Document:

psb-20191231 10K (EX-45)

		

			Exhibit 4.5

		

		
			DESCRIPTION OF COMMON STOCK 
		

		
			Unless the context otherwise requires, the terms “we,” “our,” “us,” and the “Company” refer to PS Business Parks, Inc., a California corporation, and the term “Operating Partnership” refers to PS Business Parks L.P., a California limited partnership.
		

		
			We are authorized to issue 100,000,000 shares of common stock, par value $0.01 per share. 
		

		
			Common Stock 
		

		
			The following description of our common stock sets forth certain general terms and provisions of the common stock. The statements below describing our common stock are in all respects subject to and qualified in their entirety by reference to the applicable provisions of our articles of incorporation and bylaws. 
		

		
			Subject to any preference with respect to our preferred stock or equity stock, holders of our common stock will be entitled to receive distributions when, as and if declared by our board of directors, out of funds legally available therefor. Payment and declaration of dividends on our common stock and purchases of shares of common stock by us will be subject to certain restrictions if we fail to pay dividends on outstanding preferred stock. See “Description of Preferred Stock.” Upon any liquidation, dissolution or winding up of our company, holders of common stock will be entitled to share ratably in any assets available for distribution to them, after payment or provision for payment of the debts and our other liabilities and the preferential amounts owing with respect to any of our outstanding preferred stock. Holders of our common stock have no preemptive rights, except such as have been provided to certain of our shareholders by contract, which means public shareholders have no right to acquire any additional shares of common stock that we may issue at a later date. 
		

		
			Each outstanding share of our common stock entitles the holder to one vote on all matters presented to our shareholders for a vote, with the exception that they have cumulative voting rights with respect to the election of our board of directors, in accordance with California law. Cumulative voting means that each holder of our common stock is entitled to cast as many votes as there are directors to be elected multiplied by the number of shares registered in his or her name. A holder of our common stock may cumulate the votes for directors by casting all of the votes for one candidate or by distributing the votes among as many candidates as he or she chooses. Cumulative voting is intended to provide holders of smaller blocks of stock with more meaningful influence in the election of directors than they would have without cumulative voting. The outstanding shares of our common stock are, and additional shares of common stock will be, when issued, fully paid and nonassessable. 
		

		
			The partnership agreement of our Operating Partnership provides that we may not consummate a business combination in which we must have a vote of our shareholders unless the matter is also approved by the vote of the partners of the Operating Partnership. For this purpose, a business combination is any merger, consolidation or other combination with or into another person or sale of all or substantially all of our assets, or any reclassification, recapitalization or change of our existing common stock. These provisions have the effect of increasing Public Storage’s influence over us, due to its ownership of operating partnership units, and also make it more difficult for us to consummate a business combination. 
		

		
			Our common stock is traded on the New York Stock Exchange under the symbol “PSB.” The transfer agent and registrar of our common stock is American Stock Transfer & Trust Company. 
		

		
			The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock or our equity stock which we may designate and issue in the future. See “Description of Preferred Stock.”
		

		
			 
		

		
			Ownership Limitations 
		

		
			For us to qualify as a REIT under the Internal Revenue Code (the “Code”) no more than 50% in value of our outstanding shares of capital stock may be owned, directly or constructively under the applicable attribution rules of the Code, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a 
		

		

		

		 

 

		

			 

		

		taxable year. In order to maintain our qualification as a REIT, our articles of incorporation provide certain restrictions on the shares of capital stock that any shareholder may own. 
		

		
			Our articles of incorporation provide that, subject to certain exceptions, no holder may own, or be deemed to own by virtue of the attribution provisions of the Code, more than (A) 7.0% of the outstanding shares of our common stock and (B) 9.9% of the outstanding shares of each class or series of shares of our preferred stock or equity stock and that all shares of stock be imprinted with a legend setting forth that restriction. Our articles of incorporation provide, however, that no person shall be deemed to exceed the ownership limit solely by reason of the beneficial ownership of shares of any class of stock to the extent that such shares of stock were beneficially owned by such person (including Public Storage) upon completion of, and after giving effect to, the merger with American Office Park Properties. Thus, this limitation does not affect the ownership of common stock held by Public Storage and certain other shareholders at the time of the merger. Furthermore, the limitation does not apply with respect to shares of stock deemed to be owned by a person as a result of such person’s ownership of shares of Public Storage (however, such ownership will be taken into account in determining whether a subsequent acquisition or transfer of our shares (but not Public Storage) violates the ownership limit). The ownership limitation is intended to assist in preserving our REIT status in view of Public Storage’s substantial ownership interest in us and the Hughes family’s substantial ownership interest in Public Storage. There can be no assurance, however, that such ownership limit will enable us to satisfy the requirement that a REIT not be “closely held” within the meaning of Section 856(h) of the Code for any given taxable year, in part as a result of the provision described above providing that the ownership limitation generally does not apply to our shares deemed to be owned as a result of a person’s ownership of shares of Public Storage. 
		

		
			Our articles of incorporation provide that our board of directors, in its sole and absolute discretion, may grant exceptions to the ownership limits, so long as (A) our board has determined that we would not be “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the event in question takes place during the second half of a taxable year) and would not otherwise fail to qualify as a REIT, after giving effect to an acquisition by an excepted person of beneficial ownership of the maximum amount of capital stock permitted as a result of the exception to be granted, and taking into account the existing and permitted ownership by other persons of stock (taking into account any other exceptions granted) and (B) the excepted persons provide to our board such representations and undertakings as our board may require. In any case, no holder may own or acquire, either directly, indirectly or constructively under the applicable attribution rules of the Code, any shares of any class of capital stock if such ownership or acquisition (i) would cause more than 50% in value of outstanding capital stock to be owned, either directly or constructively, under the applicable attribution rules of the Code, by five or fewer individuals (as defined in the Code to include certain tax-exempt entities, other than, in general, qualified domestic pension funds), (ii) would result in our stock being beneficially owned by less than 100 persons (determined without reference to any rules of attribution) or (iii) would otherwise result in our failing to qualify as a REIT. 
		

