-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OyRGE6vWLFGT4E2GSvkCYhEyyJpJgmbQo1Hs9aGEuVtt2oPQx8pRzTS5EbJe6QxE A2QAVYwY+VXSgaGYXY90wg== 0000318380-06-000023.txt : 20060511 0000318380-06-000023.hdr.sgml : 20060511 20060511165726 ACCESSION NUMBER: 0000318380-06-000023 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060509 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060511 DATE AS OF CHANGE: 20060511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC STORAGE INC /CA CENTRAL INDEX KEY: 0000318380 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 953551121 STATE OF INCORPORATION: CA FISCAL YEAR END: 0506 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08389 FILM NUMBER: 06830866 BUSINESS ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: STE 200 CITY: GLENDALE STATE: CA ZIP: 91201-2349 BUSINESS PHONE: (818) 244-8080 MAIL ADDRESS: STREET 1: 701 WESTERN AVE STREET 2: SUITE 200 CITY: GLENDALE STATE: CA ZIP: 91201 FORMER COMPANY: FORMER CONFORMED NAME: STORAGE EQUITIES INC DATE OF NAME CHANGE: 19920703 8-K 1 psi8k_050906.txt PUBLIC STORAGE, INC. 8K MAY 9, 2006 UNITED STATES 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): May 9, 2006 PUBLIC STORAGE INC. (Exact Name of Registrant as Specified in its Charter) California 1-8389 95-3551121 (State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Incorporation) Identification No.) 701 Western Avenue, Glendale, California 91201-2349 (Address of Principal Executive Offices) (Zip Code) (818) 244-8080 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement On May 9, 2006, Public Storage, Inc., a California corporation (the "Company"), entered into a contribution agreement (the "Contribution Agreement") among the Company, PSA Institutional Partners, L.P., a California limited partnership ("PSAIP") and a majority - owned indirect subsidiary of the Company, and Belair Real Estate Corporation, Belport Realty Corporation, Belrose Realty Corporation, Belshire Realty Corporation, Belterra Realty Corporation, Belwater Realty Corporation, and Clearwood Realty Corporation (the "Contributors"). The Contribution Agreement relates to the sale of 7.25% Series J Cumulative Redeemable Perpetual Preferred Units ("Series J Preferred Units") of PSAIP to the Contributors. The sale was completed on May 9, 2006. Under certain circumstances, the Series J Preferred Units are exchangeable for shares of the Company's 7.25% Series J Cumulative Redeemable Preferred Stock (the "Series J Preferred Stock"). The Series J Preferred Stock is registrable under the Securities Act of 1933, as amended (the "Securities Act") in the circumstances contemplated by the Registration Rights Agreement dated as of May 9, 2006 (the "Registration Rights Agreement") between the Company and the Contributors. The Registration Rights Agreement is attached hereto as Exhibit 4.1. Item 3.02. Unregistered Sales of Equity Securities On May 9, 2006, and pursuant to the Contribution Agreement, PSAIP sold 4,000,000 7.25% Series J Cumulative Preferred Redeemable Perpetual Preferred Units to the Contributors for $100,000,000. The terms of the Series J Preferred Units are specified by the Fourth Amendment to Amended and Restated Agreement of Limited Partnership of PSAIP dated as of May 9, 2006 (the "Fourth Amendment"), which is attached hereto as Exhibit 10.1. Under the Fourth Amendment, PSAIP has the right to redeem the Series J Preferred Units on or after the fifth anniversary of issuance at the Liquidation Preference as defined in the Partnership Agreement. The Series J Preferred Units are exchangeable for depositary shares representing interests in shares of Series J Preferred Stock on or after the tenth anniversary of issuance at the option of a holder or PSAIP, at a rate of one Series J Preferred Unit for one depositary shares representing one thousandth (1/1000) of a share of Series J Preferred Stock, subject to certain adjustments. In addition, under certain circumstance, Series J Preferred Units may be exchanged prior to the tenth anniversary of the date of issuance. Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year Under the Company's Articles of Incorporation, as amended, the Company's Board of Directors is authorized without further shareholder action to provide for the issuance of up to 50,000,000 shares of preferred stock. Effective as of May 9, 2006, the Company filed with the Secretary of State of the State of California a Certificate of Determination designating 4,000 shares of the Company's preferred stock as "7.25% Series J Cumulative Redeemable Preferred Stock." A copy of the Certificate of Determination, which specifies the terms of the Series N Preferred Stock is attached hereto as Exhibit 3.1. Item 7.01. Regulation FD Disclosure On May 9, 2006, PSAIP and the Company issued a press release announcing the sale of the Series J Preferred Units. The information in Item 7.01 of this Form 8-K and Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing. Item 9.01. Financial Statements and Exhibits (d) Exhibits Exhibits 3.1, 4.1 and 10.1 shall be deemed filed. Exhibit 99.1, relating to Item 7.01, shall be deemed to be furnished, and not filed: Exhibit 3.1- Certificate of Determination of Preferences of 7.25% Series J Cumulative Redeemable Preferred Stock of Public Storage, Inc. Exhibit 4.1- Registration Rights Agreement dated as of May 9, 2006, among the Company and the Contributors Exhibit 10.1- Fourth Amendment, dated as of May 9, 2006, to Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P. Exhibit 99.1- Press Release dated May 9, 2006 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. Date: May 9, 2006 By: /s/ Stephanie Heim ------------------- Stephanie Heim Vice President, Corporate Counsel and Secretary EX-3 2 psi8k5906_ex31.txt EXHIBIT 3.1 Exhibit 3.1 CERTIFICATE OF DETERMINATION OF PREFERENCES OF 7.25% CUMULATIVE PREFERRED STOCK, SERIES J OF PUBLIC STORAGE, INC. The undersigned, John Reyes and Stephanie Heim, Senior Vice President and Chief Financial Officer, and Secretary, respectively, of PUBLIC STORAGE, 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 "7.25% Cumulative Preferred Stock, Series J" consisting of 4,000 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 9th day of May, 2006. /s/ John Reyes -------------- John Reyes Senior Vice President and Chief Financial Officer /s/ Stephanie Heim ------------------ Stephanie Heim Secretary EXHIBIT A RESOLUTION OF THE BOARD OF DIRECTORS OF PUBLIC STORAGE, INC. ESTABLISHING A SERIES OF 7.25% CUMULATIVE PREFERRED STOCK, SERIES J 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 "7.25% Cumulative Preferred Stock, Series J," shall consist of 4,000 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 date of issuance of such share (the "Issue Date") to but excluding the first day of the first calendar quarter occurring after the Issue Date, 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 the first day of the first calendar quarter occurring after the Issue Date, and shall end on and include the day next preceding the next Dividend Period Commencement Date, at a rate per annum equal to 7.25% of the $25,000 per share stated value thereof (the "Dividend Rate"). Dividends on each share of this Series shall be cumulative from the Issue Date of such share and shall be payable, without interest thereon, when, as and if declared by the Board of Directors, (i) on or before March 31, June 30, September 30 and December 31 of each year and (ii) in the event of redemption, on the applicable redemption 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 holders of record of shares of this Series as they appear 3 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. (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 (including, without limitation, the shares of the Corporation's 6.40% Cumulative Preferred Stock, Series NN (the "Series NN Preferred Stock"), 8.000% Cumulative Preferred Stock, Series R (the "Series R Preferred Stock"), 7.875% Cumulative Preferred Stock, Series S (the "Series S Preferred Stock"), 7.625% Cumulative Preferred Stock, Series T (the "Series T Preferred Stock"), 7.625% Cumulative Preferred Stock, Series U (the "Series U Preferred Stock"), 7.500% Cumulative Preferred Stock, Series V (the "Series V Preferred Stock"), 6.500% Cumulative Preferred Stock, Series W (the "Series W Preferred Stock"), 6.450% Cumulative Preferred Stock, Series X (the "Series X Preferred Stock"), 6.850% Cumulative Preferred Stock, Series Y (the "Series Y Preferred Stock"), 6.250% Cumulative Preferred Stock, Series Z (the "Series