Document:

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                                                                     EXHIBIT 4.1

                            PS BUSINESS PARKS, INC.

                        AMERICAN STOCK TRANSFER & TRUST
                            COMPANY, AS DEPOSITARY

                                      AND

                       THE HOLDERS FROM TIME TO TIME OF
                   THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
                     RELATING TO SERIES D PREFERRED STOCK

                               DEPOSIT AGREEMENT

                            Dated as of May 7, 2001
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                                Table of Contents
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                                                  ARTICLE I

                                                 Definitions

                                                  ARTICLE II

                                      Form of Receipts, Deposit of Stock,
                                        Execution and Delivery, Transfer,
                                      Surrender and Redemption of Receipts
<S>                                                                                               <C>
SECTION 2.1       Form and Transfer of Receipts..............................................      2
SECTION 2.2       Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof....      4
SECTION 2.3       Registration of Transfer of Receipts.......................................      4
SECTION 2.4       Split-ups and Combinations of Receipts; Surrender of Receipts and
                  Withdrawal of Stock........................................................      5
SECTION 2.5       Limitations on Execution and Delivery, Transfer, Surrender and
                  Exchange of Receipts.......................................................      6
SECTION 2.6       Lost Receipts, etc.........................................................      6
SECTION 2.7       Cancellation and Destruction of Surrendered Receipts.......................      7
SECTION 2.8       Redemption of Stock........................................................      7

                                                  ARTICLE III

                            Certain Obligations of Holders of Receipts and the Company

SECTION 3.1       Filing Proofs, Certificates and Other Information .........................      9
SECTION 3.2       Payment of Taxes or Other Governmental Charges.............................      9
SECTION 3.3       Warranty as to Stock.......................................................      9

                                                  ARTICLE IV

                                      The Deposited Securities; Notices

SECTION 4.1       Cash Distributions........................................................       10
SECTION 4.2       Distributions Other than Cash, Rights, Preferences or Privileges..........       10
SECTION 4.3       Subscription Rights, Preferences or Privileges............................       11
SECTION 4.4       Notice of Dividends, etc.; Fixing Record Date for Holders of Receipts.....       12
SECTION 4.5       Voting Rights.............................................................       12
SECTION 4.6       Changes Affecting Deposited Securities and Reclassifications,
                  Recapitalizations, etc....................................................       13
SECTION 4.7       Delivery of Reports.......................................................       13
SECTION 4.8       List of Receipt Holders...................................................       14
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                                Table of Contents
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                                  (continued)
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                                                  ARTICLE V

                      Depositary, the Depositary's Agents, the Registrar and the Company
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SECTION 5.1       Maintenance of Offices, Agencies and Transfer Books

                  by the Depositary; Registrar..............................................        14
SECTION 5.2       Prevention of or Delay in Performance by the Depositary,
                  the Depositary's Agents, the Registrar or the Company.....................        15
SECTION 5.3       Obligation of the Depositary, the Depositary's Agents,
                  the Registrar and the Company.............................................        15
SECTION 5.4       Resignation and Removal of the Depositary; Appointment of
                  Successor Depositary......................................................        17
SECTION 5.5       Corporate Notices and Reports.............................................        18
SECTION 5.6       Indemnification by the Company............................................        18
SECTION 5.7       Charges and Expenses......................................................        18
SECTION 5.7       Shares....................................................................        19
SECTION 5.8       Tax Compliance............................................................        19

                                                   ARTICLE VI

                                            Amendment and Termination

SECTION 6.1       Amendment.................................................................        19
SECTION 6.2       Termination...............................................................        20

                                                   ARTICLE VII

                                                  Miscellaneous

SECTION 7.1       Counterparts..............................................................        20
SECTION 7.2       Exclusive Benefit of Parties..............................................        20
SECTION 7.3       Invalidity of Provisions..................................................        20
SECTION 7.4       Notices...................................................................        21
SECTION 7.5       Appointment of Registrar..................................................        22
SECTION 7.6       Holders of Receipts Are Parties...........................................        22
SECTION 7.7       Governing Law.............................................................        22
SECTION 7.8       Inspection of Deposit Agreement...........................................        22
SECTION 7.9       Headings..................................................................        22
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                                      ii
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DEPOSIT AGREEMENT, dated as of May 7, 2001, among PS BUSINESS PARKS, INC., a
California corporation (the "Company"), American Stock Transfer & Trust Company
(the "Depositary"), and the holders from time to time of the Receipts described
herein.

          WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of Series D Preferred Stock of the
Company with the Depositary for the purposes set forth in this Deposit Agreement
and for the issuance hereunder of Receipts evidencing Depositary Shares in
respect of the Stock so deposited; and

          WHEREAS, the Receipts are to be substantially in the form of Exhibit A
annexed hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;

          NOW, THEREFORE, in consideration of the promises contained herein, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

                                   ARTICLE I

                                  Definitions

          The following definitions shall, for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement:

          "Certificate" shall mean the Certificate of Determination filed with
the Secretary of State of the State of California establishing the Stock as a
series of preferred stock of the Company.

          "Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.

          "Depositary" shall mean American Stock Transfer & Trust Company and
any successor as Depositary hereunder.

          "Depositary Shares" shall mean Depositary Shares, each representing
1/1,000 of a share of Stock and evidenced by a Receipt.

                                      -1-
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          "Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 5.1 and shall include the Registrar if such Registrar is not
the Depositary.

          "Depositary's Office" shall mean the principal office of the
Depositary at which at any particular time its depositary receipt business shall
be administered.

          "Receipt" shall mean one of the Depositary Receipts, substantially in
the form set forth as Exhibit A hereto, issued hereunder, whether in definitive
or temporary form and evidencing the number of Depositary Shares held of record
by the record holder of such Depositary Shares.

          "record holder" or "holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books of the Depositary
maintained for such purpose.

          "Registrar" shall mean the Depositary or such other bank or trust
company which shall be appointed to register ownership and transfers of Receipts
as herein provided.

          "Securities Act" shall mean the Securities Act of 1933, as amended.

          "Stock" shall mean shares of the Company's 9 1/2% Cumulative
Preferred Stock, Series D, stated value $25,000 per share.

                                  ARTICLE II

                      Form of Receipts, Deposit of Stock,
                       Execution and Delivery, Transfer,
                     Surrender and Redemption of Receipts

          SECTION 2.1 Form and Transfer of Receipts. Definitive Receipts shall
be engraved or printed or lithographed on steel-engraved borders, with
appropriate insertions, modifications and omissions, as hereinafter provided, if
and to the extent required by any securities exchange on which the Receipts are
listed. Pending the preparation of definitive Receipts or if definitive Receipts
are not required by any securities exchange on which the Receipts are listed,
the Depositary, upon the written order of the Company or any holder of Stock, as
the case may be, delivered in compliance with Section 2.2, shall execute and
deliver temporary Receipts which are printed, lithographed, typewritten,
mimeographed or otherwise substantially of the tenor of the definitive Receipts
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the persons executing such
Receipts may determine, as evidenced by their execution of

                                      -2-
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such Receipts. If temporary Receipts are issued, the Company and the Depositary
will cause definitive Receipts to be prepared without unreasonable delay. After
the preparation of definitive Receipts, the temporary Receipts shall be
exchangeable for definitive Receipts upon surrender of the temporary Receipts at
the Depositary's Office or at such other place or places as the Depositary shall
determine, without charge to the holder. Upon surrender for cancellation of any
one or more temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of Depositary
Shares as represented by the surrendered temporary Receipt or Receipts. Such
exchange shall be made at the Company's expense and without any charge to the
holder therefor. Until so exchanged, the temporary Receipts shall in all
respects be entitled to the same benefits under this Agreement, and with respect
to the Stock, as definitive Receipts.

          Receipts shall be executed by the Depositary by the manual and/or
facsimile signature of a duly authorized officer of the Depositary. No Receipt
shall be entitled to any benefits under this Deposit Agreement or be valid or
obligatory for any purpose unless it shall have been executed in accordance with
the foregoing sentence. The Depositary shall record on its books each Receipt so
signed and delivered as hereinafter provided.

          Receipts shall be in denominations of any number of whole Depositary
Shares. The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.

          Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.

          Title to Depositary Shares evidenced by a Receipt, which is properly
endorsed or accompanied by a properly executed instrument of transfer, shall be
transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Receipt shall be
            --------  -------
registered on the books of the Depositary as provided in Section 2.3, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of

                                      -3-
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dividends or other distributions or to any notice provided for in this Deposit
Agreement and for all other purposes.

          SECTION 2.2 Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
the Company may from time to time deposit shares of Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for the
Stock to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a duly executed instrument of transfer or endorsement, in form
satisfactory to the Depositary, together with all such certifications as may be
required by the Depositary in accordance with the provisions of this Deposit
Agreement, and together with a written order of the Company directing the
Depositary to execute and deliver to, or upon the written order of, the person
or persons stated in such order a Receipt or Receipts for the number of
Depositary Shares representing such deposited Stock.

          Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places as the Depositary shall determine.

          Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together with
the other documents required as above specified, and upon recordation of the
Stock on the books of the Company in the name of the Depositary or its nominee,
the Depositary, subject to the terms and conditions of this Deposit Agreement,
shall execute and deliver, to or upon the order of the person or persons named
in the written order delivered to the Depositary referred to in the first
paragraph of this Section, a Receipt or Receipts for the whole number of
Depositary Shares representing, in the aggregate, the Stock so deposited and
registered in such name or names as may be requested by such person or persons.
The Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office or such other offices, if any, as the Depositary may
designate. Delivery at other offices shall be at the risk and expense of the
person requesting such delivery.