		
			Our articles of incorporation generally provide that if any holder of capital stock purports to transfer shares to a person or there is a change in our capital structure, and either the transfer or the change in capital structure would result in our failing to qualify as a REIT, or such transfer or the change in capital structure would cause the transferee to hold shares in excess of the applicable ownership limit, then the shares causing the violation will be automatically transferred to a trust for the benefit of a designated charitable beneficiary. The purported transferee of those shares will have no right to receive dividends or other distributions with respect to them and will have no right to vote the shares. Any dividends or other distributions paid to such purported transferee prior to the discovery by us that the shares have been transferred to a trust will be paid to the trustee of the trust for the benefit of the charitable beneficiary upon demand. The trustee will designate a transferee of those shares so long as the shares would not violate the restrictions on ownership in the articles of incorporation in the hands of the designated transferee. Upon the sale of such shares, the purported transferee will receive out of any proceeds remaining after payment of expenses of the charitable trust and us the lesser of (A)(i) the price per share such purported transferee paid for the stock in the purported transfer that resulted in the transfer of the shares to the trust, or (ii) if the transfer or other event that resulted in the transfer of the shares to the trust was not a transaction in which the purported transferee gave full value for such shares, a price per share equal to the market price on the date of the purported transfer or other event that resulted in the transfer of the shares to the trust and (B) the price per share received by the trustee from the sale or other disposition of the shares held in the trust. Each purported transferee shall be deemed to have waived any claims such purported transferee may have against the trustee and us arising from the disposition of the 
		

		 

 

		

			 

		

		shares, except for claims arising from the trustee’s or our gross negligence, willful misconduct, or failure to make payments when required by the articles of incorporation. 
		

		
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		DESCRIPTION OF PREFERRED STOCK 
		

		
			We are authorized to issue 50,000,000 shares of preferred stock, par value $0.01 per share. Our articles of incorporation provide that the preferred stock may be issued from time to time in one or more series and give our board of directors broad authority to fix the dividend and distribution rights, conversion and voting rights, if any, redemption provisions and liquidation preferences of each series of preferred stock. Holders of preferred stock have no preemptive rights. The preferred stock will be, when issued, fully paid and nonassessable. 
		

		
			The issuance of preferred stock with special voting rights could be used to deter attempts to obtain control of us in transactions not approved by our board of directors. We have no present intention to issue stock for that purpose. For a discussion of provisions in the partnership agreement of the Operating Partnership that restrict our ability to enter into business combinations, see “Description of Common Stock.” 
		

		
			Description of 5.20% Cumulative Preferred Stock, Series W
		

		
			General
		

		
			The following is a brief description of the terms of our 5.20% Cumulative Preferred Stock, Series W (“Series W Preferred Stock”), which does not purport to be complete and is subject to and qualified in its entirety by reference to the Certificate of Determination of the Series W Preferred Stock, which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part. Our Series W Preferred Stock is listed on the NYSE under the symbol “PSBPrW.”
		

		
			Ranking
		

		
			With respect to the payment of dividends and amounts upon liquidation, the Series W Preferred Stock will rank pari passu with any other shares of preferred stock issued by us, whether now or hereafter issued, ranking pari passu with the Senior Preferred Stock (collectively, with the Series W Preferred Stock, the “Senior Preferred Stock”), and will rank senior to our common stock and any other capital stock of the Company ranking junior to the Series W Preferred Stock.
		

		
			Dividends
		

		
			Holders of shares of Series W Preferred Stock, in preference to the holders of shares of our common stock, and of any other capital stock issued by us ranking junior to the Series W Preferred Stock as to payment of dividends, will be entitled to receive, when, as and if declared by the Board of Directors out of assets of the Company legally available for payment, cash dividends payable quarterly at the rate of 5.20% of the liquidation preference per year ($1,300.00 per year per share of Series W Preferred Stock, equivalent to $1.30 per year per Series W Depositary Share (as defined below)). Dividends on the shares of Series W Preferred Stock will be cumulative from, and including, the date of issuance and will be payable, when, as and if declared by the board of directors, quarterly on or before March 31, June 30, September 30 and December 31, commencing on or before December 31, 2016, to holders of record as they appear on the stock register of the Company on such record dates, not less than 15 or more than 45 days preceding the payment dates thereof, as shall be fixed by the board of directors. After full dividends on the Series W Preferred Stock have been paid or declared and funds set aside for payment for all past dividend periods and for the then current quarter, the holders of shares of Series W Preferred Stock will not be entitled to any further dividends with respect to that quarter.
		

		
			When dividends are not paid in full upon the Series W Preferred Stock and any other shares of preferred stock of the Company ranking on a parity as to dividends with the Series W Preferred Stock (including the other series of Senior Preferred Stock), all dividends declared upon the Series W Preferred Stock and any other preferred shares of the Company ranking on a parity as to dividends with the Series W Preferred Stock shall be declared pro rata so that the amount of dividends declared per share on such Series W Preferred Stock and such other shares shall in all cases bear to each other the same ratio that the accrued dividends per share on the Series W Preferred Stock and such other preferred shares bear to each other. Except as set forth in the preceding sentence, unless full dividends on the Series W Preferred Stock have been paid for all past dividend periods, no dividends (other than in common stock or other 
		

		 

 

		

			 

		

		shares of capital stock issued by us ranking junior to the Series W Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set aside for payment, nor shall any other distribution be made on the common stock or on any other shares of capital stock issued by us ranking junior to or on a parity with the Series W Preferred Stock as to dividends or upon liquidation.
		

		
			Unless full dividends on the Series W Preferred Stock have been paid for all past dividend periods, we and our subsidiaries may not redeem, repurchase or otherwise acquire for any consideration (nor may we or they pay or make available any moneys for a sinking fund for the redemption of) any shares of common stock or any other shares of capital stock issued by us ranking junior to or on a parity with the Series W Preferred Stock as to dividends or upon liquidation except by conversion into or exchange for shares of capital stock issued by us ranking junior to the Series W Preferred Stock as to dividends and upon liquidation.
		

		
			If for any taxable year, we elect to designate as “capital gain dividends” (as defined in the Code) any portion of the dividends paid or made available for the year to the holders of all classes and series of our stock, then the portion of the dividends designated as capital gain dividends that will be allocable to the holders of Series W Preferred Stock will be an amount equal to the total capital gain dividends multiplied by a fraction, the numerator of which will be the total dividends paid or made available to the holders of Series W Preferred Stock for the year (determined for U.S. federal income tax purposes), and the denominator of which will be the total dividends paid or made available to holders of all classes and series of our outstanding stock for that year (determined for U.S. federal income tax purposes).
		

