<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13 (e) (1) of the Securities Exchange Act of 1934)
G&L REALTY CORP.
(Name of issuer)
G&L REALTY CORP.
(Name of Person(s) Filing Statements)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
(Title of Class of Securities)
361271109
(CUSIP Number of Class of Securities)
George I. Nagler, Esq.
Vice President, General Counsel and Secretary
G&L Realty Corp.
439 N. Bedford Drive
Beverly Hills, CA 90210
(310) 273-9930
(Name, address and telephone number of person authorized to receive notices and
communications on behalf of the person(s) filing statement)
COPIES TO:
Frederick B. McLane, Esq.
O'Melveny & Myers, LLP
400 South Hope Street
Los Angeles, CA 90071
(213) 430-6000
October 1, 1999
(Date tender offer first published, sent or given to security holders)
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE*
$10,500,000 $2,100
*Calculated solely for the purpose of determining the filing fee, based upon the
purchase of 1,000,000 shares at the offer price of $10.50 per share. The filing
fee was calculated at the rate of 1/50/th/ of 1% of the Transaction Value.
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a) (2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
================================================================================
<PAGE>
Item 1. Security and Issuer
(a) The name of the issuer is G&L Realty Corp., a Maryland corporation, which
has its principal executive office at 439 N. Bedford Drive, Beverly Hills,
CA 90210.
(b) This statement relates to a tender offer by the Company to purchase
1,000,000 shares (or such lesser number of shares as are validly tendered)
of its common stock, $0.01 par value per share (the "Shares") at a price of
$10.50 per Share, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated October 1, 1999 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which together constitute the
"Offer"), copies of which are filed as Exhibits (a)(1) and (a)(2),
respectively. The information set forth in the "Introduction" and in
"Section 1. Number of Shares; Proration," "Section 8. Interest of Directors
and Executive Officers; Transactions and Arrangements Concerning the
Shares," and "Section 15. Extension of the Offer; Termination; Amendments"
of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in the "Introduction" and "Section 7. Price
Range of Shares; Dividends" of the Offer to Purchase is incorporated herein
by reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a) - (b) The information set forth in "Section 11. Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
(a) - (j) The information set forth in the "Introduction" and "Section 8.
Interest of Directors and Executive Officers; Transactions and Arrangements
Concerning the Shares," "Section 9. Background and Purpose of the Offer,"
and "Section 12. Effects of the Offer on the Market for Shares;
Registration under the Exchange Act" of the Offer to Purchase is
incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
The information set forth in "Section 8. Interest of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares" and Appendix A of
the Offer to Purchase is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships With
Respect to the Issuer's Securities.
The information set forth in the "Introduction," "Section 8. Interest of
Directors and Executive Officers; Transactions and Arrangements Concerning the
Shares," and "Section 11. Source and Amount of Funds" of the Offer to Purchase
is incorporated herein by reference.
Item 6. Persons Retained, Employed or to be Compensated.
The information set forth in "Section 16. Fees and Expenses" of the Offer to
Purchase is incorporated herein by reference.
Item 7. Financial Information.
(a) - (b) The information set forth in Section 10 of the Offer to Purchase, the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998 and the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1999 is incorporated herein by reference.
Item 8. Additional Information.
(a) The information set forth in "Section 8. Interests of Directors and
Executive Officers; Transactions and Arrangements Concerning the Shares" of
the Offer to Purchase is incorporated herein by reference.
(b) The information set forth in "Section 13. Certain Legal Matters; Regulatory
Approvals" of the Offer to
1
<PAGE>
Purchase is incorporated herein by reference.
(c) The information set forth in "Section 12. Effects of the Offer on the
Market for Shares; Registration under the Exchange Act" of the Offer to
Purchase is incorporated herein by reference.
(d) Not Applicable.
(e) The information set forth in the Offer to Purchase and related Letter of
Transmittal is incorporated in its entirety herein by reference.
Item 9. Material to be Filed as Exhibits.
(a) (1) Offer to Purchase, dated October 1, 1999.
(2) Letter of Transmittal.
(3) Notice of Guaranteed Delivery.
(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(6) Letter to Stockholders of the Company, dated October 1, 1999, from
Daniel M. Gottlieb, Chief Executive Officer and Co-Chairman of the
Board of Directors of the Company, and Steven D. Lebowitz, President
and Co-Chairman of the Board of Directors of the Company.
(7) Press Release dated September 27, 1999 of the Company.
(8) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(b) (1) GMAC Commercial Mortgage Corporation Mortgage Loan Commitment, dated
August 30, 1999.
(2) Credit Agreement between G&L Realty Partnership, L.P. and First
Professional Bank, N.A. for a $1,500,000 Credit Line.
(c) Not Applicable.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this Statement is true, complete and correct.
G&L REALTY CORP.
By: /s/ Daniel M. Gottlieb By: /s/ Steven D. Lebowitz
- ------------------------------------------ --------------------------------
Daniel M. Gottlieb Steven D. Lebowitz
Chief Executive Officer and President and Co-Chairman of the
Co-Chairman of the Board of Directors Board of Directors
Dated: October 1, 1999
2
<PAGE>
EXHIBIT 99.(a)(1)
G&L Realty Corp.
OFFER TO PURCHASE FOR CASH
UP TO 1,000,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE OF $10.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 11:59 P.M.,
NEW YORK CITY TIME, ON FRIDAY, OCTOBER 29, 1999, UNLESS THE OFFER IS EXTENDED.
G&L Realty Corp., a Maryland corporation (the "Company"), hereby invites its
stockholders to tender shares of its common stock, par value $0.01 per share
(the "Shares"), to the Company upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which together constitute the "Offer"). The Company will pay, a price of
$10.50 per Share in cash (the "Purchase Price") for Shares validly tendered
pursuant to the Offer. The Company will buy 1,000,000 Shares (or such lesser
number of Shares as are validly tendered) pursuant to the Offer. The Company
reserves the right, in its sole discretion, to purchase more than 1,000,000
Shares pursuant to the Offer.
The Board of Directors has determined to change the Company's dividend
policy with respect to the Shares. The Board has declared a common stock
dividend of $0.125 for the third quarter of 1999 (as compared to $0.39 in the
third quarter of 1998), intends to declare a dividend of $0.125 for the fourth
quarter of 1999 (compared to $0.39 in the fourth quarter of 1998) and
currently anticipates that the quarterly dividends for the year 2000 will also
be $0.125. However, the Company expects to realize gains from the sale of
assets during 2000 which it may be unable to offset against accumulated
deferred tax benefits, in which case the total dividends in 2000 could be
significantly greater. See Section 9.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO TENDER SHARES AND,
IF SO, HOW MANY SHARES TO TENDER.
THE COMPANY HAS BEEN ADVISED THAT TWO OF ITS EXECUTIVE OFFICERS INTEND TO
TENDER UP TO AN AGGREGATE OF 65,606 SHARES PURSUANT TO THE OFFER.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery
may be directed to Michael Gordon, Investor Relations, at the address and
telephone number set forth on the back cover of this Offer to Purchase.
October 1, 1999
<PAGE>
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal or a
facsimile copy thereof in accordance with the instructions in the Letter of
Transmittal, mail or deliver it and any other required documents to Chase
Mellon Shareholder Services (the "Depositary"), and either mail or deliver the
stock certificates for such Shares to the Depositary or follow the procedure
for book-entry delivery set forth in Section 3, or (2) request a broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction on the stockholder's behalf. A stockholder having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact that broker, dealer, commercial bank, trust company
or other nominee if such stockholder desires to tender such Shares.
Stockholders who desire to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply with the procedure
for book-entry transfer by the expiration of the Offer must tender such Shares
by following the procedures for guaranteed delivery set forth in Section 3.
STOCKHOLDERS MUST PROPERLY COMPLETE THE LETTER OF TRANSMITTAL, INCLUDING THE
SECTION OF THE LETTER OF TRANSMITTAL RELATING TO THE NUMBER OF SHARES WHICH
THEY ARE TENDERING, IN ORDER TO EFFECT A VALID TENDER OF THEIR SHARES.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER, OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATIONS, INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
ii
<PAGE>
SUMMARY
This general summary is provided for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text
and more specific details of this Offer to Purchase.
1,000,000 Shares (or such lesser number of
Number of Shares to be Shares as are validly tendered).
Purchased....................
Purchase Price............... The Company will pay a cash price of $10.50 per
Share for Shares validly tendered.
How to Tender Shares......... See Section 3. Call Michael Gordon, Investor
Relations, at the telephone number set forth on
the back cover of this Offer to Purchase or
consult your broker for assistance.
Brokerage Commissions........ None.
Stock Transfer Tax........... None, if payment is made to the registered
holder.
Expiration and Proration Friday, October 29, 1999, at 11:59 p.m., New
Dates........................ York City time, unless extended by the Company.
Payment Date................. As soon as practicable after the Expiration
Date (as defined in Section 1).
Odd Lots..................... There will be no proration of Shares tendered
by any stockholder who (1) beneficially owns
less than 100 Shares in the aggregate as of
September 30, 1999, (2) continues to
beneficially own less than 100 Shares in the
aggregate on the Expiration Date, (3) tenders
all of such Shares at the Purchase Price prior
to the Expiration Date and (4) checks the "Odd
Lots" box in the Letter of Transmittal.
Withdrawal Rights............ Tendered Shares may be withdrawn at any time
until 11:59 p.m., New York City time, on
Friday, October 29, 1999, unless the Offer is
extended by the Company, and after 11:59 p.m.,
New York City time, on Tuesday, November 30,
1999, if not purchased pursuant to the Offer by
such time. See Section 4.
Position of the Company and
its Board of Directors;
Tender by Certain Executive
Officers.....................
Neither the Company nor its Board of Directors
makes any recommendation to any stockholder as
to whether to tender or refrain from tendering
Shares. The Company has been advised that two
of its executive officers intend to tender up
to an aggregate of 65,606 Shares pursuant to
the Offer.
Background and Purpose of
the Offer....................
The purpose of the Offer is to provide
liquidity for those stockholders whose
investment objectives may be inconsistent with
the Company's new dividend policy. The Board of
Directors has decided to reduce the common
stock dividend to $0.125 for the third quarter
of 1999 (as compared to $0.39 in the third
quarter of 1998), intends to declare a dividend
of $0.125 for the fourth quarter of 1999 (as
compared to $0.39 in the fourth quarter of
1998) and currently anticipates that the
quarterly dividends for the year 2000 will also
be $0.125. However, the Company expects to
realize gains from the sale of assets during
2000 which it may be unable to offset against
accumulated deferred tax benefits, in which
case the total dividends for 2000 could be
significantly higher. Other unanticipated
events could also affect the level of future
dividends. In addition, the Board of Directors
believes that the Shares are currently
undervalued and thus, the purchase of Shares is
an attractive use of the Company's financial
resources. See Section 9.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
------- -----
<C> <S> <C>
Summary................................................................ (iii)
Introduction........................................................... 1
1. Number of Shares; Proration....................................... 2
2. Tenders by Holders of Fewer than 100 Shares....................... 3
3. Procedure for Tendering Shares.................................... 3
4. Withdrawal Rights................................................. 6
5. Purchase of Shares and Payment of Purchase Price.................. 6
6. Certain Conditions of the Offer................................... 7
7. Price Range of Shares; Dividends.................................. 9
8. Interest of Directors and Executive Officers; Transactions and
Arrangements Concerning
the Shares........................................................ 9
9. Background and Purpose of the Offer............................... 11
10. Certain Information About the Company............................. 13
11. Source and Amount of Funds........................................ 18
Effects of the Offer on the Market for Shares; Registration Under
12. the Exchange Act.................................................. 19
13. Certain Legal Matters; Regulatory Approvals....................... 20
14. Certain Federal Income Tax Consequences........................... 20
15. Extension of the Offer; Termination; Amendments................... 22
16. Fees and Expenses................................................. 23
17. Miscellaneous..................................................... 23
</TABLE>
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF
G&L REALTY CORP.:
Introduction
The Company hereby invites its stockholders to tender Shares to the Company,
upon the terms and subject to the conditions of the Offer. The Company will
pay $10.50 per share in cash (the "Purchase Price") for Shares validly
tendered pursuant to the Offer. The Company will buy 1,000,000 Shares (or such
lesser number of Shares as are validly tendered) pursuant to the Offer. The
Company reserves the right, in its sole discretion, to purchase more than
1,000,000 Shares pursuant to the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
If more than 1,000,000 Shares (or such greater number of Shares as the
Company may elect to purchase) are validly tendered before the Expiration Date
(as defined in Section 1), the Company will accept Shares for purchase first
from all Odd Lot Owners (as defined in Section 2) who validly tender all of
their Shares and then on a pro rata basis, if necessary, from all other
stockholders who validly tender Shares. See Sections 1 and 2. The Company will
return all Shares not purchased under the Offer because of proration.
Tendering stockholders will not be obligated to pay solicitation fees or,
subject to Instruction 7 of the Letter of Transmittal, stock transfer taxes on
the Company's purchase of Shares pursuant to the Offer. The Company will pay
certain fees and expenses of Chase Mellon Shareholder Services (the
"Depositary") in connection with the Offer. See Section 16.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF
SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS BEEN ADVISED THAT TWO OF ITS
EXECUTIVE OFFICERS INTEND TO TENDER UP TO AN AGGREGATE OF 65,606 SHARES
PURSUANT TO THE OFFER.
The Company is making the offer to promote its long-term objectives of
providing a fair financial return to its stockholders as well as providing
those stockholders who desire to sell their Shares an opportunity to do so at
a fair price. The Company believes that its purchase of Shares represents an
attractive long-term investment that will benefit the Company and its
remaining stockholders. See Section 9.
After this Share repurchase is completed, the Company believes that it will
have sufficient liquidity to operate its existing business.
THE OFFER PROVIDES STOCKHOLDERS WITH THE OPPORTUNITY TO SELL ALL OR A
PORTION OF THEIR SHARES AT THE PURCHASE PRICE OF $10.50 PER SHARE.
This Offer to Purchase contains forward-looking statements within the
meaning of the federal securities laws. A number of factors could cause the
Company's actual operating performance or financial results to differ
materially from those anticipated. These include changes in the general
economy, the supply of and demand for health care related real estate in the
Company's markets, increases in construction costs, construction delays, the
cost and availability of financing, the receipt of any government approvals
required for development, potential environmental liabilities, and other
factors affecting the condition of properties being acquired, and other risks
described from time to time in reports or registration statements filed by the
Company with the Securities and Exchange Commission.
As of the close of trading on September 30, 1999, there were 3,846,700
Shares outstanding and 127,167 Shares issuable upon exercise of stock options
which were exercisable within 60 days thereof under the
1
<PAGE>
Company's stock option plans. The 1,000,000 Shares that the Company is
offering to purchase represent approximately 26.0% of the Shares outstanding
as of September 30, 1999 and approximately 25.2% of the sum of the Shares then
outstanding plus all Shares issuable upon exercise of stock options which were
exercisable within 60 days thereof. The Shares are traded on New York Stock
Exchange ("NYSE") under the symbol "GLR". On September 29, 1999, the second to
last full trading day prior to the commencement of the Offer, the closing per
Share sales price as reported on NYSE was $9.13. THE COMPANY URGES
STOCKHOLDERS TO OBTAIN CURRENT QUOTATIONS OF THE MARKET PRICE OF THE SHARES.
1. Number Of Shares; Proration.
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment and purchase 1,000,000 Shares or such lesser number of
Shares as are validly tendered on or prior to the Expiration Date at a price
of $10.50 per Share. THE TERM "EXPIRATION DATE" MEANS 11:59 P.M., NEW YORK
CITY TIME, ON FRIDAY, OCTOBER 29, 1999, UNLESS THE COMPANY, IN ITS SOLE
DISCRETION, EXTENDS THE PERIOD OF TIME DURING WHICH THE OFFER IS OPEN, IN
WHICH EVENT THE TERM "EXPIRATION DATE" SHALL REFER TO THE LATEST TIME AND DATE
AT WHICH THE OFFER, AS SO EXTENDED BY THE COMPANY, EXPIRES. See Section 15 for
a description of the Company's right to extend the time during which the Offer
is open and to delay, terminate or amend the Offer. See also Section 6.
Subject to Section 2, if the Offer is oversubscribed, Shares tendered at the
Purchase Price prior to the Expiration Date will be subject to proration. The
proration period also expires on the Expiration Date.
The Company will, upon the terms and subject to the conditions of the Offer,
pay $10.50 per Share (the "Purchase Price") for Shares validly tendered
pursuant to the Offer. The Company will buy 1,000,000 Shares (or such lesser
number as are validly tendered at a price of $10.50 per Share) pursuant to the
Offer. As described in Section 15, the Company reserves the right, in its sole
discretion, to purchase more than 1,000,000 Shares pursuant to the Offer.
If (i) the Company increases or decreases the price to be paid for Shares,
increases by 2% of the outstanding Shares the number of Shares being sought,
or decreases the number of Shares being sought and (ii) the Offer is scheduled
to expire less than ten business days from and including the date that notice
of such increase or decrease is first published, sent or given in the manner
specified in Section 15, then the Offer will be extended for ten business days
from and including the date of such notice. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 11:59 p.m., New York
City time.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder desiring to tender Shares must tender shares only at the Purchase
Price. All Shares not purchased pursuant to the Offer, including Shares not
purchased because of proration, will be returned to the tendering stockholders
at the Company's expense as promptly as practicable following the Expiration
Date.
Upon the terms and subject to the conditions of the Offer, if the number of
Shares validly tendered prior to the Expiration Date is less than or equal to
1,000,000 Shares (or such greater number of Shares as the Company may elect to
purchase pursuant to the Offer), the Company will purchase at the Purchase
Price all Shares so tendered.
2
<PAGE>
Upon the terms and subject to the conditions of the Offer, if prior to the
Expiration Date more than 1,000,000 Shares (or such greater number of Shares
as the Company elects to purchase) are validly tendered at the Purchase Price,
the Company will accept Shares for purchase in the following order of
priority:
. first, all Shares validly tendered at the Purchase Price prior to
the Expiration Date and not withdrawn by any Odd Lot Owner (as
defined in Section 2) who:
(1) tenders all Shares beneficially owned by such Odd Lot Owner at
the Purchase Price (partial tenders will not qualify for this
preference); and
(2) completes the section captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
. then, after the purchase of all foregoing Shares, all other Shares
validly tendered at the Purchase Price before the Expiration Date
and not withdrawn on a pro rata basis, if necessary (with
adjustments to avoid purchases of fractional shares).
If the proration of tendered Shares is required, the Company will determine
the final proration factor as promptly as practicable after the Expiration
Date. Proration for each stockholder tendering Shares other than Odd Lot
Owners will be based on the ratio of the number of Shares tendered by such
stockholder to the total number of Shares tendered by all stockholders other
than Odd Lot Owners. Although the Company does not expect to be able to
announce the final results of such proration until approximately seven NYSE
trading days after the Expiration Date, the Company will announce preliminary
results of proration by press release as promptly as practicable after the
Expiration Date. Stockholders may obtain such preliminary information from
Michael Gordon, Investor Relations, at the telephone number set forth on the
back cover of this Offer to Purchase and may be able to obtain such
information from their brokers or financial advisors.
As described in Section 14, the number of Shares that the Company purchases
from a stockholder, and the order in which they are purchased, may affect the
federal income tax consequences of such purchase to the stockholder and
therefore may be relevant to a stockholder's decision whether to tender
Shares. The Letter of Transmittal affords each tendering stockholder the
opportunity to designate the order of priority in which Shares tendered are to
be purchased in the event of proration.
2. Tenders By Holders Of Fewer Than 100 Shares.
The Company, upon the terms and subject to the conditions of the Offer, will
accept for purchase, without proration, all Shares validly tendered on or
prior to the Expiration Date at the Purchase Price by or on behalf of
stockholders who beneficially owned as of the close of business on September
30, 1999, and continue to beneficially own as of the Expiration Date, an
aggregate of fewer than 100 Shares ("Odd Lot Owners"). To avoid proration,
however, an Odd Lot Owner must validly tender all Shares that such Odd Lot
Owner beneficially owns; partial tenders will not qualify for this preference.
This preference is not available to holders of 100 or more Shares, even if
such holders have separate stock certificates for fewer than 100 Shares. Any
Odd Lot Owner wishing to tender, free of proration, all Shares beneficially
owned by such Odd Lot Owner must complete the section captioned "Odd Lots" in
the Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery. BY ACCEPTING THE OFFER, A STOCKHOLDER OWNING FEWER THAN 100 SHARES
WOULD AVOID ANY APPLICABLE ODD LOT DISCOUNTS PAYABLE IN A SALE OF THE
STOCKHOLDER'S SHARES.
3. Procedure for Tendering Shares.
Proper Tender Of Shares. For Shares to be validly tendered pursuant to the
Offer:
. the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature
guarantees, and any other documents required by the Letter of
Transmittal, must be received on or before the Expiration Date by the
Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase; or
. the tendering stockholder must comply with the guaranteed delivery
procedure set forth below.
3
<PAGE>
AS SPECIFIED IN INSTRUCTIONS 3 AND 4 OF THE LETTER OF TRANSMITTAL, EACH
STOCKHOLDER DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY
INDICATE IN THE SECTION CAPTIONED "DESCRIPTION OF SHARES TENDERED" ON THE
LETTER OF TRANSMITTAL THE NUMBER OF SHARES BEING TENDERED; PROVIDED, HOWEVER,
THAT AN ODD LOT OWNER MAY CHECK THE BOX IN THE SECTION ENTITLED "ODD LOTS"
INDICATING A TENDER OF ALL OF SUCH STOCKHOLDER'S SHARES AT THE PURCHASE PRICE.
Odd Lot Owners who tender all of their Shares must complete the section
entitled "Odd Lots" in the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery in order to qualify for the preferential
treatment available to Odd Lot Owners as set forth in Section 1.
Signature Guarantees And Method Of Delivery. No signature guarantee is
required on the Letter of Transmittal if (i) the Letter of Transmittal is
signed by the registered holder of the Shares exactly as the name of the
registered holder (which term, for purposes of this Section 3, includes any
participant in The Depository Trust Company (the "Book-Entry Transfer
Facility") whose name appears on a security position listing as the holder of
the Shares) appears on the certificate tendered therewith, and payment and
delivery are to be made directly to such registered holder, or (ii) Shares are
tendered for the account of a member firm of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or by a
commercial bank or trust company having an office, branch or agency in the
United States which is a member of one of the Stock Transfer Association's
approved medallion programs (such as the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchange Medallion Program) (each such entity, an "Eligible Institution"). In
all other cases, all signatures on the Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the Letter of
Transmittal.
If a certificate representing Shares is registered in the name of a person
other than the signer of a Letter of Transmittal, or if payment is to be made,
or Shares not purchased or tendered are to be issued, to a person other than
the registered holder, the certificate must be endorsed or accompanied by an
appropriate stock power, in either case signed exactly as the name of the
registered holder appears on the certificate, with the signature on the
certificate or stock power guaranteed by an Eligible Institution. In all
cases, payment for Shares tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of certificates
for such Shares (or a timely confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility), a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees and any other documents
required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING STOCK CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
Federal Income Tax Backup Withholding. To prevent federal income tax backup
withholding equal to 31% of the gross payments made pursuant to the Offer,
each stockholder who does not otherwise establish an exemption from such
withholding must notify the Depositary of such stockholder's correct taxpayer
identification number (or certify that such taxpayer is awaiting a taxpayer
identification number) and provide certain other information by completing a
Substitute Form W-9 (included in the Letter of Transmittal). Foreign
stockholders may be required to submit Form W-8 (or a substitute form),
certifying non-United States status, in order to avoid backup withholding. See
Instructions 12 and 13 of the Letter of Transmittal.
