EXHIBIT 3.1.1
LIBERTY PROPERTY TRUST
ARTICLES SUPPLEMENTARY
473,000 SHARES
7.625% SERIES D CUMULATIVE REDEEMABLE
PREFERRED SHARES OF BENEFICIAL INTEREST
Liberty Property Trust, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and
Taxation of Maryland (the "Department") that:
FIRST: Pursuant to the authority expressly vested in the Board of
Trustees of the Company by Sections 3.2(e), 6.1 and 6.3 of the Amended
and Restated Declaration of Trust of the Company filed with the
Department on May 29, 1997, as supplemented by the Articles
Supplementary accepted for record by the Department on August 7, 1997,
by the Articles Supplementary accepted for record by the Department on
December 23, 1997, by the Articles Supplementary accepted for record by
the Department on July 28, 1999, and by the Articles Supplementary
accepted for record by the Department on April 18, 2000 (collectively,
as supplemented, the "Charter") and Section 8-203 of the Corporations
and Associations Article of the Annotated Code of Maryland, the Board
of Trustees of the Company (the "Board"), by resolutions duly adopted
on March 5, 2002, has classified 473,000 shares of the authorized but
unissued shares of beneficial interest in the Company as a series
designated the 7.625% Series D Cumulative Redeemable Preferred Shares
of Beneficial Interest with the following preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, terms and conditions of redemption, and other terms and
conditions:
SECTION 1. Designation and Number. A series of preferred shares
of beneficial interest of the Company, designated the "7.625% Series D
Cumulative Redeemable Preferred Shares of Beneficial Interest" (the
"Series D Preferred Shares") is hereby established. The number of
Series D Preferred Shares shall be 473,000. The par value of the
Series D Preferred Shares is established to be $0.00l per share.
SECTION 2. Rank. The Series D Preferred Shares will, with
respect to distributions and rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Company, rank senior to
all classes or series of Common Shares (as defined in the Charter) and
to all classes or series of equity securities of the Company now or
hereafter authorized, issued or outstanding including, without
limitation, the "Series A Junior Participating Preferred Shares" and
other than any class or series of equity securities of the Company
expressly designated as ranking on a parity with or senior to the
Series D Preferred Shares as to distributions and rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Company.
For purposes of these Articles Supplementary, the term "Parity
Preferred Shares" shall be used to refer to any class or series of
equity securities of the Company now or hereafter authorized, issued or
outstanding expressly designated by the Company to rank on a parity
with Series D Preferred Shares with respect to distributions and rights
upon voluntary or involuntary liquidation, winding-up or dissolution of
the Company including, without limitation, the "8.80% Series A
Cumulative Redeemable Preferred Shares of Beneficial Interest," the
"9.25% Series B Cumulative Redeemable Preferred Partnership Interests"
and the "9.125% Series C Cumulative Redeemable Preferred Shares." The
term "equity securities" does not include debt securities, which will
rank senior to the Series D Preferred Shares prior to conversion.
SECTION 3. Distributions.
(a) Payment of Distributions.
(i) Subject to the rights of holders of Parity Preferred
Shares and holders of equity securities ranking senior to the Series D
Preferred Shares as to payment of distributions, holders of Series D
Preferred Shares will be entitled to receive, when, as and if declared
by the Board, out of funds legally available for the payment of
distributions, cumulative preferential cash distributions at the rate
per annum of 7.625% of the $50 liquidation preference per Series D
Preferred Share (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 March 31, June 30, September 30
and December 31 of each year, commencing on the first of such dates to
occur after the original date of issuance and, (ii) in the event of a
redemption, on the redemption date (each a "Preferred Shares
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 D
Preferred Shares 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 D Preferred Shares will be made to the
holders of record of the Series D Preferred Shares on the relevant
record dates, which, unless otherwise provided by the Company with
respect to any distribution, will be fifteen (15) Business Days prior
to the relevant Preferred Shares Distribution Payment Date (each a
"Distribution Record Date"). Notwithstanding anything to the contrary
set forth herein, each Series D Preferred Share shall also continue to
accrue all accrued and unpaid distributions up to the exchange date on
any Series D Preference Unit (as such term is defined in the Second
Restated and Amended Agreement of Limited Partnership of Liberty
Property Limited Partnership, dated as of October 22, 1997, as amended
by that certain First Amendment to Second Restated and Amended
Agreement of Limited Partnership, dated as of July 28, 1999, that
certain Second Amendment to Second Restated and Amended Agreement of
Limited Partnership, dated as of April 18, 2000, and that certain Third
Amendment to Second Restated and Amended Agreement of Limited
Partnership, dated June 10, 2002 (as amended, the "Partnership
Agreement")) validly exchanged into such Series D Preferred Share in
accordance with the provisions of such Partnership Agreement
(ii) "Business Day" shall mean each day, other than a
Saturday or a Sunday, which is not a day on which banking institutions
in New York, New York are authorized or required by law, regulation or
executive order to close.
