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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-12482
GLIMCHER REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 31-1390518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 SOUTH THIRD STREET 43215
COLUMBUS, OHIO (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 621-9000
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class Name of each exchange on which registered
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COMMON SHARES OF BENEFICIAL INTEREST, PAR VALUE $0.01 PER SHARE NEW YORK STOCK EXCHANGE
9-1/4% SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARES OF BENEFICIAL NEW YORK STOCK EXCHANGE
INTEREST, PAR VALUE $0.01 PER SHARE
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Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES ______NO __X__
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].
As of March 10, 1998, there were 23,676,041 Common Shares of Beneficial Interest
outstanding, par value $0.01 per share, and the aggregate market value of such
stock held by non-affiliates of the Registrant was $526,416,548 (based on the
closing price on the New York Stock Exchange on such date).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1997 Glimcher Realty Trust Proxy Statement to be filed with the
Securities and Exchange Commission within 120 days after the year covered by
this Form 10-K with respect to the Annual Meeting of Shareholders to be held on
May 15, 1998 are incorporated by reference into Part III.
1 of 66 pages
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TABLE OF CONTENTS
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FORM
10-K
REPORT
PAGE
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ITEM NO.
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PART I
1. Business.................................................................................... 3
2. Properties.................................................................................. 9
3. Legal Proceedings........................................................................... 21
4. Submission of Matters to a Vote of Security Holders......................................... 21
PART II
5. Market for the Registrant's Common Equity and Related Shareholder Matters................... 22
6. Selected Financial Data..................................................................... 23
7. Management's Discussion and Analysis of Financial Condition and Results of Operations....... 24
7A. Quantitative and Qualitative Disclosures About Market Risk.................................. 32
8. Financial Statements and Supplementary Data................................................. 33
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........ 33
PART III
10. Directors and Executive Officers of the Registrant.......................................... 33
11. Executive Compensation...................................................................... 33
12. Security Ownership of Certain Beneficial Owners and Management.............................. 33
13. Certain Relationships and Related Transactions.............................................. 33
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K........................... 33
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PART I
This Form 10-K, together with other statements and information publicly
disseminated by Glimcher Realty Trust ("GRT"), contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements are based on assumptions and expectations which may not be
realized and are inherently subject to risks and uncertainties, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and otherwise, may
differ from the results discussed in the forward-looking statements. Risks and
other factors that might cause differences, some of which could be material,
include, but are not limited to, the effect of economic and market conditions;
failure to consummate financing and joint venture arrangements, including the
failure of Nomura Asset Capital Corporation ("Nomura") to purchase additional
preferred shares or to provide permanent financing; development risks, including
lack of satisfactory financing, construction and lease-up delays and cost
overruns; the level and volatility of interest rates; the financial stability of
tenants within the retail industry; the rate of revenue increases versus expense
increases, as well as other risks listed from time to time in this Form 10-K and
in GRT's other reports filed with the Securities and Exchange Commission.
ITEM 1. BUSINESS
(a) General Development of Business
GRT is a fully-integrated, self-administered and self-managed Maryland
REIT which was formed on September 1, 1993 to continue the business of The
Glimcher Company ("TGC"), and its affiliates, of owning, leasing, acquiring,
developing and operating a portfolio of retail properties consisting of regional
and super regional malls (including, most recently, value-oriented
super-regional malls) (the "Mall Properties") and community shopping centers
(including single tenant retail properties) (the "Community Centers"). The Mall
Properties and Community Centers are each individually referred to herein as a
"Property" and the Mall Properties and Community Centers in which GRT holds an
ownership position are collectively referred to herein as the "Properties". On
January 26, 1994, GRT consummated an initial public offering (the "IPO") of
15,825,000 of its common shares of beneficial interest (the "Shares"). On
February 3, 1994, GRT sold an additional 2,373,750 Shares as a result of the
underwriters exercising the over-allotment option granted to them in connection
with the IPO . The net proceeds of the IPO were used by GRT primarily to acquire
(at the time of the IPO) an 86.2% interest in Glimcher Properties Limited
Partnership (the "Operating Partnership"), a Delaware limited partnership of
which Glimcher Properties Corporation ("GPC"), a Delaware corporation and a
wholly owned subsidiary of GRT, is sole general partner, and to repay mortgage
indebtedness with respect to one of the Properties acquired in connection with
the IPO ( the "IPO Properties). The Operating Partnership and/or its
subsidiaries applied the portion of the net proceeds received by it from GRT
towards (i) the acquisition of 46 Properties (the "Acquisition Properties"),
(ii) the repayment of certain mortgage indebtedness and prepayment penalties on
29 Properties (the "Glimcher Properties") contributed to the Operating
Partnership and its affiliates by entities affiliated with Herbert Glimcher and
David J. Glimcher or the beneficial owners of such entities (collectively, the
"Glimcher Entities"), (iii) the payment to persons unaffiliated with TGC of the
purchase price for minority interests in certain of the Glimcher Properties,
(iv) the payment of other costs and expenses associated with the IPO
transactions, and (v) for working capital and other general business purposes.
The net proceeds from the exercise of the over-allotment option were used
entirely to reduce the then outstanding balance of GRT's credit facility.
On June 27, 1995 and October 6, 1997, GRT completed public offerings
for an additional 3,500,000 and 1,750,000 Shares, respectively, (the "Additional
Offerings"). The net proceeds from the Additional Offerings were used by GRT to
acquire additional units of limited partnership in the Operating Partnership.
The Operating Partnership then used the proceeds obtained in exchange for the
GRT units to reduce variable rate indebtedness. On November 17, 1997, GRT
completed a public offering of 4,800,000 shares of 9-1/4% Series B cumulative
redeemable preferred shares of beneficial interest (the "Series B Preferred
Shares"), par value $0.01 per share, with each share having a liquidation
preference of $25.00. On November 25, 1997, GRT sold an additional 318,000
Series B Preferred Shares as a result of the underwriters exercising the
over-allotment option granted to them. The net proceeds were used by GRT to (i)
repay the balance of a $34.4 million bridge loan facility and (ii) to repay a
portion of the outstanding borrowings on GRT's credit facility.
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On November 27, 1996, the Company issued 34,000 shares of its 40,000
authorized Series A convertible preferred shares. The Series A Preferred Shares
were offered and sold in a private placement to an affiliate of Nomura, for an
aggregate cash consideration of $34.0 million and may be redeemed by the Company
at any time, prior to conversion, at its option without any penalty or premiums.
On November 7, 1997, the Series A preferred shares were exchanged for Series A-1
preferred shares (the "Series A-1 Preferred Shares") having substantially the
same terms. Beginning in 2001, the Series A-1 Preferred Shares are convertible
into the number of Shares obtained by dividing the liquidation preference by the
conversion price per Share. The conversion price per share is the product of (i)
the average market price per Share over the 30 trading days prior to the
conversion, multiplied by (ii) the applicable conversion percentage which ranges
between 70.0% and 90.0%.
On December 5, 1997, the Company issued 56,000 shares of its Series C
convertible preferred shares (the "Series C Preferred Shares"). The Series C
Preferred Shares were issued pursuant to a purchase agreement dated December 4,
1997, among the Company and an affiliate of Nomura, to obtain equity funding for
the purchase by Elizabeth Metro Mall, LLC, of real estate on which to construct
and develop a value-oriented super-regional mall in Elizabeth, New Jersey. It is
contemplated that, subject to satisfactory completion of its due diligence and
satisfaction of certain other conditions, a Nomura affiliate will purchase a
series of the Company's preferred shares and that the proceeds of such sale will
be used to redeem the Series C Preferred Shares.
The Series C Preferred Shares were offered and sold for an aggregate
cash consideration of $56.0 million and may be redeemed by the Company at any
time, prior to conversion, at its option without any penalty or premiums.
Beginning in December 1998, the Series C Preferred Shares are convertible into
the number of Shares obtained by dividing the liquidation preference by the
conversion price per Share. The conversion price per Share is the product of (i)
the average market price per Share over the 30 trading days prior to the
conversion, multiplied by (ii) the applicable conversion percentage which ranges
between 70.0% and 80.0%.
The sale of the Series A-1 and Series C Preferred Shares was exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act") by virtue of the fact that the Series A-1 and Series C Preferred Shares
were sold to Nomura affiliates for their account for investment and not with a
view towards the resale, transfer or distribution thereof, nor with any present
intention of distributing the Series A-1 and Series C Preferred Shares, thus
qualifying the sale as a transaction by an issuer not involving any public
offering in accordance with Section 4(2) of the Securities Act. In addition the
Nomura affiliates are "accredited investors" as defined in Rule 501 (a) under
the Securities Act.
The Operating Partnership is a 99.0% limited partner of five Delaware
limited partnerships, Glimcher Holdings Limited Partnership ("Holdings"),
Glimcher Centers Limited Partnership ("Centers"), Grand Central Limited
Partnership ("GCLP"), Glimcher York Associates Limited Partnership ("York") and
Glimcher University Mall Limited Partnership ("University") and of one Ohio
limited partnership, Morgantown Mall Associates Limited Partnership
("Morgantown"). The general partner in each entity is either (i) GPC, (ii)
wholly-owned by GPC, or (iii) wholly-owned by GRT. The Operating Partnership is
(i) an 81.8% member of a Colorado limited liability company, Olathe Mall LLC
("Olathe") which is a 55.0% member in Great Plains Metro Mall LLC, a Delaware
limited liability company ("Great Plains"), (ii) a 32.3% member of a Delaware
limited liability company, Johnson City Venture, LLC, whose managing member,
Glimcher Johnson City, Inc., a Delaware corporation, is a 1.0% member
(collectively "Johnson City"); (iii) a 39.0% member of a Delaware limited
liability company, Dayton Mall Venture, LLC, whose managing member, Glimcher
Dayton Mall, Inc., is a 1.0% member (collectively "Dayton"); (iv) a 39.5%
limited partner of a Delaware limited partnership, Colonial Park Mall Limited
Partnership, whose general partner, Glimcher Colonial Trust, a Delaware business
trust, is a 0.5% member (collectively "Colonial"), with an option to acquire the
remaining 11.0% interest in the entity which owns the Colonial Park Mall; (v) a
50.0% member of a Delaware limited liability company, Glimcher New Jersey Metro
Mall, LLC ("NJM"), which is a 60.0% member in Elizabeth Metro Mall, LLC, a
Delaware limited liability company; and (vi) a common shareholder of Glimcher
Development Corporation ("GDC"), a Delaware corporation, with 95.0% economic
interest and no voting interest. GDC was incorporated on October 16, 1996; the
construction, development, leasing and legal departments of GRT were transferred
to GDC on November 1, 1996, and provide their services for a fee paid by GRT to
ventures in which GRT has an ownership interest, as well as to third parties.
The operation of GDC allows the Company to earn non-qualified revenues without
jeopardizing its REIT status. The Operating Partnership and entities directly or
indirectly owned or controlled by GRT, on a consolidated basis, are hereinafter
referred to as the "Company."
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The Company does not engage or pay a REIT advisor. Management, leasing,
accounting, design and construction supervision expertise is provided through
its own personnel, through GDC, or, where appropriate, through outside
professionals.
(b) Acquisitions, Expansions, Renovations and Developments During the 1997
Fiscal Year
ACQUISITIONS
The Company's objective is to acquire retail properties which appeal to
a wide range of national and regional tenants. The Company focuses primarily on
Properties which individually or in combination with other Properties owned by
the Company, are capable of becoming a dominant retail property in their
respective trade areas. Additionally, the Company seeks accretive acquisitions
which can achieve increases in cash flow as a result of the Company's management
and leasing expertise. Consistent with this strategy, during 1997 the Company
acquired interests in joint ventures which purchased two Mall Properties
totaling approximately 2.1 million square feet of gross leasable area ("GLA")
(of which approximately 1.0 million square feet of GLA is owned by certain
anchor store tenants) for a total purchase price of approximately $139.0 million
and acquired one Mall Property totaling approximately 1.3 million square feet of
GLA (of which approximately 652,000 square feet of GLA is owned by certain
anchor tenants) for approximately $121.0 million. Additionally, effective
October 1, 1997, GDC became the leasing agent for one Mall Property aggregating
approximately 933,000 square feet of GLA and, effective November 1, 1997, the
Company and GDC became the management and leasing agent, respectively, for two
other Mall Properties aggregating approximately 1.6 million square feet of GLA.
The 1997 acquisitions of The Dayton Mall, Colonial Park Mall, and
University Square are examples of management's implementation of the Company's
acquisition strategy. The Dayton Mall, located in Dayton, Ohio, was acquired in
a joint venture with Nomura on July 2, 1997 for a total purchase price of
approximately $91.0 million. This Mall Property is a super-regional mall that
contains approximately 1.3 million square feet of GLA. Tenants include four
anchors (J.C. Penney, Lazarus, McAlpin's and Sears), 142 mall shops, an
eight-screen theater and 14 food court units. The Company also developed and
currently owns The Mall at Fairfield Commons, an approximately 1.0 million
square foot super-regional mall located in the Dayton, Ohio metropolitan area
which opened in 1993. With The Dayton Mall acquisition, the Company believes it
has secured its position as the dominant retailer within the Dayton, Ohio
market.
Colonial Park Mall, located in Harrisburg, Pennsylvania, was acquired
in a joint venture with Nomura on October 1, 1997 for a total purchase price of
approximately $48.0 million. This Mall Property is a regional mall that contains
approximately 752,000 square feet of GLA. Tenants include three anchors
(Boscov's, The Bon Ton and Sears), 89 mall shops and 11 kiosks. The acquisition
of this asset added to the Company's portfolio a Mall Property that is well
positioned in a strong market and provided additional tenant diversification.
University Square, located in Tampa, Florida, was acquired by the
Company on December 18, 1997 for a total purchase price of approximately $121.0
million. This Mall Property is an expanded and re-developed super-regional mall
that contains approximately 1.3 million square feet of GLA. Tenants include five
anchors (Burdines, Dillard's, J.C. Penney, Montgomery Ward and Sears), 152 mall
shops and a 16-screen theater.
EXPANSIONS AND RENOVATIONS
The Company maintains a strategy of selective expansion and renovation
of its Properties in order to improve the operating performance and the
competitive position of its existing Properties. The Company also engages in an
active redevelopment program with the objective of attracting innovative
retailers which management believes will enhance the operating performance of
the Properties. Certain examples of the Company's recent Property expansions and
renovations are described below.
The expansion and renovation in 1996 of the Grand Central Mall in
Parkersburg, West Virginia, focused on enhancing the entertainment component of
the Mall Property, adding a food court and expanding the existing cinema into an
approximately 37,000 square foot 12-screen complex. The Company plans to make
certain additional revenue-enhancing expansions of this Mall Property, including
an approximately 83,000 square foot Proffitt's which is expected to open in
March 1998.
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In 1997, the Company also expanded the Indian Mound Mall, located in
Newark/Heath, Ohio by approximately 122,000 square feet of GLA, which increased
its total GLA to approximately 543,000 square feet. The Company believes that
this expansion enables this Mall Property to continue to dominate its market.
The expansion is consistent with the Company's focus of combining strong anchor
tenants with an expanded entertainment component to provide a compelling
destination focus for shoppers. An approximately 93,000 square foot Sears store
opened in September 1997, and the expansion of the current cinema from
approximately 18,000 square feet to approximately 42,000 square feet, as well as
the addition of approximately 5,000 square feet of mall shops was completed
during the fourth quarter of 1997.
DEVELOPMENTS
One of the Company's objectives is to increase its portfolio by
developing new retail properties in stable markets. The Company's management
team has developed over 100 retail properties nationwide and has significant
experience in all phases of the development process, including site selection,
zoning, design, predevelopment leasing, construction financing and construction
management.
The Company has begun developing value-oriented super-regional malls
while continuing to acquire and develop traditional regional mall and community
shopping center properties. These value-oriented, super-regional malls transcend
the typical design and format of the value-oriented mall by combining the
amenities and comforts of a contemporary regional mall with significant
entertainment facilities and diversified tenants. The Company has recently
strengthened its management team with the addition of senior executives with
substantial experience in leasing and developing properties of this type. On
August 14, 1997, the Company opened The Great Mall of the Great Plains, located
in Olathe, Kansas, the first of its value-oriented and entertainment
super-regional malls. The approximately 782,000 square foot initial phase of the
mall features 10 anchors and 150 mall shops. The Great Mall of the Great Plains
features a unique mix of tenants, including department stores, manufacturers'
retail outlets, factory outlets, factory direct retailers and specialty stores.
The entertainment area includes a 16-screen stadium seating cinema complex, a 12
restaurant food court and Jeepers!, a 30,000 square foot family entertainment
anchor. A planned second phase of the project, not yet under construction, is
expected to include theme restaurants and additional entertainment venues.
In December, the Company, through a joint venture, purchased the land
for a value-oriented super-regional mall located in Elizabeth New Jersey (the
"Jersey Gardens"). Also, the Company has an option to acquire the land for
another value-oriented super-regional mall located in Carson, California, (the
"LA Metro Mall") with the seller, who is also expected to participate in the
joint venture which will develop and own such Mall Property.
The Company's recent development of Community Centers has been focused
on developments in strategic locations in markets where the Company believes
that the Properties either alone, or in combination with other Properties owned
by the Company, are capable of becoming the market's dominant retail center.
Georgesville Square is an approximately 232,000 square foot development located
in a rapidly growing area in Columbus, Ohio that was developed at a cost of
approximately $18.4 million. An anchor tenant, Lowe's, opened in October 1996,
while Kroger and the specialty shops opened during the second quarter of 1997.
Meadowview Square is an approximately 151,000 square foot development
located in the Kent/Ravenna, Ohio area that was developed at a cost of
approximately $9.6 million. An anchor tenant, Wal-Mart, opened in January 1997,
while the specialty shops opened during the second half of 1997.
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(c) Narrative Description of Business
General The Company concentrates its business on various types of
retail properties such as Mall Properties and Community Centers, which are
generally strategically located in markets where management of the Company has
extensive operating experience and knowledge of market conditions. At December
31, 1997, the Properties consisted of 13 Mall Properties containing an aggregate
of 9.3 million square feet of GLA (3.4 million square feet of GLA is owned in
joint ventures) and 104 Community Centers (including 17 single tenant retail
properties) containing an aggregate of 13.6 million square feet of GLA.
Additionally, effective October 1, 1997, the Company became the leasing agent
for one Mall Property aggregating approximately 932,904 square feet of GLA and,
effective November 1, 1997, became the management and leasing agent for two
other Mall Properties aggregating approximately 1,573,741 square feet of GLA.
As of December 31, 1997, the occupancy rate for all of the Properties
was 94.0% of which 90.0%, 6.0% and 4.0% was leased to national retailers,
regional retailers and local retailers, respectively. The Company's focus is to
maintain high occupancy rates for the Properties by capitalizing on management's
long-standing relationships with national and regional tenants and its extensive
experience in marketing to local retailers.
As of December 31, 1997, the Properties had average annualized minimum
rents of $7.43 per square foot of GLA. Approximately 84.0%, 8.0% and 8.0% of the
annualized minimum rents of the Properties as of December 31, 1997 was derived
from national retail chains, regional retail chains and local retailers,
respectively. Wal-Mart, Kmart, The Limited, Inc. and its consolidated entities
and Lowe's represented approximately 8.3%, 6.5%, 3.8% and 3.6%, respectively, of
the aggregate annualized minimum rents of the Properties as of December 31,
1997; no other tenant represented more than 3.0% of the aggregate annualized
minimum rents of the Properties for such period.
Mall Properties The Mall Properties provide a broad range of shopping
alternatives to serve the needs of customers in all market segments. Each of the
Mall Properties is anchored by two to five department stores including Bon Ton,
Boscov's, Dillard's, Elder-Beerman, J.C. Penney, Lazarus, Parisian, Proffitt's,
and Sears. Mall stores, most of which are national retailers, include
Footlocker, Hallmark, Lerner New York, Limited Express, Radio Shack, The Disney
Store, The Gap, The Limited, Warner Brothers and Waldenbooks. To provide a
complete shopping, dining and entertainment experience, the Mall Properties
generally have at least one theme restaurant, a food court which offers a
variety of fast food alternatives, multiple screen movie theaters and other
entertainment activities. The largest of the Mall Properties has 1.3 million
square feet of GLA and approximately 180 stores and the smallest has 225,000
square feet of GLA and has approximately 55 stores. The Mall Properties also
have additional restaurants and retail businesses such as Chi-Chi's, Red Lobster
and Toys "R" Us located along the perimeter of the parking areas.
As of December 31, 1997, the Mall Properties accounted for 40.7% of the
total GLA, 53.8% of the aggregate annualized minimum rents of the Properties and
had an overall occupancy rate of 93.3%.
Community Centers The Company's Community Centers are designed to
attract local and regional area customers and are typically anchored by a
combination of supermarkets, discount department stores or drug stores
("Community Anchors") which attract shoppers to each center's smaller shops. The
tenants at the Company's Community Centers typically offer day-to-day
necessities and value-oriented merchandise. Community Anchors include nationally
recognized retailers such as J.C. Penney, Kmart, Lowe's, Target and Wal-Mart and
supermarkets such as Big Bear, Kroger and Winn-Dixie. Many of the Community
Centers have retail businesses including Toys "R" Us and OfficeMax or
restaurants including Applebee's, Burger King, Lone Star, McDonald's, and
Wendy's located along the perimeter of the parking areas.
As of December 31, 1997, the Community Centers accounted for 59.3% of
the total GLA, 46.2% of the aggregate annualized minimum rents of the Properties
and had an overall occupancy rate of 94.4%.
Growth Strategies and Operating Policies Management of the Company
believes per share growth in funds from operations ("FFO") is the critical
factor in enhancing shareholder value. The Company's primary business objective
is to achieve growth in FFO by developing and acquiring retail properties and by
improving the operating performance and value of its existing portfolio through
selective expansion and renovation of its Properties and by maintaining high
occupancies, increasing minimum rents per square foot of GLA and aggressively
controlling costs.
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Key elements of the Company's growth strategies and operating policies
are to: (i) increase Property values by aggressively marketing available GLA and
renewing existing leases; (ii) negotiate and sign leases which provide for
regular or periodic fixed contractual increases to minimum rents; (iii)
capitalize on management's long-standing relationships with national and
regional retailers and extensive experience in marketing to local retailers, as
well as exploit the leverage inherent in a larger portfolio of properties to
lease available space; (iv) utilize its team management approach to increase
productivity and efficiency; (v) hold Properties for long-term investment and
emphasize regular maintenance, periodic renovation and capital improvements to
preserve and maximize value; (vi) control operating costs by utilizing Company
employees and/or GDC employees to do management, leasing, marketing, finance,
accounting, construction supervision, legal and data processing activities; and
(vii) renovate, reconfigure or expand Properties and utilize existing land
available for expansion and development of outparcels to meet the needs of
existing or new tenants. Additionally, the Company seeks to utilize its
development capabilities to develop quality Properties at the lowest possible
cost.
The Company intends to operate in a manner consistent with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable to REITs and related regulations with respect to the composition of
the Company's portfolio and the derivation of income unless, because of
circumstances or changes in the Code (or any related regulation), the trustees
of the Company determine that it is no longer in the best interests of the
Company to qualify as a REIT.
The Company's acquisition strategies are to selectively acquire
strategically located Properties in regional markets where management generally
has extensive operating experience and/or where it has been able to capitalize
on its strong working relationships with national, regional and local retailers,
to enhance such center's operating performance through a comprehensive program
of leasing, merchandising, reconfiguration, proactive management, renovation and
expansion.
The following factors, among others, are considered by the Company in
making acquisitions: (i) the geographic area and type of property; (ii) the
location, construction quality, condition and design of the property; (iii) the
current FFO generated by the property and the ability to increase FFO through
property repositioning and proactive management of the tenant base; (iv) the
potential for capital appreciation; (v) the terms of tenant leases; (vi) the
existing tenant mix at the property; (vii) the potential for economic growth and
the tax and regulatory environment of the communities in which the properties
are located; (viii) the occupancy and demand by tenants for properties of
similar type in the vicinity; and (ix) the prospects for financing or
refinancing of the property.
The Company owns its Properties for long-term investment. Therefore,
its focus is to provide for regular maintenance for its Properties and conduct
periodic renovations and refurbishments to preserve and increase Property values
while also increasing the retail sales prospects of its tenants. The projects
usually include renovating existing facades, installing uniform signage,
updating interior decor, resurfacing parking lots and increasing parking lot
lighting. To meet the needs of existing or new tenants and changing consumer
demands, the Company also reconfigures and expands its properties, including
utilizing land available for expansion and development of outparcels for the
addition of new anchors. In addition, the Company works closely with its tenants
to renovate their stores and enhance their merchandising capabilities.
Financing Strategies At December 31, 1997, the Company had a debt to
total market capitalization ratio of 42.2%, based upon the closing price of the
Shares on the New York Stock Exchange as of December 31, 1997. The Company
expects that it may from time to time reevaluate its policy with respect to its
ratio of total debt to total market capitalization in light of then current
economic conditions, relative costs of debt and equity capital, market values of
its Properties, acquisition, development and expansion opportunities and other
factors, including meeting the taxable income distribution requirement for REITs
under the Code if the Company has taxable income without receipt of cash
sufficient to enable the Company to meet such distribution requirements.
On November 17, 1997, the Company completed a public offering of
5,118,000 Series B Preferred Shares (including 318,000 Series B Preferred Shares
sold as a result of the underwriters exercising the over-allotment option
granted to them). The net proceeds of approximately $123.1 million were
contributed by the Company to the Operating Partnership and were used to: (i)
repay the balance of a $34.4 million bridge loan facility and (ii) to repay a
portion of the outstanding borrowings on the Operating Partnership's credit
facility.
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On October 6, 1997, the Company completed a second offering of
1,750,000 Shares and used the net proceeds of approximately $37.8 million to
acquire additional units of limited partnership in the Operating Partnership.
The Operating Partnership then used the proceeds obtained in exchange for the
GRT units to repay a portion of the outstanding borrowings on its credit
facility.
Corporate Headquarters The Company's headquarters are located at 20
South Third Street, Columbus, Ohio 43215, and its telephone number is (614)
621-9000. In addition, the Company maintains management offices at each of its
Mall Properties.
Competition All of the Properties are located in areas which have
shopping centers and other retail facilities. Generally, there are other retail
properties within a five-mile radius of a Property. The amount of rentable
retail space in the vicinity of the Company's Properties could have a material
adverse effect on the amount of rent charged by the Company and on the Company's
ability to rent vacant space and/or renew leases of such Properties. There are
numerous commercial developers, real estate companies and major retailers that
compete with the Company in seeking land for development, properties for
acquisition and tenants for properties, some of which may have greater financial
resources than the Company and more operating or development experience than
that of the Company. There are numerous shopping facilities that compete with
the Company's Properties in attracting retailers to lease space. In addition,
retailers at the Properties may face increasing competition from outlet malls,
discount shopping clubs, catalog companies, direct mail and telemarketing.
Employees At December 31, 1997, the Company, GDC and the ventures the
Company has interests in, had an aggregate of 849 employees of which 565 were
part-time.
Real Estate and Other Considerations As an owner and developer of real
estate, the Company is subject to risks arising in connection with such
activities and the underlying real estate, including unknown deficiencies of and
inability to manage recently acquired Properties, poor economic conditions in
those areas where Properties are located, joint venturer bankruptcies,
unanticipated conflicts of interest between the Company and joint venturers,
failure to obtain consents of joint venturers with respect to sale, refinancing
and other activities, the joint venturers removing the Company as managing agent
or managing member with respect to a Property, buy-sell arrangements with joint
venturers exercised at inopportune times, defaults under or non-renewal of
tenant leases, tenant bankruptcies, competition, liquidity of real estate,
inability to rent unleased space, failure to generate sufficient income to meet
operating expenses, including debt service, capital expenditures and tenant
improvements, balloon payments on debt, environmental matters, financing
availability, defaults under and failure to repay borrowings, fluctuations in
interest rates, changes in real estate and zoning laws, cost overruns, delays,
unavailability of satisfactory financing and other risks of development
activities. The success of the Company also depends upon certain key personnel,
its ability to maintain its qualification as a REIT, and trends in the national
and local economy, including income tax laws, governmental regulations and
legislation and population trends.
Tax Status The Company intends to continue to be taxed as a REIT under
Sections 856 through 860 of the Code. As such, the Company generally will not be
subject to Federal income tax to the extent it distributes at least 95.0% of its
REIT taxable income to its shareholders. If the Company fails to qualify as a
REIT in any taxable year, the Company will be subject to Federal income tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Even as a qualified REIT, the Company is subject to
certain state and local taxes on its income and property and to federal income
and excise taxes on its undistributed income.
ITEM 2. PROPERTIES
At December 31, 1997, the Company managed and leased a total of 120
operating properties, 113 of which were wholly-owned, four of which were
partially owned in ventures and three of which were managed or leased under
contractual arrangements (the "Operating Properties"). The Operating Properties
are located in 24 states primarily throughout the East and the Midwest as
follows: Ohio (27), Pennsylvania (12), Tennessee (10), West Virginia (7),
Kentucky (8), South Carolina (8), New York (6), North Carolina (6), Indiana (5),
Florida (3), Virginia (3), Illinois (2), Massachusetts (2), Missouri (2),
Washington (2), Wisconsin (2), Alabama (1), Arizona (1), Colorado (1), Georgia
(1) Kansas (1), Michigan (1), Nebraska (1), and Texas (1).
9
<PAGE> 10
(a) Mall Properties
Sixteen of the Operating Properties are Mall Properties and range in
size from 225,000 square feet of GLA to 1.3 million square feet of GLA. Five are
located in Ohio and 11 are located in the states of Texas (2), West Virginia
(2), Florida (1), Kansas (1), Kentucky (1), New York (1), Pennsylvania (1),
Tennessee (1) and Washington (1). The location, general character and major
tenant information are set forth below.
SUMMARY OF MALL PROPERTIES AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHORS (4)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPANY OWNED PROPERTIES:
Ashland Town Center J.C. Penney 10/31/04
Ashland, KY............... 226,862 189,964 416,826 100.0 84.5 Proffitt's 01/31/10
Wal-Mart 11/10/09
Grand Central Mall Goody's 04/30/03
Parkersburg/Vienna, WV.. 479,189 316,345 795,534 100.0 80.9 J.C. Penney 09/30/02
Phar-Mor 04/30/07
Regal Cinema 11/30/16
Sears 09/25/02
Stone & Thomas (2) 01/31/33
Indian Mound Mall Crown Cinema 12/31/07
Newark/Heath, OH........ 369,215 172,528 541,743 100.0 80.8 Elder-Beerman 09/30/06
Hills 01/31/12
J.C. Penney 10/31/01
Lazarus 09/30/01
Sears 09/23/27
Mall at Fairfield Commons, The Elder-Beerman 10/31/13
Beavercreek/Dayton, OH.. 684,742 356,477 1,041,219 100.0 93.6 J.C. Penney 10/31/08
Lazarus (2) 01/31/15
Parisian 01/31/14
Sears 10/31/08
Morgantown Mall Carmike Cinemas 10/31/05
Morgantown, WV.......... 359,171 183,226 542,397 100.0 81.3 Elder-Beerman 09/30/10
J.C. Penney 09/30/05
Proffitt's 03/15/11
Sears 09/30/05
New Towne Mall Elder-Beerman 10/31/08
New Philadelphia, OH.... 338,838 169,507 508,345 100.0 68.0 Hills 01/31/14
Hoyt's Cinema 03/31/05
J.C. Penney 09/30/03
OfficeMax 11/30/11
Phar-Mor 06/30/10
Sears 10/31/98
River Valley Mall Elder-Beerman 09/30/07
Lancaster, OH........... 316,947 238,644 555,591 100.0 85.0 Hills 01/31/13
Hoyt's Cinema 12/31/04
J.C. Penney 09/30/02
Lazarus 09/30/02
Sears 10/31/99
Southside Mall J.C. Penney 07/31/01
Oneonta, NY............. 147,508 77,585 225,093 81.4 82.7 Kmart 06/30/08
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHORS (4)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
University Mall Burdines 01/31/99
Tampa, FL............... 890,743 412,009 1,302,752 100.0 81.4 Cobb Theatre 12/31/11
Dillard's 02/01/09
J.C. Penney 10/31/04
Montgomery Ward 01/31/99
Sears 08/12/09
--------- --------- ---------
Subtotal ................. 3,813,215 2,116,285 5,929,500 99.3 83.0
--------- --------- ---------
PROPERTIES OWNED IN VENTURES (3):
Colonial Park Mall Bon Ton 01/29/05
Harrisburg, PA.......... 504,446 247,590 752,036 100.0 95.4 Boscov's 05/31/12
Sears 10/14/90
Dayton Mall, The J.C. Penney 03/31/11
Dayton, OH ............. 844,825 483,994 1,328,819 100.0 82.4 Lazarus 12/31/49
McAlpin's 12/31/11
Sears 12/31/11
Great Mall of the Great Plains, Burlington Coat 01/31/08
The Factory
Olathe, KS.............. 397,652 384,594 782,246 100.0 71.3 Dickinson Theatres 12/31/08
Dillard's Clearance 08/14/01
Foozles 08/13/02
Group USA 08/13/07
Jeepers! 12/31/06
Kitchen & Co. 01/31/08
Linens'n Things 01/31/08
Marshalls 01/31/13
Oshman's
SuperSports USA 01/31/13
Mall at Johnson City, The Goody's 05/31/06
Johnson City, TN........ 334,605 215,205 549,810 100.0 84.1 J.C. Penney 03/31/00
Proffitt's for Her 10/31/12
Proffitt's for Men,
Kids & Home 06/30/06
Sears 03/09/01
--------- --------- ---------
Subtotal.................. 2,081,528 1,331,383 3,412,911 100.0 81.9
--------- --------- ---------
PROPERTIES CURRENTLY LEASED AND/OR MANAGED:
Almeda Mall, Foley's (5)
Houston, TX............. 584,403 207,722 792,125 95.4 76.9 J.C. Penney (5)
Palais Royal 12/31/09
Ross Stores 03/31/03
Northwest Mall Foley's (5)
Houston, TX............. 558,047 223,569 781,616 100.0 71.8 J.C. Penney (5)
OfficeMax 06/30/00
Palais Royal 12/31/09
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHORS (4)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SuperMall of the Great Northwest Ann Taylor Loft 01/31/06
Auburn, WA.............. 512,718 420,186 932,904 69.1 75.4 Bed Bath &
Beyond 08/31/05
Burlington 08/31/05
Marshall's 12/31/11
Nordstrom Rack 08/31/05
Off 5th Saks 12/31/10
Oshman's
SuperSports USA 01/31/11
--------- -------- ----------
Subtotal.................. 1,655,168 851,477 2,506,645 88.8 74.7
--------- -------- ----------
Total..................... 7,549,911 4,299,145 11,849,056 97.2 81.0
========= ========= ==========
</TABLE>
(1) Includes outparcels.
(2) Ground lease.
(3) The Operating Partnership has investments in these Mall Properties ranging
from 33.3% to 45.0%. The Company as the venture's managing general partner
and GDC are responsible for management and leasing services, respectively,
and receive fees for providing these services.
(4) Lease expiration dates do not consider options to renew.
(5) Tenant operates under Operating Agreement.
(b) Community Centers
One hundred four of the Operating Properties are Community Centers
(including 17 single tenant retail properties) ranging in size from 13,000 to
490,400 square feet of GLA. They are located in 24 states primarily in the East
and the Midwest as follows: Ohio (23), Pennsylvania (12), Indiana (7), Kentucky
(7), South Carolina (7), Tennessee (7), North Carolina (6), West Virginia (6),
New York (5), Florida (3), Virginia (3), Alabama (2), Illinois (2),
Massachusetts (2), Missouri (2), Washington (2), Wisconsin (1), Arizona (1),
Colorado (1), Georgia (1), Kansas (1), Michigan (1), Nebraska (1) and Texas (1).
The location, general character and major tenant information are set forth
below.
