.
4. Representations, Warranties and Agreements of the Primary Entities.
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The Company and PS Business Parks, L.P., a limited partnership under the
laws of the state of California (the "Operating Partnership", and together with
the Company, the "Primary Entities"), jointly and severally, represent and
warrant to and agree with the Underwriter that:
(a) The Company has filed with the Commission a registration
statement, file number 333-50463, on Form S-3, including the related
prospectus included in the Registration Statement, for the registration
under the Act, of the offering and sale of, inter alia, the Shares. The
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Company may have filed one or more amendments thereto, including each
related prospectus, and one or more prospectus supplements thereto, each of
which has previously been furnished to the Representatives. The Company
has filed with, or transmitted for filing to, or shall promptly hereafter
file with or transmit for filing to, the Commission a prospectus supplement
(the "Prospectus Supplement") specifically relating to the Shares
pursuant to Rule 424 under the Act. The Company has included or will
include in such Registration Statement, as amended at the Execution Time,
and in the Prospectus Supplement all information required by the Act and
the rules thereunder to be included therein with respect to the Shares and
the offering thereof. As filed, such Registration Statement, as so
amended, and form of final prospectus contained in the Registration
Statement and Prospectus Supplement, or such final prospectus and
Prospectus Supple-
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ment, contains or will contain all required information with respect to the
Shares and the offering thereof and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to the Underwriters prior to the
date hereof or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes as the
Company has advised the Representatives, prior to the Execution Time, will
be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and, when the Prospectus Supplement is first filed in accordance with Rule
424(b) and on the Closing Date, the Prospectus will, comply in all material
respects with the requirements of the Act and the rules thereunder; on the
Effective Date, the Registration Statement did not or will not 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; and, on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus will not include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the Prospectus
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus. The Registration Statement has become effective under the
Act, and no stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose are pending
before or, to the knowledge of the Primary Entities, threatened by, the
Commission.
(c) The documents incorporated or deemed to be incorporated by
reference into the Registration Statement and the Prospectus pursuant to
Item 12 of Form S-3 under the Act (the "Incorporated Documents"), at the
time they were or hereafter are filed with the Commission, complied or will
comply in all material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder, and, when read
together with the other information in the Prospectus, at the date of the
Prospectus, as of the Closing Date and any later date on which Additional
Shares are to be purchased did not and will not include an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) Ernst & Young LLP, the accounting firm that audited the financial
statements and supporting schedules included in, or incorporated by
reference
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into, the Registration Statement and Prospectus, are, and during the
periods covered by such reports were, independent public accountants as
required by the Act.
(e) The financial statements (including the notes and schedules
thereto) included in, or incorporated by reference into, the Registration
Statement and the Prospectus present fairly the financial position of the
respective entity or entities or group presented therein at the respective
dates indicated and the results of their operations for the respective
periods specified; except as otherwise stated in the Registration Statement
and Prospectus, said financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis; the supporting schedules included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the
information included or incorporated therein and have been prepared on a
basis consistent, except as may be noted therein, with that of the
financial statements included in, or incorporated by reference into, the
Registration Statement and the Prospectus and the books and records of
the respective entities presented therein. The summary and selected
financial data included in, or incorporated by reference in, the Prospectus
present fairly the information shown therein as at the respective dates and
for the respective periods specified, and the summary and selected
financial data have been presented on a basis consistent with the financial
statements so set forth in the Prospectus and other financial information.
Pro forma financial information included in or incorporated by reference
into the Registration Statement and the Prospectus has been prepared in
accordance with the applicable requirements of the Act and guidelines of
the American Institute of Certified Public Accountants (the "AICPA") with
respect to pro forma financial information and includes all adjustments
necessary to present fairly the pro forma financial position of the Company
at the respective dates indicated and the results of operations for the
respective periods specified. All financial statements that are required
under the Act or the Exchange Act to be included in, or incorporated by
reference into, the Registration Statement and the Prospectus are included
in, or incorporated by reference into, the Registration Statement and the
Prospectus.
(f) No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Primary Entities,
threatened by the Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of the Prospectus
has been issued and no proceeding for that purpose has been instituted or
to the knowledge of the Primary Entities, threatened by the Commission or
by the state securities authority of any jurisdiction.
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(g) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the financial
condition, or in the earnings, assets, business affairs or business
prospects of the Primary Entities or any subsidiary of the Company (the
Primary Entities, such subsidiaries or any entity through which the
Primary Entities own a joint venture interest in any property being
sometimes hereinafter collectively referred to as the "Transaction
Entities" and individually as a "Transaction Entity"), or any property in
which either of the Primary Entities directly or indirectly owns an
interest (a "Facility"), whether or not arising in the ordinary course of
business, which would be material to the Transaction Entities, considered
as one enterprise (any such adverse change which would be material to the
Transaction Entities, considered as one enterprise, being hereinafter
referred to as a "Material Adverse Change"); (B) no material casualty loss
or condemnation or other adverse event with respect to any of the
Facilities has occurred; (C) there have been no material transactions or
acquisitions entered into by the Transaction Entities, other than those
in the ordinary course of business; (D) none of the Transaction Entities
has incurred any material obligation or liability, direct, contingent or
otherwise; (E) there has been no material change in the short-term debt or
long-term debt of the Transaction Entities; (F) except for regular
quarterly distributions on Common Stock in amounts per share described in
the regular quarterly distributions on Common Stock in amounts per share
described in the Prospectus, there has been no dividend or distribution of
any kind declared, paid or made by the Company, on any class of its capital
shares; and (G) there has been no change in the capital shares of the
Company or partnership interests in the Operating Partnership (the
"Units").
(h) The Company has been duly organized and is validly existing as a
corporation in good standing under and by virtue of the laws of the State
of California, with power and authority to own, lease and operate its
properties and to conduct the business in which it is engaged or proposes
to engage, as described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this Agreement and the
other Company Documents (as hereinafter defined) to which it is a party;
and the Company is duly qualified or registered to transact business and is
in good standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
or register would not result in a Material Adverse Change. Other than the
Operating Partnership, none of the subsidiaries of the Company is a
"significant subsidiary" as such term is defined in Rule 405 under the Act.
The Company owns no direct or indirect equity interest in any entity other
than the Transaction Entities and in PSCC, Inc.
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(i) The Operating Partnership has been duly organized and is validly
existing as a limited partnership in good standing under and by virtue of
the laws of the State of California, with partnership power and authority
to own, lease and operate its properties, to conduct the business in which
it is engaged and proposes to engage, in each case as described in the
Registration Statement and the Prospectus, and to enter into and perform
its obligations under this Agreement and the other Company Documents to
which it is a party. The Operating Partnership is duly qualified or
registered as a foreign partnership and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or register would not
result in a Material Adverse Change. The Company is the sole general
partner of the Operating Partnership. The Agreement of Limited Partnership
of the Operating Partnership (the "Operating Partnership Agreement") is
in full force and effect in the form in which it was incorporated by
reference as an exhibit in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (the "10-K"), and the aggregate
percentage interests of the general partner and the limited partners in the
Operating Partnership are as set forth therein.
(j) Each of the subsidiaries has been duly organized and is validly
existing as a corporation, limited partnership or other legal entity, as
the case may be, in good standing under and by virtue of the laws of its
state of organization with the requisite power and authority to own, lease
and operate its properties, to conduct the business in which it is engaged
or proposes to engage, and to enter into and perform its obligations under
the Company Documents to which it is a party, if any. Each of the
subsidiaries is duly qualified or registered as a foreign corporation,
limited partnership or other legal entity, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership or leasing of a property or the conduct of business, except where
the failure to so qualify or register would not result in a Material
Adverse Change. All of the issued and outstanding capital stock, units of
limited partnership or other equity interest, as the case may be, of each
of the subsidiaries is duly authorized, validly issued, fully paid and, in
the case of capital stock, nonassessable, and has been offered and sold in
compliance with all applicable laws (including, without limitation, federal
or state securities laws) and, except as disclosed in the Prospectus, the
capital stock, units of limited partnership or other equity interest, as
the case may be, are owned by the Company or its subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. No shares of capital stock, units of limited
partnership or other equity interest, as the case may be, of any of the
subsidiaries are reserved for any purpose, and there are no outstanding
securities convertible into or exchangeable for any
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capital stock, units of limited partnership or other equity interest, as
the case may be, of any subsidiary and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
shares of such capital stock, units of limited partnership or other equity
interest, as the case may be, or any other securities of such subsidiary,
except as disclosed in the Prospectus.
(k) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued capital stock of the Company has been
duly authorized and is validly issued, fully paid and non-assessable and
has been offered and sold in compliance with all applicable laws
(including, without limitation, federal and state securities laws) and
conforms to the description thereof contained in the Prospectus. Except
for Common Stock issuable upon the exercise of options granted under the
Company's 1997 Stock Option and Incentive Plan (the "Option Plan"), upon
exchange of interests in the Operating Partnership or as described in the
Prospectus, no capital stock of the Company is reserved for any purpose,
and there are (A) no outstanding securities convertible into or
exchangeable for any capital stock of the Company, (B) no options, rights
or warrants to purchase or to subscribe for such capital stock or any other
securities of the Company or (C) no outstanding preemptive rights, rights
of first refusal or co-sale, registration or similar rights with respect to
capital stock of the Company which have not been waived pursuant to binding
agreements in connection with the offering and sale of the Shares
hereunder.
(l) The Shares and the Preferred Shares have been duly authorized and,
when issued and delivered by the Company pursuant to this Agreement and, in
the case of the Shares, the Deposit Agreement, against payment of the
consideration therefor, will be validly issued, fully paid and non-
assessable. Upon payment of the purchase price and delivery of the Shares
in accordance herewith, the Underwriter will receive the Shares, free and
clear of all security interests and liens. The terms of such Shares
conform in substance to all statements and descriptions related thereto
contained in the Prospectus. The form of share certificates to be used to
evidence such applicable Shares will be in due and proper form and will
comply with all applicable legal and American Stock Exchange requirements.
The issuance of such Shares is not subject to any preemptive or other
similar rights.
(m) All the issued and outstanding Units have been duly authorized and
are validly issued and fully paid and have been offered and sold or
exchanged in compliance with all applicable laws (including without
limitation federal and state securities laws). Except (A) pursuant to the
Option Plan or (B) as described in the Prospectus, there are no outstanding
securities convertible or exchangeable for any Units and no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or to
subscribe for Units.
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(n) The shares of Common Stock issuable upon exchange of any of the
outstanding Units are duly and validly authorized by all necessary action
and such shares, when issued upon such exchange, will be duly and validly
issued, fully paid and non-assessable, and the issuance of such shares upon
such exchange will not be subject to preemptive or other similar rights;
the shares of Common Stock so issuable conform in all material respects to
all statements relating thereto contained in the Prospectus.
(o) None of the Transaction Entities is, and at the Closing Date and
any later date on which Additional Shares are to be issued none of the
Transaction Entities will be, in violation of its articles of
incorporation, by-laws, certificate of limited partnership, agreement of
limited partnership or other governing documents, as the case may be, and
none of the Transaction Entities is, and at the Closing Date and any later
date on which Additional Shares are to be issued none of the Transaction
Entities will be, in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument or of
any applicable law, rule, order, administrative regulation or
administrative or court decree, to which such entity is a party or by which
such entity may be bound, or to which any of its property or assets or any
Facility may be bound or subject, except for such violations and defaults
that would not, individually or in the aggregate, result in a Material
Adverse Change.
(p) (i) Each of this Agreement and the Deposit Agreement has been
duly and validly authorized, executed and delivered by the Primary Entities
which are parties thereto and is a valid and binding agreement of each of
the Primary Entities which are parties thereto, enforceable against such
Primary Entities in accordance with its terms, except as such
enforceability may be subject to (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or similar
laws affecting creditors' rights generally and (B) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); (ii) at the Closing Date and any later
date on which Additional Shares are to be issued each of this Agreement
and the Deposit Agreement will have been duly and validly authorized,
executed and delivered by the Primary Entities which are parties thereto,
and will be a valid and binding agreement of the Primary Entities which are
parties thereto, enforceable against such Primary Entities in accordance
with its terms, except as rights to indemnification under this Agreement
may be limited by applicable law and except as such enforceability may be
subject to (A) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or similar laws affecting creditors'
rights generally and (B) general principles of equity (regardless of
whether such enforceability is
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considered in a proceeding in equity or at law); (iii) each agreement filed
pursuant to Item 601(b)(10) of Regulation S-K as an exhibit to the
Registration Statement and the 10-K, or any report filed subsequently by
the Company which is incorporated by reference into the Registration
Statement (each a "Material Agreement") has been duly and validly
authorized, executed and delivered by the Transaction Entities which are
parties thereto and is a valid and binding agreement, enforceable against
the Transaction Entities which are parties thereto in accordance with its
terms except as such enforceability may be subject to (A) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer
or similar laws affecting creditors' rights generally and (B) general
principles of equity (regardless of whether such enforceability is
considered a proceeding in equity or at law). This Agreement, the Deposit
Agreement, the Operating Partnership Agreement and any Material Agreement
are sometimes herein collectively called the "Company Documents".
(q) The execution and delivery of this Agreement and the Deposit
Agreement, the issuance of the Preferred Shares, the issuance and sale of
the Shares, the performance of the obligations set forth herein or therein
and the consummation of the transactions contemplated hereby and thereby or
in the Prospectus by the Transaction Entities will not conflict with or
constitute a material breach or violation by such parties of, or default
under or result in the creation or imposition of any lien, charge or
encumbrance upon any Facility, or any other property or asset of a
Transaction Entity under or pursuant to, (i) any of the other Company
Documents or (ii) any contract, indenture, mortgage, loan agreement,
note, lease, joint venture or partnership agreement or other instrument or
agreement to which any Transaction Entity is a party or by which they, any
of them, any of their respective properties or other assets or any Facility
may be bound or subject, nor will such action conflict with or constitute a
breach or violation by the Transaction Entities of, or default under, (X)
articles of incorporation, by-laws, certificate of limited partnership,
partnership agreement or other governing documents, as the case may be,
of any Transaction Entity or (Y) any applicable law, rule, order,
administrative regulation or administrative or court decree.
(r) (i) No labor dispute with employees of either of the Primary
Entities exists or is imminent, and (ii) no Primary Entity is aware of any
existing or imminent labor disturbance by the employees of any of the
Transaction Entities' principal suppliers, manufacturers or contractors,
which, in the case of either (i) or (ii), might be expected to result in
any Material Adverse Change. No collective bargaining agreement exists with
the employees of any of the Primary Entities, and to the best knowledge of
either of the Primary Entities, no such agreement is imminent.
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(s) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Primary Entities, after due inquiry, threatened against
or affecting any Transaction Entity, Facility or, to the knowledge of the
Company, any officer or director of the Company, which is required to be
disclosed in the Registration Statement or the Prospectus (other than as
disclosed therein), or that, if determined adversely to any Transaction
Entity, Facility or such officer or director, will or could reasonably be
expected to result in a Material Adverse Change or to prevent the
transaction contemplated hereby. There are no pending legal or
governmental proceedings to which any Transaction Entity is a party or of
which they or any of their respective properties or assets or any Facility
is the subject, including ordinary routine litigation incidental to the
business, that, considered in the aggregate, could reasonably be expected
to result in a Material Adverse Change. There are no contracts or
documents of any Transaction Entity which are required to be filed as
exhibits to the Registration Statement by the Act, which have not been so
filed, or which are required to be incorporated by reference into the
Prospectus by the Act or the Exchange Act which have not been so
incorporated.
(t) At all times since its taxable year ended December 31, 1990, the
Company (including as a result of its investments in the Operating
Partnership) has been, and upon the sale of the Shares the Company will
continue to be, organized and operated in conformity with the requirements
for qualification as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code"), and its proposed method of
operation will enable it to continue to meet the requirements for taxation
as real estate investment trust under the Code.
(u) Each of the Transaction Entities has filed all federal, state,
local and foreign income tax returns which have been required to be filed
and has paid all taxes required to be paid any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due
and payable, except, in all cases, for any such tax assessment, fine or
penalty that is being contested in good faith and except in any case in
which the failure to so pay would not result in a Material Adverse Change.
(v) At all times since its formation, the Operating Partnership has
been, and upon the sale of the Shares will continue to be, classified as a
partnership for Federal income tax purposes.
(w) None of the Transaction Entities is, and at the Closing Date none
of the Transaction Entities will be, required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
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(x) None of the Transaction Entities is, and at the Closing Date none
of the Transaction Entities will be required to own or possess or to obtain
the consent of any holder of any trademarks, service marks, trade names or
copyrights not now lawfully owned or possessed in order to conduct the
business proposed to be operated by the Transaction Entities.