(b) Limitation on Distributions. No distributions on the
Series D Preferred Shares shall be declared or paid or set apart for
payment by the Company at such time as the terms and provisions of any
agreement of the Company, including any agreement relating to its
indebtedness, prohibits such declaration, payment or setting apart for
payment or provides that such declaration, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or
if such declaration, payment or setting apart for payment shall be
restricted or prohibited by law.
(c) Distributions Cumulative. Notwithstanding the foregoing,
distributions on the Series D Preferred Shares will accrue whether or
not the terms and provisions set forth in Section 3(b) hereof at any
time prohibit the current payment of distributions, whether or not the
Company has earnings, whether or not there are funds legally available
for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid
distributions on the Series D Preferred Shares will accumulate as of
the Preferred Shares Distribution Payment Date on which they first
become payable. Accumulated and unpaid distributions will not bear
interest.
(d) Priority as to Distributions.
(i) So long as any Series D Preferred Shares 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 Common Shares or any class or series of other
Shares of the Company ranking junior as to the payment of distributions
to the Series D Preferred Shares (such Common Shares or other junior
shares including, without limitation, Series A Junior Participating
Preferred Shares authorized pursuant to Articles Supplementary filed
with the Department on December 23, 1997, collectively, "Junior
Shares"), 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 D Preferred Shares, any Parity Preferred
Shares with respect to distributions or any Junior Shares, unless, in
each case, all distributions accumulated on all Series D Preferred
Shares and all classes and series of outstanding Parity Preferred
Shares as to payment of distributions have been paid in full. The
foregoing sentence will not prohibit (i) distributions payable solely
in Junior Shares, (ii) the conversion of Junior Shares or Parity
Preferred Shares into Shares of the Company ranking junior to the
Series D Preferred Shares as to distributions and upon liquidation,
winding-up or dissolution, and (iii) purchase by the Company of such
Series D Preferred Shares, Parity Preferred Shares with respect to
distributions or Junior Shares pursuant to Article VII of the Charter
to the extent required to preserve the Company's status as a real
estate investment trust.
(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 D Preferred Shares and
the Shares of any class or series of outstanding Parity Preferred
Shares, all distributions authorized and declared on the Series D
Preferred Shares and all classes or series of outstanding Parity
Preferred Shares with respect to distributions shall be authorized and
declared pro rata so that the amount of distributions authorized and
declared per share of Series D Preferred Shares and such other classes
or series of Parity Preferred Shares shall in all cases bear to each
other the same ratio that accrued distributions per share on the Series
D Preferred Shares and such other classes or series of Parity Preferred
Shares (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such class or series of
Parity Preferred Shares do not have cumulative distribution rights)
bear to each other. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on
Series D Preferred Shares or any other Parity Preferred Shares which
may be in arrears.
(e) If, for any taxable year, the Company elects to designate
as "capital gain dividends" (as defined in Section 857 of the Internal
Revenue Code of 1986, as amended (the "Code")) any portion (the
"Capital Gains Amount") of the dividends (within the meaning of the
Code) paid or made available for the year to holders of all classes of
shares of beneficial interest in the Company (the "Total Dividends"),
then the portion of the Capital Gains Amount that will be allocable to
the holders of the Series D Preferred Units will be the Capital Gains
Amount multiplied by a fraction, the numerator of which will be the
total dividends (within the meaning of the Code) paid or made available
to the holders of the Series D Preferred Units for the year and the
denominator of which shall be the Total Dividends.