SUMMARY OF COMMUNITY CENTERS AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHOR(S) (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Arnold Plaza Kmart 11/30/02
Arnold, MO.................. 140,340 14,860 155,200 100.0 100.0 Schnucks 07/31/98
Artesian Square J.C. Penney 04/30/08
Martinsville, IN............ 150,601 25,400 176,001 100.0 94.1 Kroger 11/30/09
Wal-Mart 09/29/09
Ashland Plaza
Ashland, KY................. 90,574 42,246 132,820 100.0 96.2 Hills 01/31/03
Audubon Village
Henderson, KY............... 85,491 39,099 124,590 100.0 64.5 Wal-Mart 01/31/08
Aviation Plaza Piggly Wiggly 12/31/09
Oshkosh, WI................. 123,538 51,177 174,715 100.0 83.3 Wal-Mart 12/29/09
Ayden Plaza
Ayden, NC.................. 21,000 11,800 32,800 100.0 69.5 Food Lion 10/31/07
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHOR(S) (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Barren River Plaza Goody's 10/31/00
Glasgow, KY................. 216,895 28,400 245,295 100.0 77.8 Wal-Mart 09/18/10
Watson's 09/26/10
Winn-Dixie 10/03/10
Bollweevil Shopping Center
Enterprise, AL.............. 30,625 12,760 43,385 100.0 92.5 Winn-Dixie 05/30/04
Buckhannon Plaza Ames 05/31/00
Tennerton, WV............... 70,951 13,865 84,816 100.0 85.6 A&P 04/30/00
Cambridge Plaza
Cambridge, OH............... 79,949 15,070 95,019 100.0 100.0 Hills 01/31/13
Canal Place Plaza
Rome, NY.................... 117,162 32,800 149,962 100.0 76.8 Kmart 08/31/19
Chillicothe Plaza
Chillicothe, OH............. 91,508 7,675 99,183 100.0 100.0 Hills 01/31/13
Clarksville Plaza Crossroads
Clarksville, IN............. 93,672 18,170 111,842 100.0 100.0 Furniture 01/31/04
Service
Merchandise 01/31/03
College Plaza Food Lion 09/29/12
Bluefield, VA............... 148,181 30,250 178,431 100.0 100.0 Wal-Mart 05/29/12
Corry Plaza 69,698 38,669 108,367 100.0 100.0 G.C. Murphy
Corry, PA.................. Co. 04/30/02
Quality Farm
& Fleet 08/31/04
Cross Creek Plaza J.C. Penney 02/28/10
Beaufort, SC................ 170,406 71,712 242,118 100.0 100.0 Wal-Mart 11/10/09
Winn-Dixie 07/17/11
Crossing Meadows Festival Foods 06/27/10
Onalaska, WI................ 178,599 55,385 233,984 100.0 91.8 Wal-Mart 08/23/11
Crossroads Centre Goody's 10/31/01
Knoxville, TN............... 200,980 41,450 242,430 100.0 92.3 Ingles 09/25/10
Wal-Mart 01/31/09
Cumberland Crossing Food City 12/13/10
Jacksboro, TN............... 100,034 44,700 144,734 100.0 100.0 Wal-Mart 09/28/10
Cypress Bay Village Food Lion 12/20/10
Morehead City, NC........... 197,821 59,200 257,021 100.0 94.6 Sears 02/13/00
Wal-Mart 09/29/09
Dallas Plaza
Balch Springs, TX........... 112,609 10,500 123,109 100.0 100.0 Kmart 11/30/00
Daytona Plaza
Daytona Beach, FL............ 116,907 24,346 141,253 100.0 57.2 Kmart 10/30/98
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHOR(S) (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Delaware Community Plaza
Delaware, OH................. 54,152 99,299 153,451 100.0 94.2 Kroger 03/31/13
East Pointe Plaza Food Lion 11/16/10
Columbia, SC................. 183,340 95,410 278,750 100.0 81.5 SuperPetz 03/31/06
Wal-Mart 01/31/09
East Pointe Plaza Big Bear 09/30/13
Marysville, OH............... 107,211 37,900 145,111 100.0 95.8 Wal-Mart 11/09/10
Franklin Square Goody's 05/31/99
Spartanburg, SC............. 197,764 38,800 236,564 100.0 100.0 Ingles 11/30/07
Wal-Mart 07/31/07
Georgesville Square Lowe's 10/31/16
Columbus, OH................ 194,909 36,793 231,702 100.0 41.3 Kroger 04/30/17
Grand Union
Chatham, NY................. 21,756 N/A 21,756 100.0 N/A Grand Union 07/31/19
Grand Union Plaza
South Glens Falls, NY....... 61,335 N/A 61,335 100.0 N/A Grand Union 06/30/19
Gratiot Center Kessel Food
Saginaw, MI................. 173,160 28,151 201,311 84.7 100.0 Market 10/31/09
Kmart 11/30/13
Hills Plaza East
Erie, PA.................... 77,000 19,025 96,025 100.0 87.4 Hills 10/31/02
Hocking Valley Mall Kmart 09/30/03
Lancaster, OH................ 147,817 31,670 179,487 100.0 100.0 Kroger 09/30/02
Horizon Park
Longmont, CO................. 84,180 N/A 84,180 100.0 N/A Kmart 11/30/00
Hunter's Ridge Shopping Center
Gahanna, OH.................. 84,180 92,430 176,610 100.0 92.3 Kmart 06/30/01
Huntington Plaza
Huntington, WV............... 100,671 7,200 107,871 24.8 100.0 Kroger 10/31/01
Indian Mound Plaza
Heath, OH.................... N/A 16,600 16,600 N/A 72.3 N/A N/A
Kmart
Alliance, NE (2)............. 40,800 N/A 40,800 100.0 N/A Kmart 03/31/08
Kmart
Bloomington, IN.............. 87,405 N/A 87,405 100.0 N/A Kmart 11/30/05
Kmart
Clifton Heights, PA.......... 87,543 N/A 87,543 100.0 N/A Kmart 10/31/04
Kmart
Fairhaven, MA................ 91,653 N/A 91,653 100.0 N/A Kmart 11/30/02
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHOR(S) (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kmart
Feasterville, PA............. 94,500 N/A 94,500 100.0 N/A Kmart 06/30/03
Kmart
Langhorne, PA................ 95,810 N/A 95,810 100.0 N/A Kmart 11/30/99
Kmart
Leechburg, PA................ 85,909 N/A 85,909 100.0 N/A Kmart 05/31/06
Kmart
Norfolk, VA (2).............. 120,997 N/A 120,997 100.0 N/A Kmart 07/30/99
Kmart Shopping Center
Puyallup, WA................. 91,657 38,509 130,166 100.0 72.7 Kmart 11/30/03
Kmart
Seekonk, MA (5).............. 105,900 N/A 105,900 0.0 N/A N/A N/A
Kmart
Yakima, WA................... 116,799 N/A 116,799 100.0 N/A Kmart 09/30/99
Knox Village Square Big Bear 01/29/13
Mount Vernon, OH............. 173,033 34,400 207,433 100.0 100.0 J.C. Penney 05/31/08
Kmart 01/31/18
Lexington Parkway Plaza Belks 04/10/11
Lexington, NC (4)............ 152,852 57,298 210,150 100.0 100.0 Goody's 03/31/00
Ingles 09/25/10
Wal-Mart 12/29/09
Liberty Plaza
Morristown, TN............... 29,000 29,700 58,700 100.0 75.8 Food Lion 05/31/03
Linden Corners
Buffalo, NY.................. 80,000 10 80,010 100.0 100.0 Hills 01/31/14
Logan Place Houchens 11/30/08
Russellville, KY............. 89,848 24,900 114,748 100.0 83.1 Wal-Mart 03/31/08
Lowe's
Altoona, PA.................. 121,148 N/A 121,148 100.0 N/A Lowe's 11/30/14
Lowe's
Columbus, OH................. 125,357 N/A 125,357 100.0 N/A Lowe's 12/31/14
Lowe's
Marion, OH................... 72,507 N/A 72,507 100.0 N/A Lowe's 07/31/13
Lowe's
Wooster, OH.................. 71,463 N/A 71,463 100.0 N/A Lowe's 07/31/13
Loyal Plaza Bi-Lo 05/31/12
Loyalsock, PA (2).......... 204,058 109,417 313,475 85.6 100.0 Family Toy
Warehouse 01/31/03
Kmart 08/31/01
Marion Towne Centre Piggly Wiggly 08/31/12
Marion, SC................... 102,913 53,630 156,543 100.0 82.7 Wal-Mart 06/19/12
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHOR(S) (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Meadowview Square
Ravenna/Kent, OH............. 126,242 25,000 151,242 100.0 14.0 Wal-Mart 01/28/17
Middletown Plaza
Middletown, OH............... 104,125 26,000 130,125 73.9 50.0 Hills 02/28/02
Mill Run
Columbus, OH................. 125,357 46,862 172,219 100.0 100.0 Lowe's 12/31/14
Monroe Shopping Center Ingles 11/30/02
Madisonville, TN............. 64,746 28,450 93,196 100.0 100.0 Wal-Mart 01/31/03
Morgantown Commons OfficeMax 08/31/11
Morgantown, WV............... 200,187 30,656 230,843 100.0 95.8 Phar-Mor 06/30/06
SuperKmart 02/28/21
Morgantown Plaza
Star City, WV................ 74,540 28,824 103,364 100.0 100.0 Hills 10/31/02
Morningside Plaza
Dade City, FL................ 33,896 41,221 75,117 100.0 77.9 Kash N' Karry 06/30/05
Mount Vernon Plaza Heilig-Meyers 09/12/06
Mt.Vernon, OH................ 49,932 12,759 62,691 100.0 64.4 Odd Lots 01/31/04
New Boston Mall
Portsmouth, OH............... 84,180 44,550 128,730 100.0 62.1 Kmart 11/30/03
Newberry Square Shopping Wal-Mart 09/30/07
Center - Newberry, SC........ 104,588 22,240 126,828 100.0 100.0 Winn-Dixie 12/09/07
Newport Plaza II
Newport, KY (2).............. 84,180 14,800 98,980 100.0 78.4 Kmart 06/13/04
North Horner Shopping Center
Sanford, NC.................. 22,486 17,650 40,136 100.0 47.9 Food Lion 09/11/02
Northtowne Square
Chattanooga, TN.............. 42,130 29,200 71,330 100.0 59.9 Kroger 09/30/01
Ohio River Plaza Big Bear 11/18/09
Gallipolis, OH............... 105,857 43,136 148,993 100.0 91.0 Hills 01/31/20
Pea Ridge Shopping Center Kmart 10/31/04
Huntington, WV............... 110,192 39,860 150,052 100.0 90.0 Kroger 02/29/00
Perdido Point Plaza
Pensacola, FL................ 36,987 9,600 46,587 100.0 100.0 Delchamps 04/30/05
Piedmont Plaza Food Lion 12/02/09
Greenwood, SC (4)............ 197,402 51,650 249,052 84.7 69.8 Lowe's 12/31/09
Wal-Mart 09/29/09
Plaza Vista Mall J.C. Penney 02/28/04
Sierra Vista, AZ............. 161,043 53,229 214,272 100.0 100.0 Wal-Mart 10/14/11
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHOR(S) (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Prestonsburg Village Center Big Lots 12/31/00
Prestonsburg, KY............. 134,057 41,290 175,347 100.0 84.5 Wal-Mart 09/30/05
Winn-Dixie 01/30/06
Rend Lake Shopping Center Big John's 10/31/99
Benton, IL................... 96,913 24,470 121,383 100.0 90.2 Wal-Mart 01/31/07
Rhea County Shopping Ingles 02/28/03
Dayton, TN................... 71,952 40,050 112,002 100.0 100.0 Wal-Mart 09/30/03
River Edge Plaza Food City 11/01/08
Sevierville, TN (2).......... 108,829 27,396 136,225 100.0 47.0 Wal-Mart (1) 09/30/03
River Valley Plaza Big Bear 05/31/09
Lancaster, OH................ 173,000 38,865 211,865 100.0 100.0 Family Toy
Warehouse 10/30/99
Target 10/03/14
Roane County Plaza Goody's 02/28/00
Rockwood, TN................. 124,848 35,350 160,198 100.0 93.2 Ingles 02/28/10
Wal-Mart 01/31/10
Scott Town Plaza
Bloomsburg, PA............... 47,334 30,300 77,634 100.0 72.3 Kmart 08/31/01
Shady Springs Plaza
Beaver, WV................... 37,232 30,345 67,577 100.0 70.0 Kroger 09/30/08
Sidney Shopping Center
Sidney, NY................... 50,071 N/A 50,071 100.0 N/A Grand Union 07/31/19
Southside Plaza Food Lion 12/17/11
Sanford, NC.................. 147,693 24,600 172,293 100.0 100.0 Wal-Mart 12/29/11
Springfield Commons West Big Bear 03/31/15
Springfield, OH.............. 180,167 N/A 180,167 100.0 N/A Lowe's 01/31/15
Steamboat Bend Hannibal Farm
Hannibal, MO................. 81,272 25,420 106,692 100.0 95.3 & Home 08/25/02
Wetterau 10/31/00
Stewart Plaza
Mansfield, OH................ 30,979 27,069 58,048 100.0 100.0 Kroger 10/31/99
Sunbury Plaza Acme 09/10/98
Sunbury, PA.................. 91,131 49,265 140,396 100.0 75.6 Bi-Lo 08/31/98
Sycamore Square Food Lion 01/20/10
Ashland City, TN............. 66,304 27,000 93,304 100.0 74.1 Wal-Mart 11/11/08
Target Plaza
Heath, OH.................... 97,000 N/A 97,000 100.0 N/A Target 11/29/14
Torresdale Plaza
Philadelphia, PA............. 130,882 11,400 142,282 73.2 0.0 Kmart 11/30/01
Twin County Plaza Ingles 01/31/07
Galax, VA.................... 122,273 38,440 160,713 100.0 88.6 Wal-Mart 12/31/07
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA LEASED LEASED ANCHOR(S) (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Village Plaza Bi-Lo 11/30/08
Augusta, GA.................. 450,331 40,100 490,431 100.0 88.0 Goody's 11/30/98
Home Quarters 01/31/09
OfficeMax 01/31/02
Sam's Club 07/11/08
Wal-Mart 10/28/08
Village Plaza Falley's Food
Manhattan, KS................ 24,510 31,197 55,707 100.0 96.6 4 Less 10/31/00
Village Square
Kutztown, PA................. N/A 40,074 40,074 N/A 71.0 N/A N/A
Vincennes Kmart 06/30/99
Vincennes, IN (2)............ 108,682 N/A 108,682 100.0 N/A Kroger 12/31/98
Walgreens
Louisville, KY............... 13,000 N/A 13,000 100.0 N/A Walgreens 01/31/25
Walgreens
New Albany, IN................. 13,000 N/A 13,000 100.0 N/A Walgreens 09/30/24
Wal-Mart Plaza
Springfield, OH.............. 155,198 45,305 200,503 80.3 64.3 Wal-Mart 10/27/15
Walnut Cove
Walnut Cove, NC.............. 32,000 26,450 58,450 100.0 72.8 Ingles 03/31/06
Walterboro Plaza Piggly Wiggly 09/09/10
Walterboro, SC............... 99,730 32,400 132,130 100.0 100.0 Wal-Mart 06/23/09
Westpark Plaza
Carbondale, IL (2)........... 31,170 24,152 55,322 100.0 84.0 Kroger 03/31/08
---------- --------- ----------
Company owned properties....... 10,783,796 2,817,301 13,601,097 96.6 85.9
========== ========= ==========
</TABLE>
(1) Wal-Mart vacated the store on September 30, 1995 but continues to pay
rent through lease expiration 9/30/03.
(2) Ground lease.
(3) Lease expiration dates do not consider options to renew.
(4) Tenant operates under Operating Agreement.
(5) Kmart vacated the store upon expiration of their lease.
18
<PAGE> 19
Eight of the Operating Properties are subject to long-term ground
leases where a third party owns the underlying land and has leased the land to
the Company. The expiration dates of the ground leases (assuming the exercise by
the Company of all of its options to extend the terms of such leases) range from
May 2038 to April 2082. The Company pays rent, ranging from $1,500 to $60,000
per annum, for the use of the land and generally is responsible for the costs
and expenses associated with maintaining the building and improvements thereto.
In addition, some of the ground leases provide for sharing of the percentage
rents collected, if any. At the end of the lease term, unless extended, the
land, together with all improvements thereon, will revert to the land owner
without compensation to the lessee.
(d) Properties Subject to Indebtedness
To finance the acquisition and development of the Operating Properties,
the Company has entered into mortgage loans and a credit facility which is
described below.
The Nomura Loan ($181.0 million)
The Nomura loan is held by Nomura and is evidenced by four notes
(collectively, the "Notes" and individually, a "Note"): (i) two notes, each in
the principal amount of $40.0 million, one of which bears interest at the rate
of 6.995% per annum and matures on February 1, 1999, and the other of which
bears interest at the rate of 7.505% per annum and matures on February 1, 2003;
(ii) a note in the principal amount of $76.0 million which bears interest at the
rate of 7.625% per annum and matures on August 1, 2000; and (iii) a note in the
principal amount of $25.0 million which bears interest at the rate of 6.935% per
annum and matures on October 1, 2000. Each of the Notes provides for monthly
payments of interest only with the principal amount due on maturity. The
borrowers under the Nomura loan are Holdings, Centers and GCLP (collectively,
the "Borrowers").
Each Note prohibits prepayment (other than upon casualty or
condemnation), except that the Note executed by Holdings which matures on
February 1, 1999 may be prepaid during the last six months of its term and the
other three Notes may be prepaid during the last 12 months of their respective
terms.
The Nomura loan is a non-recourse loan. Payment of principal and
interest on the Nomura loan is secured by first mortgage liens on 56 properties,
26 of which are owned by Holdings, 29 of which are owned by Centers and one of
which is owned by GCLP, (the "Nomura Properties"), and a pledge of the
partnership interests in each of the Borrowers, which interests are held by an
affiliate of GRT. These mortgages are cross-collateralized and cross-defaulted.
The Nomura loan contains customary representations, covenants and
events of default. In addition, it requires that (i) the Borrowers comply with
certain affirmative and negative covenants, including covenants restricting the
incurrence of additional indebtedness on the Nomura Properties; (ii) each
Borrower establish and maintain certain reserve funds; and (iii) the general
partner of each Borrower have an independent director whose vote will be
required for certain specified actions, including the making of any bankruptcy
filing by the respective Borrower. Neither GRT nor the Operating Partnership is
a party to, and neither has guaranteed any amount in respect of, the Nomura
loan, other than certain limited indemnification obligations primarily relating
to potential environmental liabilities and the pledge of partnership interests
as described above.
The Nomura loan also provides that the Nomura Properties will be
managed by the Company or a third party selected by the Company, provided that
the Company, or any other party then managing such property, may be removed as
manager of such properties if an event of default occurs under such loan or if
the ratio of the sum of (i) the net operating income of the Nomura Properties
during the preceding 12 calendar months and (ii) all interest earned during such
period on U.S. government obligations delivered to Nomura as substituted
collateral for the Nomura Properties released (as described in the paragraph
above), decreases below an amount equal to 75.0% of the net operating income for
the Nomura Properties determined as of September 30, 1993, (approximately $23.8
million) for three consecutive months.
19
<PAGE> 20
The Morgantown Loan ($50.2 million)
The Morgantown loan is held by Connecticut General Life Insurance
Company ("CIGNA") and bears interest at a rate equal to 7.500% per annum and is
payable interest only until maturity on April 1, 1999. Repayment of the
Morgantown loan is principally secured by first mortgage liens on Morgantown
Mall and Morgantown Commons. On January 1, 1998, CIGNA sold the Morgantown Loan
to The Lincoln National Life Insurance Company.
The CIGNA Loan ($50.0 million)
The CIGNA loan is secured by first mortgage liens on 10 properties,
bears interest at a rate equal to 7.470% per annum and is payable, interest
only, until maturity on October 26, 2002. These mortgages are
cross-collateralized and cross-defaulted. On January 1, 1998, CIGNA sold this
loan to The Lincoln National Life Insurance Company.
The Credit Facility ($190.0 million)
In May 1997, the Company amended its credit facility to (i) increase
the amount the Company can borrow thereunder from $175.0 million to $190.0
million, (ii) extend the term of the credit facility from June 30, 1998, to July
31, 1998, which term may at the Company's option be extended to July 31, 1999,
and (iii) reduce the variable tiered interest rate schedule. Borrowings under
the credit facility currently bear interest at a rate equal to LIBOR plus 170
basis points per annum (7.4375% at December 31, 1997). In connection therewith,
the Company granted first mortgage liens on 11 of the properties to secure
borrowings under the credit facility, which previously were unsecured. Payments
due under the credit facility are guaranteed by GRT and by GPC. As of December
31, 1997, the Company had outstanding borrowings of approximately $90.0 million
under the Credit Facility.
The University Mall Loan ($71.4 million)
The University Mall Loan is held by Nomura and is secured by a first
mortgage lien on University Mall. The loan consists of (i) a note in the
principal amount of $64.9 million with interest at a rate of approximately 8.23%
per annum and maturing in January 2028 and (ii) a buy up payment from Nomura of
$6.5 million which reduces the effective interest rate to 7.09% per annum.
The Community Center Loans ($113.5 million)
The Community Center loans are secured by first mortgage liens on 15
properties, bear interest at rates ranging from 7.375% to 9.125% per annum,
require payments of principal and interest and mature between June 1999 and
April 2016.
20
<PAGE> 21
The Construction Loans
Georgesville Square Loan
In September 1996, the Company entered into a construction loan to
finance the development of Georgesville Square, a Community Center in Columbus,
Ohio, pursuant to which the Company has a right to borrow $16.9 million. The
construction loan is due October 1, 1999, is subject to two extensions of six
months each, and is payable monthly, interest only, at LIBOR plus 200 basis
points (7.6875% at December 31, 1997). As of December 31, 1997, the Company had
borrowed $16.6 million under the construction loan.
Georgesville Cinema Loan
In December 1997, the Company entered into a construction loan to
finance the development of a 63,000 square foot Regal Cinema at Georgesville
Square, a Community Center in Columbus, Ohio pursuant to which the Company has
the right to borrow $6.2 million. The construction loan is due October 1, 1999,
is subject to two extensions of six months each, and is payable monthly,
interest only at LIBOR plus 200 basis points (7.6875% at December 31, 1997). The
Company had not borrowed under this construction loan as of December 31, 1997.
Meadowview Square Loan
In October 1996, the Company entered into a construction loan to
finance the development of Meadowview Square, a Community Center in Kent, Ohio,
pursuant to which the Company has a right to borrow $9.8 million. The
construction loan is due November 1, 1999, is subject to two extensions of six
months each, and is payable monthly, interest only, at LIBOR plus 200 basis
points (7.6875% at December 31, 1997). As of December 31, 1997, the Company had
borrowed $9.1 million under the construction loan.
Morgantown Commons Loan
In June 1995, the Company entered into a construction loan to finance
the expansion of Morgantown Commons, a Community Shopping Center in Morgantown,
West Virginia, pursuant to which the Company has a right to borrow $10.5
million. The construction loan is due June 1, 1998 and is payable monthly,
interest only, at LIBOR plus 200 basis points (8.000% at December 31, 1997). As
of December 31, 1997, the Company had borrowed $9.5 million under the
construction loan.
ITEM 3. LEGAL PROCEEDINGS
The Company is not presently involved in any material litigation nor,
to its knowledge, is any material litigation threatened against the Company or
its Properties, other than routine litigation arising in the ordinary course of
business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of fiscal year
1997.
21
<PAGE> 22
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
(a) Market Information
The Shares have been approved for listing and are currently traded on
the New York Stock Exchange ("NYSE") under the symbol "GRT." On March 10, 1998,
the last reported sales price of the Shares on the NYSE was $22.2500. The
following table shows the high and low sales prices for the Shares on the NYSE
for the 1997 and 1996 quarterly periods indicated as reported by the New York
Stock Exchange Composite Tape and the cash distributions per Share paid by GRT
with respect to each of such periods.
DISTRIBUTIONS
QUARTER ENDED HIGH LOW PER SHARE
------------- ---- --- ---------
March 31, 1996 $17.750 $15.250 $0.4808
June 30, 1996 17.500 16.250 0.4808
September 30, 1996 19.625 16.250 0.4808
December 31, 1996 22.000 19.000 0.4808
March 31, 1997 21.750 19.500 0.4808
June 30, 1997 21.250 17.875 0.4808
September 30, 1997 23.000 20.438 0.4808
December 31, 1997 23.063 20.875 0.4808
(b) Holders
The number of holders of record of the Shares was 950 as of March 10,
1998.
(c) Distributions
Future Share distributions paid by GRT will be at the discretion of the
trustees of GRT and will depend upon the actual cash flow of GRT, its financial
condition, capital requirements, the annual distribution requirements under the
REIT provisions of the Code and such other factors as the trustees of GRT deem
relevant.
GRT has implemented a Distribution Reinvestment and Share Purchase Plan
under which its shareholders or Operating Partnership unit holders may elect to
purchase additional shares and/or automatically reinvest their distributions in
shares. In order to fulfill its obligations under the plan, GRT may purchase
Shares in the open market or issue Shares that have been registered and
authorized specifically for the plan. As of December 31, 1997, 250,000 shares
were authorized of which 26,170 common shares have been issued.
(d) Recent Sales of Unregistered Securities
The information required herein, is set forth under the General
Development of Business.
22
<PAGE> 23
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth Selected Financial Data for the Company
and for the Company's predecessor, Glimcher Properties. This information should
be read in conjunction with the financial statements of the Company and
Management's Discussion and Analysis of the Financial Condition and Results of
Operations, each included elsewhere in this Form 10-K.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
COMPANY GLIMCHER PROPERTIES
FOR THE YEARS ENDED FOR THE YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------------ -------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA (IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS):
Total revenues................................. $ 140,138 $ 117,678 $ 104,248 $ 90,792 $ 43,129
Operating expenses............................. 29,548 27,212 22,706 22,078 11,393
Depreciation and amortization.................. 27,869 22,418 20,560 17,599 7,888
General and administrative..................... 8,286 9,371 6,409 6,182 2,323
Interest expense............................... 42,146 29,297 26,215 22,928 23,764
Equity in income (loss) from unconsolidated
entities..................................... (661) 42
Interest income................................ 1,032 506 649 655 1,208
Gain on sales of property/outparcels........... 155 1,506 1,017
Non-recurring transfer cost.................... 2,055
Minority interest in operating partnership..... 3,022 3,385 3,294 2,137 436
Extraordinary item:
Extinguishment of debt-prepayment fees
and write-off of deferred financing cost..... 5,864
Net income (loss).............................. 29,793 28,049 25,713 12,604 (450)
Preferred stock dividends...................... 4,705 268
Net income available to common shareholders.... 25,088 27,781 25,713 12,604 (450)
Per Common Share Data:
Earnings per share (basic and diluted)....... $ 1.12 $ 1.27 $ 1.27 $ 0.74
Distributions................................ $ 1.9232 $ 1.9232 $ 1.9099 $ 1.7405
BALANCE SHEET DATA (IN THOUSANDS):
Real estate, before accumulated depreciation... $1,091,422 $ 949,138 $ 696,898 $644,379 $ 351,205
Real estate, after accumulated depreciation.... 983,811 862,717 630,199 595,413 317,709
Total assets................................... 1,164,229 949,402 669,003 637,084 356,957
Total debt..................................... 591,688 575,247 324,779 345,348 375,004
Total shareholders' equity (deficit)........... 411,055 269,211 284,691 230,246 (57,816)
OTHER DATA:
Ratio of earnings to combined fixed charges and
preferred stock dividends.................. 1.49x 1.81x 1.98x 1.70x 0.97x
Funds from operations (1) (in thousands)....... $ 55,898 $ 51,382 $ 46,983 $ 38,686 $ 6,857
Cash provided by operating activities
(in thousands).............................. 56,406 53,918 40,972 31,644 7,992
Cash (used in) investing activities
(in thousands).............................. (244,823) (161,251) (49,195) (219,295) (116,717)
Cash provided by financing activities
(in thousands).............................. 186,883 110,469 7,013 184,933 111,989
Number of properties (2)....................... 120 113 88 84 27
Total GLA (in thousands) (3) (4)............... 25,450 18,554 13,154 12,298 6,228
Occupancy rate % (2) (3)....................... 94.0% 95.4% 95.6% 95.7% 92.7%
</TABLE>
(1) Management considers funds from operations (FFO) to be a supplemental
measure of the Company's operating performance. FFO, as modified in January
1996 by NAREIT is defined as net income (computed in accordance with
Generally Accepted Accounting Principles ("GAAP")), less gains or losses
from debt restructuring, plus real estate depreciation and amortization and
plus minority interest in partnership. FFO does not represent cash
generated from operating activities in accordance with GAAP and is not
necessarily indicative of cash available to fund cash needs. FFO should not
be considered as an alternative to net income, as the primary indicator of
the Company's operating performance, or as an alternative to cash flow as a
measure of liquidity.
(2) Number of Operating Properties open at the end of the period including
three properties at December 31, 1997, leased or managed by the Company, in
which the Company did not hold an ownership interest. Occupancy of the
Properties is defined as any space where a tenant is open and/or paying
rent at the date indicated, excluding all tenants with leases having an
initial term of less than one year.
(3) 1997 includes 3.4 million square feet of GLA, and 1996 includes 549,000
square feet of GLA, owned by joint ventures in which the Operating
Partnership has interests ranging from 33.3% to 45.0% .
(4) 1997 includes 2.5 million square feet of GLA leased or managed by the
Company in which the Company did not hold an ownership interest.
23
<PAGE> 24
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following should be read in conjunction with the unaudited
consolidated financial statements of Glimcher Realty Trust (the "Company" or
"GRT") including the respective notes thereto, all of which are included in this
Form 10-K.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
REVENUES
Total revenues increased 19.1%, or $22.5 million, for the year ended
December 31, 1997. Of the $22.5 million increase, $1.1 million was the result of
increased revenues at the malls, $21.7 million was the result of increased
revenues at the Community Centers, and $345,000 was related to non-property
revenue decreases.
Minimum rents
Minimum rents increased 23.1%, or $20.2 million, for the year ended
December 31, 1997.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-------------------------------------
COMMUNITY PERCENT
MALLS CENTERS TOTAL TOTAL
----- ------- ----- -----
<S> <C> <C> <C> <C>
Same Center.................... $ 0.6 $ 0.1 $ 0.7 0.8%
Acquisitions/Developments...... 0.4 19.1 19.5 22.3
----- ------ ------ ----
$ 1.0 $ 19.2 $ 20.2 23.1%
===== ====== ====== ====
</TABLE>
Percentage rents
Percentage rents increased $600,000 for the year ended December 31,
1997. Of this increase, $160,000 was earned at the malls and $440,000 was earned
at the community centers.
Tenant recoveries
Tenant recoveries reflect a net increase of 8.1% or $1.8 million for
the year ended December 31, 1997 compared to the year ended December 31, 1996.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-------------------------------------
COMMUNITY PERCENT
MALLS CENTERS TOTAL TOTAL
----- ------- ----- -----
<S> <C> <C> <C> <C>
Same center.................. $ (0.5) $ (0.3) $ (0.8) (3.6%)
Acquisitions/Developments.... 0.2 2.4 2.6 11.7
------ ------ ------ ----
$ (0.3) $ 2.1 $ 1.8 8.1%
====== ====== ====== ====
</TABLE>
Other revenues
The $180,000 decrease in other revenues is primarily the result of
increases in management fee revenues from unconsolidated joint ventures of $1.2
million and an increase of $410,000 in temporary tenant income at the malls,
offset by a decrease of $2.0 million from the RPI Properties incentive
management fee in 1996.
24
<PAGE> 25
OPERATING EXPENSES
Total operating expenses increased 8.6%, or $2.3 million, for the year
ended December 31, 1997. Recoverable expenses increased $2.2 million, the
provision for credit losses increased $170,000 and other operating expenses
decreased $80,000 primarily as a result of the acquisition and development
activities described above.
Recoverable expenses
Recoverable operating expenses increased 9.4% or $2.2 million for the
year ended December 31, 1997.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-------------------------------------
COMMUNITY PERCENT
MALLS CENTERS TOTAL TOTAL
----- ------- ----- -----
<S> <C> <C> <C> <C>
Same center................. $ (0.7) $ (0.1) $ (0.8) (3.4%)
Acquisitions/Developments... 0.2 2.8 3.0 12.8
------ ------ ------ ----
$ (0.5) $ 2.7 $ 2.2 9.4%
====== ====== ====== ====
</TABLE>
The decrease in the same center expenses at the malls reflects a $1.0
million decrease in real estate taxes and a $330,000 increase in other operating
expenses. Same center community center expenses reflect an increase in real
estate taxes of $30,000 and a decrease of $120,000 in other operating expenses.
The increase in recoverable operating expenses from acquisitions and
developments was primarily the result of the RPI Properties acquisition.
Provision for credit losses
The provision for credit losses was $2.2 million and represented 1.6%
of total revenues for the year ended December 31, 1997, compared to 1.8% of
total revenues for the year ended December 31, 1996.
Depreciation and amortization
The $5.5 million increase in depreciation and amortization consists of
an increase of $3.9 million from acquisitions (principally the RPI Properties),
$450,000 from the opening of two new community centers, an increase of $710,000
in the core portfolio properties and the balance from increased loan fee
amortization on the Company's credit facility.
GENERAL AND ADMINISTRATIVE
In the second quarter of 1996, the Company began to increase its staff
levels to support the RPI Properties acquisition and expand development and
construction activities. In addition, the Company formed GDC on October 16,
1996, and transferred 51 employees in the construction, development, leasing and
legal departments to GDC. The GDC staff provide services to the Company, to
ventures in which the Company has an ownership interest and to third parties for
a fee. GDC, an unconsolidated non-qualified REIT subsidiary, is subject to
federal income taxes. The Company also receives management fees for the services
provided by its operations staff to ventures.
25
<PAGE> 26
INTEREST EXPENSE/CAPITALIZED INTEREST
Interest expense increased 43.9% or $12.8 million, for the year ended
December 31, 1997. The summary below identifies the increase by its various
components (dollars in thousands).
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------
1997 1996 INC. (DEC.)
---- ---- -----------
<S> <C> <C> <C>
Average loan balance................. $ 586,916 $ 421,661 $ 165,255
Average rate......................... 7.66% 7.46% 0.20%
--------- ---------
Total interest....................... 44,970 31,456 13,514
Less: Capitalized interest.......... (3,053) (3,394) 341
Add: Amortization of rate buydown... 776 776
Other................................ (547) 459 (1,006)
--------- --------- ---------
Interest expense..................... $ 42,146 $ 29,297 $ 12,849
========= ========= =========
</TABLE>
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
REVENUES
Total revenues increased 12.9%, or $13.4 million, for the year ended
December 31, 1996. Of the $13.4 million increase, $640,000 was the result of
increased revenues at the Mall Properties, $10.5 million was the result of
increased revenues at the Community Centers, and $2.3 million related to other
revenue increases.
Minimum rents
Minimum rents increased 10.5%, or $8.3 million, for the year ended
December 31, 1996.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-----------------------------------------
COMMUNITY PERCENT
MALLS CENTERS TOTAL TOTAL
----- ------- ----- -----
<S> <C> <C> <C> <C>
Same Center......................... $ 0.2 $ 0.1 $ 0.3 0.4%
Acquisitions/Developments........... 0.0 8.0 8.0 10.1
------ ----- ----- ----
$ 0.2 $ 8.1 $ 8.3 10.5%
====== ===== ===== ====
</TABLE>
Percentage rents
Percentage rents decreased $25,000 for the year ended December 31,
1996. Of the $2.9 million in percentage rents for 1996, $1.6 million was earned
at the malls and $1.3 million was earned at the community centers.
Tenant recoveries
Tenant recoveries reflect a net increase of 14.7% or $2.9 million for
the year ended December 31, 1996, compared to the year ended December 31, 1995.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-----------------------------------------------
COMMUNITY PERCENT
MALLS CENTERS TOTAL TOTAL
<S> <C> <C> <C> <C>
Same Center.................... $ 0.6 $ 1.1 $ 1.7 8.6%
Acquisitions/Developments...... 0.0 1.2 1.2 6.1
----- ----- ----- ----
$ 0.6 $ 2.3 $ 2.9 14.7%
===== ===== ===== ====
</TABLE>
Other revenues
26
<PAGE> 27
The $2.2 million increase in other revenues was primarily the result of
the $2.3 million incentive management fee relating to net operating cash flow
the Company earned during the escrow period of its acquisition of the RPI
Properties.
OPERATING EXPENSES
Total operating expenses increased 19.8%, or $4.5 million, for the year
ended December 31, 1996. Recoverable expenses increased $3.6 million, the
provision for credit losses increased $450,000 and other operating expenses
increased $440,000, primarily as a result of the acquisition and development
activities described above.
Recoverable expenses
Recoverable operating expenses increased 17.6% or $3.6 million, for the
year ended December 31, 1996.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
---------------------------------------------
COMMUNITY PERCENT
MALLS CENTERS TOTAL TOTAL
----- ------- ----- -----
<S> <C> <C> <C> <C>
Same center.................... $ 1.6 $ 0.7 $ 2.3 11.2%
Acquisitions/Developments...... 0.0 1.3 1.3 6.4
----- ----- ----- ---
$ 1.6 $ 2.0 $ 3.6 17.6%
===== ===== ===== ====
</TABLE>
The increase in the same center expenses at the malls reflect a $1.1
million increase in real estate taxes, a $410,000 increase in other operating
expenses, and a $110,000 increase in snow removal costs compared to the same
period in the prior year. Same center community center expenses reflect a
decrease in real estate taxes of $20,000 offset by increases of $380,000 in snow
removal costs and $380,000 in other operating expenses. The increase in
recoverable operating expenses from acquisitions and developments was primarily
the result of the RPI Properties acquisition.
Provision for credit losses
The provision for credit losses was $2.1 million and represented 1.8%
of total revenues for the year ended December 31, 1996, compared to 1.6% of
total revenues for the year ended December 31, 1995.
Depreciation and amortization
The $1.9 million increase in depreciation and amortization was
primarily the result of an increase of $1.0 million from acquisitions
(principally the RPI Properties), $20,000 from the opening of one new community
center and an increase of $700,000 in the core portfolio properties.
GENERAL AND ADMINISTRATIVE
In the second quarter of 1996, the Company began to increase its staff
levels to support the RPI Properties acquisition and expand development and
construction activities. In addition, the Company formed GDC on October 16,
1996, and transferred 51 employees in the construction, development, leasing and
legal departments to GDC. The GDC staff provide services to the Company, to
ventures in which the Company has an ownership interest and to third parties for
a fee. GDC, an unconsolidated non-qualified REIT subsidiary, is subject to
federal income taxes. GDC also receives management fees for the services
provided by its operations staff to ventures.
27
<PAGE> 28
INTEREST EXPENSE/CAPITALIZED INTEREST
Interest expense increased 11.8% or $3.1 million, for the year ended
December 31, 1996. The summary below identifies the increase by its various
components (dollars in thousands).
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------
1996 1995 INC. (DEC.)
---- ---- ----------
<S> <C> <C> <C>
Average loan balance................. $ 421,661 $ 333,024 $ 88,637
Average rate......................... 7.46% 7.76% (0.30)%
--------- --------
Total interest....................... 31,456 25,843 5,613
Less: Capitalized interest.......... (3,394) (690) (2,704)
Add: Amortization of rate buydown... 776 776
Other................................ 459 286 173
--------- --------- --------
Interest expense..................... $ 29,297 $ 26,215 $ 3,082
========= ========= ========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company has several active development, renovation and expansion
projects and will continue to be active in these areas. Future development
projects being considered include those relating to the commitment between the
Company and Nomura, pursuant to which Nomura has agreed, subject to satisfaction
of certain conditions, to provide equity to the Company and permanent debt
financing for certain of the Company's developments. Management anticipates that
the funds available under its credit facility, the Company's plans to utilize
construction financing, long-term mortgage debt and the venture structure to
raise equity and financing for acquisitions and developments, and the issuance
of preferred and common stock will provide sufficient capital resources to carry
out the Company's business strategy relative to the acquisitions, renovations,
expansions and developments discussed herein.
At December 31, 1997, the Company's debt to total market capitalization
was 42.2% which is consistent with the current policy of the Company to maintain
this ratio between 40.0% and 60.0%. On October 6, 1997, the Company completed an
additional offering of 1,750,000 Shares. The net proceeds to the Company of
approximately $37.8 million were used to reduce variable rate indebtedness.
On November 17, 1997, GRT completed a public offering of 4,800,000
shares of 9-1/4% Series B cumulative redeemable preferred shares of beneficial
interest (the "Series B Preferred Shares"), par value $0.01 per share, with each
share having a liquidation preference of $25.00. On November 25, 1997, GRT sold
an additional 318,000 Series B Preferred Shares as a result of the underwriters
exercising the over-allotment option granted to them. The net proceeds were
contributed by the Company to the Operating Partnership and were used to: (i)
repay the balance of a $34.4 million bridge loan facility and (ii) to repay a
portion of the outstanding borrowings on the Operating Partnership's credit
facility.
On December 5, 1997, the Company issued 56,000 shares of its Series C
convertible preferred shares (the "Series C Preferred Shares"). The Series C
Preferred Shares were issued pursuant to a purchase agreement dated December 4,
1997, among the Company and an affiliate of Nomura, to obtain equity funding for
the purchase by Elizabeth Metro Mall, LLC, of real estate on which to construct
and develop a value-oriented super-regional mall in Elizabeth, New Jersey. It is
contemplated that, subject to satisfactory completion of its due diligence and
satisfaction of certain other conditions, a Nomura affiliate will purchase a
series of Nomura preferred shares and that the proceeds of such will be used to
redeem the Series C Preferred Shares.
Net cash provided by operating activities for the year ended December
31, 1997, was $56.4 million versus $53.9 million for the corresponding period of
1996. Net income adjusted for non-cash items accounted for a $9.0 million
increase, while changes in operating assets and liabilities accounted for a $6.5
million decrease.
28
<PAGE> 29
Tenant accounts receivable, net, has increased $2.9 million since
December 31, 1996. The primary reasons for the increase relate to year-end
tenant recovery billings for the increased recoverable expenses associated with
the Properties.
Net cash used in investing activities for the year ended December 31,
1997, was $244.8 million, and reflects additional direct investments in real
estate assets and additional indirect investments in real estate through
investments in unconsolidated entities.
Net cash provided by financing activities for the year ended December
31, 1997, was $186.9 million. Cash was provided by additional borrowings of
$76.5 million and proceeds from common stock and preferred stock offerings
aggregating approximately $217.5 million. Cash was used to fund distributions of
$50.7 million, principal payments on mortgage and notes payable of $43.5 million
and payments on the Company's credit facility of $13.0 million.
ACQUISITION, RENOVATION, EXPANSION AND DEVELOPMENT ACTIVITY
The Company continues to be very active in its renovation, expansion,
development and acquisition activities. Its business strategy is to set in place
activities that will allow the Company's assets and cash flow to grow.
Acquisitions
The Company continues to pursue strategic acquisitions which will
complement and enhance its existing portfolio. On July 2, 1997, the Company, in
a joint venture partnership with Nomura, completed the acquisition of The Dayton
Mall in Dayton, Ohio, for a purchase price of $91.0 million. This Mall Property
consists of approximately 1.3 million square feet of GLA including four anchors.
On October 1, 1997, the Company, in a joint venture with Nomura, completed the
acquisition of Colonial Park Mall in Harrisburg, Pennsylvania, for a purchase
price of $48.0 million. Colonial Park Mall consists of approximately 752,000
square feet of GLA including three anchors. On December 18, 1997, the Company
completed the acquisition of University Square in Tampa, Florida, for a purchase
price of $121.0 million. University Square consists of approximately 1.3 million
square feet of GLA including five anchors.
Renovations and Expansions
Grand Central Mall
The expansion and renovation of this Mall Property located in
Parkersburg, West Virginia, continues and will increase its GLA to 882,000
square feet upon its completion. The addition of a food court and the expansion
of the existing cinema to a 37,000 square-foot 12-screen cinema were completed
and opened in 1996. Additional expansion of the Mall Property will include an
83,000 square-foot Proffitt's which is projected to open in March 1998. The
estimated cost of the Proffitt's expansion is $5.4 million of which $4.8 million
had been expended at December 31, 1997.
Indian Mound Mall
The expansion of this Mall Property located in Newark/Heath, Ohio,
will add approximately 122,000 square feet and increase its GLA to 543,000
square feet. The expansion includes the addition of a 93,000 square foot Sears,
which opened in late September 1997, expanding the current cinema from 18,000
square feet to 42,000 square feet and the addition of 5,000 square feet of small
shops. The expansion was completed in the fourth quarter of 1997. The estimated
cost of the expansion is $3.9 million of which $3.6 million had been expended at
December 31, 1997.
29
<PAGE> 30
Developments
Georgesville Square
This development is a Community Center containing 232,000 square feet
of GLA located in Columbus, Ohio. The center is anchored by a 132,000
square-foot Lowe's and a 63,000 square-foot Kroger, with the balance of the GLA
in small shops. Lowe's opened in October 1996, and Kroger and the small shops
opened in the second quarter of 1997. The cost of the development was $18.4
million of which $16.6 million has been advanced from a construction loan as of
December 31, 1997. The construction loan bears interest at LIBOR plus 200 basis
points (7.6875% at December 31, 1997) and matures October 1, 1999, subject to
two extensions of six months each. Additionally, the Company commenced the
construction of a 70,000 square-foot 16-screen cinema on one of the center's
outparcel lots which is scheduled to open in early 1998. The cinema has budgeted
costs of $6.2 million with costs to date of $2.0 million. The Company has also
expended an additional $2.5 million relating to land costs for future phases of
this development.
Meadowview Square
This development is a Community Center containing 151,000 square feet
of GLA located in Kent/Ravenna, Ohio. The center is anchored by a 126,000 square
foot Wal-Mart with the balance of the space in small shops. Wal-Mart opened in
January 1997 and the small shops opened in the second quarter of 1997. The cost
of the development was $9.6 million of which $9.1 million had been advanced from
a construction loan as of December 31, 1997. The construction loan bears
interest at LIBOR plus 200 basis points (7.6875% at December 31, 1997) and
matures October 1, 1999, subject to two extensions of six months each. The
Company has also expended an additional $1.7 million relating to land costs for
future phases of this development.
The Great Mall of the Great Plains
The Operating Partnership maintains a 45.0% interest in Great Plains
which owns The Great Mall of the Great Plains, a single level, enclosed, value
and entertainment-oriented mega mall totaling approximately 782,000 square feet
of GLA located in Olathe, Kansas (Kansas City, Kansas metropolitan area) which
opened on August 14, 1997. The cost of the project through December 31, 1997,
was financed through member equity and a construction loan of $81.9 million of
which $76.8 million was outstanding at December 31, 1997. This Mall Property
consists of 10 anchors including a 16-screen cinema, approximately 150 small
shop tenants and 20 food court and kiosk units.
Capital Invested in Real Estate
Investment in real estate has increased $142.3 million since December
31, 1996 (in thousands):
<TABLE>
<CAPTION>
NAME OF PROPERTY/DESCRIPTION COST PROJECT TYPE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
University Mall............................................... $ 121,544 Acquisition
Georgesville Square........................................... 3,476 Development
Meadowview Square............................................. 780 Development
Grand Central Mall............................................ 10,266 Renovation/Expansion
Cross Creek Plaza............................................. 1,590 Expansion
Indian Mound Mall............................................. 2,377 Renovation/Expansion
Applewood Village............................................. (4,086) Sale
Capital expenditures.......................................... 6,858 Cap-X (1)
Various properties, net....................................... (521)
---------
$ 142,284
=========
</TABLE>
(1) Capital expenditures include tenant improvements and tenant allowances on
second generation space of $3,547 and routine, recurring maintenance capital
expenditures that cannot be passed through to the tenants of $3,311.
30
<PAGE> 31
PORTFOLIO DATA
Tenants reporting sales data in the table below for the twelve month
periods ended December 31, 1997 and 1996, represent 12.5 million square feet of
GLA, or 80.6% of the 1997/1996 "same store" population.
<TABLE>
<CAPTION>
MALLS COMMUNITY CENTERS
-------------------------- ----------------------
PROPERTY TYPE SALES PSF % INCREASE SALES PSF %INCREASE
------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Anchors............................ $167.68 3.3% $224.31 3.1%
Stores............................. $258.17 2.8% $165.56 3.5%
Total.............................. $210.67 3.0% $216.17 3.1%
</TABLE>
Portfolio occupancy statistics by property type are summarized below:
<TABLE>
<CAPTION>
OCCUPANCY (1) (2)
-------------------------------------------------------------
12/31/97 9/30/97 6/30/97 3/31/97 12/31/96
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Mall Anchors....................... 99.5% 99.4% 99.1% 99.1% 99.1%
Mall Stores........................ 82.6% 79.4% 82.6% 83.1% 84.2%
Total Mall portfolio............... 93.3% 91.7% 92.8% 92.6% 93.0%
Community Center Anchors........... 97.3% 97.6% 97.9% 98.2% 98.3%
Community Center Stores............ 85.9% 83.8% 86.0% 86.0% 87.1%
Total Community Centers............ 94.7% 94.4% 95.4% 95.5% 95.8%
Single Tenant Retail Properties.... 92.2% 92.2% 100.0% 100.0% 100.0%
Total Community Center Portfolio... 94.4% 94.2% 95.8% 96.0% 96.2%
</TABLE>
The stabilized mall portfolio (excluding The Great Mall of the Great
Plains which opened in August 1997), had a Mall store occupancy rate of 84.0%
and 80.9% at December 31, 1997, and September 30, 1997, respectively.
(1) Occupancy statistics included in the above table are based on the total
Company portfolio which includes properties owned by the Company and
properties held in joint ventures.
(2) Occupied space is defined as any space where a tenant is occupying the
space and/or paying rent at the date indicated, excluding all tenants with
leases having an initial term of less than one year.
FUNDS FROM OPERATIONS
Management considers FFO to be a supplemental measure of the Company's
operating performance. FFO does not represent cash generated from operating
activities in accordance with GAAP and is not necessarily indicative of cash
available to fund cash needs. FFO should not be considered as an alternative to
net income, as the primary indicator of the Company's operating performance, or
as an alternative to cash flow as a measure of liquidity. The following table
illustrates the calculation of FFO for the years ending December 31, 1997, 1996
and 1995 (in thousands):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net income available to common shareholders............... $25,088 $27,781 $25,713
Add back (less):
Real estate depreciation and amortization............ 25,283 20,173 17,875
Litigation settlement................................ 279
Gain on sale......................................... (155) (178)
GRT share of joint venture depreciation
and amortization.................................. 2,660 43
Minority interest in partnership..................... 3,022 3,385 3,294
------- ------- -------
Funds from operations..................................... $55,898 $51,382 $46,983
======= ======= =======
</TABLE>
31
<PAGE> 32
FFO increased 8.8%, or $4.5 million for the year ended December 31,
1997. The increase was the result of improved property net operating income of
$20.1 million and an increase in the FFO from unconsolidated entities of $2.6
million, partially offset by increased interest expense of $12.8 million, a
decrease in gain on sale of outparcels of $1.4 million and an increase in
preferred stock dividends of $4.4 million.
