INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (the "Agreement") is made as of this ------ day of
- -----------, 19--- by and between PS Business Parks, Inc., a California
corporation (the "Company") and ---------------, [an officer] [a director] of
the Company ("Indemnitee").
RECITALS
A. Both the Company and Indemnitee recognize the increased risk of
litigation and other claims currently being asserted against directors and
officers of corporations.
B. The Company wishes to continue to attract and retain high quality
directors and officers of its choice and believes that adequate indemnity or
insurance against the risks of liability is required for this purpose.
C. In recognition of Indemnitee's need for substantial protection against
personal liability in order to enhance Indemnitee's continued and effective
service to the Company, and in order to induce Indemnitee to provide services to
the Company as [an officer], [a director], the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses to Indemnitee
to the fullest extent (whether partial or complete) permitted by law and as set
forth in this Agreement, and, to the extent insurance is maintained, for the
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies.
AGREEMENT
In consideration of the foregoing recitals and of Indemnitee's continuing
to serve the Company and intending to be legally bound hereby, the parties agree
as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement the following terms shall have the meanings
set forth in this section:
(a) EXPENSES: any expense, liability, or loss, including
attorneys' fees, judgments, fines, ERISA excise taxes and penalties,
amounts paid or to be paid in settlement, any interest, assessments, or
other charges imposed thereon, and any federal, state, local, or foreign
taxes imposed as a result of the actual or deemed receipt of any payments
under this Agreement, paid or incurred in connection with investigating,
defending, being a witness in, or participating in (including on appeal),
or preparing for any of the foregoing in, any Proceeding relating to any
Indemnifiable Event.
(b) INDEMNIFIABLE EVENT: any event or occurrence that takes place
either prior to or after the execution of this Agreement, related to
Indemnitee's service as [an officer] [a director] of the Company [or an
affiliate], or, at the request of the Company, as a director, officer,
employee, trustee, agent, or fiduciary of another foreign or domestic
corporation, partnership, joint venture, employee benefit plan, trust, or
other enterprise, or as a director, officer, employee, or agent of a
foreign or domestic corporation that was a predecessor corporation of the
Company or of another enterprise at the request of such predecessor
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corporation, or related to anything done or not done by Indemnitee in any
such capacity, whether or not the basis of the Proceeding is alleged action
in an official capacity as a director, officer, employee, or agent or in
any other capacity while serving as a director, officer, employee, or agent
of the Company, as described above.
(c) PROCEEDING: (i) any threatened, pending, or completed action,
suit, or proceedings, whether civil, criminal, administrative,
investigative or other, or (ii) any inquiry, hearing, or investigation,
whether conducted by the Company or any other party, that Indemnitee in
good faith believes might lead to the institution of any such action, suit
or proceeding.
2. AGREEMENT TO INDEMNIFY.
(a) GENERAL AGREEMENT. If Indemnitee becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in any Proceeding by reason of (or arising in
part out of) an Indemnifiable Event, Indemnitee shall be indemnified and
held harmless by the Company from and against any and all Expenses actually
or reasonably incurred or suffered by Indemnitee in connection with such
Proceeding to the fullest extent permitted by law, as the same exists or
may hereafter be amended or interpreted (but in the case of any such
amendment or interpretation, only to the extent that such amendment or
interpretation permits the Company to provide broader indemnification
rights than were permitted prior thereto). The Company shall also cooperate
fully with Indemnitee and render such assistance as Indemnitee may
reasonably require in the defense of any Proceeding in which Indemnitee was
or is a party or is threatened to be made a party, and shall make available
to Indemnitee and his counsel all information and documents reasonably
available to it which relate to the subject of any such Proceeding. The
parties hereto intend that this Agreement shall provide for indemnification
in excess of that expressly permitted by statute, including, without
limitation, any indemnification provided by the Company's Articles of
Incorporation, its Bylaws, or vote of its shareholders or disinterested
directors.