(y) No authorization, approval, consent or order of any court or
governmental authority or agency or other entity or person is necessary in
connection with the offering, the execution and delivery of this Agreement
or the Deposit Agreement, the issuance of the Preferred Shares or the
issuance or sale of the Shares hereunder, except such as may be required
under the Act or state securities, real estate syndication or blue sky
laws, or the listing requirements of the American Stock Exchange or such
as have been received.
(z) Each of the Transaction Entities possesses, and at the Closing
Date will possess, such certificates, authorizations or permits issued by
the appropriate local, state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now operated by it, or proposed to
be conducted by it, except for such certificates, authorizations and
permits, the failure to obtain, maintain or possess which by any of the
Transaction Entities would not result in a Material Adverse Change, and
none of the Transaction Entities has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Change.
(aa) Except as disclosed in the Prospectus, there are no persons with
registration or other similar rights to have any securities registered
pursuant to the Registration Statement that have not been waived in
connection with the offering and sale of the Shares pursuant to this
Agreement.
(bb) The outstanding shares of Common Stock are listed on the American
Stock Exchange and the Shares will be listed on the American Stock
Exchange, subject to official notice of issuance.
(cc) The Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the American Stock
Exchange, nor has the Company received any notification that the Commission
or the American Stock Exchange is contemplating terminating such
registration or listing.
(dd) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date or any later date on which Additional
Shares
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are to be purchased, as the case may be, and (ii) completion of the
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any preliminary prospectuses,
the Prospectus, the Registration Statement and other materials, if any,
permitted by the Act.
(ee) Neither the Company nor any of its subsidiaries has at any time
during the last five (5) years (i) made any unlawful contribution to any
candidate for foreign office or failed to disclose fully any contribution
in violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by
the laws of the United States or any jurisdiction thereof.
(ff) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares in violation of the
Act.
(gg) (i) At the Closing Date and any later date on which Additional
Shares are to be issued, the Company, the Operating Partnership or one of
the other Transaction Entities will have good and marketable title (or,
with respect to any Facilities located in Texas, good and indefeasible fee
simple title, or such substantially equivalent quality of title as provided
by the applicable title insurance policy) to each of the Facilities and all
other items of real property (and improvements therein), in each case free
and clear of all liens, encumbrances, claims, security interests and
defects, other than those (A) referred to in the Registration Statement or
described in any Incorporated Documents or (B) which are not material in
amount; (ii) all liens, charges, encumbrances, claims or restrictions on or
affecting any of the Facilities and the assets of any Transaction Entity
which are required to be disclosed in the Prospectus are disclosed therein;
(iii) except as otherwise described in the Prospectus, neither Primary
Entity is, and, to the best knowledge of the Primary Entities, no
Transaction Entity is, in default under (A) any space or ground leases (as
lessor or lessee, as the case may be) relating to the Facilities, or (B)
any of the mortgage or other security documents or other agreements
encumbering or otherwise recorded against the Facilities, and no Primary
Entity knows, after due inquiry, of any event which, but for the passage of
time or the giving of notice, or both, would constitute a default under any
of such documents or agreements; (iv) each of the Facilities complies with
all applicable codes, laws and regulations (including, without limitation,
building and zoning codes, laws and regulations and laws relating to
access to the Facilities); and (v) no Primary Entity has knowledge of,
after due inquiry, any pending or threatened condemnation proceeding,
zoning change or other proceeding or action that will in any material
manner affect the size of, use of, improvements on,
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construction on or access to the Facilities, except in each case for such
matters as could not, individually or in the aggregate, result in a
Material Adverse Change to the Company, the Operating Partnership or the
respective Transaction Entity, as the case may be.
(hh) Each of the Facilities has property, title, casualty and
liability insurance in favor of either the Company, the Operating
Partnership, or one of the Transaction Entities with respect to the
Facilities by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged, provided, that with respect to
certain Facilities, title insurance is held by Public Storage, Inc., a
California corporation ("PSI"), or an affiliate of PSI under policies the
benefits of which have been assigned to the Company or the Operating
Partnership pursuant to a binding agreement, or PSI has indemnified the
Company, the Operating Partnership or the respective Transfer Entity
against material defects in title to the Facilities pursuant to a binding
agreement; and none of the Company, the Operating Partnership, or the
other Transaction Entities has any reason to believe that they will not be
able to renew their existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue their businesses at a cost that would not result in a
Material Adverse Change, except as described in or contemplated by the
Registration Statement and the Prospectus.
(ii) Except as disclosed in the Prospectus, and, except for
activities, conditions, circumstances or matters that (1) do not have a
material adverse effect on the business, financial condition or operations
of the Transaction Entities, or (2) as to which the Transaction Entities
have been indemnified by PSI or another creditworthy entity: (i) the
Company and the Operating Partnership are in compliance with all
Environmental Laws (as defined below) and all requirements of applicable
permits, licenses, approval and other authorizations issued pursuant to
Environmental Laws; (ii) none of the Transaction Entities has caused or
suffered to occur any Release (as defined below) of any Hazardous
Substance (as defined below) into the Environment (as defined below) on,
in, under or from any Facility or any developed or undeveloped land held by
a Transaction Entity ("Land"), and no condition exists on, in or under any
Facility or Land that could result in the incurrence of liabilities under,
or any violations of, any Environmental Law or give rise to the imposition
of any Lien (as defined below) under any Environmental Law; (iii) none of
the Transaction Entities has received any written notice of a claim under
or pursuant to any Environmental Law or under common law pertaining to
Hazardous Substances on, in, under or originating from any Facility or
Land; (iv) none of the Transaction Entities has knowledge of, after due
inquiry, or has received any written notice from any Governmental Authority
(as defined below) or other person
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<PAGE>
claiming, any violation of any Environmental Law or a determination to
undertake and/or request the investigation, remediation, clean-up or
removal of any Hazardous Substance released into the Environment or, in,
under or from any Facility or Land; and (v) no Facility or Land is included
or, to the knowledge of the Primary Entities, after due inquiry, proposed
for inclusion on the National Priorities List issued pursuant to CERCLA (as
defined below) by the United States Environmental Protection Agency (the
"EPA") or on the Comprehensive Environmental Response, Compensation and
Liability Information System database maintained by the EPA and neither of
the Primary Entities has knowledge, after due inquiry, that any Facility or
Storage Land has otherwise been identified in a published writing by the
EPA as a potential CERCLA removal, remedial or response site or, to the
knowledge of the Primary Entities, after due inquiry, proposed for
inclusion on any similar list of potentially contaminated sites pursuant to
any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant, hazardous material, or
similarly designated materials including, without limitation, oil, petroleum-
derived substance or waste, asbestos or asbestos-containing materials, PCBs,
pesticides, explosives, radioactive materials, dioxins, urea formaldehyde
insulation or any constituent of any such substance, pollutant or waste which is
identified, regulated, prohibited or limited under any Environmental Law
(including, without limitation, materials listed in the United States Department
of Transportation Optional Hazardous Material Table, 49 C.F.R. (S) 172.101, or
in the EPA's List of Hazardous Substances and Reportable Quantities, 40 C.F.R.
Part 302) as the same may now or hereafter be amended; "Environmental" shall
mean any surface water, drinking water, ground water, land surface, subsurface
strata, river sediment, buildings, structures, and ambient workplace and
indoor and outdoor air; "Environmental Law" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. (S) 9601, et seq.) ("CERCLA"), the Resource Conservation and Recovery Act
of 1976, as amended (42 U.S.C. (S) 6901, et seq.), the Clean Air Act, as amended
(42 U.S.C. (S) 7401, et seq.) the Clean Water Act, as amended (33 U.S.C. (S)
1251, et seq.), the Toxic Substances Control Act, as amended (29 U.S.C. (S)2601
et seq.), the Occupational Safety and Health Act of 1970, as amended (29 U.S.C.
(S) 651, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. (S) 1801, et seq.), and all other federal, state and local laws,
ordinances, regulations, rules and orders relating to the protection of the
environment or of human health from environmental effects; "Governmental
Authority" shall mean any federal, state or local governmental office, agency or
authority having the duty or authority to promulgate, implement or enforce any
Environmental Law; "Lien" shall mean, with respect to any Facility, any
mortgage, deed of trust, pledge, security interest, lien, encumbrance, penalty,
charge, assessment, judgment or other liability in, on or affecting such
Facility; and "Release" shall mean any spilling, leaking, dumping, emanating or
disposing of any Hazardous Substance in the Environment, including without
limitation the abandonment or
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discard of barrels, containers, tanks (including without limitation underground
storage tanks or other receptacles containing or previously containing any
Hazardous Substance) or any release, emission, discharge or similar terms, as
those terms are defined or used in any Environmental Law.
(jj) To the best knowledge of the Primary Entities, none of the
environmental consultants which prepared environmental and asbestos
inspection reports with respect to any of the Facilities was employed for
such purpose on a contingent basis or has any substantial interest in any
Transaction Entity, and none of them nor any of their directors, officers
or employees is connected with any Transaction Entity as a promoter,
selling agent, director, officer or employee.
(kk) (i) The Company (A) has been subject to the requirements of
Section 12 of the Exchange Act and has filed all materials required of it
to be filed pursuant to Section 13 and 14 of the Exchange Act since prior
to January 1, 1996; and (B) has filed in a timely manner all reports
required of it to be filed with the Commission since January 1, 1998; (ii)
none of the Transaction Entities has, since January 1, 1998 (A) failed to
pay any dividend or sinking fund installment on preferred stock; or (B)
defaulted (1) on any installment or installments on indebtedness or
borrowed money, or (2) on any rental on one or more long-term leases, which
defaults in the aggregate were material to the financial position of such
entities taken as a whole; (iii) the aggregate market value of the voting
Common Stock of the Company held by non-affiliates (as defined in Rule 405
under the Act) is in excess of $150,000,000.
(ll) Assuming due authorization, execution and delivery of the Deposit
Agreement by the Depositary, each of the Shares will represent an interest
in 1/1,000 of a share of a validly issued, outstanding, fully paid and
nonassessable share of Preferred Stock; assuming due execution and delivery
of the Depositary Receipts by the Depositary pursuant to the Deposit
Agreement, the Depositary Receipts will entitle the holders thereof to the
benefits provided therein and in the Deposit Agreement.
(mm) Any certificate signed by any officer or authorized
representative of any Primary Entity or any Company Document signed by any
officer or authorized representative of any Primary Entity, and delivered
to the Underwriter or to counsel of the Underwriter shall be deemed a
representation and warranty by such entity or person, as the case may be,
to the Underwriter as to the matter covered thereby.
5. Agreements of the Company. The Company agrees with the Underwriters as
-------------------------
follows:
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(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by any Underwriter or any
dealer, file any amendment or supplement to the Registration Statement
(including any filing under Rule 462(b) under the Act) or the Prospectus,
unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing
thereof and the Representatives shall not have objected thereto in good
faith.
(b) The Company will use its best efforts to cause the Rule 462(b)
Registration Statement and any post-effective amendment to the Registration
Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (1) when any Rule 462(b)
Registration Statement and any post-effective amendment to the Registration
Statement become effective, (2) of the receipt of any comments from or any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (3) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose or the threat thereof, (4) of the happening of any event during the
period mentioned in the second sentence of Section 5(e) that in the
judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any
changes in the Registration Statement or the Prospectus in order to make
the statements therein, in light of the circumstances in which they are
made, not misleading, and (5) of receipt by the Company or any
representative or attorney of the Company of any other communication from
the Commission relating to the Company, the Registration Statement or the
Prospectus. If at any time the Commission shall issue any order suspending
the effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal of such order at the
earliest possible moment.
(c) The Company will furnish to the Representatives, without charge,
four copies of the signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus) and will furnish to the Representatives, without charge, for
transmittal to each of the other Underwriters, copies of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
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(e) The Company will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus, including any amendment or
supplement thereto, as the Representatives may reasonably request. The
Company consents to the use of the Prospectus, including any amendment or
supplement thereto, by the several Underwriters and by all dealers to whom
the Shares may be sold, both in connection with the offering or sale of the
Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith. If during such
period of time any event shall occur which in the judgment of the Company
or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances
under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, subject to the
provisions of Section 5(a) hereof, the Company will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment
thereto, and will deliver to the Underwriters, without charge, such
number of copies thereof as the Representatives may reasonably request.
The Company shall not file any document under the Exchange Act before the
termination of the offering of the Shares by the Underwriters if such
document would be deemed to be incorporated by reference into the
Prospectus which is not approved by the Representatives after reasonable
notice thereof.
(f) The Company will cooperate with the Representatives and counsel to
the Underwriters in connection with the registration or qualification of
the Shares and the Preferred Shares for offer and sale under the securities
or Blue Sky laws of such jurisdictions as the Representatives may
reasonably request; provided, that in no event shall the Company be
--------
obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the date hereof, the
Company will furnish to each of the Representatives and each other
Underwriter who may so request copies of such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and
will furnish to each of the Representatives and each other Underwriter who
may so request a copy of each annual or other report it shall be required
to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar
quarter in which the
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Effective Date falls, a consolidated earnings statement (which need not be
audited but shall be in reasonable detail), with respect to the Primary
Entities, for a period of 12 months commencing after the Effective Date,
and satisfying the provisions of Section 11(a) of the Act (including Rule
158 thereunder) and will file such earnings statement as an exhibit to the
next periodic report required by Section 13 or 15(d) of the Exchange Act
covering the period when the earnings statement is released.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 9 hereof or by notice given by you terminating
this Agreement pursuant to Section 9 or Section 10 hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company to comply with the terms or fulfill any
of the conditions of this Agreement, the Company agrees to reimburse the
Representatives for all out-of-pocket expenses (including fees and expenses
of counsel for the Underwriters) reasonably incurred by you in connection
herewith.
(j) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of the Shares to
facilitate the sale or resale of any of the Shares in violation of the Act.
(k) The Company will apply the net proceeds from the offering and sale
of the Shares in the manner set forth in the Prospectus under "Use of
Proceeds."
(l) The Company will use its best efforts to have the Shares listed,
subject to notice of issuance, on the American Stock Exchange.
6. Conditions of Underwriters' Obligations. The several obligations of the
---------------------------------------
Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) All of the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date.
(b) The Registration Statement (including any post-effective
amendment thereto) shall have become effective not later than 5:00 P.M.
(and, in the case of a Registration Statement filed under Rule 462(b) of
the Act, not later than 10:00 p.m.), New York City time, on the date of
this Agreement, or at such later date and time as shall be consented to in
writing by the Representatives, and all filings, if any, required by Rules
424 and 430A under the Act
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shall have been timely made; and at the Closing Date no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Company or any Underwriter, contemplated by the
Commission, and any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Representatives.
(c) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the
Transaction Entities not contemplated by the Prospectus, which in your
opinion, as Representatives of the several Underwriters, would materially,
adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company or any officer or director
of the Company which makes any statement made in the Prospectus untrue in
any material respect or which, in the opinion of the Company and its
counsel or the Underwriters and their counsel, requires the making of any
addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in
your opinion, as Representatives of the several Underwriters, adversely
affect the market for the Shares. On the Closing Date, the Underwriters
shall have received a certificate dated the Closing Date, signed by each of
the President and Chief Financial Officer of the Company confirming the
matters set forth in Sections 6(a), (b) and (c).