          SECTION 2.3 Registration of Transfer of Receipts. Subject to the terms
and conditions of this Deposit Agreement, the Depositary shall register on its
books from time to time transfers of Receipts upon any surrender thereof by the
holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer. Thereupon, the
Depositary shall execute a new Receipt or Receipts evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered and deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.

                                      -4-
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          SECTION 2.4 Split-ups and Combinations of Receipts; Surrender of
Receipts and Withdrawal of Stock. Upon surrender of a Receipt or Receipts at the
Depositary's Office or at such other offices as it may designate for the purpose
of effecting a split-up or combination of such Receipt or Receipts, and subject
to the terms and conditions of this Deposit Agreement, the Depositary shall
execute and deliver a new Receipt or Receipts in the authorized denomination or
denominations requested, evidencing the aggregate number of Depositary Shares
evidenced by the Receipt or Receipts surrendered; provided, however, that the
                                                  --------  -------
Depositary shall not issue any Receipt evidencing a fractional Depositary Share.

          Any holder of a Receipt or Receipts representing any number of whole
shares of Stock may (unless the related Depositary Shares have previously been
called for redemption) withdraw the Stock and all money and other property, if
any, represented thereby by surrendering such Receipt or Receipts at the
Depositary's Office or at such other offices as the Depositary may designate for
such withdrawals and paying any unpaid amount due the Depositary. Thereafter,
without unreasonable delay, the Depositary shall deliver to such holder or to
the person or persons designated by such holder as hereinafter provided, the
number of whole shares of Stock and all money and other property, if any,
represented by the Receipt or Receipts so surrendered for withdrawal, but
holders of such whole shares of Stock will not thereafter be entitled to deposit
such Stock hereunder or to receive Depositary Shares therefor. If a Receipt
delivered by the holder to the Depositary in connection with such withdrawal
shall evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the number of whole shares of Stock to be so
withdrawn, the Depositary shall at the same time, in addition to such number of
whole shares of Stock and such money and other property, if any, to be so
withdrawn, deliver to such holder, or upon his order, a new Receipt evidencing
such excess number of Depositary Shares; provided, however, that the Depositary
                                         --------  -------
shall not issue any Receipt evidencing a fractional Depositary Share. Delivery
of the Stock and money and other property being withdrawn may be made by the
delivery of such certificates, documents of title and other instruments as the
Depositary may deem appropriate which, if required by the Depositary, shall be
properly endorsed or accompanied by proper instruments of transfer.

          If the Stock and the money and other property being withdrawn are to
be delivered to a person or persons other than the record holder of the Receipt
or Receipts being surrendered for withdrawal of Stock, such holders shall
execute and deliver to the Depositary a written order so directing the
Depositary and the Depositary may require that the Receipt or Receipts
surrendered by such holder for withdrawal of such shares of Stock be properly
endorsed in blank or accompanied by a properly executed instrument of transfer
in blank.

                                      -5-
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          Delivery of the Stock and the money and other property, if any,
represented by Receipts surrendered for withdrawal shall be made by the
Depositary at the Depositary's Office, except that, at the request, risk and
expense of the holder surrendering such Receipt or Receipts and for the account
of the holder thereof, such delivery may be made at such other place as may be
designated by such holder.

          SECTION 2.5 Limitations on Execution and Delivery, Transfer, Surrender
and Exchange of Receipts. As a condition precedent to the execution and
delivery, registration of transfer, split-up, combination, surrender or exchange
of any Receipt, the Depositary, any of the Depositary's Agents or the Company
may require payment to it of a sum sufficient for the payment (or, in the event
that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any charges or expenses payable by the holder of a
Receipt pursuant to Sections 3.2 and 5.7, may require the production of evidence
satisfactory to it as to the identity and genuineness of any signature, and may
also require compliance with such regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of this Deposit Agreement.

          The deposit of Stock may be refused, the delivery of Receipts against
Stock may be suspended, the registration of transfer of Receipts may be refused
and the registration of transfer, surrender or exchange of outstanding Receipts
may be suspended (i) during any period when the register of stockholders of the
Company is closed, or (ii) if any such action is deemed necessary or advisable
by the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission or under any provision of this Deposit
Agreement.

          SECTION 2.6 Lost Receipts, etc. In case any receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its reasonable
discretion may execute and deliver a Receipt of like form and tenor in exchange
and substitution for such mutilated Receipt, or in lieu of and in substitution
for such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence reasonably satisfactory to the
Depositary of such destruction or loss or theft of such Receipt, of the
authenticity thereof and of his or her ownership thereof, (ii) the furnishing of
the Depositary with indemnification reasonably satisfactory to it and the
Company and (iii) the payment of any reasonable expense (including reasonable
fees, charges and expenses of the Depositary) in connection with such execution
and delivery.

                                      -6-
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          SECTION 2.7 Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Company is authorized to destroy all Receipts so cancelled.

          SECTION 2.8 Redemption of Stock. Whenever the Company shall be
permitted and shall elect to redeem shares of Stock in accordance with the
provisions of the Certificate, it shall (unless otherwise agreed to in writing
with the Depositary) give or cause to be given to the Depositary not less than
60 days' notice of the date of such proposed redemption or exchange of Stock and
of the number of such shares held by the Depositary to be so redeemed and the
applicable redemption price, as set forth in the Certificate, which notice shall
be accompanied by a certificate from the Company stating that such redemption of
Stock is in accordance with the provisions of the Certificate. Notice of
redemption of Stock will also be given by the Company 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,
and the Depositary will publish a notice of redemption of the Depositary Shares
containing the same type of information and in the same manner as the Company's
notice of redemption. On the date of such redemption, provided that the Company
shall then have paid or caused to be paid in full to the Depositary the
redemption price of the Stock to be redeemed, plus an amount equal to any
accrued and unpaid dividends thereon to the date fixed for redemption, in
accordance with the provisions of the Certificate, the Depositary shall redeem
the number of Depositary Shares representing such Stock. The Depositary shall
mail notice of the Company's redemption of Stock and the proposed simultaneous
redemption of the number of Depositary Shares representing the Stock to be
redeemed by first-class mail, postage prepaid, promptly upon receipt of the
Company's notice to redeem shares of Stock and not less than 30 and not more
than 60 days prior to the date fixed for redemption of such Stock and Depositary
Shares (the "Redemption Date") to the record holders of the Receipts evidencing
the Depositary Shares to be so redeemed, at the address of such holders as they
appear on the records of the Depositary; but neither failure to mail any such
notice of redemption of Depositary Shares to one or more such holders nor any
defect in any notice of redemption of Depositary Shares to one or more such
holders shall affect the sufficiency of the proceedings for redemption as to the
other holders. The Company will provide the Depositary with the information
necessary for the Depositary to prepare such notice and each such notice shall
state: (i) the Redemption Date; (ii) the number of Depositary Shares to be
redeemed and, if less than all the Depositary Shares held by any such holder are
to be redeemed, the number of such Depositary Shares held by such holder to be
so redeemed; (iii) the redemption price per Depositary Share; (iv) the place or
places where Receipts evidencing Depositary Shares are to

                                      -7-
<PAGE>

be surrendered for payment of the redemption price; and (v) that dividends in
respect of the Stock represented by the Depositary Shares to be redeemed will
cease to accrue on such Redemption Date. In case less than all the outstanding
Depositary Shares are to be redeemed, the Depositary Shares to be so redeemed
shall be determined pro rata or by lot in a manner determined by the Board of
Directors of the Company.

          Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Company shall have failed to provide the
funds necessary to redeem the Stock evidenced by the Depositary Shares called
for redemption) (i) dividends on the shares of Stock so called for redemption
shall cease to accrue from and after such date, (ii) the Depositary Shares being
redeemed from such proceeds shall be deemed no longer to be outstanding, (iii)
all rights of the holders of Receipts evidencing such Depositary Shares (except
the right to receive the redemption price) shall, to the extent of such
Depositary Shares, cease and terminate, and (iv) upon surrender in accordance
with such redemption notice of the Receipts evidencing any such Depositary
Shares called for redemption (properly endorsed or assigned for transfer, if the
Depositary or applicable law shall so require), such Depositary Shares shall be
redeemed by the Depositary at a redemption price per Depositary Share equal to
the same fraction of the redemption price per share paid with respect to the
shares of Stock as the fraction each Depositary Share represents of a share of
Stock plus the same fraction of all money and other property, if any,
represented by such Depositary Shares, including all amounts paid by the Company
in respect of dividends which on the Redemption Date have accumulated on the
shares of Stock to be so redeemed and have not theretofore been paid. Any funds
deposited by the Company with the Depositary for any Depositary Shares that the
holders thereof fail to redeem will be returned to the Company after a period of
five years from the date such funds are so deposited.

          If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the redemption payment, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption; provided, however, that the Depositary shall not
                           --------  -------
issue any Receipt evidencing a fractional Depositary Share.

                                      -8-
<PAGE>

                                  ARTICLE III

                             Certain Obligations of
                       Holders of Receipts and the Company

          SECTION 3.1 Filing Proofs, Certificates and Other Information. Any
holder of a Receipt may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the Company
may reasonably deem necessary or proper or otherwise reasonably request. The
Depositary or the Company may withhold the delivery, or delay the registration
of transfer, redemption or exchange, of any Receipt or the withdrawal or
conversion of the Stock represented by the Depositary Shares evidenced by any
Receipt or the distribution of any dividend or other distribution or the sale of
any rights or of the proceeds thereof until such proof or other information is
filed or such certificates are executed or such representations and warranties
are made.