Z Preferred Stock"), 6.125% Cumulative Preferred Stock, Series A (the "Series A Preferred Stock"), 7.125% Cumulative Preferred Stock, Series B (the "Series B Preferred Stock"), 6.60% Cumulative Preferred Stock, Series C (the "Series C Preferred Stock"), 6.18% Cumulative Preferred Stock, Series D (the "Series D Preferred Stock"), 6.75% Cumulative Preferred Stock, Series E (the "Series E Preferred Stock"), 6.45% Cumulative Preferred Stock, Series F (the "Series F Preferred Stock"), 7.00% Cumulative Preferred Stock, Series G (the "Series G Preferred Stock"), 6.95% Cumulative Preferred Stock, Series H (the "Series H Preferred Stock"), and 7.25% Cumulative Preferred Stock, Series I (the "Series I Preferred Stock")) 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 4 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 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 $.10 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 (including the shares of Series NN Preferred Stock, Series R Preferred Stock, Series S Preferred Stock, Series T 5 Preferred Stock, Series U Preferred Stock, Series V Preferred Stock, Series W Preferred Stock, Series X Preferred Stock, Series Y Preferred Stock, Series Z Preferred Stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series H Preferred Stock and Series I Preferred Stock) 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. (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 May 9, 2011. 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 redeemed 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. 6 (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 the Corporation and so stated in the notice) of their certificates, and the shares represented thereby shall no 7 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 J 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 J 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, 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 (i) the closing sale price on any national securities exchange or trading market on which the shares of this Series are listed, or (ii) the last quoted price as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or any other United States automated inter-dealer quotation system, on the last business day prior to the redemption date, or if the shares of this Series so called for redemption are not listed on any such exchange, trading market or quotation system, at $25,000 per share of this Series (subject to adjustment in the case of stock splits, combinations, stock dividends and similar transactions); 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 8 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 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, 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 9 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 Shareholders 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 (including the shares of Series NN Preferred Stock, Series R Preferred Stock, Series S Preferred Stock, Series T Preferred Stock, Series U Preferred Stock, Series V Preferred Stock, Series W Preferred Stock, Series X Preferred Stock, Series Y Preferred Stock, Series Z Preferred Stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series H Preferred Stock and Series I Preferred Stock), 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. (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 EX-4 3 psi8k5906_ex41.txt EXHIBIT 4.1 Exhibit 4.1 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENt"), dated as of May 9, 2006, is entered into by and between PUBLIC STORAGE, INC., a California corporation (the "Company"), and BELAIR REAL ESTATE CORPORATION, BELPORT REALTY CORPORATION, BELROSE REALTY CORPORATION, BELSHIRE REALTY CORPORATION, BELTERRA REALTY CORPORATION, BELWATER REALTY CORPORATION and CLEARWOOD REALTY CORPORATION, each a Delaware corporation (each a "Contributor", and collectively "Contributors"). RECITALS WHEREAS, in connection with the offering of 4,000,000 7.25% Series J Cumulative Redeemable Preferred Units (the "SERIES J PREFERRED UNITS") of PSA Institutional Partners, L.P., a California limited partnership ( the "OPERATING PARTNERSHIP"), Contributors contributed to the Operating Partnership $100,000,000, in the aggregate, in return for the Series J Preferred Units on terms and conditions set forth in the Contribution Agreement, dated as of the date hereof, by and among Contributors, the Company and Operating Partnership (the "Contribution Agreement"); WHEREAS, the Contributors will receive the Series J Preferred Units in exchange for cash contributed to the Operating Partnership; WHEREAS, pursuant to the Agreement of Limited Partnership of Operating Partnership, dated as of the date hereof (as the same may be amended from time to time in accordance with the terms thereof, the "AGREEMENT OF LIMITED PARTNERSHIP"), the Series J Preferred Units owned by the Contributors or their successors and assigns will be redeemable for cash or exchangeable for shares of the Company's 7.25% Series J Cumulative Redeemable Preferred Shares (the "PREFERRED SHARES") or depository shares representing fractional interests in the Preferred Shares upon the terms and subject to the conditions contained therein; and WHEREAS, in order to induce the Contributors to enter into the Contribution Agreement, the Company and the Operating Partnership have agreed to enter into this Agreement and to provide registration rights set forth herein to the Contributors and any subsequent holder or holders of the Series J Preferred Units and Registrable Securities (as hereinafter defined). NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. DEFINITIONS. 1 As used in this Agreement, the following capitalized defined terms shall have the following meanings: "AFFILIATE" shall mean, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. "AGREEMENT" shall have the meaning set forth in the preamble. "AGREEMENT OF LIMITED PARTNERSHIP" shall have the meaning set forth therefor in the Recitals. "CLOSING DATE" shall mean the date of closing of the Operating Partnership's sale of Series J Preferred Units to the Contributors. "COMPANY" shall have the meaning set forth in the preamble and shall also include the Company's successors or other parties who succeed to the Company's obligations hereunder. "CONTRIBUTION AGREEMENT" shall have the meaning set forth in the preamble. "CONTRIBUTORS" shall have the meaning set forth in the preamble and shall include their successors and permitted assigns. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, and any successor statute thereto, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the relevant time. "HOLDER" shall mean (i) any Contributor holding Registrable Securities or (ii) any Person holding Registrable Securities as a result of a transfer or assignment of Registrable Securities to that Person other than pursuant to an effective Registration Statement or Rule 144 under the Securities Act and who has agreed to be bound by the terms of this Agreement, in each case where securities sold in such transaction may be resold in a public distribution without subsequent registration under the Securities Act, and together the entities described in clauses (i) and (ii) hereof shall be "Holders". "INDEMNIFIED PARTY" shall have the meaning set forth in Section 7(c) hereof. "INDEMNIFYING PARTY" shall have the meaning set forth in Section 7(c) hereof. "OPERATING PARTNERSHIp" shall have the meaning set forth therefor in the Recitals. "PERSON" shall mean an individual, partnership, corporation, trust, or unincorporated organization, or government or agency or political subdivision thereof. "PREFERRED SHARES" shall have the meaning set forth therefor in the Recitals. 