Registration Rights Agreement (2005)Full Document 

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     THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of this 12 day of December, 2005, by and between PS Business Parks, Inc., a California corporation (the “Company”), and GSEP 2005 Realty Corp., a Delaware corporation (“Holder”).
     A. In connection with the offering of 800,000 “7 1/8% Series N Cumulative Redeemable Preferred Units” (the “Series N Preferred Units”), Holder will contribute to PS Business Parks, L.P. (the “Operating Partnership”) cash in return for which the Operating Partnership will issue the Series N Preferred Units to the Holder on terms and conditions set forth in the Contribution Agreement, dated as of December 12, 2005 (the “Contribution Agreement”), by and among the Company, the Operating Partnership, the Holder and Goldman Sachs 2005 Exchange Place Fund, L.P. All capitalized terms used but not defined herein have the meanings given them in the Contribution Agreement.
     B. Each of the parties hereto agree that the rights, benefits and obligations under this Agreement shall be fully assignable to any Person to whom the Holder transfers its Series N Preferred Units pursuant to the terms and conditions of the Partnership Agreement;
     C. Pursuant to the Partnership Agreement, the Series N Preferred Units owned by the Holder will be redeemable for cash or exchangeable for shares of the Company’s 7 1/8% Series N Cumulative Redeemable Preferred Stock (the “Preferred Stock”) upon the terms and subject to the conditions contained therein; and
     D. To induce the Holder and the Contributor to enter into the Contribution Agreement, the Company has agreed to provide the registration rights set forth herein to the Holder, and any subsequent holder or holders of the Series N Preferred Units, with respect to the Holder’s Preferred Stock and any securities of the Company that may be issued or distributed with respect to, in exchange or substitution for, or upon conversion of such Holder’s Preferred Stock, or on account of such Holder’s Preferred Stock as a result of any stock dividend, stock split, reverse split or other distribution, merger, combination, consolidation, recapitalization or reclassification or otherwise (collectively, “Registrable Securities”).



     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
     1. Underwritten Offerings.
          1.1 Demand by Holder.
               (a) At the request of Holder, the Company shall prepare and file a “shelf” registration statement (the “Registration Statement”) with respect to the Registrable Securities covering the resale thereof by the Holder on an appropriate form for an offering to be made on a continuous or delayed basis pursuant to Rule 415 within 60 days after receipt of such request (provided that the Registrable Securities subject to such request have been issued by the Company on or before the date of such request) and shall use its best efforts to cause such Registration Statement to be declared effective within 120 days after the date of such request. The Company shall use its best efforts to keep the Registration Statement continuously effective until the earliest of (A) such time as all of the Registrable Securities have been sold pursuant to the Registration Statement or Rule 144 of the Securities Act, (B) the date on which all of the Registrable Securities may be sold without volume restrictions in accordance with Rule 144 of the Securities Act and (C) 24 months following the effective date of the Registration Statement. The Company’s registration obligations under this Section 1.1 shall include, in addition to those set forth elsewhere in this Agreement, an obligation to effect (A) appropriate qualification under applicable blue sky or other state securities laws in those jurisdictions selected by the managing underwriter or underwriters designated pursuant to Section 1.2 or, if no such managing underwriter or underwriters is designated, in those jurisdictions reasonably selected by Holder, (B) appropriate compliance with applicable federal and state laws, requirements and regulations, and (C) such steps as are reasonably necessary to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request.
               (b) At the request of Holder, Company shall effect an underwritten offering to cover such amount of Registrable Securities as Holder elects; provided, however, Holder shall attempt to sell in such underwritten offering at any one time at least an amount of Registrable Securities representing in the aggregate the Registrable Securities issuable upon the exchange of 25% of the originally issued Series N Preferred Units (the “Minimum Share Amount”), except in the event the balance of unsold Registrable Securities is less than the Minimum Share Amount, in which case, Holder shall be permitted to sell the entire remaining balance of the Registrable Securities in the underwritten offering; provided further, however, the number of times which the Company must effect such underwritten offerings is limited to 3 times.
               (c) In the event that all of the Series N Preferred Units have not been exchanged as of the date of expiration of the Registration Statement filed pursuant to Section 1.1(a), the Company shall prepare and file another Registration Statement (covering the remaining Registrable Securities) subject to the same terms and conditions delineated in Section 1.1(a).

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