Document:

Exhibit 10.25

Exhibit 10.25

GATX CORPORATION
2012 INCENTIVE AWARD PLAN
PERFORMANCE SHARE AGREEMENT
FOR EXECUTIVE OFFICERS

This PERFORMANCE SHARE AGREEMENT (this “Agreement”) is entered into as of January 24, 2013 (the “Grant Date”) by and between the Participant and GATX Corporation (the "Company") in respect of the performance period beginning on January 1, 2013 through and including December 31, 2015 (the “Performance Period”).

WHEREAS, the Company maintains the GATX Corporation 2012 Incentive Award Plan (the "Plan"), which is incorporated into and forms a part of this Agreement, and the Participant has been selected by the Compensation Committee of the Board of Directors of the Company (the “Committee”), which has been charged with the responsibility of administering the Plan, to receive a grant of Performance Shares under the Plan;

NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant as follows:

		
	1.
	Defined Terms.  Certain capitalized terms used in this Agreement are defined in paragraph 13 or elsewhere in this Agreement.  Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Plan.

		
	2.
	Award.  Subject to the terms of the Plan and this Agreement, the Participant is hereby granted the number of Performance Shares approved by the Committee, subject to Section 3.1 and Article 5 of the Plan and as set forth on the Benefits Access website (https://www.benefitaccess.com) of Morgan Stanley Smith Barney (“MSSB”) or any successor administrator the Committee may designate from time to time to administer the Plan and this Agreement.  Each Performance Share entitles the Participant to receive one share of Common Stock of the Company (each a “Share”) subject to the terms and conditions of this Agreement.

		
	3.
	Voting Rights and Dividends.  Notwithstanding anything to the contrary, the Participant shall not have any rights as a shareholder of the Company, including the right to vote, until the Participant actually receives Shares in accordance with paragraph 4 of this Agreement.   

An account shall be established for the Participant, to which shall be credited dividend equivalents equal to the product of (a) the number of the Participant’s Performance Shares and (b) the dividend declared on a single share of Common Stock.  To the extent the participant becomes vested in Performance Shares, the Participant shall be entitled to a distribution of the dividend equivalents credited to his or her account if and when Shares are issued with respect to Performance Shares to which the Participant becomes entitled pursuant to paragraph 4 of this Agreement.  All dividend equivalents paid will be considered ordinary income and will be subject to supplemental withholding rates for income tax purposes including payroll taxes, applicable to such supplemental income.

		
	4.
	Vesting, Transfer and Forfeiture.  

		
	(a)
	Subject to the terms hereof, if the Company’s Total Gross Income Less Total Ownership Costs for each of the three years during the Performance Period (as reported on the Company’s audited income statement for each such year) is greater than $500,000,000 (the “Threshold Goal”) and the Committee certifies that the Threshold Goal has been achieved, the Participant shall be entitled to the number of Shares set forth in the 2012 resolutions of the Committee providing for the grant of this Performance Share award (the "Unadjusted Award Amount").  However, if the Threshold Goal for the Performance Period is not achieved and certified by the Committee, the Unadjusted Award Amount shall be zero.

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	(b) 
	After the end of the Performance Period, the Committee shall determine the number of the Participant's Performance Shares that have been earned for the Performance Period in accordance with the schedule set forth on Exhibit 1, weighted by the percentages set forth in the column captioned “Weight” on Exhibit 2 and calculated in the manner set forth on Exhibit 2 (provided that the determination under this subparagraph 4(b) shall be subject to modification as provided in paragraph 8 hereof).  The Unadjusted Award Amount shall be reduced to the number of Performance Shares determined to be earned in accordance with the foregoing provisions of this subparagraph 4(b), and any unearned portion of the Unadjusted Award Amount or Performance Shares shall be forfeited.  In no event shall the Performance Shares earned by the Participant exceed the Unadjusted Award Amount.

		
	(c)
	As soon as practicable after the Committee determines the number of the earned Performance Shares pursuant to subparagraphs 4(a) and 4(b) above, but not later than March 15 of the year following the end of the Performance Period, an equal number of Shares shall be transferred to the Participant.

		
	(d)
	Except as provided in subparagraph 4(e) below, if the Participant's Date of Termination occurs prior to the end of the Performance Period, the Participant shall forfeit all Performance Shares and rights under this Agreement. 

		
	(e)
	Notwithstanding subparagraph 4(d) above, the Participant shall become vested in a number of earned Performance Shares hereunder, and shall become owner of an equal number of Shares in respect thereof, free and clear of all restrictions otherwise imposed by this Agreement, as follows:

		
	(i)
	If the Participant’s employment is involuntarily terminated by the Company other than for Cause, not less than eighteen (18) months following the beginning of the Performance Period but on or prior to the end of the Performance Period, the Participant will be entitled to a pro rata portion of his or her earned Performance Shares based on the length of his or her employment during the Performance Period.  The pro rata portion of the Performance Shares shall equal the product of:  

		
	(A) 
	the number of Performance Shares to which the Participant would otherwise be entitled in accordance with the foregoing provisions of this paragraph 4 had his or her employment not been terminated; and 

		
	(B)
	a fraction (not greater than one), the numerator of which is the number of days the Participant was employed by the Company or its Subsidiaries during the period beginning on the date of commencement of the Performance Period and ending on the Date of Termination, and the denominator of which is the number of days in the Performance Period.