EACH STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S TAX ADVISOR AS TO WHETHER
SUCH STOCKHOLDER IS SUBJECT TO OR EXEMPT FROM FEDERAL INCOME TAX WITHHOLDING.
For a discussion of certain other federal income tax consequences to
tendering stockholders, see Section 14.
4
<PAGE>
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
facility to transfer such Shares into the Depositary's account in accordance
with such facility's procedure for such transfer. Even though delivery of
Shares may be effected through book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and other required documents must, in any case, be
transmitted to and received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration
Date, or the guaranteed delivery procedure set forth below must be followed.
DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates are not immediately available
(or the procedures for book-entry transfer cannot be completed on a timely
basis) or time will not permit all required documents to reach the Depositary
by the Expiration Date, such Shares may nevertheless be tendered, provided
that all of the following conditions are satisfied:
. such tender is made by or through an Eligible Institution;
. the Depositary receives (by hand, mail, facsimile or telegram), on or
prior to the Expiration Date, a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form the Company has
provided with this Offer to Purchase, which includes a guarantee by an
Eligible Institution in the form set forth in such Notice of Guaranteed
Delivery; and
. the certificates for all tendered Shares in proper form for transfer (or
confirmation of book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
and any other documents required by the Letter of Transmittal, are
received by the Depositary within three NYSE trading days after the date
the Depositary receives such Notice of Guaranteed Delivery.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor, the form of documents, the
terms of the Offer and the validity, form, eligibility (including the time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any
or all tenders it determines not to be in proper form or the acceptance of or
payment for which may in the opinion of the Company's counsel be unlawful. The
Company also reserves the absolute right to waive any of the conditions of the
Offer or any defect or irregularity in the tender of any particular Shares. No
tender of Shares will be deemed to be validly made until all defects and
irregularities have been cured or waived. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as
the Company determines. None of the Company, the Depositary or any other
person is or will be obligated to give notice of any defects or irregularities
in tenders, and none of them will incur any liability for failure to give such
notice.
Tender Constitutes an Agreement. The Company's acceptance for payment of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the tendering stockholder and the Company upon the terms and subject
to the conditions of the Offer.
Stockholder's Acceptance of Terms and Conditions of Offer; Representation
and Warranty of Stockholder. It is a violation of Rule 14e-4 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a
person (directly or indirectly) to tender Shares for his own account unless,
at the time of tender and at the end of the proration period (including any
extension thereof), the person so tendering (i) has a net long position equal
to or greater than the amount of Shares tendered in (x) Shares or (y) other
securities
5
<PAGE>
immediately convertible into, exercisable for, or exchangeable for the amount
of Shares tendered and will acquire such Shares for tender by conversion,
exercise or exchange of such other securities and (ii) will cause such Shares
to be delivered in accordance with the terms of the Offer. Rule 14e-4 provides
a similar restriction applicable to the tender or guarantee of a tender on
behalf of another person. The tender of Shares pursuant to any one of the
procedures described above will constitute the tendering stockholder's
acceptance of the terms and conditions of the Offer as well as the tendering
stockholder's representation and warranty that (i) such stockholder has a net
long position in the Shares being tendered within the meaning of Rule 14e-4
and (ii) the tender of such Shares complies with Rule 14e-4.
4. Withdrawal Rights.
Except as otherwise provided in this Section 4, the tender of Shares
pursuant to the Offer is irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Company, may also be withdrawn after
11:59 p.m.. New York City time, on Tuesday, November 30, 1999.
For a withdrawal to be effective, the Depositary must timely receive (at one
of its addresses set forth on the back cover of this Offer to Purchase) a
written notice of withdrawal. Such notice of withdrawal must specify the name
of the person who tendered the Shares to be withdrawn, the number of Shares to
be withdrawn and the name of the registered holder, if different from that of
the person who tendered such Shares. If the certificates have been delivered
or otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering stockholder must also submit the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible
Institution). All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all
parties. None of the Company, the Depositary or any other person is or will be
obligated to give any notice of any defects or irregularities in any notice of
withdrawal, and none of them will incur any liability for failure to give such
notice. Any Shares properly withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. Withdrawn Shares may, however, be
retendered by the Expiration Date by again following any of the procedures
described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or is
unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and
the Shares may not be withdrawn except to the extent tendering stockholders
are entitled to withdrawal rights as described in this Section 4.
5. Purchase of Shares and Payment of Purchase Price.
Upon the terms and subject to the conditions of the Offer, the Company will
pay the Purchase Price for validly tendered Shares, and will accept for
payment (and thereby purchase) as soon as practicable after the Expiration
Date Shares validly tendered. For purposes of the Offer, the Company will be
deemed to have accepted for payment (and therefore purchased), subject to
proration, Shares which are tendered at the Purchase Price and not withdrawn
when, as and if it gives oral or written notice to the Depositary of its
acceptance of such Shares for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (including
proration), the Company will purchase and pay the Purchase Price for 1,000,000
Shares (subject to increase or decrease as provided in Section 1 and Section
15) or such lesser number of Shares as are validly tendered as promptly as
practicable after the Expiration Date. No alternative, conditional or
contingent tenders will be accepted, and no fractional Shares will be
purchased.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which
will act as agent for tendering stockholders solely for the purpose of
receiving payment from the Company and transmitting payment to the tendering
stockholders.
6
<PAGE>
In the event of proration, the Company will determine the proration factor
and pay for those tendered Shares accepted for payment as soon as practicable
after the Expiration Date; however, the Company does not expect to be able to
announce the final results of any such proration until approximately seven
NYSE trading days after the Expiration Date. Certificates for all Shares not
purchased, including Shares not purchased due to proration, will be returned
(or, in the case of Shares tendered by book-entry transfer, such Shares will
be credited to the account maintained with the Book-Entry Transfer Facility by
the participant therein who so delivered such Shares) as soon as practicable
after the Expiration Date or termination of the Offer without expense to the
tendering stockholder. Under no circumstances will the Company pay interest on
the Purchase Price. In addition, if certain events occur, the Company may not
be obligated to purchase Shares pursuant to the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer of Shares purchased pursuant to the Offer; provided, however, that if
payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) if unpurchased Shares are to be registered in the name
of, any person other than the registered holder, or if tendered certificates
are registered in the name of any person other than the person signing the
Letter of Transmittal, the amount of all stock transfer taxes, if any (whether
imposed on the registered holder or such other person), payable on account of
the transfer to such person will be deducted from the Purchase Price unless
evidence satisfactory to the Company of the payment of such taxes or exemption
therefrom is submitted. See Instruction 7 of the Letter of Transmittal.
THE COMPANY MAY BE REQUIRED TO WITHHOLD AND REMIT TO THE INTERNAL REVENUE
SERVICE (THE "IRS") 31% OF THE GROSS PROCEEDS PAID TO ANY TENDERING
STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN THE SUBSTITUTE
FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE SECTION 3.
6. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment
of, the purchase of and the payment for any Shares tendered, if at any time on
or after October 1, 1999, and at or before the time of purchase of any such
Shares, any of the following events shall have occurred (or shall have been
determined by the Company to have occurred) which, in the Company's sole
judgment in any such case and regardless of the circumstances (including any
action or inaction by the Company), makes it inadvisable to proceed with the
Offer or with such purchase or payment:
. there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person,
domestic or foreign, or before any court or governmental, regulatory or
administrative authority, agency or tribunal, domestic or foreign,
which; (1) challenges, seeks to make illegal, delays or otherwise,
directly or indirectly, restrains or prohibits the making of the Offer,
the acquisition of Shares pursuant to the Offer or otherwise relates in
any manner to or affects the Offer or (2) in the Company's sole
judgment, could materially affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any
way the contemplated future conduct of the business of the Company or
any of its subsidiaries or materially impair the Offer's contemplated
benefits to the Company; or
. there shall have been any action threatened, instituted, pending or
taken, or approval withheld, or any statute, rule, regulation, judgment,
order or injunction threatened, proposed, sought, promulgated, enacted,
entered, amended, enforced or deemed to be applicable to the Offer or
the Company or any of its subsidiaries by any court or any government or
governmental, regulatory or administrative authority, agency or
tribunal, domestic or foreign, which, in the Company's sole judgment,
would or might directly or indirectly: (1) challenge, seek to make
illegal, delay or otherwise, directly or indirectly, restrain or
prohibit the making of the Offer, the acquisition of Shares pursuant to
the Offer or otherwise relate in any manner to or affect the Offer or
(2) materially affect the business, condition (financial or other),
income, operations or prospects of the Company and its subsidiaries,
taken as a whole, or
7
<PAGE>
otherwise materially impair in any way the contemplated future conduct
of the business of the Company or any of its subsidiaries or materially
impair the Offer's contemplated benefits to the Company; or
. there shall have occurred: (1) the declaration of any banking moratorium
or suspension of payments in respect of banks in the United States, (2)
any general suspension of trading in, or limitation on prices for,
securities on any United States national securities exchange or in the
over-the-counter market, (3) the commencement of a war, armed
hostilities or any other national or international crisis directly or
indirectly involving the United States, (4) any limitation (whether or
not mandatory) by any governmental, regulatory or administrative agency
or authority on, or any event which, in the Company's sole judgment,
might affect, the extension of credit by banks or other lending
institutions in the United States, (5) any significant decrease in the
market price of the Shares or in the general level of market prices of
equity securities in the United States or abroad, (6) any change in the
general political, market, economic or financial conditions in the
United States or abroad that could have a material adverse effect on the
Company's business, operations or prospects or the trading in the Shares
or that, in the sole judgment of the Company, makes it inadvisable to
proceed with the Offer or (7) in the case of any of the foregoing
existing at the time of the commencement of the Offer, in the Company's
sole judgment, a material acceleration or worsening thereof; or
. any change shall have occurred, be pending or be threatened in the
business, condition (financial or other), income, operations, Share
ownership or prospects of the Company and its subsidiaries taken as a
whole, which, in the Company's sole judgment, is or may be material to
the Company, or any other event shall have occurred which, in the
Company's sole judgment, may impair the Offer's contemplated benefits to
the Company; or
. a tender or exchange offer for any or all of the Shares (other than the
Offer), or any merger, business combination or other similar transaction
with or involving the Company or any subsidiary, shall have been
proposed, announced or made by any person; or
. (1) any entity, "group" (as that term is used in Section 13(d)(3) of the
Exchange Act) or person shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Shares (other
than any such person, entity or group who has filed a Schedule 13D or
Schedule 13G with the Securities and Exchange Commission (the
"Commission") before September 30, 1999), (2) any such entity, group or
person who has filed a Schedule 13D or Schedule 13G with the Commission
before September 30, 1999 shall have acquired or proposed to acquire
beneficial ownership of an additional 2% or more of the outstanding
Shares or (3) any person, entity or group shall have made a public
announcement reflecting an intent to acquire the Company or any of its
subsidiaries or any of their respective assets or securities; or
. the consummation of the Offer would jeopardize the real estate
investment trust ("REIT") status of the Company under the Internal
Revenue Code of 1986, as amended. More specifically, the consumation of
the Offer would result in (i) beneficial ownership of the Company being
held by less than 100 persons, (ii) more than 50% in value of the
outstanding stock of the Company being held, directly or indirectly, by
or for five or fewer individuals, or (iii) the disqualification of any
rental income of the Company from treatment as "rents from real
property" for tax purposes.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition (including any action or inaction by the Company) or may be
waived by the Company in whole or in part. The Company's failure at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right, and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by the Company
concerning the events described in this Section 6 shall be final and binding
on all parties.
8
<PAGE>
7. Price Range of Shares; Dividends.
The Shares are traded on NYSE under the symbol "GLR." The following table
sets forth for the calendar periods indicated the high and low per Share sales
prices on NYSE as reported in published financial sources, as well as the
dividend per Share declared during the period.
<TABLE>
<CAPTION>
Cash
Dividend
Per
High Low Share
------ ------ --------
<S> <C> <C> <C>
1997
1st Quarter............................................. $19.00 $16.00 $0.36
2nd Quarter............................................. 17.88 15.38 0.36
3rd Quarter............................................. 19.00 15.75 0.36
4th Quarter............................................. 21.25 17.38 0.39
1998
1st Quarter............................................. $21.50 $16.88 $0.39
2nd Quarter............................................. 18.13 17.19 0.39
3rd Quarter............................................. 17.44 14.69 0.39
4th Quarter............................................. 15.94 12.88 0.39
1999
lst Quarter............................................. $15.19 $11.88 $0.39
2nd Quarter............................................. 12.94 10.06 0.39
3rd Quarter (through September 29, 1999)................ 12.13 9.13 0.125
</TABLE>
On September 29, 1999, the second to last trading day prior to the
commencement of the Offer, the closing per Share sales price as reported on
NYSE was $9.13. THE COMPANY URGES STOCKHOLDERS TO OBTAIN CURRENT QUOTATIONS OF
THE MARKET PRICE OF THE SHARES.
As discussed in Section 9, the Company intends to reduce the dividend paid
to holders of the Shares. The Company currently does not intend to reduce the
dividend paid to holders of any of its preferred stock.
8. Interest of Directors and Executive Officers; Transactions and Arrangements
Concerning the Shares.
As of October 1, 1999, the Company had issued and outstanding 3,846,700
Shares and had 127,167 Shares reserved for issuance upon exercise of stock
options exercisable within 60 days thereof. As of October 1, 1999, 625,272
operating partnership units (the "Units"), which are convertible into Shares
on a one-for-one basis, were outstanding. The 1,000,000 Shares that the
Company is offering to purchase represent approximately 26.0% of the Shares
outstanding as of October 1, 1999, approximately 25.2% of the sum of the
Shares then outstanding, plus all Shares issuable upon exercise of stock
options exercisable within 60 days thereof, and approximately 21.7% of the sum
of the Shares then outstanding, plus all Shares issuable upon exercise of
stock options exercisable within 60 days thereof, plus all Shares issuable
upon conversion of all of the Units.
As of October 1, 1999, the Company's directors and executive officers as a
group beneficially owned Shares, options convertible into Shares within 60
days and Units convertible into Shares representing 29.7% of the common equity
of the Company. Following consummation of the Offer as described herein, it is
anticipated that these individuals, as a group, will beneficially own Shares,
options convertible into Shares within 60 days and Units convertible into
Shares representing 36.1% of the common equity. As of October 1, 1999, the
Company's directors and executive officers as a group beneficially owned
(including Shares issuable upon the exercise of options exercisable within 60
days) an aggregate of 800,793 Shares (representing approximately 20.2% of the
outstanding Shares, including 127,167 Shares issuable upon the exercise of
options exercisable within 60 days), and an aggregate of 564,658 Units
(approximately 12.4% of the outstanding Shares, including 127,167 Shares
issuable upon the exercise of options exercisable within 60 days and Shares
issuable upon conversion of the 564,658 Units held by the directors and
executive officers). If the Company purchases 1,000,000 Shares (or
approximately 26.0% of the Shares outstanding at October 1, 1999) pursuant to
the Offer, and the two executive officers who intend to tender up to an
aggregate of 65,606 Shares tender all of such Shares pursuant to the Offer,
then after the purchase of Shares pursuant to the Offer, the Company's
executive officers and directors as a group
9
<PAGE>
would beneficially own approximately 24.7% of the outstanding Shares,
including Shares issuable upon the exercise of options exercisable within 60
days, and approximately 36.1% of the outstanding Shares, including Shares
issuable upon the exercise of option exercisable within 60 days and Shares
issuable upon conversion of all of the Units held by the directors and
executive officers.
Since 1995, the Company has been repurchasing Shares in open-market
transactions pursuant to a stock repurchase program authorized by the Board of
Directors. As of September 30, 1999, the Company had purchased 473,300 Shares
in open-market transactions effected through brokers and dealers in accordance
with Rule l0b-18 under the Exchange Act. The amounts, dates and prices of all
repurchases under this program for the 40 business days prior to commencement
of this Offer are set forth on the attached Exhibit A. Based upon the
Company's records and upon information provided to the Company by its
directors, executive officers and affiliates, neither the Company nor any of
its subsidiaries nor, to the best of the Company's knowledge, any of the
directors or executive officers of the Company or its subsidiaries, nor any
associates or affiliates of any of the foregoing, has effected any other
transactions in the Shares since August 5, 1999.
Executive officers and directors of the Company may participate in the Offer
on the same basis as the Company's other stockholders. THE COMPANY HAS BEEN
ADVISED THAT TWO OF ITS EXECUTIVE OFFICERS INTEND TO TENDER UP TO AN AGGREGATE
OF 65,606 SHARES PURSUANT TO THE OFFER.
Daniel M. Gottlieb, the Chief Executive Officer and Co-Chairman of the Board
of Directors of the Company, beneficially owns 411,332 Shares (including
33,500 Shares issuable upon exercise of outstanding options exercisable within
60 days) (which represents approximately 10.4% of the outstanding Shares as of
October 1, 1999, including Shares issuable upon the exercise of the options
exercisable within 60 days), beneficially owns 300,771 Units (which represents
approximately 6.6% of the outstanding Shares as of October 1, 1999, including
Shares issuable upon the exercise of the options exercisable within 60 days
and Shares issuable upon conversion of such Units into Shares), and has
indicated an intent to tender 35,605 Shares. The 35,605 Shares which Mr.
Gottlieb intends to tender represent 5% of the total Shares and Units owned by
Mr. Gottlieb. If all such Shares are tendered, and assuming 1,000,000 Shares
are purchased pursuant to the Offer (without consideration of proration), Mr.
Gottlieb would beneficially own 375,727 Shares and 300,771 Units after the
Offer (which would represent approximately 13.2% of the then outstanding
Shares, and approximately 21.5% of the then outstanding Shares, including
Shares issuable upon conversion of all of Mr. Gottlieb's Units).
Steven D. Lebowitz, President and Co-Chairman of the Board of Directors for
the Company, beneficially owns 336,128 Shares (including 33,500 Shares
issuable upon exercise of outstanding options exercisable within 60 days)
(which represents approximately 8.5% of the outstanding Shares as of October
1, 1999, including Shares issuable upon the exercise of the options
exercisable within 60 days), beneficially owns 263,887 Units (which represents
approximately 5.8% of the outstanding Shares as of October 1, 1999, including
Shares issuable upon the exercise of the options exercisable within 60 days
and Shares issuable upon conversion of such Units into Shares), and has
indicated an intent to tender 30,001 Shares. The 30,001 Shares which Mr.
Lebowitz intends to tender represent 5% of the total Shares and Units owned by
Mr. Lebowitz. If all such Shares are tendered, and assuming 1,000,000 Shares
are purchased pursuant to the Offer (without consideration of proration),
Mr. Lebowitz would beneficially own 306,127 Shares and 263,887 Units after the
Offer (which would represent approximately 10.8% of the then outstanding
Shares, and approximately 18.3% of the then outstanding Shares, including
Shares issuable upon conversion of all of Mr. Lebowitz's Units).
Messrs. Gottlieb and Lebowitz intend to tender the Shares discussed above in
order to pay down their respective debt and increase their personal liquidity.
The number of Shares which each executive officer has indicated an intention
to tender is based on the present intention of such individual, and such
individual reserves the right to tender all or any portion of the Shares
beneficially owned by such individual. Other than these individuals, the
Company has been advised that no other executive officers or directors intend
to tender Shares.
The Company's charter contains an ownership limit of 9.8% (in value or in
number of shares, whichever is more restrictive) of the outstanding shares of
the Company's equity stock, which includes the Company's
10
<PAGE>
common stock and preferred stock. At the August 31, 1999 Annual Meeting of
Stockholders, the stockholders approved an amendment to the Charter that would
give the Board of Directors the authority to waive the ownership limitation
for any person. The Board of Directors believes that the Offer will not
require the ownership limitation to be waived for any person.
On September 27, 1999, the Compensation Committee of the Board of Directors
of the Company approved incentive compensation for 1999 for Mr. Gottlieb and
Mr. Lebowitz which, if the Company meets certain business objectives, could
result in their receiving cash bonuses of up to $127,500 each (50% of base
salary) and options to acquire up to 150,000 shares each at an exercise price
equal to the fair market value of the common stock on the date of issuance.
Except for outstanding options to purchase Shares granted to certain
employees (including executive officers) of the Company, and except as
otherwise described herein, neither the Company nor, to the best of the
Company's knowledge, any of its affiliates, directors or executive officers,
or any of the executive officers or directors of its affiliates, is a party to
any contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer with respect to any securities
of the Company (including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
such securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies, consents or authorizations).
Except as disclosed in this Offer and the documents incorporated by
reference herein, the Company has no plans or proposals which relate to or
would result in (a) the acquisition by any person of additional securities of
the Company or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present Board of Directors or management
of the Company; (c) any material change in the present dividend rate or
policy, indebtedness or capitalization of the Company; (f) any other material
change in the Company's corporate structure or business; (g) any change in the
Company's Articles of Incorporation or Bylaws, or any actions which may impede
the acquisition of control of the Company by any person; (h) a class of equity
security of the Company being delisted from a national securities exchange or
ceasing to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (i) a class of equity securities
of the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act; or (j) the suspension of the Company's
obligation to file reports pursuant to Section 15(d) of the Exchange Act.
9. Background and Purpose of the Offer.
The Company believes that the Offer is consistent with the Company's long-
term goal of increasing stockholder value. The Company is making this Offer in
order to provide liquidity for those stockholders whose investment objectives
may be inconsistent with the Company's new dividend policy. In addition, the
Board of Directors believes that the Shares are currently undervalued and
thus, the purchase of Shares is an attractive use of the Company's financial
resources.
On September 27, 1999, following several months of study, the Board of
Directors determined to change the Company's dividend policy with respect to
the Shares. Historically, the Board of Directors has attempted to
maintain a relatively constant quarterly dividend. However, this has resulted
in a return of capital to stockholders because the Company's earnings have not
kept pace with such distributions. The Board of Directors believes that, going
forward, the Company and its stockholders would be better served by a policy
which generally reserves for the Company close to the maximum amount of its
cash flow that can be retained by it by distributing dividends close to the
amount necessary for the Company to maintain its status as a REIT for federal
income tax purposes. Accordingly, the Board of Directors has declared a common
stock dividend of $0.125 for the third quarter of 1999 (as compared to $0.39
in the third quarter of 1998), intends to declare a dividend of $0.125 for the
fourth quarter of 1999 (as compared to $0.39 in the fourth quarter of 1998)
and currently anticipates that the quarterly dividends for the year 2000 will
also be $0.125, or $0.50 annually. However, as discussed in Sections 10 and
11, the Company expects to realize gains from the sale of assets during 2000.
