Exhibit 10.1
FOURTH AMENDMENT TO THE
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF GREAT LAKES REIT, L.P.
This Fourth Amendment to the Amended and Restated Agreement of Limited
Partnership of Great Lakes REIT, L.P., a Delaware limited partnership (the
"Partnership"), is made and entered into as of the 23rd day of December, 1998 by
Great Lakes REIT, a Maryland real estate investment trust ("GLREIT").
RECITALS:
WHEREAS, GLREIT is the sole general partner of the Partnership, the
business and affairs of which are conducted in accordance with the terms and
conditions of the Agreement of Limited Partnership of the Partnership dated
September 27, 1996, as amended and restated by the Amended and Restated
Agreement of Limited Partnership dated as of December 19, 1996 and as further
amended by the First Amendment to the Amended and Restated Agreement of Limited
Partnership of the Partnership dated February 6, 1997, the Second Amendment to
the Amended and Restated Agreement of Limited Partnership of the Partnership
dated February 10, 1997 and the Third Amendment to the Amended and Restated
Agreement of Limited Partnership of the Partnership dated May 22, 1998
(collectively, the "Partnership Agreement"); and
WHEREAS, Sections 4.2(c) and 13.1(b)(iii) of the Partnership Agreement
expressly provide that the General Partner shall amend the Partnership Agreement
to set forth the designations, rights, powers and duties, and preferences of the
Preferred Units in one or more Preferred Unit Designations without the consent
of the Limited Partners; and
WHEREAS, the Partnership Agreement provides that a holder of such
Preferred Units shall have such rights to the allocations of Profits and
Losses as specified in Article VI of the Partnership Agreement and to
distributions pursuant to Section 5.1 of the Partnership Agreement;
WHEREAS, in connection with GLREIT's issuance and sale on the date
hereof of 1,500,000 9 3/4% Series A Cumulative Redeemable Preferred Shares of
Beneficial Interest, $.01 par value per share ("Series A Preferred Shares"),
and GLREIT's contribution to the Partnership of the Required Funds obtained
from the issuance and sale of the Series A Preferred Shares, the Partnership
hereby assumes the expenses (including the applicable underwriter discounts)
incurred by GLREIT in connection with raising such Required Funds and issues
to GLREIT Preferred Units to reflect GLREIT's contribution of such funds,
which Preferred Units have the economic rights, including, distribution,
redemption and conversion rights and sinking funds provisions, set forth
herein; and
WHEREAS, GLREIT, as the sole general partner of the Partnership, desires to
amend the Partnership Agreement to reflect the issuance of the Series A
Preferred Units and to set forth the applicable designation, rights, powers,
duties and preferences thereof;
NOW THEREFORE, the Partnership Agreement shall be amended as follows:
1. A series of Preferred Units, designated the 9 3/4% Series A Cumulative
Redeemable Preferred Units (the "Series A Preferred Units"), is hereby
established. The number of authorized Series A Preferred Units is
1,500,000.
2. The Required Funds obtained from the sale of the Series A Preferred
Shares shall be contributed to the Partnership as Contributed Funds.
3. The Series A Preferred Units shall, with respect to distribution
rights and rights upon liquidation, dissolution or winding up of the
Partnership, rank (a) senior to all classes or series of Partnership
Units, and to all Units issued by the Partnership ranking junior to
such Series A Preferred Units; (b) on a parity with all other Units
issued by the Partnership, the terms of which specifically provide
that such equity securities rank on a parity with the Series A
Preferred Units; and (c) junior to all Units issued by the
Partnership, the terms of which specifically provide that such equity
securities rank senior to the Series A Preferred Units.