The Shares to which the Participant is entitled pursuant to this subparagraph 4(e)(i) shall be transferred to the Participant in the year following the end of the Performance Period as soon as practical following the determinations described in subparagraphs 4(a) and 4(b) above, but not later than March 15 of the year following the end of the Performance Period.

		
	(ii)
	If the Participant's Date of Termination occurs by reason of the Participant's death, Retirement or Disability prior to the end of the Performance Period, the Participant will be entitled to receive a pro rata portion of his or her earned Performance Shares based on the length of his or her employment during the Performance Period.  The pro rata portion of the Performance Shares shall equal the product of:  

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	(A) 
	the number of Performance Shares to which the Participant would otherwise be entitled in accordance with the foregoing provisions of this paragraph 4 if no Date of Termination had occurred; and 

		
	(B)
	a fraction (not greater than one), the numerator of which is the number of days during the period beginning on the date of commencement of the Performance Period and ending on the date of the Participant’s death, Retirement or Disability, and the denominator of which is the number of days in the Performance Period. 

Notwithstanding the foregoing, if the Participant’s Date of Termination occurs by reason of the Participant’s death, Retirement or Disability, the Committee may, in its sole discretion, increase the number of Performance Shares to which the Participant is entitled, but in no event will the Participant be entitled to a distribution that is greater than what would have been distributable if no Date of Termination had occurred. The Shares to which the Participant is entitled pursuant to this subparagraph 4(e)(ii) shall be transferred to the Participant in the year following the end of the Performance Period as soon as practical following the determinations described in paragraphs 4(a) and 4(b) above, but not later than March 15 of the year following the end of the Performance Period.

		
	(iii)
	Subject to the provisions of Section 14.2 of the Plan (relating to the adjustment of Shares), if a Change in Control occurs prior to a Participant's Date of Termination and before the end of the Performance Period and, within two (2) years after the occurrence of the Change in Control, the Participant's Date of Termination occurs by reason of discharge by the Participant's employer without Cause or the Participant resigns from employment with the employer for Good Reason, the Participant shall become vested in all Performance Shares granted under this Agreement prior to the Change in Control that are held by the Participant as of the Date of Termination, in accordance with subparagraphs 4(e)(iv) or 4(e)(v), as applicable.  

		
	(iv)
	With respect to any Performance Shares that become vested in connection with a Change in Control described in Subsection 2.7(a), (b), (c) or (d) of the Plan, the number of Shares to which the Participant is entitled upon the vesting of his or her Performance Shares shall be calculated as if the Company had achieved 100% performance against its Performance Goals, and shall be transferred to the Participant as soon as practicable following the Date of Termination.  Following a distribution in accordance with this subparagraph 4(e)(iv), the Participant shall have no further rights under this Agreement.

		
	(v)
	With respect to any Performance Shares that become vested in connection with a Change in Control described in Subsection 2.7(e) of the Plan, with respect to a Participant as described therein (relating to certain transactions involving a Subsidiary or Business Segment), as soon as practicable following the Date of Termination, the Participant shall receive a distribution of the following number of Shares, determined on the assumption that the Company achieved 100% performance against its Performance Goals as follows:  

		
	(A)
	If the Date of Termination occurs during the first year of the Performance Period, the Participant shall be entitled to receive Shares equal in number to one-third (1/3) of his or her Performance Shares.

		
	(B)
	If the Date of Termination occurs during the second year of the Performance Period, the Participant shall be entitled to receive Shares equal in number to two-thirds (2/3) of his or her Performance Shares.   

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	(C)
	If a Date of Termination occurs during the third year of the Performance Period, such Participant shall be entitled to receive Shares equal in number to the total of all of his or her Performance Shares.  

Following a distribution in accordance with this subparagraph 4(e)(v), the Participant shall have no further rights under this Agreement.

		
	(vi)
	For purposes of subparagraphs 4(e)(iii) and 4(e)(v) hereof, if, as a result of a Change in Control described in Subsection 2.7(e) of the Plan, the Participant’s employer ceases to be a Subsidiary (and the Participant’s employer is or becomes an entity that is separate from the Company), and the Participant is not, immediately following the Change in Control, employed by the Company or an entity that is then a Subsidiary, then the occurrence of the Change in Control shall be treated as the Participant’s Date of Termination caused by the Participant being discharged by the employer without Cause.  

		
	(f)
	Except pursuant to a domestic relations order, the Performance Shares may not be sold, assigned, transferred, pledged or otherwise encumbered until Shares have been distributed to the Participant free and clear of all restrictions.