2 "PROSPECTUS" shall mean the prospectus included in a Registration Statement, including any preliminary Prospectus, and any such Prospectus as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and by all other amendments and supplements to such Prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein. "REGISTERING HOLDERS" shall have the meaning set forth in Section 2(b) hereof. "REGISTRABLE SECURITIES" shall mean (i) the shares of Preferred Shares issued by the Company to the holders of the Series J Preferred Units in exchange for the Series J Preferred Units, (ii) any securities issued or issuable with respect to the Preferred Shares issued in exchange for the Series J Preferred Units by way of a stock split or stock dividend or in connection with a combination of shares recapitalization, merger, consolidation or other reorganization and (iii) depository shares representing fractional interests in the Preferred Shares; provided, however, that the securities listed above shall cease to be Registrable Securities to the extent that (i) a Registration Statement with respect to such securities shall have been declared effective under the Securities Act and remains effective as provided herein, (ii) all such securities are eligible for resale in a public distribution pursuant to Rule 144 or otherwise without holding periods or volume limitations, or (iii) such securities have been disposed of pursuant to such Registration Statement. "REGISTRATION EXPENSES" shall mean any and all expenses incident to the Company's performance of or compliance with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. ("NASD") registration, listing and filing fees, (ii) all reasonable fees and expenses incurred in connection with compliance with federal or state securities or blue sky laws (including reasonable fees and disbursements of counsel for any Underwriters and one counsel (reasonably acceptable to Company) to the Holders in connection with state or federal securities law compliance and blue sky qualification of any of the Registrable Securities and the preparation of a "blue sky" memorandum and compliance with the rules of the NASD), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, duplicating, printing, delivering and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements, certificates and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing of any of the Registrable Securities on any securities exchange or the Nasdaq National Market pursuant to Section 4(k) hereof, (v) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company (including, without limitation, the expenses of any annual or special audit and comfort letters required by the Underwriters), but excluding underwriting discounts and commission and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder; (vi) Securities Act liability insurance, if the Company so desires; and (vii) fees and expenses of other Persons reasonably necessary in connection with the registration, including any experts, transfer agent or registrar, retained by the Company. "REGISTRATION REQUEST" shall have the meaning set forth in Section 2(b) hereof. 3 "REGISTRATION STATEMENT" shall mean a Registration Statement of the Company which covers all or part of the Registrable Securities on an appropriate form under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "SEC" shall mean the Securities and Exchange Commission or any successor federal agency. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and any successor statute thereto, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the relevant time. "SERIES J PREFERRED UNITs" shall have the meaning therefor set forth in the Recitals. "UNDERWRITER" means a securities dealer who purchases any Registrable Securities as principal and not as part of such dealer's market-making activities. "UNDERWRITTEN OFFERING" shall mean a sale of securities of the Company to an underwriter or underwriters for reoffering to the public. 2. REGISTRATION UNDER THE SECURITIES ACT. (a) FILING OF SHELF REGISTRATION STATEMENT. At any Holder's request, the Company shall file, on or before the date which is the tenth (10th) anniversary of the Closing Date or within forty-five (45) days after such earlier date as all Series J Preferred Units shall be exchanged for Preferred Shares, a "shelf" Registration Statement providing for the sale of all of the Registrable Securities of the Holder. The Company shall use its best efforts to have such shelf Registration Statement declared effective by the SEC within one hundred and twenty (120) days thereafter. The Company agrees to use its best efforts to keep the shelf Registration Statement continuously effective for a period of two (2) years following the date the Registration Statement is declared effective, or such shorter period which will terminate when all of the Registrable Securities covered by the shelf Registration Statement have been sold pursuant to the shelf Registration Statement. The Company further agrees, if necessary, to supplement or amend the shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registration. Any offering pursuant to a shelf registration provided for in this Section 2(a) may, at the election of the Holders of a majority of the Registrable Securities, be an Underwritten Offering. (b) DEMAND REGISTRATION. (i) At any time during which a shelf Registration Statement is not effective with respect to the Registrable 4 Securities, upon receipt of a written request (a "REGISTRATION REQUEST"), which shall include a description of such Holders' proposed method of distribution (which method may, at the election of the Holders of a majority of the Registrable Securities, also include an Underwritten Offering by a nationally recognized Underwriter selected by the Company and reasonably acceptable to the Registering Holders) from Holders holding Registrable Securities having an aggregate expected offering price of at least $50,000,000 (or, if the expected offering price of all remaining Registrable Securities should be less than $50,000,000, such lesser amount), the Company shall (i) promptly give notice of the Registration Request to all non-requesting Holders and (ii) prepare and file with the SEC, within forty-five (45) days after receipt of such Registration Request, a Registration Statement for the sale of all Registrable Securities held by the requesting Holders and any other Holder who makes a written request of the Company to have her or his Registrable Securities included in such Registration Statement, which such written request must be received by the Company within ten (10) days after such Holder receives the Registration Request (all of such Holders, collectively, the "REGISTERING HOLDERS"). Upon receipt of such written request, the Company shall use its best efforts to cause such Registration Statement to be declared effective within one hundred twenty (120) days after receipt of a Registration Request. The Company shall keep such Registration Statement continuously effective until the earlier of either: (i) the date on which all Registrable Securities have been sold pursuant to such Registration Statement or Rule 144 or (ii) two (2) years from the effective date of the Registration Statement. (ii) The Company shall not be required to effect more than three registrations pursuant to this Section 2(b). (iii) If any of the Registrable Securities registered pursuant to a Registration Statement filed under this Section 2(b) are to be sold in an Underwritten Offering, and the lead managing Underwriter advises the Holders in writing that in its opinion the total number or dollar amount of Registrable Securities proposed to be sold in such offering is such as to materially and adversely affect the success of such offering, then the Company will include in such registration, first, the Registrable Securities of the Holders and, second, any securities to be sold for the account of the Company and for the account of other security holders of the Company who have contractual rights to participate in such registration (the "OTHER HOLDERS") electing to include (but not being entitled to demand inclusion of) securities in such registration (it being understood that such lead managing Underwriter shall have the right to eliminate entirely the participation in such registration of the Company and such Other Holders). (iv) The Company shall be entitled to postpone, for a reasonable period of time not in excess of one hundred twenty (120) days, the filing of a Registration Statement of the Company, if it determines, in the good faith exercise of its reasonable business judgement, that such registration and offering could materially adversely affect the bona fide 5 financing plans of the Company or would require the disclosure of information, the premature disclosure of which could materially adversely affect the Company or any transaction under consideration by the Company; provided, however, that the Company shall not be entitled to such postponement more than once in any 360-day period. (c) EXPENSES. The Company shall pay all Registration Expenses in connection with any registration undertaken pursuant to Sections 2(a) and 2(b) hereof. The Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to the Registration Statement. 