          SECTION 3.2 Payment of Taxes or Other Governmental Charges. Holders of
Receipts shall be obligated to make payments to the Depositary of certain
charges and expenses, as provided in Section 5.7. Registration of transfer of
any Receipt or any withdrawal of Stock and all money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused
until any such payment due is made, and any dividends, interest payments or
other distributions may be withheld or any part of or all the Stock or other
property represented by the Depositary Shares evidenced by such Receipt and not
theretofore sold may be sold for the account of the holder thereof (after
attempting by reasonable means to notify such holder prior to such sale), and
such dividends, interest payments or other distributions or the proceeds of any
such sale may be applied to any payment of such charges or expenses, the holder
of such Receipt remaining liable for any deficiency.

          SECTION 3.3 Warranty as to Stock. The Company hereby represents and
warrants that the Stock, when issued, will be duly authorized, validly issued,
fully paid and nonassessable. Such representation and warranty shall survive the
deposit of the Stock and the issuance of Receipts.

                                      -9-
<PAGE>

                                  ARTICLE IV

                       The Deposited Securities; Notices

          SECTION 4.1 Cash Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on Stock, the Depositary shall,
subject to Sections 3.1 and 3.2, distribute to record holders of Receipts on the
record date fixed pursuant to Section 4.4 such amounts of such dividend or
distribution as are, as nearly as practicable, in proportion to the respective
numbers of Depositary Shares evidenced by the Receipts held by such holders;
provided, however, that in case the Company or the Depositary shall be required
--------  -------
to withhold and shall withhold from any cash dividend or other cash distribution
in respect of the Stock an amount on account of taxes or as otherwise required
by law, regulation or court process, the amount made available for distribution
or distributed in respect of Depositary Shares shall be reduced accordingly. In
the event that the calculation of any such cash dividend or other cash
distribution to be paid to any record holder on the aggregate number of Receipts
held by such holder results in an amount which is a fraction of a cent, the
amount the Depositary shall distribute to such record holder shall be rounded to
the next highest whole cent if such fraction of a cent is equal to or greater
than $.005, otherwise such fractional interest shall be disregarded; and upon
request of the Depositary, the Company shall pay the additional amount to the
Depositary for distribution.

          SECTION 4.2 Distributions Other than Cash, Rights, Preferences or
Privileges. Whenever the Depositary shall receive any distribution other than
cash, rights, preferences or privileges upon Stock, the Depositary shall,
subject to Sections 3.1 and 3.2, distribute to record holders of Receipts on the
record date fixed pursuant to Section 4.4 such amounts of the securities or
property received by it as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares evidenced by the Receipts held by such
holders, in any manner that the Depositary may deem equitable and practicable
for accomplishing such distribution. If in the opinion of the Depositary, after
consultation with the Company, such distribution cannot be made proportionately
among such record holders, or if for any other reason (including any requirement
that the Company or the Depositary withhold an amount on account of taxes) the
Depositary, after consultation with the Company, deems such distribution not to
be feasible, the Depositary may, with the approval of the Company, adopt such
method as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and upon
such terms as it may deem equitable and appropriate. The net proceeds of any
such sale shall, subject to Sections 3.1 and

                                      -10-
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3.2, be distributed or made available for distribution, as the case may be, by
the Depositary to record holders of Receipts as provided by Section 4.1 in the
case of a distribution received in cash.

          SECTION 4.3 Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is recorded on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Depositary may determine,
either by the issue to such record holders of warrants representing such rights,
preferences or privileges or by such other method as may be approved by the
Depositary in its discretion with the approval of the Company; provided,
however, that (i) if at the time of issue or offer of any such rights,
preferences or privileges the Depositary determines that it is not lawful or
(after consultation with the Company) not feasible to make such rights,
preferences or privileges available to holders of Receipts by the issue of
warrants or otherwise, or (ii) if and to the extent so instructed by holders of
Receipts who do not desire to execute such rights, preferences or privileges,
then the Depositary, in its discretion (with approval of the Company, in any
case where the Depositary has determined that it is not feasible to make such
rights, preferences or privileges available), may, if applicable laws or the
terms of such rights, preferences or privileges permit such transfer, sell such
rights, preferences or privileges at public or private sale, at such place or
places and upon such terms as it may deem proper. The net proceeds of any such
sale shall, subject to Sections 3.1 and 3.2, be distributed by the Depositary to
the record holders of Receipts entitled thereto as provided by Section 4.1 in
the case of a distribution received in cash.

          If registration under the Securities Act of the securities to which
any rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold the securities to which such rights, preferences
or privileges relate, the Company will file promptly a registration statement
pursuant to the Securities Act with respect to such rights, preferences or
privileges and securities and use its best efforts and take all steps available
to it to cause such registration statement to become effective sufficiently in
advance of the expiration of such rights, preferences or privileges to enable
such holders to exercise such rights, preferences or privileges. In no event
shall the Depositary make available to the holders of Receipts any right,
preference or privilege to subscribe for or to purchase any securities unless
and until it has received written notice from the Company that such registration
statement shall have become effective, or that the offering and sale of such
securities to such holders are exempt from registration under the provisions of
the

                                      -11-
<PAGE>

Securities Act and the Company shall have provided to the Depositary an opinion
of counsel reasonably satisfactory to the Depositary to such effect.

     If any other action under the laws of any jurisdiction or any governmental
or administrative authorization, consent or permit is required in order for such
rights, preferences or privileges to be made available to holders of Receipts,
the Company will use its reasonable best efforts to take such action or obtain
such authorization, consent or permit sufficiently in advance of the expiration
of such rights, preferences or privileges to enable such holders to exercise
such rights, preferences or privileges.

     SECTION 4.4 Notice of Dividends, etc.; Fixing Record Date for Holders of
Receipts. Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or if rights,
preferences or privileges shall at any time be offered, with respect to Stock,
or whenever the Depositary shall receive notice of any meeting at which holders
of Stock are entitled to vote or of which holders of Stock are entitled to
notice, or whenever the Depositary and the Company shall decide it is
appropriate, the Depositary shall in each such instance fix a record date (which
shall be the same date as the record date fixed by the Company with respect to
or otherwise in accordance with the terms of the Stock) for the determination of
the holders of Receipts who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the sale
thereof, or to give instructions for the exercise of voting rights at any such
meeting, or who shall be entitled to notice of such meeting or for any other
appropriate reasons.

     SECTION 4.5 Voting Rights. Upon receipt of notice of any meeting at which
the holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts as of the record
date for such meeting a notice which shall contain (i) such information as is
contained in such notice of meeting, (ii) a statement that the holders may,
subject to any applicable restrictions, instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of Stock represented by
their respective Depositary Shares (including an express indication that
instructions may be given to the Depositary to give a discretionary proxy to a
person designated by the Company), and (iii) a brief statement as to the manner
in which such instructions may be given. Upon the written request of the holders
of Receipts on the relevant record date, the Depositary shall use its best
efforts to vote or cause to be voted, in accordance with the instructions set
forth in such requests, the maximum number of whole shares of Stock represented
by the Depositary Shares evidenced by all Receipts as to which any particular
voting instructions are received. The Company hereby agrees to take all action
which may be deemed

                                      -12-
<PAGE>

necessary by the Depositary in order to enable the Depositary to vote such Stock
or cause such Stock to be voted. In the absence of specific instructions from
the holder of a Receipt, the Depositary will abstain from voting to the extent
of the Stock represented by the Depositary Shares evidenced by such Receipt.

     SECTION 4.6 Changes Affecting Deposited Securities and Reclassifications,
Recapitalizations, etc. Upon any change in par value or liquidation preference,
split-up, combination or any other reclassification of the Stock, or upon any
recapitalization, reorganization, merger or consolidation affecting the Company
or to which it is a party, the Depositary may in its discretion with the
approval (not to be unreasonably withheld) of, and shall upon the instructions
of, the Company, and (in either case) in such manner as the Depositary may deem
equitable, (i) make such adjustments in the fraction of an interest in one share
of Stock represented by one Depositary Share as may be necessary (as certified
by the Company) fully to reflect the effects of such change in par value or
liquidation preference, split-up, combination or other reclassification of
Stock, or of such recapitalization, reorganization, merger or consolidation and
(ii) treat any securities which shall be received by the Depositary in exchange
for or upon conversion of or in respect of the Stock as new deposited securities
so received in exchange for or upon conversion or in respect of such Stock. In
any such case, the Depositary may in its discretion, with the approval of the
Company, execute and deliver additional Receipts or may call for the surrender
of all outstanding Receipts to be exchanged for new Receipts specifically
describing such new deposited securities. Anything to the contrary herein
notwithstanding, holders of Receipts shall have the right from and after the
effective date of any such change in par value or liquidation preference,
split-up, combination or other reclassification of the Stock or any such
recapitalization, reorganization, merger or consolidation to surrender such
Receipts to the Depositary with instructions to convert, exchange or surrender
the Stock represented thereby only into or for, as the case may be, the kind and
amount of shares of stock and other securities and property and cash into which
the Stock represented by such Receipts would have been converted or for which
such Stock would have been exchanged or surrendered had such Receipt been
surrendered immediately prior to the effective date of such transaction.

     SECTION 4.7 Delivery of Reports. The Depositary shall furnish to holders of
Receipts any reports and communications received from the Company which are
received by the Depositary as the holder of Stock. In addition, the Depositary
will make available for inspection by holders of Receipts at the Depository's
Office, 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 Stock.

                                      -13-
<PAGE>

     SECTION 4.8 List of Receipt Holders. Promptly upon request from time to
time by the Company, the Depositary shall furnish to it a list, as of the most
recent practicable date, of the names, addresses and holdings of Depositary
Shares of all record holders of Receipts. The Company shall be entitled to
receive such list four times annually without charge.