		
			Our credit facility restricts our ability to pay distributions in excess of 95% of our “Funds from Operations” for the prior four fiscal quarters. Funds from operations is defined generally as net income before gain on sale of real estate, gain or loss from debt restructuring, and deductions for depreciation and amortization. Our management believes that this restriction will not impede our ability to pay the dividends on the Series W Preferred Stock in full.
		

		
			Distributions that are treated as dividends for U.S. federal income tax purposes paid by regular C corporations to persons or entities that are taxed as individuals are generally taxed at the rate applicable to long-term capital gains, which is a maximum of 20%, subject to certain limitations. Because we are a REIT, however, our dividends, including dividends paid on the Series W Preferred Shares, generally are taxed at regular ordinary income tax rates, except to the extent that the special rules relating to qualified dividend income or capital gains dividends paid by a REIT apply. 
		

		
			No Conversion Rights
		

		
			The Series W Preferred Stock will not be convertible into shares of any other class or series of capital stock of the Company.
		

		
			Liquidation Rights
		

		
			In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of the Series W Preferred Stock will be entitled to receive out of our assets available for distribution to stockholders, before any distribution of assets is made to holders of common stock or of any other shares of capital stock issued by us ranking as to such distribution junior to the Series W Preferred Stock, liquidating distributions in the amount of $25,000 per share (equivalent to $25.00 per Depositary Share), plus all accrued and unpaid dividends (whether or not earned or declared) for the then current, and all prior, dividend periods. If upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, the amounts payable with respect to the Series W Preferred Stock and any other shares of stock issued by us ranking as to any such distribution on a parity with the Series W Preferred Stock are not paid in full, the holders of the Series W Preferred Stock and of such other shares will share ratably in any such distribution of assets of the Company in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of the liquidating distribution to which they are entitled, the holders of the Series W Preferred Stock will not be entitled to any further participation in any distribution of assets by us.
		

		

		

		 

 

		

			 

		

		For purposes of liquidation rights, a consolidation or merger of the Company with or into any other corporation or corporations or a sale of all or substantially all of the assets of the Company is not a liquidation, dissolution or winding up of the Company.
		

		
			Redemption
		

		
			Except in certain circumstances relating to our qualification as a REIT, we may not redeem the shares of Series W Preferred Stock prior to October 20, 2021. On and after October 20, 2021, at any time or from time to time, we may redeem the shares of Series W Preferred Stock in whole or in part at our option at a cash redemption price of $25,000 per share of Series W Preferred Stock (equivalent to $25.00 per Depositary Share), plus all accrued and unpaid dividends to the date of redemption. If fewer than all the outstanding shares of Series W Preferred Stock are to be redeemed, the shares to be redeemed will be determined by the board of directors of the Company, and such shares shall be redeemed pro rata from the holders of record of such shares in proportion to the number of such shares held by such holders (with adjustments to avoid redemption of fractional shares) or by lot in a manner determined by the board of directors of the Company.
		

		
			Notwithstanding the foregoing, if any dividends, including any accumulated dividends, on the Series W Preferred Stock are in arrears, we may not redeem any Series W Preferred Stock unless we redeem simultaneously all outstanding Series W Preferred Stock, and we may not purchase or otherwise acquire, directly or indirectly, any Series W Preferred Stock; provided, however, that this shall not prevent the purchase or acquisition of the Series W Preferred Stock pursuant to a purchase or exchange offer if such offer is made on the same terms to all holders of the Series W Preferred Stock.
		

		
			Notice of redemption of the Series W Preferred Stock will be given by publication in a newspaper of general circulation in the County of Los Angeles and the City of New York, such publication to be made once a week for two successive weeks commencing not less than 30 nor more than 60 days prior to the redemption date. A similar notice will be mailed by us, postage prepaid, not less than 30 or more than 60 days prior to the redemption date, addressed to the respective holders of record of shares of Series W Preferred Stock to be redeemed at their respective addresses as they appear on the stock transfer records of the Company. Each notice shall state: (1) the redemption date; (2) the number of shares of Series W Preferred Stock to be redeemed; (3) the redemption price per share of Series W Preferred Stock; (4) the place or places where certificates for the Series W Preferred Stock are to be surrendered for payment of the redemption price; and (5) that dividends on the shares of Series W Preferred Stock to be redeemed will cease to accrue on such redemption date. If fewer than all the shares of Series W Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series W Preferred Stock to be redeemed from such holder. In order to facilitate the redemption of shares of Series W Preferred Stock, the board of directors may fix a record date for the determination of shares of Series W Preferred Stock to be redeemed, such record date to be not less than 30 nor more than 60 days prior to the date fixed for such redemption.
		

		
			Notice having been given as provided above, from and after the date specified therein as the date of redemption, unless we default in providing funds for the payment of the redemption price on such date, all dividends on the Series W Preferred Stock called for redemption will cease. From and after the redemption date, unless we so default, all rights of the holders of the Series W Preferred Stock as shareholders of the Company, except the right to receive the redemption price (but without interest), will cease. Upon surrender in accordance with such notice of the certificates representing any such shares (properly endorsed or assigned for transfer, if the Company shall so require and the notice shall so state), the redemption price set forth above shall be paid out of the funds provided by the Company. If fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.
		

		
			Subject to applicable law and the limitation on purchases when dividends on the Series W Preferred Stock are in arrears, we may, at any time and from time to time, purchase any shares of Series W Preferred Stock in the open market, by tender or by private agreement.
		

		

		

		 

 

		

			 

		

		
		

		
			Voting Rights
		

		
			Except as indicated below, or except as expressly required by applicable law, holders of the Series W Preferred Stock will not be entitled to vote.
		

		
			If the equivalent of six quarterly dividends payable on the Series W Preferred Stock or any other series of preferred stock are in default (whether or not declared or consecutive), holders of the Series W Preferred Stock (voting as a class with all other shares of preferred stock that are similarly entitled to this right, without regard to series) will be entitled to elect two additional directors until all dividends in default have been paid or declared and set apart for payment.
		

		
			Such right to vote separately to elect directors shall, when vested, be subject, always, to the same provisions for vesting of such right to elect directors separately in the case of future dividend defaults. At any time when such right to elect directors separately shall have so vested, we may, and upon the written request of the holders of record of not less than 10% of the total number of shares of preferred stock of the Company then outstanding shall, call a special meeting of shareholders for the election of directors. In the case of such a written request, such special meeting shall be held within 90 days after the delivery of such request and, in either case, at the place and upon the notice provided by law and in our bylaws, provided that we shall not be required to call such a special meeting if such request is received less than 120 days before the date fixed for the next ensuing annual meeting of shareholders, and the holders of all classes of outstanding preferred stock (in the case of dividend defaults) are offered the opportunity to elect such directors (or fill any vacancy) at such annual meeting of shareholders. Directors so elected shall serve until the next annual meeting of our shareholders or until their respective successors are elected and qualify.
		

