exv10w1



 






Exhibit 10.1




PS BUSINESS PARKS, L.P.




AMENDMENT TO AGREEMENT OF LIMITED

PARTNERSHIP RELATING TO

7 1/8% SERIES N CUMULATIVE REDEEMABLE

PREFERRED UNITS




     This Amendment to the Agreement of Limited Partnership of PS Business Parks, L.P., a
California limited partnership (the “Partnership”), dated as of the 12th day of December,
2005 (this “Amendment”) amends the Agreement of Limited Partnership of the Partnership,
dated as of March 17, 1998, by and among PS Business Parks, Inc. (the “General Partner”)
and each of the limited partners executing a signature page thereto, as amended by that certain
Amendment to Agreement of Limited Partnership Relating to 8 7/8% Series B Cumulative Redeemable
Preferred Units, dated as of April 23, 1999, an Amendment to Agreement of Limited Partnership
Relating to 91/4% Series A Cumulative Redeemable Preferred Units, dated as of April 30, 1999, an
Amendment to Agreement of Limited Partnership Relating to 8 7/8% Series X Cumulative Redeemable
Preferred Units, dated as of September 7, 1999, an Amendment to Agreement of Limited Partnership
Relating to Additional 8 7/8% Series X Cumulative Redeemable Preferred Units, dated as of September
23, 1999, an Amendment to Agreement of Limited Partnership Relating to 83/4% Series C Cumulative
Redeemable Preferred Units, dated as of September 3, 1999, an Amendment to Agreement of Limited
Partnership Relating to 8 7/8% of Series Y Cumulative Redeemable Preferred Units, dated as of July 12,
2000, an Amendment to Agreement of Limited Partnership Relating to 91/2% Series D Cumulative
Redeemable Preferred Units, dated as of May 10, 2001, as amended by Amendment No. 1 to such
Amendment to Agreement of Limited Partnership Relating to 91/2% Series D Cumulative Redeemable
Preferred Units, dated as of June 18, 2001, an Amendment to Agreement of Limited Partnership
Relating to 91/4% Series E Cumulative Redeemable Preferred Units, dated as of September 21, 2001, an
Amendment to Agreement of Limited Partnership Relating to 83/4% Series F Cumulative Redeemable
Preferred Units, dated as of January 28, 2002, an Amendment to Agreement of Limited Partnership
Relating to 7.95% Series G Cumulative Redeemable Preferred Units, dated as of October 30, 2002, an
Amendment to Agreement of Limited Partnership Relating to 7.000% Series H Cumulative Redeemable
Preferred Units, dated as of January 30, 2004 as amended by that certain Amendment No. 1 to
Amendment to Agreement of Limited Partnership Relating to 7.000% Series H Cumulative Redeemable
Preferred Units, dated as of October 25, 2004, an Amendment to
Agreement of Limited Partnership
Relating to 6.875% Series I Cumulative Redeemable Preferred Units, dated as of April 21, 2004, an
Amendment to Agreement of Limited Partnership Relating to 7.50% Series J Cumulative Redeemable
Preferred Units, dated as of May 27, 2004 as amended by that certain Amendment No. 1 to Amendment
to Agreement of Limited Partnership Relating to 7.50% Series J Cumulative Redeemable Preferred
Units, dated as of June 17, 2004, an Amendment to Agreement of Limited Partnership Relating to
7.950% Series K Cumulative Redeemable Preferred Units, dated as of June 30, 2004, an Amendment to



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Agreement of Limited Partnership Relating to 7.60% Series L Cumulative
Redeemable Preferred Units, dated as of August 31, 2004, and an Amendment to Agreement of Limited
Partnership Relating to 7.20% Series M Cumulative Redeemable Preferred Units, dated as of May 2,
2005, as amended by that certain Amendment No. 1 to Amendment to Agreement of Limited Partnership
Relating to 7.20% Series M Cumulative Redeemable Preferred Units, dated as of May 9, 2005
(collectively, the “Partnership Agreement”). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the Partnership Agreement.
Section references are (unless otherwise specified) references to sections in this Amendment.



     WHEREAS, pursuant to Section 4.2(a) of the Partnership Agreement, the General Partner desires
to cause the Partnership to issue additional Units of a new class and series, with the
designations, preferences and relative, participating, optional or other special rights, powers and
duties set forth herein;



     WHEREAS, pursuant to Sections 4.2(a) and 14.1(b)(2) of the Partnership Agreement, the General
Partner, without the consent of the Limited Partners, may amend the Partnership Agreement by
executing a written instrument setting forth the terms of such amendment; and



     WHEREAS, the General Partner desires by this Amendment to so amend the Partnership Agreement
as of the date first set forth above to provide for the designation and issuance of such new class
and series of Units.



     NOW, THEREFORE, the Partnership Agreement is hereby amended by establishing and fixing the
rights, limitations and preferences of a new class and series of Units as follows:



     Section 1. Definitions. Capitalized terms not otherwise defined herein shall have
their respective meanings set forth in the Partnership Agreement. Capitalized terms that are used
in this Amendment shall have the meanings set forth below:



     (a) “Liquidation Preference” means, with respect to the Series N Preferred Units (as
hereinafter defined), $25.00 per Series N Preferred Unit, plus the amount of any accumulated and
unpaid Priority Return with respect to such unit, whether or not declared, minus any distributions
in excess of the Priority Return that has accrued with respect to such Series N Preferred Units to
the date of payment.