3. HOLD-BACK AGREEMENT. Each Holder of Registrable Securities shall agree not to effect any public sale or distribution of securities of the Company of the same or similar class or classes of the securities included in the Registration Statement or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 or Rule 144A under the Securities Act, during such periods as reasonably requested by the Underwriter in an underwritten public offering by the Company; provided that no Holder shall be so obligated under this Section 3 in the event that any such period requested by the Underwriter is longer than ninety (90) days or occurs more than once in any twelve (12) month period. 4. REGISTRATION PROCEDURES. In connection with the obligations of the Company with respect to a Registration Statement pursuant to Sections 2(a), 2(b) and 2(c) hereof, the Company shall use its best efforts to effect or cause to be effected the registration of the Registrable Securities under the Securities Act to permit the sale of such Registrable Securities by the Holder in accordance with its intended method or methods of distribution, and the Company shall: (a) prepare and file with the SEC, as specified in Section 2 hereof, a Registration Statement, which Registration Statement shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, and use its best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) subject to Section 4(j) hereof, prepare and file with the SEC such amendments and post-effective amendments to each such Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period; cause each such Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 or any similar rule that may be adopted under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holder thereof; (c) furnish to the Holder of Registrable Securities without charge, as many copies of each Prospectus, including each summary 6 prospectus or preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Securities; the Company consents to the use of any such Prospectus, including each preliminary Prospectus, by the Holder of Registrable Securities, if any, in connection with the offering and sale of the Registrable Securities covered by any such Prospectus; (d) use its best efforts to register or qualify, or obtain exemption from registration or qualification for, all Registrable Securities by the time the applicable Registration Statement is declared effective by the SEC under all applicable state securities or "blue sky" laws of such jurisdictions as the Holder of Registrable Securities covered by a Registration Statement shall reasonably request in writing, keep each such registration or qualification or exemption effective during the period such Registration Statement is required to be kept effective and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for this Section 4(d), (ii) subject itself to taxation in any such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction; (e) notify the Holder of Registrable Securities promptly and, if requested by such Holder, confirm such advice in writing (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, and (iii) of the happening of any event during the period a Registration Statement is effective as a result of which such Registration Statement or the related Prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (iv) of the Company's receipt of any notification of the suspension of the qualification of any Registrable Securities covered by a Registration Statement for sale in any jurisdiction; in the event the Company shall give notice as to the occurrence of any event described Sections 4(e)(ii), 4(e)(iii) or 4(e)(iv) hereof, the Company shall extend the period during which such Registration Statement shall be maintained effective by the number of days during the period from and including the date of the giving of such notice to the date the Company delivers notice that disposition may be made; (f) furnish to the Holder of Registrable Securities copies of any request by the SEC or any state securities authority of amendments or supplements to a Registration Statement and Prospectus or for additional information; (g) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment; 7 (h) provide to the Holders, at no cost to such Holders, a copy of the Registration Statement and any amendment thereto with respect to Registrable Securities, each Prospectus contained in such Registration Statement or post-effective amendment and any amendment or supplement thereto and such other documents as such Holders may reasonably request in order to facilitate the disposition of their Registrable Securities covered by such Registration Statement; the Company consents to the use of each such Prospectus and any supplement thereto by such Holders in connection with the offering and sale of their Registrable Securities covered by such Registration Statement or any amendment thereto; (i) upon the occurrence of any event contemplated by Section 4(e)(iii) hereof, immediately notify all Holders of the Registrable Securities affected by such event of such event and prepare and provide to such Holders a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference and file any required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (j) make available for inspection by representatives of the Holder of the Registrable Securities and any Underwriters participating in any disposition pursuant to a Registration Statement and any special counsel or accountant retained by such Holders or Underwriters, all financial and other records, pertinent corporate documents and properties of the Company and cause the respective officers, directors and employees of the Company to supply all information reasonably requested by any such representative, Underwriter, special counsel or accountant in connection with a Registration Statement; provided, however, that such records, documents or information which the Company determines, in good faith, to be confidential and notifies such representatives, Underwriter's special counsel or accountants are confidential shall not be disclosed by the representatives, Underwriter's special counsel or accountants unless (i) the disclosure of such records, documents or information is necessary to avoid or correct a misstatement or omission in a Registration Statement, (ii) the release of such records, documents or information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, or (iii) such records, documents or information have been generally made available to the public; (k) use its best efforts (including, without limitation, seeking to cure any deficiencies (within the Company's control) cited by such exchange or market in the Company's listing application) to list all Registrable Securities on The New York Stock Exchange (unless the Company qualifies and chooses to list all Registrable Securities on the American Stock Exchange or The Nasdaq National Market, in which event the Company shall use its best efforts to list all Registrable Securities on the American Stock Exchange or The Nasdaq National Market); (l) provide a CUSIP number for all Registrable Securities, not later than the effective date of the Registration Statement; 8 (m) use best efforts to comply with the Securities Act and the Exchange Act in connection with the offer and sale of the Registrable Securities to be sold pursuant to a Registration Statement, and, make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least twelve (12) months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (n) provide and cause to be maintained a transfer agent for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement; (o) cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing their Registrable Securities to be sold pursuant to a Registration Statement and not bearing any Securities Act legend; and enable certificates for such Registrable Securities be issued for such numbers of shares and registered in such names as such Holders may reasonably request at least two (2) business days prior to any sale of their Registrable Securities; (p) enter into customary agreements (including an underwriting agreement or securities sales agreement, if any, in customary form) containing such representations and warranties to the Holders of such Registrable Securities and the Underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by them and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities; and (q) furnish to each registering Holder of Registrable Securities and to each Underwriter, if any, a signed counterpart, addressed to such registering Holder of Registrable Securities or Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company's independent public accountants (to the extent permitted by the standards of the American Institute of Certified Public Accountants), each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the Holders of a majority of the Registrable Securities included in such offering or the managing Underwriter or Underwriters therefor reasonably request. The Company may require the Holder of Registrable Securities to furnish to the Company such information regarding the proposed distribution by such Holder of such Registrable Securities as the Company may from time to time reasonably request in writing. The Holders agree that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(e)(iii) hereof, such Holder will immediately discontinue disposition of Registrable Securities pursuant to a Registration 9 Statement until such Holders' receipt of the copies of the supplemented or amended Prospectus, if so directed by the Company, such Holders will deliver to the Company (at the expense of the Company) all copies in its possession, other than permanent file copies then in such Holders' possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. 