(d) The Underwriters shall have received an opinion, dated the Closing
Date and satisfactory in form and substance to counsel for the
Underwriters, from David Goldberg, counsel for the Company, to the effect
that:
(i) Each of the Company and the Operating Partnership has been
duly organized and is validly existing (in the case of the Company, as
a corporation) in good standing under the laws of the jurisdiction in
which it is organized, with full power and authority to own or lease
and occupy its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business, and is in good
standing, in each jurisdiction which requires such qualification,
except where the failure to so qualify would not, individually or in
the aggregate, have a Material Adverse Change;
(ii) All of the Company's ownership interest in the Operating
Partnership is owned free and clear of any perfected security interest
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and, to my knowledge, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iii) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms to
the description thereof contained in the Prospectus in all material
respects; the statements in the Prospectus Supplement under the
caption "Description of Preferred Stock and Depositary Shares" and in
the Prospectus under the captions "Description of Preferred Stock" and
"Description of the Depositary Shares," insofar as such statements
constitute summaries of the documents referred to therein, have been
reviewed by such counsel and fairly summarize the matters referred to
therein in all material respects; the outstanding shares of Common
Stock have been duly and validly authorized and issued and are fully
paid and nonassessable and the deposit of the Preferred Shares in
accordance with the Deposit Agreement has been duly authorized; the
Shares and the Preferred Shares have been duly and validly authorized,
and, when issued and delivered pursuant to the Agreement and the
Deposit Agreement and, in the case of the Shares, paid for by the
Underwriters pursuant to the Agreement, will be fully paid and
nonassessable; the Shares have been duly authorized for listing,
subject to official notice of issuance, on the American Stock
Exchange; the forms of certificates for the Shares are in valid and
sufficient form in compliance with the American Stock Exchange
requirements; and the holders of outstanding shares of capital stock
of the Company are not entitled to preemptive or other rights to
subscribe for the Shares or the Preferred Shares;
(iv) To the best of my knowledge, after due inquiry, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or arbitrator involving the
Company or the Operating Partnership of a character required to be
disclosed in the Registration Statement which is not adequately dis
closed in the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit, which is not
described or filed as required; and, to the best of my knowledge,
after due inquiry, the statements in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, under Part II,
Item 7 -"Management's Discussion and Analysis of Financial Condition
and Results of Operations - Liquidity and Capital Resources -
Distributions" and under Part III, Item 13 - "Certain Relationships
and Related Party Transactions" (other than the financial statements
and other financial and statistical information contained therein, as
to which such counsel
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need not express any opinion) fairly summarize the matters therein
described in all material respects;
(v) The Registration Statement and the Prospectus and any
amendment or supplement thereto comply as to form in all material
respects with the requirements for the use of Form S-3 and the rules
and regulations thereunder, and the Registration Statement and the
Prospectus and any amendment or supplement thereto (other than the
financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Act and
the rules thereunder and each of the Incorporated Documents (or, if
any amendment with respect to any such document was filed, when such
document was filed), complied as to form in all material respects with
the requirements of the Exchange Act and the rules thereunder (other
than the financial statements and other financial information
contained therein, as to which such counsel need express no opinion);
(vi) The Company has full corporate power and authority to enter
into and perform its obligations under the Agreement and the Deposit
Agreement and to issue, sell and deliver the Shares and to issue and
deliver the Preferred Shares; the Agreement has been, and the Deposit
Agreement will have been as of the Closing Date, duly authorized,
executed and delivered by the Company; the Operating Partnership has
full partnership, power and authority to enter into and to perform its
obligations under the Agreement; and the Agreement has been duly
authorized, executed and delivered by the Operating Partnership;
(vii) No consent, approval, authorization or order of any court
or governmental agency, authority or body is required for the
execution of the Agreement or the Deposit Agreement by the Principal
Entities which are parties thereto, the performance by such Principal
Entities of their obligations thereunder or the consummation of the
transactions contemplated herein or therein, except such as have been
obtained under the Act and the Exchange Act and such as may be
required under the Blue Sky laws of any jurisdiction in connection
with the purchase and distribution by the Underwriters of the Shares;
(viii) The Company and the Operating Partnership have all
requisite power and authority, and, to the best knowledge of such
counsel, after due inquiry, all necessary material authorizations,
approvals, orders, licenses, certificates and permits of and from all
regulatory or governmental officials, bodies and tribunals, to own or
lease their
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respective properties and to conduct their respective businesses as
now being conducted and as described in the Prospectus; and, to the
best of my knowledge, after due inquiry, all such authorizations,
approvals, licenses, certificates and permits are in full force and
effect, except where the failure to be in full force and effect would
not have a Material Adverse Change, and the Company and the
Operating Partnership are complying with all applicable laws, the
violation of which could have a Material Adverse Change;
(ix) The Company is not in violation of its articles of
incorporation or by-laws, and the Operating Partnership is not in
violation of its partnership agreement, and to the best of my
knowledge, after due inquiry, neither the Company nor the Operating
Partnership is in default in the performance of any obligation,
agreement or condition contained in any loan, note or other evidence
of indebtedness or in any indenture, mortgage, deed of trust or any
other material agreement by which it or its properties are bound,
except for such defaults as could not, individually or the aggregate,
have a Material Adverse Change;
(x) Neither the issue and sale of the Shares nor the
consummation of any of the other transactions contemplated by the
Agreement (including without limitation the execution, delivery and
performance of the Deposit Agreement, the issuance and deposit of the
Preferred Shares in accordance with the Deposit Agreement and the
consummation of the transactions contemplated therein) nor the
fulfillment of the terms hereof or thereof will conflict with, result
in a breach or violation of, or constitute a default under any law or
the articles of incorporation or by-laws of the Company or the
partnership agreement of the Operating Partnership or the terms of any
indenture or other agreement or instrument known to me and to which
the Company or the Operating Partnership is a party or is bound or
any judgment, order or decree known to me to be applicable to the
Company or the Operating Partnership of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or the Operating Partnership;
(xi) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement,
except as provided therein;
(xii) Any required filing of the Prospectus, including any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the
best of my knowledge, no stop order suspending the effectiveness of
the
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Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened;
(xiii) To the best of such counsel's knowledge, after reasonable
inquiry, neither the Company nor the Operating Partnership is in
violation of any law, ordinance, administrative or governmental rule
or regulation applicable to the Company or the Operating Partnership
or of any decree of any court or governmental agency or body having
jurisdiction over the Company or the Operating Partnership, the
violation of which could have a Material Adverse Change;
(xiv) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements
or other legal documents, or refer to statements of law or legal
conclusions, are accurate and present fairly the information required
to be shown in all material respects;
(xv) The Company and the Operating Partnership own or have the
right to use all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by them or any of them or necessary for the conduct of
their respective businesses, and, other than routine proceedings which
if adversely determined would not materially affect the business of
the Company and the Operating Partnership taken as a whole as
described in the Prospectus, such counsel is not aware of any claim to
the contrary or any challenge by any other person to the rights of the
Company and the Operating Partnership with respect to the foregoing;
(xvi) Except as described in the Prospectus, to the best of such
counsel's knowledge, after reasonable inquiry, there are no
outstanding options, warrants or other rights calling for the issuance
of, and there are no commitments, plans or arrangements to issue, any
shares of capital stock of the Company or any security convertible
into or exchangeable or exercisable for capital stock of the
Company;
(xvii) Except as described in the Prospectus, to the best of such
counsel's knowledge, after reasonable inquiry, there is no holder of
any security of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to sell or otherwise
issue to them, or to permit them to underwrite the sale of, the Shares
or the Preferred Shares or the right to have any Common Stock or other
securities of the Company included in the Registration Statement or
the right, as a result of the filing of the Registration Statement, to
require
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registration under the Act of any shares of Common Stock or other
securities of the Company;
(xviii) Assuming due authorization, execution and delivery by the
Depositary, the Deposit Agreement constitutes the valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) general principles of equity
and (regardless of whether a proceeding is considered at law or in
equity);
(xix) When the Shares evidenced by the Depositary Receipts are
issued and delivered in accordance with the terms of the Deposit
Agreement against the deposit of duly authorized and issued, fully
paid and nonassessable shares of Preferred Stock, the Depositary
Receipts will entitle the holders thereof to the benefits provided
therein and in the Deposit Agreement.
In addition, such counsel shall state that he has participated in
conferences with representatives of the Underwriters, and with officers and
other representatives of the Company and representatives of the independent
certified public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel does not pass upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, on the basis of the
foregoing (relying as to certain factual matters on the information provided to
such counsel by the Company and not on an independent investigation, but in
the absence of information to the contrary), no facts have come to such
counsel's attention which leads such counsel to believe that the Registration
Statement, as of its effective date, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus,
as of its date and as of the date hereof, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that such counsel need not express any comment
--------
with respect to the financial statements and other financial data included in
the Registration Statement or Prospectus.
(e) The Underwriters shall have received an opinion, dated the Closing
Date and satisfactory in form and substance to counsel for the
Underwriters, from Hogan & Hartson L.L.P., counsel for the Company, to the
effect that:
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(i) The Company was organized and has operated in conformity
with the requirements for qualification and taxation as a real estate
investment trust ("REIT") under the Code for the taxable year ended
December 31, 1998, and the Company's current organization and method
of operation (as described in the Prospectus, the Prospectus
Supplement and the Management Representation Letter) will enable it to
continue to meet the requirements for qualification and taxation as a
REIT.
(ii The statements in the Prospectus under the heading "Certain
Federal Income Tax Considerations" and "Risk Factors - Tax Risks,"
read in conjunction with the statements in the Prospectus Supplement
under the heading "Federal Income Tax Considerations," to the extent
they describe matters of law or legal conclusions, are correct in all
material respects.
(f) The Underwriters shall have received an opinion, dated the Closing
Date from Hale and Dorr LLP, counsel to the Underwriters, with respect to
the Registration Statement, the Prospectus and this Agreement, which
opinion shall be satisfactory in all respects to the Representatives, and
such counsel shall have been provided by the Company with such documents
and information as they may reasonably request to enable them to pass on
such matters.
(g) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and
the Closing Date from Ernst & Young LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been taken or, to the knowledge of the Company, shall be contemplated
by the Commission at or prior to the Closing Date; (ii) there shall not
have been any material change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); (iii) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse
change in the condition (financial or other), business, prospects,
properties, net worth or results of operations of the
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Primary Entities taken as a whole; (iv) the Primary Entities shall not have
any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Primary Entities,
taken as a whole, other than those reflected in the Registration Statement
or the Prospectus (or any amendment or supplement thereto); and (v) all the
representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on and as of the date
hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing
Date and signed by the chief executive officer and the chief financial
officer of the Company (or such other officers as are acceptable to you),
to the effect set forth in this Section 6(h) and in Section 6(i) hereof.
(i) The Company shall not in any material respect have failed at or
prior to the Closing Date to have performed or complied with any of its
agreements herein contained or contained in the Deposit Agreement and
required to be performed or complied with by it hereunder or thereunder at
or prior to the Closing Date.
(j) Prior to the Closing Date the Shares shall have been listed,
subject to notice of issuance, on the American Stock Exchange.
(k) The Company shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Representatives of the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Company to
each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 6, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (d) through (h) shall be dated the Option
Closing Date in question and
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the opinions called for by paragraphs (d), (e) and (f) shall be revised to
reflect the sale of Additional Shares.
7. Indemnification and Contribution.
--------------------------------
(a) The Primary Entities, jointly and severally, agree to indemnify
and hold harmless you and each other Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus
or in the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon
and in conformity with the information relating to such Underwriter
furnished in writing to the Company by or on behalf of any Underwriter
through you expressly for use in connection therewith; provided, however,
that the indemnification contained in this paragraph (a) with respect to
any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter)
on account of any such loss, claim, damage, liability or expense arising
from the sale of the Shares by such Underwriter to any person if a copy of
the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in
addition to any liability which the Primary Entities may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Primary Entities, such Underwriter or
such controlling person shall promptly notify the Company (but failure to
so notify the Company shall not relieve the Company from any liability
hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement) and the
Company shall assume the defense thereof, including the employment of
counsel and payment of all fees
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and expenses; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or
more legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying
party, the indemnifying party shall not have the right to direct the
defense of such action on behalf of such indemnified party or parties and
such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. Such Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and
to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Primary Entities jointly and severally have agreed in
writing to pay such fees and expenses, (ii) the Company has failed promptly
to assume the defense and employ counsel, or (iii) the named parties to any
such action, suit or proceeding (including any impleaded parties) include
both such Underwriter or such controlling person and a Primary Entity and
such Underwriter or such controlling person shall have been advised by its
counsel that representation of such indemnified party and a Primary Entity
by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same
counsel has been proposed) due to actual or potential differing interests
between them (in which case the Company shall not have the right to assume
the defense of such action, suit or proceeding on behalf of such
Underwriter or such controlling person). It is understood, however, that
the Company shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits
or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons not
having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Salomon Smith
Barney Inc., and that all such fees and expenses shall be reimbursed as
they are incurred. The Primary Entities shall not be liable for any
settlement of any such action, suit or proceeding effected without the
Company's written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Primary Entities jointly and severally agree to indemnify
and hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Regis-
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<PAGE>
tration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each
Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus
or any Preliminary Prospectus, or any amendment or supplement thereto. If
any action, suit or proceeding shall be brought against the Company, any of
its directors, any such officer, or any such controlling person based on
the Registration Statement, the Prospectus or any Preliminary Prospectus,
or any amendment or supplement thereto, and in respect of which indemnity
may be sought against any Underwriter pursuant to this paragraph (c), such
Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the
defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but
the fees and expenses of such counsel shall be at such Underwriter's
expense), and the Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters may otherwise
have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraph (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Primary Entities on the one hand and the
Underwriters on the other hand from the offering of the Shares, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Primary Entities on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Primary
Entities on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Primary Entities on the one hand and the
Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged
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untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Primary
Entities on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The Primary Entities, on the one hand and the Underwriters, on the
other hand, agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by a pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
numbers of Firm Shares set forth opposite their names in Schedule I hereto
(or such numbers of Firm Shares increased as set forth in Section 9 hereof)
and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and does not include a
statement as to or an admission of fault, culpability or a failure to act
by or on behalf of any indemnified party.
(g) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(b) effected without its
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written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, an indemnifying
party shall not be liable for any settlement of the nature contemplated by
Section 7(b) effected without its consent if such indemnifying party (i)
reimburses such indemnified party in accordance with such request to the
extent such indemnifying party considers such request to be reasonable and
(ii) provides written notice to the indemnified party substantiating the
unpaid balance as unreasonable, in each case prior to the date of such
settlement.
(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers, or any
person controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter, or
to the Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements con tained in this Section 7.
8. Expenses.
--------
The Company agrees to pay the following costs and expenses and all other
costs and expenses incident to the performance by it of its obligations
hereunder: (i) the preparation, printing or reproduction, and filing with the
Commission of the Registration Statement (including financial statements and
exhibits thereto) and the Prospectus, including each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, the Prospectus, the Incorporated
Documents, including all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance
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and delivery of certificates for the Shares and the Preferred Shares, including
any stamp taxes in connection with the original issuance and sale of the Shares
and the Preferred Shares; (iv) the printing (or reproduction) and delivery of
this Agreement, the preliminary and supplemental Blue Sky Memoranda, the Deposit
Agreement and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Shares and the Preferred
Shares; (v) the fees and expenses of the Depositary, including the fees and
disbursements of counsel for the Depositary, if any; (vi) the registration of
the Shares under the Exchange Act and the listing of the Shares on the American
Stock Exchange; (vii) the registration or qualification of the Shares and the
Preferred Shares for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 5(f) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (viii)
the filing fees and the fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc.; (ix) the transportation and other expenses incurred by
or on behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; and (x) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company.
9. Effective Date of Agreement.
---------------------------
This Agreement shall become effective: (i) upon the execution and delivery
hereof by the parties hereto; or (ii) if, at the time this Agreement is executed
and delivered, it is necessary for a post-effective amendment to the
Registration Statement or a Rule 462 Registration Statement to be declared or
become effective before the offering of the Shares may commence, when
notification of the effectiveness of such post-effective amendment has been
released by the Commission or, in the case of a Rule 462(b) Registration
Statement, upon filing thereof. Until such time as this Agreement shall have
become effective, it may be terminated by the Company, by notifying you, or by
you, as Representatives of the several Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than one-
tenth of the aggregate number of Shares which the Underwriters are obligated to
purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in
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accordance with Section 20 of the Master Agreement Among Underwriters of Salomon
Smith Barney Inc., to purchase the Shares which such defaulting Underwriter or
Underwriters are obligated, but fail or refuse, to purchase. If any one or more
of the Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 9 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
10. Termination.
-----------
This Agreement shall be subject to termination in your absolute discretion,
without liability on the part of any Underwriter to the Company by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the business,
properties, net worth or results of operations of the Company or the Operating
Partnership, whether or not arising in the ordinary course of business, (ii)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (iii) a general moratorium on commercial banking activities
in New York or California shall have been declared by either federal or state
authorities, or (iv) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets
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of the United States is such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Shares at the offering
price to the public set forth on the cover page of the Prospectus or to enforce
contracts for the resale of the Shares by the Underwriters. Notice of such
termination may be given to the Company by telegram, telecopy or telephone and
shall be subsequently confirmed by letter.
11. Information Furnished by the Underwriters.
-----------------------------------------
The statements set forth in the last paragraph on the cover page, the
stabilization legend on the inside front cover and the statements in the first
three paragraphs under the caption "Underwriting" in the Prospectus Supplement
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 3(b) and 7 hereof.
12. Miscellaneous.
-------------
Except as otherwise provided in Sections 3, 9 and 10 hereof, notice given
pursuant to any provision of this Agreement shall be in writing and shall be
delivered (i) if to any of the Primary Entities, at the office of the Company,
PS Business Parks, Inc., 701 Western Avenue, 2nd Floor, Glendale, California
91201-2397, Attention: Legal Department, or (ii) if to you, as Representatives
of the several Underwriters, care of Salomon Smith Barney Inc., 388 Greenwich
Street, New York, New York 10013, Attention: General Counsel.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Primary Entities, their respective directors and officers, and
the other controlling persons referred to in Section 7 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Shares in his status as such purchaser.
13. Applicable Law; Counterparts.
----------------------------
This agreement shall be governed by and construed in accordance with the
laws of the State of New York, including without limitation Section 5-1401 of
the New York General Obligations Law.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
-36-
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Primary
Entities and the several Underwriters.
Very truly yours,
PS Business Parks, Inc.
By: /s/ David Goldberg
-----------------------------------------
Name: David Goldberg
Title: Vice President
PS Business Parks L.P.