		
			The affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares of the Series W Preferred Stock will be required to amend any provision of the Articles of Incorporation, including the Certificate of Determination for the Series W Preferred Stock, if such action would adversely alter or change the powers, preferences, privileges or rights of the Series W Preferred Stock, except as set forth below. The affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares of the Series W Preferred Stock and any other series of preferred stock similarly entitled to this right and ranking on a parity with the Series W Preferred Stock as to dividends and upon liquidation, voting as a single class, will be required to authorize another class or series of shares senior to the Series W Preferred Stock with respect to the payment of dividends or the distribution of assets on liquidation.
		

		
			No consent or approval of the holders of shares of the Series W Preferred Stock will be required for the issuance from our authorized but unissued preferred stock of other shares of any series of preferred stock ranking on a parity with or junior to the Series W Preferred Stock as to payment of dividends and distribution of assets, including other shares of Series W Preferred Stock.
		

		
			 
		

		
			Description of 5.25% Cumulative Preferred Stock, Series X
		

		
			The following is a brief description of the terms of our 5.25% Series X Cumulative Preferred Stock (“Series X Preferred Stock”), which does not purport to be complete and is subject to and qualified in its entirety by reference to the Certificate of Determination of the Series X Preferred Stock, which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part. The terms and provisions of our Series X Preferred Stock are substantially the same as those of our Series W Preferred Stock as described in “—Description of 5.20% Cumulative Preferred Stock, Series W” above, except that cash dividends are payable quarterly at the rate of 5.25% of the liquidation preference per year ($1,312.50 per year per share of Series X Preferred Stock, equivalent to $1.3125 per Series X Depositary Share (as defined below)), dividends on the shares of Series X Preferred Stock commenced on December 28, 2017 and, except in certain circumstances, we may not redeem the shares of Series X Preferred Stock prior to September 21, 2022. Our Series X Preferred Stock is listed on the NYSE under the symbol “PSBPrX.”
		

		

		

		 

 

		

			 

		

		
		

		
			Description of 5.20% Cumulative Preferred Stock, Series Y
		

		
			The following is a brief description of the terms of our 5.20% Series Y Cumulative Preferred Stock (“Series Y Preferred Stock”), which does not purport to be complete and is subject to and qualified in its entirety by reference to the Certificate of Determination of the Series Y Preferred Stock, which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part. The terms and provisions of our Series Y Preferred Stock are substantially the same as those of our Series W Preferred Stock as described in “—Description of 5.20% Cumulative Preferred Stock, Series W” above, except that dividends on the shares of Series Y Preferred Stock commenced on March 29, 2018 and, except in certain circumstances, we may not redeem the shares of Series Y Preferred Stock prior to December 7, 2022. Our Series Y Preferred Stock is listed on the NYSE under the symbol “PSBPrY.”
		

		
			Description of 4.875% Cumulative Preferred Stock, Series Z
		

		
			The following is a brief description of the terms of our 4.875% Series Z Cumulative Preferred Stock (“Series Z Preferred Stock”), which does not purport to be complete and is subject to and qualified in its entirety by reference to the Certificate of Determination of the Series Z Preferred Stock, which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part. The terms and provisions of our Series Z Preferred Stock are substantially the same as those of our Series W Preferred Stock as described in “—Description of 5.20% Cumulative Preferred Stock, Series W” above, except that cash dividends are payable quarterly at the rate of 4.875% of the liquidation preference per year ($1,218.75 per year per share of Series Z Preferred Stock, equivalent to $1.21875 per Series Z Depositary Share (as defined below)), dividends on the shares of Series Z Preferred Stock commenced on December 31, 2019 and, except in certain circumstances, we may not redeem the shares of Series Z Preferred Stock prior to November 4, 2024. Our Series Z Preferred Stock is listed on the NYSE under the symbol “PSBPrZ.”
		

		
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		DESCRIPTION OF DEPOSITARY SHARES 
		

		
			Description of Depositary Shares, each Representing 1/1,000 of a Share of Series W Preferred Stock
		

		
			General
		

		
			The following is a brief description of the terms of our depositary shares, each representing 1/1,000 of a share of Series W Preferred Stock (“Series W Depositary Shares”) which does not purport to be complete and is subject to and qualified in its entirety by reference to the provisions of the Deposit Agreement relating to the Series W Preferred Stock (the “Deposit Agreement”), which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part.  
		

		
			The shares of the Series W Preferred Stock are deposited with American Stock Transfer & Trust Company, as Depositary (the “Preferred Stock Depositary”), under a Deposit Agreement among the Company, the Preferred Stock Depositary and the holders from time to time of the depositary receipts (the “Depositary Receipts”) issued by the Preferred Stock Depositary under the Deposit Agreement. The Depositary Receipts evidence the Series W Depositary Shares. Each holder of a Depositary Receipt evidencing a Series W Depositary Share is entitled, proportionately, to all the rights and preferences of, and subject to all of the limitations of, the interest in the Series W Preferred Stock represented by the Depositary Share (including dividend, voting, redemption and liquidation rights and preferences).
		

		
			Dividends
		

		
			The Depositary will distribute all cash dividends or other cash distributions received in respect of the Series W Preferred Stock to the record holders of Depositary Receipts in proportion to the number of Series W Depositary Shares owned by such holders on the relevant record date, which will be the same date as the record date fixed by us for the Series W Preferred Stock. In the event that the calculation of such amount to be paid results in an amount which is a fraction of one cent, the amount the Depositary shall distribute to such record holder shall be rounded to the next highest whole cent if such fraction of one cent is equal to or greater than $0.005. Otherwise, the fractional interest shall be disregarded.
		

		
			In the event of a distribution other than in cash, the Depositary will distribute property received by it to the record holders of Depositary Receipts entitled thereto, in proportion, as nearly as may be practicable, to the number of Series W Depositary Shares owned by such holders on the relevant record date, unless the Depositary determines (after consultation with us) that it is not feasible to make such distribution, in which case the Depositary may (with our approval) adopt any other method for such distribution as it deems equitable and appropriate, including the sale of such property (at such place or places and upon such terms as it may deem equitable and appropriate) and distribution of the net proceeds from such sale to such holders.
		