		
	5.
	Withholding.  The granting, vesting and settlement of Performance Shares under this Agreement are subject to withholding of all applicable taxes.  Subject to such rules and limitations as may be established by the Committee from time to time, the Participant may satisfy his or her withholding obligations through (i) payment of cash to the Company equal to the amount of taxes required to be withheld, (ii) contemporaneously withholding from other sources of income otherwise payable to the Participant by the Company or any Subsidiary, or (iii) the surrender of Shares which the Participant already owns, or to which the Participant is otherwise entitled under the Plan or this Agreement; provided, however, that, except as otherwise provided by the Committee, Shares otherwise payable under this Agreement may not be used to satisfy more than the Company's minimum statutory withholding obligation (based on minimum statutory withholding rates for income tax purposes, including payroll taxes, that are applicable to such supplemental taxable income) .  In the event that the withholding obligation arises during a period in which the Participant is prohibited from trading in Common Stock pursuant to the Company’s insider trading policy, or by applicable securities or other laws, then unless otherwise elected by the Participant during a period when he or she was not so restricted from trading, the Company shall automatically satisfy the Participant’s withholding obligation by withholding from Shares otherwise deliverable under this Agreement.

		
	6.
	Heirs and Successors.  This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, including any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company's assets and business.  If any rights of the Participant or benefits distributable to the Participant under this Agreement have not been exercised or distributed, respectively, at the time of the Participant's death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan.  If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant.  If the Designated Beneficiary survives the Participant but dies before the exercise of all rights or the complete distribution of benefits under this Agreement, then any remaining rights and any remaining benefit distribution shall be exercisable by or distributed to the legal representative of the estate of the Designated Beneficiary.

		
	7.
	Administration.  The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan.  Any interpretation of this Agreement by the Committee and any decision made by it with respect to this Agreement shall be final and binding on all persons.

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	8.
	Modification of Performance Goals.  Pursuant to Subsection 2.33(b) of the Plan, in determining the extent to which the Performance Goals (but not the Threshold Goal) have been achieved, the Committee may, in its sole discretion, include or exclude items or events that impact the final results, positively or negatively, as it deems appropriate.

		
	9.
	Plan Governs.  Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the Director, Compensation of the Company. This Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.

		
	10.
	Not An Employment Contract.  The grant of Performance Shares hereunder will not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Participant's employment or other service at any time.

		
	11.
	Notices.  Any written notices provided for in this Agreement or the Plan shall be provided in accordance with subparagraph 11(a) or 11(b), as applicable and, if provided to the Company, shall be addressed as follows:

GATX Corporation
222 West Adams Street
Chicago, IL 60606-5314
U.S.A.

		
	(a)
	Any notice required by the Participant pursuant to the definition of Good Reason, as defined below, shall be in writing given by hand delivery or by registered or certified mail, return receipt requested, postage prepaid, addressed to the Senior Vice President, Human Resources and shall be effective when actually received.  

		
	(b)
	All other notices shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail.  Any such notice sent by mail shall be deemed received three business days after mailing, but in no event later than the date of actual receipt and shall be directed, if to the Participant, at the Participant's address indicated by the Company's records, or if to the Company, to the attention of the Director, Compensation.

		
	12.
	Amendment.  This Agreement may be amended in accordance with the provisions of the Plan, and may otherwise be amended by written agreement of the parties.

		
	13.
	Definitions.  For purposes of this Agreement, the terms used in this Agreement shall be subject to the following:

“3-Year Average Return on Equity” shall mean the sum of net income divided by average equity for each year in the Performance Period divided by three (3).  Accumulated other comprehensive income is excluded from equity.

“3-Year Cumulative Investment Volume” shall mean the sum of consolidated cumulative GAAP basis portfolio investments and capital additions as reported on the company’s audited balance sheet for each year in the Performance Period.  Purchases of leased in assets are excluded.

“Cause” shall mean (i) the willful and continued failure of the Participant to perform the Participant’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), or (ii) the willful engaging by the Participant in illegal conduct or gross misconduct in the course of his or her discharge of duties for the Company.   For purposes of this provision, no act or failure to act, on the part of the Participant, shall be considered “willful” unless it is done, or 

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omitted to be done, by the Participant in bad faith or without reasonable belief, that the Participant’s action or omission was in the best interests of the Company.

“Change in Control” shall have the meaning ascribed to it in Section 2.7 of the Plan.

“Date of Termination” shall mean the date on which the Participant incurs a Termination of Service.

“Designated Beneficiary” shall mean the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require.  

“Disability” shall mean, except as otherwise provided by the Committee, the period in which the Participant is considered to be "disabled" as that term is defined in the Company's long term disability plan.

“Good Reason” shall mean the occurrence of one or more of the following conditions without the consent of the Participant:

		
	(a)
	a material diminution in the Participant's base compensation, compared with the Participant's base compensation in effect immediately prior to the consummation of a Change in Control;

		
	(b)
	a material diminution in the Participant's authority, duties, or responsibilities, compared with the authority, duties, and responsibilities of the Participant immediately prior to the consummation of a Change in Control;  

		
	(c)
	the Participant is required to report to a supervisor with materially less authority, duties, or responsibilities than the authority, duties, and responsibilities of the supervisor who had the greatest such authority, duties, and responsibilities at the time the Participant was required to report to such supervisor during the 120-day period immediately preceding the consummation of a Change in Control;

		
	(d)
	a material diminution in the budget over which the Participant retains authority, compared with the most significant budget, if any, over which the Participant had authority at any time during the 120-day period immediately preceding the consummation of a Change in Control;

		
	(e)
	a material change in the geographic location at which the Participant must perform services; or

		
	(f)
	any other action or inaction by the Company that constitutes a material breach of any change of control agreement between the Company and the Participant that is in effect when a Change in Control occurs.