By: PS Business Parks, Inc.,
General Partner
By: /s/ David Goldberg
------------------------------------
Name: David Goldberg
Title: Vice President
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
Salomon Smith Barney Inc.
By: /s/ John Herbert
-------------------------------------
Name: John Herbert
Title: Managing Director
For itself and the other
several Underwriters named in Schedule I to the
foregoing Agreement.
-37-
<PAGE>
SCHEDULE I
----------
PS BUSINESS PARKS, INC.
2,000,000 Depository Shares
<TABLE>
<CAPTION>
Number of
Underwriters Firm Shares
- ------------ -----------
<S> <C>
Salomon Smith Barney Inc. ............................. 378,000
Donaldson, Lufkin & Jenrette Securities Corporation.... 375,000
Morgan Stanley & Co. Incorporated...................... 375,000
PaineWebber Incorporated............................... 375,000
Sutro & Co. Incorporated............................... 200,000
A.G. Edwards & Sons, Inc. ............................. 33,000
ABN AMRO Incorporated.................................. 33,000
Christopher Weil & Company............................. 33,000
Dain Rauscher Incorporated............................. 33,000
EVEREN Securities, Inc. ............................... 33,000
Goldman, Sachs & Co. .................................. 33,000
BancBoston Robertson Stephens Inc. .................... 33,000
The Robinson-Humphrey Company, LLC..................... 33,000
SG Cowen Securities Corporation........................ 33,000
Total............................................. 2,000,000
===========
</TABLE>
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF DETERMINATION OF PREFERENCES
OF
9 1/4% CUMULATIVE PREFERRED STOCK, SERIES A
OF
PS BUSINESS PARKS, INC.
[As Filed in the Office of the Secretary of State of the State of
California April 28, 1999]
The undersigned, David Goldberg and Jack E. Corrigan, Vice President
and Secretary, respectively, of PS BUSINESS PARKS, INC., a California
corporation, do hereby certify:
FIRST: The Restated Articles of Incorporation of the Corporation
authorize the issuance of 50,000,000 shares of stock designated "preferred
shares," issuable from time to time in one or more series, and authorize the
Board of Directors to fix the number of shares constituting any such series, and
to determine or alter the dividend rights, dividend rate, conversion rights,
voting rights, right and terms of redemption (including sinking fund
provisions), the redemption price or prices and the liquidation preference of
any wholly unissued series of such preferred shares, and the number of shares
constituting any such series.
SECOND: The Board of Directors of the Corporation did duly adopt the
resolutions attached hereto as Exhibit A and incorporated herein by reference
authorizing and providing for the creation of a series of preferred shares to be
known as "9 1/4% Cumulative Preferred Stock, Series A" consisting of 2,300
shares, none of the shares of such series having been issued.
We further declare under penalty of perjury under the laws of the
State of California that the matters set forth in this certificate are true and
correct of our own knowledge.
IN WITNESS WHEREOF, the undersigned have executed this certificate
this 28th day of April, 1999.
/s/ David Goldberg
_______________________________
David Goldberg, Vice President
/s/ Jack E. Corrigan
_______________________________
Jack E. Corrigan, Secretary
<PAGE>
EXHIBIT A
RESOLUTION OF THE BOARD OF DIRECTORS
OF PS BUSINESS PARKS, INC.
ESTABLISHING A SERIES OF 9 1/4% CUMULATIVE
PREFERRED STOCK, SERIES A
RESOLVED that pursuant to the authority conferred upon the Board of
Directors by Article III of the Restated Articles of Incorporation of this
Corporation, there is hereby established a series of the authorized preferred
shares of this Corporation having a par value of $.01 per share, which series
shall be designated "9 1/4% Cumulative Preferred Stock, Series A," shall
consist of 2,300 shares and shall have the following rights, preferences and
privileges:
(a) Dividend Rights.
---------------
(1) Dividends shall be payable in cash on the shares of this Series
when, as and if declared by the Board of Directors, out of funds legally
available therefor: (i) for the period (the "Initial Dividend Period") from the
Deemed Original Issue Date (as defined below) to but excluding July 1, 1999, and
(ii) for each quarterly dividend period thereafter (the Initial Dividend Period
and each quarterly dividend period being hereinafter individually referred to as
a "Dividend Period" and collectively referred to as "Dividend Periods"), which
quarterly Dividend Periods shall be in four equal amounts and shall commence on
January 1, April 1, July 1 and October 1 in each year (each, a "Dividend Period
Commencement Date"), commencing on July 1, 1999, and shall end on and include
the day next preceding the next Dividend Period Commencement Date, at a rate per
annum equal to 9 1/4% of the $25,000 per share stated value thereof (the
"Dividend Rate"). Dividends on each share of this Series shall be cumulative
from the Deemed Original Issue Date of such share and shall be payable, without
interest thereon, when, as and if declared by the Board of Directors, on or
before March 31, June 30, September 30 and December 31 of each year, commencing
on June 30, 1999 or, in the case of shares of this Series with a Deemed Original
Issue Date after June 30, 1999, the first such dividend payment date following
such Deemed Original Issue Date; provided, that if any such day shall be a
--------
Saturday, Sunday, or a day on which banking institutions in the State of New
York or the State of California are authorized or obligated by law to close, or
a day which is or is declared a national or a New York or California state
holiday (any of the foregoing a "Non-Business Day"), then the payment date shall
be the next succeeding day which is not a Non-Business Day. Each such dividend
shall be paid to the
-2-
<PAGE>
holders of record of shares of this Series as they appear on the stock register
of the Corporation on such record date, not more than 45 days nor less than 15
days preceding the payment date thereof, as shall be fixed by the Board of
Directors. Dividends on account of arrears for any past Dividend Periods may be
declared and paid at any time, without reference to any regular dividend payment
date, to holders of record on such date, not more than 45 days nor less than 15
days preceding the payment date thereof, as may be fixed by the Board of
Directors. After full cumulative dividends on this Series have been paid or
declared and funds therefor set aside for payment, including for the then
current Dividend Period, the holders of shares of this Series will not be
entitled to any further dividends with respect to that Dividend Period.
"Deemed Original Issue Date" means (a) in the case of any share which
is part of the first issuance of shares of this Series or part of a subsequent
issuance of shares of this Series prior to July 1, 1999, the date of such first
issuance or subsequent issuance, as the case may be, and (b) in the case of any
share which is part of a subsequent issuance of shares of this Series on or
after July 1, 1999, the later of (x) July 1, 1999 and (y) the latest Dividend
Period Commencement Date which precedes the date of issuance of such share and
which succeeds the last Dividend Period for which full cumulative dividends have
been paid; provided that, in the case of any share which is part of a subsequent
issuance, the date of issuance of which falls between (i) the record date for
dividends payable on the first succeeding dividend payment date and (ii) such
dividend payment date, the "Deemed Original Issue Date" means the date of the
Dividend Period Commencement Date that immediately follows the date of issuance.
(2) Dividends payable on shares of this Series for any period greater
or less than a full Dividend Period, including the Initial Dividend Period,
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.
(3) The Corporation shall not declare or pay or set apart for payment
any dividends on any series of preferred shares ranking, as to dividends, on a
parity with or junior to the shares of this Series unless full cumulative
dividends have been or contemporaneously are declared and paid, or declared
and a sum sufficient for payment thereof is set apart for payment, for all
Dividend Periods terminating on or prior to the date of payment of any such
dividends on such other series of preferred shares. When dividends are not paid
in full upon the shares of this Series and any other series of preferred shares
ranking on a parity therewith as to dividends, all dividends declared upon
shares of this Series and any other series of preferred shares ranking on a
parity therewith as to dividends shall be declared pro rata so that the amount
of dividends declared per share on the shares of this Series and such other
series of preferred shares shall in all cases bear to each other that same ratio
that the accumulated dividends per share on the shares of this Series and such
other
-3-
<PAGE>
series of preferred shares bear to each other. Except as provided in the
preceding sentence, unless full cumulative dividends on the shares of this
Series have been paid for all past Dividend Periods, no dividends (other than in
shares of the Corporation's common stock, par value $.01 per share (together
with any other shares of capital stock of the Corporation into which such shares
shall be reclassified or changed ("Common Shares"), or another stock ranking
junior to the shares of this Series as to dividends and upon liquidation) shall
be declared or paid or set aside for payment nor shall any other distribution be
made upon the Common Shares or on any other stock of the Corporation ranking
junior to or on a parity with the shares of this Series as to dividends or upon
liquidation. Unless full cumulative dividends on the shares of this Series have
been paid for all past Dividend Periods, no Common Shares or any other stock of
the Corporation ranking junior to or on a parity with the shares of this Series
as to dividends or upon liquidation shall be redeemed, purchased, or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by the
Corporation or any subsidiary, except by conversion into or exchange for stock
of the Corporation ranking junior to the shares of this Series as to dividends
and upon liquidation.
(b) Liquidation.
-----------
In the event of any voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation, the holders of shares of this Series are
entitled to receive out of the assets of the Corporation available for
distribution to shareholders, before any distribution of assets is made to
holders of Common Shares or any other class or series of shares ranking junior
to the shares of this Series upon liquidation, liquidating distributions in the
amount of $25,000 per share plus all accumulated and unpaid dividends (whether
or not earned or declared) for the then current and all past Dividend Periods.
If, upon any voluntary or involuntary liquidation, dissolution, or winding up of
the Corporation the amounts payable with respect to the shares of this Series
and any other shares of the Corporation ranking as to any such distribution on a
parity with the shares of this Series are not paid in full, the holders of
shares of this Series and of such other shares will share ratably in any such
distribution of assets of the Corporation in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of shares of this Series will not be entitled to any further participation in
any distribution of assets by the Corporation.
-4-
<PAGE>
(1) Written notice of any such liquidation, dissolution or winding up
of the Corporation, stating the payment date or dates when, and the place or
places where the amounts distributable in such circumstances shall be payable,
shall be given by first class mail, postage pre-paid, not less than 30 nor more
than 60 days prior to the payment date stated therein, to each record holder of
the shares of this Series at the respective addresses of such holders as the
same shall appear on the stock transfer records of the Corporation.
(2) For purposes of liquidation rights, a reorganization (as defined
in Section 181 of the California Corporations Code) or consolidation or merger
of the Corporation with or into any other corporation or corporations or a
sale of all or substantially all of the assets of the Corporation shall be
deemed not to be a liquidation, dissolution or winding up of the Corporation.
(c) Redemption.
----------
(1) Except as provided in clause (9) below, the shares of this Series
are not redeemable prior to April 30, 2004. On and after such date, the shares
of this Series are redeemable at the option of the Corporation, by resolution of
the Board of Directors, in whole or in part, from time to time upon not less
than 30 nor more than 60 days' notice, at a cash redemption price of $25,000 per
share plus all accumulated and unpaid dividends (whether or not earned or
declared) to the date of redemption.
(2) If fewer than all the outstanding shares of this Series are to be
redeemed, the number of shares to be redeemed will be determined by the Board of
Directors, and such shares shall be redeemed pro rata from the holders of
record of such shares in proportion to the number of such shares held by such
holders (with adjustments to avoid redemption of fractional shares) or by lot in
a manner determined by the Board of Directors.
(3) Notwithstanding the foregoing, if any dividends, including any
accumulation, on the shares of this Series are in arrears, no shares of this
Series shall be re deemed unless all outstanding shares of this Series are
simultaneously redeemed, and the Corporation shall not purchase or otherwise
acquire, directly or indirectly, any shares of this Series; provided, however,
-------- -------
that the foregoing shall not prevent the purchase or acquisition of shares of
this Series pursuant to a purchase or exchange offer provided such offer is made
on the same terms to all holders of shares of this Series.
-5-
<PAGE>
(4) Immediately prior to any redemption of shares of this Series, the
Corporation shall pay, in cash, any accumulated and unpaid dividends through the
redemption date, unless a redemption date falls after a dividend payment record
date and prior to the corresponding dividend payment date, in which case each
holder of shares of this Series at the close of business on such dividend
payment record date shall be entitled to the dividend payable on such shares on
the corresponding dividend payment date notwithstanding the redemption of such
shares before such dividend payment date. Except as expressly provided herein
above, the Corporation shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on shares of this Series called for redemption.
(5) Notice of redemption shall be given by publication in a newspaper
of general circulation in the County of Los Angeles and The City of New York,
such publication to be made once a week for two successive weeks, commencing not
less than 30 nor more than 60 days prior to the date fixed for redemption
thereof. A similar notice will be mailed by the Company by first class mail,
postage pre-paid, to each record holder of the shares of this Series to be
redeemed, not less than 30 nor more than 60 days prior to such redemption date,
to the respective addresses of such holders as the same shall appear on the
stock transfer records of the Corporation. Each notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to be redeemed; (iii)
the redemption price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accumulate on such
redemption date. If fewer than all the shares of this Series held by any holder
are to be redeemed, the notice mailed to such holder shall also specify the
number of shares of this Series to be redeemed from such holder.
(6) In order to facilitate the redemption of shares of this Series,
the Board of Directors may fix a record date for the determination of the shares
to be redeemed, such record date to be not less than 30 nor more than 60 days
prior to the date fixed for such redemption.
(7) Notice having been given as provided above, from and after the
date fixed for the redemption of shares of this Series by the Corporation
(unless the Corporation shall fail to make available the money necessary to
effect such redemption), the holders of shares selected for redemption shall
cease to be shareholders with respect to such shares and shall have no interest
in or claim against the Corporation by virtue thereof and shall have no voting
or other rights with respect to such shares, except the right to receive the
moneys payable upon such redemption from the Corporation, less any required tax
withholding amount, without interest thereon, upon surrender (and endorsement or
assignment of transfer, if required by
-6-
<PAGE>
the Corporation and so stated in the notice) of their certificates, and the
shares represented thereby shall no longer be deemed to be outstanding. If fewer
than all the shares represented by a certificate are redeemed, a new certificate
shall be issued, without cost to the holder thereof, representing the unredeemed
shares. The Corporation may, at its option, at any time after a notice of
redemption has been given, deposit the redemption price for the shares of this
Series designated for redemption and not yet redeemed, plus any accumulated and
unpaid dividends thereon to the date fixed for redemption, with the transfer
agent or agents for this Series, as a trust fund for the benefit of the holders
of the shares of this Series designated for redemption, together with
irrevocable instructions and authority to such transfer agent or agents that
such funds be delivered upon redemption of such shares and to pay, on and after
the date fixed for redemption or prior thereto, the redemption price of the
shares to their respective holders upon the surrender of their share
certificates. From and after the making of such deposit, the holders of the
shares designated for redemption shall cease to be shareholders with respect to
such shares and shall have no interest in or claim against the Corporation by
virtue thereof and shall have no voting or other rights with respect to such
shares, except the right to receive from such trust fund the moneys payable upon
such redemption, without interest thereon, upon surrender (and endorsement, if
required by the Corporation) of their certificates, and the shares represented
thereby shall no longer be deemed to be outstanding. Any balance of such moneys
remaining unclaimed at the end of the five-year period commencing on the date
fixed for redemption shall be repaid to the Corporation upon its request
expressed in a resolution of its Board of Directors.
(8) Any shares of this Series that shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued preferred shares, without designation as to series until such shares
are once more designated as part of a particular series by the Board of
Directors.
(9) If the Board of Directors of the Corporation shall, at any time
and in good faith, be of the opinion that ownership of securities of the
Corporation has or may become concentrated to an extent that may prevent the
Corporation from qualifying as a real estate investment trust under the REIT
Provisions of the Internal Revenue Code (as defined below), then the Board of
Directors shall have the power, by lot or other means deemed equitable by them
to prevent the transfer of and/or to call for redemption a number of shares of
this Series sufficient, in the opinion of the Board of Directors, to maintain or
bring the direct or indirect ownership thereof into conformity with the
requirements of such a real estate investment trust under the REIT Provisions of
the Internal Revenue Code. The redemption price to be paid for shares of this
Series so called for redemption, on the date fixed for redemption, shall be the
closing price of the shares on the principal national stock exchange on which
-7-
<PAGE>
the shares are listed on the last business day prior to the redemption date, or
if no sales of shares were made on such date, the average of the highest bid and
the lowest asked quotations on the last business day prior to the redemption
date as reported by the National Quotation Bureau, Incorporated or a similar
organization selected from time to time by the Corporation or if there be no
such bid and asked quotations, as determined by the Board of Directors in good
faith; provided that if interests in shares of this Series are represented by
depositary shares, then the redemption price shall be determined in accordance
with the foregoing, but with respect to one depositary share, multiplied by the
number of depositary shares that together represent an interest in one share of
this Series. From and after the date fixed for redemption by the Board of
Directors, the holder of any shares of this Series so called for redemption
shall cease to be entitled to any distributions, voting rights and other
benefits with respect to such shares of this Series, other than the right to
payment of the redemption price determined as aforesaid. "REIT Provisions of
the Internal Revenue Code" shall mean Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended. In order to exercise the redemption option
set forth in this clause (9), with respect to the shares of this Series, the
Corporation shall give notice of redemption by publication in a newspaper of
general circulation in the County of Los Angeles and The City of New York, such
publication to be made once a week for two successive weeks, commencing not less
than 30 nor more than 60 days prior to the date fixed for redemption. A similar
notice will be mailed by the Corporation by first class mail, postage pre-paid,
to each record holder of the shares of this Series to be redeemed, not less than
30 nor more than 60 days prior to such redemption date, to the respective
addresses of such holders as the same shall appear on the stock transfer records
of the Corporation. Each notice shall state: (i) the redemption date; (ii) the
number of shares of this Series to be redeemed; (iii) the redemption price; (iv)
the place or places where certificates for such shares are to be surrendered for
payment of the redemption price; and (v) that dividends on the shares to be
redeemed will cease to accumulate on such redemption date. If fewer than all
the shares of this Series held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of this Series to
be redeemed from such holder.