		
			Liquidation Preference
		

		
			In the event of the liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of each Depositary Share will be entitled to 1/1000th of the liquidation preference accorded to each share of the Series W Preferred Stock.
		

		
			Redemption
		

		
			Whenever we redeem any Series W Preferred Stock held by the Depositary, the Depositary will redeem as of the same redemption date the number of Series W Depositary Shares representing the Series W Preferred Stock so redeemed. The Depositary will publish a notice of redemption of the Series W Depositary Shares containing the same type of information and in the same manner as our notice of redemption and will mail the notice of redemption promptly upon receipt of such notice from us and not less than 30 nor more than 60 days prior to the date fixed for redemption of the Series W Preferred Stock and the Series W Depositary Shares to the record holders of the Depositary Receipts. In case less than all the outstanding Series W Depositary Shares are to be redeemed, the Series W Depositary Shares to be so redeemed shall be determined pro rata or by lot in a manner determined by the Board of Directors.
		

		

		

		 

 

		

			 

		

		Voting
		

		
			Promptly upon receipt of notice of any meeting at which the holders of the Series W Preferred Stock are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of the Depositary Receipts as of the record date for such meeting. Each such record holder of Depositary Receipts will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the number of shares of Series W Preferred Stock represented by such record holder’s Series W Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote such Series W Preferred Stock represented by such Series W Depositary Shares in accordance with such instructions, and we will agree to take all action which may be deemed necessary by the Depositary in order to enable the Depositary to do so. The Depositary will abstain from voting any of the Series W Preferred Stock to the extent that it does not receive specific instructions from the holders of Depositary Receipts.
		

		
			Withdrawal of Series W Preferred Stock
		

		
			Upon surrender of Depositary Receipts at the principal office of the Depositary, upon payment of any unpaid amount due the Depositary, and subject to the terms of the Deposit Agreement, the owner of the Series W Depositary Shares evidenced thereby is entitled to delivery of the number of whole shares of Series W Preferred Stock and all money and other property, if any, represented by such Series W Depositary Shares. Partial shares of Series W Preferred Stock will not be issued. If the Depositary Receipts delivered by the holder evidence a number of Series W Depositary Shares in excess of the number of Series W Depositary Shares representing the number of whole shares of Series W Preferred Stock to be withdrawn, the Depositary will deliver to such holder at the same time a new Depositary Receipt evidencing such excess number of Series W Depositary Shares. Holders of Series W Preferred Stock thus withdrawn will not thereafter be entitled to deposit such shares under the Deposit Agreement or to receive Depositary Receipts evidencing Series W Depositary Shares therefor.
		

		
			Amendment and Termination of Deposit Agreement
		

		
			The form of Depositary Receipt evidencing the Series W Depositary Shares and any provision of the Deposit Agreement may at any time and from time to time be amended by agreement between us and the Depositary. However, any amendment which materially and adversely alters the rights of the holders (other than any change in fees) of Series W Depositary Shares will not be effective unless such amendment has been approved by the holders of at least a majority of the Series W Depositary Shares then outstanding. No such amendment may impair the right, subject to the terms of the Deposit Agreement, of any owner of any Series W Depositary Shares to surrender the Depositary Receipt evidencing such Series W Depositary Shares with instructions to the Depositary to deliver to the holder the Series W Preferred Stock and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law. The Deposit Agreement may be terminated by us or the Depositary only if (1) all outstanding Series W Depositary Shares have been redeemed or (2) there has been a final distribution in respect of the Series W Preferred Stock in connection with any liquidation, dissolution or winding up of the Company and such distribution has been made to all the holders of Series W Depositary Shares.
		

		
			Charges of Depositary
		

		
			We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the Depositary in connection with the initial deposit of the Series W Preferred Stock and the initial issuance of the Series W Depositary Shares, and redemption of the Series W Preferred Stock and all withdrawals of Series W Preferred Stock by owners of Series W Depositary Shares. Holders of Depositary Receipts will pay transfer and other taxes and governmental charges and certain other charges as are provided in the Deposit Agreement to be for their accounts. In certain circumstances, the Depositary may refuse to transfer Series W Depositary Shares, may withhold dividends and distributions and sell the Series W Depositary Shares evidenced by such Depositary Receipt if such charges are not paid.
		

		
			Miscellaneous
		

		
			The Depositary will forward to the holders of Depositary Receipts all reports and communications from us which are delivered to the Depositary and which we are required to furnish to the holders of the Series W Preferred Stock.  
		

		 

 

		

			 

		

		In addition, the Depositary will make available for inspection by holders of Depositary Receipts at the principal office of the Depositary, and at such other places as it may from time to time deem advisable, any reports and communications received from the Company which are received by the Depositary as the holder of Series W Preferred Stock.
		

		
			Neither the Depositary nor any Depositary’s Agent (as defined in the Deposit Agreement), nor the Registrar (as defined in the Deposit Agreement) nor the Company assumes any obligation or will be subject to any liability under the Deposit Agreement to holders of Depositary Receipts other than for its gross negligence, willful misconduct or bad faith. Neither the Depositary, any Depositary’s Agent, the Registrar nor the Company will be liable if it is prevented or delayed by law or, in the case of the Depositary, any Depositary’s Agent or the Registrar, any circumstance beyond its control, in performing its obligations under the Deposit Agreement. The Company and the Depositary are not obligated to prosecute or defend any legal proceeding in respect of any Series W Depositary Shares, Depositary Receipts or Series W Preferred Stock unless reasonably satisfactory indemnity is furnished. The Company and the Depositary may rely on written advice of counsel or accountants, on information provided by holders of Depositary Receipts or other persons believed in good faith to be competent to give such information and on documents believed to be genuine and to have been signed or presented by the proper party or parties.
		

		
			Holders of Depositary Receipts may inspect the Depositary’s transfer records for the Depositary Receipts at the Depositary’s office during normal business hours, provided that such inspection is for a proper purpose.
		

		
			Registration of Transfer of Receipts
		

		
			The Depositary will register on its books transfers of Depositary Receipts upon surrender of the receipt by the holder, properly endorsed or accompanied by appropriate instruments of transfer, subject to certain restrictions and conditions set forth in the Deposit Agreement. Title to Series W Depositary Shares represented by a Depositary Receipt, which is properly endorsed or accompanied by appropriate instruments of transfer, will be transferable by delivery with the same effect as in the case of a negotiable instrument.
		