     (b) “Parity Preferred Units” means any class or series of Partnership Interests of the
Partnership now or hereafter authorized, issued or outstanding and expressly designated by the
Partnership to rank on a parity with the Series N Preferred Units with respect to distributions and
rights upon voluntary or involuntary liquidation, winding-up or dissolution of the Partnership,
including the 91/2 Series D Cumulative Redeemable Preferred Units (the “Series D Preferred
Units”), the 91/4% Series E Cumulative Redeemable Preferred Units (the “Series E Preferred



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Units”), the 83/4% Series F Cumulative Redeemable Preferred Units (the “Series F 
Preferred Units”), the 7.95% Series G Cumulative Redeemable Preferred Units (the
“Series G Preferred Units”), the 7.000% Series H Cumulative Redeemable Preferred Units (the
“Series H Preferred Units”), the 6.875% Series I Cumulative Redeemable Preferred Units (the
“Series I Preferred Units”), the 7.50% Series J Cumulative Redeemable Preferred Units (the
“Series J Preferred Units”), the 7.950% Series K Cumulative Redeemable Preferred Units (the
“Series K Preferred Units”), the 7.60% Series L Cumulative Redeemable Preferred Units (the
“Series L Preferred Units”), and the 7.20% Series M Cumulative Redeemable Preferred Units
(the “Series M Preferred Units”). Notwithstanding the differing allocation rights set
forth in Section 4 below that apply to the Series D, F, H, I, K, L and M Preferred Units (as
compared to the Series E, G, J and N Preferred Units), for purposes of this Amendment, those Series
D, F, H, I, K, L and M Preferred Units and any future series of preferred units that rank in parity
with those series also shall be considered Parity Preferred Units to the Series E, G, J and N
Preferred Units.



     (c) “Priority Return” means an amount equal to 7 1/8% per annum of the Liquidation
Preference per Series N Preferred Unit, commencing on the date of issuance of such Series N
Preferred Unit, determined on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly period for which distributions are computed, the amount of the
distributions payable will be based on the ratio of the actual number of days elapsed in such
period to ninety (90) days, cumulative to the extent not distributed for any given distribution
period pursuant to Section 3, hereof, commencing on the date of the issuance of such Series N
Preferred Unit.



     (d) “PTP” means a “publicly traded partnership” within the meaning of Section 7704 of
the Code.



     Section 2. Designation and Number. Pursuant to Section 4.2(a) of the Partnership
Agreement, a series of Partnership Units in the Partnership designated as the “7 1/8% Series N
Cumulative Redeemable Preferred Units” (the “Series N Preferred Units”) is hereby
established. The number of Series N Preferred Units shall be 800,000. The holders of Series N
Preferred Units shall not have any Percentage Interest (as such term is defined in the Partnership
Agreement) in the Partnership.



     Section 3. Distributions. (a) Payment of Distributions. Subject to the rights
of holders of Parity Preferred Units as to the payment of distributions pursuant to Section 5.1 of
the Partnership Agreement, holders of Series N Preferred Units shall be entitled to receive, when,
as and if declared by the Partnership acting through the General Partner, the Priority Return. Such
Priority Return shall be cumulative, shall accrue from the original date of issuance of the Series
N Preferred Units and, notwithstanding Section 5.1 of the Partnership Agreement, will be payable
(i) quarterly in arrears on March 31, June 30, September 30 and December 31 of each year commencing
on December 31, 2005, and (ii) in the event of (A) a redemption of Series N



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Preferred Units, or (B) an exchange of Series N Preferred Units into Series N Preferred Stock, on
the redemption date or the exchange date, as applicable (each a “Series N Preferred Unit
Distribution Payment Date”). The amount of the distribution payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months and for any period shorter than a
full quarterly period for which distributions are computed, the amount of the distribution payable
will be computed based on the ratio of the actual number of days elapsed in such period to ninety
(90) days. If any date on which distributions are to be made on the Series N Preferred Units is
not a Business Day (as defined herein), then payment of the distribution to be made on such date
will be made on the Business Day immediately preceding such date with the same force and effect as
if made on such date. Distributions on the Series N Preferred Units will be made to the holders of
record of the Series N Preferred Units on the relevant record dates to be fixed by the Partnership
acting through the General Partner, which record dates shall in no event exceed fifteen (15)
Business Days prior to the relevant Series N Preferred Unit Distribution Payment Date (the
“Series N Preferred Unit Partnership Record Date”).



     (b) Prohibition on Distribution. No distributions on Series N Preferred Units shall
be authorized by the General Partner or paid or set apart for payment by the Partnership at any
such time as the terms and provisions of any agreement of the Partnership or the General Partner,
including any agreement relating to their 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 to the extent that such authorization
or payment shall be restricted or prohibited by law.



     (c) Distributions Cumulative. Distributions on the Series N Preferred Units will
accrue, whether or not declared, whether or not the terms and provisions of any agreement of the
Partnership or the General Partner, including any agreement relating to its indebtedness at any
time prohibit the current payment of distributions, whether or not the Partnership has earnings,
whether or not there are funds legally available for the payment of such distributions and whether
or not such distributions are authorized. Accrued but unpaid distributions on the Series N
Preferred Units will accumulate as of the Series N Preferred Unit Distribution Payment Date on
which they first become payable. Distributions on account of arrears for any past distribution
periods may be declared and paid at any time, without reference to a regular Series N Preferred
Unit Distribution Payment Date to holders of record of the Series N Preferred Units on the record
date fixed by the Partnership acting through the General Partner which date shall not exceed
fifteen (15) Business Days prior to the payment date. Accumulated and unpaid distributions will not
bear interest.



     (d) Priority as to Distributions. Subject to the provisions of Article 13 of the
Partnership Agreement:



          (i) so long as any Series N Preferred Units are outstanding, no distribution of


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cash or other property shall be authorized, declared, paid or set apart for payment on or with
respect to any class or series of Partnership Interest ranking junior as to the payment of
distributions or rights upon a voluntary or involuntary liquidation, dissolution or winding-up of
the Partnership to the Series N Preferred Units (collectively, “Junior Units”), nor shall
any cash or other property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series N Preferred Units, any Parity Preferred Units or any
Junior Units, unless, in each case, all distributions accumulated on all Series N Preferred Units
and all classes and series of outstanding Parity Preferred Units have been paid in full. The
foregoing sentence shall not prohibit (x) distributions payable solely in Junior Units, or (y) the
conversion of Junior Units or Parity Preferred Units into Partnership Interests ranking junior to
the Series N Preferred Units as to distributions and rights upon involuntary or voluntary
liquidation, dissolution or winding up of the Partnership or (z) the redemption of Partnership
Interests corresponding to Series N Preferred Stock, Parity Preferred Stock or Junior Stock to be
purchased by the General Partner pursuant to the Articles of Incorporation of the General Partner
with respect to the General Partner’s common stock and comparable provisions in the Articles of
Incorporation with respect to other classes or series of capital stock of the General Partner to
preserve the General Partner’s status as a real estate investment trust, provided that such
redemption shall be upon the same terms as the corresponding purchase pursuant to the Articles of
Incorporation.