(d) Voting Rights. The shares of this Series shall not have any
-------------
voting powers either general or special, except as required by law, except that:
(1) If the Corporation shall fail to pay full cumulative dividends on
the shares of this Series or any other of its preferred shares for six quarterly
dividend payment periods, whether or not consecutive (a "Dividend Default"), the
holders of all outstanding preferred shares, voting as a single class without
regard to series, will be entitled to elect two Directors until full cumulative
dividends for all past dividend
-8-
<PAGE>
payment periods on all preferred shares have been paid or declared and funds
therefor set apart for payment. Such right to vote separately as a class to
elect Directors shall, when vested, be subject, always, to the same provisions
for the vesting of such right to elect Directors separately as a class in the
case of future Dividend Defaults. At any time when such right to elect Directors
separately as a class shall have so vested, the Corporation may call, and, upon
the written request of the holders of record of not less than 20% of the total
number of preferred shares of the Corporation then outstanding, shall call, a
special meeting of stockholders for the election of Directors. In the case of
such a written request, such special meeting shall be held within 90 days after
the delivery of such request and, in either case, at the place and upon the
notice provided by law and in the Bylaws of the Corporation, provided that the
Corporation shall not be required to call such a special meeting if such request
is received less than 120 days before the date fixed for the next ensuing Annual
Meeting of Share holders of the Corporation and the holders of all classes of
outstanding preferred shares are afforded the opportunity to elect such
Directors (or fill any vacancy) at such Annual Meeting of Shareholders.
Directors elected as aforesaid shall serve until the next Annual Meeting of
Shareholders of the Corporation or until their respective successors shall be
elected and qualified. If, prior to the end of the term of any Director elected
as aforesaid, a vacancy in the office of such Director shall occur during the
continuance of a Dividend Default by reason of death, resignation, or
disability, such vacancy shall be filled for the unexpired term by the
appointment of a new Director for the unexpired term of such former Director,
such appointment to be made by the remaining Director elected as aforesaid.
(2) The affirmative vote or consent of the holders of at least 66 2/3%
of the outstanding shares of this Series, voting separately as a class, will be
required for any amendment to the Articles of Incorporation of the Corporation
that will adversely alter or change the powers, preferences, privileges or
rights of the shares of this Series, except as set forth below. The affirmative
vote or consent of the holders of at least 66 2/3% of the outstanding shares of
this Series and any other series of preferred shares ranking on a parity with
this Series as to dividends and upon liquidation, voting as a single class
without regard to series, will be required to issue, authorize or increase the
authorized amount of any class or series of shares ranking prior to this Series
as to dividends or upon liquidation or to issue or authorize any obligation or
security convertible into or evidencing a right to purchase any such security,
but the Articles of Incorporation may be amended to increase the number of
authorized preferred shares ranking on a parity with or junior to this Series or
to create another class of preferred shares ranking on a parity with or junior
to this Series without the vote of the holders of outstanding shares of this
Series.
-9-
<PAGE>
(3) Nothing herein shall be taken to require a class vote or consent
in connection with the authorization, designation, increase or issuance of any
shares of any class or series (including additional preferred shares of any
series) that rank junior to or on a parity with this Series as to dividends and
liquidation rights or in connection with the authorization, designation,
increase or issuance of any bonds, mortgages, debentures or other debt
obligations of the Corporation.
(e) Conversion. The shares of this Series are not convertible into
----------
shares of any other class or series of the capital stock of the Corporation.
-10-
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
PS BUSINESS PARKS, INC.
AMERICAN STOCK TRANSFER & TRUST
COMPANY, AS DEPOSITARY
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
RELATING TO SERIES A PREFERRED STOCK
-----------------
DEPOSIT AGREEMENT
-----------------
Dated as of April 28, 1999
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
Definitions
ARTICLE II
Form of Receipts, Deposit of Stock,
Execution and Delivery, Transfer,
Surrender and Redemption of Receipts
<TABLE>
<S> <C>
SECTION 2.1 Form and Transfer of Receipts.................................... 2
SECTION 2.2 Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof..................................................... 3
SECTION 2.3 Registration of Transfer of Receipts............................. 4
SECTION 2.4 Split-ups and Combinations of Receipts; Surrender
of Receipts and Withdrawal of Stock................................. 4
SECTION 2.5 Limitations on Execution and Delivery, Transfer, Surrender and
Exchange of Receipts............................................... 5
SECTION 2.6 Lost Receipts, etc............................................... 6
SECTION 2.7 Cancellation and Destruction of Surrendered Receipts............. 6
SECTION 2.8 Redemption of Stock.............................................. 6
</TABLE>
ARTICLE III
Certain Obligations of
Holders of Receipts and the Company
<TABLE>
<S> <C>
SECTION 3.1 Filing Proofs, Certificates and Other Information............... 8
SECTION 3.2 Payment of Taxes or Other Governmental Charges.................. 8
SECTION 3.3 Warranty as to Stock............................................ 8
</TABLE>
ARTICLE IV
The Deposited Securities; Notices
<TABLE>
<S> <C>
SECTION 4.1 Cash Distributions............................................... 8
SECTION 4.2 Distributions Other than Cash, Rights Preferences or Privileges.. 9
SECTION 4.3 Subscription Rights, Preferences or Privileges................... 9
SECTION 4.4 Notice of Dividends, etc.; Fixing Record Date
for Holders of Receipts.............................................. 10
SECTION 4.5 Voting Rights..................................................... 11
SECTION 4.6 Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc............................ 11
SECTION 4.7 Delivery of Reports............................................... 12
SECTION 4.8 List of Receipt Holders........................................... 12
</TABLE>
i
<PAGE>
ARTICLE V
The Depositary, the Depositary's
Agents, the Registrar and the Company
<TABLE>
<S> <C>
SECTION 5.1 Maintenance of Offices, Agencies and Transfer Books
by the Depositary; Registrar......................................... 12
SECTION 5.2 Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, the Registrar or
the Company.......................................................... 13
SECTION 5.3 Obligation of the Depositary, the Depositary's
Agents, the Registrar and the Company................................ 13
SECTION 5.4 Resignation and Removal of the Depositary;
Appointment of Successor Depositary.................................. 15
SECTION 5.5 Corporate Notices and Reports..................................... 16
SECTION 5.6 Indemnification by the Company.................................... 16
SECTION 5.7 Charges and Expenses.............................................. 16
SECTION 5.8 Tax Compliance.................................................... 17
</TABLE>
ARTICLE VI
Amendment and Termination
<TABLE>
<S> <C>
SECTION 6.1 Amendment......................................................... 17
SECTION 6.2 Termination....................................................... 17
</TABLE>
ARTICLE VII
Miscellaneous
<TABLE>
<S> <C>
SECTION 7.1 Counterparts..................................................... 18
SECTION 7.2 Exclusive Benefit of Parties..................................... 18
SECTION 7.3 Invalidity of Provisions......................................... 18
SECTION 7.4 Notices.......................................................... 18
SECTION 7.5 Appointment of Registrar......................................... 19
SECTION 7.6 Holders of Receipts are Parties.................................. 19
SECTION 7.7 Governing Law.................................................... 20
SECTION 7.8 Inspection of Deposit Agreement.................................. 20
SECTION 7.9 Headings......................................................... 20
</TABLE>
Form of Depositary Shares
<TABLE>
<S> <C>
Form of Face of Receipt....................................................... A-1
Form of Reverse of Receipt.................................................... A-3
</TABLE>
ii
<PAGE>
DEPOSIT AGREEMENT, dated as of April 28, 1999, among PS BUSINESS
PARKS, INC., a California corporation (the "Company"), American Stock Transfer &
Trust Company (the "Depositary"), and the holders from time to time of the
Receipts described herein.
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of Series A Preferred Stock of the
Company with the Depositary for the purposes set forth in this Deposit Agreement
and for the issuance hereunder of Receipts evidencing Depositary Shares in
respect of the Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A
annexed hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the promises contained herein, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
Definitions
The following definitions shall, for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement:
"Certificate" shall mean the Certificate of Determination filed with
the Secretary of State of the State of California establishing the Stock as a
series of preferred stock of the Company.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.
"Depositary" shall mean American Stock Transfer & Trust Company and
any successor as Depositary hereunder.
"Depositary Shares" shall mean Depositary Shares, each representing
1/1,000 of a share of Stock and evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 5.1 and shall include the Registrar if such Registrar is not
the Depositary.
"Depositary's Office" shall mean the principal office of the
Depositary at which at any particular time its depositary receipt business shall
be administered.
<PAGE>
"Receipt" shall mean one of the Depositary Receipts, substantially in
the form set forth as Exhibit A hereto, issued hereunder, whether in definitive
or temporary form and evidencing the number of Depositary Shares held of record
by the record holder of such Depositary Shares.
"record holder" or "holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books of the Depositary
maintained for such purpose.
"Registrar" shall mean the Depositary or such other bank or trust
company which shall be appointed to register ownership and transfers of Receipts
as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of the Company's 9 1/4% Cumulative
Preferred Stock, Series A, $.01 par value per share.
ARTICLE II
Form of Receipts, Deposit of Stock,
Execution and Delivery, Transfer,
Surrender and Redemption of Receipts
SECTION 2.1 Form and Transfer of Receipts. Definitive Receipts shall
be engraved or printed or lithographed on steel-engraved borders, with
appropriate insertions, modifications and omissions, as hereinafter provided, if
and to the extent required by any securities exchange on which the Receipts are
listed. Pending the preparation of definitive Receipts or if definitive
Receipts are not required by any securities exchange on which the Receipts are
listed, the Depositary, upon the written order of the Company or any holder of
Stock, as the case may be, delivered in compliance with Section 2.2, shall
execute and deliver temporary Receipts which are printed, lithographed,
typewritten, mimeographed or otherwise substantially of the tenor of the
definitive Receipts in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the persons
executing such Receipts may determine, as evidenced by their execution of such
Receipts. If temporary Receipts are issued, the Company and the Depositary will
cause definitive Receipts to be prepared without unreasonable delay. After the
preparation of definitive Receipts, the temporary Receipts shall be exchangeable
for definitive Receipts upon surrender of the temporary Receipts at the
Depositary's Office or at such other place or places as the Depositary shall
determine, without charge to the holder. Upon surrender for cancellation of any
one or more temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of Depositary
Shares as represented by the surrendered temporary Receipt or Receipts. Such
exchange shall be made at the Company's expense and without any charge to the
holder therefor.
2
<PAGE>
Until so exchanged, the temporary Receipts shall in all respects be entitled to
the same benefits under this Agreement, and with respect to the Stock, as
definitive Receipts.
Receipts shall be executed by the Depositary by the manual and/or
facsimile signature of a duly authorized officer of the Depositary. No Receipt
shall be entitled to any benefits under this Deposit Agreement or be valid or
obligatory for any purpose unless it shall have been executed in accordance with
the foregoing sentence. The Depositary shall record on its books each Receipt
so signed and delivered as hereinafter provided.
Receipts shall be in denominations of any number of whole Depositary
Shares. The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt, which is properly
endorsed or accompanied by a properly executed instrument of transfer, shall be
transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Receipt shall be
-------- -------
registered on the books of the Depositary as provided in Section 2.3, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.2 Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
the Company or, subject to Section 2.4, any holder of Stock may from time to
time deposit shares of Stock under this Deposit Agreement by delivery to the
Depositary of a certificate or certificates for the Stock to be deposited,
properly endorsed or accompanied, if required by the Depositary, by a duly
executed instrument of transfer or endorsement, in form satisfactory to the
Depositary, together with all such certifications as may be required by the
Depositary in accordance with the provisions of this Deposit Agreement, and
together with a written order of the Company or such holder, as the case may be,
directing the Depositary to execute and deliver to, or upon the written order
of, the person or persons stated in such order a Receipt or Receipts for the
number of Depositary Shares representing such deposited Stock.
3
<PAGE>
Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places as the Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together with
the other documents required as above specified, and upon recordation of the
Stock on the books of the Company in the name of the Depositary or its nominee,
the Depositary, subject to the terms and conditions of this Deposit Agreement,
shall execute and deliver, to or upon the order of the person or persons named
in the written order delivered to the Depositary referred to in the first
paragraph of this Section, a Receipt or Receipts for the whole number of
Depositary Shares representing, in the aggregate, the Stock so deposited and
registered in such name or names as may be requested by such person or persons.
The Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office or such other offices, if any, as the Depositary may
designate. Delivery at other offices shall be at the risk and expense of the
person requesting such delivery.
SECTION 2.3 Registration of Transfer of Receipts. Subject to the
terms and conditions of this Deposit Agreement, the Depositary shall register on
its books from time to time transfers of Receipts upon any surrender thereof by
the holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer. Thereupon, the
Depositary shall execute a new Receipt or Receipts evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered and deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.
SECTION 2.4 Split-ups and Combinations of Receipts; Surrender of
Receipts and Withdrawal of Stock. Upon surrender of a Receipt or Receipts at
the Depositary's Office or at such other offices as it may designate for the
purpose of effecting a split-up or combination of such Receipt or Receipts, and
subject to the terms and conditions of this Deposit Agreement, the Depositary
shall execute and deliver a new Receipt or Receipts in the authorized
denomination or denominations requested, evidencing the aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
--------
however, that the Depositary shall not issue any Receipt evidencing a fractional
- -------
Depositary Share.
Any holder of a Receipt or Receipts representing any number of whole
shares of Stock may (unless the related Depositary Shares have previously been
called for redemption) withdraw the Stock and all money and other property, if
any, represented thereby by surrendering such Receipt or Receipts at the
Depositary's Office or at such other offices as the Depositary may designate for
such withdrawals and paying any unpaid amount due the Depositary. Thereafter,
without unreasonable delay, the Depositary shall deliver to such holder or to
the person or persons designated by such holder as hereinafter provided, the
number of whole shares of Stock and all money and other property, if any,
represented by the Receipt or Receipts so surrendered for withdrawal, but
holders of such whole shares of Stock will not thereafter be entitled to deposit
such Stock hereunder or to receive
4
<PAGE>
Depositary Shares therefor. If a Receipt delivered by the holder to the
Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Stock to be so withdrawn, the Depositary shall at the
same time, in addition to such number of whole shares of Stock and such money
and other property, if any, to be so withdrawn, deliver to such holder, or upon
his order, a new Receipt evidencing such excess number of Depositary Shares,
provided, however, that the Depositary shall not issue any Receipt evidencing a
- -------- -------
fractional Depositary Share. Delivery of the Stock and money and other property
being withdrawn may be made by the delivery of such certificates, documents of
title and other instruments as the Depositary may deem appropriate which, if
required by the Depositary, shall be properly endorsed or accompanied by proper
instruments of transfer.
If the Stock and the money and other property being withdrawn are to
be delivered to a person or persons other than the record holder of the Receipt
or Receipts being surrendered for withdrawal of Stock, such holders shall
execute and deliver to the Depositary a written order so directing the
Depositary and the Depositary may require that the Receipt or Receipts
surrendered by such holder for withdrawal of such shares of Stock be properly
endorsed in blank or accompanied by a properly executed instrument of transfer
in blank.
Delivery of the Stock and the money and other property, if any,
represented by Receipts surrendered for withdrawal shall be made by the
Depositary at the Depositary's Office, except that, at the request, risk and
expense of the holder surrendering such Receipt or Receipts and for the account
of the holder thereof, such delivery may be made at such other place as may be
designated by such holder.
SECTION 2.5 Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, any of the Depositary's Agents or the
Company may require payment to it of a sum sufficient for the payment (or, in
the event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any charges or expenses payable by the holder of a
Receipt pursuant to Sections 3.2 and 5.7, may require the production of evidence
satisfactory to it as to the identity and genuineness of any signature, and may
also require compliance with such regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against
Stock may be suspended, the registration of transfer of Receipts may be refused
and the registration of transfer, surrender or exchange of outstanding Receipts
may be suspended (i) during any period when the register of stockholders of the
Company is closed, or (ii) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law
5
<PAGE>
or of any government or governmental body or commission or under any provision
of this Deposit Agreement.
