Exhibit 10
SIXTH AMENDMENT
TO
SECOND RESTATED AND AMENDED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
This Sixth Amendment
to the Second Restated and Amended Agreement of Limited
Partnership , dated as of
June 30, 2005 (this “ Amendment ”),
is entered into by LIBERTY PROPERTY TRUST, a Maryland real estate
investment trust, as general partner (the “ General
Partner ”) of LIBERTY PROPERTY LIMITED PARTNERSHIP, a
Pennsylvania limited partnership (the “
Partnership ”), for itself and on behalf of the
limited partners of the Partnership, and GSEP 2005 REALTY CORP., a
Delaware corporation (“ Goldman
”).
Whereas
, Section 4.2(a) of the Second
Restated and Amended Agreement of Limited Partnership of the
Partnership, as amended by that certain First Amendment to the
Second Restated and Amended Agreement of Limited Partnership, dated
as of July 28, 1999, that certain Second Amendment to the
Second Restated and Amended Agreement of Limited Partnership, dated
as of April 18, 2000, that certain Third Amendment to the Second
Restated and Amended Agreement of Limited Partnership, dated as of
June 10, 2002, that certain Fourth Amendment to the Second
Restated and Amended Agreement of Limited Partnership, dated as of
September 1, 2004, and that certain Fifth Amendment to the
Second Restated and Amended Agreement of Limited Partnership, dated
as of June 16, 2005 (collectively, as amended, the “
Partnership Agreement ”), authorizes the
General Partner to cause the Partnership to issue additional
Partnership Units in one or more classes or series, with such
designations, preferences and relative, participating, optional or
other special rights, powers and duties as shall be determined by
the General Partner, subject to the provisions of such section;
and
Whereas
, pursuant to the authority granted
to the General Partner pursuant to Sections 4.2(a) and 14.1(b)
of the Partnership Agreement, the General Partner desires to amend
the Partnership Agreement (i) to establish a new class of
Partnership Units, the “Series F Preferred Units”
(as hereinafter defined), and to set forth the designations,
rights, powers, preferences and duties of such Series F
Preferred Units, (ii) to issue the Series F Preferred
Units to Goldman and admit Goldman as an Additional Limited Partner
and (iii) to make certain other changes to the Partnership
Agreement.
Now,
therefore , in
consideration of good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the General Partner
hereby amends the Partnership Agreement as follows:
Section 1. Definitions
. For purposes of this Amendment,
the term “ Parity Preferred Units ” shall
be used to refer to any class or series of Partnership Interests of
the Partnership now or hereafter authorized, issued or outstanding
expressly designated by the Partnership to rank on a parity with
Series F Preferred Units with respect to distributions and
rights upon voluntary or involuntary liquidation, winding-up or
dissolution of the Partnership including, without limitation, the
“7.45% Series B Cumulative Redeemable Preferred
Partnership Interests,” the “7.625% Series D
Cumulative Redeemable Preferred Partnership Interests,” and
the “7.00%
Series E Cumulative
Redeemable Preferred Partnership Interests.” The term “
Priority Return ” shall mean an amount equal to
6.65% per annum, as the same may be adjusted pursuant to Section
3(a) below, determined on the basis of a 360 day year of
twelve (12) 30-day months (and for any period shorter than a
full quarterly period for which distributions are computed, the
amount of the distribution payable will be computed based on the
ratio of the actual number of days elapsed in such period to ninety
(90) days), cumulative to the extent not distributed for any
given distribution period pursuant to Section 6.2 of the
Partnership Agreement, of the stated value of $50 per Series F
Preferred Unit, commencing on the date of issuance of such
Series F Preferred Unit. The term “
Subsidiary ” shall mean with respect to any
person, any corporation, partnership, limited liability company,
joint venture or other entity of which a majority of (i) voting
power of the voting equity securities or (ii) the outstanding
equity interests, is owned, directly or indirectly, by such person.