FFO increased 9.4%, or $4.4 million for the year ended December 31,
1996. The increase was the result of improved property net operating income of
$9.0 million, including the incentive management fee of $2.3 million relating to
net operating cash flow the Company earned during the escrow period of its
acquisition of the RPI portfolio, and the gain on the sales of three outparcels
of $1.5 million. This increase was partially offset by increased interest
expense of $3.1 million and increased general and administrative expense of $3.0
million.
ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 131, "Disclosures About Segments
of an Enterprise and Related Information." SFAS No. 131 is effective for
financial statements for years beginning after December 15, 1997. SFAS No. 131
establishes standards for publicly-held business enterprises to report
information about operating segments in annual financial statements and requires
that these enterprises report selected information about operating segments in
interim financial reports issued to shareholders. The Company plans to adopt
SFAS No. 131 in 1998.
The Company is assessing the impact of the year 2000 issue as it
relates to the Company's information systems and vendor supplied application
software. Management does not currently anticipate any significant or material
impact on the Company as a result of implications associated with that issue.
OTHER
The shopping center industry is seasonal in nature, particularly in the
fourth quarter during the holiday season, when tenant occupancy and retail sales
are typically at their highest levels. In addition, shopping malls achieve most
of their temporary tenant rents during the holiday season. As a result of the
above, earnings are generally highest in the fourth quarter of each year.
The retail industry has experienced some difficulty, which is reflected
in sales trends and in the bankruptcies and continued restructuring of several
prominent retail organizations. Continuation of these trends could impact future
earnings performance.
INFLATION
Inflation has remained relatively low during the past three years and
has had a minimal impact on the Company's Properties. Many tenants' leases
contain provisions designed to lessen the impact of inflation. Such provisions
include clauses enabling the Company to receive percentage rentals based on
tenants' gross sales, which generally increase as prices rise, and/or escalation
clauses, which generally increase rental rates during the terms of the leases.
In addition, many of the leases are for terms of less than 10 years, which may
enable the Company to replace existing leases with new leases at higher base
and/or percentage rentals if rents of the existing leases are below the
then-existing market rate. Substantially all of the leases, other than those for
anchors, require the tenants to pay a proportionate share of common area
maintenance, real estate taxes and insurance, thereby reducing the Company's
exposure to increases in costs and operating expenses resulting from inflation.
However, inflation may have a negative impact on some of the Company's
other operating items. Interest expense and general and administrative expenses
may be adversely affected by inflation as these specified costs could increase
at a rate higher than rents. Also, for tenant leases with stated rent increases,
inflation may have a negative effect as the stated rent increases in these
leases could be lower than the increase in inflation at any given time.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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<PAGE> 33
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and financial statement schedule of Glimcher
Realty Trust and the Report of Independent Accountants thereon are filed
pursuant to this Item 8 and are included in this report in Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 15, 1998.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 15, 1998.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 15, 1998.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 15, 1998.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(a) (1) Financial Statements Page Number
-------------------- -----------
<S> <C>
- Report of Independent Accountants.................................. 39
- Glimcher Realty Trust Consolidated Balance Sheets as of
December 31, 1997 and 1996......................................... 40
- Glimcher Realty Trust Consolidated Statements of Operations
for the years ended December 31, 1997, 1996, and 1995............ 41
- Glimcher Realty Trust Consolidated Statements of Shareholders'
Equity ended December 31, 1997, 1996 and 1995...................... 42
- Glimcher Realty Trust Consolidated Statements of Cash Flows
for the years ended December 31, 1997, 1996, and 1995............ 43
- Notes to Consolidated Financial Statements......................... 44
(2) Financial Statement Schedule
- Schedule III - Real Estate and Accumulated Depreciation............ 57
- Notes to Schedule III.............................................. 66
</TABLE>
33
<PAGE> 34
(3) Exhibits
--------
<TABLE>
<S> <C>
3.1 Amended and Restated Declaration of Glimcher Realty Trust. (2)
3.2 Bylaws, as amended. (2)
3.3 Amendment to the Company's Amended and Restated Declaration of Trust. (1)
3.4 Limited Partnership Agreement of Glimcher Properties Limited Partnership.
3.5 Amendment to Limited Partnership Agreement of Glimcher Properties Limited Partnership.
3.6 Amendment No.1 to Limited Partnership Agreement of Glimcher Properties Limited Partnership.
3.7 Amendment No.2 to Limited Partnership Agreement of Glimcher Properties Limited Partnership.
3.8 Amendment No.3 to Limited Partnership Agreement of Glimcher Properties Limited Partnership.
3.9 Amendment No.4 to Limited Partnership Agreement of Glimcher Properties Limited Partnership.
4.1 Specimen Certificate for Common Shares of Beneficial Interest. (2)
4.2 Specimen Certificate evidencing 34,000 shares of Series A Convertible Preferred Shares. (8)
4.3 Specimen Certificate evidencing Series A-1 Convertible Preferred Shares. (11)
4.4 Specimen Certificate evidencing 9-1/4% Series B Cumulative Redeemable Preferred Shares of
Beneficial Interest. (11)
4.5 Specimen Certificate evidencing Series C Convertible Preferred Shares.
10.1 Loan Agreement between Glimcher Properties Limited Partnership, Glimcher Realty Trust,
Glimcher Properties Corporation and The Huntington National Bank relating to the Credit
Facility. (1)
10.2 First Amendment to Loan Agreement by and among The Huntington National Bank, Glimcher Realty
Trust and Glimcher Properties Corporation relating to the Credit Facility. (1)
10.3 Second Amendment to Loan Agreement, First Note
Extension Agreement and First Amendment to a Credit
Line Deed of Trust by and among The Huntington
National Bank, Glimcher Properties Limited
Partnership, Glimcher Realty Trust and Glimcher
Properties Corporation relating to the Credit
Facility. (1)
10.4 Revolving Note issued by Glimcher Properties Limited Partnership in connection with the
Credit Facility. (1)
10.5 Executed Form of Open-End Mortgage, Assignment of Rents and Security Agreement issued by
Glimcher Properties Limited Partnership in connection with the Credit Facility. (1)
10.6 Promissory Note issued by Morgantown Mall Associates Limited Partnership in connection with
the Morgantown Loan. (2)
10.7 Credit Line Deed of Trust and Security Agreement, issued by Morgantown Mall Associates
Limited Partnership in connection with the Morgantown Loan. (2)
10.8 Amended and Restated Loan Agreement among Nomura Asset Capital Corporation, Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership and Grand Central Limited
Partnership relating to the Nomura Loan. (1)
10.9 Holdings A Note, Nonrecourse Mortgage Note executed by Glimcher Holdings Limited
Partnership, Glimcher Centers Limited Partnership and Grand Central Limited Partnership
relating to the Nomura Loan. (1)
10.10 Holdings B Note, Nonrecourse Mortgage Note executed by
Glimcher Holdings Limited Partnership, Glimcher
Centers Limited Partnership and Grand Central Limited
Partnership relating to the Nomura Loan. (1)
10.11 Centers Note, Nonrecourse Mortgage Note executed by Glimcher Holdings Limited Partnership,
Glimcher Centers Limited Partnership and Grand Central Limited Partnership relating to the
Nomura Loan. (1)
10.12 Grand Central Note, Nonrecourse Mortgage Note executed by Glimcher Holdings Limited
Partnership, Glimcher Centers Limited Partnership and Grand Central Limited
Partnership relating to the Nomura Loan. (1)
10.13 ISDA Master Agreement between The Huntington National Bank and Glimcher Properties Limited
Partnership. (1)
10.14 Agreement by and between Glimcher Properties Limited Partnership and Start Marketing, Inc. (1)
</TABLE>
34
<PAGE> 35
<TABLE>
<S> <C>
10.15 Continuing Guaranty issued by Glimcher Realty Trust guaranteeing payment of obligations of Glimcher
Properties Limited Partnership in connection with the Credit Facility. (1)
10.16 Continuing Guaranty issued by Glimcher Properties Corporation guaranteeing payment of obligations of
Glimcher Properties Limited Partnership in connection with the Credit Facility. (1)
10.17 Exemplar of Mortgage/Deed of Trust, Assignment of Leases, Security Agreement and Fixture Filing issued
by Glimcher Holdings Limited Partnership in connection with the Nomura Loan. (1)
10.18 Exemplar of Mortgage/Deed of Trust, Assignment of Leases, Security Agreement and Fixture Filing and
Modification of Mortgage/Deed of Trust issued by Glimcher Centers Limited Partnership in connection
with the Nomura Loan. (1)
10.19 Deed of Trust, Assignment of Leases, Security Agreement and Fixture Filing and Modification of Deed
of Trust issued by Grand Central Limited Partnership in connection with the Nomura Loan. (1)
10.20 Glimcher Realty Trust 1993 Employee Share Option Plan. (2)
10.21 Glimcher Realty Trust 1993 Trustee Share Option Plan. (2)
10.22 First Amended and Restated Loan Agreement dated as of June 30, 1995 between Glimcher Properties Limited
Partnership, Glimcher Realty Trust, Glimcher Properties Corporation, The Huntington National Bank,
Society National Bank and a Bank Group. (3)
10.23 Revolving Promissory Note dated June 30, 1995, in the amount of $87.5 million executed by Glimcher
Properties Limited Partnership to The Huntington National Bank. (3)
10.24 Revolving Promissory Note dated June 30, 1995, in the amount of $87.5 million executed by Glimcher
Properties Limited Partnership to Society National Bank. (3)
10.25 Guaranty dated June 30, 1995, issued by Glimcher Realty Trust in favor of The Huntington
National Bank. (3)
10.26 Guaranty dated June 30, 1995, issued by Glimcher Properties Corporation in favor of The
Huntington National Bank. (3)
10.27 Guaranty dated June 30, 1995, issued by Glimcher Realty Trust in favor of Society National
Bank. (3)
10.28 Guaranty dated June 30, 1995, issued by Glimcher Properties Corporation in favor of Society
National Bank. (3)
10.29 Promissory Note dated as of October 26, 1995, issued by Glimcher Properties Limited Partnership in the
amount of twenty seven million six hundred thousand dollars ($27,600,000). (4)
10.30 Exemplar Open-End Mortgage, Security Agreement and Fixture Filing issued by Glimcher
Properties Limited Partnership in connection with the Connecticut General Life Insurance
Company Loan. (4)
10.31 Exemplar Second Mortgage and Security Agreement dated as of October 26, 1995, issued by Glimcher
Properties Limited Partnership in connection with the Connecticut General Life Insurance Company Loan. (4)
10.32 Exemplar Assignment of Rents and Leases dated as of October 26, 1995, issued by Glimcher Properties
Limited Partnership in connection with the Connecticut General Life Insurance Company Loan. (4)
10.33 Promissory Note dated as of October 26, 1995, issued by Glimcher Properties Limited Partnership in the
amount of six million two hundred thousand dollars ($6,200,000). (4)
10.34 Promissory Note dated as of October 26, 1995, issued by Glimcher Properties Limited Partnership in the
amount of three million six hundred thousand dollars ($3,600,000). (4)
10.35 Promissory Note dated as of October 26, 1995, issued by Glimcher Properties Limited Partnership in the
amount of three million three hundred thousand dollars ($3,300,000). (4)
10.36 Promissory Note dated as of October 26, 1995, issued by Glimcher Properties Limited Partnership in the
amount of four million two hundred thousand dollars ($4,200,000). (4)
10.37 Promissory Note dated as of October 26, 1995, issued by Glimcher Properties Limited Partnership in the
amount of five million one hundred thousand dollars ($5,100,000). (4)
</TABLE>
35
<PAGE> 36
<TABLE>
<S> <C>
10.38 Completion Guaranty dated as of October 26, 1995, issued by Glimcher Properties Limited Partnership and
Glimcher Realty Trust in favor of Connecticut General Life Insurance Company. (4)
10.39 Purchase and Sale Agreement by and among the Company and Retail Property Investors, Inc., PaineWebber
Retail Property Investments, Ltd., PaineWebber Retail Property Investments Joint Venture, PaineWebber
College Plaza, LP., and PaineWebber Marion Towne, L.P., dated as of March 11, 1996, as amended. (6)
10.40 Securities Purchase Agreement among Partnership Acquisition Trust II, Glimcher Properties
Limited Partnership and Glimcher Realty Trust, dated November 26, 1996. (7)
10.41 Articles Supplementary designating 40,000 Shares of Series A Convertible Preferred Shares
Beneficial Interest. (8)
10.42 Second Amendment to First Amended and Restated Loan Agreement. (7)
10.43 Second Amended and Restated Loan Agreement dated as of May 15, 1997 between Glimcher Properties Limited
Partnership, Glimcher Realty Trust, Glimcher Properties Corporation, The Huntington National Bank,
("Huntington"), KeyBank National Association ("KeyBank"), Fleet National Bank ("Fleet"), Star Bank,
National Association ("Star"), PNC Bank, National Association ("PNC"), The Provident Bank ("Provident"),
National City Bank of Columbus ("National City") and Bankers Trust Company ("Bankers Trust"). (9)
10.44 Form of Revolving Note for each of the eight (8) individual notes, dated May 15, 1997, and
executed by Glimcher Properties Limited Partnership. (9)
a. Huntington in the amount of $32.5 million;
b. KeyBank in the amount of $32.5 million;
c. Fleet in the amount of $20 million;
d. Star in the amount of $20 million;
e. PNC in the amount of $25 million;
f. Provident in the amount of $10 million;
g. National City in the amount of $20 million; and
h. Bankers Trust in the amount of $30 million.
10.45 Form of Guaranty for each of the eight (8) individual guarantees, dated May 15, 1997, and
issued by Glimcher Realty Trust and Glimcher Properties Corporation (9)
a. Huntington to the extent of $32.5 million;
b. KeyBank to the extent of $32.5 million;
c. Fleet to the extent of $20 million;
d. Star to the extent of $20 million;
e. PNC to the extent of $25 million;
f. Provident to the extent of $10 million;
g. National City to the extent of $20 million; and
h. Bankers Trust to the extent of $30 million.
10.46 Security Agreement - Interest Rate Protection Contract dated May 15, 1997, executed by Glimcher Properties
Limited Partnership in favor of Huntington as Administrative Agent for the lenders. (9)
10.47 Executed Form of Open-End Mortgage, Assignment of Rents and Security Agreement for each of the three (3)
individual mortgages, dated May 15, 1997, and issued by Glimcher Properties Limited Partnership in
connection with the Credit Facility. (9)
10.48 Severance Benefits Agreement dated June 11, 1997, by and among Glimcher Realty Trust, Glimcher Properties
Limited Partnership and Herbert Glimcher.
10.49 Severance Benefits Agreement dated June 11, 1997, by and among Glimcher Realty Trusts,
Glimcher Properties Limited Partnership and William G. Cornely.
10.50 Severance Benefits Agreement dated June 11, 1997, by and among Glimcher Realty Trust,
Glimcher Properties Limited Partnership and William R. Husted.
10.51 Severance Benefits Agreement dated June 11, 1997, by and among Glimcher Realty Trust,
Glimcher Properties Limited Partnership and Michael P. Glimcher.
10.52 Severance Benefits Agreement dated June 11, 1997, by and among Glimcher Realty Trust,
Glimcher Properties Limited Partnership and George A. Schmidt.
10.53 Severance Benefits Agreement dated June 11, 1997, by and among Glimcher Realty Trust,
Glimcher Properties Limited Partnership and Timothy C. Getz.
</TABLE>
36
<PAGE> 37
<TABLE>
<S> <C>
10.54 Underwriting Agreement, dated as of September 30, 1997, among Glimcher Realty Trust,
Glimcher Properties Limited Partnership and Prudential Securities Incorporated. (10)
10.55 Amendment No. 1 dated as of November 6, 1997, to Securities Purchase Agreement among
Partnership Acquisition Trust II, Glimcher Properties Limited Partnership and Glimcher
Realty Trust, dated November 26, 1996. (11)
10.56 Articles Supplementary classifying 5,520,000 Shares of beneficial interest on Series B Cumulative
Redeemable Preferred Shares of Beneficial Interest.
10.57 Articles Supplementary designating 40,000 Shares of Series A-1 Convertible Preferred Shares
Beneficial Interest.
10.58 Articles Supplementary designating 56,000 Shares of Series C Convertible Preferred Shares
Beneficial Interest.
10.59 Promissory Note dated as of December 17, 1997, issued by Glimcher University Mall Limited Partnership in
the amount of sixty four million eight hundred ninety eight thousand five hundred forty six dollars
($64,898,546). (12)
10.60 Mortgage, assignment of rents, security agreement and fixture filing by Glimcher University Mall Limited
Partnership to Nomura Asset Capital Corporation dated as of December 17, 1997. (12)
10.61 Glimcher Realty Trust 1997 Incentive Plan.
10.62 Exhibit A to Glimcher Properties Limited Partnership Agreement, as amended, showing new OP Unit holders
following the purchase of Polaris Center, LLC.
21.1 Subsidiaries of the Registrant
23.1 Consent of Independent Accountants
27 Financial Data Schedule. (5)
</TABLE>
(1) Incorporated by reference to GRT's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, filed with the
Securities and Exchange Commission on March 21, 1995.
(2) Incorporated by reference to GRT's Registration Statement No.
33-69740.
(3) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on July 26, 1995.
(4) Incorporated by reference to GRT's Form 8-K filed with the
Securities and exchange Commission on December 13, 1995.
(5) This exhibit is filed for EDGAR filing purposes only.
(6) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on November 7, 1996.
(7) Incorporated by reference to GRT's Annual Report Form 10-K for
the fiscal year ended December 31, 1996, filed with the
Securities and Exchange Commission on March 25, 1997.
(8) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on February 5, 1997.
(9) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission June 23, 1997.
(10) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on November 4, 1997.
(11) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on November 14, 1997.
(12) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on December 31, 1997.
(b) Reports on Form 8-K
During the fiscal year ended December 31, 1997, the Company filed
the following Reports on Form 8-K.
o Form 8-K dated February 5, 1997, filed February 5, 1997.
o Form 8-K dated June 17, 1997, filed June 23, 1997.
o Form 8-K dated November 4, 1997, filed November 4, 1997.
o Form 8-K dated November 13, 1997, filed November 14, 1997.
o Form 8-K dated December 31, 1997, filed December 31, 1997.
37
<PAGE> 38
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GLIMCHER REALTY TRUST
/s/ HERBERT GLIMCHER
------------------------------------------------------------
Herbert Glimcher
Chairman of the Board, President and Chief Executive Officer
March 24, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been executed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ HERBERT GLIMCHER Chairman of the Board, President March 24, 1998
- ----------------------------------- Chief Executive Officer (Principal
Herbert Glimcher Executive Officer) and Trustee
/s/ WILLIAM G. CORNELY Senior Vice President March 24, 1998
- ----------------------------------- and Chief Financial Officer
William G. Cornely
/s/ WILLIAM R. HUSTED Senior Vice President March 24, 1998
- ----------------------------------- of Construction and Trustee
William R. Husted
/s/ MICHAEL P. GLIMCHER Senior Vice President March 24, 1998
- ----------------------------------- of Leasing and Trustee
Michael P. Glimcher
/s/ PHILIP G. BARACH Member, Board of Trustees March 24, 1998
- -----------------------------------
Philip G. Barach
/s/ OLIVER BIRCKHEAD Member, Board of Trustees March 24, 1998
- -----------------------------------
Oliver Birckhead
/s/ E. GORDON GEE Member, Board of Trustees March 24, 1998
- -----------------------------------
E. Gordon Gee
/s/ DAVID J. GLIMCHER Member, Board of Trustees March 24, 1998
- -----------------------------------
David J. Glimcher
/s/ ALAN R. WEILER Member, Board of Trustees March 24, 1998
- -----------------------------------
Alan R. Weiler
/s/ HARVEY WEINBERG Member, Board of Trustees March 24, 1998
- -----------------------------------
Harvey Weinberg
</TABLE>
38
<PAGE> 39
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders
of Glimcher Realty Trust
We have audited the consolidated financial statements and financial
statement schedule of Glimcher Realty Trust and subsidiaries as listed in Item
14(a) of this Form 10-K. These financial statements and financial statement
schedule are the responsibility of Glimcher Realty Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Glimcher Realty Trust and subsidiaries as of December 31, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
February 20, 1998
39
<PAGE> 40
GLIMCHER REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PAR VALUE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1997 1996
---- ----
<S> <C> <C>
Investment in real estate:
Land................................................................ $ 92,247 $ 78,339
Buildings, improvements and equipment............................... 976,645 846,500
Developments in progress:
Land .............................................................. 6,541 6,852
Developments....................................................... 15,989 17,447
---------- --------
1,091,422 949,138
Less accumulated depreciation....................................... 107,611 86,421
---------- --------
Net investment in real estate...................................... 983,811 862,717
Cash and cash equivalents.............................................. 7,434 8,968
Cash in escrow......................................................... 7,668 5,008
Investment in unconsolidated entities.................................. 118,195 41,351
Tenant accounts receivable, net........................................ 23,938 21,068
Deferred expenses, net................................................. 7,980 8,644
Prepaid and other assets............................................... 15,203 1,646
---------- --------
$1,164,229 $949,402
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable................................................. $ 501,272 $470,929
Notes payable.......................................................... 90,416 104,318
Accounts payable and accrued expenses.................................. 25,500 26,770
Distributions payable.................................................. 14,079 12,044
---------- --------
631,267 614,061
Commitments and contingencies
Minority interest in partnership....................................... 31,907 32,130
Redeemable preferred shares:
Series A-1 and Series C convertible preferred shares of beneficial
interest, $0.01 par value, 90,000 and 34,000 shares issued and
outstanding as of December 31, 1997 and 1996, respectively........ 90,000 34,000
Shareholders' equity:
Series B cumulative redeemable preferred shares of beneficial
interest, $0.01 par value, 5,118,000 shares issued and outstanding 127,950
Common shares of beneficial interest, $0.01 par value, 23,669,960
and 21,888,931 shares issued and outstanding as of December 31,
1997 and 1996, respectively....................................... 237 219
Additional paid-in capital........................................... 348,433 316,673
Distributions in excess of accumulated earnings...................... (65,565) (47,681)
---------- --------
$1,164,229 $949,402
========== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
40
<PAGE> 41
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Revenues:
Minimum rents ................................................ $ 107,895 $ 87,660 $ 79,323
Percentage rents ............................................. 3,499 2,896 2,921
Tenant recoveries ............................................ 24,186 22,384 19,514
Other ........................................................ 4,558 4,738 2,490
--------- -------- --------
Total revenues ............................................. 140,138 117,678 104,248
--------- -------- --------
Operating expenses:
Real estate taxes ............................................ 10,868 10,233 8,588
Recoverable operating expenses ............................... 15,515 13,893 11,920
--------- -------- --------
26,383 24,126 20,508
Other operating expenses ..................................... 3,165 3,086 2,198
--------- -------- --------
Total operating expenses ..................................... 29,548 27,212 22,706
--------- -------- --------
Property net operating income .............................. 110,590 90,466 81,542
Depreciation and amortization ..................................... 27,869 22,418 20,560
General and administrative ........................................ 8,286 9,371 6,409
Gain on sales of property/outparcels .............................. 155 1,506
Interest income ................................................... 1,032 506 649
Interest expense .................................................. 42,146 29,297 26,215
Equity in income (loss) of unconsolidated entities ................ (661) 42
Minority interest in operating partnership ........................ 3,022 3,385 3,294
--------- -------- --------
Net income ................................................. 29,793 28,049 25,713
Preferred stock dividends ......................................... 4,705 268
--------- -------- --------
Net income available to common shareholders ................ $ 25,088 $ 27,781 $ 25,713
========= ======== ========
Earnings per share (basic and diluted) ............................ $ 1.12 $ 1.27 $ 1.27
========= ======== ========
Cash distributions declared per common share of beneficial
interest...................................................... $ 1.9232 $ 1.9232 $ 1.9099
========= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
41
<PAGE> 42
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON SHARES OF
SERIES A-1 AND C SERIES B CUMULATIVE BENEFICIAL INTEREST
CONVERTIBLE REDEEMABLE -------------------
PREFERRED SHARES PREFERRED SHARES SHARES AMOUNT
---------------- ---------------- ------ ------
<S> <C> <C> <C> <C>
Balance, December 31, 1994 ..................... 18,358,598 $184
----
Distributions declared, $1.9099 per Share .....
Proceeds from Distribution Reinvestment
and Share Purchase Plan ................ 11,419
Other issuance of Shares ...................... 11,904
Net proceeds from public offering ............. 3,500,000 35
Net income ....................................
Transfer to minority interest in partnership...
---------- ----
Balance, December 31, 1995 ..................... 21,881,921 219
---------- ----
Distributions declared, $1.9232 per Share .....
Proceeds from Distribution Reinvestment
and Share Purchase Plan 3,540
Other issuance of Shares ...................... 3,470
Preferred equity .............................. $34,000
Preferred stock dividends declared ............
Net income ....................................
---------- ----
Balance, December 31, 1996 ..................... 34,000 21,888,931 219
------- ---------- ----
Distributions declared, $1.9232 per Share .....
Proceeds from Distribution Reinvestment
and Share Purchase Plan ................ 11,211
Other issuance of Shares ...................... 19,818
Proceeds from Series B public offering ........ $127,950
Net proceeds from public offering ............. 1,750,000 18
Preferred equity .............................. 56,000
Preferred stock dividends declared ............
Net income ....................................
Transfer to minority interest in partnership...
------- -------- ---------- ----
Balance, December 31, 1997 ..................... $90,000 $127,950 23,669,960 $237
======= ======== ========== ====
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
ADDITIONAL IN EXCESS OF
PAID-IN ACCUMULATED
CAPITAL EARNINGS TOTAL
------- -------- -----
<S> <C> <C> <C>
Balance, December 31, 1994 ..................... $249,411 $(19,349) $230,246
-------- -------- --------
Distributions declared, $1.9099 per Share ..... (38,450) (38,450)
Proceeds from Distribution Reinvestment
and Share Purchase Plan ................ 227 227
Other issuance of Shares ...................... 250 250
Net proceeds from public offering ............. 68,775 68,810
Net income .................................... 25,713 25,713
Transfer to minority interest in partnership... (2,105) (2,105)
-------- -------- --------
Balance, December 31, 1995 ..................... 316,558 (32,086) 284,691
-------- -------- --------
Distributions declared, $1.9232 per Share ..... (42,096) (42,096)
Proceeds from Distribution Reinvestment
and Share Purchase Plan 60 60
Other issuance of Shares ...................... 55 55
Preferred equity .............................. (1,280) 32,720
Preferred stock dividends declared ............ (268) (268)
Net income .................................... 28,049 28,049
-------- -------- --------
Balance, December 31, 1996 ..................... 316,673 (47,681) 303,211
-------- -------- --------
Distributions declared, $1.9232 per Share ..... (42,972) (42,972)
Proceeds from Distribution Reinvestment
and Share Purchase Plan ................ 232 232
Other issuance of Shares ...................... 342 342
Proceeds from Series B public offering ........ (4,878) 123,072
Net proceeds from public offering ............. 37,828 37,846
Preferred equity .............................. 56,000
Preferred stock dividends declared ............ (4,705) (4,705)
Net income .................................... 29,793 29,793
Transfer to minority interest in partnership... (1,764) (1,764)
-------- -------- --------
Balance, December 31, 1997 ..................... $348,433 $(65,565) $501,055
======== ======== ========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
42
<PAGE> 43
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income ................................................. $ 29,793 $ 28,049 $ 25,713
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for doubtful accounts ......................... 2,242 2,072 1,620
Depreciation and amortization ........................... 27,869 22,418 20,560
Equity in (income) loss of unconsolidated entities ...... 661 (42)
Other non-cash expenses ................................. 776 816 776
Minority interest in partnership ........................ 3,022 3,385 3,294
Gains on sales of outparcels ............................ (155) (1,506)
Net changes in operating assets and liabilities:
Tenant accounts receivable, net ......................... (5,190) (7,222) (4,199)
Deferred expenses, prepaid and other assets ............. 1,065 898 (136)
Accounts payable and accrued expenses ................... (3,677) 5,050 (6,656)
--------- --------- --------
Net cash provided by operating activities .................. 56,406 53,918 40,972
--------- --------- --------
Cash flows from investing activities:
Additions to investment in real estate ..................... (26,909) (36,615) (44,789)
Acquisition of properties .................................. (122,579) (88,482) (5,601)
Investment in unconsolidated entities ...................... (77,505) (41,309)
Proceeds from sales of outparcels .......................... 253 4,330
(Payments to) withdrawals from cash in escrow .............. (1,875) 997 4,203
Additions to deferred expenses, prepaid and other assets.... (16,208) (172) (3,008)
--------- --------- --------
Net cash used in investing activities ...................... (244,823) (161,251) (49,195)
--------- --------- --------
Cash flows from financing activities:
(Payments to) proceeds from revolving line of credit, net... (13,000) 69,800 (39,972)
Proceeds from issuance of mortgages and notes payable ...... 76,538 58,128 66,152
Principal payments on mortgage and notes payable ........... (43,497) (3,155) (46,749)
Net proceeds from issuance of common shares ................ 38,418 77 69,037
Net proceeds from issuance of redeemable preferred shares... 179,072 32,720
Cash distributions ......................................... (50,648) (47,101) (41,455)
--------- --------- --------
Net cash provided by financing activities ................... 186,883 110,469 7,013
--------- --------- --------
Net change in cash and cash equivalents ..................... (1,534) 3,136 (1,210)
Cash and cash equivalents, at beginning of period ........... 8,968 5,832 7,042
--------- --------- --------
Cash and cash equivalents, at end of period ................. $ 7,434 $ 8,968 $ 5,832
========= ========= ========
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
43
<PAGE> 44
GLIMCHER REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Glimcher Realty Trust (the "Company" or "GRT") is a fully-integrated,
self-administered and self-managed Maryland real estate investment trust
("REIT"), which owns, leases, manages and develops a portfolio of retail
properties (the "Properties") consisting of regional malls ("Mall Properties")
and community shopping centers, (including single tenant retail properties)
("Community Centers"). At December 31, 1997, the Company, managed and leased a
total of 120 operating properties, 113 of which were wholly owned, four of which
were partially owned in ventures and three of which were managed or leased under
contractual agreements, consisting of 16 Mall Properties and 104 Community
Centers, and owned interests in and operated 113 Properties at December 31,
1996, consisting of nine Mall Properties and 104 Community Centers. Glimcher
Properties Limited Partnership (the "Operating Partnership") also holds
substantially all of the economic interest in Glimcher Development Corporation
("GDC"), a non-qualified REIT subsidiary which provides development,
construction, leasing and legal services to the Company, ventures in which the
Company has an ownership interest and to third parties.
Basis of Presentation
The accompanying consolidated financial statements include the accounts
of GRT, the Operating Partnership (90.1% owned by GRT at December 31, 1997 and
89.4% at December 31, 1996), five Delaware limited partnerships (Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership, Grand
Central Limited Partnership, Glimcher York Associates Limited Partnership, and
Glimcher University Mall Limited Partnership) and one Ohio limited partnership
(Morgantown Mall Associates Limited Partnership), all of which are owned
directly or indirectly by GRT. The Operating Partnership has an investment in
several joint ventures and one other corporation which are accounted for under
the equity method. All significant inter-entity balances and transactions have
been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. For example, estimates are used to establish common area
maintenance, real estate tax and insurance tenant accounts receivable,
percentage rents and accounts receivable reserves. The Company bases its
estimates on historical sales performance of tenants, changes in Property
occupancy, mix of tenants and industry trends of tenant credit risk. Actual
results could differ from those estimates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment in Real Estate
Real estate assets are stated at cost. Costs incurred for the
acquisition, development, construction and improvement of properties are
capitalized, including direct costs incurred by GRT for these activities.
Interest and real estate taxes incurred during construction periods are
capitalized and amortized on the same basis as the related assets.
44
<PAGE> 45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Depreciation expense is computed using the straight-line method and
estimated useful lives for building and improvements of 40 years and equipment
and fixtures of five to 10 years. Expenditures for improvements and construction
allowances paid to tenants are capitalized and amortized over the remaining life
of the initial terms of each lease. Maintenance and repairs are charged to
expense when incurred.
Management evaluates the recoverability of its investment in real
estate assets in accordance with Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for Impairment of Long-Lived Assets and Long-Lived
Assets To Be Disposed Of". This statement requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate
that full asset recoverability is questionable. Management's assessment of
recoverability of its real estate assets under this statement includes, but is
not limited to, recent operating results, expected net operating cash flow and
management's plans for future operations.
Cash and Cash Equivalents
For purposes of the statements of cash flows, all highly liquid
investments purchased with original maturities of three months or less are
considered to be cash equivalents. The carrying amounts approximate fair value.
Cash in Escrow
Cash in escrow consists primarily of cash held for real estate taxes,
payments by tenants for early termination of their leases, and property
maintenance and expansion or leasehold improvements as required by certain of
the loan agreements.
Deferred Expenses
Deferred expenses consist principally of financing fees, leasing
commissions paid to third parties and direct costs related to leasing
activities. These costs are amortized on a straight-line basis over the terms of
the respective agreements. Deferred expenses in the accompanying consolidated
balance sheets are shown net of accumulated amortization of $12,187 and $9,232
as of December 31, 1997 and 1996, respectively.
Revenue Recognition
Minimum rents are recognized on an accrual basis over the terms of the
related leases which approximates a straight-line basis. Percentage rents are
recognized on an accrual basis. Recoveries from tenants for taxes, insurance and
other shopping center operating expenses are recognized as revenues in the
period the applicable costs are accrued.
An allowance for doubtful accounts has been provided against the
portion of tenant accounts receivable which is estimated to be uncollectible.
Tenant accounts receivable in the accompanying balance sheets are shown net of
an allowance for doubtful accounts of $5,030, $4,463 and $2,229 as of December
31, 1997, 1996 and 1995, respectively.
Interest Costs
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Interest capitalized........................ $ 3,053 $ 3,394 $ 690
Interest expense............................ 41,370 28,521 25,439
Amortization of interest rate buydown....... 776 776 776
------- -------- -------
Total interest costs........................ $45,199 $32,691 $26,905
======= ======= =======
</TABLE>
45
<PAGE> 46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Advertising Costs
The Company promotes its Properties on behalf of its tenants through
various media. The majority of the advertising expenses incurred are recovered
from the tenants through lease obligations. Net advertising expense was $269,
$308 and $106 for the years ended December 31, 1997, 1996 and 1995,
respectively.
Income Taxes
GRT files as a REIT under Sections 856-860 of the Internal Revenue Code
(the "Code"). In order to qualify as a REIT, GRT is required to distribute at
least 95.0% of its taxable income to shareholders and to meet certain asset and
income tests as well as certain other requirements. GRT will generally not be
liable for federal income taxes, provided it satisfies the necessary
distribution requirements. Even as a qualified REIT, the Company is subject to
certain state and local taxes on its income and property.
The Company has an equity investment in GDC, which is a non-qualified
REIT subsidiary under Section 856 (I) of the Code. For federal income tax
purposes, GDC is treated as a separate entity and taxed as a regular
C-Corporation.
Supplemental Disclosure of Non-Cash Financing and Investing Activities
Accounts payable of $5,991, $5,617 and $2,152 were accrued for real
estate improvements and other assets as of December 31, 1997, 1996 and 1995,
respectively.
GRT, through the Operating Partnership, acquired one Mall Property
during the year ended December 31, 1997. The purchase price included cash of
$122,579 and the assumption of net liabilities of $606. GRT, through the
Operating Partnership, acquired 23 Community Centers during the year ended
December 31, 1996. The purchase price included cash of $88,482 and the
assumption of net liabilities of $125,738.
Share distributions of $11,381, $10,524 and $10,521 and Operating
Partnership distributions of $ 1,252, $1,252 and $1,252 had been declared but
not paid as of December 31, 1997, 1996 and 1995, respectively. Series A-1
convertible preferred share distributions of $268 had been declared but not paid
as of December 31, 1996. Series B cumulative redeemable preferred share
distributions of $1,446 had been declared but not paid as of December 31, 1997.
Amounts paid for interest were $44,935, $30,295 and $25,457 in 1997,
1996 and 1995, respectively.
Amounts paid for state and local income taxes were $878, $572 and $810
in 1997, 1996 and 1995, respectively.
Reclassifications
Certain reclassifications of prior period amounts have been made in the
financial statements to conform to the 1997 presentation.
46
<PAGE> 47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
3. MORTGAGE NOTES PAYABLE AS OF DECEMBER 31, 1997 AND 1996 CONSIST OF THE
FOLLOWING:
<TABLE>
<CAPTION>
CARRYING AMOUNT OF PAYMENT PAYMENT AT MATURITY
DESCRIPTION MORTGAGE NOTES PAYABLE INTEREST RATE TERMS MATURITY DATE
- -----------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Central Limited Partnership..... $ 25,000 $ 25,000 6.935% 6.935% (a) $25,000 Oct. 1, 2000
Glimcher Holdings L.P. - Loan A....... 40,000 40,000 6.995% 6.995% (a) 40,000 Feb. 1, 1999
Glimcher Holdings L.P. - Loan B....... 40,000 40,000 7.505% 7.505% (a) 40,000 Feb. 1, 2003
Glimcher Centers L.P.................. 76,000 76,000 7.625% 7.625% (a) 76,000 Aug. 1, 2000
Morgantown Mall Associates L.P........ 50,200 50,200 7.500% 7.500% (a) 50,200 Apr. 1, 1999
Glimcher Properties L.P. Mortgage.....
Notes Payable:
Glimcher Properties L.P............... 50,000 50,000 7.470% 7.470% (a) 50,000 Oct. 26, 2002
Other Mortgage Notes.................. 113,456 125,279 (d) (d) (b) 101,079 (h)
University Mall Limited Partnership... 71,376 (i) (b) (i) (i)
RPI Bridge Facility................... 34,372 (g) (e)
Construction Loans.................... 35,240 30,078 (c) (c) (a) (f)
-------- --------
Total Mortgage Notes Payable.......... $501,272 $470,929
======== ========
</TABLE>
(a) The loan requires monthly payments of interest only.
(b) The loans require monthly payments of principal and interest.
(c) Interest rates ranging from 7.6875% to 8.000% in 1997 (7.625% in 1996).
(d) Interest rates ranging from 7.375% to 9.125%.
(e) The loan was paid off November 17, 1997.
(f) Final maturity dates ranging from June 1998 to November 1999.
(g) The loan bore interest at LIBOR plus 175 basis points (7.375% at December
31, 1996).
(h) Final maturity dates ranging from June 1999 to April 2016.
(i) The loan has an effective interest rate of 7.090% and matures in January
2028, with an optional prepayment rate in January 2013.
All mortgage notes payable are collateralized by certain Properties
owned by the respective partnerships. The loan agreement for Grand Central
Limited Partnership, Glimcher Holdings Limited Partnership and Glimcher Centers
Limited Partnership contains financial covenants regarding minimum net operating
income and coverage ratios.
Principal maturities (excluding extension options) on mortgage notes
payable during the five years subsequent to December 31, 1997, are as follows:
1998 - $11,917; 1999 - $152,613; 2000 - $141,515; 2001 - $24,483; 2002 -
$56,576; thereafter - $114,168.
4. NOTES PAYABLE
In May 1997, the Company amended its revolving line of credit (the
"Credit Facility") to (i) increase the amount the Company can borrow thereunder
from $175,000 to $190,000, (ii) extend the term of the Credit Facility from June
30, 1998, to July 31, 1998, which term may at the Company's option be extended
to July 31, 1999, (iii) reduce the variable tiered interest rate schedule, and
(iv) grant first mortgage liens on 11 of the Properties to secure borrowings
under the Credit Facility. Borrowings under the Credit Facility currently bear
interest at a rate equal to LIBOR plus 170 basis points per annum (7.4375% at
December 31, 1997). Payments due under the Credit Facility are guaranteed by GRT
and by Glimcher Properties Corporation, a wholly owned subsidiary of the
Company. During 1997 and 1996, the weighted average interest rate was 7.465% and
7.112%, respectively.
47
<PAGE> 48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Credit Facility, as amended, contains customary covenants,
representations, warranties and events of default, including maintenance of a
specified minimum net worth requirement, loan to value ratios, project costs to
asset value ratios, total debt to asset value ratios and EBITDA to total debt
service, restrictions on the incurrence of additional indebtedness and approval
of anchor leases with respect to the Properties which secure the Credit
Facility.
At December 31, 1997, the balance outstanding on the Credit Facility
was $90,000. As of December 31, 1997, the unused balance of the Credit Facility
available to the Company was $99,750.
5. SERIES A-1, B AND C PREFERRED SHARES
The Company's Declaration of Trust authorizes the Company to issue up
to an aggregate 100,000,000 Shares of the Company, consisting of common shares
or one or more series of preferred shares of beneficial interest.
On November 27, 1996, the Company sold 34,000 of its Series A
convertible preferred shares. On November 7, 1997, the Series A preferred shares
were exchanged for Series A-1 preferred shares (the "A-1 Preferred Shares")
having substantially the same terms. Distributions on the A-1 Preferred Shares
will be paid quarterly based upon 90 day LIBOR plus 285 basis points (8.631% at
December 31, 1997 and 8.350% at December 31, 1996). The Company may redeem the
A-1 Preferred Shares at any time, prior to conversion, at its option without any
penalty or premiums. Beginning in 2001, the A-1 Preferred Shares are convertible
into the number of Shares obtained by dividing the liquidation preference by the
conversion price per Share. The conversion price per share is the product of (i)
the average market price per Share over the 30 trading days prior to the
conversion, multiplied by (ii) the applicable conversion percentage which ranges
between 70.0% and 90.0%.
On November 17, 1997, the Company completed a $120,000 public offering
of 4,800,000 shares of 9-1/4 % Series B cumulative redeemable preferred shares
of beneficial interest (the "B Preferred Shares"). On November 25, 1997, the
Company sold an additional 318,000 B Preferred Shares as a result of the
underwriters exercising the over-allotment option granted to them. Aggregate net
proceeds of the offering were $123,072. Distributions on the B Preferred Shares
are payable quarterly in arrears. The Company generally may redeem the B
Preferred Shares any time on or after November 15, 2002, at a redemption price
of $25.00 per share, plus accrued and unpaid distributions. The redemption price
(other than the portion thereof consisting of accrued and unpaid distributions)
is payable solely out of the sale proceeds of other capital shares of the
Company, which may include other series of preferred shares. The Company
contributed the proceeds to the Operating Partnership in exchange for preferred
units. The Operating Partnership pays a preferred distribution to the Company
equal to the dividends paid on the B Preferred Shares.
On December 5, 1997, the Company sold 56,000 shares of its Series C
convertible preferred shares (the "C Preferred Shares"). Distributions on the C
Preferred Shares will be paid quarterly based upon 90 day LIBOR plus 285 basis
points. The C Preferred Shares may be redeemed by the Company at any time, prior
to conversion, at its option without any penalty or premiums. Beginning in
December 1998, the C Preferred Shares are convertible into the number of Shares
obtained by dividing the liquidation preference by the conversion price per
Share. The conversion price per Share is the product of (i) the average market
price per Share over the 30 trading days prior to the conversion, multiplied by
(ii) the applicable conversion percentage which ranges between 70.0% and 80.0%.
6. DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments to manage interest
rate risks. In 1995, the Company entered into a rate protection agreement for up
to $175,000 of borrowings on its amended Credit Facility for a term of three
years. Under the agreement the obligor agreed to reimburse the Company to the
extent interest expense
48
<PAGE> 49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
increased as a result of an increase in LIBOR above 8.500% per annum, and the
Company agreed to reimburse the obligor to the extent interest expense decreased
as a result of a decrease in LIBOR below 4.500% per annum. The Company is
exposed to credit loss in the event of non-performance by the obligor. However,
the Company does not anticipate non-performance by the obligor.
7. RENTALS UNDER OPERATING LEASES
GRT receives rental income from the leasing of retail shopping center
space under operating leases with expiration dates through the year 2025. The
minimum future base rentals under non-cancelable operating leases as of December
31, 1997 are as follows:
1998....................................... $ 113,294
1999....................................... 107,223
2000....................................... 98,533
2001....................................... 91,493
2002....................................... 84,744
Thereafter................................. 507,739
----------
$1,003,026
==========
Minimum future base rentals do not include amounts which may be
received from certain tenants based upon a percentage of their gross sales or as
reimbursement of operating expenses. Minimum rents contain straight-line
adjustments for rental revenue increases which aggregated $1,324, $1,747 and
$1,686 for the years ended December 31, 1997, 1996 and 1995, respectively.
In 1997, no tenant collectively accounted for more than 10.0% of rental
income. In 1996 and 1995, Kmart represented approximately 10.0% and 11.3% of
rental income, respectively. The tenant base includes national, regional and
local retailers, and consequently the credit risk is concentrated in the retail
industry.
8. INVESTMENT IN UNCONSOLIDATED ENTITIES
Investments in unconsolidated entities consist of preferred stock and
non-voting common stock of GDC, a 45.0% interest in Great Plains Metro Mall
L.L.C., a 33.3% interest in Johnson City Venture L.L.C., a 40.0% interest in
Dayton Mall L.L.C., a 40.0% interest in Colonial Park Mall Limited Partnership,
and a 30.0% interest in Elizabeth Metro Mall, L.L.C.
The net income (loss) for each unconsolidated entity is allocated in
accordance with the provisions of the applicable operating agreements. The
allocation provisions in these agreements may differ from the ownership interest
held by each member under the terms of these agreements.
The summary financial information of the Company's unconsolidated
entities accounted for using the equity method, and a summary of the Operating
Partnership's investment in and share of net income (loss) from such
unconsolidated entities are presented below:
49
<PAGE> 50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
BALANCE SHEETS
DECEMBER 31,
----------------------------
1997 1996
----------------------------
<S> <C> <C>
Assets:
Investment properties at cost, net ..................... $ 357,416 $ 110,281
Other assets ........................................... 20,452 1,310
--------- ---------
$ 377,868 $ 111,591
========= =========
Liabilities and Members' Equity:
Mortgage note payable .................................. $ 205,058 $ 57,978
Accounts payable and accrued expenses .................. 26,842 5,682
--------- ---------
231,900 63,660
Members' equity ........................................ 145,968 47,931
--------- ---------
$ 377,868 $ 111,591
========= =========
Operating Partnership's Share of:
Members' equity ........................................ $ 111,529 $ 40,439
========= =========
RECONCILIATION OF MEMBERS' EQUITY TO COMPANY
INVESTMENT IN UNCONSOLIDATED ENTITIES:
Members' equity ........................................ $ 111,529 $ 40,439
Advances and additional costs .......................... 6,666 912
--------- ---------
Investment in unconsolidated entities .................. $ 118,195 $ 41,351
========= =========
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1997 1996
--------------------------------
Total revenues .............................................. $ 26,427 $ 994
Operating expenses .......................................... (13,608) (706)
--------- ---------
Net operating income ........................................ 12,819 288
Depreciation and amortization ............................... (4,039) (84)
Interest expense ............................................ (7,569) (270)
Gain on sale ................................................ 286
--------- ---------
Net income ............................................. $ 1,211 $ 220
========= =========
Operating Partnership's share of net (loss) income .......... $ (661) $ 42
========= =========
</TABLE>
9. TRANSACTIONS WITH AFFILIATES
On October 16, 1996, the Company formed GDC, an unconsolidated
non-qualified REIT subsidiary which is owned by the Operating Partnership,
Herbert Glimcher, David J. Glimcher and Michael P. Glimcher. The Operating
Partnership holds 95.0% of the ownership interest; the Glimchers hold 100.0% of
the voting interest and 5.0% of the ownership interest. GDC provides services
for a fee, to the Company, to ventures in which the Company has an ownership
interest and to third parties. In 1997, GDC recognized fee income of $1,293 for
services provided to these ventures.
In 1997, the Company reimbursed The Glimcher Company ("TGC") and
Corporate Flight, Inc. ("CFI") $11 and $179, respectively, for the use, in
connection with Company related matters, of a bus owned by TGC and an airplane
owned by CFI; GDC reimbursed the same two companies $25 and $895, respectively.
In 1996, the
50
<PAGE> 51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Company purchased a parcel of land from TGC for $215 and reimbursed TGC and CFI
$20 and $59, respectively In 1995, the Company purchased a parcel of land from
TGC for $129 reimbursed TGC $143 for the use of an airplane and purchased four
automobiles from TGC for use at its Mall Properties for $32.
In 1995, the Company executed a lease termination agreement with a
tenant owned by Herbert Glimcher and David J. Glimcher. As part of the lease
termination agreement, the Company received equipment in the amount of $250 in
consideration for the remaining lease obligation of the tenant.
Effective January 1994, the Company engaged Archer-Meek-Weiler Agency,
Inc. ("AMW"), an agency in which Alan R. Weiler (a Trustee of GRT) is president,
to provide property and employee practices liability insurance services to the
Company. Total commissions received by AMW during 1997, 1996 and 1995 were
approximately $137, $128, and $170, respectively.
Certain of the properties also have tenants in which officers of GRT
hold a financial interest. Annual base minimum rents and tenant accounts
receivable from these tenants are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Minimum rents.................................... $559 $580 $934
Tenant accounts (payable) receivable............. (9) 27 60
</TABLE>
10. COMMITMENTS
The Operating Partnership leases office space under an operating lease
that had an initial term of ten years commencing on March 21, 1994.
Additionally, eight of GRT's properties are subject to long-term ground leases
where a third party owns the underlying land and has leased the land to GRT. GRT
pays rent, ranging from $2 to $60 per annum, for the use of the land and
generally is responsible for the costs and expenses associated with maintaining
the building and improvements thereto. Future minimum rental payments as of
December 31, 1997 are as follows:
OFFICE LEASE GROUND LEASES
------------ -------------
1998................................. $ 697 $ 263
1999................................. 689 219
2000................................. 682 222
2001................................. 709 223
2002................................. 625 177
Thereafter........................... 715 7,556
------ ------
$4,117 $8,660
====== ======
Total rental expenses (including miscellaneous month-to-month lease
rentals) for the years ended December 31, 1997, 1996 and 1995 were $612, $618,
and $457, respectively. Ground lease expenses for the years ended December 31,
1997, 1996 and 1995 were $256, $336, and $223, respectively.
In connection with the development of The Great Mall of the Great
Plains, the Operating Partnership provided the lender with a completion
guarantee and an unconditional guarantee of payment of the greater of (i) 25.0%
of the outstanding obligation on the indebtedness, or (ii) the indebtedness less
capitalized net operating income calculated in accordance with the agreement.
In connection with a mortgage note payable for Johnson City Venture,
L.L.C., the Operating Partnership provided an unconditional guarantee for the
payment of the lesser of $6,200 or the outstanding balance of the loan.
51
<PAGE> 52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
11. SHARE OPTION PLANS
GRT has established the Employee Share Option Plan (the "Employee
Plan") and the Trustee Share Option Plan (the "Trustee Plan") for the purpose of
attracting and retaining the Company's trustees, executive and other employees.
A maximum of 400,000 Shares have been reserved for issuance under the Employee
Plan and a maximum of 700,000 Shares have been reserved for issuance under the
Trustee Plan.
The Company applies Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized related to options granted under the
plans. Had compensation cost for the plans been determined based on the fair
value at the grant dates for grants under these plans consistent with SFAS No.
123, the Company's net income available to common shareholders would have been
decreased to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C> <C>
Net income available to As reported...... $25,088 $27,781
common shareholders Pro forma........ 24,961 27,742
Earnings per share (basic and diluted) As reported...... $1.12 $1.27
Earnings per share (basic and diluted) Pro forma........ $1.12 $1.27
</TABLE>
The fair value of each option grant was estimated on the date of the
grant using the Black-Scholes options pricing model with the following
assumptions: average risk free interest rates ranging from 5.79% to 6.90%,
expected average lives of five years, annual dividend rates of $1.9232 and
volatility of 14.39%.
The options exercisable at December 31, 1997, 1996 and 1995 under the
Trustee Plan were 144,800, 90,333, and 45,667, respectively. The options
exercisable at December 31, 1997, 1996 and 1995 under the Employee Plan were
136,386, 76,333 and 49,333, respectively.
A summary of the status of the Company's two option plans at December
31, 1997, 1996 and 1995 and changes during the years ending on those dates is
presented below:
52
<PAGE> 53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1996 1997
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
TRUSTEE PLAN:
Outstanding at beginning of year............ 127,000 $20.250 129,000 $20.250 242,000 $18.732
Granted..................................... 2,000 20.250 114,000 17.000 371,000 18.750
Exercised................................... - - (1,000) 17.000 (1,500) 18.750
Forfeited................................... - - - - (35,000) 19.320
------- ------- -------
Outstanding at end of year.................. 129,000 20.250 242,000 18.732 576,500 18.707
======= ======= =======
EMPLOYEE PLAN:
Outstanding at beginning of year............ 149,300 $20.250 150,250 $20.262 284,550 $18.456
Granted..................................... 15,000 20.375 181,800 17.092 141,500 19.606
Exercised................................... - - - - (18,128) 17.069
Forfeited................................... (14,050) 20.250 (47,500) 18.950 (47,550) 18.337
------- ------- -------
Outstanding at end of year.................. 150,250 20.262 284,550 18.456 360,372 18.993
======= ======= =======
Options exercisable at year-end under
the Trustee Plan............................ 45,667 90,333 144,800
Options exercisable at year-end under
the Employee Plan........................... 49,333 76,333 136,386
Weighted-average of fair value of
options granted during the year............. $0.8945 $0.4781 $0.8384
</TABLE>
The following table summarizes information regarding the options
outstanding at December 31, 1997 under the Company's two plans:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------------------------------- ------------------------------------
NUMBER WEIGHTED-AVERAGE NUMBER
RANGE OF OUTSTANDING AT REMAINING WEIGHTED-AVERAGE EXERCISABLE AT WEIGHTED-AVERAGE
EXERCISE PRICES DECEMBER 31, 1997 CONTRACTUAL LIFE EXERCISE PRICE DECEMBER 31, 1997 EXERCISE PRICE
- ----------------- ----------------- ---------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Trustee Plan:
- -----------------
$20.250 102,000 6.1 $20.250 102,000 $20.250
20.250 2,000 7.3 20.250 2,000 20.250
17.000 103,000 8.2 17.000 36,300 17.000
18.750 - 20.750 369,500 9.1 19.833 4,500 18.750
------- -------
17.000 - 20.750 576,500 8.4 19.402 144,800 19.389
======= =======
Employee Plan:
- -----------------
$20.250 87,700 6.1 $20.250 87,700 $20.250
20.375 15,000 7.8 20.375 10,000 20.375
16.250 - 19.750 116,172 8.3 17.118 38,686 17.118
18.750 - 22.000 141,500 9.4 19.606 -- --
------- -------
16.250 - 22.000 360,372 8.2 18.993 136,386 19.371
======= =======
</TABLE>
53
<PAGE> 54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
All of the options granted in 1995 under the Trustee Plan were
exercisable immediately. These options remain exercisable through the tenth
anniversary of the grant. All of the options granted in 1995 under the Employee
Plan will be exercisable at the rate of 33.3% per annum over a three-year period
beginning with the first anniversary of the date of grant and will remain
exercisable through the tenth anniversary of such date.
All but 20,000 Shares granted in 1996 under the Employee Plan will be
exercisable at the rate of 33.3% per annum over a three-year period beginning
with the first anniversary of the date of grant and will remain exercisable
through the tenth anniversary of such date. Options for 20,000 Shares will be
exercisable at the rate of 50.0% per annum over a two-year period beginning with
the first anniversary of the date of grant and will remain exercisable through
the tenth anniversary of such date. All but 4,000 Shares granted under the
Trustee Plan in 1996 will be exercisable at the rate of 33.3% per annum over a
three-year period beginning with the first anniversary of the date of grant and
will remain exercisable through the tenth anniversary of such date. Options for
4,000 Shares were exercisable immediately, and will remain exercisable through
the tenth anniversary of such date.
All of the options granted in 1997 under the Employee Plan will be
exercisable at the rate of 33.3% per annum over a three year period beginning
with the first anniversary of the date of grant and will remain exercisable
through the tenth anniversary of such date. All but 6,000 options granted under
the Trustee Plan in 1997 will be exercisable at the rate of 33.3% per annum over
a three-year period beginning with the first anniversary of the date of grant
and will remain exercisable through the tenth anniversary of such date. Options
for 6,000 Shares were exercisable immediately, and will remain exercisable
through the tenth anniversary of such date.
12. EMPLOYEE BENEFIT PLAN - 401(k) PLAN
In January 1996, the Company established a qualified retirement savings
plan under IRC 401(k) for eligible employees which contains a cash or deferred
arrangement which permits participants to defer up to a maximum of 15.0% of
their compensation, subject to certain limitations. Participant's salary
deferrals up to a maximum of 4.0% of qualified compensation will be matched at
50.0%. The Company matching will be in the form of GRT Shares. The Company
contributed $109 and $89 to the plan in 1997 and 1996, respectively.
13. DISTRIBUTIONS
For the years ended December 31, 1997, 1996 and 1995, approximately
30.6%, 31.0%, and 38.0%, respectively, of the distributions received by common
shareholders were considered to be a return of capital for tax purposes. Also,
0.68% of each quarterly distribution declared in 1996 was designated and
considered to be long-term capital gain for tax purposes.
14. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share." SFAS No. 128 establishes standards for computing and presenting earnings
per share ("EPS") and replaces the presentation of primary EPS with a
presentation of basic EPS and diluted EPS, as summarized in the table below:
54
<PAGE> 55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------------------
1997 1996 1995
-------------------------------- -------------------------- ---------------------------
PER PER PER
INCOME SHARES SHARE INCOME SHARES SHARE INCOME SHARES SHARE
------ ------ ----- ------ ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BASIC EPS
Income available to
common stockholders.............. $25,088 22,321 $1.12 $27,781 21,888 $1.27 $25,713 20,169 $1.27
EFFECT OF DILUTIVE SECURITIES
Operating partnership units...... 3,022 2,604 -- 3,386 2,604 -- 3,294 2,604 --
Options.......................... -- 71 -- -- 10 -- -- -- --
DILUTED EPS
Income available plus........... ------- ------ ----- ------- ------ ----- ------- ------ -----
assumed conversions.............. $28,110 24,996 $1.12 $31,167 24,502 $1.27 $29,007 22,773 $1.27
======= ====== ===== ======= ====== ===== ======= ====== =====
</TABLE>
The Series A-1 and Series C Preferred Shares include certain conversion features
that could potentially dilute basic EPS in the future, but were not included in
the computation of diluted EPS because to do so would have been antidilutive
(based on period end share prices) for the periods presented.
15. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, cash in escrow,
tenant accounts receivable, accounts payable and accrued expenses are reasonable
estimates of their fair values because of the short maturity of these financial
instruments. The carrying value of the Credit Facility is also a reasonable
estimate of its fair value because it bears variable rate interest at current
market rates. Based on the discounted amount of future cash flows using rates
currently available to GRT for similar liabilities (ranging from 6.82% to 8.88%
per annum at December 31, 1997 and 7.10% to 8.00% per annum at December 31,
1996), the fair value of GRT's mortgage notes payable is estimated at $500,470
and $471,119 at December 31, 1997 and 1996, respectively. The fair value of the
debt instruments identified with GRT considers in part the credit of GRT as an
entity, and not just the individual entities and properties owned by GRT.
16. PROPERTY ACQUISITIONS
<TABLE>
<CAPTION>
NET
AMOUNT LIABILITIES
ACQUISITION PROPERTY NAME ALLOCATED TO AND DEBT
DATE AND LOCATION ASSETS ACQUIRED CASH ASSUMED
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Acquisitions - 1996:
- --------------------
Jan. 1996 Delaware Community Plaza -
Delaware, OH......................... $ 12,368 $ 5,167 $ 7,201
Oct. 1996 RPI..................................... 201,852 83,315 118,537
--------- --------- ---------
Total......................................................... $214,220 $ 88,482 $125,738
======== ======== ========
Acquisitions - 1997:
- --------------------
Dec. 1997 University Mall - Tampa, FL............. $123,185 $122,579 $ 606
======== ======== ==========
</TABLE>
55
<PAGE> 56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
17. INTERIM FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
YEAR ENDED DECEMBER 31, 1996 QUARTER QUARTER QUARTER QUARTER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues .............................................. $27,248 $27,095 $27,634 $35,701
Income before minority interest in partnership................ 7,163 7,628 7,508 9,135
Preferred stock dividends..................................... 268
Net income available to common shareholders................... 6,412 6,802 6,679 7,888
Earnings per share (basic and diluted)........................ 0.29 0.31 0.31 0.36
Distributions declared per share.............................. 0.4808 0.4808 0.4808 0.4808
FIRST SECOND THIRD FOURTH
YEAR ENDED DECEMBER 31, 1997 QUARTER QUARTER QUARTER QUARTER
- --------------------------------------------------------------------------------------------------------------
Total revenues .............................................. $34,390 $34,721 $34,401 $36,626
Income before minority interest in partnership................ 7,769 7,960 7,196 9,890
Preferred stock dividends..................................... 715 726 728 2,536
Net income available to common shareholders................... 6,217 6,360 5,677 6,834
Earnings per share (basic and diluted)........................ 0.28 0.29 0.26 0.29
Distributions declared per share.............................. 0.4808 0.4808 0.4808 0.4808
</TABLE>
56
<PAGE> 57
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MALL PROPERTIES
Ashland Town Center
Ashland, KY [g] $ 3,866 $ 21,454 $ 5,565 $ 4,144 $ 26,741 $ 30,885
Grand Central Mall
Parkersburg/Vienna, WV $ 25,000 3,960 41,136 8,345 3,960 49,481 53,441
Indian Mound Mall
Newark/Heath, OH [f] 892 19,497 5,786 801 25,374 26,175
The Mall at Fairfield Commons
Beavercreek/Dayton, OH [f] 5,438 102,914 4,739 5,438 107,653 113,091
Morgantown Mall
Morgantown, WV [i] 1,273 40,484 2,465 1,249 42,973 44,222
New Towne Mall
New Philadelphia, OH [f] 1,190 23,475 7,741 1,248 31,158 32,406
River Valley Mall
Lancaster, OH [g] 875 26,910 11,528 1,002 38,311 39,313
Southside Mall
Oneonta, NY [g] 1,194 10,643 244 1,194 10,887 12,081
University Mall
Tampa, FL 71,376 13,314 108,230 13,314 108,230 121,544
COMMUNITY CENTERS
Arnold Plaza
Arnold, MO [g] 527 4,965 92 527 5,057 5,584
Artesian Square
Martinsville, IN 5,314 760 6,791 5 760 6,796 7,556
Ashland Plaza
Ashland, KY [g] 312 1,633 486 312 2,119 2,431
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MALL PROPERTIES
Ashland Town Center
Ashland, KY $ 5,813 1989 [e]
Grand Central Mall
Parkersburg/Vienna, WV 6,022 1993 [e]
Indian Mound Mall
Newark/Heath, OH 6,940 1986 [e]
The Mall at Fairfield Commons
Beavercreek/Dayton, OH 14,413 1993 [e]
Morgantown Mall
Morgantown, WV 10,424 1990 [e]
New Towne Mall
New Philadelphia, OH 8,877 1988 [e]
River Valley Mall
Lancaster, OH 10,692 1987 [e]
Southside Mall
Oneonta, NY 1,082 1994 [e]
University Mall
Tampa, FL - 1997
COMMUNITY CENTERS
Arnold Plaza
Arnold, MO 478 1994 [e]
Artesian Square
Martinsville, IN 199 1996 [e]
Ashland Plaza
Ashland, KY 992 1968 [e]
</TABLE>
57
<PAGE> 58
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Audubon Village
Henderson, KY $ 4,213 $ 606 $ 5,453 $ (7) $ 606 $ 5,446 $ 6,052
Aviation Plaza
Oshkosh, WI 6,660 914 8,227 914 8,227 9,141
Ayden Plaza
Ayden, NC [g] 138 1,243 138 1,243 1,381
Barren River Plaza
Glasgow, KY 8,002 1,215 10,932 1,215 10,932 12,147
Bollweevil Shopping Center
Enterprise, AL [g] 215 1,916 3 215 1,919 2,134
Buckhannon Plaza
Tennerton, WV [g] 269 2,464 269 2,464 2,733
Cambridge Plaza
Cambridge, OH [g] 195 691 365 195 1,056 1,251
Canal Place Plaza
Rome, NY [h] 420 6,264 110 420 6,374 6,794
Chillicothe Plaza
Chillicothe, OH [g] 78 410 180 78 590 668
Clarksville Plaza
Clarksville, IN [f] 127 621 470 127 1,091 1,218
College Plaza
Bluefield, VA 1,072 9,650 1,072 9,650 10,722
Corry Plaza
Corry, PA [g] 265 2,472 164 265 2,636 2,901
Cross Creek Plaza
Beaufort, SC 1,317 11,854 1,590 1,317 13,444 14,761
Crossing Meadows
Onalaska, WI 9,266 1,334 12,006 1,334 12,006 13,340
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Audubon Village $ 159 1996 [e]
Henderson, KY
Aviation Plaza 241 1996 [e]
Oshkosh, WI
Ayden Plaza 122 1994 [e]
Ayden, NC
Barren River Plaza 319 1996 [e]
Glasgow, KY
Bollweevil Shopping Center 189 1994 [e]
Enterprise, AL
Buckhannon Plaza 240 1994 [e]
Tennerton, WV
Cambridge Plaza 645 1965 [e]
Cambridge, OH
Canal Place Plaza 587 1994 [e]
Rome, NY
Chillicothe Plaza 193 1964 [e]
Chillicothe, OH
Clarksville Plaza 279 1968 [e]
Clarksville, IN
College Plaza 282 1996 [e]
Bluefield, VA
Corry Plaza 254 1994 [e]
Corry, PA
Cross Creek Plaza 365 1996 [e]
Beaufort, SC
Crossing Meadows 350 1996 [e]
Onalaska, WI
</TABLE>
58
<PAGE> 59
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Crossroads Centre
Knoxville, TN $ 6,550 $ 883 $ 7,944 $ 883 $ 7,944 $ 8,827
Cumberland Crossing
Jacksboro, TN 5,074 729 6,562 $ 5 729 6,567 7,296
Cypress Bay Village
Morehead City, NC 1,121 10,089 66 1,121 10,155 11,276
Dallas Plaza
Balch Springs, TX [g] 262 2,326 262 2,326 2,588
Daytona Plaza
Daytona Beach, FL [g] 420 3,807 114 420 3,921 4,341
Delaware Community Plaza
Delaware, OH 8,188 1,250 11,118 1,250 11,118 12,368
East Pointe Plaza
Columbia, SC 11,027 1,255 11,294 1,255 11,294 12,549
East Pointe Plaza
Marysville, OH [f] 453 4,112 3,408 427 7,546 7,973
Franklin Square
Spartanburg, SC 977 8,789 977 8,789 9,766
Georgesville Square
Columbus, OH 16,641 17,435 2,005 15,430 17,435
Grand Union
Chatham, NY 227 2,042 227 2,042 2,269
Grand Union Plaza
South Glens Falls, NY 507 4,566 507 4,566 5,073
Gratiot Center
Saginaw, MI [h] 1,196 10,778 12 1,196 10,790 11,986
Hills Plaza East
Erie, PA [g] 241 2,240 217 241 2,457 2,698
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Crossroads Centre $ 232 1996 [e]
Knoxville, TN
Cumberland Crossing 192 1996 [e]
Jacksboro, TN
Cypress Bay Village 297 1996 [e]
Morehead City, NC
Dallas Plaza 228 1994 [e]
Balch Springs, TX
Daytona Plaza 399 1994 [e]
Daytona Beach, FL
Delaware Community Plaza 536 1996 [e]
Delaware, OH
East Pointe Plaza 329 1996 [e]
Columbia, SC
East Pointe Plaza 1,003 1992 [e]
Marysville, OH
Franklin Square 256 1996 [e]
Spartanburg, SC
Georgesville Square 308 1996
Columbus, OH
Grand Union 179 1994 [e]
Chatham, NY
Grand Union Plaza 409 1994 [e]
South Glens Falls, NY
Gratiot Center 966 1994 [e]
Saginaw, MI
Hills Plaza East 220 1994 [e]
Erie, PA
</TABLE>
59
<PAGE> 60
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Hocking Valley Mall
Lancaster, OH [g] $ 606 $ 5,550 $ 101 $ 606 $ 5,651 $ 6,257
Horizon Park
Longmont, CO [g] 219 1,908 40 219 1,948 2,167
Hunter's Ridge Shopping Center
Gahanna, OH [h] 850 7,713 140 850 7,853 8,703
Huntington Plaza
Huntington, WV 175 525 29 175 554 729
Indian Mound Plaza
Heath, OH 22 384 39 22 423 445
Kmart
Alliance, NE [g] 175 1,567 6 175 1,573 1,748
Kmart
Bloomington, IN [g] 298 2,689 298 2,689 2,987
Kmart
Clifton Heights, PA [g] 277 2,491 122 277 2,613 2,890
Kmart
Fairhaven, MA [g] 221 1,995 221 1,995 2,216
Kmart
Feasterville, PA [g] 244 2,204 244 2,204 2,448
Kmart
Langhorne, PA [g] 314 2,936 314 2,936 3,250
Kmart
Leechburg, PA [g] 261 2,338 12 261 2,350 2,611
Kmart
Norfolk, VA [g] 188 1,662 188 1,662 1,850
Kmart
Seekonk, MA [g] 244 2,182 244 2,182 2,426
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hocking Valley Mall $ 550 1994 [e]
Lancaster, OH
Horizon Park 182 1994 [e]
Longmont, CO
Hunter's Ridge Shopping Center 642 1994 [e]
Gahanna, OH
Huntington Plaza 186 1966 [e]
Huntington, WV
Indian Mound Plaza 96 1988 [e]
Heath, OH
Kmart 153 1994 [e]
Alliance, NE
Kmart 260 1994 [e]
Bloomington, IN
Kmart 246 1994 [e]
Clifton Heights, PA
Kmart 194 1994 [e]
Fairhaven, MA
Kmart 215 1994 [e]
Feasterville, PA
Kmart 284 1994 [e]
Langhorne, PA
Kmart 229 1994 [e]
Leechburg, PA
Kmart 162 1994 [e]
Norfolk, VA
Kmart 213 1994 [e]
Seekonk, MA
</TABLE>
60
<PAGE> 61
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kmart
Puyallup, WA [g] $ 426 $ 3,870 $ 34 $ 426 $ 3,904 $ 4,330
Kmart
Yakima, WA [g] 256 2,305 256 2,305 2,561
Knox Village Square
Mount Vernon, OH [g] 865 8,479 89 865 8,568 9,433
Lexington Parkway Plaza
Lexington, NC $ 7,367 1,0037 9,029 31 1,003 9,060 10,063
Liberty Plaza
Morristown, TN [g] 369 3,312 369 3,312 3,681
Linden Corners
Buffalo, NY [g] 414 3,726 414 3,726 4,140
Logan Place
Russellville, KY 2,335 367 3,307 367 3,307 3,674
Lowe's
Altoona, PA [h] 1,452 4,877 1 1,452 4,878 6,330
Lowe's
Columbus, OH [h] 1,330 4,569 24 1,330 4,593 5,923
Lowe's
Marion, OH [g] 626 2,454 626 2,454 3,080
Lowe's
Wooster, OH [g] 500 2,515 37 520 2,532 3,052
Loyal Plaza
Loyalsock, PA [g] 1,718 15,513 397 1,718 15,910 17,628
Marion Towne Center
Marion, SC 5,668 754 6,787 754 6,787 7,541
Meadowview Square
Kent, OH 9,144 9,370 408 8,962 9,370
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kmart
Puyallup, WA $ 382 1994 [e]
Kmart
Yakima, WA 226 1994 [e]
Knox Village Square
Mount Vernon, OH 1,119 1992 [e]
Lexington Parkway Plaza
Lexington, NC 264 1996 [e]
Liberty Plaza
Morristown, TN 324 1994 [e]
Linden Corners
Buffalo, NY 364 1994 [e]
Logan Place
Russellville, KY 97 1996 [e]
Lowe's
Altoona, PA 375 1994 [e]
Lowe's
Columbus, OH 344 1994 [e]
Lowe's
Marion, OH 274 1993 [e]
Lowe's
Wooster, OH 281 1993 [e]
Loyal Plaza
Loyalsock, PA 1,552 1994 [e]
Marion Towne Center
Marion, SC 198 1996 [e]
Meadowview Square
Kent, OH 166
</TABLE>
61
<PAGE> 62
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Middletown Plaza
Middletown, OH [f] $ 127 $ 1,159 $ 175 $ 127 $ 1,334 $ 1,461
Mill Run
Columbus, OH [h] 2,711 6,935 74 2,711 7,009 9,720
Monroe Shopping Center
Madisonville, TN [g] 375 3,522 47 375 3,569 3,944
Morgantown Commons
Morgantown, WV [i] 175 7,549 408 358 7,774 8,132
Morgantown Commons-Expansion
Morgantown, WV $ 9,455 10,691 10,691 10,691
Morgantown Plaza
Star City, WV [f] 305 1,137 704 305 1,841 2,146
Morningside Plaza
Dade City, FL [g] 487 4,300 67 487 4,367 4,854
Mount Vernon Plaza
Mount Vernon, OH 58 431 736 58 1,167 1,225
New Boston Mall
Portsmouth, OH [g] 537 4,906 82 537 4,988 5,525
Newberry Square Shopping Center
Newberry, SC [h] 594 5,355 1 594 5,356 5,950
Newport Plaza II
Newport, KY [g] 462 4,176 24 462 4,200 4,662
North Horner Shopping Center
Sanford, NC [g] 206 1,875 206 1,875 2,081
Northtowne Square
Chattanooga, TN [g] 390 3,516 48 390 3,564 3,954
Ohio River
Gallipolis, OH [f] 502 6,373 53 461 6,467 6,928
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Middletown Plaza $ 187 1972 [e]
Middletown, OH
Mill Run 511 1995 [e]
Columbus, OH
Monroe Shopping Center 341 1994 [e]
Madisonville, TN
Morgantown Commons 1,843 1991 [e]
Morgantown, WV
Morgantown Commons-Expansion 1996
Morgantown, WV
Morgantown Plaza 738 1967 [e]
Star City, WV
Morningside Plaza 446 1994 [e]
Dade City, FL
Mount Vernon Plaza 614 1963 [e]
Mount Vernon, OH
New Boston Mall 494 1994 [e]
Portsmouth, OH
Newberry Square Shopping Center 438 1994 [e]
Newberry, SC
Newport Plaza II 408 1994 [e]
Newport, KY
North Horner Shopping Center 183 1994 [e]
Sanford, NC
Northtowne Square 348 1994 [e]
Chattanooga, TN
Ohio River 1,307 1989 [e]
Gallipolis, OH
</TABLE>
62
<PAGE> 63
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Pea Ridge Shopping Center
Huntington, WV [g] $ 687 $ 6,160 $ 153 $ 687 $ 6,313 $ 7,000
Perdido Point Plaza
Pensacola, FL [g] 329 2,957 329 2,957 3,286
Piedmont Plaza
Greenwood, SC $ 10,055 1,070 9,632 (291) 1,070 9,341 10,411
Plaza Vista Mall
Sierra Vista, AZ [f] 1,531 6,436 3,599 1,396 10,170 11,566
Prestonsburg Village Center
Prestonsburg, KY [h] 663 6,002 54 663 6,056 6,719
Rend Lake Shopping Center
Benton, IL [g] 462 4,175 (5) 462 4,170 4,632
Rhea County Shopping Center
Dayton, TN [g] 395 3,524 395 3,524 3,919
River Edge Plaza
Sevierville, TN [g] 553 5,054 553 5,054 5,607
River Valley Plaza
Lancaster, OH [g] 320 5,035 164 304 5,215 5,519
Roane County Plaza
Rockwood, TN 5,008 630 5,669 630 5,669 6,299
Scott Town Plaza
Bloomsburg, PA [g] 188 1,730 8 188 1,738 1,926
Shady Springs Plaza
Beaver, WV [g] 455 4,094 116 455 4,210 4,665
Sidney Shopping Center .
Sidney, NY 518 4,656 518 4,656 5,174
Southside Plaza
Sanford, NC 960 8,644 960 8,644 9,604
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pea Ridge Shopping Center
Huntington, WV $ 621 1994 [e]
Perdido Point Plaza
Pensacola, FL 290 1994 [e]
Piedmont Plaza
Greenwood, SC 280 1996 [e]
Plaza Vista Mall
Sierra Vista, AZ 1,847 1988 [e]
Prestonsburg Village Center
Prestonsburg, KY 488 1994 [e]
Rend Lake Shopping Center
Benton, IL 408 1994 [e]
Rhea County Shopping Center
Dayton, TN 345 1994 [e]
River Edge Plaza
Sevierville, TN 492 1994 [e]
River Valley Plaza
Lancaster, OH 1,109 1988 [e]
Roane County Plaza
Rockwood, TN 165 1996 [e]
Scott Town Plaza
Bloomsburg, PA 176 1994 [e]
Shady Springs Plaza
Beaver, WV 406 1994 [e]
Sidney Shopping Center
Sidney, NY 407 1994 [e]
Southside Plaza
Sanford, NC 252 1996 [e]
</TABLE>
63
<PAGE> 64
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Springfield Commons West
Springfield, OH [h] $ 859 $ 8,707 $ 859 $ 8,707 $ 9,566
Steamboat Bend
Hannibal, MO [f] 100 1,649 409 100 2,058 2,158
Stewart Plaza
Mansfield, OH [f] 563 1,867 (148) 264 2,018 2,282
Sunbury Plaza
Sunbury, PA [g] 448 4,074 33 448 4,107 4,555
Sycamore Square
Ashland City, TN 334 3,010 6 334 3,016 3,350
Target Plaza
Heath, OH 171 17 171 17 188
Torresdale Plaza
Philadelphia, PA [g] 476 4,282 60 476 4,342 4,818
Twin County Plaza
Galax, VA 575 5,199 6 575 5,205 5,780
Village Plaza
Augusta, GA $ 18,728 2,194 19,747 34 2,194 19,781 21,975
Village Plaza
Manhattan, KS 100 1,481 269 100 1,750 1,850
Village Square
Kutztown, PA [g] 225 2,013 69 225 2,082 2,307
Vincennes
Vincennes, IN [g] 208 1,875 136 208 2,011 2,219
Walgreens
Louisville, KY [g] 128 1,141 27 128 1,168 1,296
Walgreens
New Albany, IN [g] 123 1,093 28 123 1,121 1,244
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Springfield Commons West
Springfield, OH $ 615 1995 [e]
Steamboat Bend
Hannibal, MO 411 1988 [e]
Stewart Plaza
Mansfield, OH 891 1979 [e]
Sunbury Plaza
Sunbury, PA 403 1994 [e]
Sycamore Square
Ashland City, TN 89 1996 [e]
Target Plaza
Heath, OH 1 1995 [e]
Torresdale Plaza
Philadelphia, PA 420 1994 [e]
Twin County Plaza
Galax, VA 306 1995 [e]
Village Plaza
Augusta, GA 580 1996 [e]
Village Plaza
Manhattan, KS 432 1988 [e]
Village Square
Kutztown, PA 199 1994 [e]
Vincennes
Vincennes, IN 185 1994 [e]
Walgreens
Louisville, KY 112 1994 [e]
Walgreens
New Albany, IN 108 1994 [e]
</TABLE>
64
<PAGE> 65
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- ---------------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES [D] LAND [A] IMPROVEMENTS LAND [B] [C] [B] [C]
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Walmart Plaza
Springfield, OH [h] $ 875 $ 7,952 $ 44 $ 875 $ 7,996 $ 8,871
Walnut Cove
Walnut Cove, NC [g] 209 1,855 209 1,855 2,064
Walterboro Plaza
Walterboro, SC 629 5,660 4 629 5,664 6,293
Westpark Plaza
Carbondale, IL [g] 432 3,881 432 3,881 4,313
PARTNERSHIPS
Glimcher Properties Limited
Partnership -- 1,780 2,433 -- 4,213 4,213
-------- --------- --------- ------- --------- -----------
89,800 877,174 101,918 92,247 976,645 1,068,892
-------- --------- --------- ------- --------- -----------
DEVELOPMENTS IN PROGRESS
Georgesville Square
Columbus, OH 5,311 4,246 1,065 5,311
Grand Central Mall
Parkersburg, WV 12,260 12,260 12,260
Meadowview Square
Kent, OH 1,752 1,710 42 1,752
Other Developments -- -- 3,207 585 2,622 3,207
-------- --------- --------- ------- --------- -----------
-- -- 22,530 6,541 15,989 22,530
-------- --------- --------- ------- --------- -----------
Total $ 89,800 $ 877,174 $ 124,448 $98,788 $ 992,634 $ 1,091,422
======== ========= ========= ======= ========= ===========
</TABLE>
<TABLE>
<CAPTION>
LIFE UPON WHICH
DATE DEPRECIATION IN
CONSTRUCTION LATE STATEMENT
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE OF OPERATIONS
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED IS COMPUTED
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Walmart Plaza $ 472
Springfield, OH 1995 [e]
Walnut Cove 181
Walnut Cove, NC 1994 [e]
Walterboro Plaza 165
Walterboro, SC 1996 [e]
Westpark Plaza 380
Carbondale, IL 1994 [e]
PARTNERSHIPS
Glimcher Properties Limited 1,228
Partnership --------- 1994 [e]
107,611
---------
DEVELOPMENTS IN PROGRESS
Georgesville Square
Columbus, OH
Grand Central Mall
Parkersburg, WV
Meadowview Square
Kent, OH --
Other Developments ---------
--
---------
$ 107,611
Total =========
</TABLE>
65
<PAGE> 66
GLIMCHER REALTY TRUST
NOTES TO SCHEDULE III
(dollars in thousands)
(a) Initial cost for constructed and acquired property is cost at end of
first complete calendar year subsequent to opening or acquisition. For centers
that opened during 1997 and have not yet completed their first calendar year
subsequent to opening, the initial cost is cost incurred through December 31,
1997.
(b) The aggregate gross cost of land and buildings, improvements and
equipment for federal income purposes is approximately $1,080,237.
(c) RECONCILIATION OF REAL ESTATE
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year......... $ 949,138 $696,898 $644,379
Additions:
Improvements..................... 29,375 41,841 46,765
Acquisitions..................... 121,254 214,220 5,754
Deductions........................... (8,345) (3,821)
---------- -------- --------
Balance at close of year............. $1,091,422 $949,138 $696,898
========== ======== ========
RECONCILIATION OF ACCUMULATED DEPRECIATION
YEAR ENDED DECEMBER 31,
--------------------------------------
1997 1996 1995
---- ---- ----
Balance at beginning of year......... $ 86,421 $ 66,699 $ 48,966
Depreciation expense................ 25,150 20,124 17,733
Deductions.......................... (3,960) (402)
---------- -------- --------
Balance at close of year............. $ 107,611 $ 86,421 $ 66,699
========== ======== ========
</TABLE>
(d) See description of debt in notes 3 and 4 of Notes to Consolidated
Financial Statements.
(e) Depreciation is computed based upon the following estimated lives:
Buildings and improvements 40 years
Equipment and fixtures 5-10 years
(f) Properties cross-collateralize the Credit Facility with a
consortium of banks of up to $190,000.
(g) Properties cross-collateralize the following loans:
Glimcher Holdings Limited Partnership Loan A......... $40,000
Glimcher Holdings Limited Partnership Loan B......... $40,000
Glimcher Centers Limited Partnership................. $76,000
(h) Properties cross-collateralize the following loan:
Glimcher Properties Limited Partnership.............. $50,000
(i) Properties cross-collateralize the following loan:
Morgantown Mall Associates Limited Partnership....... $50,200
66
<PAGE> 1
Exhibit 3.4
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C> <C>
1. Definitions..........................................................................................1
2. Partnership.........................................................................................12
2.1 Formation.................................................................................13
2.2 Name......................................................................................13
2.3 Registered Office and Agent...............................................................13
3. Purpose and Powers of the Partnership...............................................................13
4. Term................................................................................................14
5. Principal Office....................................................................................14
6. Capital Contributions; OP Units.....................................................................14
6.1 OP Units..................................................................................14
6.2 Initial Capital Contributions.............................................................14
6.3 Additional Capital Contributions..........................................................15
6.4 Issuance of OP Units......................................................................16
6.5 Capital Accounts..........................................................................17
6.6 Interest on and Return of Capital.........................................................18
6.7 Negative Capital Accounts.................................................................19
6.8 Limit on Contributions and Obligations of Partners........................................19
7. Allocations.........................................................................................19
7.1 Profits...................................................................................19
7.2 Losses....................................................................................19
7.3 Special Allocations.......................................................................19
7.4 Curative Allocations......................................................................21
7.5 Other Allocation Rules....................................................................22
7.6 Tax Allocations; Code Section 704(c)......................................................22
8. Distributions.......................................................................................23
8.1 Requirement and Characterization of Distributions.........................................23
8.2 Amounts Withheld..........................................................................23
8.3 Distributions Upon Liquidation............................................................23
9. Management and Operations of Partnership............................................................24
9.1 Management by General Partner.............................................................24
9.2 Limitations on Powers and Authorities of Partners.........................................28
9.3 No Management by Limited Partners.........................................................29
9.4 Liability of General Partner..............................................................29
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
9.5 Indemnity.................................................................................29
9.6 Other Activities of Partners and the Trust................................................31
9.7 Contracts with Related Parties............................................................32
9.8 Other Matters Concerning the General Partner..............................................33
9.9 Bankruptcy of a Limited Partner...........................................................33
9.10 Duties of Limited Partners and Conflicts..................................................34
9.11 Acquisition Projects......................................................................34
9.12 Development Projects......................................................................35
9.13 Acquisition/Development Projects--Further Assurances......................................35
9.14 Partner Exculpation.......................................................................35
9.15 General Partner Expenses and Liabilities..................................................36
9.16 Title to Partnership Assets...............................................................37
9.17 Reliance by Third Parties.................................................................37
9.18 Limited Partner Representatives...........................................................38
10. Banking.............................................................................................38
11. Accounting..........................................................................................38
11.1 Fiscal Year...............................................................................38
11.2 Books of Account..........................................................................38
11.3 Method of Accounting......................................................................39
11.4 Preparation of Tax Returns................................................................39
11.5 Tax Election..............................................................................39
11.6 Tax Matters Partner.......................................................................39
11.7 Organizational Expenses...................................................................41
11.8 Withholding...............................................................................41
12. Transfers of Partnership Interests..................................................................42
12.1 Transfers.................................................................................42
12.2 General Partner...........................................................................42
12.3 Limited Partners..........................................................................43
12.4 Substituted Limited Partners..............................................................45
12.5 Assignees.................................................................................45
12.6 General Provisions........................................................................46
13. Admission of Partners...............................................................................47
13.1 Admission of Successor General Partner....................................................47
13.2 Admission of Additional Limited Partners..................................................47
14. Limited Partner Representations and Warranties......................................................48
14.1 Representations and Warranties of the Primary Limited Partners............................48
14.2 Survival of Representations and Warranties................................................48
14.3 Indemnification...........................................................................48
14.4 Limitations on Indemnification Obligations................................................48
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
14.5 Security and Remedies.....................................................................50
14.6 Nonrecourse...............................................................................51
14.7 Restriction on Transfer...................................................................51
15. Liquidation and Dissolution.........................................................................52
15.1 Dissolution...............................................................................52
15.2 Winding Up................................................................................53
15.3 Compliance with Timing Requirements of Regulations........................................54
15.4 Deemed Distribution and Recontribution....................................................55
15.5 Notice of Dissolution.....................................................................55
15.6 Cancellation of Certificate of Limited Partnership........................................55
15.7 Reasonable Time for Winding-Up............................................................55
15.8 Waiver of Partition.......................................................................56
16. Power of Attorney...................................................................................56
17. Redemption of Limited Partnership Interests.........................................................57
18. Amendment of Agreement..............................................................................57
19. Arbitration of Disputes.............................................................................58
19.1 Arbitration...............................................................................58
19.2 Procedures................................................................................58
19.3 Binding Character.........................................................................60
19.4 Exclusivity...............................................................................60
19.5 No Alteration of Agreement................................................................60
20. Miscellaneous.......................................................................................60
20.1 Notices...................................................................................60
20.2 Modifications.............................................................................60
20.3 Counterparts..............................................................................60
20.4 Construction..............................................................................61
20.5 Governing Law.............................................................................61
20.6 Other Instruments.........................................................................61
20.7 Legal Construction........................................................................61
20.8 Gender....................................................................................61
20.9 Prior Agreements Superseded...............................................................61
20.10 No Third Party Beneficiary................................................................61
20.11 Representations...........................................................................61
20.12 Waiver....................................................................................62
20.13 Time of Essence...........................................................................62
</TABLE>
-iii-
<PAGE> 5
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
THIS LIMITED PARTNERSHIP AGREEMENT (this "Agreement") has been executed and
delivered as of the 30th day of November, 1993, by and among Glimcher Properties
Corporation (the "General Partner"), a Delaware corporation, Glimcher Realty
Trust (the "Trust"), a Maryland real estate investment trust, and the Persons
whose names are set forth on Exhibit A hereto (together with the Trust, the
"Limited Partners") (the General Partner and the Limited Partners being each a
"Partner" and collectively, the "Partners").