(f) No Further Rights. Holders of Series D Preferred Shares
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. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the
rights of holders of Parity Preferred Shares with respect to rights
upon any voluntary or involuntary liquidation, dissolution or winding-
up of the Company and subject to equity securities ranking senior to
the Series D Preferred Shares with respect to rights upon any voluntary
or involuntary liquidation, dissolution or winding-up of the Company,
the holders of Series D Preferred Shares shall be entitled to receive
out of the assets of the Company legally available for distribution or
the proceeds thereof, after payment or provision for debts and other
liabilities of the Company, but before any payment or distributions of
the assets shall be made to holders of Common Shares or any other class
or series of shares of the Company that ranks junior to the Series D
Preferred Shares as to rights upon liquidation, dissolution or winding-
up of the Company, an amount equal to the sum of (i) a liquidation
preference of $50 per share of Series D Preferred Shares, and (ii) an
amount equal to any accumulated and unpaid distributions thereon,
whether or not declared, to the date of payment. In the event that,
upon such voluntary or involuntary liquidation, dissolution or winding-
up, there are insufficient assets to permit full payment of liquidating
distributions to the holders of Series D Preferred Shares and any
Parity Preferred Shares as to rights upon liquidation, dissolution or
winding-up of the Company, all payments of liquidating distributions on
the Series D Preferred Shares and such Parity Preferred Shares shall be
made so that the payments on the Series D Preferred Shares and such
Parity Preferred Shares shall in all cases bear to each other the same
ratio that the respective rights of the Series D Preferred Shares and
such other Parity Preferred Shares (which shall not include any
accumulation in respect of unpaid distributions for prior distribution
periods if such Parity Preferred Shares do not have cumulative
distribution rights) upon liquidation, dissolution or winding-up of the
Company bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Company,
stating the payment date or dates when, and the place or places where,
the amounts distributable in such circumstances shall be payable, shall
be given by (i) fax and (ii) by first class mail, postage pre-paid, not
less than thirty (30) and not more than sixty (60) days prior to the
payment date stated therein, to each record holder of the Series D
Preferred Shares at the respective addresses of such holders as the
same shall appear on the share transfer records of the Company.
(c) No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of
Series D Preferred Shares will have no right or claim to any of the
remaining assets of the Company.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Company to, or the
consolidation or merger or other business combination of the Company
with or into any corporation, trust or other entity (or of any
corporation, trust or other entity with or into the Company) shall not
be deemed to constitute a liquidation, dissolution or winding-up of the
Company.
SECTION 5. Optional Redemption.
(a) Right of Optional Redemption. The Series D Preferred
Shares may not be redeemed prior to June 10, 2007. However, in order
to ensure that the Company remains a qualified real estate investment
trust ("REIT") for federal income tax purposes, the Series D Preferred
Shares shall be subject to the provisions of Article VII of the Charter
pursuant to which Series D Preferred Shares owned by a shareholder in
excess of the Ownership Limit (as such term is defined in the Charter)
will automatically be exchanged for Excess Shares (as such term is
defined in the Charter) and the Company will have the right to purchase
Excess Shares from the holder. On or after June 10, 2007, the Company
shall have the right to redeem the Series D Preferred Shares, in whole
or in part, at any time or from time to time, upon not less than thirty
(30) nor more than sixty (60) days written notice, at a redemption
price, payable in cash, equal to $50 per Series D Preferred Share plus
accumulated and unpaid distributions, whether or not declared, to the
date of redemption. If fewer than all of the outstanding Series D
Preferred Shares are to be redeemed, the Series D Preferred Shares to
be redeemed shall be selected pro rata (as nearly as practicable
without creating fractional units).
(b) Limitation on Redemption.
(i) The redemption price of the Series D Preferred Shares
(other than the portion thereof consisting of accumulated but unpaid
distributions) will be payable solely out of the sale proceeds of
capital stock of the Company and from no other source. For purposes of
the preceding sentence, "capital stock" means any equity securities
(including Common Shares and Preferred Shares), shares, participation
or other ownership interests (however designated) and any rights (other
than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Company may not redeem fewer than all of the
outstanding Series D Preferred Shares unless all accumulated and unpaid
distributions have been paid in full (or a sum sufficient for such
payment has been irrevocably deposited in trust for immediate payment)
on all outstanding Series D Preferred Shares for all quarterly
distribution periods, including the current period, terminating on or
prior to the date of redemption; provided, however, that the foregoing
shall not prevent the purchase by the Company of Excess Shares in order
to ensure that the Company remains qualified as a REIT for federal
income tax purposes or the purchase or acquisition of Series D
Preferred Shares pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series D Preferred Shares.