          (ii) So long as distributions have not been paid in full (or a sum sufficient for such full
payment is not irrevocably deposited in trust for payment) upon the Series N Preferred Units, all
distributions authorized and declared on the Series N Preferred Units and all classes or series of
outstanding Parity Preferred Units shall be authorized and declared so that the amount of
distributions authorized and declared per Series N Preferred Unit and such other classes or series
of Parity Preferred Units shall in all cases bear to each other the same ratio that accrued
distributions per Series N Preferred Unit and such other classes or series of Parity Preferred
Units (which shall not include any accumulation in respect of unpaid distributions for prior
distribution periods if such class or series of Parity Preferred Units do not have cumulative
distribution rights) bear to each other.




     (e) No Further Rights. Holders of Series N Preferred Units shall not be entitled to
any distributions, whether payable in cash, other property or otherwise, in excess of the full
cumulative distributions described herein.



     Section 4. Allocations. Section 6.1(a)(ii) of the Partnership Agreement is amended to
read, in its entirety, as follows:




     “(ii)(A) Notwithstanding anything to the contrary contained in this Agreement, in any
taxable year: (1) the holders of Series D, F, H, I, K, L and M Preferred Units shall first
be allocated an amount of gross income equal to the Priority Return distributed to such
holders in such taxable year, and (2) subject to any prior allocation of Profit pursuant



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to the loss chargeback set forth in Section 6.1(a)(ii)(B) below, the holders of Series E, G, J
and N Preferred Units shall then be allocated an amount of Profit equal to
the Priority Return distributed to such holders either in such taxable year or in prior
taxable years to the extent that such distributions have not previously been matched with an
allocation of Profit pursuant to this Section 6.1(a)(ii)(A)(2).




     (B) After the Capital Account balances of all Partners other than holders of any series
of Preferred Units have been reduced to zero, Losses of the Partnership that otherwise would
be allocated so as to cause deficit Capital Account balances for those other Partners shall
be allocated to the holders of the Series D, E, F, G, H, I, J, K, L, M and N Preferred Units
in proportion to the positive balances of their Capital Accounts until those Capital Account
balances have been reduced to zero. If Losses have been allocated to the holders of the
Series D, E, F, G, H, I, J, K, L, M and N Preferred Units pursuant to the preceding
sentence, the first subsequent Profits shall be allocated to those preferred partners so as
to recoup, in reverse order, the effects of the loss allocations.



     (C) Upon liquidation of the Partnership or the interest of the holders of Series D, E,
F, G, H, I, J, K, L, M or N Preferred Units in the Partnership: (1) items of gross income or
deduction shall first be allocated to the holders of Series D, F, H, I, K, L and M Preferred
Units in a manner such that, immediately prior to such liquidation, the Capital Account
balances of such holders shall equal the amount of their Liquidation Preferences, and (2) an
amount of Profit or Loss shall then be allocated to the holders of Series E, G, J and N
Preferred Units in a manner such that, immediately prior to such liquidation, the Capital
Account balances of such holders shall equal the amount of their Liquidation Preferences.”



     Section 5. Optional Redemption. (a) Right of Optional Redemption. Except as
otherwise provided herein, the Series N Preferred Units may not be redeemed prior to the fifth
(5th) anniversary of the issuance date. On or after such date, the Partnership shall have the right
to redeem the Series N Preferred Units, in whole (and not in part), at any time, upon not less than
30 nor more than 60 days written notice, at a redemption price, payable in cash, equal to the
Liquidation Preference (the “Series N Redemption Price”). The Redemption Right given to
Limited Partners in Section 8.6 of the Partnership Agreement shall not be available to the holders
of the Series N Preferred Units and all references to Limited Partners in said Section 8.6 (and
related provisions of the Partnership Agreement) shall not include holders of the Series N
Preferred Units.



     (b) Procedures for Redemption. (i) Notice of redemption will be (A) faxed, and (B)
mailed by the Partnership, by certified mail, postage prepaid, not less than 30 nor more than 60
days prior to the redemption date, addressed to the respective holders of record of the Series N
Preferred Units at their respective addresses as they appear on the records of the Partnership. No



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failure to give or defect in such notice shall affect the validity of the proceedings for the
redemption of any Series N Preferred Units except as to the holder to whom such notice was
defective or not given. In addition to any information required by law each such notice shall
state: (m) the redemption date, (n) the Series N Redemption Price, (o) the aggregate number of
Series N Preferred Units to be redeemed, (p) as provided in Section 5(b)(ii) below, the place or
places where evidence of the surrender of such Series N Preferred Units shall be delivered for
payment of the Series N Redemption Price, (q) that distributions on the Series N Preferred Units to
be redeemed will cease to accumulate on such redemption date and (r) that payment of the Series N
Redemption Price will be made upon presentation of evidence of the surrender of such Series N
Preferred Units as set forth in Section 5(b)(ii) below.