		
			Resignation and Removal of Depositary
		

		
			The Depositary may resign at any time by delivering to us notice of its election to do so, and we may at any time remove the Depositary, any such resignation or removal to take effect upon the appointment of a successor Depositary and its acceptance of such appointment. Such successor Depositary must be appointed within 60 days after delivery of the notice for resignation or removal and must be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $150,000,000.
		

		
			Description of Depositary Shares, each Representing 1/1,000 of a Share of Series X Preferred Stock 
		

		
			The following is a brief description of the terms of our depositary shares, each representing 1/1,000 of a share of Series X Preferred Stock (“Series X Depositary Shares”), which does not purport to be complete and is subject to and qualified in its entirety by reference to the Deposit Agreement relating to the Series X Preferred Stock, which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part.  The terms and provisions of our Series X Depositary Shares are substantially the same as those of our Series W Depositary Shares as described in “—Description of Depositary Shares, each Representing 1/1,000 of a Share of Series W Preferred Stock” above.
		

		
			Description of Depositary Shares, each Representing 1/1,000 of a Share of Series Y Preferred Stock 
		

		
			The following is a brief description of the terms of our depositary shares, each representing 1/1,000 of a share of Series Y Preferred Stock (“Series Y Depositary Shares”), which does not purport to be complete and is subject to and qualified in its entirety by reference to the Deposit Agreement relating to the Series Y Preferred Stock, which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part.  The terms and provisions of our Series Y Depositary Shares are substantially the same as those of our Series W Depositary Shares as described in “—Description of Depositary Shares, each Representing 1/1,000 of a Share of Series W Preferred Stock” above.
		

		

		

		 

 

		

			 

		

		Description of Depositary Shares, each Representing 1/1,000 of a Share of Series Z Preferred Stock 
		

		
			The following is a brief description of the terms of our depositary shares, each representing 1/1,000 of a share of Series Z Preferred Stock (“Series Z Depositary Shares”), which does not purport to be complete and is subject to and qualified in its entirety by reference to the Deposit Agreement relating to the Series Z Preferred Stock, which is included as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.5 is a part.  The terms and provisions of our Series Z Depositary Shares are substantially the same as those of our Series W Depositary Shares as described in “—Description of Depositary Shares, each Representing 1/1,000 of a Share of Series W Preferred Stock” above.
		

		
			﻿psb-20191231 10K (EX-1010)

		

			Exhibit 10.10

		

		
			PS BUSINESS PARKS, L.P.
		

		
			AMENDMENT TO AGREEMENT OF LIMITED 
		

		
			PARTNERSHIP RELATING TO 
		

		
			4.875% SERIES Z 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 November 4, 2019 (this “Amendment”), amends the Agreement of Limited Partnership of the Partnership, dated as of March 17, 1998, as amended, by and among PS Business Parks, Inc. (the “General Partner”) and each of the limited partners described on Exhibit A to that partnership agreement (the “Partnership Agreement”). Section references are (unless otherwise specified) references to sections in this Amendment. 
		

		
			WHEREAS, the General Partner agreed to issue up to 13,000,000 Depositary Shares each representing 1/1000th of a share of the General Partner’s preferred stock designated as the “4.875% Cumulative Preferred Stock, Series Z” (the “Depositary Shares”) for a price of $25.00 per Depositary Share; 
		

		
			WHEREAS, Section 4.1(b)(2) of the Partnership Agreement requires the General Partner to contribute to the Partnership the funds raised through the issuance of additional shares of the General Partner in return for additional Partnership Units, and provides that the General Partner’s capital contribution shall be deemed to equal the amount of the gross proceeds of that share issuance (i.e., the net proceeds actually contributed, plus any underwriter’s discount or other expenses incurred, with any such discount or expense deemed to have been incurred on behalf of the Partnership); 
		

		
			WHEREAS, Section 4.2(a) of the Partnership Agreement provides generally for the creation and issuance of Partnership Units with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to other Partnership Interests, all as shall be determined by the General Partner, without the consent of the Limited Partners, and Section 4.2(b) of the Partnership Agreement specifically contemplates the issuance of Units to the General Partner having designations, preferences and other rights, all such that the economic interests are substantially similar to the designations, preferences and other rights of shares issued by the General Partner, such as the Depositary Shares; 
		

		
			WHEREAS, 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; 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 Z Preferred Units (as defined below), $25.00 per Series Z Preferred Unit, plus the amount of any accumulated and unpaid Priority Return (as defined below) with respect to such Series Z Preferred Unit, whether or not declared, minus any distributions in excess of the Priority Return that has accrued with respect to such Series Z Preferred Units, to the date of payment. 
		

		
			(b) “Parity Preferred Units” means any class or series of Partnership Interests (as such term is defined in the Partnership Agreement) of the Partnership now or hereafter authorized, issued or outstanding and expressly designated by the Partnership to rank on a parity with the Series Z Preferred Units with respect to distributions and rights upon voluntary or involuntary liquidation, winding-up or dissolution of the Partnership, including the 5.75% Series U Cumulative Redeemable Preferred Units (the “Series U Preferred Units”), the 5.70% Series V Cumulative 
		

		

		

		 

 

		

			 

		

		Redeemable Preferred Units (the “Series V Preferred Units”), the 5.20% Series W Cumulative Redeemable Preferred Units (the “Series W Preferred Units”), the 5.25% Series X Cumulative Redeemable Preferred Units (the “Series X Preferred Units”) and the 5.20% Series Y Cumulative Redeemable Preferred Units (the “Series Y Preferred Units”). Notwithstanding the differing allocation rights set forth in Section 4 below that apply to the Series U, V, W, X  and Y Preferred Units. 
		

		
			(c) “Priority Return” means an amount equal to 4.875% per annum, of the Liquidation Preference per Series Z Preferred Unit, commencing on the date of issuance of such Series Z Preferred Unit, determined on the basis of a 360-day year (and twelve 30-day months), cumulative to the extent not distributed on any Series Z Preferred Unit Distribution Payment Date (as defined below). 
		

		
			Section 2. Creation of Series Z Preferred Units. (a) Designation and Number. Pursuant to Section 4.2(a) of the Partnership Agreement, a series of Partnership Units (as such term is defined in the Partnership Agreement) in the Partnership designated as the “4.875%  Series Z Cumulative Redeemable Preferred Units” (the “Series Z Preferred Units”) is hereby established effective as of November 4, 2019. The number of Series Z Preferred Units shall be 13,000,000. The Holders of Series Z Preferred Units shall not have any Percentage Interest (as such term is defined in the Partnership Agreement) in the Partnership. 
		

