EX-10.2






Exhibit 10.2




GLADSTONE COMMERCIAL LIMITED PARTNERSHIP

SCHEDULE 4.2(a)(3) TO FIRST AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

DESIGNATION OF

SENIOR COMMON UNITS





	(i)	 	Designation and Number. A class of Partnership Units, designated “Senior Common
Units,” is hereby established. The number of Senior Common Units authorized for issuance
shall be 3,833,333.






	(ii)	 	Maturity. The Senior Common Units have no stated maturity and will not be subject to
any sinking fund or mandatory redemption.






	(iii)	 	Rank. The Senior Common Units, with respect to distribution rights and rights upon
liquidation, dissolution or winding up of the Partnership, will rank (i) senior to the Common
Units of the Partnership with respect to distribution rights and on parity with the Common
Units of the Partnership with respect to rights upon liquidation, dissolution or winding up of
the Partnership, (ii) senior to all Partnership Interests ranking junior to the Senior Common
Units with respect to distribution rights or rights upon liquidation, dissolution or winding
up of the Partnership; (iii) on parity with all Partnership Interests issued by the
Partnership, the terms of which Partnership Interests specifically provide that such
Partnership Interests rank on a parity with the Senior Common Units with respect to
distribution rights or rights upon liquidation, dissolution or winding up of the Partnership
(the “Parity Preferred Units”); (iv) junior to the 7.75% Series A Cumulative Redeemable
Preferred Units and the 7.50% Series B Cumulative Redeemable Preferred Units; and (v) junior
to all existing and future indebtedness of the Partnership. The term “Parity Preferred Units”
does not include convertible debt securities, which will rank senior to the Senior Common
Units prior to conversion.






	(iv)	 	Distributions. (a) Holders of the Senior Common Units are entitled to receive, when
and as declared by the General Partner, out of funds legally available for the payment of
distributions, cash distributions in an amount equal to $1.05 per Senior Common Unit per
annum, declared daily and paid at the rate of $0.0875 per Senior Common Unit per month.
Distributions will be cumulative from the date of issue of the Senior Common Units, and will
be payable monthly on or about the last day of each month beginning with the first full month
after issuance of the Senior Common Units.






(b) No distributions on Senior Common Units shall be declared by the General Partner or
paid or set apart for payment by the Partnership at such time as the terms and provisions of
any agreement of the Partnership, 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 of such distributions would constitute a
breach thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.




(c) Notwithstanding the foregoing, distributions on the Senior Common Units will accumulate
whether or not the Partnership has earnings, whether or not restrictions exist in respect
thereof, whether there are funds legally available for the payment of such distributions and
whether or not such distributions are declared. Accumulated but unpaid distributions on the
Senior Common Units will not bear interest, and holders of the Senior Common Units will not
be entitled to any distributions in excess of full cumulative distributions described above.
No distributions will be declared or paid or set apart for payment on any Partnership
Interests or any other series of Parity Preferred Units or any series or class of equity
securities ranking junior to the Senior Common Units (other than a distribution of the
Partnership’s Common Units or any other class of Partnership Interests ranking junior to the
Senior Common 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 Senior
Common Units for all past distribution periods and the then current distribution period.




	(v)	 	Liquidation Preference. Holders of Senior Common Units will not have any liquidation
preference.






	(vi)	 	Redemption. In the event that any REIT Senior Common Shares are redeemed either by
Gladstone Commercial Corporation or by the holders thereof, the Partnership shall be deemed to
have automatically redeemed, as of the effective date of the redemption of the REIT Senior
Common Shares, an equivalent number of Senior Common Units at an equivalent redemption price
per Senior Common Unit.






	(vii)	 	Voting Rights. Holders of the Senior Common Units will not have any voting rights.






	(viii)	 	Exchange Option. In the event that any REIT Senior Common Shares are exchanged for
REIT Shares in accordance with the Articles Supplementary Establishing and Fixing the Rights
and Preferences of Senior Common Stock (the “Senior Common Articles Supplementary”), an
equivalent number of Senior Common Units shall be automatically converted into a number of
Common Units equal to the number of REIT Shares issued upon exchange of REIT Senior Common
Shares.






	(ix)	 	Automatic Conversion. Each Senior Common Unit shall be converted into a Common Unit
in accordance with the same exchange ratio applied to the conversion of REIT Senior Common
Shares into REIT Shares automatically upon any of the following events: (a) an acquisition of
Gladstone Commercial Corporation by another company by means of any transaction or series of
related transactions to which Gladstone Commercial Corporation is a party (including, without
limitation, any stock acquisition, reorganization, merger or consolidation, but excluding any
sale of stock for capital raising purposes) other than a transaction or series of transactions
in which the holders of voting securities of Gladstone Commercial Corporation outstanding
immediately prior to such transaction continue to retain at least 50% of the total voting
power represented by voting securities of the Gladstone Commercial Corporation or those of
such other surviving entity outstanding immediately after such transaction or series of
transaction; (b) a sale of all or substantially all of the assets of Gladstone Commercial
Corporation; or (c) a liquidation, dissolution or winding up of Gladstone Commercial
Corporation.






	(x)	 	Anti-Dilution. If the outstanding REIT Senior Common Shares are increased or
decreased or otherwise adjusted pursuant to Article Third, Section 8 of the Senior Common
Articles Supplementary, appropriate adjustment will be made to the number of Senior Common
Units and the relative terms thereof.