          (ii) If the Partnership gives a notice of redemption in respect of Series N Preferred Units
(which notice will be irrevocable) then, by 12:00 noon, New York City time, on the redemption date,
the Partnership will deliver into escrow with an escrow agent acceptable to the Partnership and the
holders of the Series N Preferred Units (the “Escrow Agent”) the Series N Redemption Price
and an executed Redemption Agreement, in substantially the form attached hereto as Exhibit
A (the “Redemption Agreement”), and an Amendment to the Agreement of Limited
Partnership evidencing the redemption, in substantially the form attached hereto as Exhibit
B. The holders of the Series N Preferred Units shall also, by 12:00 noon, New York City time,
on the redemption date, deliver into escrow with the Escrow Agent an executed Redemption Agreement
and an executed Amendment to the Agreement of Limited Partnership evidencing the redemption. Upon
delivery of all of the above-described items by both parties, Escrow Agent shall release the Series
N Redemption Price to the holders of the Series N Preferred Units and the fully-executed Redemption
Agreement and Amendment to Agreement of Limited Partnership to both parties. On and after the date
of redemption, distributions will cease to accumulate on the Series N Preferred Units called for
redemption, unless the Partnership defaults in the payment thereof. If any date fixed for
redemption of Series N Preferred Units is not a Business Day, then payment of the Series N
Redemption Price payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Series N Redemption Price is improperly withheld or refused and
not paid by the Partnership, distributions on such Series N Preferred Units will continue to
accumulate from the original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of calculating the
applicable Series N Redemption Price.




     Section 6. Voting Rights. (a) General. Holders of the Series N 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 in Section 14.1 of the Partnership Agreement
and in this



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Section 6. (Solely for purposes of Section 14.1 of the Partnership Agreement, each
Series N Preferred Unit shall be treated as one Partnership Unit.) If and for so long as the
General Partner holds any Series N Preferred Units, the General Partner shall not have any voting
rights with respect to such Series N Preferred Units and such Series N Preferred Units shall not be
counted in determining the number of such units outstanding for the purpose of determining whether the
holders of such units have granted any approval called for hereunder.



     (b) Certain Voting Rights. So long as any Series N Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote of the holders of at least a
majority of the Series N Preferred Units outstanding at the time:



          (i) authorize or create, or increase the authorized or issued amount of, any class or series
of Partnership Interests ranking senior to the Series N Preferred Units with respect to payment of
distributions or rights upon liquidation, dissolution or winding-up or reclassify any Partnership
Interests into any such Partnership Interest, or create, authorize or issue any obligations or
security convertible into or evidencing the right to purchase any such Partnership Interests (for
this purpose, partnership interests that rank in parity with the Series D, F, H, I, K, L and M
Preferred Units or other series with equivalent parity shall not be treated as ranking senior to,
and shall be treated as in parity with, the Series N Preferred Units and any other series that rank
in parity with the Series N Preferred Units);




          (ii) designate or create, or increase the authorized or issued amount of, any Parity Preferred
Units or reclassify any authorized Partnership Interests into any such Parity Preferred Units, or
create, authorize or issue any obligations or security convertible into or evidencing the right to
purchase any such shares, but only to the extent such Parity Preferred Units are issued to an
Affiliate of the Partnership on terms that differ from the terms of such series of Parity Preferred
Units issued to the public or non-Affiliates of the Partnership (for purposes of this Section
6(b)(ii), an issuance to the General Partner shall not be treated as an issuance to an Affiliate of
the Partnership to the extent the issuance of such Partnership Interests was to allow the General
Partner to issue corresponding preferred stock to persons who are not Affiliates);




          (iii) either (A) exchange shares, consolidate, merge into or with, or convey, transfer or
lease its assets substantially as an entirety to, any corporation or other entity or (B) amend,
alter or repeal the provisions of the Partnership Agreement, whether by merger, consolidation or
otherwise, that would materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series N Preferred Units or the holders thereof;
provided, however, that with respect to the occurrence of a share exchange, merger,
consolidation or a sale or lease of all of the Partnership’s assets as an entirety, so long as (1)
the Partnership is the surviving entity and the Series N Preferred Units remain outstanding with
the terms thereof unchanged, or (2) the resulting, surviving or transferee entity (I) is a
partnership,


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limited liability company or other pass-through entity organized under the laws of any
state, (II) is not taxable as a corporation for U.S. federal income tax purposes, and (III)
substitutes for the Series N Preferred Units other interests in such entity having substantially
the same terms and rights as the Series N Preferred Units, including with respect to distributions,
voting rights and rights upon liquidation, dissolution or winding-up, then the occurrence of any
such event shall
not be deemed to materially and adversely affect such powers, special rights, preferences,
privileges or voting powers of the holders of the Series N Preferred Units; and provided
further that any increase in the amount of Partnership Interests or the creation or
issuance of any other class or series of Partnership Interests, in each case ranking (y) junior to
the Series N Preferred Units with respect to payment of distributions or the distribution of assets
upon liquidation, dissolution or winding-up, or (z) on a parity to the Series N Preferred Units
with respect to payment of distributions or the distribution of assets upon liquidation,
dissolution or winding-up, to the extent such Partnership Interests are not issued to an Affiliate
of the Partnership (an issuance to the General Partner shall not be treated as an issuance to an
Affiliate of the Partnership to the extent the issuance of such Partnership Interests was to allow
the General Partner to issue corresponding preferred stock to persons who are not Affiliates of the
Partnership) such issuance shall not be deemed to materially and adversely affect such powers,
special rights, preferences, privileges or voting powers (for this purpose, partnership interests
that rank in parity with the Series D, F, H, I, K, L and M Preferred Units or other series with
equivalent parity shall not be treated as ranking senior to, and shall be treated as in parity
with, the Series N Preferred Units and any other series that rank in parity with the Series N
Preferred Units); or




          (iv) increase the authorized or issued amount of Series N Preferred Units.




     In addition to the foregoing, the Partnership will not (x) enter into any contract, mortgage,
loan or other agreement that prohibits or restricts, or has the effect of prohibiting or
restricting, the ability of a holder of the Preferred Units to exercise its rights set forth herein
to effect in full an exchange or redemption pursuant to Section 8, below, except with the written
consent of such holder; or (y) amend, alter, or repeal or waive Sections 7.6 or 11.3(f) of the
Partnership Agreement without the affirmative vote of at least a majority of the Series N Preferred
Units outstanding at the time.