WHEREAS, Glimcher Properties Limited Partnership (the "Partnership") was
duly organized on September 9, 1993 under the Delaware Revised Limited
Partnership Act for the purposes herein stated; and
WHEREAS, the Partners desire to set forth their Agreement concerning the
Partnership, its management and operations.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners agree as follows:
1. Definitions.
1.1 As used in this Agreement, the following terms shall have the
meanings set forth respectively after each:
"Acquisition Notice" shall have the meaning set forth in Section 14.5
hereof.
"Acquisition Project" shall mean Shopping Center Projects; provided,
however, that the term "Acquisition Project" shall not include the Development
Projects.
"Acquisition Properties" means the 46 properties acquired by the
Partnership and/or Subsidiary Partnerships from unaffiliated third parties as
defined in the Registration Statement.
"Act" shall mean the Delaware Revised Limited Partnership Act, as
amended from time to time, and any successor statute thereto.
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 13.2 hereof.
<PAGE> 6
"Adjusted Capital Account Deficit" shall mean, at any time, the then
deficit balance in the Capital Account of a Partner, after giving effect to the
following adjustments:
(i) credit to such Capital Account any amounts that such Partner is
deemed obligated to restore as described in the penultimate sentences of
Regulations Section 1.704-2(g)(1) and Regulations Section 1.704-2(i)(5);
and
(ii) debit such Capital Account with the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
"Affiliate" of a Person (the "Principal") shall mean (i) any Person who,
directly or indirectly throughout one or more intermediaries controls, is
controlled by or under common control with the Principal; (ii) if the Principal
is not an individual, any officer, director, trustee or general partner of the
Principal; and (iii) any relative or spouse (or any relative of that spouse) of
the Principal or of any other Person included in clause (i) or (ii) above, any
of whom has the same home address as the Principal.
"Agreement" shall mean this Limited Partnership Agreement, as it may be
amended from time to time.
"Assignee" means a Person to whom one or more OP Units have been
transferred in a manner permitted under this Agreement, but who has not become a
Substituted Limited Partner, and who has the rights set forth in Section 12.5
hereof.
"Available Cash" means, with respect to any period for which such
calculation is being made:
(a) the sum of:
(i) the Partnership's Profit or Loss (as the case may be) for
such period (without regard to adjustments resulting from allocations
described in Sections 7.3(a)-7.3(f) hereof);
(ii) Depreciation and all other noncash charges deducted in
determining Profit or Loss for such period;
(iii) the amount of any reduction in reserves of the Partnership
referred to in clause (b)(vi) below (including reductions resulting
because the General Partner determines such amounts are no longer
necessary);
(iv) the excess of proceeds from the sale, exchange, disposition
or refinancing of Partnership
-2-
<PAGE> 7
property for such period over the gain (or loss, as the case may be)
recognized from such sale, exchange, disposition or refinancing during
such period (excluding Terminating Capital Transactions); and
(v) all other cash received by the Partnership for such period
(other than Capital Contributions) that was not included in
determining Profit or Loss for such period;
(b) less the sum of:
(i) all principal debt payments made during such period by the
Partnership;
(ii) capital expenditures made by the Partnership during such
period;
(iii) investments in any entity (including loans made thereto) to
the extent that such investments are not otherwise described in
clauses (b)(i) or (ii);
(iv) all other expenditures and payments not deducted in
determining Profit or Loss for such period;
(v) any amount included in determining Profit or Loss for such
period that was not received by the Partnership during such period;
and
(vi) the amount of any increase in reserves established during
such period which the General Partner determines is necessary or
appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves, or take into account any disbursements made
or reserves established, after commencement of the dissolution and liquidation
of the Partnership.
"Bankruptcy" of a Partner shall mean (a) the commencement by such
Partner of any proceeding seeking relief under any provision or chapter of the
Federal Bankruptcy Code or any other Federal or state law relating to
insolvency, bankruptcy, or reorganization; (b) an adjudication that such Partner
is insolvent or bankrupt; (c) the entry of an order for relief under the Federal
Bankruptcy Code with respect to such Partner; (d) the filing of any such
petition or the commencement of any such case or proceeding against such
Partner, unless such petition and the case or proceeding initiated thereby is
dismissed within ninety (90) days from the date of such filing; (e) the filing
of an answer by such Partner admitting the allegations of any such petition; (f)
the appointment of a trustee, receive or custodian for all or substantially all
of the
-3-
<PAGE> 8
assets of such Partner unless such appointment is vacated or dismissed within
ninety (90) days from the date of such appointment but not less than five (5)
days before the proposed sale of any assets of such Partner; (g) the insolvency
of such Partner or the execution by such Partner of a general assignment for the
benefit of creditors or (h) the levy, attachment, execution or other seizure of
substantially all the assets of such Partner where seizure is not discharged
within thirty (30) days thereafter.
"Capital Account" shall mean the capital account maintained by the
Partnership for each Partner as described in Section 6.5 hereof.
"Capital Contribution" shall mean, when used in respect of a Partner,
any amounts of money or the fair market value, as determined by the General
Partner, of other property contributed by such Partner to the capital of the
Partnership pursuant to the terms of this Agreement, including the Capital
Contribution made by any predecessor holder of the Partnership Interest of such
Partner.
"Certificate" shall have the meaning set forth in Section 2.1 hereof.
"Claim" shall have the meaning set forth in Section 14.4 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time, and any successor statute thereto. Any reference to a
specific provision of the Code shall include any amendments to such provision or
any corresponding provisions of succeeding law.
"Closing Price" on any date shall mean the last sale price, regular way,
or, in case no such sale takes place on such date, the average of the closing
bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common Shares are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Common Shares are listed or admitted to trading or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or if not so quoted, the average of the highest bid and lowest ask
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer used, the principal other automated quotation system that may then be in
use or, if the Common Shares are not quoted by any such
-4-
<PAGE> 9
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making the market in the Common Shares as such person
is selected from time to time by the Trustees of the Company.
"Collateral" shall have the meaning set forth in Section 14.5 hereof.
"Common Share Value" as of any date shall mean the total number of
Common Shares issued and outstanding at the close of business on such date (and
excluding any treasury shares), multiplied by the Current Per Share Market Price
on such date.
"Common Shares" means the common shares of beneficial interest, $.01 par
value per share, of the Trust.
"Completion of the Offering" shall mean the closing of the first sale of
Common Shares in the Offering.
"Consent of the Limited Partners" means the written consent of Limited
Partners (other than the Trust) holding a majority of the Limited Partnership
Interests (not including Limited Partnership Interests held by the Trust).
"Current Per Share Market Price" as of any date shall mean the average
of the Closing Price for the five consecutive Trading Days ending on such date.
"Deemed Partnership Interest Value" as of any date, shall mean with
respect to a Partner, the Deemed Value of the Partnership (as of the day
preceding such date) multiplied by such Partner's Percentage Interest.
"Deemed Value of the Partnership" as of any date, shall mean and be
equal to the Common Share Value as of the Trading Day immediately preceding such
date.
"Demand Notice" shall have the meaning set forth in Section 19.2 hereof.
"Depreciation" shall mean for any fiscal year or portion thereof of the
Partnership, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such period for
Federal income tax purposes, except that if the Gross Asset Value of an asset
differs from its adjusted basis for Federal income tax purposes at the beginning
of such period, Depreciation shall be an amount that bears the same relationship
to such beginning Gross Asset Value as the depreciation, amortization or cost
recovery deduction in such period for Federal income tax purposes bears to such
beginning adjusted tax basis; provided, however, that if the adjusted basis for
Federal income tax purposes of an asset at the beginning such period is zero,
Depreciation shall be
-5-
<PAGE> 10
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.
"Development Land" shall mean any vacant land suitable for development
as a shopping center.
"Development Project" shall mean any Development Land and any Shopping
Center Project developed and/or constructed on Development Land by the Primary
Limited Partners and/or their Affiliates, directly or indirectly; provided,
however, the term Development Project shall not include the properties described
on attached Exhibit B which, as of the date hereof, are owned by the Limited
Partners and/or their Affiliates or are properties in which the Limited Partners
and/or their Affiliates have equity ownership or other economic interests.
"Disclosure Schedule" shall mean that certain Disclosure Schedule
attached as Exhibit D which contains the exceptions to the representations and
warranties of the Primary Limited Partners made pursuant to Section 14.1 hereof.
For the convenience of the parties, each exception noted in the Disclosure
Schedule shall be numbered to correspond to the applicable subsection of Exhibit
C to which it refers; provided, however, that where disclosure in the Disclosure
Schedule of a matter in response to one subsection is made as to the nature or
character of such matter, the failure to otherwise set forth such matter
elsewhere in the Disclosure Statement shall not give rise to any claim or
liability so long as any such disclosure sufficiently described its
applicability to such matter and indicates its applicability to the other
subsection.
"Environmental Laws" means the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.), as amended by the Hazardous and Solid Waste
Amendments of 1984; the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986; the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.); the Toxic Substance Control
Act (15 U.S.C. Section 2601 et seq.); Clean Air Act (42 U.S.C. Section 9402 et
seq.); the Clean Water Act (33 U.S.C. Section 1251 et seq.); the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et seq.); the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) and all
applicable federal, state and local environmental laws, including obligations
under the common law, ordinances, rules and regulations, as any of the foregoing
may have been amended, supplemented or supplanted prior to the date hereof,
relating to regulation or control of hazardous, toxic or dangerous substances or
wastes, or their handling, storage or disposal or to environmental health and
safety.
"Environmental Reports" shall have the meaning set forth in Exhibit C
hereto.
-6-
<PAGE> 11
"General Partner" means Glimcher Properties Corporation or any successor
general partner of the Partnership.
"General Partnership Interest" means a Partnership Interest held by a
Partner in its capacity as General Partner.
"Glimcher Properties" shall mean the 29 Properties designated as the
Glimcher Properties in the Registration Statement.
"Gross Asset Value" means, with respect to any Partnership asset, the
asset's adjusted basis for Federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of
such asset, as determined by the General Partner;
(ii) The Gross Asset Value of the Partnership assets shall be
adjusted to equal their respective gross fair market value, as
determined by the General Partner, as of the following times: (a) the
acquisition of an additional interest in the Partnership by any new or
existing Partner in exchange for more than a de minimis Capital
Contribution; (b) the distribution by the Partnership to a Partner of
more than a de minimis amount of Partnership property as consideration
for an interest in the Partnership; and (c) the liquidation of the
Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to
clauses (a) and (b) above shall be made only if the General Partner
reasonably determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners
in the Partnership;
(iii) The Gross Asset Value of any Partnership asset distributed
to any Partner shall be adjusted to equal the gross fair market value
of such asset on the date of distribution as determined by the General
Partner; and
(iv) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m) and paragraph (vi) of the definition of
Profits and Losses and Section 7.3 hereof; provided, however, that
Gross Asset Values shall not be adjusted pursuant to this paragraph
(iv) to the extent the General Partner determines that an adjustment
pursuant to
-7-
<PAGE> 12
paragraph (ii) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to
this paragraph (iv).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (i), (ii) or (iv) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.
"Immediate Family" means, with respect to any natural Person, such
natural Person's spouse, parents, descendants, nephews, nieces, brothers and
sisters.
"Incapacity" or "Incapacitated" means, (i) as to any individual Partner,
death, total physical disability or entry by a court of competent jurisdiction
adjudicating him incompetent to manage his Person or his estate; (ii) as to any
corporation which is a Partner, the filing of a certificate of dissolution, or
its equivalent, for the corporation or the revocation of its charter; (iii) as
to any partnership which is a Partner, the dissolution and commencement of
winding up of the Partnership; (iv) as to any estate which is a Partner, the
distribution by the fiduciary of the estate's entire interest in the
Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the Bankruptcy of such Partner.
"Indemnitee" means (i) any Person made a party to a proceeding by reason
of his status as (a) the General Partner or (b) a director, trustee, officer or
shareholder of the Partnership or the General Partner, and (ii) such other
Persons (including Affiliates of the General Partner or the Partnership) as the
General Partner may designate from time to time, in its sole and absolute
discretion.
"Initial Transactions" shall mean the formation transactions described
in the Registration Statement.
"IRS" means the United States Internal Revenue Service.
"Lien" shall mean any liens, security interests, mortgages, deeds of
trust, changes, claims, encumbrances, pledges, options, rights of first offer or
first refusal and any other rights or interests of others of any kind or nature,
actual or contingent, or other similar encumbrances of any nature whatsoever.
"Limited Partner" shall mean any Person set forth on Exhibit A hereto,
or any Substituted Limited Partner and any Additional Limited Partner recorded
in the books and records of the Partnership, in such Person's capacity as a
Limited Partner
-8-
<PAGE> 13
of the Partnership. "Limited Partners" means all such Persons.
"Limited Partnership Interest" means a Partnership Interest held by a
Partner in his or its capacity as a Limited Partner.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations Section
1.752-1(a)(2).
"Notice of Breach" shall have the meaning set forth in Section 14.2
hereof.
"Offering" shall have the meaning set forth in the Registration
Statement.
"OP Units" shall have the meaning provided in Section 6.1 hereof.
"Other Common Shares" shall have the meaning set forth in Section 6.3(b)
hereof.
"Other Securities" shall have the meaning set forth in Section 6.3(b)
hereof.
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i)(2).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i).
"Partners" shall mean, collectively, the General Partner and each
Limited Partner, or any additional or successor Partners of the Partnership.
Reference to a Partner shall be to any one of the Partners.
"Partnership Interest" shall mean the ownership interest of a Partner in
the Partnership at any particular time, including the right of such Partner to
any and all benefits to which such Partner may be entitled as provided in this
Agreement, and to the extent not inconsistent with this Agreement, under the
Act, together with the obligations of such Partner to comply with all of the
terms and provisions of this Agreement and of the Act.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Sections 1.704-2(b)(2) and 1.704-2(d).
"Partnership Record Date" means the record date
-9-
<PAGE> 14
established by the General Partner for the distribution of Available Cash
pursuant to Section 8.1 hereof, which record date shall be the same as the
record date established by the General Partner for a distribution to its
shareholders of some or all of its portion of such distribution.
"Percentage Interest" of a Partner in the Partnership shall mean the
percentage interest of such Partner as stated in Exhibit A hereto, or as such
percentage interest may be adjusted from time to time in accordance with the
provisions of this Agreement and recorded in the books and records of the
Partnership.
"Person" means any individual, partnership, corporation, trust or other
entity.
"Preferred Shares" shall have the meaning set forth in Section 6.3(b)
hereof.
"Primary Limited Partners" shall mean Herbert Glimcher and David J.
Glimcher.
"Profits" and "Losses" shall mean for each fiscal year or portion
thereof, an amount equal to the Partnership's items of taxable income or loss
for such year or period, determined in accordance with Section 703(a) of the
Code, with the following adjustments:
(i) any income which is exempt from Federal income tax and not
otherwise taken into account in computing Profits or Losses shall be
added to (or subtracted from) taxable income (or loss);
(ii) any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Section 705(a)(2)(b) expenditures
under Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken
into account in computing Profits or Losses, will be subtracted from
(or added to) taxable income (or loss);
(iii) in the event that the Gross Asset Value of any Partnership
asset is adjusted pursuant to the definition of Gross Asset Value
contained in this Section 2, the amount of such adjustment shall be
taken into account as gain or loss from the disposition of such asset
for purposes of computing Profits and Losses;
(iv) gain or loss resulting from any disposition of Partnership
assets with respect to which gain or loss is recognized for Federal
income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted
tax basis of such property differs from its Gross Asset Value;
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(v) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for
such fiscal year or other period;
(vi) to the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) is required pursuant
to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into
account in determining Capital Accounts as a result of a distribution
other than in complete liquidation of a Partner's Partnership
Interest, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases the basis of the asset) from the disposition
of the asset and shall be taken into account for purposes of computing
Profits and Losses; and
(vii) any items specifically allocated pursuant to Section 7.3 or
Section 7.4 hereof shall not be considered in determining Profits or
Losses.
"Properties" shall mean the 75 properties as defined in the Registration
Statement.
"Qualified Individual" shall have the meaning set forth in Section 19.2
hereof.
"Real Estate Investment Trust" shall mean such term as defined in
Section 856 of the Code.
"Registration Statement" shall mean the Registration Statement No.
33-69740 (including the Prospectus contained therein) heretofore filed by the
Trust with the Securities and Exchange Commission, and any amendments at any
time hereafter made thereto (other than post-effective amendments), pursuant to
which the Trust proposes to offer and sell certain of its Common Shares.
"Regulations" shall mean the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such Regulations may be amended from
time to time (including corresponding provisions of succeeding Regulations).
"REIT Requirements" is defined in Section 3(c) hereof.
"Requesting Party" shall have the meaning set forth in Section 19.2
hereof.
"Responding Party" shall have the meaning set forth in Section 19.2
hereof.
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"Restricted Period" shall have the meaning set forth in Section 9.11
hereof.
"Restrictions Lapse Date" shall have the meaning set forth in Section
9.11 hereof.
"Rights of Redemption" shall have the meaning set forth in Section 17.1
hereof.
"Shopping Center Project" shall mean any shopping center, including
construction and improvement activities undertaken with respect thereto and
off-site improvements, on-site improvements, structures, buildings and/or
related parking and other facilities.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Subsidiary Partnerships" means partnerships that are directly or
indirectly majority owned by the Partnership and/or the Trust.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 12.4 hereof.
"Terminating Capital Transaction" means any sale or other disposition of
all or substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Shares is listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.
"Trust" means Glimcher Realty Trust, a Maryland real estate investment
trust.
2. Partnership.
2.1 Formation. The Partnership was formed upon the filing of the
Certificate of Limited Partnership of the Partnership
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(the "Certificate") with the Secretary of State of the State of Delaware in
compliance with the provisions of the Act, for the limited purposes set forth
herein. Except as otherwise specifically provided in this Agreement, the rights
and obligations of the Partners and the management and termination of the
Partnership shall be governed by the Act.
2.2 Name. The name of the Partnership is Glimcher Properties Limited
Partnership or such other name as may from time to time be selected by the
General Partner, provided that prompt notice of any such other name selected
shall be given to the other Partners. The General Partner shall cause to be
executed and filed on behalf of the Partnership such assumed or fictitious name
certificates as may be required to be filed in connection with the business of
the Partnership.
2.3 Registered Office and Agent. The address of the Partnership's
registered office in the State of Delaware is 32 Loockerman Square, Suite 100L,
Dover, Kent County, Delaware 19901, and the name of the Partnership's registered
agent at such address is The Prentice Hall Corporation System, Inc. The General
Partner, in its discretion, may from time to time change such registered office
and agent.
3. Purpose and Powers of the Partnership.
(a) The purposes of the Partnership shall be to acquire, purchase, own,
operate, manage, develop, redevelop, construct, reconstruct, alter, modify, add
to, subtract from, invest in, mortgage, encumber, exchange, sell, lease and
otherwise deal with shopping centers, enclosed malls, single tenant and other
primarily retail properties and residential, office and mixed use
(retail/office) properties and industrial and warehouse properties and real
estate and interests therein of all types, including, without limitation,
mortgages, deeds of trust and similar interests and other instruments and
participations therein, and assets related to the foregoing, including, without
limitation, related amenities such as amusement parks or centers, whether
directly or indirectly, alone or in association with others, and in general, to
make any investments or expenditures, to borrow and lend money and to take any
and all actions which are incidental or related to any of these purposes. It is
agreed that each of the foregoing is an ordinary part of the Partnership's
business and affairs. Property may be acquired subject to, or by assuming, the
liens, encumbrances and title exceptions which affect such property. The
Partnership may also be a partner, general or limited, in partnerships, general
or limited, and joint ventures created to accomplish all or any of the
foregoing.
(b) The Partnership is empowered, and the General Partner is authorized,
to do any and all acts and things necessary, appropriate, proper, advisable,
incidental to or
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convenient for the furtherance and accomplishment of the purposes and business
described in Section 3(a) hereof.
(c) Notwithstanding anything to the contrary contained in this
Agreement, for so long as the Trust is a Partner, the Partnership shall operate
in such a manner and the Partnership shall take or omit to take all actions as
may be necessary (including making appropriate distributions from time to time)
so as to permit the Trust (i) to continue to qualify as a Real Estate Investment
Trust under Sections 856 through 860 of the Code so long as such requirements
exist (the "REIT Requirements"), and (ii) to minimize its exposure to the
imposition of an excise tax under Section 4981(a) of the Code or a tax under
Section 857(b)(5) of the Code, so long as such taxes may be imposed, each of (i)
and (ii) to at all times be determined (A) as if the Trust's sole asset is its
Partnership Interest, and (B) without regard to the action or inaction of the
Trust with respect to distributions (by way of dividends or otherwise) and the
timing thereof. In addition, and without limitation of the foregoing, the
Partnership shall take no action with respect to a sale, exchange, or other
disposition of any property owned by the Partnership with respect to which a
material issue exists as to whether such sale, exchange or other disposition
would cause the Trust to incur a prohibited transaction tax under Section
857(b)(6) of the Code.
4. Term. The term of the Partnership shall continue until December 31,
2092 unless the Partnership is dissolved sooner upon the occurrence of an event
described in Section 15.1 hereof.
5. Principal Office. The principal office of the Partnership shall be
located at 35 North Fourth Street, Columbus, Ohio 43215-3602, or at
such other place as the General Partner may designate. The General Partner shall
give prompt written notice of such designation to the other Partners.
6. Capital Contributions; OP Units.
6.1 OP Units. The interest of a Partner in the Partnership is sometimes
referred to as being evidenced by one or more "OP Units". Such OP Units may, but
shall not be required to be, represented by certificates indicating such
Partner's interest.
6.2 Initial Capital Contributions. At the time of execution of this
Agreement, the Partners shall make the Capital Contributions, shall hold the OP
Units and shall have the Percentage Interests set forth opposite their
respective names on Exhibit A hereto. The agreed to gross fair market value of
each of the contributed assets shall be its respective initial Gross Asset Value
as set forth on Exhibit A hereto.
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6.3 Additional Capital Contributions.
(a) No Partner shall be assessed or, except as provided for in Section
6.3(b) hereof, be required to contribute additional funds or other property to
the Partnership. Any additional funds or other property required by the
Partnership, as determined by the General Partner in its sole discretion, may,
at the option of the General Partner and without an obligation to do so (except
as provided for in Section 6.3(b) hereof), be contributed by the General Partner
as additional Capital Contributions. Except as otherwise provided in Section
6.3(b) hereof, if and as the General Partner or any other Partner makes
additional Capital Contributions to the Partnership, each such Partner shall
receive additional OP Units as provided for in Section 6.4(a) hereof. The
General Partner shall also have the right (but not the obligation) to raise any
additional funds required for the Partnership by causing the Partnership to
borrow the necessary funds from any Person, including the Trust and its
Affiliates. Such borrowing shall be on such terms and conditions as the General
Partner shall deem appropriate in its reasonable discretion; provided that if
the Trust or one of its Affiliates is the lender and obtained such funds through
its own borrowing, then the borrowing by the Partnership shall be on comparable
terms and conditions and costs and expenses, as shall be applicable with respect
to or incurred in connection with the borrowing by the Trust or one of its
Affiliates. If the General Partner elects to cause the Partnership to borrow
additional funds, it may cause one or more of the Partnership's assets to be
encumbered to secure the loan.
(b) The net proceeds of any and all funds raised by or through the Trust
through the issuance of additional Common Shares of the Trust shall be
contributed to the Partnership as additional Capital Contributions and, in such
event, the Trust shall be issued additional OP Units pursuant to Section 6.4(a)
hereof. The net proceeds of any and all funds raised by or through the Trust
through the issuance of preferred shares of beneficial interest ("Preferred
Shares") of the Trust or shares of any class of common shares of beneficial
interest of the Trust other than Common Shares ("Other Common Shares") or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase Preferred Shares, Common Shares or Other
Common Shares (collectively, "Other Securities"), together with any subsequent
proceeds from the exercise of the Other Securities, shall be contributed to the
Partnership as additional Capital Contributions, and in such event the Trust
shall cause the Partnership to issue to the Trust an interest in the Partnership
or rights, options, warrants or convertible or exchangeable securities of the
Partnership, having designations, preferences and other rights, all such that
their economic interests are substantially similar to those of the Preferred
Shares, Other Common Shares or Other Securities, as the case may be. At such
time as the Other Securities are exercised,
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converted or exchanged for or into Common Shares, the Trust shall exercise,
convert or exchange for or into OP Units the consideration it received upon
contribution to the Partnership of the proceeds from the sale of Other
Securities.
(c) If the Trust has a reinvestment program, each Limited Partner shall
have the right to reinvest any or all cash distributions payable to it from time
to time pursuant to this Agreement by having some or all (as each such Limited
Partner elects) of such distributions contributed to the Partnership as
additional Capital Contributions, and in such event the Partnership shall issue
to each such Limited Partner additional OP Units pursuant to Section 6.4(a)
hereof. In such event, the General Partner shall create and administer a
reinvestment program to effect the foregoing in substantial conformance with any
dividend reinvestment program available to holders of the Common Shares.
(d) Except as provided herein, no Partner shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership or (ii) the issuance or sale of OP
Units.
6.4 Issuance of OP Units.
(a) Subject to the provisions of this Section 6.4(a), the General
Partner from time to time shall cause the Partnership to issue additional OP
Units as follows:
(i) to existing or newly-admitted Partners (including itself) in
exchange for the contribution by a Partner (the "Contributing Partner") of
additional Capital Contributions to the Partnership;
(ii) to the Trust in connection with the purchase by the Trust from
the Partnership of OP Units pursuant to Paragraph 5 of Exhibit E hereto; or
(iii) to the Trust upon the issuance by the Trust of additional Common
Shares not in connection with the purchase by the Trust from the
Partnership of OP Units pursuant to Paragraph 5 of Exhibit E hereto,
provided that any net proceeds received by the Trust as a result of the
issuance of such additional Common Shares are contributed to the
Partnership as additional Capital Contributions, in accordance with Section
6.3(b) hereof (it being understood that the Trust may issue Common Shares
in connection with any Trust Share Option Plan or Other Securities without
receiving any cash proceeds and that the issuance of such shares shall
nonetheless entitle the Trust to additional OP Units).
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The number of OP Units issued to a Contributing Partner under clause (i) of this
Section 6.4(a) shall be equal to the quotient (rounded to the nearest whole
number) arrived at by dividing (x) the amount of cash or the Gross Asset Value
of the property contributed as additional Capital Contributions (net of any debt
to which such property is subject or assumed by the Partnership in connection
with such contribution) by (y) the Current Per Share Market Price. The number of
OP Units issued to the Trust under clause (ii) of this Section 6.4(a) shall be
equal to the number of OP Units sold by the Partnership to the Trust for Common
Shares. The number of OP Units issued to the Trust under clause (iii) of this
Section 6.4(a) shall be equal to the number of Common Shares issued. Upon the
issuance of additional OP Units, the Percentage Interests of all of the Partners
shall be adjusted by the General Partner so that the Percentage Interest of each
Partner is equal to the quotient (expressed as a percentage) arrived at by
dividing the number of OP Units held by a Partner by the total number of OP
Units then outstanding. Notwithstanding anything to the contrary contained
herein, in no event shall any additional OP Units be issued to the extent that
the effect of such issuance would be to reduce the Trust's and the General
Partner's aggregate Percentage Interest to less than 51%.
(b) In the event of any change in the outstanding Common Shares by
reason of any stock dividend, split, recapitalization, merger, consolidation,
combination, exchange of shares or other similar corporate change, the number of
OP Units held by each Partner shall be proportionately adjusted so that the
Deemed Value of the Partnership divided by the number of OP Units issued and
outstanding remains equal to the then Current Per Share Market Price. In the
event the Trust issues any Common Shares in consideration for OP Units pursuant
to Paragraph 5 of Exhibit E hereto, any such OP Units so acquired by the Trust
shall immediately thereafter be cancelled by the Partnership and the Partnership
shall issue to the Trust new OP Units pursuant to Section 6.4(a)(ii) hereof.
6.5 Capital Accounts. A separate capital account ("Capital Account")
shall be maintained for each Partner.
(a) To each Partner's Capital Account there shall be credited such
Partner's Capital Contributions, such Partner's distributive share of Profits
and any items in the nature of income or gain which are specially allocated
pursuant to Section 7.3 of Section 7.4 hereof, and the amount of any Partnership
liabilities assumed by such Partner or which are secured by any Partnership
property distributed to such Partner.
(b) To each Partner's Capital Account there shall be debited the amount
of cash and the Gross Asset Value of any Partnership property distributed to
such Partner pursuant to any provision of this Agreement, such Partner's
distributive
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share of Losses and any items in the nature of expenses or losses which are
specifically allocated pursuant to Section 7.3 or Section 7.4 hereof, and the
amount of any liabilities of such Partner assumed by the Partnership or which
are secured by any property contributed by such Partner to the Partnership.
(c) In the event all or a portion of a Partnership Interest is
transferred in accordance with the terms of this Agreement (including a sale by
the Partnership of OP Units to the Trust, pursuant to Paragraph 5 of Exhibit E
hereto), the transferee shall succeed to the Capital Account of the transferor
to the extent it relates to the transferred Partnership Interest.
(d) In determining the amount of any liability for purposes of Sections
6.5(a) and 6.5(b) hereof, there shall be taken into account Code Section 752(c)
and any other applicable provisions of the Code and Regulations.
(e) This Section 6.5 and the other provisions of this Agreement relating
to the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b) and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the General Partner shall determine that it
is prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including debits or credits relating to liabilities which are
secured by contributed or distributed property or which are assumed by the
Partnership or the Partners) are computed, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributed to any Partner pursuant to Section 15 hereof upon the
dissolution of the Partnership or would otherwise not have a material adverse
effect on any Partner or any Partner's Capital Account. The General Partner also
shall (i) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(g),
and (ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b); provided that such adjustments or modifications to the extent they
may be made in the discretion of the General Partner shall not, either singly or
in the aggregate, have a material adverse effect on any Partner or any Partner's
Capital Account.
6.6 Interest on and Return of Capital.
(a) No Partner shall be entitled to any interest on its Capital Account
or on its contributions to the capital of the Partnership.
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(b) Except as expressly provided for in this Agreement, no Partner shall
have the right to demand or to receive the return of all or any part of his
Capital Contributions to the Partnership and there shall be no priority of one
Partner over the other as to the return of Capital Contributions or withdrawals
or as to distributions, profits and losses. No Partner shall have the right to
demand or receive property other than cash in return for the contributions of
such Partner to the Partnership.
6.7 Negative Capital Accounts. No Limited Partner shall be required to
pay to the Partnership or any other Partner any deficit or negative balance
which may exist in its Capital Account.
6.8 Limit on Contributions and Obligations of Partners. Except as
provided in Section 6.3(a) hereof, neither the Limited Partners nor the General
Partner shall be required to make any additional advances or contributions to or
on behalf of the Partnership or to endorse any obligations of the Partnership.
7. Allocations.
7.1 Profits. After giving effect to the special allocations set forth in
Section 7.3 and 7.4 hereof, Profits for any fiscal year shall be allocated among
the Partners in proportion to their respective Percentage Interests.
7.2 Losses.
(a) After giving effect to the special allocations set forth in Section
7.3 and 7.4 hereof, Losses for any fiscal year shall be allocated among the
Partners in proportion to their respective Percentage Interests.
(b) The Losses allocated pursuant to Section 7.2(a) hereof shall not
exceed the maximum amount of Losses that can be so allocated without causing any
Limited Partner to have an Adjusted Capital Account Deficit at the end of any
fiscal year. All Losses in excess of the limitations set forth in this Section
7.2(b) shall be allocated to the General Partner.
7.3 Special Allocations. Subject to Section 7.6 hereof, the following
special allocations shall be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding any other provision of this Section 7, if
there is a net decrease in Partnership Minimum Gain during any fiscal year, each
Partner shall be specially allocated items of Partnership income and gain for
such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal
to such Partner's share of the
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net decrease in Partnership Minimum Gain, determined in accordance with
Regulations Section 1.704-2(g). The items to be so allocated shall be determined
in accordance with Regulations Section 1.704-2(f)(6) and 1.704-2(j)(2). The
General Partner is hereby authorized to seek a waiver from the IRS of the
provisions of this Section 7.3 and the minimum gain chargeback provisions of the
Regulations if the General Partner determines to do so in its sole and absolute
discretion. This Section 7.3(a) is intended to comply with minimum gain
chargeback requirement in Section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this
Section 7, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to a Partner Nonrecourse Debt during any Partnership fiscal year,
each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt determined in accordance with
Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such fiscal year (and, if necessary, subsequent
fiscal years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(4). The items
to be so allocated shall be determined in accordance with Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). The General Partner is hereby authorized to
seek a waiver from the IRS of the provisions of this Section 7.3 and the minimum
gain chargeback provisions of the Regulations if the General Partner determines
to do so in its sole and absolute discretion. This Section 7.3(b) is intended to
comply with the minimum gain chargeback requirement in Regulations Section
1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations, or distributions described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(d)(5) or Section
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially
allocated to each such Partner in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the Adjusted Capital Account Deficit
of such Partner as quickly as possible, provided that an allocation pursuant to
this Section 7.3(c) shall be made only if and to the extent that such Partner
would have an Adjusted Capital Account Deficit after all other allocations
provided for this Section 7 have been tentatively made, as if this Section
7.3(c) were not in the Agreement.
(d) Gross Income Allocation. In the event any Partner has an Adjusted
Capital Account Deficit at the end of
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any Partnership fiscal year, each such Partner shall be specifically allocated
items of Partnership income and gain in the amount of such excess as quickly as
possible, provided that an allocation pursuant to this Section 7.3(d) shall be
made only if and to the extent that such Partner would have an Adjusted Capital
Account Deficit after all other allocations provided for in this Section 7 have
been made as if this Section 7.3(d) were not in the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year
shall be allocated among the Partners in accordance with their respective
Percentage Interests.
(f) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions
for any fiscal year shall be specially allocated to the Partner who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable, in accordance with Regulations
Section 1.704-2(i)(1).
(g) Section 754 Adjustments. The Partnership shall make a timely
election under Section 754 such that the Trust may adjust the tax bases of the
Partnership assets pursuant to Section 743(b), if appropriate, upon a transfer
of a Partnership Interest. In addition, to the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) is
required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment to
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis) and such item of gain or loss shall be specifically allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations.
7.4 Curative Allocations. The allocations set forth in Sections 7.2(b)
and 7.3(a)-7.3(g) hereof (the "Regulatory Allocations") are intended to comply
with certain requirements of the Regulations under Sections 704(b) and
514(c)(9)(E) of the Code. It is the intent of the Partners that, to the extent
possible, all Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items of Partnership
income, gain, loss or deduction pursuant to this Section 7.4. Therefore,
notwithstanding any other provision of this Section 7 (other than the Regulatory
Allocations and Section 7.6), the General Partner shall make such offsetting
special allocations of Partnership income, gain, loss or deduction in whatever
manner it determines appropriate so that, after such offsetting allocations are
made, each Partner's Capital Account balance is, to the extent possible, equal
to the Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of the
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Agreement and all Partnership items were allocated pursuant to Sections 7.1 and
7.2(a), and so that, to the greatest extent possible, such allocations comply
with the Regulations under Code Section 514(c)(9)(E). In exercising its
discretion under this Section 7.4, the General Partner shall take into account
future Regulatory Allocations under Sections 7.3(a) and 7.3(b) that, although
not yet made, are likely to offset other Regulatory Allocations previously made
under Sections 7.3(e) and 7.3(f).
7.5 Other Allocation Rules.
(a) For purposes of determining the Profits, Losses or any other items
allocable to any period, Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, as determined by the General
Partner using any permissible method under Code Section 706 and the Regulations
thereunder.
(b) The Partners are aware of the income tax consequences of the
allocations made by this Section 7 and hereby agree to be bound by the
provisions of this Section 7 in reporting their shares of Partnership income and
loss for income tax purposes.
(c) Solely for purposes of determining a Partner's proportionate share
of the "excess nonrecourse liabilities" of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3), the Partners' interests in Partnership
profits are equal to their respective Percentage Interests.
7.6 Tax Allocations; Code Section 704(c).
(a) Notwithstanding any other provision herein to the contrary, income,
gain, loss and deduction with respect to any property contributed to the capital
of the Partnership shall, solely for tax purposes, be allocated among the
Partners so as to take account of any variation between the adjusted basis of
such property to the Partnership for Federal income tax purposes and its initial
Gross Asset Value in accordance with Code Section 704(c) and Prop. Reg. Section
1.704-3(b) (1), provided, however, that if the General Partner determines, in
its sole and absolute discretion, that the method described in Prop. Reg.
Section 1.704-3(b) is not permissible under the Code and regulations, then the
method described in Prop. Reg. Section 1.704-3(c) should be used.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to the definition of "Gross Asset Value" contained in Section
1 hereof, subsequent allocations of income, gain, loss and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for Federal income tax purposes and its Gross Asset Value in
the same manner as set forth in Section 7.6(a) above.
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(c) Allocations pursuant to this Section 7.6 are solely for purposes of
Federal, state and local taxes and shall not affect, or in any way be taken into
account in computing, any Partner's Capital Account or share of Profits, Losses,
other items or distributions pursuant to any provision in this Agreement.
8. Distributions.
8.1 Requirement and Characterization of Distributions. The General
Partner shall distribute quarterly all, or such portion as the General Partner
may in its discretion determine, of Available Cash generated by the Partnership
during such quarter to the Partners who are Partners on the Partnership Record
Date with respect to such quarter in accordance with their respective Percentage
Interests on such Partnership Record Date. The General Partner shall take such
reasonable efforts, as determined by it in its sole and absolute discretion and
consistent with the Trust's qualification as a Real Estate Investment Trust, to
distribute Available Cash to the Limited Partners so as to preclude any such
distribution or portion thereof from being treated as part of a sale of property
to the Partnership by a Limited Partner under Section 707 of the Code or the
Regulations thereunder; provided that the General Partner and the Partnership
shall not have liability to a Limited Partner under any circumstances as a
result of any distribution to a Limited Partner being so treated.
8.2 Amounts Withheld. All amounts withheld pursuant to the Code or any
provisions of any state or local tax law and Section 11.8 hereof with respect to
any allocation, payment or distribution to the General Partner or the Limited
Partners shall be treated as amounts distributed to the General Partner or
Limited Partners pursuant to Section 8.1 for all purposes under this Agreement.
8.3 Distributions Upon Liquidation. Proceeds from a Terminating Capital
Transaction shall be distributed to the Partners in accordance with Section 15.2
hereof.
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9. Management and Operations of Partnership.
9.1 Management by General Partner.
(a) The General Partner shall be the sole manager of the Partnership
business, shall have the right and power to make all decisions and take any and
every action with respect to the property, the business and affairs of the
Partnership, and shall have all the rights, power and authority generally
conferred by law, or necessary, advisable or consistent with accomplishing the
purposes of the Partnership. All such decisions or actions made or taken by the
General Partner hereunder shall be binding upon all of the Partners and the
Partnership. The powers of the General Partner to manage the Partnership
business shall include the power and authority to:
(i) operate any business related to the ownership of or investment in
shopping centers, enclosed malls and single tenant and other primarily
retail properties and residential, office and mixed use (retail/office) and
other properties consistent with the purposes and powers of the
Partnership;
(ii) the making of any expenditures, the lending or borrowing of money
(including making prepayments on loans and borrowing money to permit the
Partnership to make distributions to its Partners in such amounts as will
permit the Trust (so long as the Trust qualifies as a Real Estate
Investment Trust) to avoid the payment of any Federal income tax
(including, for this purpose, any excise tax pursuant to Section 4981 of
the Code) and to make distributions to the Trust's shareholders of amounts
sufficient to permit the Trust to maintain Real Estate Investment Trust
status), the entering into arrangements to limit exposure to fluctuations
in interest rates, including interest rate swaps and caps, the assumption
or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness (including the
securing of same by mortgage, deed of trust or other lien or encumbrance on
the Partnership's assets) and the incurring of any obligations it deems
necessary for the conduct of the activities of the Partnership;
(iii) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Partnership;
(iv) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or
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exchange of any assets of the Partnership or the merger or other
combination of the Partnership with or into another entity;
(v) the use of the assets of the Partnership (including cash on hand)
for any purpose consistent with the terms of this Agreement and on any
terms it sees fit, including the borrowing and/or financing of the conduct
of the operations of the Trust, the General Partner, the Partnership or any
of the Partnership's or Trust's Subsidiaries, the lending of funds to other
Persons (including the Partnership's or the Trust's Subsidiaries) and the
repayment of obligations of the Partnership, the Trust and any of their
Subsidiaries and any other Person in which they have an equity investment;
(vi) the negotiation, execution and performance of any contracts,
conveyances or other instruments, including leases and licenses, that the
General Partner considers useful or necessary to the conduct of the
Partnership's operations or the implementation of the General Partner's
powers under this Agreement, including those with the General Partner, the
Trust or their Affiliates;
(vii) the distribution of Partnership cash or other Partnership assets
in accordance with this Agreement;
(viii) the selection and dismissal of employees of the Partnership or
the General Partner (including employees having titles such as "president,"
"vice president," "secretary" and "treasurer"), and agents, outside
attorneys, accountants, consultants and contractors of the General Partner
or the Partnership and the determination of their compensation and other
terms of employment or hiring;
(ix) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate;
(x) the formation of, or acquisition of an interest in, and the
contribution of cash or property to, any further limited or general
partnerships, joint ventures or other relationships that it deems desirable
and, in general, the making of investments of any kind, so long as such
investments are consistent with the REIT Requirements;
(xi) the control of any matters affecting the rights and obligations
of the
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Partnership, including the conduct of litigation and the incurring of legal
expense and the settlement of claims and litigation, and the
indemnification of any Person against liabilities and contingencies to the
extent permitted by law;
(xii) the undertakings of any action in connection with the
Partnership's direct or indirect investment in its Subsidiaries or any
other Person (including the contribution or loan of funds by the
Partnership to such Persons); and
(xiii) the determination of the fair market value of any Partnership
property distributed in kind using such reasonable method of valuation as
it may adopt.