If (I) the Participant provides written notice to the Company of the occurrence of Good Reason within a reasonable time (not more than 90 days) after the Participant has knowledge of the circumstances constituting Good Reason, which notice specifically identifies the circumstances which the Participant believes constitute Good Reason; (II) the Company fails to notify the Participant of the Company's intended method of correction within a reasonable period of time (not less than 30 days) after the Company receives the notice, or the Company fails to correct the circumstances within a reasonable period of time after such notice (except that no such opportunity to correct shall be applicable if the circumstances constituting Good Reason are those described in paragraph (e) above, relating to relocation); and (III) the Participant resigns within a reasonable time after receiving the Company's response, if such notice does not indicate an intention to correct such circumstances, or within a reasonable time after the Company fails to correct such circumstances (provided that in no event may such termination occur more than two (2) years after the initial existence of the condition constituting Good Reason); then the Participant shall be considered to have terminated for Good Reason.

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“Performance Goals” shall mean 3-Year Average Return on Equity and 3-Year Cumulative Investment Volume established by the Committee for the Performance Period as set forth in Exhibit 1.

“Retirement shall mean retirement of the Participant on a "Retirement Date," as that term is defined in the GATX Corporation Non-Contributory Pension Plan for Salaried Employees.

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Exhibit 1

Performance Goals, Weights and % of Target Earned
2013 – 2015 Performance Period

	
		
	3-Year Average ROE (1)
(50% weight)
	

% of Target Grant Earned

	<9.5%
	0%

	9.5%
	25%

	10.0%
	50%

	10.5%
	75%

	11.0%
	100%

	12.0%
	125%

	12.5%
	150%

	13.0%
	175%

	>= 13.5%
	200%

Interpolated for actual performance between levels shown

		
	(1)
	3-Year Average Return on Equity is defined as the sum of net income divided by average equity for each year in the Performance Period divided by three (3); excludes accumulated other comprehensive income from equity.

	
		
	3-Year Cumulative Investment Volume (2)
(50% weight)
	

% of Target Grant Earned

	<$1.40 billion
	0%

	$1.40 billion
	25%

	$1.70 billion
	50%

	$2.00 billion
	75%

	$2.30 billion
	100%

	$2.45 billion
	125%

	$2.70 billion
	150%

	$2.90 billion
	175%

	>= $3.10 billion
	200%

Interpolated for actual performance between levels shown

		
	(2)
	3-Year Cumulative Investment Volume is defined as the sum of consolidated cumulative GAAP basis portfolio investments and capital additions as externally reported for each year in the Performance Period; excludes purchases of leased in assets.

In determining the extent to which the Performance Goals (but not the Threshold Goal) have been achieved, the Committee, in its sole discretion, may include or exclude items or events that impact the final results, positively or negatively.  However, in no event will the award exceed the Unadjusted Award Amount.

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Exhibit 2

Sample Calculation of Performance Shares Earned

Number of Performance Shares Granted:        1,000

    
	
						
	

Performance Goal
	Weight
	

Target
Goal
	

Assumed
Actual
	Payout Percentage
	Weighted Payout Percentage

	

3-Year Average ROE

3-Year Cumulative Investment Volume
	

50%

50%

	

11.0%

$2.30 billion
	

12.5%

$2.00 billion
	

150%

75%
	

75.0%

37.5%

	

Total Weighted Payout

	 
	 
	

112.5%

	
			
	Performance Shares Earned

	Shares Granted
	Weighted Payout
	

Total Performance Shares Earned

	1,000   x
	112.5%
	=    1,125

9LRY Ex. 4.15 12.31.12 10K

 
 
Exhibit 4.15

THIRD SUPPLEMENTAL INDENTURE, dated as of December 10, 2012, between LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership (the “Company”), having its principal offices at 500 Chesterfield Parkway, Malvern, Pennsylvania 19355, and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, as trustee (the “Trustee”), having its Corporate Trust Office at Two Liberty Place, 50 S. 16th Street, Suite 2000, Mail Station: Ex-PA-WBSP, Philadelphia, PA 19102. 

RECITALS 

WHEREAS, the Company executed and delivered its Base Indenture (the “Base Indenture”), dated as of September 22, 2010, to the Trustee to issue from time to time for its lawful purposes debt securities evidencing its unsecured indebtedness.

WHEREAS, the Base Indenture provides that by means of a supplemental indenture, the Company may create one or more series of its debt securities and establish the form and terms and conditions thereof.

WHEREAS, the Company intends by this Third Supplemental Indenture to (i) create a series of debt securities to be issued from time to time in an unlimited principal amount entitled “Liberty Property Limited Partnership 3.375% Senior Notes due 2023” (the “Notes”); and (ii) establish the form and the terms and conditions of such Notes.

WHEREAS, the Board of Trustees of Liberty Property Trust (the “Trust”), the general partner of the Company, has approved the creation of the Notes and the form, terms and conditions thereof.