     Section 7. Transfer Restrictions. The holders of Series N Preferred Units shall be
subject to all of the provisions of Section 11 of the Partnership Agreement except Section 11.3(b),
as modified by this Section 7. Except as otherwise provided, if the General Partner’s consent to a
transfer of Series N Preferred Units is required by Section 11.3 of the Partnership Agreement, the
General Partner agrees not to unreasonably withhold that consent. Subject to the consent of the
General Partner, which shall not be unreasonably withheld or delayed, the Series N Preferred Units
may be transferred to a maximum of five (5) persons. At no time shall the number of holders of the
Series N Preferred Units exceed five.



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     Section 8. Exchange Rights.



     (a) Right to Exchange. (i) All, but not less than all, of the Series N Preferred
Units will be exchangeable at any time on or after the tenth (10th) anniversary of the date of
issuance, at the option of the Partnership or upon the affirmative vote of the holders of a
majority of the
outstanding Series N Preferred Units, for authorized but previously unissued shares of 7 1/8%
Series N Cumulative Redeemable Preferred Stock of the General Partner (the “Series N Preferred
Stock”) at an exchange rate of one share of Series N Preferred Stock for one Series N Preferred
Unit, subject to adjustment as described below (the “Series N Exchange Price”); provided
that all, but not less than all, of the Series N Preferred Units will become exchangeable for
Series N Preferred Stock at any time upon the affirmative vote of the holders of a majority of the
outstanding Series N Preferred Units (x) if at any time full distributions shall not have been
timely made on any Series N Preferred Unit with respect to six (6) prior quarterly distribution
periods, whether or not consecutive; provided, however, that a distribution in respect of Series N
Preferred Units shall be considered timely made if made within two (2) Business Days after the
applicable Series N Preferred Unit Distribution Payment Date if at the time of such late payment
there shall not be any prior quarterly distribution periods in respect of which full distributions
were not timely made, or (y) at any time (1) a holder of Series N Preferred Units concludes (in the
reasonable judgment of the holder) that it is imminent that the Partnership will not or likely will
not satisfy the income and asset tests of Section 856 of the Internal Revenue Code of 1986, as
amended (the “Code“), for a taxable year if the Partnership were a real estate investment
trust within the meaning of the Code, (2) such holder delivers to the General Partner an opinion of
nationally recognized independent counsel to the effect that it is imminent that the Partnership
will not or likely will not satisfy the income and asset tests of Section 856 of the Code for a
taxable year if the Partnership were a real estate investment trust within the meaning of the Code,
and (3) such failure would create a meaningful risk that a holder of the Series N Preferred Units
would fail to maintain its qualification as a real estate investment trust.



     In addition to and not in limitation of the foregoing, all, but not less than all, of the
Series N Preferred Units may be exchanged (regardless of whether held by GSEP 2005 Realty Corp.
(“Contributor”)) upon the affirmative vote of the holders of a majority of the outstanding
Series N Preferred Units for Series N Preferred Stock (but only if the exchange in whole may be
accomplished consistently with the ownership limitations set forth under the Article IV of the
Charter of the General Partner, taking into account exceptions thereto) if at any time (i) such
holders conclude based on results or projected results that there exists (in the reasonable
judgment of such holders) an imminent and substantial risk that the Series N Preferred Units
represent or will represent more than 19.5% of the total profits of or capital interests in the
Partnership for a taxable year, (ii) such holders deliver to the General Partner an opinion of
nationally recognized independent counsel, reasonably acceptable to the General Partner, to the
effect that there is a substantial risk that its interest in the Partnership does not or will not
satisfy



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the 19.5% limit, and (iii) the General Partner agrees with the conclusions referred to in
clauses (i) and (ii) of this sentence, such agreement not to be unreasonably withheld.



          (ii) Notwithstanding anything to the contrary set forth in Section 8(a)(i), if an Exchange
Notice (as hereinafter defined) has been delivered to the General Partner, then the General Partner
may, at its option, elect to redeem or cause the Partnership to redeem all (but not a portion) of
the outstanding Series N Preferred Units for cash in an amount equal to the
Liquidation Preference per Series N Preferred Unit. The General Partner may exercise its option to
redeem the Series N Preferred Units for cash pursuant to this Section 8(a)(ii) by giving each
holder of record of Series N Preferred Units notice of its election to redeem for cash, within five
(5) Business Days after receipt of the Exchange Notice, by (m) fax, and (n) registered mail,
postage paid at the address of each holder as it may appear on the records of the Partnership
stating (A) the redemption date, which shall be no later than sixty (60) days following the receipt
of the Exchange Notice, (B) the redemption price, (C) the place or places where the Series N
Preferred Units are to be surrendered for payment of the redemption price, (D) that distributions
on the Series N Preferred Units will cease to accrue on such redemption date; (E) that payment of
the redemption price will be made upon presentation and surrender of the Series N Preferred Units
and (F) the aggregate number of Series N Preferred Units to be redeemed.