4. DISTRIBUTIONS. Section 5.1 of the Partnership agreement is hereby
amended to incorporate the following distribution provisions relating to the
Series A Preferred Units:
a. Holders of the then outstanding Series A Preferred Units shall be
entitled to receive, when and as authorized by the General
Partner, out of Available Cash Flow, cumulative preferential cash
distributions at the rate of 9 3/4% of the $25.00 liquidation
preference per annum (equivalent to a fixed annual amount of
$2.4375 per Series A Preferred Unit). Such distributions shall be
cumulative from the first date on which any Series A Preferred
Units are issued and shall be payable quarterly in arrears on or
before March 1, June 1, September 1 and December 1 of each year
or, if not a business day, the next succeeding business day
(each, a "Series A Partnership Distribution Payment Date"). The
first distribution, which will be paid on March 1, 1999, will
cover the period from the date of issuance of the Series A
Preferred Units to March 1, 1999. Such distribution and any
distribution payable on the Series A Preferred Units for any
partial distribution period will be computed on the basis of a
360-day year consisting of twelve 30-day months. Distributions
will be payable to holders of record as they appear in the
records of the Partnership at the close of business on the
applicable record date, which shall be the fifteenth day of the
calendar month immediately preceding the calendar month in which
the applicable Series A Partnership Distribution Payment Date
falls or on such other date designated by the General Partner as
the record date for the payment of distributions on the Series A
Preferred Shares that is not more than 30 nor less than 10 days
prior to such Partnership Distribution Payment Date (each, a
"Series A Partnership Record Date").
b. No distributions on Series A Preferred Units shall be authorized
by the General Partner or paid or set apart for payment by the
General Partner at such time as the terms and provisions of
any agreement of the Partnership, including any agreement
relating to its indebtedness, prohibits such authorization,
payment or setting apart for payment or provides that such
authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such
authorization or payment shall be restricted or prohibited by
law.
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c. Notwithstanding the foregoing, distributions on the Series A
Preferred Units shall accrue whether or not the terms and
provisions set forth in Paragraph 4.b. hereof at any time
prohibit the current payment of distributions, whether or not the
Partnership has Available Cash Flow, whether or not there are
funds legally available for the payment of such distributions and
whether or not such distributions are declared. Accrued but
unpaid distributions on the Series A Preferred Units will
accumulate as of the Series A Partnership Distribution Payment
Date on which they first become payable.
d. Except as provided in Paragraph 4.e. below, no distributions will
be declared or paid or set apart for payment on any Partnership
Units or any other series of Preferred Units ranking, as to
distributions, on a parity with or junior to the Series A
Preferred Units (other than a distribution in the Partnership
Units or in any other class of Units ranking junior to the Series
A Preferred Units as to distributions and upon liquidation) for
any period unless full cumulative distributions have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such payment
on the Series A Preferred Units for all past distribution periods
and the then current distribution period.
e. When distributions are not paid in full (and a sum sufficient for
such full payment is not so set apart) upon the Series A
Preferred Units and any other series of Preferred Units ranking
on a parity as to distributions with the Series A Preferred
Units, all distributions declared upon the Series A Preferred
Units and any other series of Preferred Units ranking on a parity
as to distributions with the Series A Preferred Units shall be
declared pro rata so that the amount of distributions declared
per Series A Preferred Units and such other series of Preferred
Units shall in all cases bear to each other the same ratio that
accrued distributions per Series A Preferred Units and such other
series of Preferred Units (which shall not include any accrual in
respect of unpaid distributions for prior distribution periods if
such Preferred Units do not have a cumulative distribution) bear
to each other. No interest, or sum of money in lieu of interest,
shall be payable in respect of any distribution payment or
payments on Series A Preferred Units that may be in arrears.
f. Except as provided in the immediately preceding paragraph, unless
full cumulative distributions on the Series A Preferred Units
have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof is set apart for
payment for all past distribution periods and the then current
distribution period, no distributions (other than in Partnership
Units or other Units ranking junior to the Series A Preferred
Units as to distributions and upon liquidation) shall be declared
or paid or set aside for payment, nor shall any other
distribution be declared or made, upon the Partnership Units or
any other Units of the Partnership ranking junior to or on a
parity with the Series A Preferred Units as to distributions or
upon liquidation, nor shall any Partnership
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Units, or any other Units of the Partnership ranking junior to
or on a parity with the Series A Preferred Units as to
distributions or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any monies be
paid to or made available for a sinking fund for the
redemption of any such shares) by the Partnership (except by
conversion into or exchange for other Units of the Partnership
ranking junior to the Series A Preferred Units as to
distributions and upon liquidation)
g. Holders of the Series A Preferred Units shall not be entitled to
any distribution, whether payable in cash, property or shares in
excess of full cumulative distributions on the Series A Preferred
Units as described above. Any distribution payment made on the
Series A Preferred Units shall first be credited against the
earliest accrued but unpaid distribution due with respect to such
shares that remains payable.
