Exhibit 10.5

 

EXECUTION COPY

 

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF EXTRA SPACE STORAGE LP

 

This First Amendment to Second Amended and Restated Agreement of Limited
Partnership of Extra Space Storage LP, dated September 18, 2008 (this
“Amendment”), is entered into by and among ESS Holdings Business Trust I, a
Massachusetts business trust (the “General Partner”) and the limited partners
listed on Exhibit A hereto (the “Limited Partners”).

 

WHEREAS, the General Partner and ESS Holdings Business Trust II, a Massachusetts
business trust (the “Parent Limited Partner”; and collectively with the General
Partner and the Limited Partners, the “Partners”), entered into that certain
First Amended and Restated Agreement of Limited Partnership of Extra Space
Storage LP dated as of August 17, 2004 (the “Original Agreement”);

 

WHEREAS, the General Partner and the Parent Limited Partner amended and restated
the Original Agreement by entering into that certain Second Amended and Restated
Agreement of Limited Partnership of Extra Space Storage LP (the “Partnership
Agreement”) dated as of June 25, 2007, in order to admit the Limited Partners
into Extra Space Storage LP (the “Partnership”), including the admission of
those Limited Partners that hold Series A Preferred Units (as defined in the
Partnership Agreement), and to set forth the rights and responsibilities of the
Partners and the Partnership;

 

WHEREAS, the Partners wish to clarify in this Amendment the allocation
provisions of the Partnership Agreement to reflect the original economic
understanding and agreement among the parties with respect to the treatment of
depreciation in allocations of Net Income and Net Loss to Holders of Series A
Preferred Units, as set forth herein; and

 

NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby amend the Partnership Agreement as follows:

 

1.                                       Definitions. Capitalized terms used
herein, unless otherwise defined herein, shall have the same meanings as set
forth in the Partnership Agreement.

 

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2.                                       Amendments.

 

a.                                       Article I of the Partnership Agreement
is hereby amended to include the following definition in alphabetical order:

 

“Adjusted Section 704(b) Net Income” means, for any Partnership Year or other
applicable period, (i) the Partnership’s Net Income for such Partnership Year or
other applicable period as determined under the Code, minus (ii) that portion of
the Series A Preferred Priority Return for such Partnership Year or other
applicable period that consists of an amount, with respect to each Series A
Preferred Unit, equal to 5.00% per annum on the Series A Preferred Stated Value
per Series A Preferred Unit, commencing on the date of original issuance of the
Series A Preferred Units.”

 

b.                                      Section 6.2 of the Partnership Agreement
is hereby amended by adding a new paragraph D. as follows:

 

“D.                              Depreciation Adjustments. Notwithstanding
anything to the contrary in Section 6.2.A(a)(iv) of this Agreement, for any
Partnership year or other applicable period, (a) allocations of Net Income to
the Series A Preferred Units with respect to that portion of their Series A
Preferred Priority Return consisting of 5.00% per annum on the Series A
Preferred Stated Value per Series A Preferred Unit shall be exclusive of
Depreciation, and (b) the Series A Preferred Units shall be allocated
Depreciation on a proportionate basis with respect to the remaining portion of
their Series A Preferred Priority Return consisting of the Series A Preferred
Priority Return consisting of the Series A Preferred Return. For purposes of
Section 6.2.D.(b) above, Depreciation shall be allocated to the Series A
Preferred Units based on a fraction, the numerator of which is that portion of
the Series A Preferred Priority Return for a Partnership Year or other
applicable period that constitutes the Series A Preferred Return, and the
denominator of which is the Adjusted Section 704(b) Net Income for such
Partnership Year or other applicable period.”

 

3.                                       Effective Date. Because this Amendment
sets forth the original agreement among the parties and is intended to be only
for purposes of clarification, the parties agree that this Amendment shall be
effective as of June 25, 2007.

 

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4.                                       Continuing Effect of Partnership
Agreement. Except as modified herein, the Partnership Agreement is hereby
ratified and confirmed in its entirety and shall remain and continue in full
force and effect, provided, however, that to the extent there shall be a
conflict between the provisions of the Partnership Agreement and this Amendment,
the provisions in this Amendment shall prevail. All references in any document
to the Partnership Agreement shall mean the Partnership Agreement, as amended
hereby.

 

5.                                       Counterparts. This Amendment may be
executed in any number of counterparts, each of which shall be deemed to be an
original and all of which shall constitute one and the same agreement. Facsimile
signatures shall be deemed effective execution of this Amendment and may be
relied upon as such. In the event facsimile signatures are delivered, originals
of such signatures shall be delivered within three (3) business days after
execution.

 

[Remainder of Page Left Blank Intentionally]

 

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

 

 

 

GENERAL PARTNER:

 

 

 

ESS HOLDINGS BUSINESS TRUST I

 

 

 

 

 

By:

/s/ Kent W. Christensen

 

 

Name: Kent W. Christensen

 

 

Title: Trustee

 

 

 

 

 

LIMITED PARTNERS:

 

 

 

ESS HOLDINGS BUSINESS TRUST II

 

 

 

 

 

By:

/s/ Kent W. Christensen

 

 

Name: Kent W. Christensen

 

 

Title: Trustee

 

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EXHIBIT A

 

LIMITED PARTNERS

 

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