          (iii) If an exchange of Series N Preferred Units pursuant to Section 8(a)(i) would violate the
provisions on ownership limitation of the General Partner set forth in Article IV of the Charter of
the General Partner (taking into account exceptions thereto) with respect to the Series N Preferred
Stock, the General Partner shall give written notice thereof to each holder of record of Series N
Preferred Units, within five (5) Business Days following receipt of the Exchange Notice, by (m)
fax, and (n) registered mail, postage prepaid, at the address of each such holder set forth in the
records of the Partnership. In such event, each holder of Series N Preferred Units shall be
entitled to exchange, pursuant to the provisions of Section 8(b) a number of Series N Preferred
Units which would comply with the provisions on the ownership limitation of the General Partner set
forth in such Article IV of the Charter of the General Partner and any Series N Preferred Units not
so exchanged (the “Excess Units”) shall be redeemed by the Partnership for cash in an
amount equal to the Liquidation Preference. The written notice of the General Partner shall state
(A) the number of Excess Units held by such holder, (B) the redemption price of the Excess Units,
(C) the date on which such Excess Units shall be redeemed, which date shall be no later than sixty
(60) days following the receipt of the Exchange Notice, (D) the place or places where such Excess
Units are to be surrendered for payment of the redemption price, (E) that distributions on the
Excess Units will cease to accrue on such redemption date, and (F) that payment of the redemption
price will be made upon presentation and surrender of such Excess Units. If an exchange would
result in Excess Units, as a condition to such exchange, each holder of such units agrees to
provide representations and covenants reasonably requested by the General Partner relating to (1)
the widely held nature of the interests in such holder, sufficient to assure the General Partner
that the holder’s ownership of stock of the


11









 







General Partner (without regard to the limits described
above) will not cause any Person (as such term is defined in the Charter of the General Partner) to
own stock of the General Partner in an amount that would cause such Person not to comply with the
provisions of the ownership limitation of the General Partner set forth in such Article IV of the
Charter of the General Partner; and (2) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder’s ownership of tenants of the Partnership
and its affiliates.




     To the extent the General Partner would not be able to pay the cash set forth above in
exchange for the Excess Units, and to the extent consistent with the Charter, the General Partner
agrees that it will grant to the holders of the Series N Preferred Units exceptions to the
Beneficial Ownership Limit and Constructive Ownership Limit set forth in the Charter sufficient to
allow such holders to exchange all of their Series N Preferred Units for Series N Preferred Stock,
provided such holders furnish to the General Partner representations acceptable to the General
Partner in its sole and absolute discretion which assure the General Partner that such exceptions
will not jeopardize the General Partner’s tax status as a REIT for purposes of federal and
applicable state law.



     Notwithstanding any provision of the Agreement to the contrary, no holder of Series N
Preferred Units shall be entitled to effect an exchange of Series N Preferred Units for Series N
Preferred Stock to the extent that the ownership or right to acquire such shares would cause the
holder or any other Person or, in the opinion of counsel selected by the General Partner, may cause
the holder or any other Person, to violate the restrictions on ownership and transfer of Series N
Preferred Stock set forth in the Charter (taking into account exceptions thereto). To the extent
any such attempted exchange for Series N Preferred Stock would be in violation of the previous
sentence, it shall be void ab initio and such holder of Series N Preferred Units shall not acquire
any rights or economic interest in the Series N Preferred Stock otherwise issuable upon such
exchange.



          (iv) The redemption of Series N Preferred Units described in Sections 8(a)(ii) and 8(a)(iii)
shall be subject to the provisions of Sections 5(b)(i) and 5(b)(ii); provided, however, that the
term “;redemption price” in such Section shall be read to mean the Liquidation Preference per Series
N Preferred Unit being redeemed.




     (b) Procedure for Exchange. (i) Any exchange shall be exercised pursuant to a notice
of exchange (the “Exchange Notice”) delivered to the General Partner by the holder who is
exercising such exchange right, by (a) fax and (b) by certified mail postage prepaid. The exchange
of Series N Preferred Units may be effected after the fifth (5th) Business Day following receipt by
the General Partner of the Exchange Notice by delivering certificates, if any, representing such
Series N Preferred Units to be exchanged together with, if applicable, written notice of exchange
and a proper assignment of such Series N Preferred Units to the office of the



12









 







General Partner
maintained for such purpose. Currently, such office is c/o PS Business Parks, Inc., 701 Western
Avenue, Glendale, California 91201, Attention: Edward A. Stokx. Each exchange will be deemed to
have been effected immediately prior to the close of business on the date on which such Series N
Preferred Units to be exchanged (together with all required documentation) shall have been
surrendered and notice shall have been received by the General Partner as aforesaid and the Series
N Exchange Price shall have been paid. Any Series N Preferred Stock issued pursuant to this Section
8 shall be delivered, as promptly as practicable, as shares which are duly authorized, validly
issued, fully paid and nonassessable, free of pledge, lien, encumbrance or restriction other than
those provided in the Charter, the Bylaws of the
General Partner, the Securities Act of 1933, as amended, and relevant state securities or blue sky
laws.



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




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




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



          (ii) In case the General Partner shall be a party to any transaction (including, without
limitation, a merger, consolidation, statutory share exchange, tender offer for all or
substantially all of the General Partner’s capital stock or sale of all or substantially all of the
General Partner’s assets), in each case as a result of which the Series N Preferred Stock will be


13









 







converted into the right to receive shares of capital stock, other securities or other property
(including cash or any combination thereof), each Series N Preferred Unit will thereafter be
exchangeable into the kind and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the consummation of such transaction by
a holder of that number of shares of Series N Preferred Stock or fraction thereof into which one
Series N Preferred Unit was exchangeable immediately prior to such transaction. The General Partner
may not become a party to any such transaction unless the terms thereof are consistent with the
foregoing. In addition, so long as the Contributor or any of its permitted successors or assigns
holds any Series N Preferred Units, the General Partner shall not, without the affirmative vote of
the holders of at least a majority of the Series N Preferred Units
outstanding at the time: (a) designate or create, or increase the authorized or issued amount of,
any class or series of shares ranking senior to the Series N Preferred Stock with respect to the
payment of distributions or rights upon liquidation, dissolution or winding-up or reclassify any
authorized shares of the General Partner into any such shares, or create, authorize or issue any
obligations or securities convertible into or evidencing the right to purchase any such shares; or
(b) amend, alter or repeal the provisions of the Charter or Bylaws of the General Partner, whether
by merger, consolidation or otherwise, that would materially and adversely affect the powers,
special rights, preferences, privileges or voting power of the Series N Preferred Stock or the
holders thereof; provided, however, that any increase in the amount of authorized
Preferred Shares or the creation or issuance of any other series or class of Preferred Shares, or
any increase in the amount of authorized shares of each class or series, in each case ranking
either (1) junior to the Series N Preferred Stock with respect to the payment of distributions and
the distribution of assets upon liquidation, dissolution or winding-up, or (2) on a parity with the
Series N Preferred Stock with respect to the payment of distributions and the distribution of
assets upon liquidation, dissolution or winding-up shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers. In the event of a conflict between
the provisions of this Section 8(c)(ii) and any provision of the Partnership Agreement, the
provisions of this Section 8(c)(ii) shall control.