SECTION 2.6 Lost Receipts, etc. In case any receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its reasonable
discretion may execute and deliver a Receipt of like form and tenor in exchange
and substitution for such mutilated Receipt, or in lieu of and in substitution
for such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence reasonably satisfactory to the
Depositary of such destruction or loss or theft of such Receipt, of the
authenticity thereof and of his or her ownership thereof, (ii) the furnishing of
the Depositary with indemnification reasonably satisfactory to it and the
Company and (iii) the payment of any reasonable expense (including reasonable
fees, charges and expenses of the Depositary) in connection with such execution
and delivery.
SECTION 2.7 Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Company is authorized to destroy all Receipts so cancelled.
SECTION 2.8 Redemption of Stock. Whenever the Company shall be
permitted and shall elect to redeem shares of Stock in accordance with the
provisions of the Certificate, it shall (unless otherwise agreed to in writing
with the Depositary) give or cause to be given to the Depositary not less than
60 days' notice of the date of such proposed redemption or exchange of Stock and
of the number of such shares held by the Depositary to be so redeemed and the
applicable redemption price, as set forth in the Certificate, which notice shall
be accompanied by a certificate from the Company stating that such redemption of
Stock is in accordance with the provisions of the Certificate. Notice of
redemption of Stock will also be given by the Company by publication in a
newspaper of general circulation in the County of Los Angeles and the City of
New York, such publication to be made once a week for two successive weeks
commencing not less than 30 nor more than 60 days prior to the redemption date,
and the Depositary will publish a notice of redemption of the Depositary Shares
containing the same type of information and in the same manner as the Company's
notice of redemption. On the date of such redemption, provided that the Company
shall then have paid or caused to be paid in full to the Depositary the
redemption price of the Stock to be redeemed, plus an amount equal to any
accrued and unpaid dividends thereon to the date fixed for redemption, in
accordance with the provisions of the Certificate, the Depositary shall redeem
the number of Depositary Shares representing such Stock. The Depositary shall
mail notice of the Company's redemption of Stock and the proposed simultaneous
redemption of the number of Depositary Shares representing the Stock to be
redeemed by first-class mail, postage prepaid, not less than 30 and not more
than 60 days prior to the date fixed for redemption of such Stock and Depositary
Shares (the "Redemption Date") to the record holders of the Receipts evidencing
the Depositary Shares to be so redeemed, at the address of such holders as they
appear on the records of the Depositary; but neither failure to mail any such
6
<PAGE>
notice of redemption of Depositary Shares to one or more such holders nor any
defect in any notice of redemption of Depositary Shares to one or more such
holders shall affect the sufficiency of the proceedings for redemption as to the
other holders. The Company will provide the Depositary with the information
necessary for the Depositary to prepare such notice and each such notice shall
state: (i) the Redemption Date; (ii) the number of Depositary Shares to be
redeemed and, if less than all the Depositary Shares held by any such holder are
to be redeemed, the number of such Depositary Shares held by such holder to be
so redeemed; (iii) the redemption price per Depositary Share; (iv) the place or
places where Receipts evidencing Depositary Shares are to be surrendered for
payment of the redemption price; and (v) that dividends in respect of the Stock
represented by the Depositary Shares to be redeemed will cease to accrue on such
Redemption Date. In case less than all the outstanding Depositary Shares are to
be redeemed, the Depositary Shares to be so redeemed shall be determined pro
rata or by lot in a manner determined by the Board of Directors.
Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Company shall have failed to provide the
funds necessary to redeem the Stock evidenced by the Depositary Shares called
for redemption) (i) dividends on the shares of Stock so called for redemption
shall cease to accrue from and after such date, (ii) the Depositary Shares being
redeemed from such proceeds shall be deemed no longer to be outstanding, (iii)
all rights of the holders of Receipts evidencing such Depositary Shares (except
the right to receive the redemption price) shall, to the extent of such
Depositary Shares, cease and terminate, and (iv) upon surrender in accordance
with such redemption notice of the Receipts evidencing any such Depositary
Shares called for redemption (properly endorsed or assigned for transfer, if the
Depositary or applicable law shall so require), such Depositary Shares shall be
redeemed by the Depositary at a redemption price per Depositary Share equal to
the same fraction of the redemption price per share paid with respect to the
shares of Stock as the fraction each Depositary Share represents of a share of
Stock plus the same fraction of all money and other property, if any,
represented by such Depositary Shares, including all amounts paid by the Company
in respect of dividends which on the Redemption Date have accumulated on the
shares of Stock to be so redeemed and have not theretofore been paid. Any funds
deposited by the Company with the Depositary for any Depositary Shares that the
holders thereof fail to redeem will be returned to the Company after a period of
five years from the date such funds are so deposited.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the redemption payment, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption, provided, however, that the Depositary shall not
-------- -------
issue any Receipt evidencing a fractional Depositary Share.
7
<PAGE>
ARTICLE III
Certain Obligations of
Holders of Receipts and the Company
SECTION 3.1 Filing Proofs, Certificates and Other Information. Any
holder of a Receipt may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the Company
may reasonably deem necessary or proper or otherwise reasonably request. The
Depositary or the Company may withhold the delivery, or delay the registration
of transfer, redemption or exchange, of any Receipt or the withdrawal or
conversion of the Stock represented by the Depositary Shares evidenced by any
Receipt or the distribution of any dividend or other distribution or the sale of
any rights or of the proceeds thereof until such proof or other information is
filed or such certificates are executed or such representations and warranties
are made.
SECTION 3.2 Payment of Taxes or Other Governmental Charges. Holders
of Receipts shall be obligated to make payments to the Depositary of certain
charges and expenses, as provided in Section 5.7. Registration of transfer of
any Receipt or any withdrawal of Stock and all money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused
until any such payment due is made, and any dividends, interest payments or
other distributions may be withheld or any part of or all the Stock or other
property represented by the Depositary Shares evidenced by such Receipt and not
theretofore sold may be sold for the account of the holder thereof (after
attempting by reasonable means to notify such holder prior to such sale), and
such dividends, interest payments or other distributions or the proceeds of any
such sale may be applied to any payment of such charges or expenses, the holder
of such Receipt remaining liable for any deficiency.
SECTION 3.3 Warranty as to Stock. The Company hereby represents and
warrants that the Stock, when issued, will be duly authorized, validly issued,
fully paid and nonassessable. Such representation and warranty shall survive
the deposit of the Stock and the issuance of Receipts.
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.1 Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on Stock, the Depositary
shall, subject to Sections 3.1 and 3.2, distribute to record holders of Receipts
on the record date fixed pursuant to Section 4.4 such amounts of such dividend
or distribution as are, as nearly as practicable,
8
<PAGE>
in proportion to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders; provided, however, that in case the Company or
-------- -------
the Depositary shall be required to withhold and shall withhold from any cash
dividend or other cash distribution in respect of the Stock an amount on account
of taxes or as otherwise required by law, regulation or court process, the
amount made available for distribution or distributed in respect of Depositary
Shares shall be reduced accordingly. In the event that the calculation of any
such cash dividend or other cash distribution to be paid to any record holder on
the aggregate number of Depositary Receipts held by such holder results in an
amount which is a fraction of a cent, the amount the Depositary shall distribute
to such record holder shall be rounded to the next highest whole cent if such
fraction of a cent is equal to or greater than $.005, otherwise such fractional
interest shall be disregarded; and upon request of the Depositary, the Company
shall pay the additional amount to the Depositary for distribution.
SECTION 4.2 Distributions Other than Cash, Rights, Preferences or
Privileges. Whenever the Depositary shall receive any distribution other than
cash, rights, preferences or privileges upon Stock, the Depositary shall,
subject to Sections 3.1 and 3.2, distribute to record holders of Receipts on the
record date fixed pursuant to Section 4.4 such amounts of the securities or
property received by it as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the Receipts held by such
holders, in any manner that the Depositary may deem equitable and practicable
for accomplishing such distribution. If in the opinion of the Depositary such
distribution cannot be made proportionately among such record holders, or if for
any other reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes) the Depositary deems such distribution
not to be feasible, the Depositary may, with the approval of the Company, adopt
such method as it deems equitable and practicable for the purpose of effecting
such distribution, including the sale (at public or private sale) of the
securities or property thus received, or any part thereof, at such place or
places and upon such terms as it may deem equitable and appropriate. The net
proceeds of any such sale shall, subject to Sections 3.1 and 3.2, be distributed
or made available for distribution, as the case may be, by the Depositary to
record holders of Receipts as provided by Section 4.1 in the case of a
distribution received in cash.
SECTION 4.3 Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is recorded on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Depositary may determine,
either by the issue to such record holders of warrants representing such rights,
preferences or privileges or by such other method as may be approved by the
Depositary in its discretion with the approval of the Company; provided,
--------
however, that (i) if at the time of issue or offer of any such rights,
- -------
preferences or privileges the Depositary determines that it is not lawful or
(after consultation with the Company) not feasible to make such rights,
9
<PAGE>
preferences or privileges available to holders of Receipts by the issue of
warrants or otherwise, or (ii) if and to the extent so instructed by holders of
Receipts who do not desire to execute such rights, preferences or privileges,
then the Depositary, in its discretion (with approval of the Company, in any
case where the Depositary has determined that it is not feasible to make such
rights, preferences or privileges available), may, if applicable laws or the
terms of such rights, preferences or privileges permit such transfer, sell such
rights, preferences or privileges at public or private sale, at such place or
places and upon such terms as it may deem proper. The net proceeds of any such
sale shall, subject to Sections 3.1 and 3.2, be distributed by the Depositary to
the record holders of Receipts entitled thereto as provided by Section 4.1 in
the case of a distribution received in cash.
If registration under the Securities Act of the securities to which
any rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold the securities to which such rights, preferences
or privileges relate, the Company will file promptly a registration statement
pursuant to the Securities Act with respect to such rights, preferences or
privileges and securities and use its best efforts and take all steps available
to it to cause such registration statement to become effective sufficiently in
advance of the expiration of such rights, preferences or privileges to enable
such holders to exercise such rights, preferences or privileges. In no event
shall the Depositary make available to the holders of Receipts any right,
preference or privilege to subscribe for or to purchase any securities unless
and until it has received written notice from the Company that such registration
statement shall have become effective, or that the offering and sale of such
securities to such holders are exempt from registration under the provisions of
the Securities Act and the Company shall have provided to the Depositary an
opinion of counsel reasonably satisfactory to the Depositary to such effect.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to
holders of Receipts, the Company will use its reasonable best efforts to take
such action or obtain such authorization, consent or permit sufficiently in
advance of the expiration of such rights, preferences or privileges to enable
such holders to exercise such rights, preferences or privileges.
SECTION 4.4 Notice of Dividends, etc.; Fixing Record Date for Holders
of Receipts. Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or if rights,
preferences or privileges shall at any time be offered, with respect to Stock,
or whenever the Depositary shall receive notice of any meeting at which holders
of Stock are entitled to vote or of which holders of Stock are entitled to
notice, or whenever the Depositary and the Company shall decide it is
appropriate, the Depositary shall in each such instance fix a record date (which
shall be the same date as the record date fixed by the Company with respect to
or otherwise in accordance with the terms of the Stock) for the determination of
the holders of Receipts who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the sale
thereof, or to give instructions for the exercise of voting rights
10
<PAGE>
at any such meeting, or who shall be entitled to notice of such meeting or for
any other appropriate reasons.
SECTION 4.5 Voting Rights. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of meeting and
(ii) a statement that the holders may, subject to any applicable restrictions,
instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of Stock represented by their respective Depositary Shares (including
an express indication that instructions may be given to the Depositary to give a
discretionary proxy to a person designated by the Company) and a brief statement
as to the manner in which such instructions may be given. Upon the written
request of the holders of Receipts on the relevant record date, the Depositary
shall use its best efforts to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of whole shares of
Stock represented by the Depositary Shares evidenced by all Receipts as to which
any particular voting instructions are received. The Company hereby agrees to
take all action which may be deemed necessary by the Depositary in order to
enable the Depositary to vote such Stock or cause such Stock to be voted. In the
absence of specific instructions from the holder of a Receipt, the Depositary
will not vote (but, at its discretion, may appear at any meeting with respect to
such Stock unless directed to the contrary by the holders of all the Receipts)
to the extent of the Stock represented by the Depositary Shares evidenced by
such Receipt.
SECTION 4.6 Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any change in par value or
liquidation preference, split-up, combination or any other reclassification of
the Stock, or upon any recapitalization, reorganization, merger or
consolidation affecting the Company or to which it is a party, the Depositary
may in its discretion with the approval (not to be unreasonably withheld) of,
and shall upon the instructions of, the Company, and (in either case) in such
manner as the Depositary may deem equitable, (i) make such adjustments in the
fraction of an interest in one share of Stock represented by one Depositary
Share as may be necessary (as certified by the Company) fully to reflect the
effects of such change in par value or liquidation preference, split-up,
combination or other reclassification of Stock, or of such recapitalization,
reorganization, merger or consolidation and (ii) treat any securities which
shall be received by the Depositary in exchange for or upon conversion of or in
respect of the Stock as new deposited securities so received in exchange for or
upon conversion or in respect of such Stock. In any such case, the Depositary
may in its discretion, with the approval of the Company, execute and deliver
additional Receipts or may call for the surrender of all outstanding Receipts to
be exchanged for new Receipts specifically describing such new deposited
securities. Anything to the contrary herein notwithstanding, holders of
Receipts shall have the right from and after the effective date of any such
change in par value or liquidation preference, split-up, combination or other
reclassification of the Stock or any such recapitalization, reorganization,
merger or consolidation to surrender such Receipts to the Depositary with
instructions to convert, exchange or surrender the Stock represented
11
<PAGE>
thereby only into or for, as the case may be, the kind and amount of shares of
stock and other securities and property and cash into which the Stock
represented by such Receipts would have been converted or for which such Stock
would have been exchanged or surrendered had such Receipt been surrendered
immediately prior to the effective date of such transaction.
SECTION 4.7 Delivery of Reports. The Depositary shall furnish to
holders of Receipts any reports and communications received from the Company
which are received by the Depositary as the holder of Stock.
SECTION 4.8 List of Receipt Holders. Promptly upon request from time
to time by the Company, the Depositary shall furnish to it a list, as of the
most recent practicable date, of the names, addresses and holdings of Depositary
Shares of all record holders of Receipts. The Company shall be entitled to
receive such list four times annually without charge.
ARTICLE V
The Depositary, the Depositary's
Agents, the Registrar and the Company
SECTION 5.1 Maintenance of Offices, Agencies and Transfer Books by
the Depositary; Registrar. Upon execution of this Deposit Agreement, the
Depositary shall maintain at the Depositary's office facilities for the
execution and delivery, registration and registration of transfer, surrender and
exchange of Receipts, and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration of transfer, surrender and exchange of
Receipts, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Receipts, which books during normal
business hours shall be open for inspection by the record holders of Receipts;
provided that any such holder requesting to exercise such right shall certify to
the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.
The Depositary may close such books, at any time or from time to time,
when deemed expedient by it in connection with the performance of its duties
hereunder.
The Depositary may, with the approval of the Company, appoint a
Registrar for registration of the Receipts or the Depositary Shares evidenced
thereby. If the Receipts or the Depositary Shares evidenced thereby or the
Stock represented by such Depositary Shares shall be listed on one or more
national securities exchanges, the Depositary will appoint a Registrar
(acceptable to the Company) for registration of such Receipts or Depositary
Shares in accordance with any requirements of such exchange. Such Registrar
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<PAGE>
(which may be the Depositary if so permitted by the requirements of any such
exchange) may be removed and a substitute registrar appointed by the Depositary
upon the request or with the approval of the Company. If the Receipts, such
Depositary Shares or such Stock are listed on one or more other stock exchanges,
the Depositary will, at the request and at the expense of the Company, arrange
such facilities for the delivery, registration, registration of transfer,
surrender and exchange of such Receipts, such Depositary Shares or such Stock as
may be required by law or applicable securities exchange regulation.
The Depositary may from time to time appoint Depositary's Agents to
act in any respect for the Depositary for the purposes of this Deposit Agreement
and may at any time appoint additional Depositary's Agents and vary or terminate
the appointment of such Depositary's Agents. The Depositary will notify the
Company of any such action.
