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): November 2, 2011 (October 31, 2011)
CUBESMART
CUBESMART, L.P.
(Exact Name Of Registrant As Specified In Charter)
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Maryland
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001-32324 |
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20-1024732 |
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Delaware
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000-54662 |
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34-1837021 |
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(State or Other Jurisdiction of
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(Commission File Number) |
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(IRS Employer Identification Number) |
460 E. Swedesford Road, Suite 3000, Wayne, Pennsylvania 19087
(Address of Principal Executive Offices)
(610) 293-5700
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 3.03 Material Modifications to Rights of Security Holders
On October 31, 2011, CubeSmart (the “Company”) filed with the State Department of Assessments and Taxation of the State of Maryland Articles Supplementary (the “Articles Supplementary”) to the Company’s Declaration of Trust, as amended and supplemented (the “Declaration of Trust”), classifying and designating 3,220,000 of the Company’s authorized preferred shares of beneficial interest, $.01 par value per share, as 7.75% Series A cumulative redeemable preferred shares of beneficial interest, $.01 par value per share (the “Series A Preferred Shares”). A copy of the Articles Supplementary was filed as Exhibit 3.3 to the Company’s registration statement on Form 8-A, filed on October 31, 2011, and is incorporated herein by reference.
As set forth in the Articles Supplementary, the Series A Preferred Shares rank senior to the Company’s common shares and to any other of the Company’s future equity securities that it may later authorize or issue that by their terms rank junior to the Series A Preferred Shares with respect to the payment of distributions and the distribution of assets in the event of the Company’s liquidation, dissolution or winding up. The Series A Preferred Shares rank pari passu with any future equity securities that the Company may later authorize or issue that by their terms are on a parity with the Series A Preferred Shares, including any of the Company’s Series B cumulative redeemable preferred shares that may be issued by the Company pursuant to its previously disclosed Purchase Agreement with Wells Fargo Investment Holdings, LLC. The Series A Preferred Shares rank junior to any equity securities that the Company may later authorize or issue that by their terms rank senior to the Series A Preferred Shares. Any such authorization or issuance would require the affirmative vote of the holders of at least two-thirds of the outstanding Series A Preferred Shares. Any convertible debt securities that the Company may issue are not considered to be equity securities for these purposes. The Series A Preferred Shares rank junior to all of the Company’s existing and future indebtedness.
Holders of Series A Preferred Shares, when and as authorized by the Board of Trustees of the Company, are entitled to cumulative cash distributions at the rate of 7.75% per annum of the $25.00 per share liquidation preference (equivalent to $1.9375 per annum per share). Distributions are payable quarterly on January 15, April 15, July 15 and October 15, commencing January 15, 2012. In addition to other preferential rights, the holders of Series A Preferred Shares are entitled to receive the liquidation preference, which is $25.00 per share, before the holders of common shares of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company’s affairs.
Generally, the Company may not redeem the Series A Preferred Shares until November 2, 2016. Upon the occurrence of a “Change of Control” (as defined below), each holder of Series A Preferred Shares will have the right (unless, prior to the Change of Control Conversion Date (as defined below), the Company has provided or provides notice of its election to redeem the Series A Preferred Shares) to convert some or all of the Series A Preferred Shares held by such holder on the Change of Control Conversion Date (the “Change of Control Conversion Right”) into a number of the Company’s common shares per Series A Preferred Share to be converted equal to the lesser of:
· the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accumulated and unpaid distributions to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a record date for a Series A Preferred Share distribution payment and prior to the corresponding Series A Preferred Share distribution payment date, in which case no additional amount for such accumulated and unpaid distribution will be included in this sum) by (ii) the common share price; and
· 5.1546, subject to certain adjustments;
subject, in each case, to an aggregate cap on the total number of common shares issuable upon exercise of the Change of Control Conversion Right and to provisions for the receipt of alternative consideration as described in the Articles Supplementary.
If the Company has provided or provides a redemption notice, whether pursuant to the Company’s special optional redemption right in connection with a Change of Control or the Company’s optional redemption right, holders of Series A Preferred Shares will not have any right to convert the Series A Preferred Shares in connection with the Change of Control Conversion Right and any Series A Preferred Shares subsequently selected for redemption that have been tendered for conversion will be redeemed on the related date of redemption instead of converted on the Change of Control Conversion Date.