If the Company is unable to offset a portion of these gains against
accumulated deferred tax benefits, the annual dividend for 2000
11
<PAGE>
could be significantly greater than $0.50. In addition, certain events not
anticipated by the Company may cause the Company's earnings to increase or
decrease to a level that would require the Company to distribute a dividend
higher or lower than $0.50 annually. No change in the dividends to be paid on
the Company's preferred stock is currently anticipated.
This change in the Company's dividend policy is principally the result of a
determination by the Board of Directors to emphasize the development,
construction and turn-around aspects of the Company's real estate business and
to move away from the competitive market for mature health care properties.
The Board of Directors believes that most existing health care properties are
fully priced and that the best opportunities for a REIT with the Company's
management resources is to focus on the development of new health care
properties and the turn-around or repositioning of currently underperforming
health care properties. Currently, the Company has three development projects
in progress for a total capital commitment of approximately $20 million. These
three projects involve the development of Pacific Park, a 23,000 square foot
medical office building ("MOB") located in Aliso Viejo, California; Eagle Run,
a 78-unit assisted living facility in Omaha, Nebraska; and Yorba Linda, a 92-
bed assisted living facility in Yorba Linda, California. The Company is also
under contract to purchase a parcel of land in El Toro, California upon which
it intends to develop a 40,000 square foot MOB. Furthermore, the Company
recently completed construction on a 44,000 square foot MOB on the Henry Mayo
Newhall Hospital Campus, a 93-unit assisted living facility in Rancho
Penasquitos, California and a 33,000 square foot MOB in Aliso Viejo,
California.
The Board of Directors believes that these types of projects currently offer
good opportunities for capital appreciation and long term growth, and that its
management team has the expertise and experience to take advantage of such
opportunities. The Board of Directors also understands that these types of
projects entail a greater degree of risk than the acquisition of mature
properties, and require significant capital outlays in advance of the
realization of stabilized cash flow. Furthermore, the timing of the
recognition for tax purposes of the gain resulting from such capital
enhancement can be uncertain, resulting in irregular amounts of taxable income
from one year to the next.
The Board of Directors recognizes that this is a fundamental change in the
Company's dividend policy, and that this new dividend policy may not meet the
investment objectives of all of the Company's current stockholders. The Board
of Directors also appreciates that there may not be sufficient liquidity in
the market for the Company's Shares to permit an orderly transition to those
wishing to move out of the Shares and into investments offering a potentially
better yield. Accordingly, the Board of Directors has authorized the Company
to make this Offer.
This Offer also reflects the belief of the Board of Directors that the
Shares are significantly undervalued when compared to the net asset value of
the Company on a going concern basis, and that the current price of the Shares
does not adequately reflect the value of the Company's projects currently in
the development and construction stages. The Company also believes that the
values of most of its existing properties have appreciated significantly since
these assets were acquired by the Company. This belief is based in part on
independent third party appraisals of a majority of the Company's properties.
Thus, the Board of Directors believes that the purchase of Shares through the
Offer is an attractive use of the Company's financial resources.
Based on the foregoing, the Board of Directors decided that it would be in
the best interests of the Company and its stockholders to make the Offer and
to consummate the repurchase of Shares in accordance with the terms of the
Offer.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL
OF SUCH STOCKHOLDER'S SHARES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY
SUCH RECOMMENDATION. STOCKHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL
INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND
MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES
TO TENDER.
12
<PAGE>
Any Shares that the Company acquires pursuant to the Offer will become
authorized but unissued shares and will be available for the Company to re-
issue without further stockholder action (except as required by applicable law
or the rules of any securities exchange, including the NYSE, on which the
Shares are listed). Such Shares could be issued without stockholder approval
for such purposes as, among others, the acquisition of other businesses, the
raising of additional capital for use in the Company's business, the
distribution of stock dividends and the implementation of employee benefit
plans.
10. Certain Information About the Company.
The Company was incorporated in Maryland on September 15, 1993 and is a
self-managed REIT that owns, acquires, develops, manages, leases and finances
health care properties. The Company's business currently consists of
investments, made either directly or through joint ventures, in health care
properties and in debt obligations secured by health care properties. The
Company's operations focus primarily on opportunities to own or develop
medical office buildings through its MOB operations, or own or finance senior
care facilities ("Senior Care Facilities") through its senior care operations.
The Company was formed to continue the ownership, management, acquisition
and development activities previously conducted by G&L Development, a
California general partnership, the Company's predecessor.
As of October 1, 1999, the Company owned 33 MOBs and retail properties
totaling approximately 1 million rentable square feet, and 9 Senior Care
Facilities totaling approximately 990 beds/units. In addition, the Company has
three projects currently under development (See "Item 9. Background and
Purpose of the Offer"). Furthermore, the Company expects the following
transactions to occur during the next 12 to 18 months:
. A loan of $340,000 by the Company and a third party partner to a not-
for-profit entity that intends to issue tax-exempt bonds under Section
103 of the Internal Revenue Code to purchase two apartment complexes
located in Tustin, Oklahoma. The Company expects to receive its
investment back plus a profit of approximately $100,000 plus an
additional $500,000 to $750,000 in subordinated bonds. The Company
expects this transaction to close during 1999.
. The purchase of a $10.3 million assisted living facility located in
Tarzana, California in which the Company will own 85% of the equity. The
Company expects this transaction to close during 1999.
. The sale of the St. Thomas More skilled nursing facility located in
Baltimore, Maryland (See "Item 11. Source and Amount of Funds).
. The sale of the three skilled nursing facilities located in Hampden,
Massachusetts (See "Item 11. Source and Amount of Funds).
While the Company is actively pursuing these transactions, no assurances can
be given that any of these transactions will occur, or, if they do occur, that
the Company will realize the aforementioned gains or net cash proceeds.
The Company has been informed by Tokai Bank of California that as of
December 31, 1998 and June 30, 1999 the Company was in default on its $4.6
million unsecured line of credit due to a loan covenant violation. Tokai Bank
has informed the Company that it has elected not to declare a default on the
line of credit. The loan covenant requires that the Company maintain a ratio
of EBITDA less distributions to debt service of at least 1.20 to 1.0. The
Company believes that the reduction in the common stock dividend will allow
the Company to comply with the loan covenant in the future.
The Company's principal executive offices are located at 439 North Bedford
Drive, Beverly Hills, CA 90210 and the Company's telephone number is (310)
273-9930.
13
<PAGE>
SUMMARY HISTORICAL FINANCIAL INFORMATION
The table below includes summary historical financial information of the
Company. The summary financial information has been derived from the audited
consolidated financial statements as reported in the Company's annual report
on Form 10-K for the year ended December 31, 1998 and the unaudited
consolidated financial statements as reported in the Company's quarterly
report on Form l0-Q for the second quarter ended June 30, 1999, and such
reports are incorporated herein by reference. In the opinion of management,
the unaudited financial statements for the six months ended June 30, 1999 and
1998 reflect all adjustments necessary for a fair statement of the results of
operations for the interim periods. However, the results of operations for any
interim period are not necessarily indicative of results for the full year.
The summary historical financial information should be read in conjunction
with, and is qualified in its entirety by reference to, the consolidated
financial statements and related notes included in the reports referred to
above. Copies of these reports may be obtained from the Commission and the
NYSE in the manner specified in "Additional Information" below.
14
<PAGE>
G&L REALTY CORPORATION
SUMMARY HISTORICAL FINANCIAL INFORMATION
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended
------------------ December 31,
1999 1998 1998
-------- -------- ------------
(unaudited)
<S> <C> <C> <C>
Income Statement Data:
Revenues:
Rental revenues............................. $ 13,976 $ 11,995 $ 24,639
Tenant reimbursements....................... 610 338 781
Parking..................................... 538 733 1,501
Interest, loan fees and other............... 1,295 2,323 4,517
Other....................................... 290 171 254
-------- -------- --------
Total revenues............................ 16,709 15,560 31,692
======== ======== ========
Expenses:
Property operations......................... 3,666 2,917 6,171
Depreciation and amortization............... 2,735 2,143 4,597
Interest.................................... 5,512 4,009 8,683
General and administrative.................. 1,457 1,423 2,554
Provision for doubtful accounts, notes and
bonds receivable........................... -- -- 5,603
-------- -------- --------
Total expenses............................ 13,370 10,492 27,608
======== ======== ========
Income from operations before minority
interests and equity in (loss) earnings of
unconsolidated affiliates.................... 3,339 5,068 4,084
Equity in (loss) earnings of unconsolidated
affiliates................................... (270) 153 80
Minority interest in consolidated affiliates.. (89) (115) (225)
Minority interest in Operating Partnership.... 86 (143) 404
-------- -------- --------
Net income.................................... $ 3,066 $ 4,963 $ 4,343
======== ======== ========
Balance Sheet Data, at Period End:
Land, buildings and improvements, net......... $189,160 $156,485 $186,751
Mortgage loans and bonds receivable, net...... 13,500 19,002 12,101
Total assets.................................. 227,157 207,769 219,499
Total debt.................................... 147,729 115,865 134,880
Total stockholders' equity.................... 75,098 86,698 79,584
Per Share Data:
Basic (loss) earnings per share............... $ (0.14) $ 0.33 $ (0.70)
Diluted (loss) earnings per share............. (0.14) 0.32 (0.70)
Book value per share.......................... 0.82 3.60 1.93
Cash dividends declared....................... 0.78 0.78 1.56
Average Shares Outstanding:
Basic earnings per share...................... 3,957 4,124 4,092
Diluted earnings per share.................... 3,971 4,177 4,135
Selected Financial Ratios:
Ratio of earnings to fixed charges and
preferred dividends (1)...................... 0.94x 1.17x 0.82x
Ratio of funds from operations to fixed
charges and preferred dividends(2)........... 1.21x 1.41x 1.05x
Ratio of total debt to total market
capitalization............................... 54.3% 43.3% 50.6%
</TABLE>
- --------
(1) The deficit of earnings to fixed charges and preferred dividends for the
six months ended June 30, 1999 and the year ended December 31, 1998 was
$540 and $3,038, respectively.
15
<PAGE>
(2) FFO represents net income (computed in accordance with GAAP, consistently
applied), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation of real property, less preferred stock
dividends paid to holders of preferred stock during the period and after
adjustments for consolidated and unconsolidated entities in which the
Company holds a partial interest. FFO is computed in accordance with the
definition adopted by NAREIT. FFO should not be considered as an
alternative to net income or any other indicator developed in compliance
with GAAP, including measures of liquidity such as cash flows from
operations, investing and financing activities. FFO is helpful in
evaluating the performance of a real estate portfolio considering the fact
that historical cost accounting assumes that the value of real estate
diminishes predictably over time. FFO is only one of a range of indicators
which should be considered in determining a company's operating
performance. The methods of calculating FFO among different companies are
subject to variation, and FFO therefore may be an invalid measure for
purposes of comparing companies. Also, the elimination of depreciation and
gains and losses on sales of property may not be a true indication of an
entity's ability to recover its investment in properties. The Company
implemented the new method of calculating FFO effective as of the NAREIT-
suggested adoption date of January 1, 1996. FFO has been restated for all
prior periods under the new method.
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information sets forth the
historical financial information as adjusted to give effect to the purchase of
1,000,000 Shares at a Purchase Price of $10.50 per Share pursuant to the Offer
to Purchase. The pro forma information does not take into consideration the
Share repurchases by the Company between June 30, 1999 and the commencement of
the Offer. The pro forma adjustments assume the transaction occurred, for
purposes of the summary consolidated income statement, as of the first day of
the period presented, and, for purposes of the consolidated balance sheet, as
of the balance sheet date. The pro forma financial information does not
purport to be indicative of the results that may be obtained in the future or
that would have actually been obtained had the Offer occurred as of the dates
indicated. The pro forma information should be read in conjunction with the
Summary Historical Financial Information.
G&L REALTY CORPORATION
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
--------------- ------------
1999 1998 1998
------- ------- ------------
<S> <C> <C> <C>
Income Statement Data:
Revenues:
Rental revenues................................. $13,976 $11,995 $24,639
Tenant reimbursements........................... 610 338 781
Parking......................................... 538 733 1,501
Interest, loan fees and other................... 1,295 2,323 4,517
Other........................................... 290 171 254
------- ------- -------
Total revenues................................ 16,709 15,560 31,692
======= ======= =======
Expenses:
Property operations............................. 3,666 2,917 6,171
Depreciation and amortization................... 2,735 2,143 4,597
Interest........................................ 5,970 4,032 9,691
General and administrative...................... 1,457 1,423 2,554
Provision for doubtful accounts, notes and bonds
receivable..................................... -- -- 5,603
------- ------- -------
Total expenses................................ 13,828 10,515 28,616
------- ------- -------
</TABLE>
16
<PAGE>
<TABLE>
<S> <C> <C> <C>
Income from operations before minority interests
and equity in (loss) earnings of unconsolidated
affiliates...................................... 2,881 5,045 3,076
Equity in (loss) earnings of unconsolidated
affiliates...................................... (270) 153 80
Minority interest in consolidated affiliates..... (89) (115) (225)
Minority interest in Operating Partnership....... 193 (204) 747
-------- -------- --------
Net income....................................... $ 2,714 $ 4,879 $ 3,678
======== ======== ========
Balance Sheet Data, at Period End:
Land, buildings and improvements, net............ $189,160 $156,485 $186,751
Mortgage loans and bonds receivable, net......... 13,500 19,002 12,101
Total assets..................................... 225,821 197,368 218,613
Total debt....................................... 157,729 116,365 145,880
Total stockholders' equity....................... 65,884 77,356 69,467
Per Share Data:
Basic (loss) earnings per share.................. $ (0.30) $ 0.41 $ (1.14)
Diluted (loss) earnings per share................ (0.30) 0.40 (1.14)
Book value per share............................. (2.04) 1.76 (0.80)
Cash dividends declared.......................... 0.78 0.78 1.56
Average Shares Outstanding:
Basic earnings per share......................... 2,957 3,124 3,092
Diluted earnings per share....................... 2,971 3,177 3,135
Selected Financial Ratios:
Ratio of earnings to fixed charges and preferred
dividends (1)................................... 0.91x 1.16x 0.80x
Ratio of funds from operations to fixed charges
and preferred dividends (2) 1.15x 1.41x 0.99x
Ratio of total debt to total market
capitalization.................................. 58.9% 47.3% 55.8%
</TABLE>
- --------
(1) The deficit of earnings to fixed charges and preferred dividends for the
six months ended June 30, 1999 and the year ended December 31, 1998 was
$892 and $3,534, respectively.
(2) FFO represents net income (computed in accordance with GAAP, consistently
applied), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation of real property, less preferred stock
dividends paid to holders of preferred stock during the period and after
adjustments for consolidated and unconsolidated entities in which the
Company holds a partial interest. FFO is computed in accordance with the
definition adopted by NAREIT. FFO should not be considered as an
alternative to net income or any other indicator developed in compliance
with GAAP, including measures of liquidity such as cash flows from
operations, investing and financing activities. FFO is helpful in
evaluating the performance of a real estate portfolio considering the fact
that historical cost accounting assumes that the value of real estate
diminishes predictably over time. FFO is only one of a range of indicators
which should be considered in determining a company's operating
performance. The methods of calculating FFO among different companies are
subject to variation, and FFO therefore may be an invalid measure for
purposes of comparing companies. Also, the elimination of depreciation and
gains and losses on sales of property may not be a true indication of an
entity's ability to recover its investment in properties. The Company
implemented the new method of calculating FFO effective as of the NAREIT-
suggested adoption date of January 1, 1996. FFO has been restated for all
prior periods under the new method.
17
<PAGE>
NOTES TO SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following assumptions regarding the Offer were made in determining the
summary unaudited, consolidated pro forma financial information:
(1) The information assumes that 1,000,000 Shares are purchased at $10.50
per Share, with the aggregate purchase price of $10,500,000 plus estimated
expenses of $380,000 being financed from cash on hand plus additional
mortgage debt secured by the Company's properties and the Company's
unsecured line of credit. The average interest rate of these financings is
assumed to be 8.5% per annum. There can be no assurance that the Company
will purchase 1,000,000 Shares.
(2) The basic and diluted earnings per share calculation gives effect to
the reduced number of Shares that results from the repurchase of Shares
pursuant to the Offer. For the six months ended June 30, 1999 and the year
ended December 31, 1998, the incremental shares that would have been
outstanding upon the assumed exercise of stock options would have been
anti-dilutive and, therefore, were not considered in the computation of
diluted earnings per share.
(3) A 1/8 of 1% change in the interest rate on the Company's variable
rate debt would not have a material impact on the Company's earnings.
Additional Information. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the Commission relating
to its business, financial condition and other matters. The Company is
required to disclose in such proxy statements and reports certain information,
as of particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal owners of the
Company's securities and any material interest of such persons in transactions
with the Company. The Company has also filed an Issuer Tender Offer Statement
on Schedule 13E-4 (the "Schedule 13E-4") with the Commission, which includes
certain additional information relating to the Offer.
Such material may be inspected at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549
and also should be available for inspection and copying at the following
regional offices of the Commission: Seven World Trade Center, New York, New
York 10048, and Northwestern Atrium Center, 500 West Madison, Suite 1400,
Chicago, Illinois 60661. Such information may also be accessed electronically
on the Commission's website at <http://www.sec.gov>. All reports, proxy and
information statements and other information filed with the Commission also
may be inspected at the offices of NYSE, 11 Wall Street, New York, NY 10005.
Copies may also be obtained by mail for prescribed rates from the Commission's
Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Schedule 13E-4 will not be available at the Commission's regional offices.
11. Source and Amount of Funds.
Assuming that the Company purchases 1,000,000 Shares pursuant to the Offer
at a Purchase Price of $10.50 per Share, the Company expects the maximum
aggregate cost of the Offer, including all fees and expenses applicable to the
Offer, to be approximately $10,880,000. The Company anticipates that the funds
necessary to purchase Shares pursuant to the Offer and to pay the related fees
and expenses will come from cash on hand plus additional mortgage debt to be
secured by four of the Company's properties, as discussed below, and its
unsecured line of credit.
As of October 1, 1999, the Company currently has $6.4 million in cash on
hand.
The Company currently owns three skilled nursing facilities located in
Massachusetts that were purchased on October 28, 1997 for $20.0 million. Of
this amount, the Company borrowed $6.0 million from Nomura Asset Capital
Corporation ("Nomura") at an interest rate of 8.62% per annum. The Company has
received a commitment from General Motors Acceptance Corporation ("GMAC") to
obtain a three-year bridge loan secured by a first deed of trust on the three
facilities in the amount of $13.9 million less loan costs of
18
<PAGE>
approximately $200,000. The interest rate on the loan is LIBOR plus 2.75% per
annum. The loan proceeds will be used to repay the $6.0 million loan from
Nomura plus repayment fees of $120,000 less deposits with Nomura totaling
$400,000 which will be returned to the Company upon repayment of the $6.0
million loan. The net proceeds of $8.0 million will be used to purchase Shares
pursuant to the Offer. The Company plans to repay the $13.9 million loan by
selling the facilities to a not-for-profit entity that will finance the
purchase by issuing tax-exempt bonds under Section 103 of the Internal Revenue
Code. The Company expects this transaction to occur during 2000 and estimates
a gain on sale of the facilities of $1 million to $3 million and net cash
proceeds of $7 million to $9 million. In addition, the Company expects to
receive approximately $2 million to $3 million of subordinated bonds as part
of the transaction. The value of these bonds is not included in the gain on
sale of the facilities. Although the Company believes that the sale of these
facilities will occur in 2000, there can be no assurances that the transaction
will occur in 2000, if at all, or that the Company will realize these amounts.
The Company currently has $1.5 million available on an unsecured line of
credit. The interest rate on any borrowings under the line of credit is the
prime rate plus 1% per annum and the line expires on February 11, 2000.
The Company currently holds a first deed of trust on a skilled nursing
facility located in Baltimore, Maryland. The Company has applied to GMAC to
obtain a three-year loan secured by a first deed of trust on the facility in
the amount of $8.0 million less loan costs of approximately $200,000. The
projected interest rate on the loan is between LIBOR plus 2.0% and LIBOR plus
3.0% per annum. A portion of the net proceeds of approximately $7.8 million
will be used to purchase Shares pursuant to the Offer. The balance of the
proceeds will be used by the Company to repay short-term debt, finance
acquisitions and development and for general corporate purposes. The Company
plans to repay the $8.0 million loan by selling the facilities to a not-for-
profit entity that will finance the purchase by issuing tax-exempt bonds under
Section 103 of the Internal Revenue Code. The Company expects this transaction
to occur during the end of 1999 or 2000 and estimates a gain on the repayment
of its note and net cash proceeds of $2 million to $3 million. Also, the
Company expects to receive approximately $0.5 million to $1.5 million of
subordinated bonds as part of the transaction. The value of these bonds is not
included in the gain on repayment of the note. Although the Company believes
that the sale of this facility will occur in 1999 or 2000, there can be no
assurances that the transaction will occur in 1999 or 2000, if at all, or that
the Company will realize these amounts.
After completing these financings and including the Company's cash on hand
and available line of credit, the Company expects to have approximately $23.5
million of cash available for the Offer.
12. Effects of the Offer on the Market for Shares; Registration Under The
Exchange Act.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce
the number of stockholders. Nonetheless, the Company anticipates that there
will still be a sufficient number of Shares outstanding and publicly traded
following the Offer to ensure a continued trading market in the Shares.
Based on the published guidelines of the NYSE, the Company believes that its
purchase of Shares pursuant to the Offer will not cause its remaining Shares
to be delisted from the NYSE.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the purchase of Shares pursuant to the Offer, the Shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and to the Commission and comply with the Commission's proxy rules in
connection with meetings of the Company's stockholders. The Company believes
that its purchase of Shares pursuant to the Offer will not result in the
Shares becoming eligible for deregistration under the Exchange Act.
19
<PAGE>
13. Certain Legal Matters; Regulatory Approvals.
The Company is not aware of any license or regulatory permit that is
material to its business that might be adversely affected by its acquisition
of Shares as contemplated in the Offer or of any approval or other action by
any government or governmental, administrative or regulatory authority or
agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares as contemplated by the Offer. After this
Share repurchase is completed, the Company believes that it will have
sufficient liquidity to operate its existing business. Should any such
approval or other action be required, the Company currently contemplates that
it will seek such approval or other action. The Company cannot predict whether
it may determine that it is required to delay the acceptance for payment of,
or payment for, Shares tendered pursuant to the Offer pending the outcome of
any such matter. There can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that the failure to obtain any such approval or other action
might not result in adverse consequences to the Company's business. The
Company's obligations under the Offer to accept for payment and pay for Shares
are subject to certain conditions. See Section 6.
14. Certain Federal Income Tax Consequences.
The following summary is a general discussion of certain of the United
States federal income tax consequences of the Offer. This summary is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change, possibly retroactively. No ruling as to any matter
discussed in this summary has been requested or received from the IRS.
EACH STOCKHOLDER IS URGED TO CONSULT AND RELY ON THE STOCKHOLDER'S OWN TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO THE STOCKHOLDER OF TENDERING
SHARES PURSUANT TO THE OFFER.
In General. A stockholder's exchange of Shares for cash pursuant to the
Offer will be a taxable transaction for federal income tax purposes, and may
also be a taxable transaction under applicable state, local, foreign or other
tax laws. This summary does not discuss any aspects of state, local, foreign
or other tax laws. Certain stockholders (including insurance companies, tax-
exempt organizations, financial institutions and broker dealers) may be
subject to special rules not discussed below. For purposes of this discussion,
stockholders are assumed to hold their Shares as capital assets.
