PSB » Topics » Exchange Notice

This excerpt taken from the PSB 8-K filed Mar 16, 2007.
Exchange Notice”) delivered to the General Partner by the holder who is exercising such exchange right, by (a) fax and (b) by certified mail postage prepaid. The exchange of Series Q Preferred Units may be effected after the fifth (5th) Business Day following receipt by the General Partner of the Exchange Notice by delivering certificates, if any, representing such Series Q Preferred Units to be exchanged together with, if applicable, written notice of exchange and a proper assignment of such Series Q Preferred Units to the office of the General Partner maintained for such purpose. Currently, such office is c/o PS Business Parks, Inc., 701 Western Avenue, Glendale, California 91201, Attention: Edward A. Stokx. Each exchange will be deemed to have been effected immediately prior to the close of business on the date on which such Series Q Preferred Units to be exchanged (together with all required documentation) shall have been surrendered and notice shall have been received by the General Partner as aforesaid and the Series Q Exchange Price shall have been paid. Any Series Q Preferred Stock issued pursuant to this Section 8 shall be delivered, as promptly as practicable, as shares which are duly authorized, validly issued, fully paid and nonassessable, free of pledge, lien, encumbrance or restriction other than those provided in the Charter, the Bylaws of the General Partner, the Securities Act of 1933, as amended, and relevant state securities or blue sky laws.

 

(ii)         In the event of an exchange of Series Q Preferred Units for shares of Series Q Preferred Stock, an amount equal to the accrued and unpaid Priority Return, whether or

not declared, to the date of exchange on any Series Q Preferred Units tendered for exchange shall (a) accrue on the shares of the Series Q Preferred Stock into which such Series Q Preferred Units are exchanged, and (b) continue to accrue on such Series Q Preferred Units, which shall remain outstanding following such exchange, with the General Partner as the holder of such Series Q Preferred Units. Notwithstanding anything to the contrary set forth herein, in no event shall a holder of a Series Q Preferred Unit that was validly exchanged into Series Q Preferred Stock pursuant to this section (other than the General Partner now holding such Series Q Preferred Unit), receive a distribution from the Partnership, if such holder, after exchange, is entitled to receive a distribution from the General Partner with respect to the share of Series Q Preferred Stock for which such Series Q Preferred Unit was exchanged or redeemed.

 

(iii)       Fractional shares of Series Q Preferred Stock are not to be issued upon exchange but, in lieu thereof, the General Partner will pay a cash adjustment based upon the fair market value of the Series Q Preferred Stock on the day prior to the exchange date as determined in good faith by the Board of Directors of the General Partner.

 

(c)         Adjustment of Series Q Exchange Price. (i) The Series Q Exchange Price is subject to adjustment upon certain events, including, (a) subdivisions, combinations and reclassification of the Series Q Preferred Stock, and (b) distributions to all holders of Series Q Preferred Stock of evidences of indebtedness of the General Partner or assets (including securities, but excluding dividends and distributions paid in cash out of equity applicable to Series Q Preferred Stock).

 

(ii)         In case the General Partner shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the General Partner’s capital stock or sale of all or substantially all of the General Partner’s assets), in each case as a result of which the Series Q Preferred Stock will be converted into the right to receive shares of capital stock, other securities or other property (including cash or any combination thereof), each Series Q Preferred Unit will thereafter be exchangeable into the kind and amount of shares of capital stock and other securities and property receivable (including cash or any combination thereof) upon the consummation of such transaction by a holder of that number of shares of Series Q Preferred Stock or fraction thereof into which one Series Q Preferred Unit was exchangeable immediately prior to such transaction. The General Partner may not become a party to any such transaction unless the terms thereof are consistent with the foregoing. In addition, so long as the Contributor or any of its permitted successors or assigns holds any Series Q Preferred Units, the General Partner shall not, without the affirmative vote of the holders of at least a majority of the Series Q Preferred Units outstanding at the time: (a) designate or create, or increase the authorized or issued amount of, any class or series of shares ranking senior to the Series Q Preferred Stock with respect to the payment of distributions or rights upon liquidation, dissolution or winding-up or reclassify any authorized shares of the General Partner into any such shares, or create, authorize or issue any obligations or securities convertible into or evidencing the right to purchase any such shares; or (b) amend, alter or repeal the provisions of the Charter or Bylaws of the General Partner, whether

by merger, consolidation or otherwise, that would materially and adversely affect the powers, special rights, preferences, privileges or voting power of the Series Q Preferred Stock or the holders thereof; provided, however, that any increase in the amount of authorized Preferred Shares or the creation or issuance of any other series or class of Preferred Shares, or any increase in the amount of authorized shares of each class or series, in each case ranking either (1) junior to the Series Q Preferred Stock with respect to the payment of distributions and the distribution of assets upon liquidation, dissolution or winding-up, or (2) on a parity with the Series Q Preferred Stock with respect to the payment of distributions and the distribution of assets upon liquidation, dissolution or winding-up shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. In the event of a conflict between the provisions of this Section 8(c)(ii) and any provision of the Partnership Agreement, the provisions of this Section 8(c)(ii) shall control.

 

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