SECTION 5.2 Prevention of or Delay in Performance by the Depositary,
the Depositary's Agents, the Registrar or the Company. Neither the Depositary
nor any Depositary's Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law, or regulation thereunder, of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or the Registrar, by reason of any provision, present or
future, of the Company's Articles of Incorporation or by reason of any act of
God or war or other circumstance beyond the control of the relevant party, the
Depositary, the Depositary's Agent, the Registrar or the Company shall be
prevented, delayed or forbidden from, or subjected to any penalty on account
of, doing or performing any act or thing which the terms of this Deposit
Agreement provide shall be done or performed; nor shall the Depositary, any
Depositary's Agent, the Registrar or the Company incur liability to any holder
of a Receipt (i) by reason of any nonperformance or delay, caused as aforesaid,
in the performance of any act or thing which the terms of this Deposit Agreement
shall provide shall or may be done or performed, or (ii) by reason of any
exercise of, or failure to exercise, any discretion provided for in this Deposit
Agreement except, in the case of any such exercise or failure to exercise
discretion not caused as aforesaid, if caused by the gross negligence or willful
misconduct of the party charged with such exercise or failure to exercise.
SECTION 5.3 Obligation of the Depositary, the Depositary's Agents,
the Registrar and the Company. Neither the Depositary nor any Depositary's
Agent nor the Registrar nor the Company assumes any obligation or shall be
subject to any liability under this Deposit Agreement or any Receipt to holders
of Receipts other than for its gross negligence, willful misconduct or bad
faith.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding in respect of the Stock, the Depositary
Shares or the Receipts which in its reasonable opinion may involve it in expense
or liability unless indemnity reasonably
13
<PAGE>
satisfactory to it against expense and liability be furnished as often as may be
reasonably required.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be liable for any action or any failure to act by it in
reliance upon the written advice of legal counsel or accountants, or information
from any person presenting Stock for deposit, any holder of a Receipt or any
other person believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, the Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the shares of Stock or for the manner or effect
of any such vote made, as long as any such action or non-action is in good
faith. The Depositary will indemnify the Company and hold it harmless from any
loss, liability or expense (including the reasonable costs and expenses of
defending itself) which may arise out of acts performed or omitted by the
Depositary, including when such Depositary acts as Registrar, or the
Depositary's Agents in connection with this Agreement due to its or their gross
negligence, willful misconduct or bad faith. The indemnification obligations of
the Depositary set forth in this Section 5.3 shall survive any termination of
this Agreement and any succession of any Depositary.
The Depositary, its parent, affiliates or subsidiaries, the
Depositary's Agents, and the Registrar may own, buy, sell and deal in any class
of securities of the Company and its affiliates and in Receipts or Depositary
Shares or become pecuniarily interested in any transaction in which the Company
or its affiliates may be interested or contract with or lend money to or
otherwise act as fully or as freely as if it were not the Depositary, parent,
affiliate or subsidiary or Depositary's Agent or Registrar hereunder. The
Depositary may also act as trustee, transfer agent or registrar of any of the
securities of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
nor the Registrar, acting as the Depositary's Agent or Registrar, as the case
may be, shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws, it being expressly
understood and agreed that the Depositary, any Depositary's Agent and the
Registrar are acting only in a ministerial capacity as Depositary or Registrar
for the Stock.
Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent nor the Registrar makes any representation or
has any responsibility as to the validity of the registration statement pursuant
to which the Depositary Shares are registered under the Securities Act, the
Stock, the Depositary Shares or the Receipts (except
14
<PAGE>
for its counter-signatures thereon) or any instruments referred to therein or
herein, or as to the correctness of any statement made therein or herein.
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity or genuineness of any
Stock at any time deposited with the Depositary hereunder or of the Depositary
Shares, as to the validity or sufficiency of this Deposit Agreement, as to the
value of the Depositary Shares or as to any right, title or interest of the
record holders of Receipts in and to the Depositary Shares. The Depositary
shall not be accountable for the use or application by the Company of the
Depositary Shares or the Receipts or the proceeds thereof.
SECTION 5.4 Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by delivering notice of its election to do so to the Company, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor Depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor Depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$150,000,000. If no successor Depositary shall have been so appointed and have
accepted appointment within 60 days after delivery of such notice, the resigning
or removed Depositary may petition any court of competent jurisdiction for the
appointment of a successor Depositary. Every successor Depositary shall execute
and deliver to its predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor Depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor and for all purposes shall be
the Depositary under this Deposit Agreement, and such predecessor, upon payment
of all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Stock and any moneys or property held hereunder to
such successor, and shall deliver to such successor a list of the record holders
of all outstanding Receipts and such records, books and other information in its
15
<PAGE>
possession relating thereto. Any successor Depositary shall promptly mail notice
of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act, and notice thereof shall
not be required hereunder. Such successor Depositary may authenticate the
Receipts in the name of the predecessor Depositary or in the name of the
successor Depositary.
SECTION 5.5 Corporate Notices and Reports. The Company agrees that
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at the
addresses recorded in the Depositary's books, copies of all notices and reports
(including without limitation financial statements) required by law or by the
rules of any national securities exchange upon which the Stock, the Depositary
Shares or the Receipts are listed, to be furnished to the record holders of
Receipts. Such transmission will be at the Company's expense and the Company
will provide the Depositary with such number of copies of such documents as the
Depositary may reasonably request.
SECTION 5.6 Indemnification by the Company. The Company shall
indemnify the Depositary, any Depositary's Agent and the Registrar against, and
hold each of them harmless from, any loss, liability or expense (including the
reasonable costs and expenses of defending itself) which may arise out of acts
performed or omitted in connection with this Deposit Agreement and the Receipts
by the Depositary, any Registrar or any of their respective agents (including
any Depositary's Agent), except for any liability arising out of gross
negligence, willful misconduct or bad faith on the respective parts of any such
person or persons. The obligations of the Company set forth in this Section 5.6
shall survive any succession of any Depositary or Depositary's Agent.
SECTION 5.7 Charges and Expenses. The Company shall pay all transfer
and other taxes and governmental charges arising solely from the existence of
the depositary arrangements. The Company shall pay charges of the Depositary in
connection with the initial deposit of the Stock and the initial issuance of the
Depositary Shares, all withdrawals of shares of the Stock by owners of
Depositary Shares, and any redemption of the Stock at the option of the Company.
All other transfer and other taxes and governmental charges shall be at the
expense of holders of Depositary Shares. If, at the request of a holder of
Receipts, the Depositary incurs charges or expenses for which it is not
otherwise liable hereunder, such holder will be liable for such charges and
expenses. All other charges and expenses of the Depositary and any Depositary's
Agent hereunder (including, in each case, reasonable fees and expenses of
counsel) incident to the performance of their respective obligations hereunder
will be paid upon consultation and agreement between the Depositary and the
Company as to the amount and nature of such charges and expenses. The
Depositary shall present its statement for charges and expenses to the Company
at such intervals as the Company and the Depositary may agree.
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SECTION 5.8 Tax Compliance. The Depositary, on its own behalf and on
behalf of the Company, will comply with all applicable certification,
information reporting and withholding (including "backup" withholding)
requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made with respect to the Depositary
Shares or (ii) the issuance, delivery, holding, transfer, redemption or exercise
of rights under the Depositary Receipts or the Depositary Shares. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.
The Depositary shall comply with any direction received from the
Company with respect to the application of such requirements to particular
payments or holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 5.3 hereof.
The Depositary shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available on
request to the Company or to its authorized representatives.
ARTICLE VI
Amendment and Termination
SECTION 6.1 Amendment. The form of the Receipts and any provisions
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable; provided, however, that no such amendment (other
-------- -------
than any change in the fees of any Depositary or Registrar, which shall go into
effect not sooner than three months after notice thereof to the holders of the
Receipts) which shall materially adversely alter the rights of the holders of
Receipts shall be effective unless such amendment shall have been approved by
the holders of at least a majority of the Depositary Shares then outstanding.
Every holder of an outstanding Receipt at the time any such amendment becomes
effective shall be deemed, by continuing to hold such Receipt, to be bound by
the Deposit Agreement as amended thereby. Notwithstanding the foregoing, in no
event may any amendment impair the right of any holder of any Depositary Shares,
upon surrender of the Receipts evidencing such Depositary Shares and subject to
any conditions specified in this Deposit Agreement, to receive shares of Stock
and any money or other property represented thereby, except in order to comply
with mandatory provisions of applicable law.
SECTION 6.2 Termination. This Deposit Agreement may be terminated by
the Company at any time upon not less than 60 days' prior written notice to the
Depositary, in which case, on a date that is not later than 30 days after the
date of such notice, the Depositary shall deliver or make available for delivery
to holders of Depositary Shares,
17
<PAGE>
upon surrender of the Receipts evidencing such Depositary Shares, such number of
whole or fractional shares of Stock as are represented by such Depositary
Shares. This Deposit Agreement will automatically terminate after (i) all
outstanding Depositary Shares have been redeemed pursuant to Section 2.8 or (ii)
there shall have been made a final distribution in respect of the Stock in
connection with any liquidation, dissolution or winding up of the Company and
such distribution shall have been distributed to the holders of Depositary
Receipts pursuant to Section 4.1 or 4.2, as applicable.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, the Registrar and any Depositary's Agent under
Sections 5.6 and 5.7.
ARTICLE VII
Miscellaneous
SECTION 7.1 Counterparts. This Deposit Agreement may be executed in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.
SECTION 7.2 Exclusive Benefit of Parties. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.3 Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.4 Notices. Any and all notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to
have been duly given if personally delivered or sent by mail, or by telegram or
facsimile transmission confirmed by letter, addressed to the Company at:
PS Business Parks, Inc.
701 Western Avenue, 2nd Floor
Glendale, California 91201-2397
Facsimile No.: (818) 244-9267
or at any other address of which the Company shall have notified the Depositary
in writing.
18
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Any and all notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram or facsimile transmission
confirmed by letter, addressed to the Depositary at the Depositary's Office, at:
American Stock Transfer & Trust Company
40 Wall Street
46th Floor
New York, NY 10005
Attention: Corporate Trust Department
Facsimile No.: 718-236-4588
or at any other address of which the Depositary shall have notified the Company
in writing.
Any and all notices to be given to any record holder of a Receipt
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or
facsimile transmission confirmed by letter, addressed to such record holder at
the address of such record holder as it appears on the books of the Depositary,
or if such holder shall have filed with the Depositary a written request that
notices intended for such holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail or by telegram or facsimile
transmission shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a telegram
or facsimile transmission) is deposited for mailing by first class mail, postage
prepaid. The Depositary or the Company may, however, act upon any telegram or
facsimile transmission received by it from the other or from any holder of a
Receipt, notwithstanding that such telegram or facsimile transmission shall not
subsequently be confirmed by letter or as aforesaid.
SECTION 7.5 Appointment of Registrar. The Company hereby also
appoints the Depositary as Registrar in respect of the Receipts and the
Depositary hereby accepts such appointments.
SECTION 7.6 Holders of Receipts Are Parties. The holders of Receipts
from time to time shall be parties to this Deposit Agreement and shall be bound
by all of the terms and conditions hereof and of the Receipts by acceptance of
delivery thereof.
SECTION 7.7 Governing Law. THIS DEPOSIT AGREEMENT AND THE RECEIPTS
AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS APPLICABLE TO
CONTRACTS MADE IN AND TO BE PERFORMED IN THE STATE OF NEW YORK, INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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SECTION 7.8 Inspection of Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agent and
shall be open to inspection during business hours at the Depositary's Office or
respective offices of the Depositary's Agent, if any, by any holder of a
Receipt.
SECTION 7.9 Headings. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or the Receipts or to have any bearing upon the meaning
or interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly executed
this Agreement as of the day and year first above set forth, and all holders of
Receipts shall become parties hereto by and upon acceptance by them of delivery
of Receipts issued in accordance with the terms hereof.
PS BUSINESS PARKS, INC.
Attested by:
/s/ Jack E. Corrigan /s/ David Goldberg
_______________________________ ____________________________________
Name: Jack E. Corrigan Name: David Goldberg
Title: Secretary Title: Vice President
Attested by: AMERICAN STOCK TRANSFER &
TRUST COMPANY
/s/ Susan Silber /s/ Herbert J. Lemmer
_______________________________ ____________________________________
Name: Susan Silber Name: Herbert J. Lemmer
Title: Assistant Secretary Title: Vice President
20
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ANNEX A
- -------
The Shares represented by this Depositary Receipt are subject to restrictions on
ownership and transfer for the purpose of assisting this Corporation to maintain
its status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Except as set forth in Article IV of this Corporation's
Articles of Incorporation, no person may Beneficially Own (i) more than 2.0% of
the outstanding shares of Common Stock of this Corporation, or (ii) more than
9.9% of the outstanding shares of any series of Preferred Stock or Equity Stock
of this Corporation, with certain further restrictions and exceptions as are set
forth in this Corporation's Articles of Incorporation. Any Person who attempts
to own or Beneficially Own Shares in excess of the above limitations must notify
this Corporation in writing at least 15 days prior to such attempt. If any of
the restrictions on transfer or ownership set forth in Article IV of the
Articles of Incorporation are violated, the Shares represented hereby will be
automatically transferred to the Charitable Trustee of a Charitable Trust for
the benefit of a Charitable Beneficiary pursuant to the terms of Article IV of
the Articles of Incorporation. In addition, attempted transfers of Shares in
violation of the limitations described above (as modified or expanded upon in
Article IV of the Articles of Incorporation), may be void ab initio. All
-- ------
capitalized terms in this legend have the meanings defined in this
Corporation's Articles of Incorporation, as the same may be amended from time
to time. This Corporation will furnish to the holder hereof, upon request and
without charge, a complete written statement of the terms and conditions of
Article IV of the Articles of Incorporation. Requests for such documents may be
directed to the corporate secretary.
DEPOSITARY SHARES
THIS DEPOSITARY RECEIPT
IS TRANSFERABLE IN
NEW YORK, NY
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 69360J 30 5
DEPOSITARY RECEIPT FOR DEPOSITARY
SHARES EACH REPRESENTING 1/1,000th OF A
SHARE OF 9 1/4% CUMULATIVE PREFERRED STOCK,
SERIES A OF
PS BUSINESS PARKS, INC.
INCORPORATED UNDER THE
LAWS OF THE STATE OF CALIFORNIA
A-1
<PAGE>
American Stock Transfer & Trust Company, as Depositary (the
"Depositary"), hereby certifies that
is the registered owner of _____________________________ DEPOSITARY SHARES
("Depositary Shares"), each Depositary Share representing a 1/1,000 interest in
one share of 9 1/4% Cumulative Preferred Stock, Series A (the "Stock"), of PS
Business Parks, Inc., a California corporation (the "Corporation"), on deposit
with the Depositary, subject to the terms and entitled to the benefits of the
Deposit Agreement dated as of April 28, 1999 (the "Deposit Agreement"), between
the Corporation and the Depositary. By accepting this Depositary Receipt, the
holder hereof becomes a party to and agrees to be bound by all the terms and
conditions of the Deposit Agreement. This Depositary Receipt shall not be valid
or obligatory for any purpose or be entitled to any benefits under the Deposit
Agreement unless it shall have been executed by the Depositary by the manual
and/or facsimile signature of a duly authorized officer or, if executed in
facsimile by the Depositary, counter signed by a Registrar in respect of the
Depositary Receipts by a duly authorized officer.
The Corporation is authorized to issue Common Stock, one or more series of
Preferred Stock, one or more series of Equity Stock and Depositary Shares. The
Corporation will furnish without charge to each receiptholder, who so requests
in writing, a statement of the rights, preferences, privileges and restrictions
granted to or imposed upon the respective classes of shares and upon the holders
thereof, a copy of the Corporation's Bylaws and a copy of the Deposit Agreement.
Any such request shall be made to the Corporation at the principal office of the
Corporation at 701 Western Avenue, Glendale, California 91201-2397, Attention:
Secretary.
This Depositary Receipt is continued on the reverse hereof and the additional
provisions set forth therein (including, without limitation, those relating to
redemption) for all purposes have the same effect as if set forth at this place.
Dated:
Countersigned
AMERICAN STOCK TRANSFER & TRUST COMPANY
Depositary, Transfer Agent and
Registrar
By: ______________________________
Authorized Officer
A-2
<PAGE>
THE SHARES REPRESENTED BY THIS DEPOSITARY RECEIPT ARE SUBJECT TO THE
PROVISIONS OF THE ARTICLES, INCLUDING BUT NOT LIMITED TO (1) SECTION (C) OF THE
CERTIFICATE OF DETERMINATION RELATING TO THE STOCK, WHICH CONFERS UPON THE BOARD
THE RIGHT, ON OR AFTER APRIL 30, 2004, TO CALL FOR REDEMPTION THE STOCK
AND (2) THE PROVISIONS OF THE ARTICLES, WHICH SET FORTH OWNERSHIP LIMITATION
PROVISIONS DESIGNED TO MAINTAIN THE CORPORATION'S QUALIFICATION AS A "REAL
ESTATE INVESTMENT TRUST" UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
1. The Deposit Agreement. Depositary Receipts, of which this
Depositary Receipt is one, are made available upon the terms and conditions set
forth in the Deposit Agreement, dated as of April 28, 1999 (the "Deposit
Agreement"), among the Company, the Depositary and all holders from time to time
of Depositary Receipts. The Deposit Agreement (copies of which are on file at
the principal office maintained by the Depositary which at the time of the
execution of the Deposit Agreement is located at American Stock Transfer & Trust
Company, 40 Wall Street, 46th Floor, New York, NY 10005, Attention: Corporate
Trust Department (the "Depositary's Office") and at the office of any agent of
the Depositary) sets forth the rights of holders of Depositary Receipts and the
rights and duties of the Depositary. The statements made on the face and the
reverse of this Depositary Receipt are summaries of certain provisions of the
Deposit Agreement and are subject to the detailed provisions thereof, to which
reference is hereby made. In the event of any conflict between the provisions
of this Depositary Receipt and the provisions of the Deposit Agreement, the
provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
defined terms used in this summary of the Deposit Agreement shall have the
meanings ascribed thereto in the Deposit Agreement.