WHEREAS, the consent of Holders to the execution and delivery of this Third Supplemental Indenture is not required, and all other actions required to be taken under the Base Indenture with respect to this Third Supplemental Indenture have been taken.

NOW, THEREFORE IT IS AGREED: 

ARTICLE ONE
Definitions, Creation, Form and Terms and Conditions of the Debt Securities 

SECTION 1.01 Definitions. (a) Capitalized terms used in this Third Supplemental Indenture and not otherwise defined shall have the meanings ascribed to them in the Base Indenture. In addition, the following additional terms shall have the following meanings to be equally applicable to both the singular and the plural forms of the terms defined: 

“Closing Date” means December 10, 2012. 

“Global Note” means a single fully-registered global note in book entry form, without coupons, substantially in the form of Exhibit A attached hereto. 

“Indenture” means the Base Indenture as supplemented by this Third Supplemental Indenture. 
“Intercompany Debt” means Debt to which the only parties are the Trust, any of its subsidiaries, the Company and any Subsidiary, or Debt owed to the Trust arising from routine cash management practices, but only so long as such Debt is held solely by any of the Trust, any of its subsidiaries, the Company and any Subsidiary. 
“Subsidiary” shall have the meaning provided in the Base Indenture and shall include Liberty Property Development Corp. and Liberty Property Development Corp.-II. 

(b) The following term, which is defined in the Base Indenture, is amended and restated in its entirety as follows: 

“Reinvestment Rate” means means the yield on Treasury securities at a constant maturity corresponding to the remaining life (as of the date of redemption, and rounded to the nearest month) to Stated Maturity of the principal being redeemed (the “Treasury Yield”), plus 0.30%. For purposes hereof, the Treasury Yield shall be equal to the arithmetic mean of the yields published in the Statistical Release under the heading “Week Ending” for “U.S. Government Securities - Treasury Constant Maturities” with a maturity equal to such remaining life; provided, that if no published maturity exactly corresponds 

to such remaining life, then the Treasury Yield shall be interpolated or extrapolated on a straight-line basis from the arithmetic means of the yields for the next shortest and next longest published maturities. For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. If the format or content of the Statistical Release changes in a manner that precludes determination of the Treasury Yield in the above manner, then the Treasury Yield shall be determined in the manner that most closely approximates the above manner, as reasonably determined by the Company. 

(c) With respect to the securities of all series created on or after the date of this Third Supplemental Indenture, the term “Unencumbered Total Asset Value”, which is defined in the Base Indenture, shall have the following meaning:

“Unencumbered Total Asset Value” as of any date means the sum of: (i) the value of those Undepreciated Real Estate Assets not subject to an encumbrance; and (ii) the value of all other assets of the Partnership and its Subsidiaries on a consolidated basis not subject to an encumbrance, as determined in accordance with GAAP (but excluding accounts receivable and intangibles); provided, however, that all investments by the Company and its Subsidiaries in unconsolidated joint ventures, unconsolidated limited partnerships, unconsolidated limited liability companies and other unconsolidated entities shall be excluded from Unencumbered Total Asset Value to the extent that such investments would have otherwise been included.

SECTION 1.02 Creation of the Debt Securities. In accordance with Section 301 of the Base Indenture, the Company hereby creates the Notes as a separate series of its debt securities issued pursuant to the Indenture. The Notes shall be issued in an aggregate principal amount initially limited to $300,000,000.

The Company may issue, in addition to the Notes originally issued on the Closing Date, additional Notes. The Notes originally issued on the Closing Date and any additional Notes originally issued subsequent to the Closing Date shall be a single series for all purposes under the Indenture. 

SECTION 1.03 Form of the Debt Securities. The Notes will be represented by one or more fully-registered global notes in book-entry form, without coupons, registered in the name of the nominee of DTC. The Notes shall be in the form of Exhibit A attached hereto and the terms set forth in such form shall be incorporated herein. So long as DTC, or its nominee, is the registered owner of a Global Note, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Note for all purposes under the Indenture. Ownership of beneficial interests in the Global Note will be shown on, and transfers thereof will be effected only through, records maintained by DTC (with respect to beneficial interests of participants) or by participants or persons that hold interests through participants (with respect to beneficial interests of beneficial owners).  

SECTION 1.04 Terms and Conditions of the Debt Securities. The Notes shall be governed by all the terms and conditions of the Base Indenture, as supplemented by this Third Supplemental Indenture, and in particular, the following provisions shall be the terms of the Notes: 

(a) Optional Redemption. At any time prior to March 15, 2023, the Company may redeem the Notes at its option, in whole or from time to time in part, at a redemption price equal to the Redemption Price. 

At any time on or after March 15, 2023, the Notes will be redeemable at the option of the Company, in whole or from time to time in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued interest thereon to the Redemption Date. 

If notice of redemption has been given as provided in the Indenture and funds for the redemption of the Notes called for redemption shall have been made available on the Redemption Date referred to in such notice, such Notes will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Notes from and after the Redemption Date will be to receive payment of the Redemption Price upon surrender of such Notes in accordance with such notice.

Notice of any optional redemption of any Notes will be given to Holders at their addresses, as shown in the Security Register for the Notes, not less than 30 days nor more than 60 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, the Redemption Price and the principal amount of the Notes held by such Holder to be redeemed.