                                   ARTICLE V

                       The Depositary, the Depositary's
                     Agents, the Registrar and the Company

     SECTION 5.1 Maintenance of Offices, Agencies and Transfer Books by the
Depositary; Registrar. Upon execution of this Deposit Agreement, the Depositary
shall maintain at the Depositary's office facilities for the execution and
delivery, registration and registration of transfer, surrender and exchange of
Receipts, and at the offices of the Depositary's Agents, if any, facilities for
the delivery, registration of transfer, surrender and exchange of Receipts, all
in accordance with the provisions of this Deposit Agreement.

     The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Receipts, which books during normal
business hours shall be open for inspection by the record holders of Receipts;
provided that any such holder requesting to exercise such right shall certify to
the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.

     The Depositary may close such books, at any time or from time to time, when
deemed expedient by it in connection with the performance of its duties
hereunder.

     The Depositary may, with the approval of the Company, appoint a Registrar
for registration of the Receipts or the Depositary Shares evidenced thereby. If
the Receipts or the Depositary Shares evidenced thereby or the Stock represented
by such Depositary Shares shall be listed on one or more national securities
exchanges, the Depositary will appoint a Registrar (acceptable to the Company)
for registration of such Receipts or Depositary Shares in accordance with any
requirements of such exchange. Such Registrar (which may be the Depositary if so
permitted by the requirements of any such exchange) may be removed and a
substitute registrar appointed by the Depositary upon the request or with the
approval of the Company. If the Receipts, such Depositary Shares or such Stock
are listed on one or more other stock exchanges, the Depositary will, at the
request and at the expense of the Company, arrange such facilities for the

                                      -14-
<PAGE>

delivery, registration, registration of transfer, surrender and exchange of such
Receipts, such Depositary Shares or such Stock as may be required by law or
applicable securities exchange regulation.

     The Depositary may from time to time appoint Depositary's Agents to act in
any respect for the Depositary for the purposes of this Deposit Agreement and
may at any time appoint additional Depositary's Agents and vary or terminate the
appointment of such Depositary's Agents. The Depositary will notify the Company
of any such action.

     SECTION 5.2 Prevention of or Delay in Performance by the Depositary, the
Depositary's Agents, the Registrar or the Company. Neither the Depositary nor
any Depositary's Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law, or regulation thereunder, of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or the Registrar, by reason of any provision, present or
future, of the Company's Articles of Incorporation or by reason of any act of
God or war or other circumstance beyond the control of the relevant party, the
Depositary, the Depositary's Agent, the Registrar or the Company shall be
prevented, delayed or forbidden from, or subjected to any penalty on account of,
doing or performing any act or thing which the terms of this Deposit Agreement
provide shall be done or performed; nor shall the Depositary, any Depositary's
Agent, the Registrar or the Company incur liability to any holder of a Receipt
(i) by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing which the terms of this Deposit Agreement shall
provide shall or may be done or performed, or (ii) by reason of any exercise of,
or failure to exercise, any discretion provided for in this Deposit Agreement
except, in the case of any such exercise or failure to exercise discretion not
caused as aforesaid, if caused by the gross negligence, willful misconduct or
bad faith of the party charged with such exercise or failure to exercise.

     SECTION 5.3 Obligation of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor
the Registrar nor the Company assumes any obligation or shall be subject to any
liability under this Deposit Agreement or any Receipt to holders of Receipts
other than for its gross negligence, willful misconduct or bad faith.

     Neither the Depositary nor any Depositary's Agent nor the Registrar nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Stock, the Depositary Shares
or the Receipts which in its reasonable

                                      -15-
<PAGE>

opinion may involve it in expense or liability unless indemnity reasonably
satisfactory to it against expense and liability be furnished as often as may be
reasonably required.

     Neither the Depositary nor any Depositary's Agent nor the Registrar nor the
Company shall be liable for any action or any failure to act by it in reliance
upon the written advice of legal counsel or accountants, or information from any
holder of a Receipt or any other person believed by it in good faith to be
competent to give such information. The Depositary, any Depositary's Agent, the
Registrar and the Company may each rely and shall each be protected in acting
upon any written notice, request, direction or other document reasonably
believed by it to be genuine and to have been signed or presented by the proper
party or parties.

     The Depositary shall not be responsible for any failure to carry out any
instruction to vote any of the shares of Stock or for the manner or effect of
any such vote made, as long as any such action or non-action is in good faith.
The Depositary will indemnify the Company and hold it harmless from any loss,
liability or expense (including the reasonable costs and expenses of defending
itself) which may arise out of acts performed or omitted by the Depositary,
including when such Depositary acts as Registrar, or the Depositary's Agents in
connection with this Agreement due to its or their gross negligence, willful
misconduct or bad faith. The indemnification obligations of the Depositary set
forth in this Section 5.3 shall survive any termination of this Agreement and
any succession of any Depositary.

     The Depositary, its parent, affiliates or subsidiaries, the Depositary's
Agents, and the Registrar may own, buy, sell and deal in any class of securities
of the Company and its affiliates and in Receipts or Depositary Shares or become
pecuniarily interested in any transaction in which the Company or its affiliates
may be interested or contract with or lend money to or otherwise act as fully or
as freely as if it were not the Depositary, parent, affiliate or subsidiary or
Depositary's Agent or Registrar hereunder. The Depositary may also act as
trustee, transfer agent or registrar of any of the securities of the Company and
its affiliates.

     It is intended that neither the Depositary nor any Depositary's Agent nor
the Registrar, acting as the Depositary's Agent or Registrar, as the case may
be, shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws, it being expressly
understood and agreed that the Depositary, any Depositary's Agent and the
Registrar are acting only in a ministerial capacity as Depositary or Registrar
for the Stock.

     Neither the Depositary (or its officers, directors, employees or agents)
nor any Depositary's Agent nor the Registrar makes any representation or has any
responsibility as to the

                                     -16-
<PAGE>

validity of the registration statement pursuant to which the Depositary Shares
are registered under the Securities Act, the Stock, the Depositary Shares or the
Receipts (except for its counter-signatures thereon) or any instruments referred
to therein or herein, or as to the correctness of any statement made therein or
herein.

     The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity or genuineness of any
Stock at any time deposited with the Depositary hereunder or of the Depositary
Shares, as to the validity or sufficiency of this Deposit Agreement, as to the
value of the Depositary Shares or as to any right, title or interest of the
record holders of Receipts in and to the Depositary Shares. The Depositary shall
not be accountable for the use or application by the Company of the Depositary
Shares or the Receipts or the proceeds thereof.

     SECTION 5.4 Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by delivering notice of its election to do so to the Company, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.

     The Depositary may at any time be removed by the Company by notice of such
removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor Depositary and its acceptance of such appointment as
hereinafter provided.

     In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor Depositary,
which shall 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. If no successor Depositary shall have been so appointed and have
accepted appointment within 60 days after delivery of such notice, the resigning
or removed Depositary may petition any court of competent jurisdiction for the
appointment of a successor Depositary. Every successor Depositary shall execute
and deliver to its predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor Depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor and for all purposes shall be
the Depositary under this Deposit Agreement, and such predecessor, upon payment
of all sums due it and on the written request of the Company, shall

                                      -17-
<PAGE>

execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all right, title and interest in the Stock and any moneys or property held
hereunder to such successor, and shall deliver to such successor a list of the
record holders of all outstanding Receipts and such records, books and other
information in its possession relating thereto. Any successor Depositary shall
promptly mail notice of its appointment to the record holders of Receipts.

     Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act, and notice thereof shall
not be required hereunder. Such successor Depositary may authenticate the
Receipts in the name of the predecessor Depositary or in the name of the
successor Depositary.

     SECTION 5.5 Corporate Notices and Reports. The Company agrees that it will
deliver to the Depositary, and the Depositary will, promptly after receipt
thereof, transmit to the record holders of Receipts, in each case at the
addresses recorded in the Depositary's books, copies of all notices and reports
(including without limitation financial statements) required by law or by the
rules of any national securities exchange upon which the Stock, the Depositary
Shares or the Receipts are listed, to be furnished to the record holders of
Receipts. Such transmission will be at the Company's expense and the Company
will provide the Depositary with such number of copies of such documents as the
Depositary may reasonably request.

     SECTION 5.6 Indemnification by the Company. The Company shall indemnify the
Depositary, any Depositary's Agent and the Registrar against, and hold each of
them harmless from, any loss, liability or expense (including the reasonable
costs and expenses of defending itself) which may arise out of acts performed or
omitted in connection with this Deposit Agreement and the Receipts by the
Depositary, any Registrar or any of their respective agents (including any
Depositary's Agent), except for any liability arising out of gross negligence,
willful misconduct or bad faith on the respective parts of any such person or
persons. The obligations of the Company set forth in this Section 5.6 shall
survive any succession of any Depositary or Depositary's Agent.

     SECTION 5.7 Charges and Expenses. The Company shall pay all transfer and
other taxes and governmental charges arising solely from the existence of the
depositary arrangements. The Company shall pay charges of the Depositary in
connection with the initial deposit of the Stock and the initial issuance of the
Depositary Shares, all withdrawals of shares of the Stock by owners of
Depositary Shares, and any redemption of the Stock at the option of the Company.
All other transfer and other taxes and governmental charges shall be at the
expense of holders of Depositary

                                      -18-
<PAGE>

Shares. If, at the request of a holder of Receipts, the Depositary incurs
charges or expenses for which it is not otherwise liable hereunder, such holder
will be liable for such charges and expenses. All other charges and expenses of
the Depositary and any Depositary's Agent hereunder (including, in each case,
reasonable fees and expenses of counsel) incident to the performance of their
respective obligations hereunder will be paid upon consultation and agreement
between the Depositary and the Company as to the amount and nature of such
charges and expenses. The Depositary shall present its statement for charges and
expenses to the Company at such intervals as the Company and the Depositary may
agree.