The term “ PTP ” shall mean a
“publicly traded partnership” within the meaning of
Section 7704 of the Internal Revenue Code (the “
Code ”). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them
in the Partnership Agreement.
Section 2. Designation and
Number . A series of
Partnership Interests in the Partnership designated as the
“6.65% Series F Cumulative Redeemable Preferred
Partnership Interests” (the “ Series F
Preferred Units ”) is hereby established. The maximum
number of Series F Preferred Units shall be
880,000.
Section 3.
(a) Payment of Distributions .
Subject to the rights of holders of Parity Preferred Units and
holders of Partnership Interests ranking senior to the
Series F Preferred Units as to payment of distributions,
pursuant to Section 6.2 of the Partnership Agreement, holders
of Series F Preferred Units will be entitled to receive, when,
as and if declared by the Partnership acting through the General
Partner, out of Net Operating Cash Flow, cumulative preferential
cash distributions at the rate per annum of 6.65% of the original
Capital Contribution per Series F Preferred Unit (the “
Issuance Rate ”). All distributions shall be
cumulative, shall accrue from the original date of issuance and
will be payable (i) quarterly in arrears, on or before
March 31, June 30, September 30 and December 31
of each year commencing on the first such date to occur after the
original date of issuance, and, (ii), in the event of (A) an
exchange of Series F Preferred Units into Series F
Preferred Shares, or (B) a redemption of Series F
Preferred Units, on the exchange date or redemption date, as
applicable (each a “ Preferred Unit Distribution
Payment Date ”). The amount of the distribution
payable for any period will be computed on the basis of a 360-day
year of twelve (12) 30-day months and for any period shorter
than a full quarterly period for which distributions are computed,
the amount of the distribution payable will be computed based on
the ratio of the actual number of days elapsed in such period to
ninety (90) days. If any date on which distributions are to be
made on the Series F Preferred Units is not a Business Day (as such
term is defined herein), then payment of the distribution to be
made on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date. Distributions on the
Series F
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Preferred Units will be made to the holders of
record of the Series F Preferred Units on the relevant record
dates to be fixed by the Partnership acting through the General
Partner, which record dates shall in no event exceed fifteen
(15) Business Days prior to the relevant Preferred Unit
Distribution Payment Date (the “ Preferred Unit
Partnership Record Date ”).
(b) Distributions Cumulative .
Distributions on the Series F Preferred Units will accrue
whether or not the terms and provisions of any agreement of the
Partnership, including any agreement relating to its indebtedness
at any time prohibit the declaration, setting aside for payment or
current payment of distributions, whether or not the Partnership
has earnings, whether or not there are funds legally available for
the payment of such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on
the Series F Preferred Units will accumulate as of the
Preferred Unit Distribution Payment Date on which they first become
payable. Distributions on account of arrears for any past
distribution periods may be declared and paid at any time, without
reference to a regular Preferred Unit Distribution Payment Date to
holders of record of the Series F Preferred Units on the
record date fixed by the Partnership acting through the General
Partner, which date shall not exceed fifteen (15) Business
Days prior to the payment date. Accumulated and unpaid
distributions will not bear interest.
(c) Priority as to Distributions
.