If all or less than all of the Notes are to be redeemed at the option of the Company, the Company will notify the Trustee at least 45 days prior to giving notice of redemption (or such shorter period as is satisfactory to the Trustee) of the 

aggregate principal amount of Notes to be redeemed and their Redemption Date. The Company shall give the Trustee notice of the Make-Whole Amount promptly after the calculation thereof and if the Company has requested that the Trustee give to the Holders the notice of redemption required by Section 1104 of the Base Indenture, such notice from the Company shall be given to the Trustee at such time as shall permit the Trustee to include notice of the Make-Whole Amount in such notice of redemption. The Trustee shall have no responsibility for calculating the Make-Whole Amount. The Trustee shall select, in such manner as it shall deem fair and appropriate, no less than 60 days prior to the date of redemption, the Notes to be redeemed in part.

Neither the Company nor the Trustee shall be required to: (i) issue, register the transfer of or exchange Notes during a period beginning at the opening of business 15 days before any selection of Notes to be redeemed and ending at the close of business on the day of mailing the relevant notice of redemption; or (ii) register the transfer of or exchange any Note, or portion thereof, called for redemption, except the unredeemed portion of any Note being redeemed in part.t. 

(b) Maturity; Payment of Principal and Interest. The principal amount of the Notes shall be payable on June 15, 2023, subject to the provisions of the Indenture and the Notes. Interest will accrue from December 10, 2012. The Notes will bear interest at 3.375% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2013. Principal and interest payments on interests represented by a Global Note will be made to DTC or its nominee, as the case may be, as the registered owner of such Global Note. All payments of principal and interest in respect of the Global Note will be made by the Company in immediately available funds. The principal of the Notes payable on the Maturity Date or upon redemption will be paid against presentation and surrender of the Notes at the corporate trust office of the Trustee at 60 Livingston Avenue, 1st Floor, Bond Drop Window, St. Paul, MN, 55107, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public or private debt. 

(c) Applicability of Defeasance or Covenant Defeasance. The provisions of Article 14 of the Base Indenture shall apply to the Notes. 

ARTICLE TWO
Additional Covenants 

The Notes shall be governed by all the covenants contained in the Base Indenture, as supplemented by this Third Supplemental Indenture. In addition, this Third Supplemental Indenture amends and restates Section 1004 of the Base Indenture to read as follows: 

“SECTION 1004. Limitations on Incurrence of Debt. 

(a) The Company will not, and will not permit any Subsidiary to, incur any Debt, other than Intercompany Debt, that is subordinate in right of payment to the Notes, if, immediately after giving effect to the incurrence of such Debt and the application of the proceeds thereof, the aggregate principal amount of all outstanding Debt of the Company and its Subsidiaries on a consolidated basis determined in accordance with GAAP is greater than 60% of the sum of: (i) the Company's Adjusted Total Assets as of the end of the most recent fiscal quarter prior to the incurrence of such additional Debt; and (ii) the increase in Adjusted Total Assets since the end of such quarter (including any increase resulting from the incurrence of additional Debt).. 

(b) The Company will not, and will not permit any Subsidiary to, incur any Debt if the ratio of Consolidated Income Available for Debt Service to the Annual Service Charge on the date on which such additional Debt is to be incurred, on a pro forma basis, after giving effect to the incurrence of such Debt and to the application of the proceeds thereof would have been less than 1.5 to 1. 
(c) The Company will not, and will not permit any Subsidiary to, incur any Debt secured by any mortgage, lien, charge, pledge, encumbrance or security interest of any kind upon any of the properties of the Company or any Subsidiary (“Secured Debt”), whether owned at the date hereof or hereafter acquired, if, immediately after giving effect to the incurrence of such Secured Debt and the application of the proceeds thereof, the aggregate principal amount of all outstanding Secured Debt of the Company and its Subsidiaries on a consolidated basis is greater than 40% of the sum of: (i) the Company's Adjusted Total Assets as of the end of the most recent fiscal quarter prior to the incurrence of such additional Debt; and (ii) the increase in Adjusted Total Assets since the end of such quarter (including any increase resulting from the incurrence of additional Debt).  

(d) The Company will at all time maintain an Unencumbered Total Asset Value in an amount not less than 150% of the aggregate principal amount of all outstanding unsecured Debt of the Company and its Subsidiaries on a consolidated basis. 

For purposes of the foregoing provisions regarding the limitation on the incurrence of Debt, Debt shall be deemed to be “incurred” by the Company or a Subsidiary whenever the Company or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof. 

ARTICLE THREE
Trustee 

SECTION 3.01 Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Third Supplemental Indenture or the due execution thereof by the Company. The recitals of fact contained herein shall be taken as the statements solely of the Company, and the Trustee assumes no responsibility for the correctness thereof. 

ARTICLE FOUR
Miscellaneous Provisions 

SECTION 4.01 Ratification of Original Indenture. This Third Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Base Indenture, and as supplemented and modified hereby, the Base Indenture is in all respects ratified and confirmed, and the Base Indenture and this Third Supplemental Indenture shall be read, taken and construed as one and the same instrument. 

SECTION 4.02 Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. 