     SECTION 5.8 Tax Compliance. The Depositary, on its own behalf and on behalf
of the Company, will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements imposed
by applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Depositary Shares or (ii) the
issuance, delivery, holding, transfer, redemption or exercise of rights under
the Receipts or the Depositary Shares. Such compliance shall include, without
limitation, the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.

     The Depositary shall comply with any direction received from the Company
with respect to the application of such requirements to particular payments or
holders or in other particular circumstances, and may for purposes of this
Agreement rely on any such direction in accordance with the provisions of
Section 5.3 hereof.

     The Depositary shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available on
request to the Company or to its authorized representatives.

                                  ARTICLE VI

                           Amendment and Termination

     SECTION 6.1 Amendment. The form of the Receipts and any provisions of this
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect which they may deem
necessary or desirable; provided, however, that no such amendment (other than
                        --------  -------
any change in the fees of any Depositary or Registrar, which shall go into
effect not sooner than three months after notice thereof to the holders of the
Receipts) which shall materially adversely alter the rights of the holders of
Receipts shall be

                                      -19-
<PAGE>

effective unless such amendment shall have been approved by the holders of at
least a majority of the Depositary Shares then outstanding. Every holder of an
outstanding Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold such Receipt, to be bound by the Deposit Agreement
as amended thereby. Notwithstanding the foregoing, in no event may any amendment
impair the right of any holder of any Depositary Shares, upon surrender of the
Receipts evidencing such Depositary Shares and subject to any conditions
specified in this Deposit Agreement, to receive shares of Stock and any money or
other property represented thereby, except in order to comply with mandatory
provisions of applicable law.

     SECTION 6.2 Termination. This Deposit Agreement may be terminated by the
Company or the Depositary after (i) all outstanding Depositary Shares have been
redeemed pursuant to Section 2.8 or (ii) there shall have been made a final
distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Receipts pursuant to Section 4.1 or 4.2, as
applicable.

     Upon the termination of this Deposit Agreement, the Company shall
be discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, the Registrar and any Depositary's Agent under
Sections 5.6 and 5.7.

                                  ARTICLE VII

                                 Miscellaneous

     SECTION 7.1 Counterparts. This Deposit Agreement may be executed in any
number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.

     SECTION 7.2 Exclusive Benefit of Parties. This Deposit Agreement is for the
exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.

     SECTION 7.3 Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.

                                      -20-
<PAGE>

     SECTION 7.4 Notices. Any and all notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or
facsimile transmission confirmed by letter, addressed to the Company at:

     PS Business Parks, Inc.
     701 Western Avenue, 2nd Floor
     Glendale, California 91201-2397
     Facsimile No.: (818) 244-9267

or at any other address of which the Company shall have notified the Depositary
in writing.

     Any and all notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram or facsimile transmission
confirmed by letter, addressed to the Depositary at the Depositary's Office, at:

     American Stock Transfer & Trust Company
     59 Maiden Lane
     Plaza Level
     New York, NY 10038
     Attention: Corporate Trust Department
     Facsimile No.: 718-236-4588

or at any other address of which the Depositary shall have notified the Company
in writing.

     Any and all notices to be given to any record holder of a Receipt hereunder
or under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail, or by telegram or facsimile
transmission confirmed by letter, addressed to such record holder at the address
of such record holder as it appears on the books of the Depositary, or if such
holder shall have filed with the Depositary a written request that notices
intended for such holder be mailed to some other address, at the address
designated in such request.

     Delivery of a notice sent by mail or by telegram or facsimile transmission
shall be deemed to be effected at the time when a duly addressed letter
containing the same (or a confirmation thereof in the case of a telegram or
facsimile transmission) is deposited for mailing by first class mail, postage
prepaid. The Depositary or the Company may, however, act upon any

                                      -21-
<PAGE>

telegram or facsimile transmission received by it from the other or from any
holder of a Receipt, notwithstanding that such telegram or facsimile
transmission shall not subsequently be confirmed by letter or as aforesaid.

     SECTION 7.5 Appointment of Registrar. The Company hereby also appoints the
Depositary as Registrar in respect of the Receipts and the Depositary hereby
accepts such appointments.

     SECTION 7.6 Holders of Receipts Are Parties. The holders of Receipts from
time to time shall be parties to this Deposit Agreement and shall be bound by
all of the terms and conditions hereof and of the Receipts by acceptance of
delivery thereof.

     SECTION 7.7 Governing Law. THIS DEPOSIT AGREEMENT AND THE RECEIPTS AND ALL
RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS APPLICABLE TO CONTRACTS
MADE IN AND TO BE PERFORMED IN THE STATE OF NEW YORK, INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

     SECTION 7.8 Inspection of Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agent and
shall be open to inspection during business hours at the Depositary's Office or
respective offices of the Depositary's Agent, if any, by any holder of a
Receipt.

     SECTION 7.9 Headings. The headings of articles and sections in this Deposit
Agreement and in the form of the Receipt set forth in Exhibit A hereto have been
inserted for convenience only and are not to be regarded as a part of this
Deposit Agreement or the Receipts or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.

                                      -22-
<PAGE>

          IN WITNESS WHEREOF, the Company and the Depositary have duly executed
this Agreement as of the day and year first above set forth, and all holders of
Receipts shall become parties hereto by and upon acceptance by them of delivery
of Receipts issued in accordance with the terms hereof.

Attested by:                                    PS BUSINESS PARKS, INC.

/s/ Jack E. Corrigan                            /s/ David Goldberg
--------------------------------                --------------------------------
Name:   Jack E. Corrigan                        Name:   David Goldberg
Title:  Secretary                               Title:  Vice President

Attested by:                                    AMERICAN STOCK TRANSFER &
                                                TRUST COMPANY

/s/ Authorized Signatory                        /s/ Herbert J. Lemmer
--------------------------------                --------------------------------
Name:                                           Name: Herbert J. Lemmer
Title:                                          Title: Vice President

                                      -23-
<PAGE>

EXHIBIT A

The Shares represented by this Depositary Receipt are subject to restrictions on
ownership and transfer for the purpose of assisting this Corporation to maintain
its status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Except as set forth in Article IV of this Corporation's
Articles of Incorporation, no person may Beneficially Own (i) more than 7.0% of
the outstanding shares of Common Stock of this Corporation, or (ii) more than
9.9% of the outstanding shares of any series of Preferred Stock or Equity Stock
of this Corporation, with certain further restrictions and exceptions as are set
forth in this Corporation's Articles of Incorporation. Any Person who attempts
to own or Beneficially Own Shares in excess of the above limitations must notify
this Corporation in writing at least 15 days prior to such attempt. If any of
the restrictions on transfer or ownership set forth in Article IV of the
Articles of Incorporation are violated, the Shares represented hereby will be
automatically transferred to the Charitable Trustee of a Charitable Trust for
the benefit of a Charitable Beneficiary pursuant to the terms of Article IV of
the Articles of Incorporation. In addition, attempted transfers of Shares in
violation of the limitations described above (as modified or expanded upon in
Article IV of the Articles of Incorporation), may be void ab initio. All
                                                          -- ------
capitalized terms in this legend have the meanings defined in this Corporation's
Articles of Incorporation, as the same may be amended from time to time. This
Corporation will furnish to the holder hereof, upon request and without charge,
a complete written statement of the terms and conditions of Article IV of the
Articles of Incorporation. Requests for such documents may be directed to the
corporate secretary.

                                                         DEPOSITARY SHARES
                                                         THIS DEPOSITARY RECEIPT
                                                         IS TRANSFERABLE IN
                                                         NEW YORK, NY
                                                         SEE REVERSE FOR
                                                         CERTAIN DEFINITIONS
                                                         CUSIP 693 60J 50 3

DEPOSITARY RECEIPT FOR DEPOSITARY
   SHARES EACH REPRESENTING 1/1,000th OF A
   SHARE OF 9 1/2% CUMULATIVE PREFERRED STOCK,
   SERIES D OF
   PS BUSINESS PARKS, INC.
   INCORPORATED UNDER THE
   LAWS OF THE STATE OF CALIFORNIA

                                      A-1
<PAGE>

     American Stock Transfer & Trust Company, as Depositary (the "Depositary"),
hereby certifies that

is the registered owner of                                    DEPOSITARY SHARES
                           ----------------------------------

("Depositary Shares"), each Depositary Share representing a 1/1,000 interest in
one share of 9 1/2% Cumulative Preferred Stock, Series D (the "Stock"), of PS
Business Parks, Inc., a California corporation (the "Corporation"), on deposit
with the Depositary, subject to the terms and entitled to the benefits of the
Deposit Agreement dated as of May 7, 2001 (the "Deposit Agreement"), between the
Corporation and the Depositary. By accepting this Depositary Receipt, the holder
hereof becomes a party to and agrees to be bound by all the terms and conditions
of the Deposit Agreement. This Depositary Receipt shall not be valid or
obligatory for any purpose or be entitled to any benefits under the Deposit
Agreement unless it shall have been executed by the Depositary by the manual
and/or facsimile signature of a duly authorized officer or, if executed in
facsimile by the Depositary, countersigned by a Registrar in respect of the
Depositary Receipts by a duly authorized officer.

