EXHIBIT 10.5
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; and
WHEREAS, in connection with GL REIT'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 GL REIT'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 GL REIT'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.
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
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
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 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 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 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]
IN WITNESS WHEREOF, GLREIT has executed this Fourth Amendment to the
Partnership Agreement as of the date first above written.
GREAT LAKES REIT
By: James Hicks
------------------------------
Name: James Hicks
Title: Senior Vice President