Treatment as a Sale or Exchange. Under Section 302 of the Internal Revenue
Code of 1986, as amended (the "Code"), a transfer of Shares to the Company
pursuant to the Offer will, as a general rule, be treated as a sale or
exchange of the Shares (rather than as a dividend distribution) if the receipt
of cash pursuant to the Offer (a) is "substantially disproportionate" with
respect to the stockholder, (b) results in a "complete termination" of the
stockholder's interest in the Company or (c) is "not essentially equivalent to
a dividend" with respect to the stockholder. These tests (the "Section 302
Tests") are explained more fully below.
If any of the Section 302 Tests is satisfied, a tendering stockholder will
recognize capital gain or loss equal to the difference between the amount of
cash received by the stockholder pursuant to the Offer and the stockholder's
basis in the Shares sold pursuant to the Offer. Shares held for (i) 12 months
or less will be taxable at the short-term capital gains rate and (ii) more
than 12 months will be taxable at the long-term capital gains rate.
Constructive Ownership of Stock. In determining whether any of the Section
302 Tests is satisfied, a stockholder must take into account not only Shares
actually owned by the stockholder, but also Shares that are constructively
owned pursuant to Section 318 of the Code. Under Section 318, a stockholder
may constructively own Shares actually owned, and in some cases constructively
owned, by certain related individuals and certain entities in which the
stockholder has an interest, or, in the case of stockholders that are
entities, by certain individuals or entities in which the stockholder has an
interest or that have an interest in the stockholder, as well as any Shares
the stockholder has a right to acquire by exercise of an option or by the
conversion or exchange of
20
<PAGE>
a security. With respect to option and convertible security attribution, the
IRS takes the position that Shares constructively owned by a stockholder by
reason of a right on the stockholder's part to acquire the Shares from the
Company are not to be considered outstanding for purposes of applying the
Section 302 Tests to other stockholders; however, there are both contrary and
supporting judicial decisions with respect to this issue.
The Section 302 Tests. One of the following tests must be satisfied in order
for the exchange of shares pursuant to the Offer to be treated as a sale
rather than as a dividend distribution.
(a) Substantially Disproportionate Test. The receipt of cash by a
stockholder will be substantially disproportionate with respect to the
stockholder if the percentage of the outstanding Shares actually and
constructively owned by the stockholder immediately following the
exchange of Shares pursuant to the Offer (treating Shares exchanged
pursuant to the Offer as not outstanding) is less than 80% of the
percentage of the outstanding Shares actually and constructively owned
by the stockholder immediately before the exchange (treating Shares
exchanged pursuant to the Offer as outstanding).
(b) Complete Termination Test. The receipt of cash by a stockholder will be
a complete termination of the stockholder's interest if, on the date
that the Shares are sold pursuant to the Offer, the stockholder is not
considered to own (actually or constructively) any stock in the Company
other than Shares, and either (i) all of the Shares actually and
constructively owned by the stockholder are sold pursuant to the Offer
or (ii) all of the Shares actually owned by the stockholder are sold
pursuant to the Offer and the stockholder is eligible to waive, and
effectively waives, the attribution of Shares constructively owned by
the stockholder in accordance with the rules and procedures described
in Section 302(c)(2) of the Code. Stockholders considering terminating
their interest in accordance with Section 302(c)(2) of the Code should
do so in consultation with their own tax advisors.
(c) Not Essentially Equivalent to a Dividend Test. The receipt of cash by a
stockholder will not be essentially equivalent to a dividend if the
stockholder's exchange of Shares pursuant to the Offer results in a
"meaningful reduction" of the stockholder's proportionate interest in
the Company. Whether the receipt of cash by a stockholder will result
in a meaningful reduction of the stockholder's proportionate interest
will depend on the stockholder's particular facts and circumstances.
However, in the case of a small minority stockholder, even a small
reduction may satisfy this test where, as with the Offer, payments are
not expected to be pro rata with respect to all outstanding Shares. The
IRS has indicated in a published ruling that, in the case of a small
minority stockholder of a publicly held corporation who exercises no
control over corporate affairs, a reduction in the stockholder's
proportionate interest in the corporation from .00011189 to .000108190
would constitute a meaningful reduction.
Although the issue is not free from doubt, a stockholder may be able to take
into account acquisitions or dispositions of shares (including market
purchases and sales) substantially contemporaneous with the Offer in
determining whether any of the Section 302 Tests is satisfied.
If the Offer is oversubscribed, the Company's purchase of Shares pursuant to
the Offer will be prorated. Thus, in such case even if all the Shares actually
and constructively owned by a stockholder are tendered pursuant to the Offer,
not all of the Shares will be purchased by the Company, which in turn may
affect the stockholder's ability to satisfy the Section 302 Tests.
Treatment as a Dividend. If none of the Section 302 Tests is satisfied and
the Company has sufficient earnings and profits (as to which there can be no
assurances), a tendering stockholder will be treated as having received a
dividend includible in gross income in an amount equal to the entire amount of
cash received by the stockholder pursuant to the Offer. This amount will not
be reduced by the stockholder's basis in the Shares exchanged pursuant to the
Offer, and the stockholder's basis in those Shares will be added to the
stockholder's basis in his remaining Shares. No assurance can be given that
any of the Section 302 Tests will be satisfied as to any particular
stockholder, and thus no assurance can be given that any particular
stockholder will not be treated as having received a dividend taxable as
ordinary income. If none of the Section 302 Tests is satisfied, any cash
received for Shares pursuant to the Offer in excess of the Company's earnings
and profits will be treated first as
21
<PAGE>
a nontaxable return of capital to the extent of, and in reduction of, the
stockholder's basis for such stockholder's shares, and thereafter as a capital
gain to the extent it exceeds such basis.
Employee Option Plans. If an employee exercises a non-qualified stock option
granted under the Company's stock option plans in order to acquire Shares to
tender pursuant to the Offer, the employee will be required to recognize
ordinary income in an amount equal to the excess of the fair market value of
Shares on the date the option is exercised over the exercise price. The
employee's basis in the Shares will equal the fair market value of the Shares
on the date the option is exercised, and the employee's holding period for
purposes of determining eligibility for long-term capital gain will begin
after the option is exercised. The exchange of the Shares pursuant to the
Offer will be taxed in accordance with the rules described in the preceding
sections.
Foreign Stockholders. The Company will assume that the exchange is a
dividend as to foreign stockholders and will therefore withhold federal income
tax at a rate equal to 30% of the gross proceeds paid to a foreign stockholder
or his agent pursuant to the Offer, unless the Depositary determines that a
reduced rate of withholding is available pursuant to a tax treaty or that an
exemption from withholding is applicable because the gross proceeds are
effectively connected with the conduct of a trade or business by the foreign
stockholder within the United States. For this purpose, a foreign stockholder
is any stockholder that is not (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or
under the laws of the United States, any state thereof (including the District
of Columbia) or any political subdivision thereof, (iii) any estate the income
of which is subject to United States federal income taxation regardless of the
source of such income, or (iv) a trust if (x) a court within the United States
is able to exercise primary supervision over the administration of the trust
and (y) one or more United States persons have authority to control all
substantial decisions of the trust (or, to the extent provided in applicable
Treasury Regulations, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated U.S. Persons within the meaning of the Code).
Generally, the determination of whether a reduced rate of withholding is
applicable is made by reference to a foreign stockholder's address or to a
properly completed Form 1001 (or any successor form to the Form 1001)
furnished by the stockholder, and the determination of whether an exemption
from withholding is available on the grounds that gross proceeds paid to a
foreign stockholder are effectively connected with a United States trade or
business is made on the basis of a properly completed Form 4224 (or any
successor form to the Form 4224) furnished by the stockholder. The Depositary
will determine a foreign stockholder's eligibility for a reduced rate of, or
exemption from, withholding by reference to the stockholder's address and any
Forms 1001 or 4224 (or respective successor forms) submitted to the Depositary
by a foreign stockholder, unless facts and circumstances indicate that such
reliance is not warranted or unless applicable law requires some other method
for determining whether a reduced rate of withholding is applicable. These
forms can be obtained from the Depositary. See the instructions to the Letter
of Transmittal.
A foreign stockholder with respect to whom tax has been withheld may be
eligible to obtain a refund of all or a portion of the withheld tax if the
stockholder satisfies one of the Section 302 Tests for capital gain treatment
or is otherwise able to establish that no tax or a reduced amount of tax was
due. Foreign stockholders are urged to consult their own tax advisors
regarding the application of federal income tax withholding, including
eligibility for a withholding tax reduction or exemption and the refund
procedure.
15. Extension of the Offer; Termination; Amendments.
The Company expressly reserves the right, at any time or from time to time,
in its sole discretion, and regardless of whether any of the conditions
specified in Section 6 shall have occurred, to extend the period of time
during which the Offer is open by giving oral or written notice of such
extension to the Depositary and making a public announcement of the extension.
The Company also expressly reserves the right, in its sole discretion, to
terminate the Offer and not accept for payment or pay for any Shares not
previously accepted for payment or paid for or, subject to applicable law, to
postpone payment for Shares upon the occurrence of any of the conditions
specified in Section 6 by giving oral or written notice of the termination or
postponement to the Depositary and making a public announcement.
22
<PAGE>
The Company's reservation of the right to delay payment for Shares that it
has accepted for payment is limited by Rules 13e-4(f)(2) and 13e4(f)(5)
promulgated under the Exchange Act. Rule 13e-4(f)(2) requires that the Company
permit Shares tendered pursuant to the Offer to be withdrawn: (i) at any time
during the period the Offer remains open and (ii) if not yet accepted for
payment, after the expiration of forty business days from the commencement of
the Offer. Rule 13e-4(f)(5) requires that the Company must either pay the
consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, at any time or from time to time, to amend the
Offer in any respect, including increasing or decreasing the number of Shares
the Company may purchase or the price it may pay pursuant to the Offer.
Amendments to the Offer may be made at any time or from time to time by public
announcement of the amendment, and in the case of an extension, the
announcement will be issued no later than 9:00 A.M., New York City time, on
the next business day after the previously scheduled Expiration Date. Any
public announcement made pursuant to the Offer will be disseminated promptly
to stockholders in a manner reasonably designed to inform stockholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company has no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer or information concerning the offer (other than a change in price or a
change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms or
information. If (i) the Company increases or decreases the price to be paid
for Shares, the Company increases the number of Shares being sought and any
such increase in the number of Shares being sought exceeds 2% of the
outstanding Shares, or the Company decreases the number of Shares being
sought, and (ii) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including,
the date that notice of such increase or decrease is first published, sent or
given, the Offer will be extended until the expiration of the period of ten
business days.
16. Fees and Expenses.
The Company has retained Chase Mellon Shareholder Services as Depositary in
connection with the Offer. The Depositary will receive reasonable and
customary compensation for its services. The Company will also reimburse the
Depositary for out-of-pocket expenses, including reasonable attorneys fees,
and has agreed to indemnify the Depositary against certain liabilities in
connection with the Offer, including certain liabilities under the federal
securities laws. The Depositary has not been retained to make solicitations or
recommendations in connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any Shares
pursuant to the Offer. The Company will, however, reimburse such persons for
customary handling and mailing expenses incurred in forwarding materials in
respect of the Offer to the beneficial owners for which they act as nominees.
No such broker, dealer, commercial bank or trust company has been authorized
to act as the Company's agent for purposes of this Offer. The Company will pay
(or cause to be paid) any stock transfer taxes on its purchase of Shares,
except as otherwise provided in Instruction 7 of the Letter of Transmittal.
17. Miscellaneous.
The Offer is not being made to, nor will the Company accept tenders from,
holders of Shares in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or blue sky laws of such jurisdiction.
The Company is not aware of any jurisdiction in which the making of the Offer
or the tender of Shares would not be in compliance with the laws of such
jurisdiction. However, the Company reserves the right
23
<PAGE>
to exclude holders in any jurisdiction in which it is asserted that the Offer
cannot lawfully be made. So long as the Company makes a good faith effort to
comply with any state law deemed applicable to the Offer, if it cannot do so,
the Company believes that the exclusion of holders residing in such
jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under the
Exchange Act. In any jurisdiction the securities or blue sky laws of which
require the Offer to be made by a licensed broker or dealer, the Offer shall
be deemed to be made on the Company's behalf by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
G&L REALTY CORP.
October 1, 1999
24
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Purchase Price
Trade Day # of Shares Per Share
- --------- ----------- --------------
<S> <C> <C>
8/10/99.............................................. 1,000 11.25
8/16/99.............................................. 10,500 10.80
8/17/99.............................................. 7,800 10.71
8/18/99.............................................. 2,100 10.62
8/23/99.............................................. 3,600 10.55
8/24/99.............................................. 12,000 10.56
8/25/99.............................................. 3,600 10.66
9/1/99............................................... 15,100 10.55
9/3/99............................................... 9,000 10.31
</TABLE>
25
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for the Shares and any other required
documents should be sent or delivered by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company or other nominee
to the Depositary at one of its addresses set forth below:
The Depositary:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight Delivery:
Reorganization Department Reorganization Department Reorganization Department
P. O. Box 3304 120 Broadway 85 Challenger Road,
South Hackensack, NJ 07606 13th Floor Mail Drop-Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
</TABLE>
By Facsimile Transmission (for eligible institutions only):
(201) 296-4293
To Confirm Receipt of
Notice of Guaranteed
Delivery:
(201) 296-4860
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to Investor Relations at the telephone number and
address below. You may also contact your broker, dealer, commercial bank or
trust company for assistance concerning the Offer. To confirm delivery of your
Shares, you are directed to contact the Depositary.
Michael Gordon
Investor Relations
G&L Realty Corp.
439 N. Bedford Drive
Beverly Hills, CA 90210
(310) 273-9930
<PAGE>
EXHIBIT 99.(a)(2)
Letter of Transmittal
To Tender Shares of Common Stock
of
G&L Realty Corp.
Pursuant to the Offer to Purchase
Dated October 1, 1999
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 11:59 P.M.,
NEW YORK CITY TIME, ON FRIDAY, OCTOBER 29, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight Delivery:
Reorganization Department Reorganization Department Reorganization Department
P. O. Box 3301 120 Broadway 85 Challenger Road,
South Hackensack, NJ 07606 13th Floor Mail Drop-Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
</TABLE>
By Facsimile Transmission (for eligible institutions only):
(201) 296-4293
To Confirm Receipt of
Notice of Guaranteed
Delivery:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO ANYONE OTHER THAN THE DEPOSITARY OR
TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
DESCRIPTION OF SHARES TENDERED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name(s) and Address(es) of
Registered Holder(s)
Please fill in,if blank,
exactly as name(s)
appear(s) of Share Share Certificate(s) and Shares Tendered
Certificate(s)) (Attach Additional Signed List if necessary)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Number of Number
Share Certificate Shares Evidenced by of Shares
Number(s)* Share Certificate(s)* Tendered**
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Total Shares
Indicate in this box the order (by certificate number) in which Shares are
to be purchased in the event of proration.*** (Attach additional signed
list if necessary.) See Instruction 14.
1st: 2nd: 3rd:
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
* Need not be completed by stockholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
*** If you do not designate an order, then in the event less than all
Shares tendered are purchased due to proration, Shares will be selected
for purchase by the Depositary.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET
FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
This Letter of Transmittal is to be completed by stockholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC" or the "Book-Entry
Transfer Facility") pursuant to the book-entry transfer procedure described in
Section 3 of the Offer to Purchase (as defined below). Delivery of documents
to the Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
. Stockholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates
and all other documents required hereby to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-
entry transfer on a timely basis and who wish to tender their Shares must do
so pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase. See Instruction 2.
[_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of tendering institution ______________________________________________
Account No. ________________________________________________________________
Transaction Code No. ______________________________________________________
[_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Felivery ______________________________
Give Account Number and Transaction Code Number if delivered by book-entry
transfer:
Account No. ________________________________________________________________
Transaction Code No. _______________________________________________________
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to G&L Realty Corp, a Maryland corporation
(the "Company"), the above-described shares of common stock $0.01 par value
(the "Shares"), at the price of $10.50 per Share (the "Purchase Price"),
payable to the seller in cash upon the terms and subject to the conditions set
forth in the Company's Offer to Purchase dated October 1, 1999 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer").
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), the undersigned hereby sells, assigns and transfers to, or upon
the order of, the Company all right, title and interest in and to all Shares
tendered hereby or orders the registration of such Shares tendered by book-
entry transfer that are purchased pursuant to the Offer to or upon the order
of the Company and hereby irrevocably constitutes and appoints the Depositary
the true and lawful agent and attorney-in-fact of the undersigned with respect
to such Shares, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares, or transfer ownership of such
Shares on the account books maintained by the Book-Entry Transfer Facility,
together, in either case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Company, upon receipt by the
Depositary, as the undersigned's agent, of the Purchase Price with respect to
such Shares, (ii) present Share Certificates for cancellation and transfer on
the books of the Company and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares, all in accordance with the
terms of the Offer.
The undersigned hereby represents and warrants to the Company that (i) the
undersigned understands that tenders of Shares pursuant to any one of the
procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer, including the undersigned's representation and
warranty that (a) the undersigned has a net long position in Shares or
equivalent securities at least equal to the Shares tendered within the meaning
of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and (b) such tender of Shares complies with Rule
14e-4; (ii) when and to the extent the Company accepts the Shares for
purchase, the Company will acquire good, marketable and unencumbered title to
them, free and clear of all security interests, liens, charges, encumbrances,
conditional sales agreements or other obligations relating to their sale or
transfer, and not subject to any adverse claim; (iii) on request, the
undersigned will execute and deliver any additional documents which the
Depositary or the Company deems necessary or desirable to complete the
assignment, transfer and purchase of the Shares tendered hereby; (iv) the
undersigned has read and agrees to all of the terms of the Offer; and (v) the
undersigned has full power and authority to tender, sell, assign and transfer
Shares tendered hereby.
The names and addresses of the registered holders should be printed, if they
are not already printed above, exactly as they appear on the Share
Certificates tendered hereby. The certificate numbers, the number of Shares
represented by such Share Certificates and the number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes.
The undersigned understands that the Company will pay a price of $10.50 per
Share for Shares validly tendered pursuant to the Offer. The undersigned
understands that the Company will buy 1,000,000 Shares (or such lesser number
of Shares as are validly tendered, payable to the seller in cash upon the
terms and subject to the conditions of the Offer, including its proration
provisions. The undersigned understands that the Company will return all
Shares that are not validly tendered and all Shares not purchased because of
proration.
The undersigned recognizes that under certain circumstances set forth in the
Offer to Purchase, the Company may terminate or amend the Offer or may not be
required to purchase any of the Shares tendered hereby or
3
<PAGE>
may accept for payment fewer than all of the Shares tendered hereby. The
undersigned understands that Share Certificates representing Shares not
tendered or not purchased will be returned to the undersigned at the address
indicated above, unless otherwise indicated under the "Special Payment
Instructions" or "Special Delivery Instructions" below. The undersigned
recognizes that the Company has no obligation, pursuant to the "Special
Payments Instructions," to transfer any Share Certificate from the name of its
registered holder, or to order the registration or transfer of such Shares
tendered by book-entry transfer, if the Company purchases none of the Shares
represented by such certificate or tendered by such book-entry transfer.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the Purchase Price for such of the tendered Shares as are
purchased will be issued to the order of the undersigned and mailed to the
address indicated above unless otherwise indicated under the "Special Payment
Instructions" or the "Special Delivery Instructions" below.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligations of the undersigned under this Letter of Transmittal shall be
binding upon the heirs, personal representatives, successors and assigns of
the undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 4, 6, 7 and 8) (See Instructions 1, 4, 6 and 9)
To be completed ONLY if the To be completed ONLY if the
check for the purchase price of check issued in the name of the
Shares purchased or Share Certif- undersigned for the purchase
icates evidencing Shares not ten- price of Shares purchased or
dered or not purchased are to be Share Certificates evidencing
issued in the name of someone Shares not tendered or not
other than the undersigned. purchased are to be mailed to
someone other than the
undersigned, or to the
undersigned at an address other
than that shown under
"Description of Shares Tendered."
Issue:[_] Check Mail:[_] Check
[_] Share Certificate(s) to: [_] Share Certificate(s) to:
Name _____________________________
(Please Print)
Name _____________________________
Address __________________________ (Please Print)
__________________________________
(Include Zip Code) Address __________________________
__________________________________
__________________________________ (Include Zip Code)
(Tax Identification or Social
Security No.)
5
<PAGE>
ODD LOTS
(See Instruction 8)
To be completed ONLY if Shares are being tendered by or on behalf of
a person owning beneficially, as of the close of business on September
30, 1999, and who continues to own beneficially as of the Expiration
Date, an aggregate of less than 100 Shares.
The undersigned either (check one box):
[_] was the beneficial owner, as of the close of business on
September 30, 1999, of an aggregate of less than 100 Shares all of
which are being tendered; or
[_] is a broker, dealer, commercial bank, trust company or other
nominee which:
(a) is tendering, for the beneficial owners thereof, Shares with
respect to which it is the record owner, and
(b) believes, based upon representations made to it by such
beneficial owners, that each such person was the beneficial owner, as
of the close of business on September 30, 1999, of an aggregate of less
than 100 Shares and is tendering all of such Shares.
6
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(See Instructions 1 and 6)
(Please Complete Substitute Form W-9 Contained Herein)
Signature(s) of Holder(s): __________________________________________________
Dated: , 1999
________________________________________________________
Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a person(s) authorized
to become registered holder(s) by certificates and documents transmitted
with this Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, please provide the
following information. See Instruction 6.
Name(s): ____________________________________________________________________
(Please Print)
Capacity (full title): ______________________________________________________
Address: ____________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: _____________________________________________
Taxpayer Identification or
Social Security Number(s): __________________________________________________
(See Substitute Form W-9 contained herein)
GUARANTEE OF SIGNATURE(S)
(If Required see Instructions 1 and 6)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
Area Code and Telephone Number: _____________________________________________
Dated:_________________________________________________________________, 1999
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. All signatures on this Letter of Transmittal
must be guaranteed by a member firm of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or by a
commercial bank or trust company having an office, branch or agency in the
United States which is a member of one of the Stock Transfer Association's
approved medallion programs (such as the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchange Medallion Program) (each of the foregoing being referred to as an
"Eligible Institution"), unless (i) this Letter of Transmittal is signed by
the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the holder of Shares)
tendered hereby and such holder(s) has (have) completed neither the box
entitled "Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (ii) such Shares are tendered
for the account of an Eligible Institution. See Instruction 6.
2. Delivery of Letter of Transmittal and Share Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be used either if Share
Certificates are to be forwarded herewith or if Shares are to be delivered by
book-entry transfer pursuant to the procedure set forth in Section 3 of the
Offer to Purchase. Share Certificates evidencing ALL physically tendered
Shares, or a confirmation of a book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility of all Shares delivered by book-
entry transfer, as well as a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date. If Share Certificates
are forwarded to the Depositary in multiple deliveries, a properly completed
and duly executed Letter of Transmittal must accompany each such delivery.