The Corporation is authorized to issue Common Stock, one or more series of
Preferred Stock, one or more series of Equity Stock and Depositary Shares. The
Corporation will furnish without charge to each receiptholder, who so requests
in writing, a statement of the rights, preferences, privileges and restrictions
granted to or imposed upon the respective classes of shares and upon the holders
thereof, a copy of the Corporation's Bylaws and a copy of the Deposit Agreement.
Any such request shall be made to the Corporation at the principal office of the
Corporation at 701 Western Avenue, Glendale, California 91201-2397, Attention:
Secretary.

This Depositary Receipt is continued on the reverse hereof and the additional
provisions set forth therein (including, without limitation, those relating to
redemption) for all purposes have the same effect as if set forth at this place.

Dated:

                                         Countersigned

                                         AMERICAN STOCK TRANSFER & TRUST COMPANY

                                         Depositary, Transfer Agent and
                                         Registrar

                                         By: ______________________________
                                                 Authorized Officer

                                      A-2
<PAGE>

          THE SHARES REPRESENTED BY THIS DEPOSITARY RECEIPT ARE SUBJECT TO
THE PROVISIONS OF THE ARTICLES OF INCORPORATION OF THE CORPORATION, INCLUDING
BUT NOT LIMITED TO (1) SECTION (C) OF THE CERTIFICATE OF DETERMINATION RELATING
TO THE STOCK, WHICH CONFERS UPON THE BOARD THE RIGHT, ON OR AFTER MAY 10, 2006,
TO CALL FOR REDEMPTION THE STOCK AND (2) THE OWNERSHIP LIMITATION PROVISIONS
DESIGNED TO MAINTAIN THE CORPORATION'S QUALIFICATION AS A "REAL ESTATE
INVESTMENT TRUST" UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

          1.   The Deposit Agreement. Depositary receipts ("Depositary
Receipts"), of which this Depositary Receipt is one, are made available upon the
terms and conditions set forth in the Deposit Agreement, dated as of May 7, 2001
(the "Deposit Agreement"), among the Company, the Depositary and all holders
from time to time of Depositary Receipts. The Deposit Agreement (copies of which
are on file at the principal office maintained by the Depositary which at the
time of the execution of the Deposit Agreement is located at American Stock
Transfer & Trust Company, 59 Maiden Lane, Plaza Level, New York, NY 10038,
Attention: Corporate Trust Department (the "Depositary's Office") and at the
office of any agent of the Depositary) sets forth the rights of holders of
Depositary Receipts and the rights and duties of the Depositary. The statements
made on the face and the reverse of this Depositary Receipt are summaries of
certain provisions of the Deposit Agreement and are subject to the detailed
provisions thereof, to which reference is hereby made. In the event of any
conflict between the provisions of this Depositary Receipt and the provisions of
the Deposit Agreement, the provisions of the Deposit Agreement will govern.

          2.   Definitions. Unless otherwise expressly herein provided, all
defined terms used in this summary of the Deposit Agreement shall have the
meanings ascribed thereto in the Deposit Agreement.

          3.   Redemption of Stock. Whenever the Company shall elect to redeem
shares of Stock, it shall (unless otherwise agreed in writing with the
Depositary) give the Depositary not less than 60 days' notice of the date of
such proposed redemption and of the number of such shares of Stock held by the
Depositary to be so redeemed and the applicable redemption price. The Depositary
shall mail, first-class postage prepaid, notice of the redemption of Stock and
the proposed simultaneous redemption of Depositary Shares representing the Stock
to be redeemed, promptly upon receipt of the Company's notice to redeem shares
of Stock and not less than 30 and not more than 60 days prior to the date fixed
for redemption of such Stock and Depositary Shares, to the record holders of the
Depositary Receipts evidencing the Depositary Shares to be so redeemed, at the
addresses of such holders as the same appear on the records of the Depositary.
Any such notice shall also be published in the same manner as notices of
redemption of the Stock are required to be published by the Company. On the date
of such redemption, the Depositary shall redeem the number of Depositary Shares
representing such redeemed Stock; provided, that the Company shall then have
paid or caused to be paid in full to the Depositary the redemption price of the
Stock to be redeemed, plus any accrued and unpaid dividends payable with respect
thereto to the date of any such redemption. In case fewer than all the
outstanding Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed shall be determined pro rata or by lot in a manner determined by the
Board of Directors of the Company. Notice having been mailed as aforesaid, from
and after the Redemption Date (unless the Company shall have failed to provide
the funds necessary to redeem the shares of Stock evidenced by the Depositary
Shares called for redemption), dividends on the shares of Stock so called for
redemption shall cease to accrue, the Depositary Shares called for redemption
shall be deemed no longer to be outstanding and all rights of the holders of
Depositary Receipts evidencing such Depositary Shares (except the right to
receive the redemption price) shall, to the extent of such Depositary Shares,
cease and terminate. Upon surrender in accordance

                                      A-3
<PAGE>

with said notice of the Depositary Receipts evidencing such Depositary Shares
(properly endorsed or assigned for transfer, if the Depositary or applicable law
shall so require), such Depositary Shares shall be redeemed at a redemption
price per Depositary Share equal to the same fraction of the redemption price
per share paid with respect to the shares of Stock as the fraction each
Depositary Share represents of a share of Stock plus the same fraction of all
money and other property, if any, represented by such Depositary Shares,
including all amounts paid by the Company in respect of dividends which on the
Redemption Date have accumulated on the shares of Stock to be so redeemed and
have not theretofore been paid. The foregoing is subject further to the terms
and conditions of the Certificate of Determination. If fewer than all of the
Depositary Shares evidenced by this Depositary Receipt are called for
redemption, the Depositary will deliver to the holder of this Depositary Receipt
upon its surrender to the Depositary, together with the redemption payment, a
new Depositary Receipt evidencing the Depositary Shares evidenced by such prior
Depositary Receipt and not called for redemption.

          4.   Surrender of Depositary Receipts and Withdrawal of Stock. Upon
surrender of this Depositary Receipt to the Depositary at the Depositary's
Office or at such other offices as the Depositary may designate, and subject to
the provisions of the Deposit Agreement, the holder hereof is entitled to
withdraw, and to obtain delivery, without unreasonable delay, to or upon the
order of such holder, any or all of the Stock (but only in whole shares of
Stock) and all money and other property, if any, at the time represented by the
Depositary Shares evidenced by this Depositary Receipt; provided, however, that,
in the event this Depositary Receipt shall evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the whole
number of shares of Stock to be withdrawn, the Depositary shall, in addition to
such whole number of shares of Stock and such money and other property, if any,
to be withdrawn, deliver, to or upon the order of such holder, a new Depositary
Receipt or Depositary Receipts evidencing such excess number of whole Depositary
Shares.

          5.   Transfers, Split-ups, Combinations. Subject to the Deposit
Agreement, this Depositary Receipt is transferable on the books of the
Depositary upon surrender of this Depositary Receipt to the Depositary, properly
endorsed or accompanied by a properly executed instrument of transfer, and upon
such transfer the Depositary shall sign and deliver a Depositary Receipt or
Depositary Receipts to or upon the order of the person entitled thereto, all as
provided in and subject to the Deposit Agreement. This Depositary Receipt may be
split into other Depositary Receipts or combined with other Depositary Receipts
into one Depositary Receipt evidencing the same aggregate number of Depositary
Shares evidenced by the Depositary Receipt or Depositary Receipts surrendered;
provided, however, that the Depositary shall not issue any Depositary Receipt
evidencing a fractional Depositary Share.

          6.   Conditions to Signing and Delivery, Transfer, etc., of Depositary
Receipts. Prior to the execution and delivery, registration of transfer,
split-up, combination, surrender or exchange of this Depositary Receipt, the
Depositary, any of the Depositary's Agents or the Company may require any or all
of the following: (i) payment to it of a sum sufficient for the payment (or, in
the event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge with respect
thereto; (ii) production of proof satisfactory to it as to the identity and
genuineness of any signature; and (iii) compliance with such reasonable
regulations, if any, as the Depositary or the Company may establish not
inconsistent with the Deposit Agreement.

          7.   Suspension of Delivery, Transfer, etc. The deposit of Stock may
be refused, the delivery of this Depositary Receipt against Stock may be
suspended, the registration of transfer of Depositary Receipts may be refused
and the registration of transfer, surrender or exchange of this Depositary
Receipt may be suspended (i) during

                                      A-4
<PAGE>

any period when the register of stockholders of the Company is closed or (ii) if
any such action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission,
or under any provision of the Deposit Agreement.

          8.   Amendment. The form of the Depositary Receipts and any provision
of the Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable; provided, however, that no such amendment (other
than any changes in the fees of any Depositary or Registrar which shall go into
effect not sooner than three months after notice thereof to the holders of the
Depositary Receipts) which shall materially adversely alter the rights of
holders of Depositary Receipts shall be effective unless such amendment shall
have been approved by the holders of at least a majority of the Depositary
Shares then outstanding. The holder of this Depositary Receipt at the time any
such amendment becomes effective shall be deemed, by continuing to hold this
Depositary Receipt, to be bound by the Deposit Agreement as amended thereby. In
no event shall any amendment impair the right of the owner of the Depositary
Shares evidenced by this Depositary Receipt to surrender this Depositary Receipt
with instructions to the Depositary to deliver to the holder the Stock and all
money and other property, if any, represented thereby, except in order to comply
with mandatory provisions of applicable law.

          9.   Charges and Expenses. The Company will pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangement, except such charges as are expressly provided in the
Deposit Agreement to be at the expense of holders of Depositary Receipts.