(c) Procedures for Redemption.
(i) Notice of redemption will be (A) faxed, and (B)
mailed by the Company, postage prepaid, not less than thirty (30) nor
more than sixty (60) days prior to the redemption date, addressed to
the respective holders of record of the Series D Preferred Shares to be
redeemed at their respective addresses as they appear on the transfer
records of the Company. No failure to give or defect in such notice
shall affect the validity of the proceedings for the redemption of any
Series D Preferred Shares except as to the holder to whom such notice
was defective or not given. In addition to any information required by
law or by the applicable rules of any exchange upon which the Series D
Preferred Shares may be listed or admitted to trading, each such notice
shall state: (1) the redemption date; (2) the redemption price; (3)
the number of Series D Preferred Shares to be redeemed; (4) the place
or places where such Series D Preferred Shares are to be surrendered
for payment of the redemption price; (5) that distributions on the
Series D Preferred Shares to be redeemed will cease to accumulate on
such redemption date and (6) that payment of the redemption price and
any accumulated and unpaid distributions will be made upon presentation
and surrender of such Series D Preferred Shares. If fewer than all of
the Series D Preferred Shares held by any holder are to be redeemed,
the notice mailed to such holder shall also specify the number of
Series D Preferred Shares held by such holder to be redeemed.
(ii) If the Company gives a notice of redemption in
respect of Series D Preferred Shares (which notice will be irrevocable)
then, by 12:00 noon, New York City time, on the redemption date, the
Company will deposit irrevocably in trust for the benefit of the Series
D Preferred Shares being redeemed funds sufficient to pay the
applicable redemption price, plus any accumulated and unpaid
distributions, if any, on such shares to the date fixed for redemption,
without interest, and will give irrevocable instructions and authority
to pay such redemption price and any accumulated and unpaid
distributions, whether or not declared, if any, on such shares to the
holders of the Series D Preferred Shares upon surrender of the Series D
Preferred Shares by such holders at the place designated in the notice
of redemption. If fewer than all Series D Preferred Shares evidenced
by any certificate is being redeemed, a new certificate shall be issued
upon surrender of the certificate evidencing all Series D Preferred
Shares, evidencing the unredeemed Series D Preferred Shares without
cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series D Preferred Shares
or portions thereof called for redemption, unless the Company defaults
in the payment thereof. If any date fixed for redemption of Series D
Preferred Shares is not a Business Day, then payment of the redemption
price payable 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 falls in the next
calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date fixed for redemption. If payment of the redemption price or
any accumulated or unpaid distributions in respect of the Series D
Preferred Shares is improperly withheld or refused and not paid by the
Company, distributions on such Series D Preferred Shares will continue
to accumulate from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the applicable redemption
price and any accumulated and unpaid distributions.
(d) Application of Article VII. The Series D Preferred Shares
are subject to the provisions of Article VII of the Charter, including,
without limitation, the provision for the redemption of Excess Shares.
Notwithstanding the provisions of Article IX of the Charter, Series D
Preferred Shares which have been exchanged pursuant to the Charter for
Excess Shares may be redeemed, in whole or in part, at any time or from
time to time, for cash at a redemption price of $50 per share, plus all
accrued and unpaid distributions thereon to the date of redemption,
without interest. If less than all of the outstanding Excess Shares
are to be redeemed, the Excess Shares to be redeemed shall be selected
pro rata (as nearly as may be practicable without creating fractional
shares).
(e) Status of Redeemed Shares. Any Series D Preferred Shares
that shall at any time have been redeemed shall after such redemption,
have the status of authorized but unissued Preferred Shares, without
designation as to class or series until such shares are once more
designated as part of a particular class or series by the Board.
SECTION 6. Voting Rights.
(a) General. Holders of the Series D Preferred Shares will not
have any voting rights, except as set forth below.
(b) Right to Elect Trustees.
(i) If at any time full distributions shall not have been
timely made on any Series D Preferred Shares with respect to any six
(6) prior quarterly distribution periods, whether or not consecutive,
(a "Preferred Distribution Default"), the holders such Series D
Preferred Shares, voting together as a single class with the holders of
each class or series of Parity Preferred Shares upon which like voting
rights have been conferred and are exercisable, will have the right to
elect two (2) additional trustees to serve on the Company's Board (the
"Preferred Shares Trustees") at a special meeting called in accordance
with Section 6(b)(ii) (unless such request is received less than ninety
(90) days before the date fixed for the next annual meeting) or at the
next annual meeting of shareholders, and at each subsequent annual
meeting of shareholders or special meeting held in place thereof, until
all such distributions in arrears and distributions for the current
quarterly period on the Series D Preferred Shares and each such class
or series of Parity Preferred Shares have been paid in full or an
amount sufficient for such payment has been irrevocably deposited in
trust for immediate payment.