5. LIQUIDATION PREFERENCE.
a. Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Partnership, the holders of
Series A Preferred Units then outstanding are entitled to be paid
out of the assets of the Partnership legally available for
distribution to its unitholders a liquidation preference of
$25.00 per share, plus an amount equal to any accrued and unpaid
distributions to the date of payment, before any distribution of
assets is made to holders of Partnership Units or any other class
or series of Units of the Partnership that ranks junior to the
Series A Preferred Units as to liquidation rights.
b. In the event that, upon such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of
the Partnership are insufficient to pay the amount of the
liquidating distributions on all outstanding Series A Preferred
Units and the corresponding amounts payable on all shares of
other classes or series of Units of the Partnership ranking on a
parity with the Series A Preferred Units in the distribution of
assets, then the holders of the Series A Preferred Units and all
other such classes or series of Units shall share ratably in any
such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively
entitled.
c. After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Series A Preferred
Units will have no right or claim to any of the remaining assets
of the Partnership.
d. Written notice of any such liquidation, dissolution or winding up
of the Partnership, 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 first class
mail, postage pre-paid, not less than 30 nor more than 60 days
prior to the payment date stated therein, to each record holder
of the Series A Preferred Units (other than the General
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Partner) at the respective addresses of such holders as the
same shall appear on the unit transfer records of the
Partnership.
e. In determining whether a distribution (other than upon voluntary
or involuntary liquidation), by distribution, redemption or other
acquisition of units of the Partnership or otherwise, is
permitted under Delaware law, amounts that would be needed, if
the Partnership were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution
of holders of Series A Preferred Units will not be added to the
Partnership's total liabilities.
6. REDEMPTION.
a. RIGHT OF OPTIONAL REDEMPTION. The Series A Preferred Units are
not redeemable prior to December 16, 2003. On and after
December 16, 2003, the Partnership, at its option and upon not
less than 30 nor more than 60 days written notice, may redeem the
Series A Preferred Units, in whole or in part, at any time or
from time to time, for cash at a redemption price of $25.00 per
Series A Preferred Unit, plus all accrued and unpaid
distributions thereon to the date fixed for redemption (except as
provided in Section 5(c) below), without interest. If less than
all of the outstanding Series A Preferred Units are to be
redeemed, the Series A Preferred Units to be redeemed shall be
selected pro rata (as nearly as may be practicable without
creating fractional units) or by any other equitable method
determined by the Partnership.
b. LIMITATIONS ON REDEMPTION.
i. The redemption price of the Series A Preferred Units (other
than the portion thereof consisting of accrued and unpaid
distributions) is payable solely out of the contribution
to the Partnership by GLREIT of the sale proceeds of other
shares of beneficial interest of GLREIT, which may include
other series of Preferred Shares, and from no other
source. For purposes of the preceding sentence, "shares of
beneficial interest" means any equity securities (including
Common Shares and Preferred Shares), shares, interest,
participation or other ownership interests (however
designated) and any rights (other than debt securities
convertible
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into or exchangeable for equity securities) or options to
purchase any of the foregoing.
ii. Unless full cumulative distributions on all Series A
Preferred Units shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past
distribution periods and the then current distribution
period, no Series A Preferred Units shall be redeemed unless
all outstanding Series A Preferred Units are simultaneously
redeemed, and the Partnership shall not redeem any Series A
Preferred Units (except by exchange for Units of the
Partnership ranking junior to the Series A Preferred Units
as to distributions and upon liquidation); PROVIDED,
HOWEVER, that the foregoing will not prevent the
redemption of Series A Preferred Units pursuant to a
purchase or exchange offer made on the same terms to holders
of all outstanding Series A Preferred Units.
c. RIGHTS TO DISTRIBUTIONS ON SHARES CALLED FOR REDEMPTION.