(b) The General Partner on behalf of the Partnership and without the
consent of the Limited Partners shall have the right but not the obligation:
(i) to transfer any Partnership property in complete or partial
satisfaction of a creditor's claims, including the holder of a mortgage or
other lien on Partnership property, by executing and delivering a deed in
lieu of foreclosure, bill of sale or otherwise;
(ii) to confess a judgment; and
(iii) not to contest any foreclosure action commenced with respect to
Partnership property or any other action claiming a default under any
mortgage or other lien on Partnership property.
(c) Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this Agreement
(except as provided in Section 9.2 hereof), the Act or any applicable law, rule
or regulation. The execution, delivery or performance by the General Partner or
the Partnership of any agreement authorized or permitted under this Agreement
shall not constitute a breach by the General Partner of any duty that the
General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
(d) At all times from and after the date hereof, the General Partner may
cause the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the properties of the Partnership and (ii) liability insurance for
the Indemnitees hereunder.
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(e) At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain working capital reserves in such
amounts as the General Partner, in its sole and absolute discretion, deems
appropriate and reasonable from time to time.
(f) In exercising its authority under this Agreement, the General
Partner shall take into account the tax consequences to any Partner of any
action taken by it. The General Partner and the Partnership shall not have
liability to a Limited Partner under any circumstances as a result of an income
tax liability incurred by such Limited Partner as a result of an action (or
inaction) by the General Partner pursuant to its authority under this Agreement.
(g) To the extent that such action is determined by the General Partner
to be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
and each other state in which the Partnership may elect to do business or own
property. The General Partner shall not be required, before or after filing, to
deliver or mail a copy of the Certificate or any amendment thereto to any
Limited Partner. The General Partner shall use all reasonable efforts to cause
to be filed such other certificates or documents as may be reasonable and
necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware and any other state in
which the Partnership may elect to do business or own property.
(h) The Partners agree that the Trust may issue additional Common Shares
in accordance with Section 6.4(a) hereof, notwithstanding that the result of
such issuance would be to dilute the interests of the Limited Partners in the
Partnership.
(i) The Partners agree that a majority of the Board of Directors of the
General Partner shall at all times be the same independent directors as are
members of the Board of Directors of the Trust.
(j) The Limited Partners shall have the right, exercisable upon the
delivery to the General Partner of written notice by the Limited Partners
holding a majority of the Limited Partnership Interests, (i) to cause the
removal of the General Partner for any reason, with or without cause, and (ii)
to select a successor general partner. Upon such removal,
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the General Partner's interest in the Partnership shall be converted into a
Limited Partnership Interest with the same economic interest as such General
Partner's interest.
9.2 Limitations on Powers and Authorities of Partners.
(a) Notwithstanding the powers of the General Partner set forth in
Section 9.1 hereof, no Partner shall have the right of power to do any of the
following:
(i) do any act in contravention of this Agreement, or any amendment
hereto;
(ii) do any act which would make it impossible to carry on the ordinary
business of the Partnership, except to the extent that such act is specifically
permitted by the terms hereof; or
(iii) perform any act that would subject a Limited Partner to liability
as a general partner in any jurisdiction or to any other liability except as
provided herein or in the Act.
(b) The General Partner may not, without the Consent of the Limited
Partners, take any of the following actions:
(i) amend, modify or terminate this Agreement, except as otherwise
provided herein;
(ii) make a general assignment for the benefit of creditors or appoint
or acquiesce in the appointment of a custodian, receiver or trustee for all or
any part of the assets of the Partnership;
(iii) institute any proceeding on behalf of the Partnership under Title
11 of the United States Code, as the same may be amended from time to time; or
(iv) dissolve the Partnership.
Notwithstanding the foregoing, the Consent of the Limited Partners shall not be
required for any action listed above in this Section 9.2(b) if, at the time that
the General Partner desires to take such action, the Limited Partners (other
than the Trust) own, in the aggregate, less than ten percent (10%) of the
Partnership Interests. In addition to the foregoing, the Consent of the Limited
Partners holding a majority of the Limited Partnership Interests is required for
the General Partner to take the action specified in clause (iv) above.
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9.3 No Management by Limited Partners. The Limited Partners shall have
no right or authority to act for or to bind the Partnership and no Limited
Partner shall participate in the conduct or control of the Partnership's affairs
or business.
9.4 Liability of General Partner.
(a) The General Partner shall not be liable or accountable, in damages
or otherwise, to the Partnership or to any other Partner for any error of
judgment or for any mistakes of fact or law or for anything which it may do or
refrain from doing hereafter in connection with the business and affairs of the
Partnership except (i) in the case of fraud or willful misconduct (such as an
intentional breach of fiduciary duty or an intentional breach of this
Agreement), and (ii) for other breaches of this Agreement, but the liability of
the General Partner under this clause (ii) shall be limited to its interest in
the Partnership as more particularly provided for in Section 9.9 hereof. The
General Partner shall not have any personal liability for the return of any
Limited Partner's capital.
(b) The Limited Partners expressly acknowledge that the General Partner
is acting on behalf of the Partnership, and that the General Partner shall not
be liable for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith.
(c) Subject to its obligations and duties as General Partner set forth
herein, the General Partner may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, as provided in Section 9.8 hereof.
(d) Any amendment, modification or repeal of this Section 9.4 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 9.4 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
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9.5 Indemnity.
(a) The Partnership shall indemnify and hold harmless any Indemnitee
from and against any loss or damage, including reasonable legal fees and
expenses and court costs, incurred by it by reason of anything it may do or
refrain from doing hereafter for and on behalf of the Partnership or in
connection with its business or affairs; provided, however, that (i) the
Partnership shall not be required to indemnify any Indemnitee for any loss or
damage which it might incur as a result of its fraud or willful misconduct in
the performance of its duties that relate to the Partnership and (ii) this
indemnification shall not relieve the General Partner of its proportionate part
of the obligations of the Partnership as a Partner.
(b) The right of indemnification set forth in this Section 9.5 shall be
in addition to any rights to which the Indemnitee may otherwise be entitled and
shall inure to the benefit of the successors and assigns or any such person or
entity. No Partner shall be personally liable with respect to any claim for
indemnification pursuant to this Section 9.5, but such claim shall be satisfied
soley out of assets of the Partnership. Notwithstanding the foregoing provisions
of this Section 9.5, the General Partner shall be entitled to reimbursement by
the Partnership, and to seek recovery for such obligation from the assets of the
Partnership, for any amounts paid by the General Partner or the Trust in
satisfaction of indemnification obligations owed by the General Partner or the
Trust to present or former trustees, directors, officers or shareholders of the
General Partner or the Trust or its predecessors, as may be provided for in or
pursuant to the Declaration of Trust and By-Laws of the Trust, regardless of
whether such Persons were acting on behalf of the Partnership. The General
Partner may cause the Partnership to pay directly out of Partnership assets such
amounts owed by the General Partner or the Trust.
(c) Reasonable expenses incurred by an Indemnitee who is a party to a
proceeding may be paid or reimbursed by the Partnership in advance of the final
disposition of the proceeding upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 9.5 has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined upon entry of a final judgment by a court having competent
jurisdiction that the standard of conduct has not been met.
(d) The Partnership may purchase and maintain insurance, on behalf of
any Indemnitee, including trustee, director and officer insurance for the
Partnership, the General Partner and the Trust as the sole shareholder of the
General
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Partner, against any liability that may be asserted against or expenses that may
be incurred by such Person in connection with the Partnership's, the General
Partner's and the Trust's activities, regardless of whether the Partnership
would have the power to indemnify such Person against such liability under the
provisions of this Agreement.
(e) For purposes of this Section 9.5, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by an Indemnitee of the Indemnitee's duties to the
Partnership also imposes duties on, or otherwise involves services by, the
Indemnitee to the plan or participants or beneficiaries of the plan; excise
taxes assessed on the Indemnitee with respect to an employee benefit plan
pursuant to applicable law shall constitute expenses within the meaning of this
Section 9.5; and actions taken or omitted by the Indemnitee with respect to an
employee benefit plan in the performance of the Indemnitee's duties for a
purpose reasonably believed by the Indemnitee to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.
(f) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 9.5 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
9.6 Other Activities of Partners and the Trust. Neither the General
Partner nor the Trust shall, directly or indirectly, enter into or conduct any
business, other than in connection with the ownership, acquisition and
disposition of the Properties, Partnership Interests as a General Partner or
Limited Partner, as the case may be, and the management of the business of the
Partnership and the Trust, and such activities as are incidental thereto;
provided, however, that the Trust, the General Partner or a wholly owned
Subsidiary of the Trust or the General Partner may serve as a one percent (1%)
general partner of Subsidiary Partnerships. Neither the General Partner nor the
Trust shall own any assets other than Partnership Interests as a General Partner
or Limited Partner of the Partnership, as the case may be, the one percent (1%)
general partnership interest in each of the Subsidiary Partnerships (which
interests may be held directly or through wholly owned subsidiaries of the Trust
or the General Partner), and such bank accounts, similar instruments and other
assets as it deems necessary to carry out its responsibilities contemplated
under this Agreement and the Trust's Declaration of Trust, as amended or
supplemented. Except as may otherwise be agreed to in writing or in this
Agreement, each Limited Partner and its Affiliates, shall be free to engage in,
to conduct or to participate in any business or activity whatsoever, including
the acquisition, development, management
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and exploitation of real and personal property (other than property of the
Partnership), without any accountability, liability or obligation whatsoever to
the Partnership or to any other Partner, even if such business or activity
competes with or is enhanced by the business of the Partnership. None of the
Limited Partners nor any other Person shall have any rights by virtue of this
Agreement or the partnership relationship established hereby in any business
venture of any other Person and such Person shall have no obligation pursuant to
this Agreement to offer any interest in any such business ventures to the
Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.
9.7 Contracts with Related Parties.
(a) The Partnership may lend money or contribute any asset(s) (including
money) to the Trust, the Trust's or the Partnerships Subsidiaries, Subsidiary
Partnerships or other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of the Trust,
the Trust's or the Partnership's Subsidiary, Subsidiary Partnership or any other
Person.
(b) The Partnership may transfer assets to joint ventures, other
partnerships, corporations and other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions consistent
with this Agreement and applicable law, as the General Partner shall determine
in its sole and absolute discretion.
(c) The General Partner, in the exercise of its power and authority
under this Agreement, may contract and otherwise deal with or otherwise obligate
the Partnership to entities in which the General Partner or the Trust or any one
or more of the officers, trustees, directors or shareholders of the General
Partner or the Trust may have an ownership or other financial interest, whether
direct or indirect, so long as the terms of such transactions are fair and
reasonable, in the sole and absolute discretion of the General Partner, and are
approved by the independent trustees of the Trust.
(d) The General Partner, in its sole and absolute discretion and without
the approval of the Limited Partners, may propose and adopt on behalf of the
Partnership employee benefit plans funded by the Partnership for the benefit of
employees of the General Partner, the Trust, the Partnership, Subsidiaries of
the Partnership or the Trust or any Affiliate of any of them in respect of
services performed, directly or
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indirectly, for the benefit of the Partnership, the General Partner, the Trust
or any of the Partnership's or the Trust's Subsidiaries.
(e) The General Partner is expressly authorized to enter into, in the
name and on behalf of the Partnership, a right of first opportunity or first
refusal arrangement and other conflict avoidance agreements with various
Affiliates of the Partnership, the General Partner and the Trust, including
their respective trustees, directors, officers, shareholders and partners, on
such terms as the General Partner, in its sole and absolute discretion, believes
are advisable.
9.8 Other Matters Concerning the General Partner.
(a) The General Partner shall be protected in relying, acting or
refraining from acting on any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(b) The General Partner may exercise any of the powers granted by or
perform any of the duties imposed by this Agreement either directly or through
agents and attorneys-in-fact, including any entity which is an Affiliate of the
General Partner. Each such attorney shall, to the extent provided by the General
Partner in the power of attorney, have full power and authority to do and
perform all and every act and duty which is permitted or required to be done by
the General Partner hereunder. The General Partner may consult with counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants selected by it, each of whom may serve as consultants for the
Partnership. An opinion by any consultant on a matter which the General Partner
believes to be within its professional or expert competence shall be full and
complete protection as to any action taken or omitted by the General Partner
based on the opinion and taken or omitted in good faith. The General Partner
shall not be responsible for the misconduct, negligence, acts or omissions of
any consultant or contractor of the Partnership or of the General Partner, and
shall assume no obligations other than to use due care in the selection of all
consultants and contractors.
(c) Notwithstanding any other provisions of this Agreement or the Act,
any action of the General Partner on behalf of the Partnership or any decision
of the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the Trust to continue to
qualify as a Real Estate Investment Trust or (ii) to avoid the Trust incurring
any taxes under Section 857
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or Section 4981 of the Code, is expressly authorized under this Agreement and is
deemed approved by all of the Limited Partners.
9.9 Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership, but the rights of such
Limited Partner to share in the Net Profits or Net Losses of the Partnership and
to receive distributions of Partnership funds shall, on the happening of such
event, devolve on its successors or assigns, subject to the terms and conditions
of this Agreement, and the Partnership shall continue as a limited partnership.
However, in no event shall such assignee(s) become a Substituted Limited Partner
except in accordance with Section 12 hereof.
9.10 Duties of Limited Partners and Conflicts. The General Partner
recognizes that the Limited Partners (other than the Trust) and their Affiliates
have or may have other business interests, activities and investments, some of
which may be in conflict or competition with the business of the Partnership,
and that, subject to the provisions of Sections 9.11 and 9.12 hereof, such
persons are entitled to carry on such other business interests, activities and
investments. Subject to the provisions of Sections 9.11 and 9.12 hereof, the
Limited Partners, other than the Trust, and their Affiliates may engage in or
possess an interest in any other business or venture of any kind, independently
or with others, on their own behalf or on behalf of other entities with which
they are affiliated or associated, and such persons may engage in any
activities, whether or not competitive with the Partnership, without any
obligation to offer any interest in such activities to the Partnership or to any
Partner. Except as otherwise provided in Sections 9.11 and 9.12 hereof, neither
the Partnership nor any Partner shall have any right, by virtue of this
Agreement, in or to such activities, or the income or profits derived therefrom,
and the pursuit of such activities, even if competitive with the business of the
Partnership, shall not be deemed wrongful or improper.
9.11 Acquisition Projects. Notwithstanding anything contained in Section
9.10 hereof to the contrary, the Primary Limited Partners and/or their
Affiliates shall not, during the period (the "Restricted Period") commencing on
the date hereof and ending or the earlier of (i) the tenth (10th) anniversary of
the date on which the Completion of the Offering occurs and (ii) the
Restrictions Lapse Date (as defined below), acquire an equity ownership interest
in any Acquisition Project other than through their ownership interest in the
Partnership and the Trust. During the Restricted Period, the Primary Limited
Partners may, in their sole discretion, notify the General Partner of any
opportunities available to the Partnership to acquire any equity ownership
interest in an Acquisition Project to the extent Primary Limited Partners
believe such opportunities may be appropriate for consideration by the
Partnership. Notwithstanding
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the preceding sentence, the Primary Limited Partners and/or their Affiliates may
not acquire an equity ownership interest in any Acquisition Project during the
Restricted Period other than through their ownership interests in the
Partnership or the Trust. The "Restrictions Lapse Date" shall mean the second
anniversary of the date on which all of the following conditions are satisfied:
(i) neither Primary Limited Partner is an executive officer or director of the
Trust and (ii) Herbert Glimcher and David Glimcher are not (or would not be
assuming such persons exercised all of their outstanding Rights of Redemption
and received Common Shares in consideration therefor), in the aggregate, the
beneficial owners of 10% or more of the outstanding Common Shares of the Trust.
For purposes of the previous sentence, during his lifetime, a person shall be
deemed to be the beneficial owner of any Common Shares beneficially owned by his
Affiliates (including shares that would be owned assuming all outstanding Rights
of Redemption were exercised and Common Shares were received in consideration
therefor by such persons).
9.12 Development Projects. Notwithstanding anything contained in Section
9.11 hereof to the contrary, the Primary Limited Partners and their Affiliates
shall not, during the Restricted Period, acquire, hold, own, develop, construct,
improve, maintain, operate, sell, lease, transfer, encumber, convey or otherwise
deal with any Development Project. During the Restricted Period, the Primary
Limited Partners may notify the General Partner of any opportunities available
to the Partnership to acquire an interest in any Development Project to the
extent such Primary Limited Partners believe such opportunities may be
appropriate for consideration by the Partnership.
9.13 Acquisition/Development Projects--Further Assurances. The Primary
Limited Partners acknowledge and agree that the restrictions contained in
Sections 9.11 and 9.12 hereof relating to Acquisition Projects and Development
Projects shall continue to remain effective with respect to a Primary Limited
Partner and his Affiliates for the applicable periods specified in such Sections
9.11 and 9.12 notwithstanding any transfer of the Partnership Interest of such
Primary Limited Partner. In connection with the transfer of a Primary Limited
Partner's entire Partnership Interest, the Primary Limited Partner shall execute
and deliver to the General Partner such instruments or documents as the General
Partner may reasonably request confirming the transferor Primary Limited
Partner's obligations to continue to be bound by the provisions of this Section
9.13 and Sections 9.11 and 9.12 hereof.
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9.14 Partner Exculpation.
(a) Except as provided for in this Agreement and except for fraud or
willful misconduct, no Partner shall have any personal liability whatever,
whether to the Partnership or to the other Partners, for the debts or
liabilities of the Partnership or its obligations hereunder, and the full
recourse of the other Partners shall be limited to the interest of those
Partners in the Partnership. Without limitation of the foregoing, and except for
fraud or willful misconduct, no property or assets of any Partner, other than
its interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partners and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of any Partner
solely as officers of the same and not in their own individual capacities. No
advisor, trustee, director, officer, partner, employee, beneficiary,
shareholder, participant or agent of any Partner (or of any Partner of a
Partner) shall be personally liable in any matter or to any extent under or in
connection with this Agreement, and the Partnership, each Partner and their
respective successors and assigns shall look solely to the interest of the other
Partners in the Partnership for the payment of any claim or for any performance
hereunder.
(b) Without limitation of the foregoing, the Partners agree that this
Agreement and all documents, agreements, understandings and arrangements
relating thereto have been executed and entered into by an officer or trustee of
the Trust in such officer's or trustee's capacity as an officer or trustee of
the Trust, which has been formed as a Maryland Real Estate Investment Trust
pursuant to a Declaration of Trust dated as of September 1, 1993, as amended,
and not individually, and none of the trustees, officers or shareholders of the
Trust shall be bound or have any personal liability hereunder or thereunder. The
Partners shall look solely to the assets of the Trust for satisfaction of any
liability of the Trust, in respect of this Agreement and all documents,
agreements, understandings and arrangements relating thereto and shall not seek
recourse or commence any action against any of the trustees, officers or
shareholders of the Trust or any of their personal assets for the performance or
payment of any obligation hereunder or thereunder.
9.15 General Partner Expenses and Liabilities. All costs and expenses
incurred by the General Partner or the Trust in connection with its activities
as a Partner hereunder, all costs and expenses incurred by the General Partner
and the Trust in connection with the Trust's continued existence, qualification
as a Real Estate Investment Trust under the Code and otherwise, and all other
liabilities incurred or suffered by the General Partner or the Trust in
connection with the pursuit of their business and affairs as contemplated
hereunder and in
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connection with activities as a Partner hereunder, shall be paid (or reimbursed
to the General Partner or the Trust, as the case may be, if paid by the General
Partner or the Trust) by the Partnership. Such expenses shall be deemed to
include, without limitation, those expenses required in connection with the
administration of the Partnership and the Trust such as the maintenance of
Partnership and Trust books and records, management of the Partnership and Trust
property and assets and preparation of information respecting the Partnership
needed by the Partners in the preparation of their individual tax returns. The
General Partner and the Trust shall also be reimbursed for all expenses the
General Partner or the Trust incurs relating to the organization of the Trust,
the Partnership and the General Partner, the initial public offering of Common
Shares by the Trust and the transactions related to or occurring in connection
therewith, including, without limitation, the Initial Transactions, and any
other issuance of additional Partnership Interests, Common Shares, Preferred
Shares or Other Securities.
9.16 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner shall be held by
the General Partner for the use and benefit of the Partnership in accordance
with the provisions of this Agreement; provided, however, that the General
Partner shall use its best efforts to cause beneficial and record title to such
assets to be vested in the Partnership as soon as reasonably practicable. All
Partnership assets shall be recorded as the property of the Partnership in its
books and records, irrespective of the name in which legal title to such
Partnership assets is held.
9.17 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority to encumber, sell
or otherwise use in any manner any and all assets of the Partnership and to
enter into any contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses or other remedies which may be available against
such Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or its representatives
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be obligated to ascertain that the terms of this Agreement have been complied
with or to inquire into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or
its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (i) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (ii) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (iii) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.
9.18 Limited Partner Representatives. A majority in interest of the
Limited Partners other than the Trust shall appoint one or more representatives
("Limited Partner Representatives"). Whenever, under the terms of this
Agreement, matters require the Consent of the Limited Partners, the same shall
mean the consent of a majority of the Limited Partner Representatives, and any
action taken by the Limited Partner Representatives shall be fully binding on
the Limited Partners, it being the intention of the Limited Partners that the
Limited Partner Representatives shall have full power and authority, which shall
be irrevocable, to take all action, or to authorize all action, which the
Limited Partners other than the Trust are authorized to take under the
provisions of this Agreement. A majority in interest of the Limited Partners
other than the Trust shall have the right, at any time, within their sole
discretion, to replace any of the Limited Partner Representatives, to appoint a
temporary substitute to act for any Limited Partner Representative unable to
act, or to vest in only one of the Limited Partner Representatives the sole
power to exercise rights of the Limited Partner Representatives hereunder. The
Limited Partner Representatives shall be appointed by the Limited Partners other
than the Trust in writing, a copy of which shall be delivered to the General
Partner. Any appointments of Limited Partner Representatives made hereunder
shall remain effective until rescinded in a writing delivered to the General
Partner and the General Partner shall have the right and authority to rely (and
shall be fully protected in so doing) on the actions taken and directions given
by such Limited Partner Representatives without any further evidence of their
authority or further action by the Limited Partners. The Limited Partners
initially appoint Herbert Glimcher and David J. Glimcher as the Limited Partner
Representatives.
10. Banking. The funds of the Partnership shall be kept in accounts
designated by the General Partner and all withdrawals therefrom shall be made on
such signature or signatures as shall be designated by the General Partner.
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11. Accounting.
11.1 Fiscal Year. The fiscal year of the Partnership shall end of the
last day of December of each year, unless another fiscal year end is selected by
the General Partner.
11.2 Books of Account. The Partnership books of account shall be
maintained at the principal office designated in Section 5 hereof or at such
other locations and by such person or persons as may be designated by the
General Partner. The Partnership shall pay the expense of maintaining its books
of account. Each Partner shall have, during reasonable business hours and upon
reasonable prior notice, access to the books of the Partnership and in addition,
at its expense, shall have the right to copy such books. The General Partner, at
the expense of the Partnership, shall cause to be prepared and distributed to
the Partners annual financial data sufficient to reflect the status and
operations of the Partnership and its assets and to enable each Partner to file
its Federal income tax return.
11.3 Method of Accounting. The Partnership books of account shall be
maintained and kept, and its income, gains, losses and deductions shall be
accounted for, on an accrual basis in accordance with generally accepted
accounting principles consistently applied.
11.4 Preparation of Tax Returns. The General Partner shall arrange for
the preparation and timely filing of all returns of the Partnership income,
gains, deductions and losses and other items required of the Partnership for
Federal and state income tax purposes.
11.5 Tax Election. All elections and options available to the
Partnership for Federal or state income tax purposes shall be taken or rejected
by the Partnership in the sole discretion of the General Partner. In case of a
distribution of property made in the manner provided in Section 734 of the Code,
or in the case of a transfer of any interest in the Partnership permitted by
this Agreement made in the manner provided in Section 743 of the Code, the
General Partner, on behalf of the Partnership, may, in its sole discretion, file
an election under Section 754 of the Code in accordance with the procedures set
forth in the applicable Regulations.
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11.6 Tax Matters Partner.
(a) The General Partner shall be the "tax matters partner" of the
Partnership for Federal income tax purposes. Pursuant to Section 6223(c)(3) of
the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address and profit interest of each
of the Limited Partners; provided, however, that such information is provided to
the Partnership by the Limited Partners.
(b) The tax matters partner is authorized, but not required:
(i) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership
items required to be taken into account by a Partner for income tax
purposes (such administrative proceedings being referred to as a "tax
audit" and such judicial proceedings being referred to as "judicial
review"), and in the settlement agreement the tax matters partner may
expressly state that such agreement shall bind all Partners, except that
such settlement agreement shall not bind any Partner (i) who (within the
time prescribed pursuant to the Code and Regulations) files a statement
with the IRS providing that the tax matters partner shall not have the
authority to enter into a settlement agreement on behalf of such Partner or
(ii) who is a "notice partner" (as defined in Section 6231 of the Code) or
a member of a "notice group" (as defined in Section 6223(b)(2) of the
Code);
(ii) in the event that a notice of a final administrative adjustment
at the Partnership level of any item required to be taken into account by a
Partner for tax purposes (a "final adjustment") is mailed to the tax
matters partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the Tax Court or
the United States Claims Court, or the filing of a complaint for refund
with the District Court of the United States for the district in which the
Partnership's principal place of business is located;
(iii) to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
(iv) to file a request for an administrative adjustment with the IRS
at any time and, if
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any part of such request is not allowed by the IRS, to file an appropriate
pleading (petition or complaint) for judicial review with respect to such
request;
(v) to enter into an agreement with the IRS to extend the period for
assessing any tax which is attributable to any item required to be taken
into account by a Partner for tax purposes, or an item affected by such
item; and
(vi) to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review proceeding
to the extent permitted by applicable law or regulations.
(c) The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 9.5 hereof shall be fully applicable to the tax
matters partner in its capacity as such.
(d) The tax matters partner shall receive no compensation for its
services. All third party costs and expenses incurred by the tax matters partner
in performing his duties as such (including legal and accounting fees) shall be
borne by the Partnership. Nothing herein shall be construed to restrict the
Partnership from engaging an accounting firm to assist the tax matters partner
in discharging its duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.
11.7 Organizational Expenses. The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership ratably over a
60-month period as provided in Section 709 of the Code.
11.8 Withholding. Each Limited Partner hereby authorizes the Partnership
to withhold from or pay on behalf of or with respect to such Limited Partner any
amount of Federal, state, local, or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement, including any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute a
loan by the Partnership to such Limited Partner, which loan shall be repaid by
such Limited Partner within 15 days after notice from the General Partner that
such payment must be made unless (i) the Partnership withholds such payment from
a distribution which would otherwise be made to the Limited Partner or (ii) the
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General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership which
would, but for such payment, be distributed to the Limited Partner. Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed to such Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in
such Limited Partner's Partnership Interest to secure such Limited Partner's
obligation to pay to the Partnership any amounts required to be paid pursuant to
this Section 11.8. In the event that a Limited Partner fails to pay any amounts
owed to the Partnership pursuant to this Section 11.8 when due, the General
Partner may, in its sole and absolute discretion, elect to make payment to the
Partnership on behalf of such defaulting Limited Partner, and in such event
shall be deemed to have loaned such amount to such defaulting Limited Partner
and shall succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner (including the right to receive distributions). Any
amounts payable by a Limited Partner hereunder shall bear interest at the base
rate on corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, plus four percentage
points (but not higher than the maximum lawful rate) from the date such amount
is due (i.e., 15 days after demand) until such amount is paid in full. Each
Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest
created hereunder.
12. Transfers of Partnership Interests.
12.1 Transfers.
(a) The term "transfer," when used in this Section 12 with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which the
General Partner purports to assign its General Partnership Interest to another
Person or by which a Limited Partner purports to assign its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law
or otherwise. The term "transfer" when used in this Section 12 does not include
any redemption of OP Units by the Partnership pursuant to Section 17.1 hereof.
(b) No Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Section 12.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Section 12 shall be null and void ab initio.
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12.2 General Partner.
(a) The General Partner shall not withdraw from the Partnership or
transfer all or any portion of its interest in the Partnership without the
Consent of the Limited Partners, provided that the Consent of the Limited
Partners shall not be required if the Limited Partners (other than the Trust)
own, in the aggregate, less than ten percent (10%) of the Partnership Interests.
Upon any transfer of the entire General Partnership Interest in accordance with
the provisions of this Section 12.2(a), the transferee General Partner shall
become a substituted General Partner, vested with the powers and rights of the
transferor General Partner, and shall be liable for all obligations and
responsible for all duties of the General Partner, once such transferee has
executed such instruments as may be necessary to effectuate such admission and
to confirm the agreement of such transferee to be bound by all the terms and
conditions of this Agreement with respect to the Partnership Interest so
acquired. It is a condition to any transfer otherwise permitted hereunder that
the transferee General Partner assumes by operation of law or express agreement
all of the obligations of the transferor General Partner under this Agreement
with respect to such transferred Partnership Interest and no such transfer
(other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor General Partner are assumed by a
successor by operation of law) shall relieve the transferor General Partner of
its obligations under this Agreement without the Consent of the Limited
Partners, provided that the Consent of the Limited Partners shall not be
required if the Limited Partners (other than the Trust) own, in the aggregate,
less than ten percent (10%) of the Partnership Interests.
(b) The General Partner shall not engage in any merger, consolidation or
other combination with or into another Person or any sale of all or
substantially all of its assets, or any reclassification, recapitalization or
change of outstanding Common Shares (other than a reincorporation, a change in
par value or from par value to no par value, or as a result of a subdivision or
combination of Common Shares, which requires no consent of the Limited Partners
under this Agreement) ("Transaction"), unless the General Partner has obtained
the Consent of the Limited Partners to effect the Transaction; provided that the
Consent of the Limited Partners shall not be required for any Transaction if, at
the time of such Transaction, Limited Partners (other than the Trust) own, in
the aggregate, less than ten percent (10%) of the Partnership Interests.
12.3 Limited Partners.
(a) Prior to (i) the third (3rd) anniversary of the date on which the
Completion of the Offering occurs with respect to Herbert Glimcher, David J.
Glimcher and all other
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trustees or executive officers of the Trust listed as Limited Partners on
Exhibit A hereto or (ii) the first (1st) anniversary of the date on which the
Completion of the Offering occurs with respect to all other Persons listed on
Exhibit A hereto, the Limited Partners shall not transfer all or any portion of
its Partnership Interest to any transferee without the consent of the General
Partner, which consent may be withheld in its sole and absolute discretion;
provided, however, that (x) each Limited Partner may at anytime, without the
consent of the General Partner, transfer all or a portion of its Partnership
Interest to an Affiliate of such Limited Partner, subject to the provisions of
this Section 12.3 and Section 12.4 hereof and (y) Scott Farrell shall have the
right to pledge his Partnership Interest as collateral security to an
institutional lender. After the third (3rd) anniversary or the first (1st)
anniversary, as the case may be, of the date on which the Completion of the
Offering occurs, each Limited Partner shall, subject to the provisions of this
Section 12.3 and Section 12.4 hereof, have the right to transfer all or a
portion of its Partnership Interest to any Person, whether or not in connection
with the exercise of a Limited Partner's Rights of Redemption. It is a condition
to any transfer otherwise permitted hereunder that the transferee assumes by
operation of law or express agreement all of the obligations of the transferor
Limited Partner under this Agreement with respect to such transferred
Partnership Interest and no such transfer (other than pursuant to a statutory
merger or consolidation wherein all obligations and liabilities of the
transferor Partner are assumed by a successor corporation by operation of law)
shall relieve the transferor Partner of its obligations under this Agreement
without the approval of the General Partner, in its reasonable discretion.
Subject to Section 12.4 hereof, upon such transfer, the transferee shall be
admitted as a Substituted Limited Partner as such term is defined in the Act and
shall succeed to all of the rights, including rights with respect to the Rights
of Redemption, of the transferor Limited Partner under this Agreement in the
place and stead of such transferor Limited Partner. Any transferee, whether or
not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee, whether by a voluntary transfer, by operation of
law or otherwise, shall have rights hereunder, other than to receive such
distributions and allocations made by the Partnership as are allocable to the
Percentage Interest transferred and to exercise the Rights of Redemption.
(b) If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Limited Partner's estate shall have all the rights of a Limited Partner, but not
more rights than those enjoyed by other Limited Partners for the purpose of
settling or managing the estate and such power as the Incapacitated Limited
Partner possessed to transfer all or any
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part of his or its interest in the Partnership. The Incapacity of a Limited
Partner, in and of itself, shall not dissolve or terminate the Partnership.
(c) The General Partner may prohibit any transfer otherwise permitted
under Section 12.3(a) hereof by a Limited Partner of his OP Units if, in the
opinion of legal counsel to the Partnership, such transfer would require filing
of a registration statement under the Securities Act of 1933 or would otherwise
violate any Federal or state securities laws or regulations applicable to the
Partnership or the OP Unit.
(d) No transfer by a Limited Partner of his OP Units may be made to any
Person if (i) in the opinion of legal counsel for the Partnership, it would
result in the Partnership being treated as an association taxable as a
corporation, or (ii) such transfer is effectuated through an "established
securities market" or a "secondary market (or the substantial equivalent
thereof)" within the meaning of Section 7704 of the Code.
(e) No transfer of any OP Units may be made to a lender to the
Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability.
12.4 Substituted Limited Partners.
(a) No Limited Partner shall have the right to substitute a transferee
as a Limited Partner in his place. The General Partner shall, however, have the
right to consent to the admission of a transferee of the interest of a Limited
Partner pursuant to this Section 12.4 as a Substituted Limited Partner, which
consent may be given or withheld by the General Partner in its sole and absolute
discretion; provided, however, that the right to substitute a transferee of the
Trust's Limited Partnership Interest as a Substituted Limited Partner in its
place shall be subject to the Consent of the Limited Partners. The General
Partner's failure or refusal to permit a transferee of any such interests to
become a Substituted Limited Partner shall not give rise to any cause of action
against the Partnership or any Partner. The admission of any Person as a
Substituted Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership.
(b) A transferee shall be admitted to the Partnership as a Substituted
Limited Partner only upon furnishing to the General Partner (i) written evidence
of transfer in form satisfactory to the General Partner, (ii) evidence of
acceptance of the terms and conditions of this Agreement, including the power of
attorney granted in Section 16 hereof, in form satisfactory to the General
Partner and (iii) such other
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documents or instruments as may be required in the discretion of the General
Partner to effect such Person's admission as a Substituted General Partner.
(c) A transferee who has been admitted as a Substituted Limited Partner
in accordance with this Section 12 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.
(d) Upon the admission of a Substituted Limited Partner, the General
Partner shall (i) reflect admission of such Substituted Limited Partner on the
books and records of the Partnership and/or (ii) amend Exhibit A to reflect such
admission, and, in either case, indicate on the books and records of the
Partnership and/or Exhibit A the name, number of OP Units, and Percentage
Interest of such Substituted Limited Partner and eliminate or adjust, if
necessary, the name and interest of the predecessor of such Substituted Limited
Partner.
12.5 Assignees. If the General Partner, in its sole and absolute
discretion, does not consent to the admission of any permitted transferee under
Section 12.3(a) hereof as a Substituted Limited Partner, as described in Section
12.4, such transferee shall be considered an Assignee for purposes of this
Agreement. An Assignee shall be entitled to all the rights of an assignee of a
limited partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Profits, Losses, each item
thereof and all other items attributable to the OP Units assigned to such
transferee, and to exercise the Rights of Redemption, but shall not be deemed to
be a holder of OP Units for any other purpose under this Agreement, and shall
not be entitled to consent respecting such OP Units (such consent being deemed
to have been in the same proportion as the consent respecting all other OP Units
held by Limited Partners). In the event any such transferee desires to make a
further assignment of any such OP Units, such transferee shall be subject to all
the provisions of this Section 12 to the same extent and in the same manner as
any Limited Partner desiring to make an assignment of OP Units.
12.6 General Provisions.
(a) No Limited Partner may withdraw from the partnership other than as a
result of a permitted transfer of all of such Limited Partner's OP Units in
accordance with this Section 12 or an exercise of the Rights of Redemption
pursuant to Section 17.
(b) Any Limited Partner who shall transfer all of his OP Units in a
transfer permitted pursuant to this Section 12 or by an exercise of the Rights
of Redemption pursuant to Section 17 shall cease to be a Limited Partner.
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(c) Transfers pursuant to this Section 12 may only be made on the first
day of a fiscal quarter of the Partnership, unless the General Partner otherwise
agrees, and shall be effective only if the General Partner receives written
evidence of transfer in form satisfactory to it.
(d) If any Partnership Interest is transferred during any quarterly
segment of the Partnership's fiscal year in compliance with the provisions of
this Section 12, Profits, Losses, each item thereof and all other items
attributable to such interest for such fiscal year shall be divided and
allocated between the transferor Partner and the transferee Partner by taking
into account their varying interests during the fiscal year in accordance with
section 706(d) of the Code, using the interim closing of the books method.
Solely for purposes of making such allocations, each of such items for the
calendar month in which the transfer or redemption occurs shall be allocated to
the Person who is a Partner as of midnight on the last day of said month. All
distributions of Available Cash with respect to which the Partnership Record
Date is before the date of such transfer or redemption shall be made to the
transferor Partner, and all distributions of Available Cash thereafter shall be
made to the transferee Partner.
(e) Limitation. Notwithstanding any other provision of this Agreement to
the contrary, no sale, exchange, assignment, or other transfer or issuance of a
Partnership Interest by or to any Partner, other than a permitted transfer by
the General Partner of all of its Partnership Interest to a successor General
Partner, shall be effective, if the effect of such transaction would be to cause
the Trust's and the General Partner's aggregate Percentage Interest in the
Partnership to decrease to a level of less than 51%.
13. Admission of Partners.
13.1 Admission of Successor General Partner. A successor to the entire
General Partner's General Partner Interest in accordance with the provisions of
Section 12.2 hereof, who is proposed to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
upon such transfer. Any such transferee shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be subject to
the successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission. Subject to
Section 12.2 hereof, the Limited Partners hereby consent to any admission
pursuant to this Section 13.1.
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13.2 Admission of Additional Limited Partners.
(a) After the admission to the Partnership of the initial Limited
Partners as of the date hereof, a Person who makes a Capital Contribution to the
Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including the power of
attorney granted in Section 16 hereof and (ii) such other documents or
instruments as may be required in the discretion of the General Partner in order
to effect such Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 13.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership.
(c) Upon admission of an Additional Limited Partner, the General Partner
shall amend Exhibit A to reflect the name, address, number of OP Units and
Percentage Interest of the Additional Limited Partner and the other Partners.
14. Limited Partner Representations and Warranties
14.1 Representations and Warranties of the Primary Limited Partners. The
Primary Limited Partners, jointly and severally, represent and warrant to the
Partnership, the General Partner and the Trust the matters set forth in attached
Exhibit C with respect to the Properties.
14.2 Survival of Representations and Warranties. All representations and
warranties contained in this Section 14 and in attached Exhibit C shall survive
formation of the Partnership; provided, however, that no claim for a breach of
any representation or warranty contained in this Section 14 or attached Exhibit
C may be maintained by the Partnership or the General Partner unless the
Partnership or the General Partner shall have delivered a written notice
("Notice of Breach") specifying the details of such claimed breach to the
Limited Partner on or before the first to occur of (a) one (1) year after the
date on which the independent directors of the General Partner knew of such
breach and (b) the third (3rd) anniversary of the date on which the Completion
of the Offering occurs.
14.3 Indemnification. Subject to the provisions of Section 14.4, the
Primary Limited Partners, jointly and severally, indemnify and holds harmless
the Partnership, the
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General Partner and the Trust against and from all liability, demands, claims
actions or causes of action, assessments, losses, fines, penalties, costs,
damages and expenses (including, without limitation, reasonable attorneys' and
accountants' fees and expenses) sustained or incurred by the Partnership, the
General Partner or the Trust as a result of or arising out of (i) any inaccuracy
in a representation or warranty made by such Primary Limited Partner under this
Agreement or (ii) any liability of the General Partner, the Partnership or the
Trust arising under that certain Underwriting Agreement between the Trust and
the underwriters for the Offering arising from any inaccuracy in any
representation or warranty made by such Primary Limited Partner herein or
therein.
14.4 Limitations on Indemnification Obligations.
(a) The Partnership, the General Partner and the Trust shall not be
entitled to indemnification under Section 14.3 hereof unless a Notice of Breach
has been delivered by the Partnership, the General Partner or the Trust within
the time period specified in Section 14.2 hereof.
(b) None of the Primary Limited Partners shall be liable under Section
14.3 hereof unless the total amount recoverable under Section 14.3 hereof
exceeds, in the aggregate, $1,000,000; provided, however, that if the Primary
Limited Partners obligation under Section 14.3 hereof exceeds $1,000,000 in the
aggregate, the Primary Limited Partners' obligation under Section 14.3 hereof
shall be for the full amount of such obligation.
(c) If a claim for indemnification is asserted by the Partnership, the
General Partner or the Trust against a Primary Limited Partner, such Primary
Limited Partner shall have the right, at its own expense, to assume the defense
of any claim, action or proceeding ("Claim") asserted against the Partnership,
the General Partner or the Trust which resulted in the claim for
indemnification, and if such right is exercised, (i) the parties shall cooperate
in the defense of such action or proceeding and (ii) the cost and expense of any
counsel retained by the indemnified party shall be borne by such indemnified
party. No Claim for which indemnification is sought shall be settled or
otherwise completed without the prior written consent of the Primary Limited
Partner(s) from which indemnification is being sought.
(d) Indemnification of the Partnership, the General Partner or the Trust
pursuant to Section 14.3 hereof and the remedies in respect thereof as set forth
in Section 14.5 hereof shall be the exclusive remedy of the Partnership, the
General Partner and the Trust for any breach of any representation or warranty
contained herein, and the only legal action which may be asserted against a
Primary Limited Partner
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under this Section 14 shall be to pursue the actions under Section 14.5 hereof.