          10.  Title to Depositary Receipts. Title to this Depositary Receipt,
when properly endorsed or accompanied by a properly executed instrument of
transfer, is transferable by delivery with the same effect as in the case of a
negotiable instrument; provided, however, that until transfer of this Depositary
Receipt has been registered on the books of the Depositary, the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the absolute owner hereof for the purpose of determining the person
entitled to distribution of dividends or other distributions or to any notice
provided for in the Deposit Agreement and for all other purposes.

          11.  Dividends and Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to the provisions of the Deposit Agreement, distribute
to record holders of Depositary Receipts such amounts of such sums as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Depositary Receipts held by such holders; provided,
however, that in case the Company or the Depositary shall be required by law to
withhold and does withhold from any cash dividend or other cash distribution in
respect of the Stock an amount on account of taxes or as otherwise required by
law, regulation or court process, the amount made available for distribution or
distributed in respect of Depositary Shares shall be reduced accordingly. In the
event that the calculation of any such cash dividend or other cash distribution
to be paid to any record holder on the aggregate number of Depositary Receipts
held by such holder results in an amount which is a fraction of a cent, the
amount the Depositary shall distribute to such record holder shall be rounded to
the next highest whole cent if such fraction of a cent is equal to or greater
than $.005, otherwise such fractional interest shall be disregarded; and upon
request of the Depositary, the Company shall pay the additional amount to the
Depositary for distribution.

                                      A-5
<PAGE>

          12.  Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose name
Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance, subject to the provisions of the Deposit
Agreement, be made available by the Depositary to the record holders of
Depositary Receipts in such manner as the Depositary shall determine.

          13.  Notice of Dividends, Fixing of Record Date. Whenever (i) any cash
dividend or other cash distribution shall become payable, or any distribution
other than cash shall be made, or any rights, preferences or privileges shall at
any time be offered, with respect to the Stock, or (ii) the Depositary shall
receive notice of any meeting at which holders of Stock are entitled to vote or
of which holders of Stock are entitled to notice or whenever the Depositary and
the Company shall decide it is appropriate, the Depositary shall in each such
instance fix a record date (which shall be the same date as the record date
fixed by the Company with respect to the Stock) for the determination of the
holders of Depositary Receipts (x) who shall be entitled to receive such
dividend, distribution, rights, preferences or privileges or the net proceeds of
the sale thereof, or (y) who shall be entitled to give instructions for the
exercise of voting rights at any such meeting or to receive notice of such
meeting or for any other appropriate reasons.

          14.  Voting Rights. Upon receipt of notice of any meeting at which the
holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Depositary Receipts as of
the record date for such meeting a notice, which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
holders may, subject to any applicable restrictions, instruct the Depositary as
to the exercise of the voting rights pertaining to the Stock represented by
their respective Depositary Shares, and (iii) a brief statement as to the manner
in which such instructions may be given. Upon the written request of a holder of
this Depositary Receipt on such record date, the Depositary shall use its best
efforts to vote or cause to be voted the Stock represented by the Depositary
Shares evidenced by this Depositary Receipt in accordance with the instructions
set forth in such request. The Company shall take all action that may be deemed
necessary by the Depositary in order to enable the Depositary to vote such Stock
or cause such Stock to be voted. In the absence of specific instructions from
the holder of this Depositary Receipt, the Depositary will abstain from voting
to the extent of the Stock represented by the Depositary Shares evidenced by
this Depositary Receipt.

          15.  Reports, Inspection of Transfer Books. The Depositary shall
transmit to the record holders of Depositary Receipts copies of all reports and
communications received from the Company that are received by the Depositary as
the holder of Stock. In addition, the Depositary will make available for
inspection to the record holders of Depositary Receipts at the Depositary's
Office any reports and communications received from the Company that are
received by the Depositary as the holder of Stock. The Depositary shall keep
books at the Depositary's Office for the registration and transfer of Depositary
Receipts, which books at all reasonable times will be open for inspection by the
record holders of Depositary Receipts; provided that any such holder requesting
to exercise such right shall certify to the Depositary that such inspection
shall be for a proper purpose reasonably related to such person's interest as an
owner of Depositary Shares.

          16.  Liability of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor
the Registrar nor the Company shall incur any liability to any holder of this
Depositary Receipt, if by reason of any provision of any present or future law
or regulation thereunder of any

                                      A-6
<PAGE>

governmental authority or, in the case of the Depositary, the Depositary's Agent
or the Registrar, by reason of any provision present or future, of the Company's
Articles of Incorporation or by reason of any act of God or war or other
circumstances beyond the control of the relevant party, the Depositary, any
Depositary's Agent, the Registrar or the Company shall be prevented or forbidden
from doing or performing any act or thing that the terms of the Deposit
Agreement provide shall be done or performed; nor shall the Depositary, any
Depositary's Agent, the Registrar or the Company incur any liability to any
holder of this Depositary Receipt (i) by reason of any nonperformance or delay,
caused as aforesaid, in the performance of any act or thing that the terms of
the Deposit Agreement provide shall or may be done or performed, or (ii) by
reason of any exercise of, or failure to exercise, any discretion provided for
in the Deposit Agreement except if such exercise or failure to exercise
discretion is caused by its gross negligence, willful misconduct or bad faith.

          17.  Obligations of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's Agent nor
the Registrar nor the Company assumes any obligation or shall be subject to any
liability under the Deposit Agreement or this Depositary Receipt to the holder
hereof, other than for its gross negligence, willful misconduct or bad faith.

          Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding with respect to the Stock, the Depositary
Shares or the Depositary Receipts that in its reasonable opinion may involve it
in expense or liability, unless indemnity reasonably satisfactory to it against
expense and liability be furnished as often as may be reasonably required.

          Neither the Depositary nor any Depositary's Agent nor the Registrar
nor the Company will be liable for any action or failure to act by it in
reliance upon the written advice of or information from legal counsel,
accountants, any holder of this Depositary Receipt or any other person believed
by it in good faith to be competent to give such information.

          18.  Termination of Deposit Agreement. The Deposit Agreement may be
terminated by the Company or the Depositary after (i) all outstanding Depositary
Shares have been redeemed or (ii) there shall have been made a final
distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Depositary Receipts.

          19.  Governing Law. The Deposit Agreement and this Depositary Receipt
and all rights thereunder and hereunder and provisions thereof and hereof shall
be governed by, and construed in accordance with, the law of the State of New
York, including without limitation Section 5-1401 of the New York General
Obligations Law.

                                      A-7
<PAGE>

The following abbreviations, when used in the inscription on the face of this
Depositary Receipt, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                             <C>
TEN COM - as tenants in common                  UNIF GIFT MIN ACT -______  Custodian _______
TEN ENT - as tenants by the entireties                                 (Cust)          (Minor)
JT TEN  - as joint tenants with right                                  under Uniform Gifts to Minors
          of survivorship and not as                                   Act ____________
          tenants in common                                                   (State)

                                                UNIF TRF MIN ACT -______ Custodian (until age __)
                                                                       (Cust)
                                                                       _______ under Uniform Transfers
                                                                       (Minor)
                                                                       to Minors Act _________________
                                                                                         (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                      A-8
<PAGE>

For Value Received, ____________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________
______________________________________
______________________________________________________________________________

______________________________________________________________________________

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

________________________ Depositary Shares represented by the within
Depositary Receipt, and do hereby irrevocably constitute and appoint
________________________ Attorney to transfer the said Depositary Shares
on the books of the within named Depositary with full power of substitution
in the premises.

Dated _______________________________     Signed _______________________________

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THIS DEPOSITARY RECEIPT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED

By      ______________________________________
        THE SIGNATURE(S) SHOULD BE GUARANTEED
        BY AN ELIGIBLE GUARANTOR INSTITUTION
        (BANKS, STOCKBROKERS, SAVINGS AND LOAN
        ASSOCIATIONS AND CREDIT UNIONS WITH
        MEMBERSHIP IN AN APPROVED SIGNATURE
        GUARANTEE MEDALLION PROGRAM), PURSUANT
        TO S.E.C. RULE 17Ad-15.

                                      A-9Exhibit 4.1
                                                                     -----------

                          UNION ACCEPTANCE CORPORATION

                              SENIOR NOTES DUE 2002
                             NOTE PURCHASE AGREEMENT
                              AMENDMENT AND CONSENT

                                                                   April 2, 1996

     Reference  is made to the Note  Purchase  Agreement,  dated as of August 7,
1995,  as  amended by the  Amendment  thereto  dated  November  22,  1995 (as so
amended, the "Note Purchase Agreement"), among Union Acceptance Corporation (the
"Company") and Anchor National Life Insurance Company,  The Travelers  Insurance
Company,  The Lincoln National Life Insurance Company, The Minnesota Mutual Life
Insurance  Company,  Cova  Financial  Services Life  Insurance Co., The Lutheran
Church - Missouri Synod Foundation,  The Ohio Casualty Insurance Company, Safeco
Life Insurance  Company,  The Travelers  Insurance Group,  Inc., First Cova Life
Insurance Co., Guarantee Mutual Life Company,  John Alden Life Insurance Company
of New York,  Physicians Mutual Insurance Company,  Trustmark Insurance Company,
Cincinnati  Life Insurance  Co.,  Acacia  National Life Insurance Co.,  Republic
Western Insurance Company, Standard Insurance Company,  Trustmark Life Insurance
Company,  Physicians  Life Insurance  Company - Annuity Pocket 2, Cova Financial
Life  Insurance Co., Fort Dearborn Life Insurance  Company,  Frontier  Insurance
Company,  Guarantee  Trust Life  Insurance  Company,  Security-Connecticut  Life
Insurance  Company,  CSA  Fraternal  Life and General  American  Life  Insurance
Company (each such entity, a "Purchaser" and  collectively,  the  "Purchasers").
Capitalized  terms used but not otherwise defined herein shall have the meanings
set forth in the Note Purchase Agreement.