A “Change of Control” is when, after the original issuance of the Series A Preferred Shares, the following have occurred and are continuing:
· the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of the Company entitling that person to exercise more than 50% of the total voting power of all shares of the Company entitled to vote generally in elections of trustees (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the passage of time or occurrence of a subsequent condition); and
· following the closing of any transaction referred to in the bullet point above, neither the Company nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts (“ADRs”) representing such securities) listed on the New York Stock Exchange (the “NYSE”), the NYSE Amex Equities or the NASDAQ Stock Market or listed or quoted on an exchange or quotation system that is a successor to the New York Stock Exchange, the NYSE Amex Equities or the NASDAQ Stock Market.
The “Change of Control Conversion Date” is the date the Series A Preferred Shares are to be converted, which will be a business day that is no fewer than 20 days nor more than 35 days after the date on which the Company provides the required notice of occurrence of a Change of Control to the holders of Series A Preferred Shares.
The “Common Share Price” will be: (i) the amount of cash consideration per common share, if the consideration to be received in the Change of Control by the holders of the Company’s common shares is solely cash; and (ii) the average of the closing prices for the Company’s common shares on the NYSE for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control, if the consideration to be received in the Change of Control by the holders of the Company’s common shares is other than solely cash.
On and after November 2, 2016, the Company may, at its option, redeem the Series A Preferred Shares, in whole or in part, by paying $25.00 per share, plus any accumulated and unpaid distributions to, but not including, the date of redemption.
The entire terms, conditions and preferences of the Series A Preferred Shares are set forth in the Articles Supplementary incorporated by reference in this Current Report on Form 8-K.
On November 2, 2011, the Company, as general partner of CubeSmart, L.P. (the “Operating Partnership”), executed an amendment (the “Partnership Agreement Amendment”) to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership. The Partnership Agreement Amendment establishes a series of preferred units (the “Series A Preferred Mirror Units”) of the Operating Partnership having designations, preferences and other rights such that the economic interests attributable to the Series A Preferred Mirror Units are substantially the same as the economic rights of the Series A Preferred Shares described above. At the closing of the sale by the Company of 2,800,000 of its Series A Preferred Shares on November 2, 2011, the Company contributed the net proceeds from such sale to the Operating Partnership in exchange for 2,800,000 Series A Preferred Mirror Units.
The Company granted the underwriters a 30-day option to purchase up to an additional 420,000 Series A Preferred Shares pursuant to the Underwriting Agreement that was filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on October 31, 2011. If and to the extent that the Company issues additional Series A Preferred Shares upon exercise of the option granted to the underwriters then the Company will contribute the net proceeds from such issuances to the Operating Partnership in exchange for a number of Series A Preferred Mirror Units equal to the number of Series A Preferred Shares so issued. The foregoing description of the Partnership Agreement Amendment is qualified in its entirety by reference to the full text of the Partnership Agreement Amendment attached to this Current Report on Form 8-K as Exhibit 3.2 and incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information about the Articles Supplementary under Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.
The information about the Partnership Agreement Amendment under Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.
Item 9.01 Financial Statements and Exhibits
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Exhibit
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Description |
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3.1 |
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Articles Supplementary to Declaration of Trust of CubeSmart classifying and designating CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 3.3 to CubeSmart’s Form 8-A, filed on October 31, 2011. |
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3.2 |
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Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of Cubesmart, L.P. dated as of November 2, 2011.* |
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4.1 |
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Form of Certificate for CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 4.1 to CubeSmart’s Form 8-A, filed on October 31, 2011. |
* Filed herewith.
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CUBESMART |
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Date: November 2, 2011 |
By: |
/s/ Jeffrey P. Foster |
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Name: |
Jeffrey P. Foster |
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Title: |
Senior Vice President, Chief Legal |
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Officer & Secretary |
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CUBESMART, L.P. |
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By: |
CubeSmart, general partner |
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Date: November 2, 2011 |
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By: |
/s/ Jeffrey P. Foster |
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Name: |
Jeffrey P. Foster |
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Title: |
Senior Vice President, Chief Legal |
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Officer & Secretary |
EXHIBIT INDEX
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Exhibit
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Description |
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3.1 |
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Articles Supplementary to Declaration of Trust of CubeSmart classifying and designating CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 3.3 to CubeSmart’s Form 8-A, filed on October 31, 2011. |
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3.2 |
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Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of Cubesmart, L.P. dated as of November 2, 2011.* |
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4.1 |
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Form of Certificate for CubeSmart’s 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, incorporated by reference to Exhibit 4.1 to CubeSmart’s Form 8-A, filed on October 31, 2011. |
* Filed herewith.
Exhibit 3.2
AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CUBESMART, L.P.
THIS AMENDMENT NO. 2 dated as of November 2, 2011 (the “ Amendment ”) amends the Second Amended and Restated Agreement of Limited Partnership Agreement (as amended to date, the “ Partnership Agreement ”) of CUBESMART, L.P., a Delaware limited partnership (the “ Partnership ”). Capitalized terms used herein but not defined herein shall have the meanings given such terms in the Partnership Agreement.
BACKGROUND
A. Pursuant to the Partnership Agreement, CubeSmart (the “ General Partner ”), as the sole general partner of the Partnership, has the power and authority to issue additional Partnership Interests in one or more newly created classes of Partnership Interests to persons on such terms and conditions as the General Partner may deem appropriate.
B. The General Partner, pursuant to the exercise of such power and authority and in accordance with the Partnership Agreement, has determined to execute this Amendment to the Partnership Agreement to create a new class of Partnership Interests designated as the 7.75% Series A Preferred Mirror Units having designations, preferences and other rights such that the economic interests attributable to such Series A Preferred Mirror Units are substantially the same as the economic rights of the 7.75% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest of the General Partner (the “ Series A Preferred Shares ”) and to evidence the issuance of such additional Partnership Interests to the General Partner in exchange for the General Partner’s contribution to the Partnership of the net proceeds of the sale of the Series A Preferred Shares.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby amend the Partnership Agreement as follows:
1. In accordance with the Partnership Agreement, the Partnership Agreement is hereby amended to establish, and to issue to the General Partner, the Series A Preferred Mirror Units having the designations, preferences and other rights set forth below:
(a) Designation and Number . A class of Partnership Interests designated as Series A Preferred Mirror Units is hereby established. The number of Series A Preferred Mirror Units shall be up to 3,220,000 of which 2,800,000 shall be issued on the date of this Amendment to the General Partner and the balance shall be issued only if and to the extent that the General Partner issues additional Series A Preferred Shares after the date hereof and contributes the net proceeds from any such issuance of additional shares to the Partnership. The stated value of each Series A Preferred Mirror Unit shall be $25.00 (the “ Stated Value ”).
(b) Rank . The Series A Preferred Mirror Units will, with respect to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership, rank (a) senior to the Class A Units and Class B Units and all Partnership Interests ranking junior to the Series A Preferred Mirror Units; (b) on a parity with all Partnership Interests issued by the Partnership after the date of this Amendment
AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CUBESMART, L.P.
the terms of which specifically provide that such Partnership Interests rank on a parity with the Series A Preferred Mirror Units; and (c) junior to all Partnership Interests issued by the Partnership the terms of which specifically provide that such Partnership Interests rank senior to the Series A Preferred Mirror Units.
(c) Distributions .
(i) Pursuant to Article V of the Partnership Agreement, holders of Series A Preferred Mirror Units shall be entitled to receive, out of funds legally available therefor, cumulative quarterly cash distributions equal to the amount of the cumulative quarterly cash distributions payable on the Series A Preferred Shares. Such distributions shall be payable quarterly in arrears on or before the date on which distributions on the Series A Preferred Shares are payable (each a “ Series A Preferred Mirror Unit Distribution Payment Date ”).
(ii) No distributions on Series A Preferred Mirror Units shall be authorized or paid or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the Partnership, including any agreement relating to its indebtedness, prohibits such authorization, payment or setting apart for payment or provides that such authorization, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such authorization or payment shall be restricted or prohibited by law.
(iii) Notwithstanding the foregoing, distributions with respect to the Series A Preferred Mirror Units will accrue whether or not the terms and provisions set forth in Section 1(c)(ii) at any time prohibit the current payment of distributions, whether or not there are funds legally available for such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series A Preferred Mirror Units will accumulate as of the Series A Preferred Mirror Unit Distribution Payment Date on which they first become payable.
(iv) When distributions are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series A Preferred Mirror Units and any other Partnership Interests ranking on a parity as to distributions with the Series A Preferred Mirror Units, all distributions authorized upon the Series A Preferred Mirror Units and any other Partnership Interests ranking on a parity as to distributions with the Series A Preferred Mirror Units shall be authorized pro rata so that the amount of distributions authorized per Partnership Unit of Series A Preferred Mirror Units and such other Partnership Interests shall in all cases bear to each other the same ratio that accrued distributions per Partnership Unit on the Series A Preferred Mirror Units and such other Partnership Interests (which shall not, with respect to such other Partnership Interests, include any accrual in respect of unpaid distributions for prior distribution periods if such other Partnership Interests do not have a cumulative distribution) bear to each other. Any distribution payment or payments on Series A Preferred Mirror Units which may be in arrears shall accrue distributions at the rate of 7.75% per annum.
(v) Except as provided in Section 1(c)(iv), unless full cumulative distributions on the Series A Preferred Mirror Units have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof is set apart for
payment for all past distribution periods and the then current distribution period, no distributions (other than in Partnership Interests ranking junior to the Series A Preferred Mirror Units as to distributions and upon liquidation, dissolution or winding up) shall be authorized or paid or set aside for payment nor shall any other distribution be authorized or made upon the Class A Units, Class B Units or any other Partnership Interests ranking junior to or on a parity with the Series A Preferred Mirror Units as to distributions or upon liquidation, dissolution or winding up, nor shall any Class A Units or Class B Units or any other Partnership Interests ranking junior to or on a parity with the Series A Preferred Mirror Units as to distributions or upon liquidation 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 such units or other Partnership Interests) by the Partnership or any other entity controlled directly or indirectly by the Partnership (except by conversion into or exchange for Partnership Interests ranking junior to the Series A Preferred Mirror Units as to distributions and upon liquidation, dissolution or winding up).
(vi) Holders of the Series A Preferred Mirror Units shall not be entitled to any distribution, whether payable in cash, property or Partnership Units in excess of full cumulative distributions on the Series A Preferred Mirror Units as described above. Any distribution payment made on the Series A Preferred Mirror Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such Series A Preferred Mirror Units which remains payable.
(d) Liquidation Preference .
(i) Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, the holders of Series A Preferred Mirror Units then outstanding are entitled to be paid out of the assets of the Partnership available for distribution to the Partners pursuant to Section 13.2 of the Partnership Agreement a liquidation preference equal to the Stated Value per Series A Preferred Mirror Unit, plus an amount equal to any accrued and unpaid distributions to the date of payment, before any distribution of assets is made to holders of Class A Units and Class B Units or any other Partnership Interests that rank junior to the Series A Preferred Mirror Units upon liquidation, dissolution or winding up.
(ii) In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the available assets of the Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding Series A Preferred Mirror Units and the corresponding amounts payable on all other Partnership Interests ranking on a parity with the Series A Preferred Mirror Units in the distribution of assets, then such assets shall be allocated among the Series A Preferred Mirror Units, as a class, and each class or series of such other such Partnership Interests, as classes, in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.
(iii) After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Mirror Units will have no right or claim to any of the remaining assets of the Partnership.
(iv) The consolidation or merger of the Partnership with or into any other partnership, limited liability company, corporation, trust or entity or of any other partnership, limited liability company, corporation, trust or other entity with or into the Partnership, or the sale, lease or conveyance of all or substantially all of the property or business of the Partnership, shall not be deemed to constitute a liquidation, dissolution or winding up of the Partnership for purposes of this Section 1(d).
(e) Redemption . In connection with a redemption by the General Partner of any or all of the Series A Preferred Shares, the Partnership shall provide cash to the General Partner for such purpose which shall be equal to the redemption price (including accrued and unpaid distributions) of the Series A Preferred Shares to be redeemed and in exchange one Series A Preferred Mirror Unit shall be canceled with respect to each Series A Preferred Share so redeemed. From and after the date on which the Series A Preferred Shares are redeemed, the Series A Preferred Mirror Units so canceled shall no longer be outstanding and all rights hereunder, to distributions or otherwise, with respect to such Series A Preferred Mirror Units shall cease.
(f) Conversion . In connection with, and at the time of, the conversion of any or all of the Series A Preferred Shares into Common Shares, a number of Series A Preferred Mirror Units equal to the number of Series A Preferred Shares so converted shall be converted into a number of Class A Units equal to the number of Common Shares issued upon such conversion.
(g) Allocations . Allocations of the Partnership’s items of income, gain, loss and deduction shall be allocated among holders of Series A Preferred Mirror Units in accordance with Article VI of the Partnership Agreement.
2. Except as expressly set forth in this Amendment to the Partnership Agreement, the Partnership Agreement is hereby ratified and confirmed in each and every respect.
[ Signature appears on following page ]
IN WITNESS WHEREOF, the General Partner has executed this Amendment as of the date first written above.
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CUBESMART, as general partner |
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By: |
/s/ Jeffrey P. Foster |
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Name: |
Jeffrey P. Foster |
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Title: |
Senior Vice President, Chief Legal Officer & Secretary |
Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of Cubesmart, L.P.