(e) In the event that the Partnership or any Subsidiary Partnership
shall pursue its rights and remedies to indemnification or otherwise against the
prior owner of a Property, an insurer or any other person relating to the same
facts or events which gave rise to the Notice of Breach delivered to the Primary
Limited Partners, the Partnership or Subsidiary Partnership, as the case may be,
shall reimburse the Primary Limited Partners for any amount paid, and costs and
expenses incurred, by the Primary Limited Partners relating to such Notice of
Breach and any claim thereunder to the extent any such amounts, costs or
expenses are recovered by the Partnership or Subsidiary Partnership. In the
event that the Partnership or any Subsidiary Partnership determines not to
pursue its rights and remedies against a prior owner of a Property, an insurer
or any other person relating to the same facts and events which gave rise to the
Notice of Breach delivered to the Primary Limited Partners, the Partnership or
Subsidiary Partnership shall, upon request of the Primary Limited Partners,
assign its rights and remedies with respect thereto to the Primary Limited
Partners. The Primary Limited Partners shall thereafter be free to pursue such
rights and remedies for its own account and at its sole cost and expense and any
amounts recovered from the prior owner of a Property, an insurer or any other
person by the Primary Limited Partners shall be their sole property and neither
the Trust, the Partnership nor any Subsidiary Partnership shall have any rights
thereto.
14.5 Security and Remedies. Each Primary Limited Partner hereby grants
to the Partnership a lien upon and continuing security interest in his OP Units
and all right, title and interest under this Agreement in and to any assets or
properties of the Partnership and in all Common Shares received by such Primary
Limited Partner in connection with the Initial Transactions or acquired by such
Primary Limited Partner upon exercise of the Rights of Redemption (collectively,
the "Collateral") which shall be security for the indemnification obligations of
such Primary Limited Partner under Section 14.3 hereof. The indemnification
obligation of each Primary Limited Partner shall be payable out of such Primary
Limited Partner's entire Collateral. Any transfer by a Primary Limited Partner
of its OP Units shall be subject to the lien and security interest granted
hereby. The Collateral shall be held in escrow by a party mutually agreeable to
the General Partner and the Primary Limited Partners. In the event the General
Partner asserts, within the time period set forth in Section 14.2 hereof, that a
Primary Limited Partner has an indemnification obligation to the Partnership,
the General Partner or the Trust under this Section 14, the General Partner
shall deliver written notice (the "Acquisition Notice") to such Primary Limited
Partner describing in reasonable detail the circumstances giving rise to such
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obligation and the amount thereof. If, within sixty (60) days after its receipt
of an Acquisition Notice, a Primary Limited Partner delivers written notice to
the General Partner indicating that the Primary Limited Partner disputes the
circumstances giving rise to or the amount of such claimed indemnification
obligation, the General Partner may submit such matter for binding arbitration
in accordance with the provisions of Section 19 hereof by delivering a Demand
Notice to such Primary Limited Partner pursuant to Section 19 hereof. If, after
receiving timely notice of a dispute hereunder from a Primary Limited Partner,
the General Partner fails to so submit the matter for arbitration within twenty
(20) days after receipt of such notice from the Primary Limited Partner, then
the Primary Limited Partner shall be relieved of the claimed indemnification
obligation described in the Acquisition Notice. In the event a Primary Limited
Partner (i) receives an Acquisition Notice and fails to timely deliver notice to
the General Partner of its dispute as to the indemnification obligation and
fails to make payment within sixty (60) days after delivery of an Acquisition
Notice or (ii) has an indemnification obligation to the Partnership or the
General Partner under this Section 14 as determined pursuant to Section 19
hereunder, and if the Primary Limited Partner does not satisfy such obligation
within sixty (60) days after the decision rendered in the arbitration, then, in
either event, the Partnership or the General Partner (as the case may be) shall,
to the extent permitted by law, be deemed, without the payment of any further
consideration or the taking of any further action required by such Primary
Limited Partner, to have acquired from such Primary Limited Partner such portion
of the Collateral as shall be equal in value (based, in the case of Partnership
Interests, on the Deemed Partnership Interest Value computed as of the date of
the Acquisition Notice and, in the case of Common Shares, the Current Per Share
Market Price computed as of the date of the Acquisition Notice) to the amount
recoverable from such Primary Limited Partner under Sections 14.3, 14.4 and
19.2(d) hereof. In the event the General Partner, the Partnership or the Trust
shall have acquired from such Primary Limited Partner any Collateral pursuant to
this Section 14.5, the General Partner shall deliver written notice to such
Primary Limited Partner within ten (10) days thereafter identifying the specific
Collateral acquired and, if such Collateral consists of OP Units, the Percentage
Interest of, and number of OP Units owned by, such Primary Limited Partner
following such acquisition.
14.6 Nonrecourse. Notwithstanding anything contained in this Section 14
or elsewhere is this Agreement to the contrary, the sole recourse of the General
Partner, the Partnership or the Trust under this Section 14 shall be against the
Collateral of a Primary Limited Partner, and no Primary Limited Partner shall
have any personal liability hereunder.
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14.7 Restriction on Transfer. In connection with the security interests
granted by the Primary Limited Partners to the Partnership under Section 14.5
hereof, until the third (3rd) anniversary of the date on which Completion of the
Offering occurs, the Primary Limited Partners agree that any Common Shares
received by such Primary Limited Partners in connection with the Initial
Transactions or acquired by such Primary Limited Partners upon exercise of the
Rights of Redemption, shall not be transferred, assigned, sold, encumbered or
otherwise disposed of except as provided for in Section 12 hereof.
Notwithstanding the foregoing, a Primary Limited Partner may, with the consent
of the General Partner exercised by its independent directors in their sole and
absolute discretion, be relieved of the restrictions on transferability
contained in this Section 14.7 by (A) consenting to personal liability (by
execution and delivery of an Agreement to such effect in form and substance
reasonably satisfactory to the General Partner) for any indemnification
obligations secured by the OP Units or Common Shares, or (B) pledging (by
execution and delivery of a pledge agreement or amendment to this Agreement in
form and substance reasonably satisfactory to the General Partner) substitute
collateral which, in the reasonable determination of the General Partner, is
substantially equivalent in value to the OP Units or Common Shares described in
this Section 14.7. In the event that a Primary Limited Partner is relieved of
the restrictions on transferability in accordance with the terms of this Section
14.7, the security interest in such Primary Limited Partner's OP Units and
Common Shares granted to the General Partner and the Partnership pursuant to
Section 14.5 shall terminate without further action, and the Partnership, at the
request of such Primary Limited Partner, shall promptly execute and deliver any
document or instrument reasonably requested by such Primary Limited Partner to
evidence such termination.
15. Liquidation and Dissolution.
15.1 Dissolution. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners or by
the admission of a successor General Partner in accordance with the terms of
this Agreement. The Partnership shall dissolve, and its affairs shall be wound
up, upon the first to occur of any of the following ("Liquidating Events"):
(a) the expiration of its terms, as provided in Section 4 hereof;
(b) an event of withdrawal of the General Partner, as defined in the
Act, unless, within 90 days after the withdrawal remaining Partners holding a
majority of the Partnership Interests of all remaining Partners agree in writing
to continue the business of the Partnership and to the appointment, effective
immediately prior to the date of withdrawal, of a substitute General Partner;
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(c) an election to dissolve the Partnership made by the General Partner,
with the Consent of the Limited Partners; provided, however, that the Consent of
the Limited Partners shall not be required at such time that the Limited
Partners (other than the Trust) own, in the aggregate, less than ten percent
(10%) of the Partnership Interests;
(d) an election to dissolve the Partnership made by the Limited
Partners, exercisable upon the written consent of the Limited Partners holding a
majority of the Limited Partnership Interests;
(e) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
(f) the sale of all or substantially all of the assets and properties of
the Partnership, unless the General Partner, with the Consent of the Limited
Partners, elects to continue the Partnership business for the purpose of the
receipt and the collection of indebtedness or the collection of other
consideration, to be received in exchange for the assets of the Partnership
(which activities shall be deemed to be part of the winding up of the
Partnership); provided that the General Partner may elect to continue the
Partnership in accordance with the provisions of this Section 15.1(f) without
the Consent of the Limited Partners if at the time of such sale the Limited
Partners (other than the Trust) own, in the aggregate, less than ten percent
(10%) of the Partnership Interests; or
(g) a final and non-appealable judgment is entered by a court with
appropriate jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a court
with appropriate jurisdiction against the General Partner, in each case under
any Federal or state bankruptcy or insolvency laws as now or hereafter in
effect, unless prior to the entry of such order or judgment remaining Partners
holding a majority of the Partnership Interests agree in writing to continue the
business of the Partnership and to the appointment, effective as of a date prior
to the date of such order or judgment, of a substitute General Partner.
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15.2 Winding Up.
(a) Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Partnership's business and affairs.
The General Partner or, in the event there is no remaining General Partner, any
Person elected by a majority in interest of the Limited Partners (the
"Liquidator") shall be responsible for overseeing the winding up and dissolution
of the Partnership and shall take full account of the Partnership's liabilities
and property and the Partnership property shall be liquidated as promptly as is
consistent with obtaining the fair value thereof, and the proceeds therefrom
(which may, to the extent determined by the General Partner, include shares in
the Trust) shall be applied and distributed in the following order:
(i) First, to the payment and discharge of all of the Partnership's
debts and liabilities to creditors, not including Partners;
(ii) Second, to the payment and discharge of all of the Partnership's
debts and liabilities to the Partners; and
(iii) The balance, if any, to the General Partner and Limited Partners
in proportion to their respective Capital Accounts, after giving effect to
all contributions, distributions and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Section 15.
(b) Notwithstanding the provisions of Section 15.2(a) hereof which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 15.2(a) hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest
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of the Partners, and shall be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems reasonable
and equitable and to any agreements governing the operation of such properties
at such time. The Liquidator shall determine the fair market value of any
property distributed in kind using such reasonable method of valuation as it may
adopt.
15.3 Compliance with Timing Requirements of Regulations. In the event
the Partnership is "liquidated" within the meaning of Regulations Sections
1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Section 15 to
the General Partner and Limited Partners who have positive Capital Accounts in
compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any Limited
Partner has a deficit balance in his Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including
the year during which such liquidation occurs), such Partner shall have no
obligation to make any contribution to the capital of the Partnership with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Partnership or to any other Person for any purpose whatsoever. In the
discretion of the General Partner, a pro rata portion of the distributions that
would otherwise be made to the General Partner and Limited Partners pursuant to
this Section 15 may be:
(i) distributed to a trust established for the benefit of the General
Partner and Limited Partners for the purposes of liquidating Partnership
assets, collecting amounts owed to the Partnership, and paying any
contingent or unforeseen liabilities or obligations of the Partnership or
of the General Partner arising out of or in connection with the
Partnership. The assets of any such trust shall be distributed to the
General Partner and Limited Partners from time to time, in the reasonable
discretion of the General Partner, in the same proportions as the amount
distributed to such trust by the Partnership would otherwise have been
distributed to the General Partner and Limited Partners pursuant to this
Agreement; or
(ii) withheld to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized portion
of any installment obligations owed to the Partnership, provided that such
withheld amounts shall be distributed to the General Partner and Limited
Partners as soon as practicable.
15.4 Deemed Distribution and Recontribution. Notwithstanding any other
provision of this Section 15, in the event the Partnership is liquidated within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event
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has occurred, the Partnership's property shall not be liquidated, the
Partnership's liabilities shall not be paid or discharged, and the Partnership's
affairs shall not be wound up. Instead, the Partnership shall be deemed to have
distributed the property in kind to the General Partner and Limited Partners,
who shall be deemed to have assumed and taken such property subject to all
Partnership liabilities, all in accordance with their respective Capital
Accounts. Immediately thereafter, the General Partner and Limited Partners shall
be deemed to have recontributed the Partnership property in kind to the
Partnership, which shall be deemed to have assumed and taken such property
subject to all such liabilities.
15.5 Notice of Dissolution. In the event a Liquidating Event occurs or
an event occurs that would, but for provisions of Section 15.1 hereof, result in
a dissolution of the Partnership, the General Partner shall, within 30 days
thereafter, provide written notice thereof to each of the Partners.
15.6 Cancellation of Certificate of Limited Partnership. Upon the
completion of the liquidation of the Partnership cash and property as provided
in Section 15.2 hereof, the Partnership shall be terminated and the Certificate
and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware shall be cancelled and such other
actions as may be necessary to terminate the Partnership shall be taken.
15.7 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 15.2 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions
of this Agreement shall remain in effect between the Partners during the period
of liquidation.
15.8 Waiver of Partition. Each Partner hereby waives any right to
partition of the Partnership property.
16. Power of Attorney. Each Limited Partner hereby irrevocably
constitutes and appoints the General Partner, with full power of substitution,
its true and lawful attorney, with full power and authority for him and in his
name, place and stead and for his use and benefit, to sign, swear to,
acknowledge, file and record:
(i) this Agreement, and subject to Section 18 hereof, amendments to
this Agreement;
(ii) any certificates, instruments and documents (including assumed
and fictitious name certificates) as may be required by, or may be
appropriate under, the laws of the State of Delaware or any other
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State or jurisdiction in which the Partnership is doing or intends to do
business, in order to discharge the purposes of the Partnership or
otherwise in connection with the use of the name or names used by the
Partnership;
(iii) any other instrument which may be required to be filed or
recorded by the Partnership on behalf of the Partners under the laws of any
State or by any governmental agency in order for the Partnership to conduct
its business;
(iv) any documents which may be required to effect the continuation of
the Partnership, the admission of a substitute or additional Partner, or
the dissolution and termination of the Partnership, provided such
continuation, admission or dissolution and termination is not in violation
of any provision of this Agreement; and
(v) any documents which may be required or desirable to have the
General Partner appointed, and act as, the "tax matters partner" as
described in the Code.
The foregoing grant of authority is a special power of attorney coupled with an
interest, is irrevocable and shall survive the subsequent Incapacity of a
Limited Partner, and shall survive the delivery of any assignment by a Limited
Partner of the whole or any portion of his interest in the Partnership.
17. Redemption of Limited Partnership Interests
17.1 Each Limited Partner, other than the Trust, shall have the right to
cause the Partnership to redeem all or a portion of its OP Units, at any time or
from time to time, on the terms and subject to the conditions and restrictions
contained in Exhibit E hereto (the "Rights of Redemption"). The Rights of
Redemption may be exercised by any one or more of the Limited Partners, other
than the Trust, on the terms and subject to the conditions and restrictions
contained in Exhibit E hereto, upon delivery to the Partnership of an Exercise
Notice in the form of attached as Schedule 1 to Exhibit E, which notice shall
specify the number of OP Units of such Limited Partner to be redeemed by the
Partnership.
17.2 The terms and provisions applicable to the Rights of Redemption
shall be as set forth in attached Exhibit E.
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18. Amendment of Agreement.
18.1 Except as provided in Section 18.2, 18.3 or 18.4 hereof, this
Agreement may be amended if it is approved by the General Partner and it
receives the Consent of the Limited Partners, provided that the Consent of the
Limited Partners shall not be required at such time that the Limited Partners
(other than the Trust) own, in the aggregate, less than ten percent (10%) of the
Partnership Interests.
18.2 Notwithstanding Section 18.1 hereof, the General Partner shall have
the power, without the consent of the Limited Partners, to amend this Agreement
as may be required to facilitate to implement any of the following purposes:
(i) to add to the obligations of the General Partner or surrender any
right or power granted to the General Partner of any Affiliate of the
General Partner for the benefit of the Limited Partners;
(ii) to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement;
(iii) to set forth the rights, powers, duties and preferences of the
holders of any additional Partnership Interests issued pursuant to Section
6.4 hereof;
(iv) to reflect a change that is of an inconsequential nature and does
not adversely affect the Limited Partners in any material respect, or to
cure any ambiguity, correct or supplement any provision in this Agreement
not inconsistent with law or with other provisions, or make other changes
with respect to matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement; and
(v) to satisfy any requirements, conditions or guidelines contained in
any order, directive, opinion, ruling or regulation of a Federal or state
agency or contained in Federal or state law.
The General Partner will provide notice to the Limited Partners when any action
under this Section 18.2 is taken.
18.3 Notwithstanding Section 18.1 hereof, this Agreement shall not be
amended without the consent of each Partner adversely affected if such amendment
would (i) convert a Limited Partner's interest in the Partnership into a general
partner's interest, (ii) modify the limited liability of a Limited Partner,
(iii) alter the allocations specified in Section 7
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hereof (except as permitted pursuant to Section 6.4 and Section 18.2(iii)
hereof) or the rights of the Partner to receive distributions pursuant to
Section 8 hereof, (iv) alter or modify the Limited Partner's rights under
Section 17 hereof, or (v) amend this Section 18.3. Further, no amendment may
alter the restrictions on the General Partner's authority set forth in
Section 9.2(a) hereof, without the consent of all the Partners.
18.4 In the event this Agreement shall be amended pursuant to this
Section 18, the General Partner shall cause this Agreement to be amended to
reflect the amendment.
19. Arbitration of Disputes.
19.1 Arbitration. Notwithstanding anything to the contrary contained in
this Agreement, all claims, disputes and controversies between the parties
hereto (including, without limitation, any claims, disputes and controversies
between the Partnership and any one or more of the Partners and any claims,
disputes and controversies between any one or more Partners) arising out of or
in connection with this Agreement or the Partnership created hereby, relating to
the validity, construction, performance, breach, enforcement or termination
thereof, or otherwise, shall be resolved by binding arbitration in Columbus,
Ohio in accordance with this Section 19 and, to the extent not inconsistent
herewith, the Expedited Procedures and Commercial Arbitration Rules of the
American Arbitration Association.
19.2 Procedures. Any arbitration called for by this Section 19 shall be
conducted in accordance with the following procedures:
(a) The Partnership or any Partner (the "Requesting Party") may demand
arbitration pursuant to Section 19.1 hereof at any time by giving written
notice of such demand (the "Demand Notice") to all other Partners and (if
the Requesting Party is not the Partnership) to the Partnership which
Demand Notice shall described in reasonable detail the nature of the claim,
dispute or controversy.
(b) Within fifteen (15) days after the giving of a Demand Notice, the
Requesting Party, on the one hand, and each of the other Partners and/or
the Partnership against whom the claim has been made or with respect to
which a dispute has arisen (collectively, the "Responding Party"), on the
other hand, shall select and designate in writing to the other party one
reputable, disinterested individual (a "Qualified Individual") willing to
act as an arbitrator of the claim, dispute or controversy in question. Each
of the Requesting Party and the Responding Party shall use their best
efforts to select a present or former partner of a "Big 6"
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accounting firm having no affiliation with any of the parties as their
respective Qualified Individual to act as an arbitrator. Within fifteen
(15) days after the foregoing selections have been made, the arbitrators so
selected shall jointly select a present or former partner of a "Big 6"
accounting firm having no affiliation with any of the parties or the
arbitrators as the third Qualified Individual willing to act as an
arbitrator of the claim, dispute or controversy in question. In the event
that the two arbitrators initially selected are unable to agree on a third
arbitrator within the second fifteen(15) day period referred to above,
then, on the application of either party, the American Arbitration
Association shall promptly select and appoint a present or former partner
of a "Big 6" accounting firm having no affiliation with any of the parties
as the Qualified Individual to act as the third arbitrator. The three
arbitrators selected pursuant to this subsection (b) shall constitute the
arbitration panel for the arbitration in question.
(c) The presentations of the parties hereto in the arbitration
proceeding shall be commenced and completed within sixty (60) days after
the selection of the arbitration panel pursuant to subsection (b) above,
and the arbitration panel shall render its decision in writing within
thirty (30) days after the completion of such presentations. Any decision
concurred in by any two (2) of the arbitrators shall constitute the
decision of the arbitration panel, and unanimity shall not be required.
(d) The arbitration panel shall have the discretion to include in its
decision a direction that all or part of the attorneys' fees and costs of
any party or parties and/or the costs of such arbitration be paid by any
other party or parties. On the application of a party before or after the
initial decision of the arbitration panel, and proof of its attorneys' fees
and costs, the arbitration panel shall order the other party to make any
payments directed pursuant to the preceding sentence.
19.3 Binding Character. Any decision rendered by the arbitration panel
pursuant to this Section 19 shall be final and binding on the parties hereto,
and judgment thereof may be entered by any state or federal court of competent
jurisdiction.
19.4 Exclusivity. Arbitration shall be the exclusive method available
for resolution of claims, disputes and controversies described in Section 19.1
hereof, and the Partnership and its Partners stipulate that the provisions
hereof shall be a complete defense to any suit, action, or proceeding in any
court or before any administrative or arbitration tribunal with respect to any
such claim, controversy or dispute. The provisions of this Section 19 shall
survive the dissolution of the Partnership.
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19.5 No Alteration of Agreement. Nothing contained herein shall be
deemed to give the arbitrators any authority, power or right to alter, change,
amend, modify, add to, or subtract from any of the provisions of this
Partnership Agreement.
20. Miscellaneous.
20.1 Notices. Any notice, election or other communication provided for
or required by this Agreement shall be in writing and shall be deemed to have
been given when delivered by hand or by telecopy or other facsimile
transmission, on the first business day after sent by overnight courier, or on
the third business day after deposit in the United States Mail, certified or
registered, return receipt requested, postage prepaid, properly addressed to the
Partner to whom such notice is intended to be given at the address for the
Partner set forth on the signature pages of this Agreement, or at such other
address as such person may have previously furnished in writing to the
Partnership and each Partner.
20.2 Modifications. Except as otherwise provided in this Agreement, no
change or modification of this Agreement shall be valid or binding upon the
Partners, nor shall any waiver of any term or condition in the future, unless
such change or modification or waiver shall be in writing and signed by all of
the Partners.
20.3 Counterparts. For the convenience of the Partners, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, and all of which taken together shall constitute
one agreement.
20.4 Construction. The titles of the Sections and subsections herein
have been inserted as a matter of convenience of reference only and shall not
control or affect the meaning or construction of any of the terms or provisions
herein.
20.5 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without regard to the principles of conflicts of law. Except
to the extent the Act is inconsistent with the provisions of this Agreement, the
provisions of such Act shall apply to the Partnership.
20.6 Other Instruments. The partners hereto covenant and agree that they
will execute such other and further instruments and documents as, in the opinion
of the General Partner, are or may become necessary or desirable to effectuate
and carry out the Partnership as provided for by this Agreement.
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20.7 Legal Construction. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
20.8 Gender. Whenever the context shall so require, all words herein in
any gender shall be deemed to include the masculine, feminine or neuter gender,
all singular words shall include the plural, and all plural words shall include
the singular.
20.9 Prior Agreements Superseded. This Agreement supersedes any prior
understandings or written or oral agreements amongst the Partners, or any of
them, respecting the within subject matter and contains the entire understanding
amongst the Partners with respect to thereto.
20.10 No Third Party Beneficiary. The terms and provisions of this
Agreement are for the exclusive use and benefit of General Partner and the
Limited Partners and shall not inure to the benefit of any other Person.
20.11 Representations. Each Limited Partner represents, warrants and
agrees that: (i) it has acquired and continues to hold its interest in the
Partnership for its own account for investment only and not for the purpose of,
or with a view toward, the resale or distribution of all or any part thereof,
nor with a view toward selling or otherwise distributing such interest or any
part thereof at any particular time or under any predetermined circumstances;
(ii) it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds it has invested in the Partnership in what it
understands to be highly speculative and illiquid investment; (iii) it is an
"accredited investor" as defined in Rule 501(a) under the Securities Act of
1933, as amended (the "Securities Act"); (iv) it understands that the offering
and sale of the Partnership Interests are intended to be exempt from
registration under the Securities Act by virtue of Section 4(2) thereof; (v) it
understands that a transfer of its Partnership Interest is restricted under the
terms of this Agreement; and (vi) it understands that it may not sell or
otherwise transfer its Partnership Interest without registration under the
Securities Act or applicable state securities laws or an exemption therefrom.
20.12 Waiver. No consent or waiver, express or implied, by any Partner
to or of any breach or default by any other Partner in the
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performance by such other Partner of its obligations hereunder shall be deemed
or construed to be a consent to or waiver of any other breach or default in the
performance by such other Partner of the same or any other obligations of such
Partner hereunder. Failure on the part of any Partner to complain of any act or
failure to act on the part of any other Partner or to declare any other Partner
in default, irrespective of how long such failure continues, shall not
constitute a waiver by such Partner of its rights hereunder.
20.13 Time of Essence. Time is hereby expressly made of the essence with
respect to the performance by the parties of their respective obligations under
this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written by the General Partner and the Limited Partners.
GENERAL PARTNER:
GLIMCHER PROPERTIES CORPORATION
By: /s/ FRED A. ZANTELLO
-------------------------------
Title: Executive Vice President
Limited Partners:
GLIMCHER REALTY TRUST, a Maryland
Real Estate Investment Trust
By:/s/ FRED A. ZANTELLO
-------------------------------
Title: Executive Vice President
(See Counterpart Execution Pages)
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ACKNOWLEDGEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 30th day of November, 1993, before me personally appeared Fred A.
Zantello, to me personally known, who, being by me duly sworn, did say that he
resides at 2498 Sherwood Road, Columbus, Ohio 43209; that he is Executive Vice
President of GLIMCHER PROPERTIES CORPORATION, the corporation described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to such instrument is such corporate seal;
that it was so affixed by order of the board of directors of said corporation,
and that he signed his name thereto by like order.
/s/ SUSAN CHUN
-------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 30th day of November, 1993, before me personally came
Fred A. Zantello, to me known to be the individual described in and who executed
the foregoing Agreement of Limited Partnership as Trustee of Glimcher Realty
Trust and acknowledged to me that he executed the same.
/s/ SUSAN CHUN
-------------------------
Notary Public
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COUNTERPART EXECUTION PAGE OF
Limited Partner TO LIMITED PARTNERSHIP
AGREEMENT OF
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
The undersigned, by executing this page, agrees to all of the terms,
provisions and conditions of the Limited Partnership Agreement of Glimcher
Properties Limited Partnership dated as of _____________, 199_, and agrees to be
bound thereby.
------------------------------
Signature
Name:
------------------------
Address:
---------------------
----------------------
Dated: , 199
---------------- --
[FOR INDIVIDUAL, PARTNERSHIP OR TRUST]
STATE OF )
: ss.:
COUNTY OF )
On this ____________ day of ______________ , 199_, before me personally
appeared ______________ , to me known and known to me to be the person described
in, and who executed the foregoing instrument and acknowledged to me he/she
executed the same.
------------------------------
Notary Public
[FOR CORPORATION]
STATE OF )
: ss.:
COUNTY OF )
On this _____________ day of _________________ , 199__, before me
personally appeared ____________ , to me personally known, who, being by me duly
sworn, did say that he resides at _____________ ; that he is the of __________
____________________ , _______________________ the corporation described in the
seal of said corporation; that the seal affixed to such instrument is such
corporate seal; that it was so affixed by order of the board of directors of
said corporation, and that he signed his name thereto by like order.
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<PAGE> 70
EXHIBIT A
<TABLE>
<CAPTION>
Cash Gross Asset Value
OP Capital Capital of Non-Cash Capital
General Partner: % Interest Units Contribution Contributions Contributions
<S> <C> <C> <C> <C> <C>
Glimcher Properties 1%
Corporation
</TABLE>
Limited Partners:
Glimcher Realty Trust
Herbert Glimcher
David J. Glimcher
Fred Zantello
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<PAGE> 71
EXHIBIT B
EXCLUDED INTERESTS
<TABLE>
<CAPTION>
Location County Owner Acreage
- -------- ------ ----- -------
<S> <C> <C> <C>
Heath, Ohio Licking Indian Mound Associates Limited Partnership 10.29 Acres
Heath, Ohio Licking The Glimcher Company 15.26 Acres
Gallipolis, Ohio Gallia Ohio River Plaza Associates Limited Partnership 2.20 Acres
Washington Court House, Ohio Fayette Washington Court House Limited Partnership 11.62 Acres
Orange Township, Ohio Delaware The Glimcher Company 140.57 Acres
Lancaster, Ohio Fairfield River Valley Associates Limited Partnership 67.68 Acres
Orange Township, Ohio Delaware T G Associates Limited Partnership 36.57 Acres
Winona, Minnesota Winona Associates Limited Partnership 12.70 Acres
Grove City, Ohio Franklin Stringtown Associates Limited Partnership 5.70 Acres
Minot, North Dakota The Glimcher Company 1.10 Acres
Scioto County, Ohio Scioto The Glimcher Company 27.00 Acres
Beavercreek, Ohio Greene Fairfield Commons Limited Partnership 8.30 Acres
5.40 Acres
15.50 Acres
Beavercreek Partnership 5.60 Acres
5,0000 Sq. Ft.
Jersey City, New Jersey Newport Associates
Development Company
Glimcher Partnership
</TABLE>
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<PAGE> 72
<TABLE>
<CAPTION>
Location County Owner Acreage
- -------- ------ ----- -------
<S> <C> <C> <C>
Fostoria, Ohio Seneca Herbert Glimcher 6.60 Acres
Findlay, Ohio Hancock Herbert Glimcher & 2.10 Acres
James Koehler
Sierra Vista, Arizona Sierra Vista Mall Associates Limited Partnership 3.30 Acres
Bucyrus, Ohio Crawford Herbert Glimcher 3.68 Acres
Mansfield, Ohio Richland Gerald Swedlow, Trustee 6.50 Acres
Columbus, Ohio Franklin Continental Downtown three buildings
Properties -
Herbert Glimcher
Bridgeport, W. Va. Meadowbrook Mall Company - Glimcher Meadowbrook Company Meadowbrook Mall
Pewaukee, Wis Waukesha Pewaukee Mall Developers Limited Partnership
Pewaukee Strip Developers Limited Partnership 70 Acres
20 Acres
Stratford, New Jersey
Welsch, West Virginia
</TABLE>
OPTION CONTRACTS:
<TABLE>
<CAPTION>
Location Seller Buyer
- ------------- -------------------- ------------
<S> <C> <C>
Allentown, PA Phillip I. Berman, Kathryn A. Stephanoff, David J. Glimcher Company
Carl J.W. Hessinger, Dexter F. Baker and
Richard K. White, as trustee
Columbus, OH Richard J. Lieb and Major Builders Service, Inc. Brice Road, Inc., assigned to The Glimcher Company
Lancaster, OH Catholic Diocese of Columbus The Glimcher Company
Rome, NY Conrad Zurich David J. Glimcher Company
Morgantown, WV Lynch, et. al. Morgantown Mall Associates Limited Partnership
Springfield, OH Harold C. Gross and Phyllis Gross Glimcher - Springfield, Inc.
</TABLE>
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<PAGE> 73
MISCELLANEOUS ENTITIES:
1. Damons Ribs
2. Rugby's
3. Jean Scene
4. B & V Candies
5. Dunkin Jewelers
6. It's Nooz
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<PAGE> 74
EXHIBIT C
Representations and Warranties
Each of the Primary Limited Partners, jointly and severally, represents and
warrants to the Partnership, except as set forth in the Disclosure Schedule
attached as Exhibit D, as follows:
(a) Authority. The Primary Limited Partners have the requisite
authority to enter into and perform this Agreement.
(b) Due Authorization; Binding Agreement. The execution, delivery and
performance of this Agreement by the Primary Limited Partners have been duly and
validly authorized by all necessary action of the Primary Limited Partners. This
Agreement has been duly executed and delivered by the Primary Limited Partners,
or an authorized representative of the Primary Limited Partners, and constitutes
a legal, valid and binding obligation of the Primary Limited Partners,
enforceable against the Primary Limited Partners in accordance with the terms
hereof, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by principles of equity.
(c) Consents and Approvals. No consent, waiver, approval or
authorization of, or filing, registration or qualification with, or notice to,
any governmental unit or any other person is required to be made, obtained or
given by the Primary Limited Partners in connection with the execution, delivery
and performance of this Agreement.
(d) No Violation. None of the execution, delivery or performance of
this Agreement by the Primary Limited Partners does or will, with or without the
giving of notice, lapse of time or both, (i) violate, conflict with or
constitute a default under any term or condition of (A) the organizational or
any Significant Agreement (as defined below) or other agreement to which the
Primary Limited Partners are a party or by which they are bound, or (B) any
terms or provision of any judgment, decree, order, statute, injunction, rule or
regulation of a governmental unit applicable to the Primary Limited Partners or
any material agreement to which the Primary Limited Partners are a party or by
which they are bound or to their assets or properties or (ii) result in the
creation of any Lien or other encumbrance upon the properties contributed by the
Primary Limited Partners to the Partnership or the assets or properties of the
Primary Limited Partners.
(e) Compliance with Laws. Each of the Properties is in compliance with
all laws applicable to the conduct of the business being conducted on it and has
all licenses and permits
<PAGE> 75
required for the conduct thereof, except where the failure to so comply or have
licenses or permits could not or would not have a material adverse effect on
such Property. To the best of the Primary Limited Partners' knowledge, such
licenses and permits are in full force and effect, such Primary Limited Partners
have not taken any action that would (or failed to take any action the omission
of which would) result in the revocation of such licenses or permits and such
Primary Limited Partners have not received any notice of violation from any
federal, state or municipal entity or notice of an intention by any such
government entity to revoke any certificate of occupancy or other certificate,
license or permit issued by it in connection with the use of any of such
Property, that in each case has not been cured or otherwise resolved to the
satisfaction of such government entity, except where such failure or such action
could not or would not have a material adverse effect on any Property.
(f) Ownership of the Partnership Interests. With respect to
contributions of partnership interests to the Partnership by the Primary Limited
Partners, the Primary Limited Partners are the sole owners of such partnership
interests and have good, valid and marketable title to such partnership
interests, free and clear of all Liens. Such partnership interests have been
issued in compliance with the applicable partnership agreements (as then in
effect). Except as described in the Registration Statement, there are no rights,
subscriptions, warrants, options, conversion rights or agreements of any kind
outstanding to purchase or to otherwise acquire any securities or obligations of
any kind convertible into any partnership interest or other equity interests or
profit participation of any kind in, such partnerships.
(g) Environmental Matters. Except as set forth in the environmental
studies performed or used in connection with the transfer of the Properties to
the Partnership and set forth on the Disclosure Schedule (the "Environmental
Reports"), the Primary Limited Partners have no knowledge of any Hazardous
Material improperly maintained or disposed of on, under or at the Properties or
any part thereof. To the best of the Limited Partners' knowledge, except as set
forth in the Environmental Reports: (i) the Properties are in compliance, and
have heretofore complied, with all Environmental Laws, (ii) none of the
Properties nor their previous owners have received any written notice from any
governmental unit or other person that it, or its current or former operations
are not or have not been in compliance with the Environmental Laws or that it
has any material liability with respect thereto, (iii) there are no
administrative, regulatory or judicial proceedings pending or threatened against
the Properties nor their previous owners alleging any material violation of, or
material liability under any Environmental Laws, (iv) none of the Properties has
been used
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<PAGE> 76
for storage or disposal of Hazardous Materials which is governed by any
Environmental Laws, and (v) there are no underground storage tanks located on,
under or about the Properties which are subject to the notification requirements
under Section 9002 of the Solid Waste Disposal Act, as now or hereafter amended
(42 U.S.C. Sections 6991, 6991a) and there is no facility located on or at such
Property that is subject to the reporting requirements of Section 312 of the
Federal Emergency Planning and Community Right to Know Act of 1986 and the
federal regulations promulgated thereunder (42 U.S.C. Section 11022).
(h) Ownership of the Existing Projects. The Properties are being
transferred to the Trust, the Partnership or a Subsidiary Partnership, as the
case may be, with good, valid and marketable title, free and clear of all Liens
other than the Permitted Exceptions. For purposes hereof, "Permitted Exceptions"
shall mean with respect to real property or any interest or estate therein owned
by any persons:
(i) Liens or deposits made to secure the release of such Liens,
securing taxes, the payment of which is at the time not
delinquent or the payment of which is actively being contested in
good faith by appropriate proceedings diligently pursued and for
which appropriate reserves or escrow shall have been established
or an adjustment to the purchase price for the Property has been
made;
(ii) attachments, judgments and other similar Liens arising in
connection with court or administrative proceedings, provided,
that the execution or other enforcement of such Liens is
effectively stayed or secured and the claims secured by such
Liens are actively being contested in good faith by appropriate
proceedings diligently pursued and for which appropriate reserves
or escrow shall have been established or adjustment to the
purchase price for the Property has been made;
(iii) zoning laws and ordinances; provided that the Property is not in
material violation thereof and that such laws and ordinances do
not require the demolition, vacation or cessation of the use for
retail purposes of any portion of the improvements material to
such Property or require the discontinuance of the use of all or
any material portion of such Property as a shopping center;
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<PAGE> 77
(iv) any laws, ordinances, deeds of trust, mortgages, Liens,
easements, rights of way, restrictions, exemptions, reservations,
conditions, limitations, covenants, adverse rights or interests
described as exceptions on Schedule B (or any other applicable
Schedule) of the title insurance policies relating to the
Properties which are being issued pursuant to the commitments
dated the date hereof; provided that the Property is not in
material violation thereof and the same do not require the
demolition, vacation or cessation of the use for retail purposes
of any portion of the improvements material to such Property or
require the discontinuance of the use of all or any material
portion of such Property as a shopping center;
(v) any other easements, rights of way, restrictions, exceptions,
reservations, conditions, limitations, covenants, adverse rights
or interests, licenses, minor irregularities in title and other
similar encumbrances which do not in the aggregate materially (A)
impair the use of such properties in the operation of the
business of the Partnership or the Trust or (B) detract from the
value of such properties for the purpose of such business;
(vi) any law or governmental regulation or other right of any
governmental unit, which (Y) requires the person to maintain
certain facilities or perform certain acts as a condition of its
occupancy or use of its assets and properties or (Z) condemns,
appropriates or recaptures the person's assets or property; and
(vii) Liens imposed by laws, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or which are being contested in good faith
by appropriate proceedings diligently pursued, and for which
adequate reserves or escrows shall have been established or
adjustment to the purchase price for the Property has been made.
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<PAGE> 78
(i) Tenant Leases. Among other things, the Disclosure Schedule sets
forth each of the leases currently in effect with respect to the Properties, as
the same have been amended or modified to the date hereof; provided, however,
that as to the Acquisition Properties such representation is being made as to
the best of the Primary Limited Partners' knowledge. The parties hereto
acknowledge that the Disclosure Schedule does not list, and the Primary Limited
Partners make no representation with respect to, subleases, concessions, or
license agreements which may have been entered into by tenants or subtenants or
license or concession agreements which have terms not in excess of 60 days;
provided that, in the case of a sublease or assignment, the Primary Limited
Partners represent that the tenant listed in the rent rolls described in
Subparagraph (t) below remains liable for the performance of the Lease.
(j) Absence of Undisclosed Liabilities and Contractual Obligations.
Except for liabilities arising in the ordinary course of business since the date
of the most recent financial statements relating to the Properties appearing in
the Registration Statement and for those matters specifically and adequately
accrued or reserved in the financial statements, the Properties have no
liabilities of any nature, whether matured or unmatured, fixed or contingent,
regardless of whether the disclosure thereof would otherwise be required by
GAAP, under circumstances whereby any such liabilities would following the date
hereof remain with such Property and which would have, individually or in the
aggregate, a material adverse effect upon the Properties taken as a whole. To
the best of the Primary Limited Partners' knowledge, there are no Significant
Agreements relating to the Properties other than as set forth in the Disclosure
Schedule. For purposes hereof, "Significant Agreement" means and includes any of
the following, in each such case as amended and currently in effect, inclusive
of any waivers relating thereto:
(i) all agreements, instruments and documents evidencing,
securing, or pertaining to the contractual obligations of a
person that involve annual payments or receipts in excess of
$100,000 and are not terminable on 90 days or less notice;
(ii) all leases affecting the Properties (including capital
leases), contracts, agreements or commitments (whether
written or oral) that are not terminable without penalty on
not more than 90 days' notice and that involve annual gross
payments or receipts in excess of $100,000;
(iii) all ground leases affecting the Properties; and
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<PAGE> 79
(iv) all reciprocal easement agreements affecting the Properties.
(k) Significant Agreements; Binding Agreements. Each of the
Significant Agreements is valid and binding and in full force and effect,
enforceable against the parties thereto in accordance with its terms; provided,
however, that as to the Acquisition Properties this representation is being made
to the best of the Primary Limited Partners' knowledge.
(l) Litigation. There are no claims, actions, suits, proceedings or
investigations pending, or, to the Primary Limited Partners' knowledge,
threatened before any court, governmental unit or any arbitrator with respect to
the Properties which would have a material adverse effect on the Partnership
subsequent to the transfer of the Properties or partnership interests, as the
case may be, to the Trust, the Partnership or its Subsidiary Partnerships.
(m) Transfer Taxes. There are no transfer taxes payable, accruing or
otherwise arising out of the transfer of the Properties to the Trust, or to the
Partnership or to a Subsidiary Partnership which shall not have been paid, set
aside or otherwise reserved for prior to date of acquisition of the Properties
and which could become obligations of the Trust, the Partnership or any
Subsidiary Partnership.
(n) Property Improvements. The improvements at the Properties owned by
the owners thereof are in good condition and repair and have not suffered any
material casualty or, to the best of the Primary Limited Partners' knowledge,
other material damage which has not been repaired in all material respects;
provided, however, that as to the Acquisition Properties this representation is
being made to the best of the Primary Limited Partners' knowledge. To the best
of such Primary Limited Partners' knowledge, there is no material latent or
patent structural, mechanical or other significant defect or deficiency in the
improvements, other than as disclosed in the structural reports prepared or used
in connection with the transfer of the Properties to the Partnership or a
Subsidiary Partnership and set forth on the Disclosure Schedule.
(o) Property Equipment. To the best of the Primary Limited Partners'
knowledge, the equipment located at the Properties and other equipment which is
owned by or available to the Trust, the Partnership or the Subsidiary
Partnerships is sufficient to permit the full operation of the improvements for
their intended purpose.
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<PAGE> 80
(p) Condemnation Proceedings. No proceedings have been commenced, or,
to the best of the Primary Limited Partners' knowledge, threatened, by an
authority having the power of eminent domain to condemn any part of the
Properties or any improvements thereon or, to the best of the Primary Limited
Partners' knowledge, any property owned by a party to a reciprocal easement
agreement affecting any Properties.
(q) Bankruptcy and Insolvency. To the best of such Primary Limited
Partners' knowledge and except as set forth in the Disclosure Schedule, none of
the tenants now occupying the Properties or having a current lease affecting the
Properties and which base rent exceeds more than two (2%) of the aggregate
annual base rents of all of the Properties is the subject of any bankruptcy,
reorganization, insolvency or similar proceedings.
(r) Insurance. The Disclosure Schedule sets forth an accurate and
complete list of the insurance policies relating to the Properties or any part
thereof and naming the Partnership or Subsidiary Partnership as an insured; all
such policies are in full force and effect and all premiums thereunder have been
paid to the extent due; and no notice of cancellation has been received with
respect thereto and, to the best knowledge of such Primary Limited Partners,
none is threatened.
(s) Full Disclosure. Neither (i) the Registration Statement nor (ii)
any representation or warranty by the Primary Limited Partners herein, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or in the
Registration Statement, in light of the circumstances under which they were
made, not misleading.