5. BLACK-OUT PERIOD. (a) Following the effectiveness of a Registration Statement (and the filings with any state securities commissions), the Company may direct the Holder to suspend sales of the Registrable Securities for such times as the Company reasonably may determine is necessary and advisable, including the following events: (i) an underwritten primary offering by the Company where the Company is advised by the underwriters for such offering that sale of Registrable Shares under the Registration Statement would have a material adverse effect on the primary offering, or (ii) pending negotiations relating to, or consummation of, a transaction or the occurrence of an event (x) that would require additional disclosure of material information by the Company in the Registration Statement (or such filings), (y) as to which the Company has a bona fide business purpose for preserving confidentiality or (z) which renders the Company unable to comply with SEC requirements, in each case under circumstances that would make it impractical or inadvisable to cause the Registration Statement (or such filings) to become effective or to promptly amend or supplement the Registration Statement on a post-effective basis, as applicable. (b) In the case of an event which causes the Company to suspend the effectiveness of a Registration Statement (a "Suspension Event"), the Company may give notice (a "Suspension Notice") to the Holder to suspend sales of the Registrable Shares so that the Company may correct or update the Registration Statement (or such filings); provided, however, that such suspension shall continue only for so long as the Suspension Event or its effect is continuing. The Holder agrees that it will not effect any sales of the Registrable Shares pursuant to such Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company. If so directed by the Company, Holder will deliver to the Company all copies of the Prospectus covering the Registrable Shares held by them at the time of receipt of the Suspension Notice. The Holder may recommence effecting sales of the Registrable Shares pursuant to the Registration Statement (or such filings) following further notice to such effect (an "End of Suspension Notice") from the Company, which End of Suspension Notice shall be given by the Company promptly following the conclusion of any Suspension Event and the effectiveness of any required amendment or supplement to the Registration Statement. (c) Notwithstanding the provisions of Sections 5(a) and 5(b) to the contrary: (i) no Holder shall be subject to the provisions of Sections 5(a) and 5(b) hereof for a period of time in excess of ninety (90) days; and (ii) no Suspension Notice may be given more than once in any twelve (12) month period. Moreover, notwithstanding 10 Sections 2(a), 2(b) and 2(c) hereof, if the Company shall give a Suspension Notice pursuant to this Section 5, the Company agrees it shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from the date of the giving of the Suspension Notice to and including the date when the Holders shall have received the End of Suspension Notice and copies of the supplemented or amended Prospectus necessary to resume sales. 6. RULE 144 AND RULE 144A. For so long as the Company is subject to the reporting requirements of Section 13 or 15 of the Exchange Act, the Company covenants that it will timely file the reports required to be filed by it under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations adopted by the SEC thereunder and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Securities, make publicly available other information so long as necessary to permit sales pursuant to Rule 144 under the Securities Act. The Company also covenants that it will provide the information required pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any Holder of Registrable Securities and it will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time, to enable such Holder to sell its Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, (b) Rules 144A under the Securities Act, as such Rule may be amended from time to time, or (c) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. 7. Indemnification. (a) The Company will indemnify each Holder, each such Holder's officers and directors, and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all claims, losses, damages, liabilities and expenses (including reasonable legal expenses), arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement or prospectus relating to such Holders' Registrable Securities, or any amendment or supplement thereto, or based on 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; provided, however, that the Company will not indemnify and will not be liable to any Holder in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in conformity with and in reliance upon information furnished in writing to the Company by such Holder or by an Underwriter for inclusion therein. (b) Each Holder will indemnify the Company, each of its directors, trust managers and each of its officers who signs the Registration Statement, each underwriter, if any, of the Company's securities covered by such Registration Statement, and each person who controls the Company or such underwriter within the meaning of 11 Section 15 of the Securities Act, against all claims, losses, damages, liabilities and expenses (including reasonable legal fees and expenses) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such Registration Statement or prospectus, or any amendment or supplement thereto, or based on 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, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement or prospectus, in reliance upon and in conformity with information furnished in writing to the Company by such Holder for inclusion therein. (c) Each party entitled to indemnification under this Section 7 (the "INDEMNIFIED PARTY") shall give notice to the party required to provide indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought. However, the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which it may have to the Indemnified Party pursuant to the provisions of this Section 7, except to the extent of the actual damages suffered by such delay in notification. The Indemnifying Party shall assume the defense of such action. including the employment of counsel, which shall be chosen by the Indemnifying Party and shall be reasonably satisfactory to the Indemnified Party, and payment of expenses in connection with such defense. The Indemnified Party shall have the right to employ its own counsel in any such case, but the legal fees and expenses of such counsel shall be at the expense of the Indemnified Party unless (i) the employment of such counsel shall have been authorized in writing by the Indemnifying Party, (ii) the Indemnifying Party shall not have assumed the defense of such action within a reasonable period of time, or (iii) the Indemnified Party shall have been reasonably advised by its counsel that there may be defenses available to it or them which are different from or additional to those available to Indemnifying Party (in which case the Indemnifying Party shall not have the right to direct the defense of such action on behalf of the Indemnified Party), in any of which events such fees and expenses shall be borne by the Indemnifying Party. No Indemnifying