Stockholders whose Share Certificates are not immediately available, who
cannot deliver their Share Certificates and all other required documents to
the Depositary prior to the Expiration Date or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis may tender
their Shares pursuant to the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such
tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form made available by the Company, must be received by the Depositary
prior to the Expiration Date; and (iii) the Share Certificates evidencing all
physically delivered Shares in proper form for transfer by delivery, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered by book-entry transfer,
in each case together with a Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be
received by the Depositary within three New York Stock Exchange trading days
after the date of receipt by the Depositary of such Notice of Guaranteed
Delivery, all as described in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
OR, IN THE CASE OF GUARANTEED DELIVERY, BY THE DEPOSITARY ONLY. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
8
<PAGE>
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate signed schedule and attached hereto.
4. Partial Tenders and Unpurchased Shares (Not Applicable to Stockholders
Who Tender by Book-Entry Transfer). If fewer than all the Shares evidenced by
any Share Certificate delivered to the Depositary herewith are to be tendered
hereby, fill in the number of Shares which are to be tendered in the column
entitled "Number of Shares Tendered" of the box captioned "Description of
Shares Tendered." In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates
delivered to the Depositary herewith will be sent to the person(s) signing
this Letter of Transmittal, unless otherwise provided in either the "Special
Payment Instructions" or "Special Delivery Instructions" box on this Letter of
Transmittal, as soon as practicable after the expiration or termination of the
Offer. All Shares evidenced by Share Certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
5. Price at which Shares are being Tendered. Shares can only be tendered at
the price of $10.50 per Share.
6. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the Share Certificates evidencing such Shares, without
alteration, enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Share Certificate evidencing Shares tendered hereby, no endorsements or
separate stock powers are required, unless payment is to be made, or Share
Certificates evidencing Shares not purchased or not tendered are to be issued,
to a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Share Certificate evidencing Shares tendered
hereby, the Share Certificate must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name(s) of the registered
holder(s) appear(s) on such Share Certificate(s). Signatures on such Share
Certificate(s) and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Company of such person's authority so to
act must be submitted.
7. Stock Transfer Taxes. Except as otherwise provided in this Instruction 7,
the Company will pay all stock transfer taxes, if any, payable on the transfer
to it of Shares purchased pursuant to the Offer. If, however, payment of the
Purchase Price is to be made to, or (in the circumstances permitted by the
Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder(s), or if tendered Share Certificates are
registered in the name of any person other than the person signing the Letter
of Transmittal, the amount of all stock transfer taxes, if any (whether
imposed on the registered holder(s), or such other person), payable on account
of the transfer to such person will be deducted from the Purchase Price,
unless evidence
9
<PAGE>
satisfactory to the Company of the payment of such taxes, or exemption
therefrom, is submitted. Except as provided in this Instruction 7, it will not
be necessary for transfer tax stamps to be affixed to the Share Certificates
evidencing the Shares tendered hereby.
8. Odd Lots. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase less than all Shares tendered before the Expiration
Date, the Shares purchased first will consist of all Shares validly tendered
on or prior to the Expiration Date by or on behalf of stockholders who
beneficially owned, as of the close of business on September 30, 1999, and
continue to beneficially own as of the Expiration Date, an aggregate of less
than 100 Shares, and who tenders all of such stockholder's Shares. This
preference will not be available unless the box captioned "Odd Lots" is
completed.
9. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased is (are) to be issued, in the
name of a person other than the person(s) signing this Letter of Transmittal,
or if a check issued in the name of the person(s) signing this Letter of
Transmittal or any such Share Certificate is to be sent to someone other than
the person(s) signing this Letter of Transmittal or to the person(s) signing
this Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on this Letter of Transmittal, the
appropriate boxes captioned "Special Payment Instructions" and/or "Special
Delivery Instructions" on this Letter of Transmittal must be completed.
10. Irregularities. The Company will determine, in its sole discretion, all
questions as to the number of Shares to be accepted, the price to be paid
therefor, the form of documents, and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of
Shares, and its determination shall be final and binding on all parties. The
Company reserves the absolute right to reject any or all tenders of Shares
determined by it not to be in proper form or the acceptance of or payment for
which may in the opinion of the Company's counsel be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer
or any defect or irregularity in the tender of any particular Shares, and the
Company's interpretation of the terms of the Offer (including these
instructions) will be final and binding on all parties. No tender of Shares
will be deemed to be validly made until all defects and irregularities have
been cured or waived. Unless waived, any defects or irregularities in
connection with tenders must be cured within such time as the Company shall
determine. None of the Company, the Depositary nor any other person is or will
be obligated to give notice of defects of irregularities in tenders, nor shall
any of them incur any liability for failure to give any such notice.
11. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to Michael Gordon, Investor
Relations at the address and telephone number set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from Investor Relations or from brokers,
dealers, commercial banks or trust companies.
12. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and
that such stockholder is not subject to backup withholding of federal income
tax. If a tendering stockholder has been notified by the Internal Revenue
Service that such stockholder is subject to backup withholding, such
stockholder must cross out item (2) of the Certification box of the Substitute
Form W-9, unless such stockholder has since been notified by the Internal
Revenue Service that such stockholder is no longer subject to backup
withholding. Failure to provide the information on the Substitute Form W-9 may
subject the tendering stockholder to 31% federal income tax withholding on the
payment of the Purchase Price of all Shares purchased from such stockholder.
If the tendering stockholder has not been issued a TIN and has applied for one
or intends to apply for one in the near future, such stockholder should check
the box next to "Awaiting TIN" in Part 3 of the Substitute Form W-9 and sign
and date the "Certificate of Awaiting Taxpayer Identification Number." If the
box in Part 3 of Substitute Form W-9 is checked and the Depositary is not
provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the Purchase Price to such stockholder until a TIN is provided to
the Depositary.
10
<PAGE>
13. Withholding on Foreign Stockholders. The Depositary will withhold
federal income taxes equal to 30% of the gross payments payable to a foreign
stockholder unless the Depositary determines that a reduced rate of
withholding or an exemption from withholding is applicable. For this purpose,
a foreign stockholder is any stockholder that is not (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created
or organized in or under the laws of the United States or any political
subdivision thereof, (iii) any estate the income of which is subject to United
States federal income taxation regardless of the source of such income, or
(iv) a trust if (x) a court within the United States is able to exercise
primary supervision over the administration of the trust and (y) one or more
United States persons have authority to control all substantial decisions of
the trust. The Depositary will determine a stockholder's status as a foreign
stockholder and eligibility for a reduced rate of, or an exemption from,
withholding by reference to the stockholder's address and to any outstanding
forms, certificates or statements concerning eligibility for a reduced rate
of, or exemption from, withholding unless facts and circumstances indicate
that reliance is not warranted. A foreign stockholder who has not previously
submitted the appropriate certificates or statements with respect to a reduced
rate of, or exemption from, withholding for which such stockholder may be
eligible should consider doing so in order to avoid over withholding. A
foreign stockholder may be eligible to obtain a refund of tax withheld if such
stockholder meets one of the three tests for capital gain or loss treatment
described in Section 14 of the Offer to Purchase or is otherwise able to
establish that no tax or a reduced amount of tax was due.
14. Order of Purchase in Event of Proration. As described in Section 1 of
the Offer to Purchase, stockholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase
may have an effect on the federal income tax classification of any gain or
loss on the Shares purchased. See Section 1 of the Offer to Purchase.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND SHARE CERTIFICATES, OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER
REQUIRED DOCUMENTS), OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). STOCKHOLDERS ARE
ENCOURAGED TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 BELOW.
11
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is such stockholder's social security
number. If the Depositary is not provided with the correct TIN, the
stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such stockholder with respect
to Shares purchased pursuant to the Offer may be subject to backup withholding
of 31%.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such
statements can be obtained from the Depositary. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
Purpose of Substitute Form W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN) and (b) that
(i) such stockholder has not been notified by the Internal Revenue Service
that such stockholder is subject to backup withholding as a result of a
failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified such stockholder that such stockholder is no longer
subject to backup withholding.
What Number to Give the Depositary
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the
name of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report. If the tendering stockholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the stockholder should check the box next to "Awaiting TIN" in Part 3
and sign and date the "Certificate of Awaiting Taxpayer Identification
Number." If the box in Part 3 of Substitute Form W-9 is checked and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% of all payments of the Purchase Price to such stockholder until a
TIN is provided to the Depositary.
12
<PAGE>
PAYER'S NAME:
Part 1--PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND ----------------------
CERTIFY BY SIGNING AND Social Security Number
DATING BELOW. OR
SUBSTITUTE
Form W-9
Department of ----------------------
the Treasury Employer Identification
Internal Number TIN
Revenue --------------------------------------------------------
Service Part 2--Certification--UNDER THE PENALTIES OF
PERJURY, I CERTIFY THAT:
Payer's Request
for Taxpayer (1) The number shown on this form is my correct
Identification Taxpayer Identification Number or I am waiting
Number (TIN) for a number to be issued to me and,
(2) I am not subject to backup withholding either
because (a) I am exempt from backup withholding,
or (b) I have been notified by the Internal
Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure to
report all interest or dividends, or (e) the IRS
has notified me that I am no longer subject to
backup withholding.
--------------------------------------------------------
Part 3--
Awaiting TIN [_]
--------------------------------------------------------
Certification Instructions--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you are subject to backup withholding,
do not cross out Item (2).
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR
CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN
THE CERTIFICATION REQUIRED TO AVOID BACKUP WITHHOLDING.
Signature ______________________ Date _____________
Name (Please Print) _________________________________
Address (Please Print) ______________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE
THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number to
the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all payments of the
purchase price made to me will be withheld, but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
Signature ________________________________________________ Date:_________
Name (Please Print) ______________________________________________________
Address (Please Print) ___________________________________________________
13
<PAGE>
For Information Regarding this Offer, Please Contact:
Michael Gordon
Investor Relations
G&L Realty Corp.
439 N. Bedford Drive
Beverly Hills, CA 90210
(310) 273-9930
14
<PAGE>
EXHIBIT 99.(a)(3)
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
G&L Realty Corp.
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) if: (i) certificates
("Share Certificates") evidencing shares of common stock, $0.01 par value, of
G&L Realty Corp., a Maryland corporation, are not immediately available, (ii)
Share Certificates and all other required documents cannot be delivered to
ChaseMellon Shareholder Services, as Depositary (the "Depositary"), prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase (as
defined below)) or (iii) the procedure for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may
be delivered by hand, overnight courier or mail to the Depositary. See Section
3 of the Offer to Purchase.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By First Class Mail: By Hand: By Overnight Delivery:
Reorganization Department Reorganization Department Reorganization Department
P. O. Box 3301 120 Broadway 85 Challenger Road,
South Hackensack, NJ 07606 13th Floor Mail Drop-Reorg
New York, NY 10271 Ridgefield Park, NJ 07660
</TABLE>
By Facsimile Transmission (for eligible institutions only):
(201) 296-4293
To Confirm Receipt of
Notice of Guaranteed
Delivery:
(201) 296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to G&L Realty Corp., a Maryland corporation
(the "Company"), upon the terms and subject to the conditions set forth in the
Offer to Purchase dated October 1, 1999 (the "Offer to Purchase") and the
related Letter of Transmittal (which together, as from time to time amended,
constitute the "Offer"), receipt of each of which is hereby acknowledged,
shares of common stock, $0.01 par value, of the Company (the "Shares"), at a
price of $10.50 per Share, pursuant to the guaranteed delivery procedures
described in Section 3 of the Offer to Purchase.
ODD LOTS
To be completed ONLY if Shares are being tendered by or on behalf of a
person owning beneficially, as of the close of business on September 30,
1999, and who continues to own beneficially as of the Expiration Date, an
aggregate of less than 100 Shares.
The undersigned either (check one box):
[_] was the beneficial owner, as of the close of business on September 30,
1999, of an aggregate of less than 100 Shares, all of which are being
tendered, or
[_] is a broker, dealer, commercial bank, trust company or other nominee
which:
(a) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and
(b) believes, based upon representations made to it by such beneficial owners,
that each such person was the beneficial owner, as of the close of business
on September 30, 1999, of an aggregate of less than 100 Shares and is
tendering all of such Shares
<TABLE>
<S> <C>
PLEASE TYPE OR PRINT SIGN HERE:
___________________________________________ ___________________________________________
___________________________________________ ___________________________________________
(Name(s))
___________________________________________ ___________________________________________
(Certificate Number(s) (If Available))
___________________________________________ Date: _____________________________________
(Address(es))
If Shares will be delivered by book-entry
___________________________________________ transfer,
(Area Code and Telephone Number) give the Depository Trust Company Account
Number: ___________________________________
</TABLE>
<PAGE>
GUARANTEE
(Not to be used for Signature Guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office, branch
or agency in the United States which is a member of one of the Stock
Transfer Association's approved medallion programs (such as the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchange Medallion Program) (each, an
"Eligible Institution"), hereby (i) guarantees to deliver to the Depositary,
at one of its addresses set forth above, Share Certificates evidencing the
Shares tendered hereby, in proper form for transfer, or confirmation of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company pursuant to the procedures set forth in Section 3
of the Offer to Purchase), together with a properly completed delivery of a
Letter of Transmittal (or facsimile thereof) properly completed and duly
executed, with any required signature guarantees and/or any other documents
required by the Letter of Transmittal, all within three New York Stock
Exchange trading days, (ii) represents that the undersigned has a net long
position in Shares or equivalent securities at least equal to the Shares
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (iii) represents that such tender of
Shares complies with Rule l4e-4.
(Name of Firm) ______________________________________________________________
-----------------------------------------------------------------------------
(Authorized Signature)
(Address) ___________________________________________________________________
(Include Zip Code)
(Title) _____________________________________________________________________
Name: _______________________________________________________________________
(Area Code and Telephone Number) ____________________________________________
Dated: ______________________________________________________________________
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.(a)(4)
G&L REALTY CORP.
Offer to Purchase for Cash
Up to 1,000,000 Shares of its Common Stock
at a Purchase Price of $10.50 Per Share
October 1, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
G&L Realty Corp., a Maryland corporation (the "Company"), is making an offer
to purchase for cash up to 1,000,000 shares of its common stock, $0.01 par
value (the "Shares"), at a price of $10.50 per Share, and upon the terms and
subject to the conditions set forth in the Offer to Purchase dated October 1,
1999 and in the related Letter of Transmittal (which together constitute the
"Offer"). We enclose the materials listed below relating to the Offer.
The Company will pay a price of $10.50 per Share (the "Purchase Price") for
Shares validly tendered pursuant to the Offer. The Company will purchase
1,000,000 Shares (or such lesser number of Shares as are validly tendered)
pursuant to the Offer. All Shares validly tendered will be purchased at the
Purchase Price, payable to the seller in cash, upon the terms and subject to
the conditions of the Offer, including the proration terms thereof. See
Section 1 of the Offer to Purchase.
If, prior to the Expiration Date, more than 1,000,000 Shares (or such
greater number of Shares as the Company may elect to purchase) are validly
tendered, the Company will, upon the terms and subject to the conditions of
the Offer, accept Shares for purchase first from Odd Lot Owners (as defined in
Section 2 of the Offer to Purchase) who validly tender all of their Shares and
then on a pro rata basis, if necessary, from all other stockholders whose
Shares are validly tendered.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set forth
in the Offer. See Section 6 of the Offer to Purchase.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 11:59 P.M., NEW YORK CITY
TIME, ON FRIDAY, OCTOBER 29, 1999, UNLESS THE OFFER IS EXTENDED.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase, dated October 1, 1999;
2. Letter to Clients which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to
the Offer;
3. Letter, dated October 1, 1999, from Daniel M. Gottlieb, Chief
Executive Officer, and Steven D. Lebowitz, President, of the Company, to
stockholders of the Company;
4. Letter of Transmittal for your use and for the information of your
clients (together with accompanying Substitute Form W-9 guidelines);
5. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available, or if the procedure
for book-entry transfer cannot be completed on a timely basis; and
No fees or commissions will be payable to brokers, dealers or any other
persons for soliciting tenders of Shares pursuant to the Offer. The Company
will, however, upon request, reimburse you for customary mailing
1
<PAGE>
and handling expenses incurred by you in forwarding any of the enclosed
materials to the beneficial owners of Shares held by you as a nominee or in a
fiduciary capacity. The Company will pay or cause to be paid any stock
transfer taxes on its purchase of Shares, except as otherwise provided in
Instruction 7 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be
sent to the Depositary with either certificate(s) representing the tendered
Shares or confirmation of their book-entry transfer, all in accordance with
the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
As described in Section 3 of the Offer to Purchase, tenders may be made
without the concurrent deposit of stock certificates or concurrent compliance
with the procedure for book-entry transfer, if such tenders are made by or
through a broker or dealer which is a member firm of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office, branch or agency in the
United States which is a member of one of the Stock Transfer Association's
approved medallion programs (such as the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchange Medallion Program). Certificates for Shares so tendered (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the "Book-Entry Transfer Facility," as described in the Offer to
Purchase), together with a properly completed and duly executed Letter of
Transmittal and any other documents required by the Letter of Transmittal,
must be received by the Depositary within three New York Stock Exchange
trading days after timely receipt by the Depositary of a properly completed
and duly executed Notice of Guaranteed Delivery.
Any inquiries you may have with respect to the Offer should be addressed to
Michael Gordon, Investor Relations at the address and telephone number set
forth on the back cover page of the Offer to Purchase. Additional copies of
the enclosed material may also be obtained from Investor Relations.
Very truly yours,
G&L REALTY CORP.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.
2
<PAGE>
EXHIBIT 99.(a)(5)
G&L Realty Corp.
Offer to Purchase for Cash
Up to 1,000,000 Shares of its Common Stock
at a Purchase Price of $10.50 Per Share
October 1, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October 1,
1999, and the related Letter of Transmittal (which together constitute the
"Offer"), in connection with the Offer by G&L Realty Corp., a Maryland
corporation (the "Company"), to purchase for cash up to 1,000,000 shares of
its common stock, $0.01 par value (the "Shares"), at a price of $10.50 per
Share, upon the terms and subject to the conditions of the Offer. Also
enclosed is certain other material related to the Offer, including a letter,
dated October 1, 1999, from Daniel M. Gottlieb, Chief Executive Officer, and
Steven D. Lebowitz, President, of the Company, to stockholders of the Company.
The Company will pay a price of $10.50 per Share (the "Purchase Price") for
Shares validly tendered pursuant to the Offer. The Company will purchase
1,000,000 Shares (or such lesser number of Shares as are validly tendered)
pursuant to the Offer. All Shares validly tendered prior to the Expiration
Date will be purchased at the Purchase Price, payable to the seller in cash
upon the terms and subject to the conditions of the Offer, including the
proration terms thereof. The Company will return all Shares that are not
validly tendered, and Shares not purchased because of proration. See Section 1
of the Offer to Purchase.
If, prior to the Expiration Date, more than 1,000,000 Shares (or such
greater number of Shares as the Company may elect to purchase) are validly
tendered, the Company will, upon the terms and subject to the conditions of
the Offer, accept Shares for purchase first from Odd Lot Owners (as defined in
Section 2 of the Offer to Purchase) who validly tender all of their Shares at
the Purchase Price, and then on a pro rata basis, if necessary, from all other
stockholders whose Shares are validly tendered at the Purchase Price.
We are the holder of record of Shares held for your account. As such, we are
the only ones who can tender your Shares, and then only pursuant to the
instructions you set forth on the attached instruction form. We are sending
you the Letter of Transmittal for your information only; you cannot use it to
tender Shares we hold for your account.
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender any number of your Shares at the Purchase Price of $10.50
a share, payable to you in cash.
2. The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions set forth
in the Offer.
3. The Offer, proration period, and withdrawal rights will expire at 11:59
p.m., New York City time, on October 29, 1999, unless the Company extends the
Offer.
4. The Offer is for up to 1,000,000 Shares, constituting approximately 26.0%
of the Shares outstanding as of September 30, 1999.
5. Subject to Instruction 7 of the Letter of Transmittal, tendering
stockholders will not be obligated to pay any stock transfer taxes on the
Company's purchase of Shares pursuant to the Offer.
<PAGE>
6. If you owned beneficially as of the close of business on September 30,
1999 an aggregate of less than 100 Shares, you instruct us to tender on your
behalf all the Shares of which we are the holder of record before the
expiration of the Offer and you check the appropriate space in the box
captioned "Odd Lots" in the attached Instruction Form, the Company will accept
all such Shares for purchase before proration, if any, of the purchase of
other Shares validly tendered.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, and returning to us the attached Instruction
Form. An envelope to return your Instruction Form to us is enclosed. If you
authorize us to tender your Shares, we will tender all such Shares unless you
specify otherwise on the attached Instruction Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER.
THE OFFER, PRORATION PERIOD, AND WITHDRAWAL RIGHTS EXPIRE AT 11:59 P.M., NEW
YORK CITY TIME, ON FRIDAY, OCTOBER 29, 1999, UNLESS THE COMPANY EXTENDS THE
OFFER.
As described in Section 1 of the Offer to Purchase, if before the Expiration
Date more than 1,000,000 Shares (or such greater number of Shares as the
Company elects to purchase) are validly tendered, the Company will accept
Shares for purchase at the Purchase Price in the following order of priority:
(a) first, all Shares validly tendered at the Purchase Price prior to the
Expiration Date by any Odd Lot Owner (as defined in Section 2 of the Offer to
Purchase) who:
(1) tenders all Shares beneficially owned by such Odd Lot Owner
(partial tenders will not qualify for this preference); and
(2) completes the section captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) then, after purchase of all of the foregoing Shares, all other Shares
validly tendered before the Expiration Date on a pro rata basis, if necessary
(with adjustments to avoid purchases of fractional Shares).
The Offer is not being made to, nor will the Company accept tenders from,
holders of Shares in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or blue sky laws of such jurisdiction.
The Company is not aware of any jurisdiction in which the making of the Offer
or the tender of Shares would not be in compliance with the laws of such
jurisdictions. However, the Company reserves the right to exclude holders in
any jurisdiction in which it is asserted that the Offer cannot lawfully be
made. So long as the Company makes a good faith effort to comply with any
state law deemed applicable to the Offer, if it cannot do so, the Company
believes that the exclusion of holders residing in such jurisdictions is
permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act. In any
jurisdiction the securities or blue sky laws of which require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed to be made on
the Company's behalf by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
<PAGE>
Instruction Form With Respect to
Offer to Purchase for Cash up to 1,000,000 Shares of Common Stock
of
G&L Realty Corp.
At a Purchase Price of $10.50 Per Share
The undersigned acknowledge(s) receipt of your letter, and the enclosed
Offer to Purchase dated October 1, 1999 and related Letter of Transmittal
(which together constitute the "Offer"), in connection with the offer by G&L
Realty Corp., a Maryland corporation (the "Company"), to purchase for cash
1,000,000 shares of its common stock, $0.01 par value (the "Shares"), at the
price of $10.50 per Share upon the terms and subject to the conditions of the
Offer.
The Company will purchase up to 1,000,000 shares. If more than 1,000,000
shares are tendered, the Company will prorate the number of shares offered
pursuant to Section 1 of the Offer to Purchase.
[_] By checking this box, all Shares held by us for your account will be
tendered at $10.50 per Share. If less than all of the Shares are to be
tendered, please check the box below and indicate the aggregate number of
shares to be tendered by us.