     Section 9. No Conversion Rights. Except as set forth in Section 8, the holders of the
Series N Preferred Units shall not have any rights to convert such units into shares of any other
class or series of stock or into any other securities of, or interest in, the Partnership.



     Section 10. No Sinking Fund. No sinking fund shall be established for the retirement
or redemption of Series N Preferred Units.



     Section 11. Exhibit A to Partnership Agreement. In order to duly reflect the issuance
of the Series N Preferred Units provided for herein, the Partnership Agreement is hereby further
amended pursuant to Section 12.3 thereof by deleting Exhibit A thereto and replacing such Exhibit A
with Exhibit C attached hereto.



     Section 12. Inconsistent Provisions. Nothing to the contrary contained in the
Partnership Agreement shall limit any of the rights or obligations set forth in this Amendment.



14









 





     IN WITNESS WHEREOF this Amendment has been executed as of the date first above written.



	 	 	 	 	 
	 	PS BUSINESS PARKS, INC.

 	 
	 	By:  	/s/ Edward A. Stokx
 	 
	 	 	Name:  	Edward A. Stokx 	 
	 	 	Title:  	Executive Vice President, Chief Financial Officer 	 



15









 






	 	 	 	 	 



Exhibit A




FORM OF

REDEMPTION AGREEMENT





     THIS REDEMPTION AGREEMENT (the “Agreement”) is entered into effective as of the ___day of
___, ___, by and between GSEP 2005 Realty Corp., a Delaware corporation (the “Retiring
Partner”), and PS Business Parks, L.P., a California limited partnership (the “Partnership”).



RECITALS:




     WHEREAS, the Agreement of Limited Partnership of the Partnership, dated as of March 17, 1998,
has been amended from time to time and was amended by an Amendment to Agreement of Limited
Partnership Relating to 7 1/8% Series N Cumulative Redeemable Preferred Units (the “Amendment”);



     WHEREAS, the Retiring Partner owns ___of the 7 1/8% Series N Cumulative Redeemable
Preferred Units in the Partnership (the “Series N Preferred Units”); and



     WHEREAS, the Partnership desires to redeem the Series N Preferred Units of the Retiring
Partner, and the Retiring Partner desires to liquidate its Series N Preferred Units (the
“Redemption”) pursuant to the Amendment and based on the representations and under the terms and
conditions hereinafter set forth;



     NOW, THEREFORE, in consideration of the mutual covenants, representations and agreements
herein contained, the parties hereto, intending to be legally bound, do hereby covenant and agree
as follows:




	1.	 	Liquidation of Retiring Partner. In satisfaction of the terms and conditions set
forth herein and in the Amendment, the Retiring Partner’s Series N Preferred Units are hereby
completely liquidated and the Retiring Partner immediately and automatically ceases to be a
limited partner in the Partnership in exchange for the payment of the Series N Redemption
Price (as defined in the Amendment and in accordance with the provisions set forth in the
Amendment) and for other good and valuable consideration.






	2.	 	Representations of Retiring Partner. The Retiring Partner represents and warrants to
the Partnership that:






	 	a.	 	The Retiring Partner is duly organized and validly existing under the laws of
the State of Delaware and has been duly authorized by all necessary and appropriate




 









 






	 	 	 	corporate action to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement is a valid and binding obligation of the
Retiring Partner, enforceable against the Retiring Partner in accordance with its
terms, except insofar as such enforceability may be affected by bankruptcy,
insolvency or similar laws affecting creditor’s rights generally and the
availability of any particular equitable remedy.






	 	b.	 	The Retiring Partner has not sold, assigned or otherwise disposed of all or any
portion of the Series N Preferred Units and the Series N Preferred Units are free of
any liens, security interests, encumbrances or other restrictions, whether existing of
record or otherwise.
	 
	 	c.	 	The execution of this Agreement by the Retiring Partner and the performance of
his obligations hereunder will not violate any contract, mortgage, indenture, or other
similar restriction to which the Retiring Partner is a party or by which its assets are
bound.
	 
	 	d.	 	Neither the execution nor the delivery of this Agreement nor the consummation
of the transactions contemplated herein nor fulfillment of or compliance with the terms
and conditions hereof (a) conflict with or will result in a breach of any of the terms,
conditions or provisions of (i) the organizational and governing documents of the
Retiring Partner or (ii) any agreement, order, judgment, decree, arbitration award,
statute, regulation or instrument to which the Retiring Partner is a party or by which
it or its assets are bound, or (b) constitutes or will constitute a breach, violation
or default under any of the foregoing. No consent or approval, authorization, order,
regulation or qualification of any governmental entity or any other person is required
for the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Retiring Partner.






	3.	 	Representations and Warranties of the Partnership. The Partnership represents and
warrants to the Retiring Partner as follows:






	 	a.	 	The Partnership is duly organized and validly existing under the laws of the
State of California and has been duly authorized by all necessary and appropriate
partnership action to enter into this Agreement and to consummate the transactions
contemplated herein. This Agreement is a valid and binding obligation of the
Partnership enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally.
	 
	 	b.	 	The execution of this Agreement by the Partnership and the performance of its
obligations hereunder will not violate any contract, mortgage, indenture, or other




 









 






	 	 	 	similar restriction to which the Partnership is a party or by which the Partnership
is bound.






	 	c.	 	Neither the execution nor the delivery of this Agreement nor the consummation
of the transactions contemplated herein nor fulfillment of or compliance with the terms
and conditions hereof (a) conflict with or will result in a breach of any of the terms,
conditions or provisions of (i) the organizational and governing documents of the
Partnership or (ii) any agreement, order, judgment, decree, arbitration award, statute,
regulation or instrument to which the Partnership is a party or by which it or its
assets are bound, or (b) constitutes or will constitute a breach, violation or default
under any of the foregoing. No consent or approval, authorization, order, regulation
or qualification of any governmental entity or any other person is required for the
execution and delivery of this Agreement and the consummation of the transactions
contemplated hereby by the Partnership.
	 
	 	d.	 	Consummation of the Redemption by the Partnership will not render the
Partnership insolvent under California partnership law.