Party in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to each such Indemnified Party of a release from all liability in respect to such claim or litigation. (d) If the indemnification provided for in this Section 7 is unavailable to a party that would have been an Indemnified Party under this Section 7, then each party that would have been an Indemnifying Party hereunder shall, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such claims, losses, damages, liabilities and expenses in such proportion as is appropriate to 12 reflect the relative fault of the Indemnifying Party on the one hand and such Indemnified Party on the other in connection with the statement or omission which resulted in such claims, losses, damages, liabilities and expenses, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact related to information supplied by the Indemnifying Party or the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that fails to take account of the equitable considerations referred to above in this Section 7(d). For purposes of this Section 7(d), each person, if any, who controls the Holder within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Holder and each trust manager of the Company, each officer of the Company who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Company. (e) No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) In no event shall any Holder be liable for any claims, losses, damages, liabilities or expenses pursuant to this Section 7 in excess of the net proceeds to such Holder for the sale of such Holder's Registrable Securities pursuant to a registration. 8. MISCELLANEOUS. (a) NO INCONSISTENT AGREEMENT. The Company has not entered into nor will the Company on or after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holder of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holder do not in any way conflict with and are not inconsistent with the rights granted to the holder of the Company's other issued and outstanding securities under any such agreements. (b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent of the Company and Holders holding at least 51% of the total then outstanding (i) Registrable Securities and (ii) Series J Preferred Units not theretofore exchanged for Preferred Shares. (c) NOTICES. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, facsimile, or any courier guaranteeing overnight delivery (i) if to the Contributors, at the address or facsimile number set forth below its signature hereon, and thereafter at such other address or facsimile number, notice of which is given in accordance with the provisions of this Section 8(c), (ii) if to an assignee or transferee of the Contributors, to such address or facsimile number such assignee or transferee shall have provided to the Company, and (iii) if to the Company, at Public Storage, Inc., 701 Western Avenue, Suite 200, Glendale, California 91201, facsimile number (818) 548-9228, and thereafter at such other address or 13 facsimile number, notice of which is given in accordance with the provisions of this Section 8(c). All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if faxed; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. (d) SUCCESSORS. The rights and obligations of any Holder hereunder may be assigned to any other Holder and to any assignee of the Series J Preferred Units permitted under the Agreement of Limited Partnership. This Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of the Company and the Holder. (e) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (f) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. (h) SEVERABILITY. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (i) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this Agreement to accordance with the terms and conditions of this Agreement in any court of the United States or any State thereof having jurisdiction. (j) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter hereof. 14 (k) ATTORNEYS' FEES. If the Company or any Holder brings an action to enforce its rights under this Agreement, the prevailing party in the action shall be entitled to recover its costs and expenses, including without limitation, reasonable attorneys' fees, incurred in connection with such action, including any appeal of such action. (1) AUTHORITY; BINDING EFFECT. Each party hereto represents and warrants that it has the full legal right, power and authority to execute this Agreement, that this Agreement has been duly authorized, executed and delivered on behalf of such party and constitutes a valid and binding agreement of such party enforceable in accordance with its terms. (signatures appear on next page) 15 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. PUBLIC STORAGE, INC. By: /s/ John Reyes -------------- Name: John Reyes Title:Senior Vice President and Chief Financial Officer BELAIR REAL ESTATE CORPORATION By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President Address: c/o Eaton Vance Management The Eaton Vance Building 255 State Street Boston, Massachusetts 02109 Attention: General Counsel Facsimile: (617) 388-8054 BELPORT REALTY CORPORATION By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President Address: c/o Eaton Vance Management The Eaton Vance Building 255 State Street Boston, Massachusetts 02109 Attention: General Counsel Facsimile: (617) 388-8054 (Signatures continue on next page.) BELROSE REALTY CORPORATION By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President Address: c/o Eaton Vance Management The Eaton Vance Building 255 State Street Boston, Massachusetts 02109 Attention: General Counsel Facsimile: (617) 388-8054 BELSHIRE REALTY CORPORATION By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President Address: c/o Eaton Vance Management The Eaton Vance Building 255 State Street Boston, Massachusetts 02109 Attention: General Counsel Facsimile: (617) 388-8054 (Signatures continue on next page.) BELTERRA REALTY CORPORATION By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President Address: c/o Eaton Vance Management The Eaton Vance Building 255 State Street Boston, Massachusetts 02109 Attention: General Counsel Facsimile: (617) 388-8054 BELWATER REALTY CORPORATION By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President Address: c/o Eaton Vance Management The Eaton Vance Building 255 State Street Boston, Massachusetts 02109 Attention: General Counsel Facsimile: (617) 388-8054 CLEARWOOD REALTY CORPORATION By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President Address: c/o Eaton Vance Management The Eaton Vance Building 255 State Street Boston, Massachusetts 02109 Attention: General Counsel Facsimile: (617) 388-8054 EX-10 4 psi8k5906_ex101.txt EXHIBIT 10.1 EXHIBIT 10.1 FOURTH AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF PSA INSTITUTIONAL PARTNERS, L.P., A CALIFORNIA LIMITED PARTNERSHIP (CREATING SERIES J PREFERRED UNITS) This Fourth Amendment (the "AMENDMENT") to the Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P., a California Limited Partnership, dated March 29, 2000 as amended by (i) the Amendment to Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P., dated as of August 11, 2000, (ii) the Second Amendment to Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P., dated as of August 11, 2000 and (iii) the Third Amendment to Amended and Restated Agreement of Limited Partnership of PSA Institutional Partners, L.P., dated as of October 12, 2004 (the "PARTNERSHIP AGREEMENT") is made and entered into as of May 9, 2006 (the "EFFECTIVE DATE") with reference to the following facts: A. Pursuant to Section 3.3 of the Partnership Agreement, the General Partner is authorized to cause the Partnership to issue certain additional units of limited partnership interest without the consent of the Limited Partners. B. The General Partner has determined that it is in the best interests of the Partnership to create a new class of units, with the designations, preferences and other rights, powers and duties set forth in this Amendment, to be known as Series J Preferred Units, and to issue those units as set forth below. Although the proceeds from the issuance of those units may be used for any Partnership purpose, the General Partner currently anticipates having the Partnership use those proceeds to acquire through another entity an indirect interest in the assets of Shurgard Storage Centers, Inc. C. Unless otherwise defined in this Amendment, capitalized terms shall have the meanings given to them in the Partnership Agreement. The parties agree as follows: 1. The following definitions shall be inserted into Section 1 of the Partnership Agreement in the appropriate alphabetical order: "BEL LIMITED PARTNERS" means Belair, Belcrest, Belmar, Belport, Belrose Realty Corporation ("BELROSE"), Belshire Realty Corporation ("BELSHIRE"), Belterra Realty Corporation ("BELTERRA"), Belwater Realty Corporation ("BELWATER"), Clearwood Realty Corporation ("CLEARWOOD") and Montebello. "SERIES J PREFERRED UNITS" means the series of partnership interests designated as the "7.25% Series J Cumulative Redeemable Perpetual Preferred Units" entitled to the rights described in this Agreement. The Series J Preferred Units are Exchangeable Preferred Units, and the Corresponding Preferred Stock with respect to those units is the 7.25% Cumulative Preferred Stock, Series J, of the Company." 