     1.  Pursuant to Section  14C of the Note  Purchase  Agreement,  the parties
hereto hereby agree to amend the Note Purchase Agreement as follows:

     (a) Section 8D of the Note Purchase Agreement is hereby amended by deleting
clause (i) thereof and inserting in lieu thereof:

          "(i) The Company may not make any  payments on  Subordinated
     Debt except as permitted by the  subordination  provisions of the
     Subordination Debt Document governing such Subordinated Debt."

     (b)  Section  12A of the Note  Purchase  Agreement  is  hereby  amended  by
deleting the definition of "Subordinated Debt" and inserting in lieu thereof:

          "'Subordinated  Debt'  means Debt of the  Company  (i) whose
     first scheduled  principal payment date is at least 92 days after
     the maturity  date of the Senior Notes (as such maturity may have
     been  extended at the time of  issuance  of such Debt),  and (ii)
     which  either (a) is issued  pursuant  to the  Subordinated  Note
     Purchase Agreement, or (b) is (x) subordinated or junior in right
     of payment to the Senior Notes on terms and provisions  which are
     no more  favorable  to the  holders  thereof  than the  terms and
     provisions  of  Section  6.1 of the  Subordinated  Note  Purchase
     Agreement  (as in effect on the date of initial  issuance  of the
     Senior  Subordinated Notes described therein and substantially in
     the form  attached to the Amendment and Consent as Exhibit A) are
     to  the  holders  of  the  Senior  Subordinated  Notes  described
     therein, and (y) otherwise evidenced by documentation in form and
     substance satisfactory to the Required Holders."

          (c) Section  12A of the Note  Purchase  Agreement  is hereby
     amended  by  adding  the  following  definitions  in  appropriate
     alphabetical order:

          "'Amendment  and Consent' means the Amendment and Consent to
     this Agreement,  dated as of April 2, 1996, among the Company and
     the Required Holders.

          'Subordinated  Debt  Documents'  means (i) the  Subordinated
     Note  Purchase  Agreement,  as in effect  on the date of  initial
     issuance of the Senior Subordinated Notes described therein,  and
     (ii)  any   other   indenture,   note  or   agreement   governing
     Subordinated Debt which satisfies the requirements of clause (ii)
     of the definition of Subordinated Debt.

          'Subordinated  Note Purchase  Agreement'  means that certain
     Note  Purchase  Agreement,  dated as of April 3, 1996,  among the
     Company and the note purchasers named therein with respect to the
     Senior  Subordinated  Notes due 2003,  as amended,  modified  and
     supplemented in accordance with the terms thereof.'"

     2. Except as hereby  amended,  the Note Purchase  Agreement shall remain in
full force and effect and is hereby ratified and confirmed in all respects,  and
all  references  to the  "Agreement"  therein  shall be  deemed to mean the Note
Purchase Agreement as amended hereby.

     3. The  Purchasers  hereby (i) consent to the execution and delivery by the
Company of the Subordinated Note Purchase  Agreement and the consummation by the
Company of the transactions  contemplated thereby, and (ii) deem the Senior Note
Purchase Agreement  substantially in the form attached hereto as Exhibit A to be
satisfactory in form and substance.

     4. The Company  hereby  confirms  that as of the date hereof (i) all of the
representations and warranties of the Company provided in Section 10 of the Note
Purchase  Agreement  are true and  correct,  (ii) all  covenants  under the Note
Purchase Agreement have been fully performed and (iii) all information  provided
to the  Purchasers in connection  with this Agreement is true and correct in all
material respects.

     5. Upon execution and delivery of this  Agreement by the Required  Holders,
the Company shall pay to the Holders an aggregate of $110,000.

     6. This  Agreement  shall be effective only upon the execution and delivery
hereof by the Company and the Required Holders.

     7. This  Agreement  may be  executed in any number of  counterparts  and by
different parties on separate  counterparts,  and each such counterpart shall be
deemed to be an original,  but all such counterparts  shall together  constitute
one and the same agreement.

     8. This Agreement shall be governed by and construed in accordance with the
laws  of the  State  of New  York,  without  regard  to the  conflicts  of  laws
principles thereof.

<PAGE>

     IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
Agreement as of the date first above written.

                                    UNION ACCEPTANCE CORPORATION

                                    By:  /s/ Cynthia F. Whitaker
                                         ---------------------------------------
                                           Name: Cynthia F. Whitaker
                                           Title:

                                    REQUIRED HOLDERS:

                                    ANCHOR NATIONAL LIFE INSURANCE
                                         COMPANY

                                    By:  /s/ Yvonne Stevens
                                         ---------------------------------------
                                           Name: Yvonne Stevens
                                           Title: Authorized Agent

                                    THE TRAVELERS INSURANCE COMPANY

                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:

                                    THE LINCOLN NATIONAL LIFE
                                         INSURANCE COMPANY

                                    By:  Lincoln Investment Mangement, Inc.,
                                         its Attorney-In-Fact

                                         By:  /s/ Gregory E. Reed
                                              ----------------------------------
                                                Name: Gregory E. Reed
                                                Title: Vice President
<PAGE>

                                    THE MINNESOTA MUTUAL LIFE
                                         INSURANCE COMPANY

                                    By:  MIMLIC Asset Management Company

                                         By:  /s/ Marilyn Froelich
                                              ----------------------------------
                                                Name: Marilyn Froelich
                                                Title: Vice President

                                    COVA FINANCIAL SERVICES LIFE
                                         INSURANCE CO.

                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name: Doug Koester
                                           Title: Vice President

                                    THE LUTHERAN CHURCH-MISSOURI
                                         SYNOD FOUNDATION

                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:

                                    THE OHIO CASUALTY INSURANCE
                                         COMPANY

                                    By:  /s/ Richard B. Kelly
                                         ---------------------------------------
                                           Name: Richard B. Kelly
                                           Title: Senior Investment Officer

<PAGE>

                                    SAFECO LIFE INSURANCE CO.

                                    By:  /s/ Michael C. Knebel
                                         ---------------------------------------
                                           Name: Michael C. Knebel
                                           Title: Vice President and Treasurer

                                    THE TRAVELERS INSURANCE GROUP
                                         INC.

                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:

                                    FIRST COVA LIFE INSURANCE CO.

                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name: Doug Koester
                                           Title: Vice President

                                    GUARANTEE MUTUAL LIFE COMPANY

                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:

                                    JOHN ALDEN LIFE INSURANCE
                                         COMPANY OF NEW YORK

                                    By:  /s/ [NOT LEGIBLE]
                                         ---------------------------------------
                                           Name:
                                           Title: Vice President, Investments

<PAGE>

                                    PHYSICIANS MUTUAL INSURANCE
                                         COMPANY

                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager

                                    TRUSTMARK INSURANCE COMPANY

                                    By:  /s/ Michael A. Scelsi
                                         ---------------------------------------
                                           Name:Michael A. Scelsi
                                           Title: Vice President, Investments

                                    CINCINNATI LIFE INSURANCE CO.

                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:

                                    ACACIA NATIONAL LIFE INSURANCE
                                         CO.

                                    By:
                                         ---------------------------------------
                                           Name:
                                           Title:

                                    REPUBLIC WESTERN INSURANCE
                                         COMPANY

                                    By:  /s/ Bradley P. Newman
                                         ---------------------------------------
                                         Name: Bradley P. Newman
                                         Title: Vice President/Treasurer

<PAGE>

                                    STANDARD INSURANCE COMPANY

                                    By:  /s/ [NOT LEGIBLE]
                                         ---------------------------------------
                                           Name:
                                           Title:

                                    TRUSTMARK LIFE INSURANCE
                                         COMPANY

                                    By:  /s/ Michael A. Scelsi
                                         ---------------------------------------
                                           Name: Michael A. Scelsi
                                           Title: Vice President, Investments

                                    PHYSICIANS LIFE INSURANCE
                                         COMPANY ANNUITY POCKET 2

                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager

                                    COVA FINANCIAL LIFE INSURANCE CO.

                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name:Doug Koester
                                           Title: Vice President

                                    FORT DEARBORN LIFE INSURANCE
                                         COMPANY

                                    By:  MIMLIC Asset Management Company

                                         By:  /s/ Loren A. Haugland
                                              ----------------------------------
                                                Name: Loren Haugland
                                                Title: Vice President

<PAGE>

                                    FRONTIER INSURANCE COMPANY

                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title:Senior Portfolio Manager

                                    GUARANTEE TRUST LIFE INSURANCE
                                         COMPANY

                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager

                                    SECURITY - CONNECTICUT LIFE
                                         INSURANCE COMPANY

                                    By:  Lincoln Investment Management,
                                         Inc., its Attorney-In-Fact

                                         By:  /s/ Gregory E. Reed
                                              ----------------------------------
                                                Name: Gregory E. Reed
                                                Title: Vice President

                                    CSA FRATERNAL LIFE

                                    By:  /s/ Kathy R. Lange
                                         ---------------------------------------
                                           Name: Kathy R. Lange
                                           Title: Senior Portfolio Manager

                                    GENERAL AMERICAN LIFE INSURANCE
                                         COMPANY

                                    By:  /s/ Doug Koester
                                         ---------------------------------------
                                           Name: Doug Koester
                                           Title: Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00025-of-00352.parquet"}]]