[ ] Shares (1)
--------
(1) Unless otherwise indicated, it will be assumed that all Shares held for
the account of the undersigned are to be tendered.
<PAGE>
ODD LOTS
[_] By checking this box, the undersigned represents that the undersigned
owned beneficially, as of the close of business on September 30, 1999, an
aggregate of less than 100 Shares, and is tendering or is instructing the
applicable record holder(s) to tender all such Shares at $10.50 per
Share.
SIGNATURE BOX
Signature(s): _______________________________________________________________
Dated: ______________________________________________________________________
Name(s) and Address(es): ____________________________________________________
(please print)
Area Code and Telephone Number: _____________________________________________
<PAGE>
EXHIBIT 99.(a)(6)
[LOGO OF G & L REALTY]
October 1, 1999
Dear Fellow Stockholder:
Over the past 24 months, we've experienced substantial change in the
conditions surrounding our healthcare real estate industry. Market prices for
quality medical office properties have soared, while the equity values of real
estate investment trusts that own many of these assets have fallen. The
business of healthcare facility financing has become both more competitive,
and more volatile. Many health care operators, large and small, are struggling
for survival because of government cuts in funding and overly aggressive price
competition.
These conditions have already affected our business at G&L in a variety of
ways, prompting us to increase reserves at the end of 1998 and to shift our
investment focus from acquisitions to new development. Looking forward, the
board of directors has concluded that growth through new development of high
quality healthcare real estate assets represents the best, potentially most
rewarding use of G&L's corporate resources for the foreseeable future. It is
our intention, therefore, to focus on the development of new properties and
the rehabilitation of existing properties, generating earnings through
property operations and property sales, when appropriate.
Development, however, requires large, immediate investments of capital,
while the earnings stream or capital gain anticipated from these new
properties can lag their completion by as much as two years. For these
reasons, G&L has recently taken the following actions:
. On September 27, 1999, G&L's board of directors reduced the company's
quarterly common stock dividend to $0.125 from $0.39 per share and
adopted a new common stock dividend policy that will reduce future
quarterly dividends to close to the minimum level required to maintain
G&L's status as a real estate investment trust. Given this new policy,
future common dividend amounts may be lower than in the past and may
fluctuate depending upon the level of the company's taxable income.
. G&L is launching a tender offer for up to one million shares of the
company's outstanding common stock at a purchase price of $10.50 per
share in cash. The company will use existing cash balances, its line of
credit and the proceeds from two mortgage refinance transactions
currently in process to repurchase the stock. Our intent in launching
this offer is to provide an orderly exit strategy for stockholders whose
investment objectives may no longer match those of the company. In
addition, our board of directors believes that G&L's common stock is
undervalued at current price levels and represents a good investment for
the company's remaining stockholders.
As always, we're grateful for our stockholder's support of G&L, and we
earnestly hope that most, if not all of you will elect to continue your
investment in the company. We are and will remain G&L's largest investors.
Collectively, we own more than 1.25 million shares of common stock (including
shares issuable upon conversion of operating partnership units), about 28% of
the total outstanding on a fully diluted basis. While we expect to tender a
small portion (approximately 5%) of our total aggregate holdings in order to
repay debt and maintain a reasonable amount of personal liquidity, our
intention over the long term is to remain as fully invested in the company as
is reasonably possible. If you agree with us that G&L's common stock
represents an excellent value at today's prices, we look forward to your
partnership, now and in the future.
Sincerely,
/s/ Daniel M. Gottlieb /s/ Steven D. Lebowitz
Daniel M. Gottlieb Steven D. Lebowitz
Chief Executive Officer and President and
Co-Chairman of the Board Co-Chairman of the Board
<PAGE>
EXHIBIT 99.(a)(7)
[LETTERHEAD OF G & L REALTY CORPORATION]
RELEASE: Immediate CONTACT:
Michael Gordon 310-273-9930
E-mail: [email protected]
G&L REALTY CORP. TO LAUNCH TENDER OFFER
---------------------------------------
FOR 1.0 MILLION SHARES OF ITS COMMON STOCK;
-------------------------------------------
REDUCES THIRD QUARTER COMMON DIVIDEND BY 68%
---------------------------- ---------------
BEVERLY HILLS, CA, September 27, 1999 G&L Realty Corp. (NYSE:GLR) will
launch a tender offer on Friday, October 1, 1999 for up to 1.0 million shares,
or approximately 26% of the real estate investment trust's outstanding common
stock at a purchase price of $10.50 per share in cash. The offer price
represents a 5% premium over Friday's closing price of $10.00 per share. If all
1.0 million shares are tendered, the transaction is expected to cost the company
approximately $10.9 million, which includes estimated offering fees and expenses
of $380,000.
Coupled with the tender offer announcement, G&L also reported that the
company's board of directors has voted to reduce G&L's third quarter common
stock dividend to $0.125 per share. The dividend will be paid on October 15,
1999, to shareholders of record on September 30, 1999. For the past seven
quarters, the company has paid a common dividend of $0.39 per share. Going
forward, G&L said it expects to pay a reduced dividend amount which approximates
the minimum common stock dividend required to maintain its status as a real
estate investment trust. This may result in variations in total dividends from
year to year depending upon variations in the company's taxable income resulting
from such factors as sales of properties or adjustments to reserves. The policy
change has no impact on the dividends paid to the company's preferred
stockholders.
G&L said its board of directors revised the company's common dividend
policy to better reflect the capital-intensive development program that now
represents G&L's primary growth strategy. Over the past 24 months, partially in
response to sharply higher acquisition prices for existing properties, G&L has
initiated development of more than $44 million in new health care-related real
estate. These properties require large upfront capital investments and generally
need 12 to 18 months following completion of construction to achieve optimum
occupancy levels and
<PAGE>
revenue generation.
G&L said the tender offer for its common stock was being made to provide an
orderly exit strategy for current stockholders whose investment objectives may
be inconsistent with the company's new dividend policy. The company also said
that its board believes G&L's common stock is currently undervalued and that the
repurchase of the stock represents a good long-term investment for remaining
shareholders. The company expects to finance the tender offer with existing
cash balances, its line of credit and the proceeds from two mortgage refinance
transactions currently in process.
As a group, G&L's management and directors currently own or control
approximately 30% of the outstanding common stock of the company, including
currently exercisable stock options and REIT operating partnership units
convertible into common stock. Two of the company's executives, co-chairmen
Daniel M. Gottlieb and Steven D. Lebowitz, have indicated their intention to
tender up to 5%, or 65,606 shares, of their aggregate common stock holdings in
the offering. If the tender offer is successfully completed and all 1.0
million shares are tendered, G&L's management and directors will own or control
approximately 36% of the company's outstanding common stock, including currently
exercisable options and operating partnership units.
The tender offer is scheduled to commence on October 1, 1999 and is
scheduled to expire on October 29, 1999.
Founded in 1976, G&L Realty Corp. is a growth-oriented health care real
estate investment trust with two major areas of operation: the Medical Office
Building Division, which owns, develops and manages high-quality, strategically
located properties, primarily in Southern California; and the Senior Care
Division, which facilitates the purchase and financing of health care facilities
throughout the United States.
This press release contains certain forward-looking statements within the
meaning of the federal securities laws. A number of factors could cause G&L
Realty's actual operating performance or financial results to differ materially
from those anticipated. These include changes in the general economy, the
supply of and demand for health care related real estate in G&L's markets,
increases in construction costs, construction delays, the availability of
financing, the receipt of any governmental approvals required for development,
potential environmental liabilities, and other factors affecting the condition
of properties being acquired, and other risks described from time to time in G&L
Realty's reports filed with the Securities and Exchange Commission.
#####
G&L Realty Corp.
Corporate Headquarters:
439 North Bedford Drive, Beverly Hills, California 90210
<PAGE>
EXHIBIT 99.(a)(8)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
Social security numbers have nine digits separated by two hyphens: i.e. 000-
00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
- ---------------------------------------------
<CAPTION>
Give the
For this type of account: SOCIAL SECURITY
number of--
- ---------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on
the account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust The actual
account that is not owner(1)
a legal or valid
trust under State
law
5. Sole proprietorship The owner(3)
account
</TABLE>
- -----------------------------------------------
<TABLE>
<CAPTION>
Give the EMPLOYER
For this type of account: IDENTIFICATION
number of--
- -----------------------------------------------
<S> <C>
6. Sole proprietorship The owner
account
7. A valid trust, estate, The legal entity
or pension trust (Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(4)
8. Corporate account The corporation
9. Partnership account The partnership
held in the name of
the business
10. Association, club, The organization
religious, charitable,
or other tax-exempt
organization
11. A broker or registered The broker or
nominee nominee
12. Account with the The public
Department of entity
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
- -----------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner. The name of the business or the "doing
business as" name may also be entered. Either the social security number
or the employer identification number may be used.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number ("TIN") or you don't know
your number, obtain Form SS-5, Application for a Social Security Number Card,
or Form SS-4, Application for Employer Identification Number, at the local
office of the Social Security Administration or the Internal Revenue Service
and apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on all dividend and
interest payments and on broker transactions include the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodian account under Section 403(b)(7).
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including the exempt-interest dividends
under section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments described in section 6049(b)(6) to nonresident aliens.
. Payments of tax-exempt interest (including the exempt-interest dividends
under section 859).
. Payments described in section 6049(b)(7) to resident aliens.
. Payments on tax-free covenant bonds under section 1466.
. Payments made to a nominee.
Exempt payees described above should file the Substitute Form W-9 to avoid
possible erroneous backup withholding. Complete the Substitute Form W-9 as
follows:
ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ACROSS THE FACE OF
THE FORM, SIGN, DATE, AND RETURN THE FORM TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup with-
holding. For details, see the sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A and 6050N and the regulations thereunder.
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes and to help verify the accuracy of tax reforms. Payers must be given
the numbers whether or not recipients are required to file tax returns. Payers
must generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) Penalty for False Information With Respect to Withholding.--If you make a
false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
(4) Misuse of Taxpayer Identification Numbers.--If the payer discloses or uses
taxpayer identification numbers in violation of Federal law, the payer may be
subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT 99.(b)(1)
[LETTERHEAD OF GMAC COMMERCIAL MORTGAGE CORPORATION]
GMAC COMMERCIAL MORTGAGE CORPORATION
MORTGAGE LOAN COMMITMENT
August 30, 1999
TO: G&L Realty Corporation
439 North Bedford Drive
Beverly Hills, CA 90210
Attention: Steve Lebowitz
George Nagler, Esquire
RE: Three Mortgage Loans Secured by the Following Existing Health Care
Facilities (each, individually and collectively, the "Facility"):
1. Chestnut Hill Nursing and Rehabilitation Center (123-bed skilled
nursing facility) located at 32 Chestnut Hill, East Longmeadow,
Massachusetts ("Chestnut Hill").
2. Mary Lyons Nursing Home (100-bed skilled nursing facility)
located at 34 Main Street, Hampden, Massachusetts ("Mary Lyons").
3. Riverdale Gardens Nursing and Rehabilitation Center (168-bed
skilled nursing facility) located at 42 Prospect Avenue, West
Springfield, Massachusetts ("Riverdale").
Gentlemen:
GMAC Commercial Mortgage Corporation ("Lender") agrees to make to Borrower
(as identified herein), three first lien mortgage loans (individually and
collectively, the "Loan") in order to refinance the costs of acquisition of the
above-referenced Facility. The Loan will be subject to the terms and conditions
as set forth in this Commitment and made in reliance upon certain information
and material furnished by you. Our agreement to make the Loan is subject to the
satisfaction of each of the terms and conditions of this Commitment. All terms
and conditions of this Commitment are to be satisfied prior to the date of the
closing of the Loan (the "Closing Date").
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 2
A. PARTIES
1. BORROWER. Three bankruptcy remote, single-asset entities to be formed
--------
or incorporated under the laws of the State of California for the sole purpose
of owning and operating its Facility and whose general partner(s) or members are
acceptable to Lender. G&L Hampden, L.L.C. shall convey fee simple title to a
single Facility to each new Borrower, respectively (collectively and
individually referred to herein as the "Borrower").
Each Borrower shall be a single asset entity whose organizational
documents shall evidence Borrower's capacity and good standing and the authority
of the persons executing any documents in connection with the Loan (the "Loan
Documents") on behalf of Borrower to execute the Loan Documents. Borrower's
organizational documents shall be approved by Lender's counsel as a condition to
closing. Borrower's organizational documents shall provide that the bankruptcy
or insolvency of Borrower's general partners or members (if any) shall not cause
the dissolution of Borrower.
2. GUARANTOR. G&L Realty Corporation, incorporated under the laws of the
---------
State of California ("Guarantor").
3. LESSEE. Hampden Nursing Homes, Inc., a Massachusetts corporation
------
("Lessee").
4. MANAGER. Lenox Healthcare, Inc., a Massachusetts corporation
-------
("Manager").
B. LOAN TERMS:
1. LOAN AMOUNT:
-----------
a. For Chestnut Hill, up to $6,480,000.00, subject to the
satisfactory review by Lender of the appraisal which must establish a Facility
loan to value ratio of not less than eighty percent (80%).
b. For Mary Lyons, up to $2,720,000.00, subject to the satisfactory
review by Lender of the appraisal which must establish a Facility loan to value
ratio of not less than eighty percent (80%).
c. For Riverdale Gardens, up to $4,720,000.00, subject to the
satisfactory review by Lender of the appraisal which must establish a Facility
loan to value ratio of not less than eighty percent (80%).
2. INTEREST RATE. Borrower acknowledges that the initial interest rate
cannot be determined until the Borrower accepts this Commitment, all fees
required herein have been received by Lender, and the conditions of this
Commitment have been satisfied. The interest rate shall be a variable rate
calculated at the 30-day LIBOR plus 275 basis points. The interest rate on the
Loan for each month shall be fixed prior to the beginning of such month at the
then
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 3
current 30-day LIBOR rate plus 275 basis points. Each change in the interest
rate on the Loan shall take effect on the first day of the calendar month
immediately following the month in which a change in the 30-day LIBOR rate has
occurred. The interest rate shall be computed on the basis of a 360-day year
and actual number of days elapsed for any whole or partial month in which
interest on the Loan is being calculated. The initial interest rate on the Loan
shall be set three (3) business days prior to the Closing Date.
The Loan was underwritten at a fixed interest rate of eight and
ninety-three one hundredths percent (8.93%) per annum. If current market
interest rates increase such that the Facility's cash flow, as calculated by
Lender utilizing the most current or pro forma financial statement of the
Facility provided to Lender, is not sufficient to support the proposed Loan as
determined by Lender, in its sole discretion, prior to the Closing Date, the
Lender will re-underwrite the Loan and will consider a counter-offer modifying
the terms of this Commitment.
3. TERM AND AMORTIZATION SCHEDULE. Three years with debt service payments
------------------------------
based on a twenty-five (25) year amortization schedule.
4. CLOSING DATE: The anticipated Closing Date shall be on or before
------------
September 30, 1999.
5. REPAYMENT. On the Closing Date, the Borrower shall pay interest due on
---------
the Loan from the Closing Date to and including the last day of the month in
which the Closing Date occurs. Commencing on the first day of the second month
after the Closing Date, and on the first day of each and every month thereafter,
monthly principal and interest payments shall be due in an amount necessary to
fully amortize the Loan amount at the interest rate specified above over an
assumed term of twenty-five (25) years. The outstanding principal balance of the
Loan plus all accrued and unpaid interest thereon shall be due and payable upon
maturity of the Loan, subject to the payment of the exit fee set forth in
paragraph G.2. below.
6. LATE PAYMENT CHARGE. Each payment of principal, interest and escrow
-------------------
amounts referenced above, not received within ten (10) calendar days following
the due date of such payments, shall bear a late payment charge for each month
during which a delinquency exists, equal to (a) five percent (5%) of said
delinquent payment or (b) the maximum amount permitted by applicable state law,
whichever is less.
7. DEFAULT INTEREST RATE. Interest shall accrue on all payments of principal
---------------------
of and interest on the promissory note evidencing the Loan (the "Note"), and
other payments under the Loan Documents, not received by Lender on the date due,
whether at maturity or by acceleration or at any other time, from the date such
payment is due and payable until paid, at a rate equal to (a) the current rate
on the Loan plus five percent (5%) per annum or (b) the maximum rate permitted
by applicable law, whichever is less.
8. PREPAYMENT PRIVILEGE. Prepayment of the Loan in full or in part shall be
--------------------
permitted at any time during the Loan term upon not less than thirty (30) days
and not more than forty (40) days prior written notice to Lender, subject to
payment of the exit fee described in Paragraph G.2. below.
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 4
C. SECURITY:
The Loan will be secured by the following (collectively, the "Security"):
(i) first lien Mortgage, fixture filing and security agreement (the "Mortgage")
with respect to the Borrower's right, title, and interest in and to the
Facility, including the underlying real property, the improvements thereon, and
all equipment, fixtures, and inventory used in connection therewith, (ii) a
first lien security interest and an assignment of Borrower's interest in all
general intangibles, licenses, permits, reimbursement contracts, leases and
contracts, (iii) a first lien security interest and an assignment of Borrower's
interest in all rents and leases relating to the Facility, (iv) an assignment of
the management contract and subordination of management fees, and (v) a first
lien security interest in accounts receivable issuing from the Facility. All
such security interests described above shall be subject to such permitted
encumbrances as Lender shall approve in its sole discretion. Each Facility will
be subject to a triple-net operating lease (individually and collectively, the
"Operating Lease") between the Borrower and Lessee, providing for a ratio of
annual aggregate net rental income to Debt Service (hereinafter defined) of 1.30
to 1.0 and a primary term of not less than four (4) years from the Closing Date.
The form and terms of such Operating Lease shall be satisfactory in all respects
to Lender.
The Loan Documents will contain provisions prohibiting the transfer or
further encumbrance of any portion of or interest in the Facility or any change
in the ownership interests in the Borrower without the Lender's prior written
consent. The Loan Documents will prohibit the execution of any other management
agreements or any operating leases during the term of the Loan without the
Lender's prior written consent. The real property underlying the Facility shall
constitute one or more separate and distinct tax parcels for purposes of all
real estate taxes and assessments. There shall be no overlap whatsoever between
such real property and any other property which will not be subject to the first
lien of the Mortgage. Evidence shall be submitted to Lender that all streets
adjoining the real property underlying the Facility have been completed,
dedicated and accepted for maintenance and public ingress and egress to such
real property.
D. ESCROW RESERVE REQUIREMENTS:
1. DEBT RESERVE FUND. Borrower will establish at closing and maintain
-----------------
during the term of the Loan, three debt service reserve funds (collectively or
individually, "Debt Reserve Fund") with Lender equal to three (3) months debt
service payments with respect to the Loan, rounded upward to the nearest $1,000
(currently estimated to be approximately $320,376 in the aggregate). The Debt
Reserve Fund shall be invested in an interest bearing investment account offered
by the Lender which shall be acceptable to Lender and Borrower. Lender and
Borrower agree that all interest which shall accrue on the Debt Reserve Fund
shall remain in the Debt Reserve Fund to be disbursed annually provided that
there is no outstanding default or event of default under the Loan Documents
evidencing and/or securing the Loan. Borrower will grant to Lender a first lien
security interest in the Debt Reserve Fund as collateral for repayment of the
Loan.
2. CAPITAL IMPROVEMENTS RESERVE FUND. Borrower will establish at closing,
---------------------------------
three capital improvements reserve funds, in an aggregate amount equal to one
hundred
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 5
twenty-five percent (125%) of the amount established by Lender, relying on
engineering or other professional reports, to cover the completion, renovation
or remediation of certain capital improvements identified by Lender as deferred
maintenance which aggregate amount is currently estimated to be $24,406 in the
aggregate and will be allocated by Lender to each Facility. Such capital
improvements reserve funds will be held by Lender in a non-interest bearing
account.
E. LOAN AND CLOSING DOCUMENTS:
1. NOTE AND MORTGAGE. The Loan shall be evidenced by the Note and
-----------------
secured by, among other things, the Mortgage. The Loan Documents shall be on
Lender's standard form loan documentation and shall otherwise be acceptable to
Lender and shall contain and/or comply with, among other things, the following
provisions:
a. FIRST LIEN. The Mortgage shall constitute a first lien on the
----------
unencumbered, marketable, fee simple absolute title to the Security free and
clear of any and all liens or delinquent real or personal taxes or special
assessments (levied or pending). Borrower shall provide Lender with satisfactory
evidence that all levied, pending or proposed assessments affecting the Facility
or any part thereof shall be satisfied and paid in full on or prior to the
Closing Date. The real property underlying the Facility must be free and clear
of all encumbrances and liens, and no rights may be outstanding that would give
rise to any lien, except the lien of real estate taxes not yet due and payable,
and other exceptions specifically waived in writing by Lender.
b. TRANSFERS AND ASSUMPTIONS. Transfers of any part of the Facility,
-------------------------
including the underlying real property, or transfers of any beneficial interests
in the Borrower shall not be permitted without the prior written consent of
Lender which may be withheld in its sole discretion.
c. SECONDARY FINANCING. Secondary financing of any type is not
-------------------
permitted without the prior written consent of Lender which may be withheld in
its sole discretion.
d. TAX AND INSURANCE ESCROWS. Borrower shall pay on a monthly basis
with each payment of principal and interest on the Loan, such amounts as in
Lender's determination will enable Lender to pay, at least thirty (30) calendar
days before due, all taxes, assessments, insurance premiums or other similar
charges affecting the Facility and the underlying real property. No interest
shall be payable to Borrower on tax and insurance escrows, unless applicable
state law requires otherwise.
e. PROPERTY INSPECTIONS. Borrower agrees to allow Lender or Lender's
--------------------
representative to conduct inspections of the Facility upon Lender giving
reasonable notice to Borrower except in cases of emergency in which no notice
shall be required. Borrower agrees to provide Lender, for such inspection
purposes, any data necessary for Lender to complete its inspection.
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 6
f. CONDEMNATION OR CASUALTY LOSS. In the event of condemnation or
-----------------------------
casualty loss, the entire award of insurance proceeds as a result thereof will
be assigned to Lender with authorization to apply all or a portion thereof to
the outstanding principal balance of the Loan or to release all or a portion
thereof to Borrower, at Lender's option in its sole discretion.
g. MANAGEMENT AGREEMENT. A Management Agreement, in form and substance
acceptable to Lender, shall be in effect with respect to the management of the
Facility by Manager, and Lender shall have the right to approve any third party
manager in its sole and absolute discretion with respect to the management of
the Facility. The management agreement will be assigned to Lender as additional
security for repayment of the Loan and payment of all management fees shall be
subordinate to payments on the Loan.
h. INSURANCE REQUIREMENTS. The following types of insurance policies
----------------------
and coverages must be obtained at Borrower's expense, which policies and
coverages must be acceptable to Lender's insurance consultant in its sole
discretion:
(i) Comprehensive "all risk" insurance, including coverage for
windstorms and hail, in an amount equal to 100% of the full replacement cost of
the Facility, which replacement cost shall be determined by the "Insurable
Value" or "Cost Approach to Value" reflected in the most recent Lender approved
appraisal for the Facility, without deduction for depreciation. Such insurance
shall also include (a) agreed insurance amount endorsement waiving all
co-insurance provisions, and (b) an "Ordinance of Law Coverage" endorsement if
the Facility or the use thereof shall constitute a legal non-conforming
structure or use.