2. The definition of "PRIORITY RETURN" in the Partnership Agreement is amended by inserting the following at the end of clause (i): ", and for the Series J Preferred Units an amount equal to seven and one quarter percent (7.25%) per annum of the stated value of $25 per unit" In addition, notwithstanding anything to the contrary in the Partnership Agreement, to reflect the issuance of certain Series J Preferred Units as of the Effective Date, the Priority Return relating to the quarter in 2006 in which those Series J Preferred Units are issued shall be 53/90th of the Priority Return that would accrue for a full calendar quarter. 3. The definition of "PARITY PREFERRED UNITS" in the Partnership Agreement shall be amended by inserting the phrase "Series J Preferred Units," into the second sentence thereof before the phrase "Series N Preferred Units". 4. On the Effective Date, in accordance with that certain Contribution Agreement, dated as of May 9, 2006, by and among Belair, Belport, Belrose, Belshire, Belterra, Belwater and Clearwood (collectively, the "CONTRIBUTORS"), the Partnership and the General Partner, the Contributors shall make a capital contribution to the Partnership in the amount of One Hundred Million ($100,000,000) Dollars and the Partnership shall issue to the Contributors, collectively, Four Million (4,000,000) Series J Preferred Units. In order to reflect the issuance of those Series J Preferred Units, Exhibit A to the Partnership Agreement is replaced with Exhibit A in the form attached to this Amendment, reflecting that Belair holds 1,000,000 Series J Preferred Units, Belport holds 700,000 Series J Preferred Units, Belrose holds 400,000 Series J Preferred Units, Belshire holds 500,000 Series J Preferred Units, Belterra holds 600,000 Series J Preferred Units, Belwater holds 600,000 Series J Preferred Units and Clearwood holds 200,000 Series J Preferred Units." 5. Section 6.6.1 of the Partnership Agreement is amended to read in its entirety as follows: "6.6.1. RIGHT OF OPTIONAL REDEMPTION. The Series J, Series N, Series O and Series P Preferred Units may not be redeemed prior to the fifth (5th) anniversary of the issuance date of the particular series to be redeemed. The Series NN Preferred Units may not be redeemed prior to March 17, 2010. The Series Z Preferred Units may not be redeemed prior to March 5, 2009. On or after the fifth anniversary of the issuance date of each of the Series J, Series N, Series O and Series P Preferred Units, and on or after March 17, 2010 with respect to the Series NN Preferred Units, and on or after March 5, 2009 with respect to the 2 Series Z Preferred Units, the Partnership shall have the right to redeem the Series J, Series N, Series O, Series P, Series NN or Series Z Preferred Units, respectively, in whole or in part, at any time or from time to time, upon not less than thirty (30) nor more than sixty (60) days' written notice, at a redemption price, payable in cash, equal to the Liquidation Preference per Series J, Series N, Series O, Series P, Series NN or Series Z Preferred Unit to be redeemed (the "REDEMPTION PRICE"). The rights of redemption of any subsequently issued Parity Preferred Units shall be as designated in an amended Exhibit A to this Agreement. If fewer than all of the outstanding Parity Preferred Units of a particular series are to be redeemed, the units to be redeemed from that series shall be selected pro rata (as nearly as practicable without creating fractional units)." 6. Section 6.7 of the Partnership Agreement is amended to insert "Series J" immediately before "Series N". 7. Section 10.3 of the Partnership Agreement is amended to read in its entirety as follows (the effect of which is to correct certain misnumbering in prior amendments and to add at the end new Section 10.3.5: 10.3.1 SERIES O PREFERRED UNITS. Holders of the Series O Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below. So long as any Series O Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least a majority of the Series O Preferred Units outstanding at the time, take any of the actions described above in Sections 10.2.1, 10.2.2 and 10.2.3, treating each reference in those provisions to "Series N Preferred Units" as a reference instead to "Series O Preferred Units." 10.3.2 SERIES P PREFERRED UNITS. Holders of the Series P Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below. So long as any Series P Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least a majority of the Series P Preferred Units outstanding at the time, take any of the actions described above in Sections 10.2.1, 10.2.2 and 10.2.3, treating each reference in those provisions to "Series N Preferred Units" as a reference instead to "Series P Preferred Units." 10.3.3 SERIES NN PREFERRED UNITS. Holders of the Series NN Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below. So long as any Series NN Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least a majority of the Series NN Preferred Units outstanding at the time, take any of the actions described above in Sections 10.2.1, 10.2.2 and 10.2.3, treating each reference in those provisions to "Series N Preferred Units" as a reference instead to "Series NN Preferred Units." 10.3.4 SERIES Z PREFERRED UNITS. Holders of the Series Z Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below. So long as any Series Z Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of 3 the holders of at least a majority of the Series Z Preferred Units outstanding at the time, take any of the actions described above in Sections 10.2.1, 10.2.2 and 10.2.3, treating each reference in those provisions to "Series N Preferred Units" as a reference instead to "Series Z Preferred Units." 10.3.5 SERIES J PREFERRED UNITS. Holders of the Series J Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below. So long as any Series J Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least a majority of the Series J Preferred Units outstanding at the time, take any of the actions described above in Sections 10.2.1, 10.2.2 and 10.2.3, treating each reference in those provisions to "Series N Preferred Units" as a reference instead to "Series J Preferred Units." 8. Section 11.2 of the Partnership Agreement is hereby amended by inserting the following language in clause (iii) of the fourth sentence thereof after the words "Series NN Preferred Units": "and Series J Preferred Units". 9. Section 12.2 of the Partnership Agreement is amended by adding immediately after Section 12.2.4 the following Section 12.2.5: "12.2.5 SERIES J PREFERRED UNITS. The Series J Preferred Units also shall be exchangeable in the same fashion as are the Series N Preferred Units: the provisions of Section 12.1 shall be read as if restated in this Section 12.2.5, but as if each reference in those provisions to "Series N Preferred Units" instead were a reference to "Series J Preferred Units," and by treating each reference to the "Series N Preferred Stock" as a reference to the 7.25% Cumulative Preferred Stock, Series J, of the Company. In addition, notwithstanding any provision herein to the contrary, so long as any Series J Preferred Units remain outstanding, in the event of the occurrence of a Covered Transaction (defined below), on the date such Covered Transaction is completed or occurs, the holders of record of the Series J Preferred Units (acting as a whole), shall have the option to cause the exchange of all of the Series J Preferred Units outstanding for depositary shares representing interests in Series J Preferred Stock based on the Exchange Ratio (as defined in Section 12.1.1) if the holders of a majority of the then outstanding Series J Preferred Units elect to so exchange in accordance with the following