3. Redemption of Stock. Whenever the Company shall elect to redeem
shares of Stock, it shall (unless otherwise agreed in writing with the
Depositary) give the Depositary not less than 60 days' notice of the date of
such proposed redemption and of the number of such shares of Stock held by the
Depositary to be so redeemed and the applicable redemption price. The
Depositary shall mail, first-class postage prepaid, notice of the redemption of
Stock and the proposed simultaneous redemption of Depositary Shares representing
the Stock to be redeemed, not less than 30 and not more than 60 days prior to
the date fixed for redemption of such Stock and Depositary Shares, to the record
holders of the Depositary Receipts evidencing the Depositary Shares to be so
redeemed, at the addresses of such holders as the same appear on the records of
the Depositary. Any such notice shall also be published in the same manner as
notices of redemption of the Stock are required to be published by the Company.
On the date of such redemption, the Depositary shall redeem the number of
Depositary Shares representing such redeemed Stock; provided, that the Company
shall then have paid or caused to be paid in full to the Depositary the
redemption price of the Stock to be redeemed, plus any accrued and unpaid
dividends payable with respect thereto to the date of any such redemption. In
case fewer than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed shall be determined pro rata or by lot in a
manner determined by the Board of Directors. Notice having been mailed as
aforesaid, from and after the Redemption Date (unless the Company shall have
failed to provide the funds necessary to redeem the shares of Stock evidenced by
the Depositary Shares called for redemption), dividends on the shares of Stock
so called for redemption shall cease to accrue, the Depositary Shares called for
redemption shall be deemed no longer to be outstanding and all rights of the
holders of Depositary Receipts evidencing such Depositary Shares (except the
right to receive the redemption price) shall, to the extent of such Depositary
Shares, cease and terminate. Upon surrender in accordance with said notice of
the Depositary Receipts evidencing such Depositary Shares (properly endorsed or
assigned for transfer, if the Depositary or applicable law shall so re quire),
such Depositary Shares shall be redeemed at a redemption price per Depositary
Share equal to the same fraction of the redemption price per share paid with
respect to the shares of Stock as the fraction each Depositary Share represents
of a share of Stock plus the same fraction of all money and other property, if
any, represented by such Depositary Shares, including all amounts paid by the
Company in respect of dividends which on the Redemption Date have accumulated on
the shares of Stock to be so redeemed and have not theretofore been paid. The
foregoing
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<PAGE>
is subject further to the terms and conditions of the Certificate of
Determination. If fewer than all of the Depositary Shares evidenced by this
Depositary Receipt are called for redemption, the Depositary will deliver to the
holder of this Depositary Receipt upon its surrender to the Depositary, together
with the redemption payment, a new Depositary Receipt evidencing the Depositary
Shares evidenced by such prior Depositary Receipt and not called for redemption.
4. Surrender of Depositary Receipts and Withdrawal of Stock. Upon
surrender of this Depositary Receipt to the Depositary at the Depositary's
Office or at such other offices as the Depositary may designate, and subject to
the provisions of the Deposit Agreement, the holder hereof is entitled to
withdraw, and to obtain delivery, without unreasonable delay, to or upon the
order of such holder, any or all of the Stock (but only in whole shares of
Stock) and all money and other property, if any, at the time represented by the
Depositary Shares evidenced by this Depositary Receipt; provided, however, that,
in the event this Depositary Receipt shall evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the whole
number of shares of Stock to be withdrawn, the Depositary shall, in addition to
such whole number of shares of Stock and such money and other property, if any,
to be withdrawn, deliver, to or upon the order of such holder, a new Depositary
Receipt or Depositary Receipts evidencing such excess number of whole Depositary
Shares.
5. Transfers, Split-ups, Combinations. Subject to the Deposit
Agreement, this Depositary Receipt is transferable on the books of the
Depositary upon surrender of this Depositary Receipt to the Depositary,
properly endorsed or accompanied by a properly executed instrument of transfer,
and upon such transfer the Depositary shall sign and deliver a Depositary
Receipt or Depositary Receipts to or upon the order of the person entitled
thereto, all as provided in and subject to the Deposit Agreement. This
Depositary Receipt may be split into other Depositary Receipts or combined with
other Depositary Receipts into one Depositary Receipt evidencing the same
aggregate number of Depositary Shares evidenced by the Depositary Receipt or
Depositary Receipts surrendered; provided, however, that the Depositary shall
not issue any Depositary Receipt evidencing a fractional Depositary Share.
6. Conditions to Signing and Delivery, Transfer, etc., of Depositary
Receipts. Prior to the execution and delivery, registration of transfer, split-
up, combination, surrender or exchange of this Depositary Receipt, the
Depositary, any of the Depositary's Agents or the Company may require any or all
of the following: (i) payment to it of a sum sufficient for the payment (or, in
the event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge with respect
thereto; (ii) production of proof satisfactory to it as to the identity and
genuineness of any signature; and (iii) compliance with such reasonable
regulations, if any, as the Depositary or the Company may establish not
inconsistent with the Deposit Agreement.
7. Suspension of Delivery, Transfer, etc. The deposit of Stock may
be refused, the delivery of this Depositary Receipt against Stock may be
suspended, the registration of transfer of Depositary Receipts may be refused
and the registration of transfer, surrender or exchange of this Depositary
Receipt may be suspended (i) during any period when the register of
stockholders of the Company is closed or (ii) if any such action is deemed
necessary or advisable by the Depositary, any of the Depositary's Agents or the
Company at any time or from time to time because of any requirement of law or of
any government or governmental body or commission, or under any provision of the
Deposit Agreement.
8. Amendment. The form of the Depositary Receipts and any provision
of the Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable; provided, however, that no such amendment (other
than any changes in the fees of any Depositary or Registrar which shall go into
effect not sooner than three months after Notice thereof to the holders of the
Depositary Receipts) which shall materially adversely alter the rights of
holders of Depositary Receipts shall be effective unless such amendment shall
have been approved by at least a majority of the Depositary Shares then
outstanding. The holder of this
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<PAGE>
Depositary Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold this Depositary Receipt, to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair the
right of the owner of the Depositary Shares evidenced by this Depositary Receipt
to surrender this Depositary Receipt with instructions to the Depositary to
deliver to the holder the Stock and all money and other property, if any,
represented thereby, except in order to comply with mandatory provisions of
applicable law.
9. Charges and Expenses. The Company will pay all transfer and
other taxes and governmental charges arising solely from the existence of the
depositary arrangement, except such charges as are expressly provided in the
Deposit Agreement to be at the expense of holders of Depositary Receipts.
10. Title to Depositary Receipts. Title to this Depositary Receipt,
when properly endorsed or accompanied by a properly executed instrument of
transfer, is transferable by delivery with the same effect as in the case of a
negotiable instrument; provided, however, that the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the absolute owner hereof for the purpose of determining the person
entitled to distribution of dividends or other distributions or to any notice
provided for in the Deposit Agreement and for all other purposes.
11. Dividends and Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to the provisions of the Deposit Agreement, distribute
to record holders of Depositary Receipts such amounts of such sums as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Depositary Receipts held by such holders; provided,
however, that in case the Company or the Depositary shall be required by law to
withhold and does withhold from any cash dividend or other cash distribution in
respect of the Stock an amount on account of taxes or as otherwise required by
law, regulation or court process, the amount made available for distribution or
distributed in respect of Depositary Shares shall be reduced accordingly. In
the event that the calculation of any such cash dividend or other cash
distribution to be paid to any record holder on the aggregate number of
Depositary Receipts held by such holder results in an amount which is a fraction
of a cent, the amount the Depositary shall distribute to such record holder
shall be rounded to the next highest whole cent; and upon request of the
Depositary, the Company shall pay the additional amount to the Depositary for
distribution.
12. Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose name
Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the Deposit
Agreement, be made available by the Depositary to the record holders of
Depositary Receipts in such manner as the Depositary shall determine.
13. Notice of Dividends, Fixing of Record Date. Whenever (i) any
cash dividend or other cash distribution shall become payable, or any
distribution other than cash shall be made, or any rights, preferences or
privileges shall at any time be offered, with respect to the Stock, or (ii) the
Depositary shall receive notice of any meeting at which holders of Stock are
entitled to vote or of which holders of Stock are entitled to notice or whenever
the Depositary and the Company shall decide it is appropriate, the Depositary
shall in each such in stance fix a record date (which shall be the same date as
the record date fixed by the Company with respect to the Stock) for the
determination of the holders of Depositary Receipts (x) who shall be entitled to
receive such dividend, distribution, rights, preferences or privileges or the
net proceeds of the sale thereof, or (y) who shall be entitled to give
instructions for the exercise of voting rights at any such meeting or to receive
notice of such meeting or for any other appropriate reasons.
14. Voting Rights. Upon receipt of notice of any meeting at which
the holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of
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<PAGE>
Depositary Receipts a notice, which shall contain (i) such information as is
contained in such notice of meeting, (ii) a statement that the holders may,
subject to any applicable restrictions, instruct the Depositary as to the
exercise of the voting rights pertaining to the Stock represented by their
respective Depositary Shares, and (iii) a brief statement as to the manner in
which such instructions may be given. Upon the written request of a holder of
this Depositary Receipt on such record date the Depositary shall use its best
efforts to vote or cause to be voted the Stock represented by the Depositary
Shares evidenced by this Depositary Receipt in accordance with the instructions
set forth in such request. The Company hereby agrees to take all action that may
be deemed necessary by the Depositary in order to enable the Depositary to vote
such Stock or cause such Stock to be voted. In the absence of specific
instructions from the holder of this Depositary Receipt, the Depositary will
abstain from voting to the extent of the Stock represented by the Depositary
Shares evidenced by this Depositary Receipt.
15. Reports, Inspection of Transfer Books. The Depositary shall
transmit to the record holders of Depositary Receipts copies of all reports and
communications received from the Company that are received by the Depositary as
the holder of Stock. The Depositary shall keep books at the Corporate Office
for the registration and transfer of Depositary Receipts, which books at all
reasonable times will be open for inspection by the record holders of Depositary
Receipts; provided that any such holder requesting to exercise such right shall
certify to the Depositary that such inspection shall be for a proper purpose
reasonably related to such person's interest as an owner of Depositary Shares.
16. Liability of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's Agent
nor the Registrar nor the Company shall incur any liability to any holder of
this Depositary Receipt, if by reason of any provision of any present or future
law or regulation thereunder of any governmental authority or, in the case of
the Depositary, the Registrar or any Depositary's Agent, by reason of any
provision present or future, of the Articles of Incorporation or by reason of
any act of God or war or other circumstances beyond the control of the relevant
party, the Depositary, any Depositary's Agent, the Registrar or the Company
shall be prevented or forbidden from doing or performing any act or thing that
the terms of the Deposit Agreement provide shall be done or performed; nor shall
the Depositary, any Depositary's Agent, the Registrar or the Company incur any
liability to any holder of this Depositary Receipt (i) by reason of any
nonperformance or delay, caused as aforesaid, in the performance of any act or
thing that the terms of the Deposit Agreement provide shall or may be done or
performed, or (ii) by reason of any exercise of, or failure to exercise, any
discretion provided for in the Deposit Agreement except if such exercise or
failure to exercise discretion is caused by its gross negligence or willful
misconduct.
17. Obligations of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's Agent
nor the Registrar nor the Company assumes any obligation or shall be subject to
any liability under the Deposit Agreement or this Depositary Receipt to the
holder hereof or other persons, other than for its gross negligence, willful
misconduct or bad faith.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding with respect to Stock, Depositary Shares or
Depositary Receipts or Common Stock that in its opinion may involve it in
expense or liability, unless indemnity satisfactory to it against all expense
and liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company will be liable for any action or failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of this Depositary Receipt or
any other person believed by it in good faith to be competent to give such
advice or information.
18. Termination of Deposit Agreement. Whenever so directed by the
Company upon not less than 60 days' prior written notice, the Depositary will
terminate the Deposit Agreement by mailing notice
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<PAGE>
of such termination to the record holders of all Depositary Receipts then
outstanding at least 30 days after the date of such notice. Upon the termination
of the Deposit Agreement, the Company shall be discharged to all obligations
thereunder except for its obligations to the Depositary, any Depositary's Agent
and any Registrar under Sections 5.6 and 5.7 of the Deposit Agreement.
19. Governing Law. The Deposit Agreement and this Depositary Receipt
and all rights thereunder and hereunder and provisions thereof and hereof shall
be governed by, and construed in accordance with, the law of the State of New
York, including without limitation Section 5-1401 of the New York General
Obligations Law.
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<PAGE>
The following abbreviations, when used in the inscription on the face of
this Depositary Receipt, shall be construed as though they were written out in
full according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT -______ Custodian _______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as Act ____________
tenants in common (State)
UNIF TRF MIN ACT -______ Custodian (until age __)
(Cust)
_______ under Uniform Transfers
(Minor)
to Minors Act _________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
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<PAGE>
For Value Received, ____________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________
______________________________________
______________________________________________________________________________
______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
________________________ Depositary Shares represented by the within
Depositary Receipt, and do hereby irrevocably constitute and appoint
________________________ Attorney to transfer the said Depositary Shares
on the books of the within named Depositary with full power of substitution
in the premises.
Dated _______________________________ Signed
_________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THIS DEPOSITARY RECEIPT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED
By ______________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
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<PAGE>
Exhibit 5.1
David Goldberg
Vice President and Counsel
PS Business Parks, Inc.
701 Western Avenue
Glendale, California 91201-2397
April 28, 1999
PS Business Parks, Inc.
701 Western Avenue
Glendale, California 91201-2397
Gentlemen:
As Vice President and Counsel of PS Business Parks, Inc. (the
"Company"), I have examined the Company's Registration Statement on Form S-3
(File No. 333-50463) which was declared effective by the Securities and Exchange
Commission on May 15, 1998 (the "Registration Statement") and the prospectus
which is a part thereof (the "Prospectus"), which relates to the offer and sale
of up to $500,000,000 stated amount of (i) shares of preferred stock, par value
$.01 per share (the "Preferred Shares"), (ii) depositary shares (the "Depositary
Shares") representing a fractional interest in a Preferred Share, (iii) shares
of equity stock, par value $.01 per share (the "Equity Shares"), (iv) shares of
common stock, par value $.01 per share (the "Common Shares") and (v) warrants
(the "Warrants").
I am familiar with the proceedings taken or to be taken by the Company
relating to the authorization and issuance of the Preferred Shares, the
Depositary Shares, the Equity Shares, the Common Shares and the Warrants in the
manner set forth in the Registration Statement. I have also examined the
Company's Restated Articles of Incorporation and Restated Bylaws and have made
such other investigation as I have deemed necessary in order to express the
opinions contained herein.
This opinion is rendered in connection with the proposed public
offering of up to 2,300,000 Depositary Shares Each Representing 1/1,000 of a
Share of 9 1/4% Cumulative Preferred Stock, Series A (the "Shares"), as
described in the Prospectus Supplement of the Company dated April 28, 1999 (the
"Prospectus Supplement").
It is my opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of California.
2. The Shares, when issued and delivered in the manner and on the
terms described in the Prospectus and the Prospectus Supplement and payment of
the agreed consideration therefor has been received by the Company, will be
legally issued, fully paid and nonassessable.
I hereby consent to the reference to me under the caption "Legal
Opinions" in the Registration Statement and to the filing of this opinion as an
exhibit to this Current Report on Form 8-K.
Very truly yours,
/s/ DAVID GOLDBERG
DAVID GOLDBERG
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Prospectus of PS Business Parks, Inc. (included in Amendment No. 1 to the
Registration Statement on Form S-3 (No. 333-50463)) for the registration of
shares of its preferred stock, its depositary shares, its equity stock, shares
of its common stock and warrants for the purchase of its preferred stock, equity
stock and common stock and to the incorporation by reference therein of our
report dated February 2, 1999 with respect to the consolidated financial
statements and schedule of PS Business Parks, Inc. in its Annual Report on Form
10-K for the year ended December 31, 1998.
/s/ Ernst & Young LLP
Los Angeles, California
April 28, 1999