SECTION 4.03 Successors and Assigns. All covenants and agreements in this Third Supplemental Indenture by the Company shall bind its successors and assigns, whether so expressed or not. 

SECTION 4.04 Separability Clause. In case any one or more of the provisions contained in this Third Supplemental Indenture shall for any reason be held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

SECTION 4.05 Governing Law. This Third Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. This Third Supplemental Indenture is subject to the provisions of the Trust Indenture Act, that are required to be part of this Third Supplemental Indenture and shall, to the extent applicable, be governed by such provisions.  

SECTION 4.06 Counterparts. This Third Supplemental Indenture may be executed in any number of counterparts, and each of such counterparts shall for all purposes be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 
  
 
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first above written. 
	
					
	 
	 
	 
	 
	 

	 
	 
	LIBERTY PROPERTY LIMITED PARTNERSHIP

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	Liberty Property Trust,

	 
	 
	 
	 
	as its sole General Partner

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 /s/ William P. Hankowsky

	 
	 
	 
	 
	 

	 
	 
	 
	 
	Name: William P. Hankowsky

	 
	 
	 
	 
	Title: Chairman, President and CEO

	
			
	 
	 
	 

	Attest: /s/ James J. Bowes
	 
	 

	 
	 
	 

	 
Name:  James J. Bowes
	 
	 

	Title: Secretary, General Counsel
	 
	 

  
  

[Signature Page to Supplemental Indenture]
 

	
					
	 
	 
	 
	 
	 

	 
	 
	U.S. BANK NATIONAL ASSOCIATION, as Trustee

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 /s/ George J. Rayzis

	 
	 
	 
	 
	 

	 
	 
	 
	 
	Name:  George J. Rayzis

	 
	 
	 
	 
	Title: Vice President

	
			
	 
	 
	 

	Attest: /s/ Stephen J. Kaba
	 
	 

	 
	 
	 

	 
Name:  Stephen J. Kaba
	 
	 

	Title:  Vice President
	 
	 

  
  

[Signature Page to Supplemental Indenture]

Exhibit A
Form of Global Note

[FACE OF NOTE]
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.
REGISTERED                                    REGISTERED
 NO. 1                                    PRINCIPAL AMOUNT
 CUSIP NO. 53117CAP7                                $300,000,000
LIBERTY PROPERTY LIMITED PARTNERSHIP
3.375% Senior Note due 2023
December 10, 2012
Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Issuer,” which term includes any successor under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or its registered assigns, the principal sum of Three Hundred Million Dollars ($300,000,000) on June 15, 2023 (the “Maturity Date”), and to pay interest thereon from December 10, 2012 (or from the most recent interest payment date to which interest has been paid or duly provided for), semi-annually in arrears on June 15 and December 15 of each year (each, an “Interest Payment Date”), commencing on June 15, 2013, and on the Maturity Date, at the rate of 3.375% per annum, until payment of said principal sum has been made or duly provided for.
The interest so payable and punctually paid or duly provided for on any Interest Payment Date and on the Maturity Date will be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the “Record Date” for such payment, which will be the June 1 or December 1 (regardless of whether such day is a Business Day (as defined below)) preceding such Interest Payment Date or the Maturity Date, as the 

case may be.  Any interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such record date, and shall be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a subsequent record date for the payment of such defaulted interest (which shall be not more than 15 days and not less than 10 days prior to the date of the payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of the Securities of this series not less than 10 days preceding such subsequent record date. Interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months.
The principal of this Note payable on the Maturity Date or upon redemption will be paid against presentation and surrender of this Note at the corporate trust office of the Trustee at 60 Livingston Avenue, 1st Floor, Bond Drop Window, St. Paul, MN, 55107, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public or private debt.
Interest payable on this Note on any Interest Payment Date and on the Maturity Date, as the case may be, will be the amount of interest accrued from and including the immediately preceding Interest Payment Date (or from and including December 10, 2012, in the case of the initial Interest Payment Date) to but excluding the applicable Interest Payment Date or the Maturity Date, as the case may be.  If any Interest Payment Date, Redemption Date or the Maturity Date falls on a day that is not a Business Day (as defined below), the required payment of interest or principal or both, as the case may be, will be made on the next Business Day with the same force and effect as if it were made on the date such payment was due and no interest will accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or the Maturity Date, as the case may be.  “Business Day” means any day, other than a Saturday or a Sunday, that is neither a legal holiday nor a day on which banking institutions in Chicago or the City of New York are authorized or required by law, regulation or executive order to close. 
Payments of principal and interest in respect of this Note will be made by wire transfer of immediately available funds in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the reverse hereof.  Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Note shall not be entitled to the benefits of the Indenture referred to on the reverse hereof or be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Trustee under such Indenture.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed manually or by facsimile by its authorized officers as of the date first set forth above.
LIBERTY PROPERTY LIMITED PARTNERSHIP,
     as Issuer
 

By:    LIBERTY PROPERTY TRUST,
     as its sole General Partner
 
 
  
                  By: _______________________________________________
                      Name: William P. Hankowsky
                     Title: Chairman, President and Chief Executive Officer
 
                 By: _______________________________________________
  
                     Name:  George J. Alburger, Jr.
                     Title:  Executive Vice President and Chief 
           Financial Officer
 

       

 

[Signature Page to Note]

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture.