		
			(b) Capital Contribution. In return for the issuance to the General Partner of the Series Z Preferred Units set forth on Exhibit C to this Amendment, the General Partner has contributed to the Partnership the funds raised through the General Partner’s issuance of the Depositary Shares (the General Partner’s capital contribution shall be deemed to equal the amount of the gross proceeds of that share issuance, i.e., the net proceeds actually contributed, plus any underwriter’s discount or other expenses incurred, with any such discount or expense deemed to have been incurred by the General Partner on behalf of the Partnership). 
		

		
			(c) Construction. The Series Z Preferred Units have been created and are being issued in conjunction with the General Partner’s issuance of the Depositary Shares relating to the General Partner’s 4.875% Cumulative Preferred Stock, Series Z, and as such, the Series Z Preferred Units are intended to have designations, preferences and other rights, all such that the economic interests are substantially similar to the designations, preferences and other rights of the Depositary Shares, and the terms of this Amendment shall be interpreted in a fashion consistent with this intent. 
		

		
			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 Z Preferred Units shall be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, the Priority Return. Such distributions shall be cumulative, shall accrue from the original date of issuance of the Series Z 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, 2019 (with the payment on that date being based pro rata on the number of days from the original issuance of the Series Z Preferred Units) and (ii) in the event of a redemption of Series Z Preferred Units (each a “Series Z Preferred Unit Distribution Payment Date”). If any date on which distributions are to be made on the Series Z Preferred Units is not a Business Day (as defined below), 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 Z Preferred Units will be made to the holders of record of the Series Z 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 Z Preferred Unit Distribution Payment Date. Business Day shall be any day other than a Saturday, Sunday or day on which banking institutions in the State of New York or the State of California are authorized or obligated by law to close, or a day which is or is declared a national or a New York or California state holiday. 
		

		
			(b) Prohibition on Distribution. No distributions on Series Z 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 Z Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership, 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 Z Preferred Units will accumulate as of the Series Z 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 Z Preferred Unit Distribution Payment Date, to holders of record of the Series Z 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 Z Preferred Units are outstanding, no distribution of 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 Interests 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 Z 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 Z Preferred Units, any Parity Preferred Units or any Junior Units, unless, in each case, all distributions accumulated on all Series Z 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 Z Preferred Units. 
		

		
			(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 Z Preferred Units, all distributions authorized and declared on the Series Z 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 Z 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 Z 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 Z 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 U, V, W, X, Y and Z Preferred Units shall be allocated an amount of gross income equal to the Priority Return distributed to such holders in such taxable year. 
		

		
			(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 U, V, W, X, Y and Z 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 U, V, W, X, Y and Z 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 U, V, W, X, Y, and Z Preferred Units in the Partnership, items of gross income or deduction shall be allocated to the holders of Series U, V, W, X, Y and Z 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. The Series Z Preferred Units shall be redeemed at the same time, to the same extent, and applying, except as set forth below, similar procedures, as any redemption by the General Partner 
		

		 

 

		

			 

		

		of the Depositary Shares. The redemption price, payable in cash, shall equal the Liquidation Preference (the “Series Z Redemption Price”). Unless otherwise agreed, the Partnership will deliver into escrow with an escrow agent acceptable to the Partnership and the holders of the Series Z Preferred Units being redeemed (the “Escrow Agent”) the Series Z Redemption Price and an executed Redemption Agreement, in substantially the form attached as Exhibit A (the “Redemption Agreement”), and an Amendment to the Agreement of Limited Partnership evidencing the Redemption, in substantially the form attached as Exhibit B. The holders of the Series Z Preferred Units to be redeemed will also 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, on the redemption date the Escrow Agent shall release the Series Z Redemption Price to the holders of the Series Z 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 Z Preferred Units called for redemption, unless the Partnership defaults in the payment of the Series Z Redemption Price. The Redemption Right (as such term is defined in the Partnership Agreement) given to Limited Partners (as such term is defined in the Partnership Agreement) in Section 8.6 of the Partnership Agreement shall not be available to the holders of the Series Z 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 Z Preferred Units. 
		

		
			Section 6. Voting Rights. Holders of the Series Z Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth in Section 14.1 of the Partnership Agreement and in this Section 6. Solely for purposes of Section 14.1 of the Partnership Agreement, each Series Z Preferred Unit shall be treated as one Partnership Unit. 
		

		
			Section 7. Transfer Restrictions. The holders of Series Z Preferred Units shall be subject to all of the provisions of Section 11 of the Partnership Agreement. 
		

		
			Section 8. No Conversion Rights. The holders of the Series Z 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 9. No Sinking Fund. No sinking fund shall be established for the retirement or redemption of Series Z Preferred Units. 
		

		
			Section 10. Exhibit A to Partnership Agreement. In order to duly reflect the issuance of the Series Z Preferred Units provided for herein, the Partnership Agreement is hereby further amended pursuant to Section 12.3 of the Partnership Agreement by replacing the current form of Exhibit A to the Partnership Agreement with the form of Exhibit A that is attached to this Amendment as 
		

		
			Exhibit C.   
		

		
			Section 11. Inconsistent Provisions. Nothing to the contrary contained in the Partnership Agreement shall limit any of the rights or obligations set forth in this Amendment. 
		

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

		
			 
		

		
			 
		

			
					
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						PS BUSINESS PARKS, INC.

				
	
					
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						By: /s/ Maria R. Hawthorne

				
	
					
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						Name: Maria R. Hawthorne

				
	
					
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						Title: President and Chief Executive Officer

				

		
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			[Signature Page to Amendment to Agreement of Limited Partnership]
		

		 

 

		

			 

		

		
		

		
			Exhibit A 
		

		
			FORM OF 
		

		
			REDEMPTION AGREEMENT 
		

		
			THIS REDEMPTION AGREEMENT (the “Agreement”) is entered into effective as of the                     day of                     ,                     , by and between                     (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, as amended, was amended by an Amendment to Agreement of Limited Partnership Relating to 4.875%  Series Z Cumulative Redeemable Preferred Units (the “Amendment”), as further amended from time to time; 
		

		
			WHEREAS, the Retiring Partner owns                     of the 4.875%  Series Z Cumulative Redeemable Preferred Units in the Partnership (the “Series Z Preferred Units”); and 
		

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

		
			NOW, THEREFORE, in consideration of the mutual covenants, representations and agreements herein contained, the parties hereto, intending to be legally bound, do 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 Z 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 Z 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                     and has been duly authorized by all necessary and appropriate [limited liability company] [corporate] [partnership] 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 Z Preferred Units and the Series Z 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 its 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 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 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, and 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:

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						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                     , as a withdrawing Limited Partner of the Partnership (the “Withdrawing Partner”). 
		