(b) STATUTORY LIMITATION ON INDEMNIFICATION. The parties intend
to indemnify Indemnitee to the fullest extent permitted by law. The General
Corporation Law of California presently prohibits indemnification in an
action brought by or in the right of the corporation for breach of a
director's duties to the corporation and its shareholders (i) for acts or
omissions that involve intentional misconduct or a knowing and culpable
violation of law, (ii) for acts or omissions that an Indemnitee believes to
be contrary to the best interests of the Company or its shareholders or
that involve the absence of good faith on the part of the Indemnitee, (iii)
for any transaction from which an Indemnitee derived an improper personal
benefit, (iv) for acts or omissions that show a reckless disregard for the
Indemnitee's duty to the Company or its shareholders, (v) for acts or
omissions that constitute an unexcused pattern of inattention that amounts
to an abdication of the Indemnitee's duty to the Company or its
shareholders, (vi) under Section 310 of the General Corporation Law of
California or (vii) under Section 316 of the General Corporation Law of
California. The General Corporation Law of California also presently
prohibits indemnification in circumstances in which indemnity is expressly
prohibited by Section 317 of the General Corporation Law of California. To
the extent that the General Corporation Law of California is amended or
interpreted to permit the Company to provide broader indemnification rights
than are now permitted, the parties contemplate that this Agreement,
without amendment or modification, shall encompass such broadened powers to
indemnify and that Indemnitee shall be entitled hereunder to any such
broadened indemnification rights.
(c) INITIATION OF PROCEEDING. Notwithstanding anything in this
Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any
Proceeding initiated by Indemnitee against the Company or any director or
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officer of the Company unless (i) the Company has joined in or the Board of
Directors has consented to the initiation of such Proceeding, or (ii) the
Proceeding is one to enforce indemnification rights.
(d) EXPENSE ADVANCES. Expenses incurred by Indemnitee in
defending any Proceeding relating in whole or in part to an Indemnifiable
Event shall be advanced by the Company prior to the final disposition of
any such Proceeding upon receipt by the Company of an undertaking by or on
behalf of Indemnitee to repay all amounts so advanced if it should be
determined ultimately that Indemnitee is not entitled to be indemnified
under this Agreement or otherwise.
(e) MANDATORY INDEMNIFICATION. Notwithstanding any other
provision of this Agreement, (i) to the extent that Indemnitee has been
successful on the merits in defense of any Proceeding relating in whole or
in part to an Indemnifiable Event or in defense of any issue or matter
therein, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith and (ii) if the monetary liability of Indemnitee in a
Proceeding brought by the Company or by a shareholder suing derivatively on
behalf of the Company may be eliminated pursuant to Section 204(a) of the
General Corporation Law of California, Indemnitee shall be indemnified
against all Expenses incurred in connection therewith.
(f) PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled.
3. NOTIFICATION AND DEFENSE OF PROCEEDING.
(a) NOTICE. Promptly after receipt by Indemnitee of notice of the
commencement of any Proceeding, Indemnitee will, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof; but the omission so to notify the
Company will not relieve it from any liability that it may have to
Indemnitee.
(b) DEFENSE. With respect to any Proceeding as to which
Indemnitee notifies the Company of the commencement thereof, the Company
will be entitled to participate in the Proceeding to the full extent
permitted by law and at its own expense, when, and only to the extent that
the Company, in its sole discretion, chooses to so participate. The
Indemnitee shall cooperate fully with the Company and render such
assistance as the Company may reasonably require in the Company's
participation in any such Proceeding and shall make available to the
Company and its counsel all information and documents reasonably available
to Indemnitee which relate to the subject of such Proceeding. The Company
shall not be liable to indemnify the Indemnitee under this Agreement with
regard to any judicial award if the Company was not given a reasonable and
timely opportunity, at its expense, to participate in the defense of such
action; the Company's liability hereunder shall not be excused if
participation in the Proceeding by the Company was barred.
(c) SETTLEMENT OF CLAIMS. The Company shall not be liable to
indemnify Indemnitee under this Agreement or otherwise for any amounts paid
in settlement of any Proceeding effected without the Company's written
consent; the Company will not unreasonably withhold its consent to any
proposed settlement.
4. REMEDY TO ENFORCE RIGHT TO INDEMNIFICATION. If a claim for indemnity
under Section 2 of this Agreement is not paid in full by the Company within
ninety days after a written claim has been received by the Company, Indemnitee
may at any time thereafter bring suit against the Company to recover the unpaid
amount of the claim, together with interest thereon, and if successful in whole
or in part, Indemnitee shall also be entitled to be paid the expense of
prosecuting such claim, including reasonable attorneys' fees incurred in
connection therewith. It shall be a defense to any such action (other than an
action brought to enforce a claim for Expenses incurred in defending any
Proceeding in advance of its final disposition where the required undertaking
has been tendered to the Company) that Indemnitee has not met the standards of
conduct which make it permissible under the General Corporation Law of
California for the Company to indemnify Indemnitee for the amount claimed, but
the burden of proving such a defense shall be on the Company. Neither the
failure of the Company (or of its full Board of Directors, its directors who are
not parties to the Proceeding with respect to which indemnification is claimed,
its shareholders, or independent legal counsel) to have made a determination
prior to the commencement of an action pursuant to this Section 4 that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct set forth in the General Corporation
Law of California, nor an actual determination by any such person or persons
that Indemnitee has not met such applicable standard of conduct, shall be a
defense to such action or create a presumption that Indemnitee has not met the
applicable standard of conduct.