                 U.S. BANK NATIONAL ASSOCIATION, as Trustee
 
 
  
 
                 By: _______________________________________________
                         Authorized Signatory
 

[REVERSE OF NOTE]

LIBERTY PROPERTY LIMITED PARTNERSHIP

3.375 % Senior Note due 2023
This Security is one of a duly authorized issue of debentures, notes, bonds, or other evidences of indebtedness of the Issuer (hereinafter called the “Securities”) of the series hereinafter specified, all issued or to be issued under and pursuant to an Indenture dated as of September 22, 2010 (herein called the “Indenture”), duly executed and delivered by the Issuer to U.S. Bank National Association, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture with respect to the series of Securities of which this Note is a part), to which Indenture and all indentures supplemental thereto relating to this security reference is hereby made for a description of the rights, limitations of rights, obligations, duties, and immunities thereunder of the Trustee, the Issuer, and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered.  The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any), and may otherwise vary as provided in the Indenture or any indenture supplemental thereto.  This Security is one of a series designated as the 3.375% Notes due 2023 of the Issuer.

In case an Event of Default with respect to this Security shall have occurred and be continuing, the principal hereof and Make Whole Amount, if any, may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect, and subject to the conditions provided in the Indenture.
The Issuer may redeem this Security at any time at the option of the Issuer, in whole or from time to time in part, at a redemption price equal to the sum of (i) the principal amount of this Security being redeemed plus accrued interest thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to this Security.  Notice of any optional redemption of any Securities of this series will be given to Holders thereof at their addresses, as shown in the Security Register for the Securities of this series, not more than 60 nor less than 30 days prior to the date fixed for redemption.  The notice of redemption will specify, among other items, the Redemption Price and the principal amount of the Securities of this series held by such Holder to be redeemed.
The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority of the aggregate principal amount of all Outstanding Securities affected, evidenced as provided in the Indenture, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Securities of each series; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Security so affected, (i) change the Stated Maturity of the principal of (or premium or Make-Whole Amount, if any, on) or any installment of interest on, any such Security, (ii) reduce the principal amount of, or the rate or amount of interest on, or any premium payable on redemption of the Notes, or adversely affect any right of repayment of the Holder of any Securities; (iii) change the place of payment, or the coin or currency, for payment of principal or premium, if any, or interest on the Securities; (iv) impair the right to institute suit for the enforcement of any payment on or with respect to the Securities on or after the stated maturity of any such Security; (v) reduce the above-stated percentage in principal amount of outstanding Securities, the consent of whose Holders is necessary to modify or amend the Indenture, for any waiver with respect to the Securities or to waive compliance with certain provisions of the Indenture or certain defaults and consequences thereunder or to reduce the quorum or voting requirements set forth in the Indenture; or (vi) modify any of the foregoing provisions or any of the provisions relating to the waiver of certain past defaults or certain covenants, except to increase the required percentage to effect such action or to provide that certain other provisions of the Indenture may not be modified or waived without the consent of the Holder of each Security.  It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in principal amount outstanding of the Securities of such series may on behalf of the Holders of all the Securities of such series waive any such past default or Event of Default and its consequences, or, subject to certain conditions, may rescind a declaration of acceleration and its consequences with respect to such Securities. Any such consent or waiver by the Holder of this Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Security and any Securities that may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this security or such other securities.
No reference herein to the Indenture and no provision of this security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any Make-Whole Amount and interest on this Security in the manner, at the respective times, at the rate and in the coin or currency herein prescribed.
This Security is issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  Securities may be exchanged for a like aggregate principal amount of Securities of this series of other authorized denominations at the office or agency of the Issuer in The Borough of Manhattan, The City of New York, in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge except for any tax or other governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of Securities at the office or agency of the Issuer in The Borough of Manhattan, The City of New York, one or more new Securities of the same series of authorized denominations in an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Issuer, the Trustee or any agent of the Issuer or the Trustee may deem and treat the Person in whose name this Security is registered as the owner of this Security (whether or not this security shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the purpose of receiving payment of, or on account of, the principal hereof and Make-Whole Amount, if any, and subject to the provisions on the face hereof, interest hereon, and for all other purposes, and neither the Issuer nor the Trustee nor any authorized agent of the Issuer or the Trustee shall be affected by any notice to the contrary.
The Indenture and each Security shall be governed by and construed in accordance with the laws of the State of New York.

Capitalized terms used herein which are not otherwise defined shall have the respective meanings assigned to them in the Indenture and all indentures supplemental thereto relating to this Security.

LIBERTY PROPERTY LIMITED PARTNERSHIP
ISSUER 
TO 
U.S. BANK NATIONAL ASSOCIATION,
TRUSTEE 
 
THIRD SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 10, 2012 
 
3.375% SENIOR NOTES DUE 2023 
 
SUPPLEMENT TO INDENTURE,
DATED AS OF SEPTEMBER 22, 2010, BETWEEN
LIBERTY PROPERTY LIMITED PARTNERSHIP AND
U.S. BANK NATIONAL ASSOCIATION

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