		
			RECITALS: 
		

		
			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 “Partnership Agreement”). 
		

		
			WHEREAS, pursuant to the redemption by the Partnership of the 4.875%  Series Z Cumulative Redeemable Preferred Units pursuant to the terms and conditions set forth in that certain Redemption Agreement by and between the Partnership and the Withdrawing Partner, dated as of                     , 20     ,                     4.875%  Series Z 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. 
		

		
			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 Partnership Agreement shall remain in full force and effect and shall be otherwise unaffected hereby. 
		

		
			2. To evidence the redemption of the 4.875%  Series Z Cumulative Redeemable Preferred Units of the Withdrawing Partner and the withdrawal of the Withdrawing Partner as a Limited Partner of the Partnership, attached 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 LIMITED PARTNER

				
	
					
						﻿

					
					
						 

				
	
					
						﻿

					
					
						By: ________________________________

				
	
					
						﻿

					
					
						     Name:

				
	
					
						﻿

					
					
						     Title:

				

		
			﻿
		

		
			﻿
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

 

		

			 

		

		
		

		
			Exhibit C 
		

		
			Revised Exhibit A to the Partnership Agreement 
		

		
			Please see attached. 
		

		
			[Attach revised Exhibit A to the Partnership Agreement] 
		

		
			EXHIBIT C (November 4, 2019)  
		

		
			﻿ 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Name of Partner

					
						(Date of Admission)

					
					
						  

					
					
						Address

					
					
						  

					
					
						Agreed Value of
Contributed  Property (1)

					
					
						 

					
					
						  

					
					
						Partnership Units

					
					
						 

					
					
						  

					
					
						Percentage Interest

					
					
						 

				
	
					
						General Partner:

					
					
						  

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Total Common Shares

					
					
						  

					
					
						 

					
					
						  

					
					
						$

					799,809,000 
					
					
						  

					
					
						  

					
					
						 

					27,436,547 
					
					
						 

					
					
						  

					
					
						 

					78.97% 
					
					
						 

				
	
					
						Total Common Units

					
					
						  

					
					
						 

					
					
						  

					
					
						$

					121,890,000 
					
					
						  

					
					
						  

					
					
						 

					7,305,355 
					
					
						 

					
					
						  

					
					
						 

					21.03% 
					
					
						 

				
	
					
						TOTAL (General & Limited Partners; not Preferred Units)

					
					
						  

					
					
						 

					
					
						  

					
					
						$

					921,699,000 
					
					
						 

					
					
						  

					
					
						 

					34,741,902 
					
					
						 

					
					
						  

					
					
						 

					100.00% 
					
					
						 

				
	
					
						Limited Partners (Series U Preferred Units):

					
					
						  

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

				
	
					
						PS Business Parks, Inc. (September 14, 2012)

					
					
						  

					
					
						701 Western Avenue

					
						Glendale, CA 91201

					
					
						  

					
					
						 

					230,000,000 
					
					
						 

					
					
						  

					
					
						 

					9,200,000 
					
					
						 

					
					
						  

					
					
						 

					17.90% 
					
					
						 

				
	
					
						Limited Partners (Series V Preferred Units):

					
					
						  

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

				
	
					
						PS Business Parks, Inc. (March 14, 2013)

					
					
						  

					
					
						701 Western Avenue

					
						Glendale, CA 91201

					
					
						  

					
					
						 

					110,000,000 
					
					
						  

					
					
						  

					
					
						 

					4,400,000 
					
					
						 

					
					
						  

					
					
						 

					8.56% 
					
					
						 

				
	
					
						Limited Partners (Series W Preferred Units):

					
					
						  

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

				
	
					
						PS Business Parks, Inc. (October 20, 2016)

					
					
						  

					
					
						701 Western Avenue

					
						Glendale, CA 91201

					
					
						  

					
					
						 

					189,750,000 
					
					
						  

					
					
						  

					
					
						 

					7,590,000 
					
					
						 

					
					
						  

					
					
						 

					14.77% 
					
					
						 

				
	
					
						Limited Partners (Series X Preferred Units):

					
					
						  

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

					
					
						  

					
					
						 

					
					
						 

					
					
						 

				
	
					
						PS Business Parks, Inc. (September 21, 2017)

					
					
						  

					
					
						701 Western Avenue

					
						Glendale, CA 91201

					
					
						  

					
					
						 

					230,000,000 
					
					
						  

					
					
						  

					
					
						 

					9,200,000 
					
					
						 

					
					
						  

					
					
						 

					17.90% 
					
					
						 

				
	
					
						Limited Partners (Series Y Preferred Units):

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						PS Business Parks, Inc. (December 7, 2017)

					
					
						  

					
					
						701 Western Avenue

					
						Glendale, CA 91201

					
					
						  

					
					
						 

					200,000,000 
					
					
						  

					
					
						  

					
					
						 

					8,000,000 
					
					
						 

					
					
						  

					
					
						 

					15.57% 
					
					
						 

				
	
					
						Limited Partners (Series Z Preferred Units):

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						PS Business Parks, Inc. (November 4, 2019)

					
					
						  

					
					
						701 Western Avenue

					
						Glendale, CA 91201

					
					
						  

					
					
						 

					325,000,000 
					
					
						  

					
					
						  

					
					
						 

					13,000,000 
					
					
						 

					
					
						  

					
					
						 

					25.30% 
					
					
						 

				
	
					
						TOTAL (Preferred Stock & Units)

					
					
						  

					
					
						 

					
					
						  

					
					
						$

					1,284,750,000 
					
					
						  

					
					
						  

					
					
						 

					51,390,000 
					
					
						 

					
					
						 

					
					
						 

					100.00% 
					
					
						 

				
	
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				

		
			   
		

			
					
						﻿

					
					
						 

				
	
					
						(1)

					
					
						Agreed value is the agreed gross value of the property at the time of contribution less any liabilities to which the property is subject at that time. 

				

		
			﻿

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}]]