Immediately prior to any redemption of Series A Preferred Units,
the Partnership shall pay, in cash, any accumulated and unpaid
distributions through the redemption date, unless a redemption
date falls after a Series A Partnership Record Date and prior to
the corresponding Series A Partnership Distribution Payment Date,
in which case each holder of Series A Preferred Units at the
close of business on such Series A Partnership Record Date shall
be entitled to the distribution payable on such shares on the
corresponding Series A Partnership Distribution Payment Date
notwithstanding the redemption of such shares before such Series
A Partnership Distribution Payment Date. Except as provided
above, the Partnership will make no payment or allowance for
unpaid distributions, whether or not in arrears, on Series A
Preferred Units that are redeemed.
d. PROCEDURES FOR REDEMPTION.
i. Notice of redemption will be mailed by the Partnership,
postage prepaid, not less than 30 nor more than 60 days
prior to the redemption date, addressed to the respective
holders of record of the Series A Preferred Units (other
than the General Partner) to be redeemed at their respective
addresses as they appear on the unit transfer records of the
Partnership. No failure to give such notice or any defect
therein or in the mailing thereof shall affect the validity
of the proceedings for the redemption of any Series A
Preferred Units except as to the holder to whom notice was
defective or not given.
ii. Such notice shall state: (A) the redemption date; (B) the
redemption price; (C) the number of Series A Preferred Units
to be
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redeemed; (D) the place or places where the Series A
Preferred Units are to be surrendered for payment of the
redemption price; and (E) that distributions on the units
to be redeemed will cease to accrue on such redemption date.
If less than all of the Series A Preferred Units held by any
holder are to be redeemed, the notice mailed to such holder
shall also specify the number of Series A Preferred Units
held by such holder to be redeemed.
iii. If notice of redemption of any Series A Preferred Units has
been given and if the funds necessary for such redemption
have been set aside by the Partnership in trust for the
benefit of the holders of any Series A Preferred Units so
called for redemption, then from and after the redemption
date distributions will cease to accrue on such Series A
Preferred Units, such Series A Preferred Units shall no
longer be deemed outstanding and all rights of the holders
of such units will terminate, except the right to receive
the redemption price. Holders of Series A Preferred Units to
be redeemed shall surrender such Series A Preferred Units at
the place designated in such notice and, upon surrender in
accordance with said notice of the certificates evidencing
Series A Preferred Units so redeemed (properly endorsed or
assigned for transfer, if the Partnership shall so require
and the notice shall so state), such Series A Preferred
Units shall be redeemed by the Partnership at the redemption
price plus any accrued and unpaid distributions payable upon
such redemption. In case less than all the Series A
Preferred Units evidenced by any such certificate are
redeemed, a new certificate or certificates shall be issued
evidencing any unredeemed Series A Preferred Units without
cost to the holder thereof.
iv. The deposit of funds with a bank or trust corporation for
the purpose of redeeming Series A Preferred Units shall be
irrevocable except that:
(A) the Partnership shall be entitled to receive from such
bank or trust corporation the interest or other
earnings, if any, earned on any money so deposited in
trust, and the holders of any shares redeemed shall
have no claim to such interest or other earnings; and
(B) any balance of monies so deposited by the Partnership
and unclaimed by the holders of the Series A Preferred
Units entitled thereto at the expiration of two years
from the applicable redemption dates shall be repaid,
together with any interest or other earnings thereon,
to the Partnership, and after any such repayment, the
holders of the shares entitled to the funds so repaid
to the Partnership shall look
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only to the Partnership for payment without interest
or other earnings.
7. The Series A Preferred Units are not convertible into or exchangeable
for any other property or securities of the Partnership.
8. Except as set forth above, no other provision of the Partnership
Agreement shall be affected, amended or modified except to the extent
necessary to conform to the above amendment. Unless defined herein,
all capitalized terms used herein shall have the definitions provided
to such terms in the Partnership Agreement.
9. The foregoing amendment has been approved by GLREIT, in its capacity
as the General Partner of the Partnership without the consent of the
Limited Partners, in accordance with the provisions of Section 13.1 of
the Partnership Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, GLREIT has executed this Fourth Amendment to the
Partnership Agreement as of the date first above written.
GREAT LAKES REIT
By: /s/ James Hicks
------------------------------------
Name: James Hicks
Title: Senior Vice President
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