	4.	 	Indemnification.






	 	a.	 	The Retiring Partner covenants and agrees to indemnify the Partnership and hold
it harmless against and with respect to any and all damage, loss, liability,
deficiency, cost and expense, including reasonable attorneys’ fees, (i) resulting from
any misrepresentation, breach of warranty or non-fulfillment of any agreement or
covenant on the part of the Retiring Partner under this Agreement, and (ii) from any
and all actions, suits, proceedings, demands, assessments, judgments, costs and legal
and other expenses incident to any of the foregoing.
	 
	 	b.	 	The Partnership covenants and agrees to indemnify the Retiring Partner and hold
him harmless against and with respect to any and all damage, loss, liability,
deficiency, cost and expense, including reasonable attorneys’ fees, (i) resulting from
any misrepresentation, breach of warranty or non-fulfillment of any agreement or
covenant on the part of such Partnership under this Agreement and (ii) from any and all
actions, suits, proceedings, demands, assessments, judgments, costs and legal and other
expenses incident to any of the foregoing.






	5.	 	Survival of Representations and Warranties. All representations, warranties,
covenants and agreements of any of the parties hereto made in this Agreement shall survive the
execution and delivery hereof, the Closing hereunder, the execution and delivery of all
instruments and documents executed in connection therewith.




 









 












	6.	 	Integration, Interpretation and Miscellaneous. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter herein and it shall not
be changed or terminated orally. This Agreement shall be construed in accordance with the
laws of the state of California. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal representatives, and
successors, or successors and assigns, as the case may be. The headings in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation of this
Agreement.




 









 











     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.



	 	 	 	 	 
	 	RETIRING PARTNER:



GSEP 2005 Realty Corp.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	PARTNERSHIP:


PS Business Parks, L.P.

 	 
	 	By:  	PS Business Parks, Inc., its
 	 
	 	 	General Partner 	 
	 	 	 	 





	 	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



Exhibit B




FORM OF

AMENDMENT TO

AGREEMENT OF LIMITED PARTNERSHIP

OF

PS BUSINESS PARKS, L.P.





     This Amendment to Agreement of Limited Partnership of PS Business Parks, L.P. (the
“Partnership”), dated as of ___, ___(this “Amendment”) is entered into by the
General Partner of the Partnership, PS Business Parks, Inc., and GSEP 2005 Realty Corp., a Delaware
corporation, as a withdrawing Limited Partner of the Partnership (the “Withdrawing Partner”).



WITNESSETH:




     WHEREAS, capitalized terms used herein, unless otherwise defined, have the meanings assigned
to such terms in the Agreement of Limited Partnership of the Partnership entered into as of March
17, 1998, as amended (the “Agreement”).



     WHEREAS, [pursuant to the redemption by the Partnership of all of the 7 1/8% Series N
Cumulative Redeemable Preferred Units pursuant to the terms and conditions set forth in that
certain Contribution Agreement by and between the Partnership and the Withdrawing Partner, dated as
of December 12, 2005, and the Amendment to the Limited Partnership Agreement, dated December 12,
2005, the 7 1/8% Series N Cumulative Redeemable Preferred Units of the Withdrawing Partner have
been redeemed by the Partnership and the General Partner desires to amend the Partnership Agreement
to (a) set forth a revised list of all Partners of the Partnership as of the date hereof and (b)
reflect the withdrawal of the Withdrawing Partner from the Partnership] OR



     [pursuant to the exchange by the Withdrawing Partner of all of the 7 1/8% Series N Cumulative
Redeemable Preferred Units for 7 1/8% Series N Cumulative Redeemable Preferred Stock of the General
Partner pursuant to the terms of conditions set forth in that certain Contribution Agreement by and
between the Partnership and the Withdrawing Partner, dated as of December 12, 2005, and the
Amendment to the Limited Partnership Agreement, dated December 12, 2005, the 7 1/8% Series N
Cumulative Redeemable Preferred Units of the Withdrawing Partner have been exchanged by the
Withdrawing Partner for 7 1/8% Series N Cumulative Redeemable Preferred Stock of the General
Partner and the General Partner desires to amend the Partnership Agreement to (a) set forth a
revised list of all Partners of the Partnership as of the date hereof and (b) reflect the
withdrawal of the Withdrawing Partner from
the Partnership]



 









 





     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
parties hereby agree as follows:



     1. This Amendment shall be deemed effective as of the date first above written. Except as
amended hereby, the Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.



     2. To evidence the exchange of the 7 1/8% Series N Cumulative Redeemable Preferred Units of
the Withdrawing Partner for 7 1/8% Series N Cumulative Redeemable Preferred Stock of the General
Partner and the withdrawal of the Withdrawing Partner as a Limited Partner of the Partnership,
attached hereto as Schedule A is a current list of Partners of the Partnership as of the
date hereof.



     3. The Withdrawing Partner is entering into this Amendment to evidence its withdrawal as a
Limited Partner of the Partnership.



     4. This Amendment shall be deemed to be a contract made under the laws of the State of
California and for all purposes shall be governed by and construed in accordance with the laws of
such state.



 









 





     IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed and delivered as
of the date first above written.



	 	 	 	 	 
	 	GENERAL PARTNER:





PS BUSINESS PARKS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WITHDRAWING PARTNER





GSEP 2005 REALTY CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: