exv10w40



 






Exhibit 10.40




INDEMNITY AGREEMENT




     THIS INDEMNITY AGREEMENT (the “Agreement”) is made as of this ___day of ______,
200______by and between PS Business Parks, Inc., a California corporation (the “Company”) and
______, an officer of the Company (“Indemnitee”).



RECITALS




     A. Both the Company and Indemnitee recognize the increased risk of litigation and other claims
currently being asserted against directors and officers of corporations.



     B. In recognition of Indemnitee’s need for substantial protection against personal liability
in order to enhance Indemnitee’s continued and effective service to the Company, and in order to
induce Indemnitee to provide services to the Company as a director and officer, the Company wishes
to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee
to the fullest extent (whether partial or complete) permitted by law and as set forth in this
Agreement, and, to the extent insurance is maintained, for the coverage of Indemnitee under the
Company’s directors’ and officers’ liability insurance policies.



AGREEMENT




     In consideration of the foregoing recitals and of Indemnitee’s continuing to serve the Company
and intending to be legally bound hereby, the parties agree as follows:



     1. Certain Definitions.



          As used in this Agreement the following terms shall have the meanings set forth in this
section:





               (a) Expenses: any expense, liability, or loss, including attorneys’ fees,
judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in
settlement, any interest, assessments, or other charges imposed thereon, and any
federal, state, local, or foreign taxes imposed as a result of the actual or deemed
receipt of any payments under this Agreement, paid or incurred in connection with
investigating, defending, being a witness in, or participating in (including on appeal),
or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable
Event.




               (b) Indemnifiable Event: any event or occurrence that takes place either prior to
or after the execution of this Agreement, related to Indemnitee’s service as a director
and officer of the Company or an affiliate, or, at the request of the Company, as a
director, officer, employee, trustee, agent, or fiduciary of another foreign or domestic
corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise, or as a director, officer, employee, or agent of a foreign or domestic
corporation that was a predecessor corporation of the Company or of another enterprise
at the request of such predecessor corporation, or related to anything done or not done
by Indemnitee in any such capacity, whether or not the basis of the Proceeding is
alleged action in an official capacity as a director, officer, employee, or agent or in
any other capacity while serving as a director, officer, employee, or agent of the
Company, as described above.



 









 






               (c) Proceeding: (i) any threatened, pending, or completed action, suit, or
proceedings, whether civil, criminal, administrative, investigative or other, or (ii)
any inquiry, hearing, or investigation, whether conducted by the Company or any other
party, that Indemnitee in good faith believes might lead to the institution of any such
action, suit or proceeding.



     2. Agreement to Indemnify.




               (a) General Agreement. If Indemnitee becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other participant
in any Proceeding by reason of (or arising in part out of) an Indemnifiable Event,
Indemnitee shall be indemnified and held harmless by the Company from and against any
and all Expenses actually or reasonably incurred or suffered by Indemnitee in connection
with such Proceeding to the fullest extent permitted by law, as the same exists or may
hereafter be amended or interpreted (but in the case of any such amendment or
interpretation, only to the extent that such amendment or interpretation permits the
Company to provide broader indemnification rights than were permitted prior thereto).
The Company shall also cooperate fully with Indemnitee and render such assistance as
Indemnitee may reasonably require in the defense of any Proceeding in which Indemnitee
was or is a party or is threatened to be made a party, and shall make available to
Indemnitee and his counsel all information and documents reasonably available to it
which relate to the subject of any such Proceeding. The parties hereto intend that this
Agreement shall provide for indemnification in excess of that expressly permitted by
statute, including, without limitation, any indemnification provided by the Company’s
Articles of Incorporation, its Bylaws, or vote of its shareholders or disinterested
directors.




               (b) Statutory Limitation on Indemnification. The parties intend to indemnify
Indemnitee to the fullest extent permitted by law. The General Corporation Law of
California presently prohibits indemnification in an action brought by or in the right
of the corporation for breach of a director’s duties to the corporation and its
shareholders (i) for acts or omissions that involve intentional misconduct or a knowing
and culpable violation of law, (ii) for acts or omissions that an Indemnitee believes to
be contrary to the best interests of the Company or its shareholders or that involve the
absence of good faith on the part of the Indemnitee, (iii) for any transaction from
which an Indemnitee derived an improper personal benefit, (iv) for acts or omissions
that show a reckless disregard for the Indemnitee’s duty to the Company or its
shareholders, (v) for acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the Indemnitee’s duty to the Company or its
shareholders, (vi) under Section 310 of the General Corporation Law of California or
(vii) under Section 316 of the General Corporation Law of California. The General
Corporation Law of California also presently prohibits indemnification in circumstances
in which indemnity is expressly prohibited by Section 317 of the General Corporation Law
of California. To the extent that the General Corporation Law of California is amended
or interpreted to permit the Company to provide broader indemnification rights than are
now permitted, the parties contemplate that this Agreement, without amendment or
modification, shall encompass such broadened powers to indemnify and that Indemnitee
shall be entitled hereunder to any such broadened indemnification rights.




               (c) Initiation of Proceeding. Notwithstanding anything in this Agreement to the
contrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement
in connection with any Proceeding initiated by Indemnitee against the Company or any
director or officer of the Company unless (i) the Company has joined in or the Board of
Directors has consented to the initiation of such Proceeding, or (ii) the Proceeding is
one to enforce indemnification rights.



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               (d) Expense Advances. Expenses incurred by Indemnitee in defending any Proceeding
relating in whole or in part to an Indemnifiable Event shall be advanced by the Company
prior to the final disposition of any such Proceeding upon receipt by the Company of an
undertaking by or on behalf of Indemnitee to repay all amounts so advanced if it should
be determined ultimately that Indemnitee is not entitled to be indemnified under this
Agreement or otherwise.




               (e) Mandatory Indemnification. Notwithstanding any other provision of this
Agreement, (i) to the extent that Indemnitee has been successful on the merits in
defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith and (ii) if the monetary liability of
Indemnitee in a Proceeding brought by the Company or by a shareholder suing derivatively
on behalf of the Company may be eliminated pursuant to Section 204(a) of the General
Corporation Law of California, Indemnitee shall be indemnified against all Expenses
incurred in connection therewith.




               (f) Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of Expenses, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.



     3. Notification and Defense of Proceeding.




               (a) Notice. Promptly after receipt by Indemnitee of notice of the commencement of
any Proceeding, Indemnitee will, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement thereof; but the
omission so to notify the Company will not relieve it from any liability that it may
have to Indemnitee.




               (b) Defense. With respect to any Proceeding as to which Indemnitee notifies the
Company of the commencement thereof, the Company will be entitled to participate in the
Proceeding to the full extent permitted by law and at its own expense, when, and only to
the extent that the Company, in its sole discretion, chooses to so participate. The
Indemnitee shall cooperate fully with the Company and render such assistance as the
Company may reasonably require in the Company’s participation in any such Proceeding and
shall make available to the Company and its counsel all information and documents
reasonably available to Indemnitee which relate to the subject of such Proceeding. The
Company shall not be liable to indemnify the Indemnitee under this Agreement with regard
to any judicial award if the Company was not given a reasonable and timely opportunity,
at its expense, to participate in the defense of such action; the Company’s liability
hereunder shall not be excused if participation in the Proceeding by the Company was
barred.




               (c) Settlement of Claims. The Company shall not be liable to indemnify Indemnitee
under this Agreement or otherwise for any amounts paid in settlement of any Proceeding
effected without the Company’s written consent; the Company will not unreasonably
withhold its consent to any proposed settlement.



     4. Remedy to Enforce Right to Indemnification. If a claim for indemnity under Section 2 of
this Agreement is not paid in full by the Company within ninety days after a written claim has been
received by the Company, Indemnitee may at any time thereafter bring suit against the Company to
recover the unpaid amount of the claim, together with interest thereon, and if successful in whole
or in part, Indemnitee shall also be entitled to be paid the expense of prosecuting such claim,
including reasonable attorneys’ fees incurred in



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connection therewith. It shall be a defense to any such action (other than an action brought
to enforce a claim for Expenses incurred in defending any Proceeding in advance of its final
disposition where the required undertaking has been tendered to the Company) that Indemnitee has
not met the standards of conduct which make it permissible under the General Corporation Law of
California for the Company to indemnify Indemnitee for the amount claimed, but the burden of
proving such a defense shall be on the Company. Neither the failure of the Company (or of its full
Board of Directors, its directors who are not parties to the Proceeding with respect to which
indemnification is claimed, its shareholders, or independent legal counsel) to have made a
determination prior to the commencement of an action pursuant to this Section 4 that
indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in the General Corporation Law of California, nor an
actual determination by any such person or persons that Indemnitee has not met such applicable
standard of conduct, shall be a defense to such action or create a presumption that Indemnitee has
not met the applicable standard of conduct.