(i) So long as any Series F Preferred Units
are outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with
respect to any class or series of Partnership Interest of the
Partnership ranking junior as to the payment of distributions or
rights upon a voluntary or involuntary liquidation, dissolution or
winding-up of the Partnership to the Series F Preferred Units
(collectively, “ Junior Units ”), nor
shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any
Series F Preferred Units, any Parity Preferred Units or any
Junior Units, unless, in each case, all distributions accumulated
on all Series F Preferred Units and all classes and series of
outstanding Parity Preferred Units have been paid in full or a sum
sufficient for such full payment has been irrevocably deposited in
trust for immediate payment. The foregoing sentence will not
prohibit (a) distributions payable solely in Junior Units,
(b) the conversion of Junior Units or Parity Preferred Units
into Partnership Interests of the Partnership ranking junior to the
Series F Preferred Units as to distributions and rights upon
the voluntary or involuntary liquidation, dissolution or winding up
of the Partnership, (c) the redemption of Partnership
Interests corresponding to any Series F Preferred Shares,
Parity Preferred Shares or Junior Shares to be purchased by the
General Partner pursuant to Article VII of the Amended and
Restated Declaration of Trust of the General Partner (as amended
and modified through the date hereof, the “
Charter ”) to preserve the General
Partner’s status as a real estate investment trust, provided
that such redemption shall be upon the same terms as the
corresponding purchase pursuant to Article VII of the Charter
or (d) the foreclosure by the Partnership on the
Partnership
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Interests constituting the Indemnity Collateral
and/or the Special Indemnity Collateral (as such term is defined in
Section 13.3 of the Partnership Agreement).
(ii) So long as distributions have not been paid
in full (or a sum sufficient for such full payment is not
irrevocably deposited in trust for immediate payment) upon the
Series F Preferred Units, all distributions authorized and
declared on the Series F Preferred Units and all classes or
series of outstanding Parity Preferred Units shall be authorized
and declared so that the amount of distributions authorized and
declared per Series F Preferred Unit and such other classes or
series of Parity Preferred Units shall in all cases bear to each
other the same ratio that accrued distributions per Series F
Preferred Unit and such other classes or series of Parity Preferred
Units (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such class
or series of Parity Preferred Units do not have cumulative
distribution rights) bear to each other. No interest or any sum of
money in lieu of interest shall be payable in respect of any
distribution, payment or payments on Series F Preferred Units
which may be in arrears.
(d) No Further Rights . Holders of
Series F Preferred Units shall not be entitled to any
distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described
herein.
Section 4. Allocations
. Section 1 of Exhibit C
to the Partnership Agreement is hereby deleted and replaced by the
following:
(a) Net Income . Except as
otherwise provided herein, Net Income for any fiscal year or other
applicable period shall be allocated in the following order and
priority:
(i) first, to the General Partner to the extent
of Net Loss previously allocated to the General Partner pursuant to
Section 1(b)(iii) below for all prior fiscal years or other
applicable periods exceed Net Income previously allocated to the
General Partner pursuant to this Section 1(a)(i) for all prior
fiscal years or other applicable periods;
(ii) second, to Partners holding any Partnership
Interests that are entitled to any preference in distribution to
the extent that Net Loss previously allocated to such holders
pursuant to Section l(b)(ii) below for all prior fiscal years or
other applicable periods exceeds Net Income previously allocated to
such Partners pursuant to this Section 1(a)(ii) for all prior
fiscal years or other applicable periods;
(iii) third, to Partners holding Partnership
Interests of a class not entitled to preference in distribution to
the extent that Net Loss previously allocated to such holders
pursuant to Section 1(b)(i) below for all prior fiscal years
or other applicable periods exceeds Net Income previously allocated
to such holders pursuant to this Section 1(a)(iii) for all
prior fiscal years or other applicable periods;
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(iv) fourth, to Partners holding any Partnership
Interests that are entitled to any preference in distribution in
accordance with the rights of any such class of Partnership
Interests until each such Partnership Interest has been allocated,
Net Income equal to the excess of (A) the cumulative
amount of preferred distributions such Partners are entitled to
receive to the last day of the current fiscal year or other
applicable period or to the date of redemption, to the extent such
Partnership Interests are redeemed during such period, over
(B) the cumulative Net Income allocated to such Partners,
pursuant to this Section 1(a)(iv) for all prior fiscal years
or other applicable periods (and, within each such class, pro
rata in proportion to the respective share of such Partnership
Interests each Partner holds as of the last day of the period for
which such allocation is being made); and
(v) fifth, with respect to Partnership Interests
that are not entitled to any preference in the allocation of Net
Income, pro rata to each such class in accordance with the
terms of such class (and, within each such class, pro rata
in proportion to each Partner’s respective share of such
Partnership Interests as of the last day of the period for which
such allocation is being made).