(ii) At any time when such voting rights shall have
vested, a proper officer of the Company shall call or cause to be
called, upon written request of holders of record of at least twenty
percent (20%) of the outstanding Series D Preferred Shares, a special
meeting of the holders of Series D Preferred Shares and all the series
of Parity Preferred Shares upon which like voting rights have been
conferred and are exercisable (collectively, the "Parity Securities")
by mailing or causing to be mailed to such holders a notice of such
special meeting to be held not less than ten (10) and not more than
forty-five (45) days after the date such notice is given. The record
date for determining holders of the Parity Securities entitled to
notice of and to vote at such special meeting will be the close of
business on the third (3rd) Business Day preceding the day on which
such notice is mailed. At any such special meeting, all of the holders
of the Parity Securities, by plurality vote, voting together as a
single class without regard to series will be entitled to elect two
directors on the basis of one vote per $50 of liquidation preference to
which such Parity Securities are entitled by their terms (excluding
amounts in respect of accumulated and unpaid dividends) and not
cumulatively. The holder or holders of one-third of the Parity
Securities then outstanding, present in person or by proxy, will
constitute a quorum for the election of the Preferred Shares Trustees
except as otherwise provided by law. Notice of all meetings at which
holders of the Series D Preferred Shares shall be entitled to vote will
be given to such holders at their addresses as they appear in the
transfer records. At any such meeting or adjournment thereof in the
absence of a quorum, subject to the provisions of any applicable law, a
majority of the holders of the Parity Securities present in person or
by proxy shall have the power to adjourn the meeting for the election
of the Preferred Shares Trustees, without notice other than an
announcement at the meeting, until a quorum is present. If a Preferred
Distribution Default shall terminate after the notice of a special
meeting has been given but before such special meeting has been held,
the Company shall, as soon as practicable after such termination, mail
or cause to be mailed notice of such termination to holders of the
Series D Preferred Shares that would have been entitled to vote at such
special meeting.
(iii) If and when all accumulated distributions and the
distribution for the current distribution period on the Series D
Preferred Shares shall have been paid in full or a sum sufficient for
such payment is irrevocably deposited in trust for payment, the holders
of the Series D Preferred Shares shall be divested of the voting rights
set forth in Section 6(b) herein (subject to revesting in the event of
each and every Preferred Distribution Default) and, if all
distributions in arrears and the distributions for the current
distribution period have been paid in full or set aside for payment in
full on all other classes or series of Parity Preferred Shares upon
which like voting rights have been conferred and are exercisable, the
term and office of each Preferred Shares Trustees so elected shall
terminate. Any Preferred Shares Trustees may be removed at any time
with or without cause by the vote of, and shall not be removed
otherwise than by the vote of, the holders of record of a majority of
the outstanding Series D Preferred Shares when they have the voting
rights set forth in Section 6(b) (voting separately as a single class
with all other classes or series of Parity Preferred Shares upon which
like voting rights have been conferred and are exercisable). So long
as a Preferred Distribution Default shall continue, any vacancy in the
office of a Preferred Shares Trustees may be filled by written consent
of the Preferred Shares Trustees remaining in office, or if none
remains in office, by a vote of the holders of record of a majority of
the outstanding Series D Preferred Shares when they have the voting
rights set forth in Section 6(b) (voting separately as a single class
with all other classes or series of Parity Preferred Shares upon which
like voting rights have been conferred and are exercisable). The
Preferred Shares Director shall each be entitled to one vote per
director on any matter.