(ii) Commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage, in or about the
Facility to be on a so-called "occurrence" basis for at least $1,000,000,00 per
occurrence and $3,000,000.00 in the aggregate with a $5,000,000 umbrella
coverage.
(iii) Professional liability insurance against claims for personal
injury, bodily injury or death, in or about the Facility to be on a so-called
"occurrence" basis for at least $1,000,000,00 per occurrence and $3,000,000.00
in the aggregate.
(iv) Business interruption income insurance for any owner-occupied
Facility in an amount equal to 100% of the net income plus carrying costs and
extraordinary expenses of the Facility for a period of twelve (12) months as
projected by Lender, containing a 90-day extended period of indemnity
endorsement.
(v) Loss of Rents insurance for any Facility leased to any
independent third party, in an amount equal to 100% of the gross rental income
of the Facility for a period of twelve (12) months as projected by Lender,
containing a 90-day extended period of indemnity endorsement.
<PAGE>
(vi) Flood Hazard Insurance if any portion of the improvements is
located in a federally designated "special flood hazard area" and in which flood
insurance is available. In lieu thereof, Lender will accept proof, satisfactory
to it in its sole discretion, that the improvements are not within the
boundaries of a designated area.
(vii) Workers' compensation insurance, if applicable and required
by state law, subject to applicable state statutory limits, and employer's
liability insurance with a limit of $1,000,000.00 per accident and per disease
per employee with respect to the Facility.
(viii) Comprehensive boiler and machinery insurance, including
property damage coverage and time element coverage in an amount equal to 100% of
the full replacement cost, without deduction for depreciation, of the Facility
housing the machinery, if steam boilers, pipes, turbines, engines or any other
pressure vessels are in operation with respect to the Facility. Such insurance
coverage shall include a "joint loss" clause if such coverage is provided by an
insurance carrier other than that which provides the comprehensive "all risk"
insurance described above.
(ix) During the period of any construction and/or renovation of
capital improvements with respects to the Facility or any new construction at
the Facility, builder's risk insurance for any improvements under construction
and/or renovation, including, without limitation, costs of demolition and
increased cost of construction or renovation, in an amount equal the amount of
the general contract plus the value of any existing trust note for improvements
and materials stored on or off the Property, including "soft cost" coverage.
(x) Such other insurance coverage may be required as may be deemed
reasonably necessary in the discretion of Lender.
Borrower is required to provide Lender with original renewals or
replacements of such insurance policies or certificates during the term of the
Loan.
If the Facility is located in a seismically active area or an area prone
to geologic instability and mine subsidence, Lender may require an inspection by
a qualified structural or geological engineer satisfactory to Lender, and at
Borrower's expense. The Facility must be structurally and geologically sound and
capable of withstanding normal seismic activity or geological movement. Lender
reserves the right to require earthquake insurance or Maximum Probable Loss
insurance on a case by case basis in amounts determined by Lender.
All insurance policies shall have a term of not less than one year and
shall be in the form and amount and with deductibles as, from time to time,
shall be acceptable to Lender in its sole discretion. All such policies shall
provide for loss payable solely to Lender and shall contain a standard "non-
contributory mortgagee" endorsement or its equivalent relating, among other
things, to recovery by Lender notwithstanding the negligent or willful acts or
omissions of Borrower and notwithstanding (i) occupancy or use of the Facility
for purposes more hazardous than those permitted by the terms of such policy,
(ii) any foreclosure or other action taken by
<PAGE>
Lender pursuant to the Mortgage upon the occurrence of an Event of Default
thereunder, or (iii) any change in title or ownership of the Facility.
All insurance policies must be written by a licensed insurance carrier in
the State in which the Facility is located and such insurance carrier must have
a long-term senior debt rating of at least "A" by Standard and Poor's Rating
Service; provided, that if the initial principal balance of the Loan is in
excess of $25,000,000.00, such insurance carrier must have a long-term senior
debt rating of at least "AA" by Standard & Poor's Rating Service.
All liability insurance policies must name "GMAC Commercial Mortgage
Corporation and its successors and/or assigns as their interests may appear" as
additional insureds, and all property insurance policies must name "GMAC
Commercial Mortgage Corporation and its successors and/or assigns" as the named
mortgage holder entitled to all insurance proceeds. Lender shall have the right,
without Borrower's consent, by notice to the insurance company, to change the
additional insured and named mortgagee endorsements in connection with any sale
of the Loan. Notwithstanding anything contained herein, Borrower shall be
entitled to all insurance proceeds covered by and disbursed under the
above-referenced comprehensive all risk insurance policy provided such proceeds
do not exceed $25,000.00 per occurrence and Borrower is not in default of any of
its obligations under any of the Loan Documents.
All insurance policies for the above required insurance must provide for
thirty (30) days prior written notice of cancellation to Lender.
Policies or binders, together with evidence of the above required
insurance on ACORD Form 27 or its equivalent, must be submitted to Lender prior
to setting the interest rate on the Loan.
2. TITLE INSURANCE. Borrower shall furnish to Lender, from a title company
---------------
acceptable to Lender, at no cost to Lender, a current title commitment or
binder, a search of chattel records and, on the Closing Date, an ALTA
mortgagee's title insurance policy (ALTA Loan Policy - 1970 or 1992 Form with
such changes as Lender may request) naming as an insured "GMAC Commercial
Mortgage Corporation, together with its successors and/or assigns as their
interests may appear," together with such coinsurance and/or reinsurance,
exceptions, and other endorsements as may be required by Lender, showing
Borrower as title holder and insuring the amount and priority of Lender's first
lien. Lender shall require, at a minimum, an ALTA 9 Comprehensive Endorsement or
an ALTA Form 100 Endorsement, an ALTA Form 3.1 Zoning Completed Structure
Endorsement, a Usury Endorsement, an Access Endorsement, an ALTA Form 8.1
Environmental Protection Lien Endorsement, an Access Endorsement, and an
Adjustable Rate Endorsement. The status of title is subject to Lender's
approval. On the Closing Date, the commitment must be marked as a binder or a
title policy must be issued, in either case subject to Lender's approval.
3. SURVEY. Prior to the Closing Date, the Borrower shall provide to Lender,
------
at no cost to Lender, five (5) copies of a survey with a licensed surveyor's
certificate, all in form and substance acceptable to and certified to Lender,
Lender's counsel and the title insurance
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 9
company. Such survey and surveyor's certificate shall not be dated more than
thirty (30) days prior to the date of the Note and shall attest to the existence
or nonexistence of a Flood Hazard Area with respect to the Facility. The survey
shall also be prepared in accordance with ALTA standards and be certified to the
Lender and the title insurance company. (See Exhibit "A" attached hereto for
detailed survey requirements.)
4. SECURITY AGREEMENT AND FINANCING STATEMENTS. The Borrower and Lessee
-------------------------------------------
will be required to execute an assignment and security agreement in favor of the
Lender as security for the Loan granting to Lender (a) a first priority security
interest in (without limitation) the Borrower's and Lessee's right, title and
interest in and to all licenses, permits, reimbursement contracts, general
intangibles, equipment and inventory for the Facility, and (b) a first priority
security interest in the Borrower's accounts receivable and revenues issuing
from the Facility. Borrower and Lessee shall execute all financial statements,
continuation statements or other instruments as Lender may require at closing
or thereafter to perfect all such liens and security interests. Borrower agrees
to execute and deliver to Lender, upon Lender's request, any financing
statements, as well as extensions, renewals amendments thereof, and
reproductions of Loan Documents in such form as Lender may require to perfect
its first lien security interest with respect to such items. Borrower shall pay
all costs of filing such financing statements and any extensions, renewals, and
amendments and releases thereof and of any termination statements, and shall pay
all reasonable costs and expenses of any record searches for financing
statements Lender may reasonably require.
5. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Prior to the Closing Date,
----------------------------------------
Lender shall be furnished with evidence satisfactory in form and substance to
its counsel, in the form of either affirmative title insurance or an opinion of
counsel acceptable to Lender, that the Facility and the use thereof comply with
all applicable zoning, building, and subdivision laws, ordinances, rules,
regulations and other covenants and restrictions and that there is no action or
proceeding pending before any court, quasi-judicial body or administrative
agency relating thereto, together with permanent and unconditional certificates
of occupancy and all other certificates, permits, licenses and other items
relating to such compliance which are required by or are to be obtained from any
board, agency or department, whether governmental or otherwise, all of which
shall be satisfactory in form and substance to Lender and its counsel.
Should the Facility in any way constitute a legal non-conforming use
under current zoning or use restriction laws, Borrower must furnish a damage
restoration letter to Lender from the proper zoning authority stating that the
Facility may legally be rebuilt to its current size and density if any portion
of the Facility becomes damaged. In addition, such legal non-conforming use
shall require an "Ordinance of Law Coverage" endorsement to the all-risk
insurance policy described in Section E.1.h. above.
6. CERTIFICATES OF NEED AND REGULATORY APPROVALS. Borrower will provide
---------------------------------------------
Lender with all certificates of need and other licensure and regulatory
approvals required for the operation of the Facility (including any approvals
required to obtain reimbursement under Medicare, Medicaid and veteran's
benefits) (collectively, the "Health Care Regulatory Approvals") or, in the
alternative, written confirmation from each applicable agency that no such
certificate of need or licensure or other regulatory approval is required. The
Loan
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 10
Documents will contain representations by Borrower that all Health Care
Regulatory Approvals required for the operation of the Facility have been
obtained, are in full force and effect, and that Borrower knows of no pending or
threatened action for revocation of any Health Care Regulatory Approvals.
7. ENVIRONMENTAL HAZARDS. The Facility and the underlying real property
---------------------
shall be free from toxic chemicals and environmentally hazardous substances.
Lender will engage a professional environmental engineer to conduct an
inspection of the Facility and the underlying real property and prepare a Phase
I Environmental Report. This report shall indicate that the buildings are free
of hazardous substances such as PCBs and urea formaldehyde insulation and that
surrounding land uses do not pose an environmental threat. If the Phase I
Environmental Report, or any other information obtained by Lender indicates that
potential hazardous waste contamination may have occurred, a Phase II assessment
acceptable to Lender may be required. The costs of such assessments will be paid
by the Borrower. Lender shall require, and must approve, the form and content of
an Asbestos Operations and Maintenance Agreement and Plan for each Facility, a
lead-based paint operations and Maintenance Agreement for Riverdale, and any
other Operations and Maintenance Agreement and Plan for other environmental
threats identified in the above report and/or assessment with respect to the
Facility.
8. PROPERTY MAINTENANCE AND INSPECTION REPORT. The Loan Documents will
------------------------------------------
require a minimum annual capital expenditure requirement of $250 per bed,
commencing the first year of the Loan and continuing throughout the Loan term
(which capital expenditures may include ordinary repairs needed to maintain or
improve the condition of the Facility) and, if the Borrower fails to provide
evidence to the Lender that it has spent such funds, Lender will require that
Borrower escrow with the Lender the difference between the amount required and
the amount actually spent, such escrow to be pledged as additional collateral
for the Loan. During the term of the Loan, Lender may, from time to time, engage
a professional building inspector to conduct an inspection of the Facility. If
the inspector's report indicates that repairs or replacements are necessary over
and above the $250 per bed requirement in this paragraph, then Lender shall
require a non-interest bearing repair escrow fund to insure completion of the
repairs. The amount of any repair escrow shall be 125% of the estimated cost of
repairs as determined by the inspector and Lender. Lender also shall require an
agreement satisfactory to Lender which will provide for completion of the
repairs and the disbursement of the escrow funds. All fees and costs associated
with the inspection, report and subsequent inspections (if required) shall be
paid by Borrower.
9. BORROWER'S AND GUARANTOR'S AND MANAGER'S AND LESSEE'S COUNSEL'S
---------------------------------------------------------------
OPINION. Lender shall be furnished an opinion letter from Borrower's and
- -------
Guarantor's and Manager's and Lessee's counsel, which shall contain
matters satisfactory to Lender and Lender's counsel.
10. ASSIGNMENT OF LEASES AND RENTS; SUBORDINATION. Borrower shall execute
---------------------------------------------
an assignment of all present and future leases and rents affecting the Facility
in form and substance satisfactory to Lender. Such assignment shall be duly
recorded. Each lease so assigned to Lender shall be in full force and effect,
the tenant shall have accepted the Facility,
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 11
be in occupancy, and be paying rent on a current basis with no rental offsets or
claims. The Operating Lease shall be subordinate to the Mortgage either by its
terms or by a separate agreement executed by the Lessee. This requirement shall
not apply to admission agreements or similar occupancy agreements with residents
of the Facility that by their terms are not leases.
11. GUARANTY AGREEMENT. Guarantor shall execute a Payment and Performance
------------------
Guaranty Agreement for the benefit of Lender, pursuant to which Guarantor shall
guaranty repayment of the Loan in full and payment and performance of all other
obligations of Borrower under the Loan Documents. Guarantor shall be released
from its obligations under the Payment and Performance Guaranty Agreement if
and only if (a) each Facility has achieved and maintained for twelve (12)
consecutive months a Debt Service Coverage Ratio of not less than 1.50 to 1.0
after assumed management fees of 5%, and (b) each Borrower has made (or caused
Lessee to make) capital expenditures with respect to its Facility in an amount
not less than $250 per bed for such twelve (12) month period.
In addition, Guarantor shall execute an Exceptions to Nonrecourse
Guaranty for the benefit of Lender, pursuant to which Guarantor shall guaranty
(a) repayment of each Loan in full in the event that Borrower sells, transfers
or encumbers the Facility or any interest in Borrower without Lender's prior
consent, and (b) any losses incurred by Lender as a result of the following:
(i) fraud or intentional misrepresentations by Borrower or any
other person in connection with the execution and delivery of the Loan
Documents;
(ii) Borrower's misapplication or misappropriation of accounts
receivable received by Borrower after the occurrence of an event of default
under the Loan Documents;
(iii) Borrower's misapplication or misappropriation of accounts
receivable collected in advance or received by Borrower after the
occurrence of an Event of Default;
(iv) The misapplication or the misappropriation of insurance
proceeds or condemnation awards;
(v) Borrower's failure to pay taxes and insurance premiums, or
charges for labor or materials or other charges that can create liens
encumbering the Facility;
(vi) Borrower's failure to manage, maintain, repair, restore
and otherwise operate the Facility in a commercially reasonable manner in
accordance with the Loan Documents;
(vii) Borrower's failure to return or reimburse Lender for any
and all personal property taken from the Facility by or on behalf of
Borrower and not replaced with personal property of the same utility and of
the same or greater value;
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 12
(viii) Any act of actual waste or arson or criminal acts by Borrower,
any principal, or constituents thereof or with respect to the Facility;
(ix) Borrower's failure to comply with any covenants relating to
the payment of any fees or distributions by Borrower to any principal,
affiliate, member or partner thereof in violation of the terms of the Loan
Documents;
(x) Borrower's failure to pay all fees, charges and taxes with
respect to the making of the Note and/or the recording of the Mortgage;
(xi) Borrower's failure to comply with certain covenants relating
to the environmental conditions of the Facility;
(xii) A voluntary bankruptcy or insolvency proceeding;
(xiii) An involuntary bankruptcy or insolvency proceeding which is
not dismissed within ninety (90) days of filing;
(xiv) Failure of Borrower to maintain and preserve, free of all
security interests and other encumbrances, all legal and beneficial
interests in any Health Care Regulatory Approvals (defined below);
(xv) The sale, transfer or encumbrance of the Facility by Borrower
or of any interest in Borrower without Lender's consent the lien of the
Mortgage or Cross-Collateralization Agreement is deemed to be a fraudulent
conveyance.
12. GOOD STANDING AND AUTHORIZING RESOLUTIONS. In addition to their
-----------------------------------------
organizational documents, Borrower and its members, Guarantor and Lessee and
Manager shall provide Lender with evidence of their respective good standing in
the State of their formation and evidence that they are qualified to do business
and are in good standing in the state where the Facility is located, and shall
also provide to Lender resolutions stating that such entities are authorized to
execute and deliver all required Loan Documents.
F. OTHER REQUIREMENTS:
1. FINANCIAL COVENANTS. The Loan Documents will require, without
-------------------
limitation, that the Facility achieve and maintain compliance with a Debt
Service Coverage Ratio (defined below), of 1.30 to 1.0 after an assumed 5%
management fee based on a rolling twelve (12) month period, tested quarterly.
The Loan Documents will also require, without limitation, that the Facility
achieve and maintain compliance with a Debt Service Coverage Ratio of 1.0 to
1.0 after actual management fees based on a rolling twelve (12) month period,
tested quarterly.
As used herein, "Debt Service Coverage Ratio" means a ratio in which
the first number is the sum of "net pre-tax income" of the Borrower from normal
operations of the Facility as set forth in the financial statements provided to
Lender (without deduction for actual
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 13
management fees or management expense incurred or paid in connection with the
operation of the Facility), calculated based upon the preceding twelve (12)
months (or such lesser period of time as shall have elapsed since the Closing
Date), plus interest expense or lease expense to the extent deducted in
determining net income and non-cash expenses or allowances for depreciation and
amortization of the Facility for said period, less either actual management fees
or an assumed 5% management fee for said period (based on the covenant to which
such definition relates), and the second number is the sum of the principal
amounts due (even if not paid) on the Loan (but which shall not include that
portion associated with the balloon payment of the Loan) for the applicable
period plus the interest amount due on the Loan for the applicable period
----
("Debt Service"). In calculating "net pre-tax income," any extraordinary income
and extraordinary expense shall be excluded.
The Loan Documents will require that the Borrower post cash or other
liquid collateral with the Lender (the "Additional Collateral") in the event
that the required Debt Service Coverage Ratio is not achieved, which will be
held by the Lender as additional collateral for the Loan. Initially, the
Additional Collateral will be equal to an amount which, when added to the first
number of the debt service coverage calculation, would have resulted in the non-
complying debt service requirement having been satisfied. However, if the debt
service coverage requirement is not achieved within two (2) consecutive calendar
quarters, Borrower will be required to increase the Additional Collateral to an
amount which, if the same had been applied on the first day of the prior twelve
(12) month period to reduce the outstanding principal indebtedness of the Loan,
would have resulted in the non-complying debt service coverage requirement
having been satisfied, which increased amount will be held by Lender for an
additional two (2) consecutive calendar quarters.
The Loan Documents will also require that the Facility maintain an
average annual occupancy of 80% or greater (based on the number of beds
available at the Facility with the minimum number of beds available at the
Facility remaining at or in excess of the number of beds set forth in the
Facility description on the first page of this Commitment).
Borrower will furnish to Lender, within forty-five (45) days of the end
of each calendar quarter, a certificate of a financial officer of the Borrower,
confirming compliance with the covenants required by the Loan Documents and
certifying that no event has occurred (that has not been cured), and no
condition currently exists that would constitute an event of default under the
Loan Documents.
2. FINANCIAL STATEMENTS, COST REPORTS, ETC. The Lender shall receive, prior
---------------------------------------
to the Closing Date, (a) the most recent financial statement of the Borrower
and/or any of its principals as determined by Lender in its sole discretion, the
Guarantor, the Lessee and the Facility, (b) copies of the most recent licensure
and certification survey reports and statement of deficiencies (with plan of
correction attached) from the most recent survey of the Facility by the
applicable regulatory authorities, (c) an accounts receivable aging report by
payor type and provider, and (d) any other such reports in such form and in such
detail as the Lender shall request. The contents of these financial statements,
surveys and statements of deficiencies and other such reports are subject to the
Lender's review and approval.
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 14
The Loan Documents will require that the Lender receive, on a continuing
basis during the term of the Loan, within the times as hereinafter set forth,
the following:
Within one hundred twenty (120) days after the end of each fiscal year of
the Borrower and the Guarantor, respectively, reviewed financial statements
prepared in accordance with generally accepted accounting principles
consistently applied by a nationally recognized accounting firm or independent
certified public accounting firm acceptable to the Lender, which statements
shall include a balance sheet and a statement of income and expenses for the
year then ended.
Within one hundred twenty (120) days after the end of each fiscal year of
the Facility and Borrower (if different from Facility) unaudited financial
statements of the operations of the Facility, prepared in accordance with
generally accepted accounting principles consistently applied, by a nationally
recognized accounting firm or independent certified public accounting firm,
acceptable to Lender, which statements shall include a balance sheet and a
statement of income and expenses for the year then ended, and shall be certified
as true and correct by a financial officer of Borrower. Lender reserves the
right, upon an event of default under the Loan Documents, to require that such
statements be audited by a nationally recognized accounting firm or independent
certified public accounting firm acceptable to Lender.
Within ninety (90) days after the end of each fiscal year of Manager,
unaudited financial statements of Manager, prepared in accordance with generally
accepted accounting principles consistently applied, by a nationally recognized
accounting firm or independent certified public accounting firm acceptable to
Lender, which statements shall include a balance sheet and a statement of income
and expenses for the year then ended, and shall be certified as true and correct
by a financial officer of Manager. Lender reserves the right, upon an event of
default under the Loan Documents, to require that such statements be audited by
a nationally recognized accounting firm or independent certified public
accounting firm acceptable to Lender.
Within ninety (90) days after the end of each fiscal year of Lessee,
unaudited financial statements of Lessee, prepared in accordance with generally
accepted accounting principles consistently applied, by a nationally recognized
accounting firm or independent certified public accounting firm, acceptable to
Lender, which statements shall include a balance sheet and a statement of income
and expenses for the year then ended, and shall be certified as true and correct
by a financial officer of Lessee. Lender reserves the right, upon an event of
default under the Loan Documents, to require that such statements be audited by
a nationally recognized accounting firm or independent certified public
accounting firm acceptable to Lender.
Within forty-five (45) days after the end of each fiscal quarter of the
Facility, unaudited interim financial statements of the Facility, certified as
true and correct in all material respects by a financial officer of Borrower,
prepared in accordance with generally accepted accounting principles
consistently applied, which statements shall include a balance sheet, statement
of income and expenses for the quarter then ended.
Within forty-five (45) days after the end of each fiscal quarter of the
Borrower, unaudited interim financial statements of Borrower certified as true
and correct in all material
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 15
respects by a financial officer of Borrower, prepd in accordance with generally
accepted accounting principles consistently applied, which statements shall
include a balance sheet and statement of income and expenses for the quarter
then ended.
Within forty-five (45) days after the end of each quarter of the
Manager, unaudited interim financial statements of Manager, certified as true
and correct in all material respects by a financial officer of Manager, prepared
in accordance with generally accepted accounting principles consistently
applied, which statements shall include a balance sheet and a statement of
income and expenses for the quarter then ended.
Within forty-five (45) days after the end of each quarter of Lessee,
unaudited interim financial statements of Lessee, certified as true and correct
in all material respects by a financial officer of Lessee, prepared in
accordance with generally accepted accounting principles consistently applied,
which statements shall include a balance sheet and a statement of income and
expenses for the quarter then ended.
Within forty-five (45) days after the end of each fiscal quarter of
Borrower, a statement of the number of bed days available and the actual patient
days incurred for such quarter, together with quarterly census information of
the Facility as of the end of such quarter in sufficient detail to show patient-
mix (i.e. private, Medicare, Medicaid, and VA) on a daily average basis for such
year through the end of such quarter, certified by a financial officer of
Manager and of Lessee to be true and correct.