5. CONTRACT RIGHT NOT EXCLUSIVE. The rights conferred by this Agreement
shall not be exclusive of any other right which Indemnitee may have or hereafter
acquire under the General Corporation Law of California or any other statute, or
any provision contained in the Company's Articles of Incorporation or Bylaws, or
any agreement, or pursuant to a vote of shareholders or disinterested directors,
or otherwise.
6. INSURANCE. The Company may purchase and maintain insurance on
behalf of its directors and officers against any liability asserted against or
incurred by any of them by reason of the fact that such person is or was a
director or officer of the Company whether or not the Company would have the
power to indemnify such persons against such liability under the General
Corporation Law of California.
7. AMENDMENT OF THIS AGREEMENT. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. Unless otherwise consented to in writing by Indemnitee,
any amendment to this Agreement shall apply only to acts or omissions of
Indemnitee after such amendment is executed by Indemnitee but such amendment
shall not affect Indemnitee's rights hereunder with respect to acts or omissions
occurring prior thereto. No waiver of any of the provisions of this Agreement
shall operate as a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver. Except as
specifically provided herein, no failure to exercise or any delay in exercising
any right or remedy hereunder shall constitute a waiver thereof.
8. AMENDMENT OF ARTICLES OF INCORPORATION, BYLAWS. The Company
shall be entitled to amend or repeal its Articles of Incorporation or Bylaws or
both but any amendment which reduces or eliminates Indemnitee's right to
indemnification shall apply only to acts or omissions of Indemnitee after such
amendment is effective and such amendment shall not affect Indemnitee's rights
with respect to acts or omissions occurring prior to the effectiveness of such
amendment. If the Company amends its Articles of Incorporation or Bylaws or both
to permit the Company to provide broader indemnification than currently
permitted under the Articles of Incorporation or Bylaws or both, Indemnitee
shall be entitled to such broadened indemnification rights to the fullest extent
permitted by law.
9. TERMINATION. This Agreement may be terminated by a writing to that
effect executed by the Company and delivered to Indemnitee; such termination
shall apply only to acts or omissions of Indemnitee after such notice is
delivered to Indemnitee but such termination shall not affect Indemnitee's
rights hereunder with respect to acts or omissions occurring prior thereto.
Indemnitee shall not forfeit Indemnitee's status as a beneficiary under this
Agreement by the termination of Indemnitee's position with the Company.
10. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise received payment (under any
insurance policy, Bylaw, or otherwise) of the amounts otherwise indemnifiable
hereunder.
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11. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation, or otherwise to all or substantially all of the business and/or
assets of the Company), spouses, heirs, and personal and legal representatives.
The Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation, or otherwise) to all, substantially all, or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place. The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity pertaining to an Indemnifiable Event even though he may have ceased to
serve in such capacity at the time of any Proceeding.
12. SEVERABILITY. If any provision (or portion thereof) of this
Agreement shall be held by a court of competent jurisdiction to be invalid,
void, or otherwise unenforceable, the remaining provisions shall remain
enforceable to the fullest extent permitted by law. Furthermore, to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any provision held to be
invalid, void, or otherwise unenforceable, that is not itself invalid, void, or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, void, or unenforceable.
13. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California applicable
to contracts made and to be performed in such State without giving effect to the
principles of conflicts of laws.
14. NOTICES. All notices, demands, and other communications required
or permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed to the
Company at:
PS Business Parks, Inc.
701 Western Avenue
Glendale, California 91201-2397
Attn: Obren B. Gerich, Vice President
and to Indemnitee at:
701 Western Avenue
Glendale, California 91201-2397
Notice of change of address shall be effective only when done in accordance
with this Section. All notices complying with this Section shall be deemed to
have been received on the date of delivery or on the third business day after
mailing.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day specified above.
PS BUSINESS PARKS, INC.
By:
------------------------
Name: Obren B. Gerich
Title: Vice President
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INDEMNITEE
------------------------
Name:------------------
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