(c) Certain Voting Rights. So long as any Series D Preferred
Shares remain outstanding, the Company shall not, without the
affirmative vote of the holders of at least two thirds of the Series D
Preferred Shares outstanding at the time: (i) (A) designate or create,
or increase the authorized or issued amount of, any class or series of
shares ranking senior to the Series D Preferred Shares with respect to
payment of distributions or rights upon liquidation, dissolution or
winding-up, (B) reclassify any authorized shares of the Company into
any such shares, or (C) create, authorize or issue any obligations or
security convertible into or evidencing the right to purchase any such
shares; (ii) (A) designate or create, or increase the authorized or
issued amount of, any Parity Preferred Shares, (B) reclassify any
authorized shares of the Company into a Parity Preferred Shares or (C)
create, authorize or issue any obligations or security convertible into
or evidencing the right to purchase any Parity Preferred Share;
provided, however, that restrictions contained in the clause (ii) of
this Paragraph (c) shall apply only to Parity Preferred Shares that are
issued to an Affiliate of the Company other than on arms' length terms;
or (iii) either (A) consolidate, or merge into or with, any corporation
or other entity, or (B) amend, alter or repeal the provisions of the
Company's Charter (including these Articles Supplementary) or Bylaws,
whether by merger, consolidation or otherwise, in such a way that would
materially and adversely affect the powers, special rights,
preferences, privileges or voting power of the Series D Preferred
Shares or the holders thereof; provided, however, that with respect to
the occurrence of a merger or consolidation, so long as (1) the Company
is the surviving entity and the Series D Preferred Shares remain
outstanding with the terms thereof unchanged, or (2) the resulting,
surviving or transferee entity is a corporation organized under the
laws of any state and substitutes for the Series D Preferred Shares
other Preferred Shares having substantially the same terms and same
rights as the Series D Preferred Shares, including with respect to
distributions, voting rights and rights upon liquidation, dissolution
or winding-up, then the occurrence of any such event shall not be
deemed materially and adversely affect the rights, privileges or voting
powers of the holders of the Series D Preferred Shares; provided,
further, that any increase in the amount of authorized Preferred Shares
or the creation or issuance of any other class or series of Preferred
Shares or any increase in an amount of authorized shares of each class
or series, shall not be deemed to materially and adversely affect the
rights, preferences, privileges or voting powers of the Series D
Preferred Shares, if such Series D Preferred Shares rank (y) junior to
the Series D Preferred Shares with respect to payment of distributions
or the distribution of assets upon liquidation, dissolution or winding-
up, or (z) on a parity with the Series D Preferred Shares with respect
to payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up; provided, that any Series D
Preferred Shares issued in reliance on the preceding clause (z) shall
not have been issued to an Affiliate of the Company or are issued to
such Affiliate on arms' length terms. In the event of any conflict or
inconsistency between this Section 6 and Sections 8.2, 10.1 and 10.3 of
the Charter, this Section 6 shall control.
SECTION 7. Transfer Restrictions. The Series D Preferred Shares
shall be subject to the provisions of Article VII of the Charter.
SECTION 8. No Conversion Rights. The holders of the Series D
Preferred Shares shall not have any rights to convert such shares into
shares of any other class or series of shares or into any other
securities of, or interest in, the Company except that the Series D
Preferred Shares may be exchanged by the Company for Excess Shares, in
accordance with the Charter.
SECTION 9. No Sinking Fund. No sinking fund shall be
established for the retirement or redemption of Series D Preferred
Shares.
SECTION 10. No Preemptive Rights. No holder of the Series D
Preferred Shares of the Company shall, as such holder, have any
preemptive rights to purchase or subscribe for additional Shares of the
Company or any other security of the Company which the Company may
issue or sell.
SECOND: The Series D Preferred Shares have been classified and
designated by the Board under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the Board
in the manner and by the vote required by law.
FOURTH: These Articles Supplementary shall be effective at the time
the State Department of Assessments and Taxation of Maryland accepts
these Articles Supplementary for record.
FIFTH: The undersigned Chairman of the Board and Chief Executive
Officer of the Company acknowledges these Articles Supplementary to be
the corporate act of the Company and, as to all matters or facts
required to be verified under oath, the undersigned Chairman of the
Board and Chief Executive Officer acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in
all material respects and that this statement is made under the
penalties for perjury.
In Witness Whereof, the Company has caused these Articles Supplementary
to be executed under seal in its name and on its behalf by its Chairman
and Chief Executive Officer and attested to by its Secretary as of June
10, 2002.
[SEAL}
ATTEST: LIBERTY PROPERTY TRUST
By:
- ---------------------------- -------------------------------
JAMES J. BOWES WILLARD G. ROUSE, III.
Secretary Chairman and Chief Executive
Officer