Provided, further, that the
holders of the Series E Preferred Units and the Series F
Preferred Units shall be allocated an amount of the net
“rents from real property” (within the meaning of Sec.
856(d) of the Code) of the Partnership equal to all amounts paid or
accrued with respect to the Series E Preferred Units and
Series F Preferred Units, respectively, pursuant to
Section 3.(a) of the Fifth Amendment to the Second Restated
and Amended Agreement of Limited Partnership, dated as of
June 16, 2005 and Section 3.(a) of the Sixth Amendment to
the Second Restated and Amended Agreement of Limited Partnership,
dated as of June 30, 2005, respectively, with respect to such
fiscal year or other period in lieu of any allocation of Net Income
or Net Loss under this Section 1 and the amount of Net Income and
Net Loss of the Partnership for any fiscal year or other period
shall be computed after taking into account the special allocation
of such net income to the holders of the Series E Preferred
Units and Series F Preferred Units, provided that the amount
of net “rents from real property” that are allocated to
the holders of the Series F Preferred Units with respect to
any fiscal year or other period shall not exceed the amount of Net
Income that would have been allocated to such holders under this
Section 1 had the foregoing allocations of net “rents
from real property” not been included in the Partnership
Agreement.
(b) Net Loss . Except as otherwise
provided herein, Net Loss for any fiscal year or other applicable
period shall be allocated in the following order and
priority:
(i) first, with respect to classes of
Partnership Interests that are not entitled to any preference in
distribution (including the General Partner Interest), pro rata to
each such class in accordance with the terms of such class (and,
within such class, pro rata in proportion to each
Partner’s respective share of such Partnership Interests as
of the last day of the period for which such allocation is being
made) until the Adjusted Capital Account (ignoring for this purpose
any amounts a Partner is obligated to contribute to the capital of
the Partnership or is deemed obligated to contribute pursuant to
Regulations Section 1.704-
5
1(b)(2)(ii)(c)(2)) of each Partner with respect
to such Partnership Interests is reduced to zero;
(ii) second, to the Partners holding any
Partnership Interests that are entitled to any preference in
distribution in accordance with the rights of any such class of
Partnership Interests (and, if there is more than one class of such
Partnership Interests, then in the reverse order of their
preference in distribution), until the Adjusted Capital Account
(modified in the same manner as in clause (i)) of each such Partner
with respect to such Partnership Interests is reduced to zero;
and
(iii) third, to the General Partner.
To
the extent permitted under Section 704 of the Code, solely for
purposes of allocating Net Income or Net Loss in any taxable year
(or a portion thereof) to Partners holding Series B Preferred
Units, Series D Preferred Units, Series E Preferred Units
or Series F Preferred Units pursuant to Section 1 hereof,
items of Net Income or Net Loss, as the case may be, shall not
include Depreciation with respect to properties that are
“ceiling limited” in respect of holders of
Series B Preferred Units, Series D Preferred Units,
Series E Preferred Units or Series F Preferred Units. For
purposes of the preceding sentence, Partnership property shall be
considered “ceiling limited” in respect of a holder of
Series B Preferred Units, Series D Preferred Units,
Series E Preferred Units or Series F Preferred Units if
Depreciation attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this
paragraph, exceeds depreciation determined for federal income tax
purposes attributable to such Partnership property which would
otherwise be allocable to such holder by more than 5%.
Notwithstanding the foregoing sentences in this paragraph, in
applying this paragraph, the General Partner may, in its discretion
for administrative ease and convenience, calculate Net Income or
Net Loss in any taxable year (or a portion thereof) allocable to
the Partners holding Series B Preferred Units, Series D
Preferred Units, Series E Preferred Units or Series F
Preferred Units by excluding Depreciation with respect to all
properties of the Partnership. The parties intend hereunder that
the aggregate C
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