paragraph. The Partnership shall give written notice of a Covered Transaction to each of the respective holders of record of the Series J Preferred Units, at their respective addresses as they appear on the transfer records of the Partnership, not less than thirty (30) days prior to the completion or occurrence of a Covered Transaction. Such notice shall not set forth any non-public information concerning such Covered 4 Transaction. Each of the holders of record of the Series J Preferred Units shall have until 5:00 p.m. (PST) on the fifteenth (15th) day following receipt of such notice from the Partnership, to give the Partnership notice of whether such holder votes in favor of having the Series J Preferred Units be exchanged for Series J Preferred Stock. Notwithstanding any provision herein to the contrary, with respect to a Covered Transaction that arises under clause (c) of the definition of Covered Transaction set forth below, in the event that the Company so fails to qualify as a real estate investment trust for any reason other than an affirmative election by the Company not to qualify, (a) the Partnership shall give notice of the occurrence of a Covered Transaction to each of the holders of record of the Series J Preferred Units within 15 days after discovery of such failure to qualify, (b) each of the holders of record of the Series J Preferred Units shall have until 5:00 p.m. (PST) on the fifteenth (15th) day following receipt of such notice from the Partnership, to give the Partnership notice of such holder's vote as to whether the Series J Preferred Units will be exchanged for Series J Preferred Stock and (c) if the holders of not less than a majority of the then outstanding Series J Preferred Units have elected to have the Series J Preferred Units exchanged for Series J Preferred Stock, all of the Series J Preferred Units shall be so exchanged on a date not later than 45 days following the date of discovery of the Company's failure to qualify. For purposes of this Section 12.2.5, the term "COVERED TRANSACTION" shall mean (a) the Company's completion of a "Rule 13e-3 transaction" (as defined in Rule 13e-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) in which, as a result of such transaction, the Company's common stock is no longer registered under Section 12 of the Exchange Act, except that this clause (a) shall not apply to any involuntary delisting of the Company's common stock from the New York Stock Exchange or any national securities exchange (as defined in the Exchange Act), (b) the completion of any transaction or series of transactions that would result in a Reorganization Event (defined below) of the Company or the Partnership or (c) the Company's failure (or election not) to qualify as a real estate investment trust as defined in Section 856 (or any successor section) of the Internal Revenue Code of 1986, as amended. For purposes of this Section 12.2.5, the term "REORGANIZATION EVENT" shall mean (x) any sale or other disposition of all or substantially all of the assets of the Partnership or the Company, as the case may be, to an entity that is not an affiliate of the Company; or (y) any consolidation, amalgamation, merger, business combination, share exchange, reorganization or similar transaction involving the Partnership or the Company, as the case may be, pursuant to which the Partners of the Partnership or the stockholders of the Company, as the case may be, immediately prior to the consummation of such transaction will own less than a majority of the equity interests in the entity 5 surviving such transaction; provided, however, a Reorganization Event shall not include any transaction contemplated by clauses (x) or (y) of this definition if the surviving entity has unsecured debt outstanding which is rated at least the lowest credit rating level established as investment grade by at least two of Standard & Poor's, Moody's Investor Service and Fitch Ratings (it being understood that as of the date of this Agreement the lowest investment grade rating of Standard & Poor's is BBB-, the lowest investment grade rating of Moody's is Baa3 and the lowest investment grade rating of Fitch Ratings is BBB-) and such rating has been reaffirmed in light of the contemplated transaction." 10. Except as expressly provided in this Amendment, all of the provisions of the Partnership Agreement are ratified and confirmed, and continue in full force and effect. [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.] 6 The undersigned have signed this Amendment as of the date indicated above. "GENERAL PARTNER:" PS TEXAS HOLDINGS, LTD., a Texas limited partnership By: PS GPT Properties, Inc., a California corporation, its general partner By: /s/ John Reyes -------------- Name: John Reyes Title: Senior Vice President and Chief Financial Officer By: /s/ Stephanie Heim ------------------ Name: Stephanie Heim Title: Secretary "LIMITED PARTNERS:" PS LPT PROPERTIES INVESTORS, a Maryland business trust By: /s/ John Reyes -------------- Name: John Reyes Title:Senior Vice President and Chief Financial Officer By: /s/ Stephanie Heim ------------------- Name: Stephanie Heim Title: Secretary 7 (SIGNATURES CONTINUE ON NEXT PAGE) BELAIR REAL ESTATE CORPORATION, a Delaware corporation By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President BELPORT REALTY CORPORATION, a Delaware corporation By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President BELROSE REALTY CORPORATION, a Delaware corporation By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President BELSHIRE REALTY CORPORATION, a Delaware corporation By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President 8 (SIGNATURES CONTINUE ON NEXT PAGE) BELTERRA REALTY CORPORATION, a Delaware corporation By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President BELWATER REALTY CORPORATION, a Delaware corporation By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President CLEARWOOD REALTY CORPORATION, a Delaware corporation By: /s/ William R. Cross -------------------- Name: William R. Cross Title: President 9 (SIGNATURES CONTINUE ON NEXT PAGE) ALL OTHER LIMITED PARTNERS By: PS Texas Holdings, Ltd., a Texas limited partnership, as their attorney-in-fact By: PS GPT Properties, Inc., a California corporation, its general partner By: /s/ John Reyes -------------- Name: John Reyes Title: Senior Vice President and Chief Financial Officer By: Stephanie Heim -------------- Name: Stephanie Heim Title: Secretary (SIGNATURES CONTINUE ON NEXT PAGE) 10 Acknowledged and agreed, as to the issuance of Company stock pursuant to Section 12 of the Partnership Agreement: "COMPANY" PUBLIC STORAGE, INC., a California corporation By: /s/ John Reyes -------------- Name: John Reyes Title: Senior Vice President and Chief Financial Officer By: /s/ Stephanie Heim ------------------ Name: Stephanie Heim Title: Secretary 11 EX-99 5 psi8k5906_ex991.txt EXHIBIT 99.1 PRESS RELEASE News Release Exhibit 99.1 Public Storage, Inc. 701 Western Avenue Glendale, CA 91201-2349 www.publicstorage.com For Release: Immediately Date: May 9, 2006 Contact: Mr. Clemente Teng (818) 244-8080 PSA Institutional Partners, L.P. Announces Placement of $100 Million of 7.25% Series J Cumulative Redeemable Preferred Units GLENDALE, California--PSA Institutional Partners, L.P., an affiliate of Public Storage, Inc. (NYSE:PSA), announced today that it has completed a private placement of $100 million of preferred units. The 7.25% series J cumulative redeemable preferred units are non-callable for five years and have no mandatory redemption. Upon the occurrence of certain events, the preferred units may be exchanged for depositary shares representing an interest in the 7.25% cumulative redeemable preferred stock, series J of Public Storage. Proceeds from the issuance are expected to be used for general corporate purposes. COMPANY INFORMATION - ------------------- Public Storage, Inc., a member of the S&P 500 and the Forbes Global 2000, is a fully integrated, self-administered and self-managed real estate investment trust that primarily acquires, develops, owns and operates storage facilities. The Company's headquarters are located in Glendale, California. The Company's storage properties are located in 37 states. At March 31, 2006, the Company had interests in 1,508 storage facilities with approximately 92 million net rentable square feet. Additional information about Public Storage, Inc. is available on the Internet. The Company's web site is www.publicstorage.com. # # # -----END PRIVACY-ENHANCED MESSAGE-----