If requested by Lender, within thirty (30) days after the filing
deadline, as may be extended from time to time, copies of all federal state and
local tax returns of Borrower and Guarantor, together with all supporting
documentation and required schedules.
Within ten (10) days after filing or receipt, all Medicaid and/or
Medicare cost reports and any amendments thereto filed with respect to the
Facility and all responses, audit reports or inquiries with respect to such cost
reports.
Within ten (10) days after receipt, copies of all licensure and
certification survey reports and statements of deficiencies (with plans of
correction attached thereto).
Within ten (10) days after receipt, a copy of the "Medicaid Rate
Calculation Worksheet" (or the equivalent thereof) from the applicable agency.
Within three (3) days after receipt, any and all notices (regardless of
form) from any and all licensing and/or certifying agencies, including but not
limited to Medicaid and/or Medicare certification, that the Facility's license
is being downgraded to a substandard category, revoked, or suspended, or that
action is pending or being considered to downgrade to a substandard category,
revoke, or suspend the Facility's license or certification.
If requested by Lender, evidence of payment by Lessee of any applicable
provider bed taxes or similar taxes.
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 16
Within one hundred twenty (120) days after the end of each of Lessee's fiscal
years, and more frequently, if requested by Lender, an aged accounts receivable
report for the Facility in sufficient detail to show amounts due from each
class of patient-mix (i.e., private, Medicare, Medicaid, and V.A.) by the
account age classifications of 30 days, 60 days, 90 days, 120 days and over 120
days.
Within ten (10) days of receipt, a statement of the number of patient days for
which the facility has received the Medicare default rate for any applicable
period. For purposes herein, "default rate" shall have the meaning ascribed to
it in that certain applicable Medicare rate notification letter prepared in
connection with any review or survey of the Facility.
The Loan Documents will require the correction of any deficiency (identified
above) by the date required by the licensure and certification agency, if such
deficiency could adversely affect either (a) the right to continue
participation in Medicare and Medicaid for existing patients or (b) the right
to admit new Medicare and Medicaid patients, or (c) the right to continue
operating the Facility as a skilled nursing facility.
The Lender reserves the right to require such other financial information of
Borrower, Guarantor, Lessee, Manager and the Facility at such other times as it
shall deem necessary. All financial statements must be in such form and detail
as the Lender shall from time to time request.
3. APPROVAL BY DESIGNATED COUNSEL. Each document required in connection with
------------------------------
the closing of the Loan shall be in form and substance acceptable to Lender's
counsel. The survey, title insurance information and drafts of all other Loan
Documents shall be submitted to Lender's counsel for approval. All Loan
Documents and other documents required for Loan closing must be submitted to
Lender and its counsel for review no less than five (5) business days prior to
the Closing Date.
4. LOAN CLOSING CERTIFICATION. No part of the Facility shall have been damaged
--------------------------
and not repaired to Lender's satisfaction or taken in condemnation or other like
proceedings, nor shall any such proceeding be pending. In addition, the
Facility as of the Closing Date shall be unimpaired and not reduce in value and
shall be free from settling and other structural defects. From the date of this
Commitment, neither the Borrower nor the Guarantor, nor any of Borrower's
principals shall be involved in any bankruptcy, reorganization or insolvency
proceeding. The occurrence of any of the above shall constitute a default and
result in this Commitment being deemed withdrawn and of no further force and
effect. Evidence in form and substance satisfactory to Lender must be furnished
on the Closing Date that the foregoing requirements have been fulfilled.
5. INDEMNIFICATION. Guarantor represents to Lender that it has not, directly
---------------
or indirectly, dealt with anyone in connection with this Commitment or the Loan
contemplated hereby, other than Lender, its subsidiaries and affiliates or
placement agent(s) designated by Lender. Guarantor hereby agrees to indemnify
Lender, its successors or assigns, and/or its investors or participants, if any,
against, and to hold the same harmless from, any claims made by
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 17
any other person or entity for commissions, fees or other compensation claimed
in connection with this Commitment or the Loan.
6. SURVIVAL OF TERMS. All of the terms and conditions of this Commitment
-----------------
not expressly set forth in the Loan Documents to be executed and delivered by
Borrower and/or Guarantor with respect to the Loan shall survive closing of the
Loan and remain in full force and effect.
7. ASSIGNMENT OF COMMITMENT. Neither this Commitment, the proceeds herefrom,
------------------------
nor any rights hereunder are assignable without Lender's prior written consent.
Any attempted assignment of this Commitment without such consent shall
constitute a default herein and result in this Commitment being withdrawn and of
no further force and effect, with the Commitment fee (identified below) retained
by Lender as liquidated damages.
8. ORAL CHANGES. This Commitment shall be deemed to contain all the terms and
------------
understandings between Lender and Guarantor with respect to the Loan and shall
supersede any and all prior understandings, instruments and agreements, written
or oral, relating thereto. Any changes to this Commitment must be evidenced in
writing by Lender.
9. ADVERTISING. Lender is authorized to state in advertising or other press
-----------
releases the fact that the type and amount of financing contemplated under this
Commitment has been provided to Guarantor for the Facility by Lender.
10. CASH ESCROWS. Guarantor agrees that any escrow required by Lender on or
------------
after the Closing Date shall be furnished in the form of cash.
11. DISBURSEMENT OF PROCEEDS. All Loan proceeds will be disbursed through a
------------------------
title company selected by Lender, pursuant to closing instructions to be
provided by Lender and/or Lender's counsel.
12. INTENTIONALLY OMITTED
13. SECONDARY MARKET. Lender may, at any time, sell, transfer or assign the
----------------
Loan, the Loan documents, and any or all servicing rights with respect to the
Loan, grant participations in the Loan or issue mortgage pass-through
certificates or other securities (the "Securities") evidencing a beneficial
interest in the Loan in a rated or unrated public offering or private placement,
and may forward to each purchaser, transferee, assignee, servicer, participant
or investor in such Securities (collectively, the "Investor"), any rating agency
rating such Securities (a "Rating Agency") or prospective Investor all documents
and information Lender has with respect to the Loan as Lender deems necessary or
desirable. Borrower and the Guarantor, if any, shall furnish and consent to
Lender furnishing to such Investors, such prospective Investors or Rating Agency
all information concerning the Loan, the Security, all leases of portions of the
Facility and the financial condition of Borrower, any guarantor, the Lessee and
the Security in such form, substance and detail as Lender, such Investor, such
<PAGE>
prospective Investor or Rating Agency may request. Upon any such transfer,
Borrower and the Guarantor, if any, shall provide an estoppel certificate to the
Investor or any prospective Investor in form and content satisfactory to Lender,
such Investor or such prospective Investor together with such other documents as
Lender may reasonably require.
14. CROSS-DEFAULT AND CROSS-COLLATERALIZATION. Each Loan shall be
-----------------------------------------
cross-defaulted with each other Loan (both) and secured by the Mortgage covering
its Facility and each other Facility.
G. FEES:
1. COMMITMENT FEE. A Commitment fee equal to one percent (1%) of the
--------------
aggregate amount of the Loan ($139,200) shall be earned upon issuance of this
Commitment. Borrower must, upon acceptance of this commitment, remit to Lender a
nonrefundable deposit in the amount of $69,600. Such deposit will be credited
against the balance of the Commitment fee which will be due at closing but will
be nonrefundable in the event that the Loan fails to close for any reason. This
Commitment shall not be binding unless the attached counterpart of this
Commitment is signed by the Guarantor and returned, along with a check for the
above-specified amount on or before September 1, 1999. The balance due of the
Commitment fee ($69,600), shall be payable on the Closing Date.
2. EXIT FEE. Borrower shall pay to Lender an exit fee equal to one half of
--------
one percent (0.50%) of the original principal amount of the Loan and all accrued
and unpaid interest thereon during the term of the Loan. The exit fee will be
waived by Lender if Lender receives a contractually agreed upon sum in
connection with the arrangement of permanent financing.
3. EXPENSES. Unless otherwise expressly provided for in this Commitment,
--------
the Borrower agrees to pay when due, whether or not the Loan closes, all
reasonable expenses, fees and charges with respect to the Loan, its processing
and its closing, or in any way connected therewith, including, without
limitation, a nonrefundable underwriting/processing fee in the amount of
$3,500.00 per Facility, appraisal fees, rating agency fees and other costs
incurred in connection with the securitization of the Loan (without any
obligation of Lender to account to Borrower or Guarantor for any securitization
expenses) survey costs, title insurance costs, environmental report fees,
seismic report fees (if applicable), investigation fees, legal fees, mortgage or
similar taxes, and all attorney's fees and legal costs of Lender. Borrower shall
remit an expense deposit of $44,000.00 for the appraisal, environmental and
engineering reports for each Facility. Lender acknowledges prior receipt of the
underwriting/processing fee in the amount of $10,500.00 and an expense deposit
of $44,000.00 for a total of $54,500.00. Guarantor agrees to remit to Lender
legal fee deposits and additional expense deposits at such time as Lender may
request prior to the Closing Date.
H. COMMITMENT ACCEPTANCE DATE:
Guarantor must forward an executed counterpart of this Commitment and
the portion of the Commitment fee specified above to Lender on or before
September 1, 1999. If the executed Commitment and the portion of the Commitment
fee referred to above are not delivered
<PAGE>
G & L Realty Corporation
August 30, 1999
Page 19
to Lender on or before September 1, 1999, then this Commitment shall be deemed
withdrawn and of no further force and effect.
I. EXPIRATION DATE:
This Commitment, if accepted on or before September 1, 1999, shall
expire on September 30, 1999 (Expiration Date). If Borrower fails to close the
Loan by the Expiration Date, then, unless the Commitment is extended in writing
by Lender, Lender's obligation hereunder shall cease and the portion of the
Commitment fee and the expense deposit which has been paid shall be retained by
Lender as liquidated damages for breach of this Commitment by the Borrower, it
being agreed by Borrower and Lender that in the event of such breach, actual
damages would be impossible to establish and that, as liquidated damages, the
amount of the Commitment fee and expense deposit already paid is a reasonable
approximation of Lender's actual damages.
We appreciate the opportunity to issue this Commitment to provide the
refinancing for your Facility. We look forward to a mutually successful Loan
closing.
Very truly yours,
/s/ John P. Fogarty
John P. Fogarty
Senior Vice President
cc: Gary Luboff
Sarah Sumner
Katherine L. Bishop, Esq.
<PAGE>
G&L Realty Corporation
August 30, 1999
Page 20
The Guarantor hereby (1) unconditionally accepts the foregoing Commitment in
accordance with the terms and conditions therein contained, (2) agrees to be
bound thereby and (3) represents that the undersigned representative of the
Guarantor has the legal capacity and authority to enter into this transaction
and to execute this Commitment. Payment of a portion of the Commitment fee in
the amount of $69,600 is tendered herewith.
Dated this 1st day of Sept., 1999.
--- -----
GUARANTOR:
G&L Realty Corporation
By: /s/ Steven D. Lebowitz
-----------------------------
Name: Steven D. Lebowitz
---------------------------
Title: President
--------------------------
<PAGE>
EXHIBIT 99.(b)(2)
CREDIT AGREEMENT
This Agreement is made this 12th day of February, 1999 between G & L
Realty Partnership, L.P. ("Borrower") and First Professional Bank, N.A., a
national banking association ("Bank").
RECITAL
Borrower wishes to borrow from Bank the sum of One Million Five Hundred
Thousand and no/100 dollars ($1,500,000.00) and Bank is willing to lend such sum
to Borrower on the terms and conditions herein contained.
NOW THEREFORE, Bank and borrower agree to the premises herein contained as
follows:
ARTICLE I -- CREDIT LINE
SECTION 1.1 CREDIT LINE. Bank hereby agrees to loan to Borrower the
principal sum of One Million Five Hundred Thousand and no/100 dollars
($1,500,000)("CREDIT LINE"),
SECTION 1.2 PROMISSORY NOTE. The CREDIT LINE shall be evidenced by
Borrower's Promissory Note dated as this Agreement substantially in the form of
EXHIBIT A attached hereto ("PROMISSORY NOTE"), all terms of which are
incorporated herein by this reference.
SECTION 1.3 PREPAYMENT. Borrower may without premium prepay principal on
the CREDIT LINE in the amount of One Thousand and no/100 Dollars ($1,000.00) or
integral multiples thereof, to be applied on the most remote installment then
unpaid.
SECTION 1.4 PURPOSE. The proceeds of the CREDIT LINE shall be used to pay
dividends pending refinance of properties specified on Advance Request Forms.
Each advance request must be accompanied by a formal Advance Request Form
identifying the amount of the advance and the estimated date and exact source of
repayment, along with documentation identifying properties in process of
refinance.
SECTION 1.5 SECURITY This CREDIT LINE is unsecured. However, Borrower
agrees to allow Bank to immediately place a demand into escrow on any properties
being refinance or sold, at any time, upon Bank's request in order to secure
repayment.
SECTION 1.6 COMPENSATING BALANCES. Borrower shall maintain with Bank a
depository relationship consistent with that at time of funding.
SECTION 1.7 USAGE EVALUATION. Borrower shall be subject to an annual usage
evaluation in which Borrower's usage on the credit line during the past 12 month
period will be evaluated to assess compliance with the facility's revolving
structure. Accordingly, Borrower must make regular advances and reductions on
the CREDIT LINE.
ARTICLE II--REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement:
SECTION 2.1 LEGAL STATUS. Borrower is a limited partnership duly
organized and existing under the laws of the State of California and is
qualified to do business in all jurisdictions in which it conducts its business.
SECTION 2.2 NO VIOLATION. The making and performance by Borrower of this
Agreement does not violate any provision of law, or result in a breach of or
constitute a default under any agreement, indenture of other instrument to
which Borrower is a party or by which Borrower may be bound.
SECTION 2.3 AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered, and is a valid and binding agreement of Borrower; and
the Promissory Note to be issued hereunder by Borrower upon its execution and
delivery, in accordance with the provisions of this Agreement, will be a valid
and binding obligation of Borrower in accordance with its terms.
SECTION 2.4 LITIGATION. There are no pending or threatened actions or
proceedings before court or administrative agency which may adversely affect the
financial condition of Borrower other than those heretofore disclosed by
Borrower to Bank in writing.
SECTION 2.5 CORRECTNESS OF FINANCIAL STATEMENT. The financial statement of
G&L Realty Corp. dated September 30, 1998 heretofore delivered by Borrower to
Bank presents fairly the financial condition of Borrower, and has been prepared
in accordance with generally accepted accounting principals consistently
applied. As of the date of such financial statement, and since such date,
there has been no material adverse change in the condition or operation of
Borrower, nor has borrower mortgaged, pledged or granted a security interest in
or encumbered any of Borrower's assets or properties since such date.
SECTION 2.6 NO SUBORDINATION. The obligations of Borrower under this
Agreement or the Promissory Note are not subordinated in right of payment to any
obligation of Borrower.
<PAGE>
ARTICLE III -- CONDITIONS PRECEDENT
The obligation of Bank to make the CREDIT LINE, or any portion thereof, is
subject to the fulfillment of the following conditions:
SECTION 3.1 COMPLIANCE. The representations and warranties contained herein
shall be true on and as of the date of the signing of this Agreement with the
same effect as though such representations and warranties had been made on and
as of such date, and on such date, no event of default as defined in Articles VI
hereof ("Event(s) of Default") and no condition, event or act which, with the
giving of notice or the lapse of time or both would constitute an Event of
Default, shall have occurred and be continuing or shall exist.
SECTION 3.2 DOCUMENTATION. Borrower shall have delivered to Bank in form and
substance satisfactory to Bank the following described documents duly executed;
A) This Agreement and Promissory Note
B) Disbursement Request and Authorization
C) Corporate Resolution to Guarantee
D) Partnership Borrowing Authorization
E) Corporate Partnership Resolution
F) Commercial Guaranty
ARTICLE IV -- AFFIRMATIVE COVENANTS
Borrower covenants that so long as Borrower is indebted to Bank under this
Agreement, and until the payment in full of the Promissory Note issued
hereunder, Borrower will:
SECTION 4.1 PUNCTUAL PAYMENT. Punctually pay the interest and principal or
the Promissory Note at the times and place and in the matter specified in the
Promissory Note.
SECTION 4.2 ACCOUNTING RECORDS. Maintain adequate books and accounts in
accordance with generally accepted accounting principals consistently applied,
and permit any representative of the Bank, at any reasonable time, to inspect,
audit and examine such books and inspect the properties of Borrower.
SECTION 4.3 FINANCIAL STATEMENTS. Furnish Bank:
a) Within 15 days of filing with the Securities Exchange Commission,
quarterly 10-Q and annual 10-K filing on G&L Realty Corp.
b) From time to time such other information as Bank may reasonably request.
SECTION 4.4 EXISTENCE. Preserve and maintain its existence and all of its
rights, privileges and franchises; conduct its business in an orderly,
efficient, and regular manner, and comply with the requirements of all
applicable laws, rules, regulations and orders of a governmental authority.
SECTION 4.5 INSURANCE. Maintain and keep in force insurance of the type and
in amounts customarily carried in lines of business similar to Borrower's,
including but not limited to fire, public liability, property damage, workmen's
compensation, carried with companies and in amounts satisfactory to Bank and
where requested by Bank naming Bank as loss payee of such insurance; and
Borrower shall deliver to Bank from time to time at Bank's request schedules
setting forth all insurance then in effect.
SECTION 4.6 FACILITIES. Keep all Borrower's properties useful or necessary
to Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals, and replacements thereto so that Borrower's
properties shall be fully and efficiently preserved and maintained.
SECTION 4.7 TAXES AND OTHER LIABILITIES. Pay and discharge when due any and
all indebtedness, obligations, assessments, taxes real and personal, including
federal and state income taxes, except such as Borrower may in good faith
contest or as to which a bonafide dispute may arise; provided provision is made
to the satisfaction of Bank for eventual payment thereof in the event that it is
found that the same is an obligation of Borrower.
SECTION 4.8 LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened in excess of Two Hundred Fifty Thousand Dollars
($250,000.00) which is not covered by appropriate insurance coverage then in
effect.
SECTION 4.9 NOTICE TO BANK. Promptly give notice in writing to Bank in the
event of:
a) The occurrence of any event of default.
b) Any change in name of Borrower, and in the case of an organization, any
change in name, identity or corporate structure.
c) Any uninsured or partially uninsured loss through fire, theft, liability
or property damage in excess of an aggregate of $250,000.00 which is not covered
by applicable insurance.
ARTICLE V -- NEGATIVE COVENANTS
2 of 4
<PAGE>
Borrower further covenants that so long as Borrower is indebted to Bank
under this Agreement and until payment in full of the Promissory Note issued
hereunder, Borrower will not without prior written consent of Bank, which shall
not unreasonably be withheld:
SECTION 5.1 USE OF FUNDS. Use any of the proceeds of the Promissory Note
except for the purpose(s) stated in Section 1.4.
SECTION 5.2 CAPITAL EXPENDITURE LIMITATION. Incur obligations for capital
expenditures by Borrower in excess of (not applicable).
SECTION 5.3 LEASE EXPENDITURES. Incur obligations for the lease or hire
of real or personal property by Borrower in excess of (not applicable).
SECTION 5.4 OTHER INDEBTEDNESS. Create, incur or permit to exist any
liabilities resulting from borrowings, loans or advances, whether secured or
unsecured, except short term borrowings from Bank and the liabilities of
Borrower to Bank for money borrowed hereunder and indebtedness reflected on
Borrower's financial statements previously provided to Bank and except for loans
secured by real property which are taken in the normal course of Borrower's
business.
SECTION 5.5 MERGER, CONSOLIDATION, SALE OF ASSETS. Merge into or
consolidate with any corporation or other entity, or acquire all or
substantially all of the assets of any other corporation or entity, or sell,
lease, assign, transfer or otherwise dispose of all or substantially all of
Borrower's assets.
SECTION 5.6 GUARANTEES. Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments in the ordinary
course of business) or accommodation endorser or otherwise for the debt or
obligations of any person or entity.
SECTION 5.7 LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or
investments in, any person or entity including but not limited to any loans to
shareholders or officers of Borrower except for loans routinely made in the
course of Borrower's real estate business.
ARTICLE VII - MISCELLANEOUS
SECTION 7.1 WAIVER. No delay or failure of Bank, or any holder of the
Promissory Note, in exercising any right, power or privilege hereunder shall
affect such right, power or privilege; nor shall any single or partial exercise
thereof or any abandonment or discontinuance of steps to enforce such a right,
power or privilege act as a waiver of such right, power or privilege. The
rights and remedies of Bank hereunder are cumulative and not exclusive. Any
waiver, permit, consent or approval of any kind by Bank, or any holder of the
Promissory Note, of any breach or default hereunder, or any such waiver of any
provisions or conditions hereof, must be in writing and shall be effective only
to the extent set forth in writing.
SECTION 7.2 NOTICES. All notices, requests and demands given to or made
upon the respective parties shall be deemed to have been given or made when
deposited in the mail, postage prepaid, and addressed as follows:
Borrower: G&L Realty Partnership, L.P.
439 Bedford Drive
Beverly Hills, CA 90210
Attn: Steve Lebowitz,
Dan Gottlieb, or George Nagler
Bank: First Professional Bank, N.A.
606 Broadway
Santa Monica, CA 90401
Attn: Loan Department
SECTION 7.3 ATTORNEY'S FEES. Borrower, will reimburse Bank for all costs,
expenses and reasonable attorney's fees expended or incurred by Bank in
enforcing this Agreement, in actions for declaratory relief in any way related
to this Agreement, or in collecting any sum which becomes due the Bank on the
Note.
SECTION 7.4 SUCCESSORS, ASSIGNMENT. This Agreement shall be binding on and
inure to the benefit of the successors and assigns of the parties, provided
however, that this Agreement may not be assigned by Borrower without the prior
written consent of Bank. Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in
Bank's rights and benefits under this Agreement, the Promissory Note or
collateral documents relating thereto. In connection therewith Bank may disclose
all documents and information which Bank now has or may hereafter acquire
relating to the Loan, the Borrower or its business, or any collateral required
hereunder.
SECTION 7.5 AMENDMENT MODIFICATION. This Agreement may be amended or
modified only in writing signed by both Bank and Borrower.
SECTION 7.6 SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent so such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement.
3 of 4
<PAGE>
SECTION 7.7 CALIFORNIA LAW APPLICABLE. This Agreement and the Promissory
Note shall be governed by and construed in accordance with the laws of the State
of California.
SECTION 7.8 COMPLETE AGREEMENT. Borrower acknowledges that this Agreement
sets forth the entire understanding between the Bank and Borrower and that the
Bank has made no commitment to extend or renew the Loan beyond the maturity date
of the Promissory Note or to extend other or further financial accommodations to
Borrower.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first written above.
G&L Realty Partnership, L.P. First Professional Bank, N.A.
by: by:
/s/ Steven D. Lebowitz
G&L Realty Corp., General Partner Linda Flintzer, Senior Vice President
Steven D. Lebowitz, President
by:
G&L Realty Corp., General Partner
George Nagler, Secretary
4 of 4