     5. Contract Right Not Exclusive. The rights conferred by this Agreement shall not be
exclusive of any other right which Indemnitee may have or hereafter acquire under the General
Corporation Law of California, the California Labor Code or any other statute, or any provision
contained in the Company’s Articles of Incorporation or Bylaws, or any agreement, or pursuant to a
vote of shareholders or disinterested directors, or otherwise.



     6. Insurance. The Company may purchase and maintain insurance on behalf of its directors and
officers against any liability asserted against or incurred by any of them by reason of the fact
that such person is or was a director or officer of the Company whether or not the Company would
have the power to indemnify such persons against such liability under the General Corporation Law
of California.



     7. Amendment of this Agreement. No supplement, modification, or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. Unless otherwise
consented to in writing by Indemnitee, any amendment to this Agreement shall apply only to acts or
omissions of Indemnitee after such amendment is executed by Indemnitee but such amendment shall not
affect Indemnitee’s rights hereunder with respect to acts or omissions occurring prior thereto. No
waiver of any of the provisions of this Agreement shall operate as a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as
specifically provided herein, no failure to exercise or any delay in exercising any right or remedy
hereunder shall constitute a waiver thereof.



     8. Amendment of Articles of Incorporation, Bylaws. The Company shall be entitled to amend or
repeal its Articles of Incorporation or Bylaws or both but any amendment which reduces or
eliminates Indemnitee’s right to indemnification shall apply only to acts or omissions of
Indemnitee after such amendment is effective and such amendment shall not affect Indemnitee’s
rights with respect to acts or omissions occurring prior to the effectiveness of such amendment.
If the Company amends its Articles of Incorporation or Bylaws or both to permit the Company to
provide broader indemnification than currently permitted under the Articles of Incorporation or
Bylaws or both, Indemnitee shall be entitled to such broadened indemnification rights to the
fullest extent permitted by law.



     9. Termination. This Agreement may be terminated by a writing to that effect executed by the
Company and delivered to Indemnitee; such termination shall apply only to acts or omissions of
Indemnitee after such notice is delivered to Indemnitee but such termination shall not affect
Indemnitee’s rights hereunder with respect to acts or omissions occurring prior thereto.
Indemnitee shall not forfeit Indemnitee’s status as a beneficiary under this Agreement by the
termination of Indemnitee’s position with the Company.



     10. No Duplication of Payments. The Company shall not be liable under this Agreement to make
any payment in connection with any claim made against Indemnitee to the extent Indemnitee has
otherwise received payment (under any insurance policy, Bylaw, or otherwise) of the amounts
otherwise indemnifiable hereunder.



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     11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors (including any direct or indirect
successor by purchase, merger, consolidation, or otherwise to all or substantially all of the
business and/or assets of the Company), spouses, heirs, and personal and legal representatives.
The Company shall require and cause any successor (whether direct or indirect by purchase, merger,
consolidation, or otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such succession had taken place.
The indemnification provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event
even though he may have ceased to serve in such capacity at the time of any Proceeding.



     12. Severability. If any provision (or portion thereof) of this Agreement shall be held by a
court of competent jurisdiction to be invalid, void, or otherwise unenforceable, the remaining
provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the
fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of this Agreement containing any provision held to be invalid, void, or otherwise
unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, void, or unenforceable.



     13. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California applicable to contracts made and to be
performed in such State without giving effect to the principles of conflicts of laws.



     14. Notices. All notices, demands, and other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given if delivered by hand, against
receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and
addressed to the Company at:



	 	 	 
	

	 	PS Business Parks, Inc.
	

	 	701 Western Avenue
	

	 	Glendale, California 91201-2397
	

	 	Attn:
	 
	 	 
	and to Indemnitee at:
	 	 
	 
	 	 
	

	 	701 Western Avenue

	

	 	Glendale, California 91201-2397






     Notice of change of address shall be effective only when done in accordance with this Section.
All notices complying with this Section shall be deemed to have been received on the date of
delivery or on the third business day after mailing.



     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of
the day specified above.



	 	 	 
	

	 	PS BUSINESS PARKS, INC.






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	 	By:	 	 	 	 
	 	 	 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	INDE
	 	MNITEE	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 	Name:
	 	 	 	 	 






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