(t) Rent Roll. The rent roll for the Properties attached as an exhibit
to the contribution or purchase agreement for each of the Properties between the
Partnership or a Subsidiary Partnership and the owner thereof, is true, correct
and complete and there are no tenant cancellation rights, renewal or extension
options or rent abatements or tenant concessions other than those summarized on
such rent roll, except in each case to the extent any inaccuracies would not,
individually or in the aggregate, have a material adverse effect on the value of
any Property.
(u) Foreign Persons. The Primary Limited Partner is neither a "foreign
person" within the meaning of Section 1445(f) of the Code nor a "foreign
partner" within the meaning of Section 1446 of the Code.
(v) Interests in Tenants. The Primary Limited Partners do not own,
directly or indirectly, (i) 4.9% or more of the
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<PAGE> 81
total combined voting power of all classes of stock entitled to vote, or 4.9% or
more of the total number of shares of all classes of stock, of any corporation
that is a tenant of the properties or (ii) an interest of 4.9% or more in the
assets or net profits of any tenant of the Properties.
(w) Defaults under Easements and Leases. To the best of the Primary
Limited Partners' knowledge, no condition exists which, with the giving of
notice or the passage of time, or both, would permit any party to cancel its
obligations under any reciprocal easement agreement or lease to which any
Property owner is a party or to be relieved of its operating covenants
thereunder.
(x) Anchor Leases. The Primary Limited Partners have received no
written notice or, to the best of the Primary Limited Partners' knowledge, any
other notice, whether or not in writing, that any anchor tenant operating a
store at a Property as of the date hereof intends either to cease such operation
(other than temporarily due to casualty, remodeling, renovation or any similar
cause) or to cease operating under the name under which it was operating as of
this date hereof.
(y) Tenant and Easement Improvements. To the best of the Primary
Limited Partners' knowledge, all alterations, improvements or other work
required to have been completed for the Properties under any reciprocal easement
agreements and leases to which owners of the Properties are party, including,
without limitation, all alterations, improvements and other work required to
prepare space for the initial occupancy of each tenant under a lease, has
heretofore been completed and paid for in full.
(z) Utilities and Facilities. The Properties are independent units
which do not now rely on any facilities (other than facilities covered by
Permitted Exceptions including, without limitation, any reciprocal easement
agreements or facilities of municipalities or public utility and water companies
and other than parking areas which the Property makes use of under any
reciprocal easements agreements) located on any property not included in the
Properties to fulfill any municipal or governmental requirement or for the
furnishing to the Properties of any essential building systems or utilities.
(aa) No Violation of Covenants and Easements. The Primary Limited
Partners have not received or been informed in writing of the receipt of any
written notice which is still in effect that there is, and, to the best of the
Primary Limited Partners' knowledge, there does not exist, any violation of a
condition or agreement contained in any easement, restrictive covenant or any
similar instrument or agreement affecting the Properties, or any portion
thereof.
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<PAGE> 82
(bb) No Violatin of Radius Restrictions. To the best of the Primary
Limited Partners' knowledge (but without having made any special investigation),
the Properties are not in violation of any radius restrictions, exclusive or
similar provisions contained in any reciprocal easement agreements, tenant
leases or any other agreements with the parties to any reciprocal easement
agreements or leases to which owners of the Properties are party.
For the purposes of the representations and warranties made pursuant
to this Exhibit C, a statement that a fact is true to "the best of the Primary
Limited Partners' knowledge" means that, after due investigation, including
inquiry of the Primary Limited Partners and senior executives of entities that
are Affiliates of the Primary Limited Partners and/or manager of each Property
after conveyed to the Trust, the Partnership or Partnership Subsidiary, the
Primary Limited Partners do not actually know that such statement is untrue.
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<PAGE> 83
Exhibit D
Disclosure Schedule
All matters referred to, contained in or disclosed pursuant to the Glimcher
Contribution Agreements and Partnership Interest Contribution Agreements dated
as of November 19, 1993, each as amended, and the Concord Purchase Agreements
dated as of November 3, 1993, each as amended, and the following documents,
instruments and other materials delivered to PaineWebber Incorporated, and its
affiliates, agents, accountants or attorneys in connection with the initial
public offering of the Common Shares of the Trust:
(i) Title and UCC Searches and Marked Title Commitments delivered in
connection with the closing
(ii) Surveys
(iii) Leases, Amendments, Modifications, Lease Abstracts, Lease
Summaries, Rent Rolls and Estoppel Certificates
(iv) Environmental Inspections and Reports
(v) Structural and Mechanical Reports
(vi) Financial Statements
(vii) Zoning and Building Code Compliance Letters or Notifications,
certificates of occupancy, licenses and permits
(viii) Partnership Agreements, Partnership Certificates, Loan
Documents and Legal Opinions
(ix) Project Contracts
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<PAGE> 84
EXHIBIT E
Terms of Rights of Redemption
The Rights of Redemption granted pursuant to Section 17.1 hereof shall
be subject to the following terms and conditions:
1. Definitions. The following terms and phrases shall, for purposes of
this Exhibit E and the Agreement, have the meanings set forth below:
"Beneficially Own" shall mean the ownership of Common Shares by a
Person who would be treated as an owner of such Common Shares either directly or
constructively through the application of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code.
"Election Notice" shall mean the written notice to be given by the
Partnership to the Exercising Partners in response to the receipt by the
Partnership of an Exercise Notice from such Exercising Partners, the form of
which Election Notice is attached hereto as Schedule 1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Exercise Notice" shall have the meaning set forth in Paragraph 2
hereof.
"Exercising Partners" shall have the meaning set forth in Paragraph 2
hereof.
"Offered Interests" shall mean the Partnership Interests of the
Exercising Partners identified in an Exercise Notice which, pursuant to the
exercise of Rights of Redemption, will be acquired by the Partnership under the
terms hereof.
"Redemption" shall have the meaning set forth in Paragraph 2 hereof.
"Registration Rights Agreement" shall mean the agreement respecting
the registration rights attributable to Common Shares, if any, issued to Limited
Partners in accordance with that certain Registration Rights Agreement dated the
date hereof.
"Rights of Redemption" shall have the meaning set forth in Paragraph 2
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor statute.
<PAGE> 85
Capitalized terms used, but not defined, in this Exhibit E, shall be
used as defined in the Agreement.
2. Delivery of Exercise Notices. Any one or more Limited Partners
other than the Trust ("Exercising Partners") may, subject to the limitations set
forth herein, deliver to the General Partner written notice (the "Exercise
Notice") pursuant to which such Exercising Partners elect to cause to
Partnership to redeem (the "Redemption") all or any portion of their Partnership
Interests, subject to the limitations contained in Paragraph 3 below (the
"Rights of Redemption").
3. Limitations on Delivery of Exercise Notices. The ability of Limited
Partners to exercise Rights of Redemption shall be restricted as follows:
(a) only three (3) Exercise Notices per Limited Partner may be
delivered to the General Partner during each calendar year period;
provided, however, such Exercise Notice may be delivered by or on behalf of
one or more Exercising Partners; and
(b) The first Exercise Notice may not be delivered to the General
Partner prior to 12 months after the date on which the Completion of the
Offering occurs.
4. Computation of Redemption Price/Form of Payment. The Redemption
price ("Redemption Price") payable by the Partnership to each Exercising Partner
shall be equal to the Deemed Partnership Interest Value of such Exercising
Partner's Offered Interest computed as of the date on which the Exercise Notice
was delivered to the General Partner (the "Computation Date"). The Redemption
Price shall, in the sole and absolute discretion of the Partnership, be paid in
the form of (a) cash, or cashier's or certified check, or by wire transfer of
immediately available funds to the Exercising Partner's designated account or
(b) by the delivery of a number of Common Shares equal to the quotient of (x)
the Redemption Price divided by (y) the Current Per Share Market Price as of the
Computation Date adjusted as appropriate to account for any stock splits, stock
dividends or other similar transactions between the Computation Date and the
closing of the purchase and sale of Offered Interests in the manner specified in
Paragraph 10(d) below or (c) any combination of cash and Common Shares (valued
at such Current Per Share Market Price).
5. Purchase by the Trust. The General Partner shall, within five (5)
days after receipt by it of any Exercise Notice delivered in accordance with the
requirements of Paragraph 3 hereof, deliver to the Trust a copy of such Exercise
Notice. The
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<PAGE> 86
Trust shall, within ten (10) days after receipt of such Exercise Notice, notify
the General Partner whether it intends to issue Common Shares to the Exercising
Partners, to satisfy the Partnership's Redemption obligation, to be used to
purchase all or a portion of the Offered Interests. If the Trust elects to issue
Common Shares to the Exercising Partners, simultaneously with the Redemption of
the remaining Offered Interests from the Exercising Partners by the Partnership,
the Trust (or its designee) shall purchase such portion of the Offered Interests
from the Exercising Partners in exchange for Common Shares, with such portion of
the Offered Interests and the Common Shares valued as provided in Paragraph 5
hereof.
6. Closing; Delivery of Election Notice. The closing of the Redemption
of Offered Interests by the Partnership shall, unless otherwise mutually agreed,
be held at the principal offices of the Partnership, on the date(s) specified
below. The General Partner shall, within thirty (30) days after receipt by it of
any Exercise Notice delivered in accordance with the requirements of Paragraph 3
hereof, deliver to the Exercising Partners an Election Notice, which Election
Notice shall set forth the computation of the Redemption Price and shall specify
the form of the Redemption Price (which the Redemption Price shall be in
accordance with Paragraph 4 hereof and shall be in the form of Common Shares to
the extent specified in the notice from the Trust given under Paragraph 5
hereof) to be paid by the Partnership and/or the Trust to such Exercising
Partners and the date, time and location for completion of the Redemption and/or
purchase of the Offered Interests, which date shall, to the extent required, in
no event be more than (i) ten (10) days after delivery by the General Partner of
the Election Notice for Offered Interests with respect to which the Partnership
has elected to pay the Redemption Price by issuance of Common Shares of the
Trust or (ii) sixty (60) days after the initial date of receipt by the
Partnership of the Exercise Notice for Offered Interests with respect to which
the Partnership has elected to pay the Redemption Price in cash; provided,
however, that such sixty (60) day period may be extended for an additional
period to the extent required for the Trust to cause additional Common Shares to
be issued to provide financing to be used to acquire the Offered Interests.
Notwithstanding the foregoing, the Partnership agrees to use its best efforts to
cause the closing of the Redemption of Offered Interests hereunder to occur as
quickly as possible.
7. Adjustment to Redemption Price. If, with respect to the exercise of
Rights of Redemption, the Partnership elects to pay all or any portion of the
Redemption Price in cash and if as a result thereof the Trust elects to raise
such cash through a public offering of its securities, borrowings or otherwise,
either (a) the Exercising Partner may withdraw the Exercise
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<PAGE> 87
Notice or (b) the aggregate Redemption Price computed under Paragraph 4 above
for a given calendar year shall be reduced by an amount ("Transaction Expenses")
equal to the expenses incurred by the Trust in connection with such raising of
funds allocable to the amounts required to pay the Redemption Price hereunder;
provided, however, that notwithstanding the foregoing, the Redemption Price
shall not be reduced hereunder by an amount exceeding 5% of the Redemption Price
computed without regard to the adjustment for Transaction Expenses.
8. Closing Deliveries. At the closing of the Redemption of Offered
Interests, payment of the Redemption Price shall be accompanied by proper
instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the Exercising Partner with respect to its
due authority to sell all of the right, title and interest in and to such
Offered Interests to or at the direction of the Partnership and with respect to
the status of the Limited Partner Interest being sold, free and clear of all
Liens, and (B) the Partnership with respect to due authority for the Redemption
of such Offered Interests, and (ii) to the extent that any Common Shares are
issued in payment of the Redemption Price or any portion thereof, (A) an opinion
of counsel for the Trust, reasonably satisfactory to the Exercising Partners, to
the effect that such shares of Common Stock have been duly authorized, are
validly issued, fully paid and nonassessable, and (B) a share certificate or
certificates evidencing the Common Shares to be issued and registered in the
name of the Exercising Partner or its designee.
9. Term of Rights of Redemption. Unless sooner terminated, the rights
of the parties with respect to the Rights of Redemption shall commence as of the
date hereof and lapse for all purposes and in all respects on the thirtieth (30)
anniversary of the date hereof; provided, however, that the parties hereto shall
continue to be bound by an Exercise Notice delivered to the General Partner
prior to such anniversary.
10. Covenants. To facilitate the Trust's and the Partnership's ability
to fully perform their respective obligations hereunder, the Trust and the
Partnership covenant and agree as follows:
(a) At all times during the pendency of the Rights of Redemption, the
Trust shall reserve for issuance such number of Common Shares as may be
necessary to enable the Partnership to use such Common Shares issued to it
in full payment of the Redemption Price in regard to all OP Units which are
from time to time outstanding.
(b) As long as the Trust shall be obligated to
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<PAGE> 88
file periodic reports under the Exchange Act, the Trust will timely file
such reports in such manner as shall enable any recipient of Common Shares
issued to the Partnership hereunder in reliance upon an exemption from
registration under the Securities Act to continue to be eligible to utilize
Rule 144 promulgated by the SEC pursuant to the Securities Act, or any
successor rule or regulation or statute thereunder, for the resale thereof.
(c) During the pendency of the Rights of Redemption, the Limited
Partner Representatives shall receive in a timely manner all reports filed
by the Trust with the SEC and all other communications transmitted from
time to time by the Trust to its shareholders generally.
(d) If the Trust shall issue or sell any Common Shares or other equity
securities or any instrument convertible into any equity security for a
consideration less than the fair value of such Common Shares or other
equity security, as determined in each case by the Board of Trustees of the
Trust, in consultation with the Trust's professional advisors, or if the
Trust shall declare any share distribution, share split, or the like, then
the Partnership shall provide fair and equitable arrangements, to the
extent necessary, to fully adjust, and to avoid any dilution in, the rights
of Limited Partners under this Agreement.
(e) Notwithstanding the Trust's determination to issue Common Shares
to effect all or a portion of the Redemption, the Trust may not issue such
Common Shares and the Partnership shall be required to pay the Redemption
Price by cashier's check or wire transfer of immediately available funds to
the extent that such issuance of Common Shares would disqualify the Trust
from being characterized as a REIT.
(f) The General Partner shall, within five days after request by a
Limited Partner, provide or cause to be provided to such Limited Partner a
computation of the Deemed Value of the Partnership.
11. Limited Partners' Covenant. Each Limited Partner covenants and
agrees with the Partnership that all Offered Interests tendered to the
Partnership in accordance with the exercise of Rights of Redemption herein
provided shall be delivered to the Partnership free and clear of all Liens and
should any Liens exist or arise with respect to such Offered
-5-
<PAGE> 89
Interests, the Partnership shall be under no obligation to acquire the same
unless, in connection with such acquisition, the Partnership has elected to pay
such portion of the Redemption Price in the form of cash consideration in
circumstances where such consideration will be sufficient to cause such existing
Lien to be discharged in full upon application of all or a part of such
consideration and the Partnership is expressly authorized to apply such portion
of the Redemption Price as may be necessary to satisfy any indebtedness in full
and to discharge such Lien in full. Each Limited Partner further agrees that, in
the event any state or local property transfer tax is payable as a result of the
Redemption of its Offered Interests by the Partnership (or its designee), such
Limited Partner shall assume and pay such transfer tax.
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<PAGE> 90
SCHEDULE 1
ELECTION NOTICE
To: [Exercising Partner]
Re: Election Notice
This notice is being given pursuant to Paragraph 6 of Exhibit E to the
Limited Partnership Agreement of Glimcher Properties Limited Partnership dated
as of _____________, 1994, as amended from time to time. Capitalized terms are
used herein as therein defined.
The Redemption Price for the Offered Interests is $___________. The
Redemption Price will be paid in the form of [specify number of Common Shares
and/or specify amount of cash].
The Redemption Price has been computed as follows:
Very truly yours,
GLIMCHER PROPERTIES LIMITED
PARTNERSHIP
By: GLIMCHER PROPERTIES CORPORATION
General Partner
By:
---------------------------
Title:
<PAGE> 1
Exhibit 3.5
AMENDMENT
TO
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
This Amendment dated as of November 30, 1993 (the "Agreement") to
Limited Partnership Agreement of Glimcher Properties Limited Partnership (the
"Partnership") dated as of November 30, 1993 (the "Partnership Agreement") by
and among Glimcher Properties Corporation (the "General Partner"), a Delaware
corporation, Glimcher Realty Trust (the "Trust"), a Maryland real estate
investment trust, and the Persons who have executed the counterpart execution
pages annexed hereto (together with the Trust, "Limited Partners") (the General
Partner and Limited Partners being each a "Partner" and collectively, the
"Partners").
WHEREAS, the Partnership was duly organized on September 9, 1993 under
the Delaware Revised Limited Partnership Act; and
WHEREAS, the Partners of the Partnership have entered into the
Partnership Agreement; and
WHEREAS, it has been the intent of the Partners and the Partnership
that each OP Unit, as defined in the Partnership Agreement, held by Exercising
Partners, as defined in EXHIBIT E to the Partnership Agreement, be redeemable
for one Common Share, as defined in the Partnership Agreement; and
WHEREAS, the Partners desire to clarify the Partnership Agreement with
respect to the redemption of OP Units for Common Shares as set forth above.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners agree as follows:
1. Definitions. Defined terms not defined herein shall have the meaning
given to them in the Partnership Agreement.
2. Common Share Value. The definition of the term "Common Share Value"
shall be modified to read as follows:
"Common Share Value" as of any date shall mean the sum of the total
number of (a) Common Shares and (b) OP Units held other than by the Trust and
General Partner issued and
<PAGE> 2
outstanding at the close of business on such date (and excluding any treasury
shares), multiplied by the current Per Share Market Price On Such Date."
3. No Modifications. Except as herein provided the Partnership
Agreement shall remain in full force and effect without amendment or
modification.
4. Counterparts. For the convenience of the Partners, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, and all of which taken together shall constitute
one agreement.
5. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without regard to the principles of conflicts of law. Except
to the extent the Act is inconsistent with the provisions of this Agreement, the
provisions of such Act shall apply to the Partnership.
6. Other Instruments. The partners hereto covenant and agree that they
will execute such other and further instruments and documents as, in the opinion
of the General Partner, are or may become necessary or desirable to effectuate
and carry out this Agreement.
7. Legal Construction. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
8. Gender. Whenever the context shall so require, all words herein in
any gender shall be deemed to include the masculine, feminine or neuter gender,
all singular words shall include the plural, and all plural words shall include
the singular.
9. Prior Agreements Superseded. This Agreement supersedes any prior
understandings or written or oral agreements amongst the Partners, or any of
them, respecting the within subject matter and contains the entire understanding
amongst the Partners with respect to thereto.
10. No Third Party Beneficiary. The terms and provisions of this
Agreement are for the exclusive use and benefit of the General Partner and
Limited Partners and shall not inure to the benefit of any other Person.
-2-
<PAGE> 3
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written by the General Partner and Limited Partners.
GENERAL PARTNER:
Glimcher Properties Corporation
By:/s/ FRED A. ZANTELLO
---------------------------
Fred A. Zantello, Executive
Vice President
LIMITED PARTNERS:
Glimcher Realty Trust, a Maryland
Real Estate Investment Trust
By: /s/ FRED A. ZANTELLO
--------------------------
Fred A. Zantello, Executive
Vice President
(SEE COUNTERPART EXECUTION PAGES)
-3-
<PAGE> 4
COUNTERPART EXECUTION PAGE OF
LIMITED PARTNER TO AMENDMENT TO
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
The undersigned, by executing this page, agrees to all of the
terms, provisions and conditions of the Amendment to Glimcher Properties Limited
Partnership Limited Partnership Agreement dated as of November 30, 1993, and
agrees to be bound thereby.
--------------------------
Signature
Print Name: ____________________
-4-
<PAGE> 1
Exhibit 3.6
AMENDMENT NO. 1 TO
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
This Amendment No. 1 to Limited Partnership Agreement of Glimcher
Properties Limited Partnership dated as of November 1, 1994 (the "Agreement"),
by and among Glimcher Properties Corporation (the "General Partner"), a Delaware
corporation, Glimcher Realty Trust (the "Trust"), a Maryland real estate
investment trust, and the Persons whose names are set forth on Exhibit A hereto
(together with the Trust, the "Limited Partners") (the General Partner and the
Limited Partners being each a "Partner" and collectively, the "Partners").
WHEREAS, Glimcher Properties Limited Partnership (the "Partnership") was
duly organized on September 9, 1993 under the Delaware Revised Limited
Partnership Act; and
WHEREAS, the parties hereto entered into the Limited Partnership Agreement
of the Partnership dated as of November 30, 1993 (the "Partnership Agreement");
and
WHEREAS, the Partners desire to amend the Partnership Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Partners agree as follows:
1. Definitions. Defined terms not defined herein shall have the meaning
given to them in the Partnership Agreement.
2. Section 6,3(c) of the Partnership Agreement is hereby amended to read as
follows:
"(c) If the Trust has a distribution reinvestment program, each Limited
Partner shall have the right to reinvest any or all the cash distributions
payable to it from time to time pursuant to this Agreement by having some or all
(as each such Limited Partner elects) of such distributions contributed to the
Partnership as additional Capital Contributions, and in such event the
Partnership shall issue to each such Limited Partner additional OP Units
pursuant to Section 6.4(a) hereof or alternatively, in the sole discretion of
the Partnership and the Trust, each Limited Partner shall have the right to
reinvest any or all cash distributions payable to it from time to time pursuant
to this Agreement by having some or all (as each such Limited Partner elects) of
such distributions, contributed to the Trust and in such event the Trust shall
issue Common Shares to
<PAGE> 2
such Limited Partner. In the event distributions are contributed to the
Partnership as additional Capital Contributions, the General Partner shall
create and administer a reinvestment program to effect the foregoing in
substantial conformance with any distribution reinvestment program available to
holders of the Common Shares."
3. No Modifications. Except as herein provided the Partnership Agreement
shall remain in full force and effect without amendment or modification.
4. Counterparts. For the convenience of the Partners, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, and all of which taken together shall constitute
one agreement.
5. Governing Law. This Agreement shall be governed by the laws of the State
of Delaware, without regard to the principles of conflicts of law. Except to the
extent the Act is inconsistent with the provisions of this Agreement, the
provisions of such Act shall apply to the Partnership.
6. Other Instruments. The partners hereto covenant and agree that they will
execute such other and further instruments and documents as, in the opinion of
the General Partner, are or may become necessary or desirable to effectuate and
carry out this Agreement.
7. Legal Construction. In case any one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
8. Gender. Whenever the context shall so require, all words herein in any
gender shall be deemed to include the masculine, feminine or neuter gender, all
singular words shall include the plural, and all plural words shall include the
singular.
9. Prior Agreements Superseded. This Agreement supersedes any prior
understandings or written or oral agreements amongst the Partners, or any of
them, respecting the within subject matter and contains the entire understanding
amongst the Partners with respect to thereto.
10. No Third Party Beneficiary. The terms and provisions of this Agreement
are for the exclusive use and
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<PAGE> 3
benefit of the General Partner and the Limited Partners and shall not inure to
the benefit of any other Person.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written by the General Partner and the Limited Partners.
GENERAL PARTNER:
GLIMCHER PROPERTIES CORPORATION
By: /s/ Fred A. Zantello
-------------------------------
Title: Executive Vice President
LIMITED PARTNERS:
GLIMCHER REALTY TRUST, a Maryland
Real Estate Investment Trust
By: /s/ Fred A. Zantello
-------------------------------
Title: Executive Vice President
(See Counterpart Execution Pages)
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<PAGE> 4
ACKNOWLEDGEMENT
STATE OF OHIO )
: SS.:
COUNTY OF FRANKLIN )
On the 7th day of December, 1994, before me personally appeared Fred A.
Zantello, to me personally known, who, being by me duly sworn, did say that he
resides at 2498 Sherwood Road, Columbus, Ohio 43209; that he is Executive Vice
President of GLIMCHER PROPERTIES CORPORATION, the corporation described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to such instrument is such corporate seal;
that it was so affixed by order of the board of directors of said corporation,
and that he signed his name thereto by like order.
/s/ Michelle Lynch
-------------------------------
Notary Public
STATE OF OHIO )
: SS.:
COUNTY OF FRANKLIN )
On the 7th day of December, 1994, before me personally came Fred A.
Zantello, to me known to be the individual described in and who executed the
foregoing Amendment No. 1 to Glimcher Properties Limited Partnership Agreement
of Limited Partnership as Trustee of Glimcher Realty Trust and acknowledged to
me that he executed the same.
/s/ Michelle Lynch
-------------------------------
Notary Public
-4-
<PAGE> 5
COUNTERPART EXECUTION PAGE OF
LIMITED PARTNER TO AMENDMENT NO. 1 TO
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
LIMITED PARTNERSHIP AGREEMENT
The undersigned, by executing this page, agrees to all of the terms,
provisions and conditions of Amendment No. 1 to Glimcher Properties Limited
Partnership Limited Partnership Agreement dated as of November 1, 1994, and
agrees to be bound thereby.
--------------------------------
Signature
Name:
Address:
Dated: , 1994
-----------------
[FOR INDIVIDUAL, PARTNERSHIP OR TRUST]
STATE OF )
: ss.:
COUNTY OF )
On this ___ day of ____________, 1994, before me personally appeared
________________________, to me known and known to me to be the person described
in, and who executed the foregoing instrument and acknowledged to me he/she
executed the same.
--------------------------------
Notary Public
[FOR CORPORATION]
STATE OF )
: SS.:
COUNTY OF )
On this ___ day of ________________, 1994, before me personally appeared
____________________, to me personally known, who, being by me duly sworn, did
say that he resides at______________________________________________________;
that he is the ________________ of ________________________, the corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to such instrument is such corporate
seal; that it was so affixed by order of the board of directors of said
corporation, and that he signed his name thereto by like order.
--------------------------------
Notary Public
<PAGE> 1
Exhibit 3.7
AMENDMENT NO. 2
TO
LIMITED PARTNERSHIP AGREEMENT
OF
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
This Amendment No. 2 is made effective as of November 26, 1996 by the
General Partner and the Limited Partners of Glimcher Properties Limited
Partnership, a Delaware limited partnership (the "Partnership").
RECITALS
1. The Partnership was organized pursuant to a Limited Partnership
Agreement dated as of November 30, 1993, as previously amended (the "Partnership
Agreement"). In furtherance of its business and purpose the Partnership and
Glimcher Realty Trust (the "Trust") have entered into a Securities Purchase
Agreement dated as of November 26, 1996 (the "SPA") with Partnership Acquisition
Trust II, a Delaware business trust ("Purchaser"). Capitalized terms not
otherwise defined herein or in the Partnership Agreement shall have the meanings
ascribed to them in the SPA.
2. Pursuant to the SPA, Purchaser has agreed to purchase one or more series
of Preferred Shares of the Trust, having an aggregate initial Liquidation
Preference not to exceed $135,000,000, for the purposes and upon the terms and
conditions set forth therein, with the proceeds from each such series to be
contributed (i) by the Trust to the Partnership in exchange for a series of
Preferred Interests in the Partnership, (ii) by the Partnership to a GRT LLC in
exchange for a preferred interest therein, and (iii) directly or indirectly by
the GRT LLC to a Property Level LLC in exchange for a preferred interest
therein.
3. Pursuant to Section 6.3(b) of the Partnership Agreement, upon
contribution to the Partnership by the Trust of the proceeds from the issuance
of Preferred Shares of beneficial interest in the Trust, the Partnership shall
issue to the Trust an interest in the Partnership having designations,
preferences and rights such that the economic interests thereof are
substantially similar to the Preferred Shares.
4. Pursuant to Section 18.2(iii) of the Partnership Agreement, the General
Partner has the power, without the consent of the Limited Partners, to amend the
Partnership Agreement with respect to the issuance of additional Partnership
Interests such as those contemplated herein.
5. Pursuant to Section 16 of the Partnership Agreement, the General Partner
has been appointed as attorney-in-fact by each of the Limited Partners for
purposes, inter alia,
<PAGE> 2
of effecting amendments to the Partnership Agreement adopted in accordance with
Section 18.
AMENDMENT
NOW, THEREFORE, the Partnership Agreement is hereby amended as set forth in
this Amendment No. 2.
1. Creation and Issuance of Preferred Interests.
(a) Upon the issuance by the Trust pursuant to the SPA of a series of
Preferred Shares, the Partnership is authorized, through the sole action of the
General Partner on its behalf, to create, designate and issue a series of units
("Units") of non-voting preferred limited partner interest (a "Preferred
Interest") having the same rate of return as such series of Preferred Shares
pursuant to the applicable Articles Supplementary; provided, that the aggregate
Preferred Contribution (as defined below) for all Preferred Interests issued
pursuant to this Amendment No. 2 shall not exceed $135,000,000. Each issuance of
Units of a series of Preferred Interest shall be evidenced by a Certificate of
Preferred Limited Partner Interest in the form attached as Exhibit A.
(b) There is hereby created and designated an initial series of Preferred
Interest (the "Series A Preferred Interest"), consisting of 40,000 Units which
shall correspond to 40,000 shares of Series A Convertible Preferred Shares (the
"Series A Preferred Shares"). On the date hereof 34,000 Units of Series A
Preferred Interest are hereby issued to the Trust contemporaneously with 34,000
Series A Preferred Shares being issued pursuant to the SPA, the proceeds of
which will be used to finance acquisition, construction and development of the
first phase of Great Plains MetroMall (the "Kansas Mall") in Olathe, Kansas by
Great Plains MetroMall LLC, a Property Level LLC ("Kansas LLC"), in which the
NACC Member will be Partnership Acquisition Trust III, a Delaware business trust
and the GRT LLC Member will be Olathe Mall LLC ("GRT Kansas LLC"). The GRT
Kansas LLC Operating Agreement is attached as Exhibit B. The Kansas LLC
Operating Agreement is attached as Exhibit C. Additional Units of Series A
Preferred Interest shall be issued by the Partnership contemporaneously with any
issuance by the Trust of additional Series A Preferred Shares in connection with
the acquisition, construction and development of additional phases of the Great
Plains MetroMall.
(c) The creation, designation and issuance of a series of Preferred
Interest (other than the Series A Preferred Interest) with respect to a related
series of Preferred Shares shall be evidenced by a Supplement to this Amendment
No. 1 in the form attached hereto as Exhibit D, to be executed and delivered by
the General Partner on behalf of the Partnership.
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<PAGE> 3
2. Preferred Contribution; Preferred Return.
(a) Simultaneously with each sale of Preferred Shares of any series under
the SPA, the Trust shall contribute an amount equal to the gross proceeds of
such sale (the "Preferred Contribution") to the Partnership in consideration of
the issuance of the related Preferred Interest.
(b) The Trust shall be entitled to receive, and the Partnership shall pay,
a return (the "Preferred Return") on each Unit of a series of Preferred Interest
equal to the return applicable to each share of the related series of Preferred
Shares under the Articles Supplementary. To the extent that any Preferred Return
is not paid when due, the same shall accrue and compound on the same terms and
conditions as dividends on the applicable Preferred Shares accrue and compound
under the Articles Supplementary. The Preferred Return for any Preferred
Interest shall be due in the same amounts on the same dates as dividends on the
applicable Preferred Shares are due under the Articles Supplementary. For
purposes hereof, no effect shall be given to (i) the fact that the Preferred
Shares may have been canceled (except (through conversion) as provided in
Section 6 below) or (ii) any amendment or modification of the Articles
Supplementary.
3. Application of Preferred Contribution. The gross amount of Preferred
Contribution received in respect of any Preferred Interest shall be contributed
by the Partnership to the applicable GRT LLC in exchange for a preferred
interest therein, and the Partnership shall cause the GRT LLC in turn directly
or indirectly to contribute such amount to the applicable Property Level LLC in
exchange for a preferred interest therein.
4. Capital Account; Allocations. A separate Capital Account shall be established
and maintained with respect to each series of Preferred Interest, with
adjustments thereto and other allocations of Partnership items made consistent
with the Regulations and the advice of the Partnership's independent
accountants.
5. Distributions.
(a) Notwithstanding any provision of the Partnership Agreement, (i) any
cash received by the Partnership as a distribution from a GRT LLC which was
received by such GRT LLC from the related Property Level LLC as a distribution
of Net Cash Flow from Operations (as defined in the Operating Agreement of such
Property Level LLC) shall be applied when received to the payment of any amounts
due and owing on account of the Preferred Return with respect to the related
Preferred Interest, and (ii) any cash (or Preferred Shares) received by the
Partnership as a distribution from a GRT LLC which was received by such GRT LLC
from the related Property Level LLC as a distribution of Proceeds from Capital
Transactions (as defined in the Operating Agreement
-3-
<PAGE> 4
of such Property Level LLC), or following termination and liquidation of such
Property Level LLC, shall be applied when received to the return of the
Preferred Contribution, together with any accrued and unpaid Preferred Return,
with respect to the related Preferred Interest. Each Preferred Share distributed
hereunder shall be deemed to have a fair market value equal to its Liquidation
Preference plus accrued and unpaid dividends as determined pursuant to the
applicable Articles Supplementary.
(b) In the event any amount received by the Partnership from a GRT LLC as
Cash Flow from Operations or Proceeds from Capital Transactions and
distributable to the holder of any Preferred Interest pursuant to Section 5.1(a)
is less than the amount then required to be paid by the Trust to the holder of
the related series of Preferred Shares, an amount equal to such deficiency shall
be distributed to the holder of such Preferred Interest prior to any
distributions to Partners pursuant to Article 8 of the Partnership Agreement.
(c) In the event of liquidation and dissolution of the Partnership, the
holder of any Preferred Interest then outstanding shall be entitled to receive,
prior to distributions to Partners pursuant to Section 15.2 of the Partnership
Agreement, an amount equal to the Liquidation Preference plus accrued and unpaid
dividends which would be payable under the applicable Articles Supplementary to
the holder of an equal amount of the related series of Preferred Shares if on
the date of dissolution of the Partnership the Trust were to dissolve and
liquidate.
(d) Except as expressly provided herein, the holders of any Preferred
Interests shall not be entitled to participate in any other distributions made
by the Partnership pursuant to Section 8, Section 15 or otherwise under the
Partnership Agreement.
6. Conversion Rights and Other Terms.
(a) Pursuant to Section 6.3(b) of the Partnership Agreement, in the event
all or any portion of a series of Preferred Shares is converted into Common
Shares of the Trust pursuant to the terms of such Preferred Shares, an equal
portion of the related series of Preferred Interest shall be converted into O.
P. Units on the same basis as the Preferred Shares are converted into Common
Shares, and such Preferred Interest shall to such extent be permanently retired
and canceled for all purposes.
(b) In the event of any redemption by the Trust of all or any portion of
any series of Preferred Shares pursuant to the Articles Supplementary, an equal
portion of the related series of Preferred Interest shall be redeemed on the
same basis as such Preferred Shares and permanently retired and canceled for all
purposes.
-4-
<PAGE> 5
(c) Upon any other return to the Trust or other holder of a Preferred
Interest of the Preferred Contribution with respect to all or any portion of
such Preferred Interest (whether in cash or Preferred Shares), together with
payment of any accrued and unpaid Preferred Return applicable thereto, such
Preferred Interest shall to such extent be permanently retired and canceled for
all purposes.
7. Collateral Assignment of Preferred Interest. It is acknowledged and agreed
that each Preferred Interest will be pledged to the purchaser of the related
series of Preferred Shares pursuant to a Collateral Assignment of Preferred
Partnership Interest (the "Collateral Assignment") for the purpose of securing
certain obligations of the Trust under the SPA.
8. Investment Representations; Transfer Restrictions.
(a) The Trust represents and warrants to the Partnership that (i) it is
acquiring the Preferred Interests for its own account for investment and not
with a view towards the resale, transfer or distribution thereof, nor with any
present intention of distributing the Preferred Interests, (ii) it is an
"accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act, and (iii) it understands that the issuance of the Preferred
Interests is intended to be exempt from registration under the Securities Act by
virtue of Section 4(2) thereof and Rule 506 thereunder, and that the Preferred
Interests will be "restricted securities" as defined in Rule 144 under the
Securities Act.
(b) The Trust covenants that it will not sell or otherwise transfer the
Preferred Interests (or any interest therein) except pursuant to (i) the
Collateral Assignment, or (ii) an effective registration under the Securities
Act or in a transaction which, in the opinion of counsel in such form and by
such counsel satisfactory to the Partnership, qualifies as an exempt transaction
under the Securities Act and the rules and regulations promulgated thereunder.
(c) The certificates evidencing Units of Preferred Interest shall bear an
appropriate legend reflecting the foregoing restrictions on transfer of the
Preferred Interests.
9. Additional Documents and Actions. The General Partner is expressly authorized
on behalf of the Partnership to (i) execute and deliver all such other
instruments, assignments, affidavits, notices, agreements, consents,
certificates and other documents, and (ii) take all such further and other
actions, as the General Partner shall deem necessary, advisable or appropriate
to carry out the transactions contemplated in this Amendment No. 2.
10. Construction; Limited Partnership Agreement. Consistent with Section 6.3(b)
of the Partnership Agreement, it is intended
-5-
<PAGE> 6
that the economic interests of any series of Preferred Interest shall be
substantially similar to the related series of Preferred Shares, and this
Amendment No. 2 shall be construed as reasonably required with respect to the
preferences and rights of such Preferred Interest to give effect to such intent.
Except as expressly provided herein or as so reasonably required to give effect
to the provisions hereof, the terms of the Partnership Agreement shall remain in
full force and effect and are hereby ratified and confirmed.
IN WITNESS WHEREOF, the General Partners and the Limited Partners have
executed this Amendment No. 2 effective as of the date first set forth above.
GENERAL PARTNER: LIMITED PARTNERS:
- ---------------- -----------------
Glimcher Properties Corporation Glimcher Realty Trust
By: /s/ George A. Schmidt By: /s/ George A. Schmidt
--------------------- ---------------------
Title: Sr. Vice President Title: Sr. Vice President
------------------ ------------------
All Other Limited Partners
By: Glimcher Properties
Corporation, pursuant to power of
attorney set forth in Section 16 of
the Partnership Agreement
By: /s/ George A. Schmidt
----------------------
Title: Sr. Vice President
--------------------
-6-
<PAGE> 7
EXHIBITS
Exhibit A - Form of Certificate of Preferred Limited Partner Interest
Exhibit B - GRT Kansas LLC Operating Agreement
Exhibit C - Kansas LLC Operating Agreement
Exhibit D - Form of Supplement
-7-
<PAGE> 1
Exhibit 3.8
AMENDMENT NO. 3
TO
LIMITED PARTNERSHIP AGREEMENT
OF
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
This Amendment No. 3 is made effective as of November __, 1997 by the
General Partner and the Limited Partners of Glimcher Properties Limited
Partnership, a Delaware limited partnership (the "Partnership").
Recitals
1. The Partnership was organized pursuant to a Limited Partnership
Agreement dated as of November 30, 1993, as previously amended (the "Partnership
Agreement"). In contemplation of a public offering of a new series of preferred
shares of beneficial interest designated "Series B Preferred Shares" (as defined
below) by Glimcher Realty Trust (the "Trust"), the Partnership and the Trust
have entered into an Underwriting Agreement dated as of November 12, 1997 (the
"Underwriting Agreement") with Donaldson, Lufkin & Jenrette, Prudential
Securities Incorporated, BT Alex. Brown Incorporated and PaineWebber
Incorporated (collectively, the "Underwriter"). Capitalized terms not otherwise
defined herein or in the Partnership Agreement shall have the meanings ascribed
to them in the Underwriting Agreement.
2. Pursuant to the Underwriting Agreement, the Underwriter has agreed to
purchase Series B Preferred Shares of the Trust, having an aggregate initial
Liquidation Preference not to exceed $115.4 million ($132.8 million if the
Underwriter's over-allotment option is exercised), for the purposes and upon the
terms and conditions set forth therein, with the proceeds from each such series
to be contributed by the Trust to the Partnership in exchange for a series of
Preferred Interests in the Partnership.
3. Pursuant to Section 6.3(b) of the Partnership Agreement, upon
contribution to the Partnership by the Trust of the proceeds from the issuance
of shares of beneficial interest in the Trust, the Partnership shall issue to
the Trust an interest in the Partnership having designations, preferences and
rights such that the economic interests thereof are substantially similar to
such issued shares of beneficial interest of the Trust.
4. Pursuant to Section 18.2(iii) of the Partnership Agreement, the Trust,
as general partner of the Partnership (in such capacity, the "General Partner")
has the power, without the consent of the limited partners of the Partnership,
to amend the Partnership Agreement with respect to the issuance of additional
interests in the Partnership such as those contemplated herein.
5. Pursuant to Section 16 of the Partnership Agreement, the General Partner
has been appointed as attorney-in-fact by each of the limited partners of the
Partnership for purposes, inter alia, of effecting amendments to the Partnership
Agreement adopted in accordance with Section 18.
6. In connection with Amendment No. 1 to the Securities Purchase Agreement,
dated as of November 10, 1997, among the Partnership, the Trust and Partnership
Acquisition Trust II, a Delaware business trust and an affiliate of Nomura Asset
Capital Corporation (i) the Trust has agreed to exchange any and all of its
outstanding Series A Convertible Preferred
<PAGE> 2
Shares of Beneficial Interest (the "Series A Preferred Shares") in the Trust for
an equal amount of Series A-1 Convertible Preferred Shares of Beneficial
Interest (the "Series A-1 Preferred Shares") in the Trust and (ii) the
Partnership and the Trust have agreed to exchange all issued and outstanding
Series A Preferred units of limited partnership interest (the "Series A
Preferred Units") in the Partnership for an equal number of a new series of
preferred units of limited partnership interest in the Partnership designated
"Series A-1 Preferred Units," the economic terms of which will be identical to
the Series A-1 Preferred Shares.
Amendment
NOW, THEREFORE, the Partnership Agreement is hereby amended as set forth in
this Amendment No. 3.
1. Creation and Issuance of Series B Preferred Interests.
(a) Upon the issuance by the Trust pursuant to the Underwriting Agreement
of the Series B Preferred Shares, the Partnership is authorized, through the
sole action of the General Partner on its behalf, to create, designate and issue
units ("Units") of non-voting preferred limited partner interest (a "Series B
Preferred Interest") having the same rate of return and other terms as
designated in the applicable Articles Supplementary of the Series B Preferred
Shares; provided, that the aggregate Preferred Contribution (as defined below)
for all Series B Preferred Interests issued pursuant to this Amendment No. 3
shall not exceed $115.4 million ($132.8 million if the Underwriters'
over-allotment option is exercised). Units of Series B Preferred Interest shall
be evidenced by a Certificate of Series B Preferred Limited Partner Interest in
the form attached as Exhibit A.
(b) There is hereby created and designated a series of non-voting preferred
limited partner interest known as the Series B Preferred Interest consisting of
5,520,000 Units which shall correspond to 5,520,000 shares of Series B Preferred
Shares (the "Series B Preferred Shares"). On the date hereof, 4,800,000 Units of
Series B Preferred Interest are hereby issued to the Trust contemporaneously
with the 4,800,000 Series B Preferred Shares being issued pursuant to the
Underwriting Agreement.
-2-
<PAGE> 3
2. Preferred Contribution; Preferred Return.
(a) Simultaneously with each sale of Series B Preferred Shares under the
Underwriting Agreement, the Trust shall contribute all of the proceeds of such
sale received by the Trust to the Partnership in consideration of the issuance
of the related equal number of Units of Series B Preferred Interest.
Notwithstanding the foregoing, for the purposes of this Agreement, the amount of
such contribution shall be deemed to be an amount equal to the gross proceeds of
such sale (the "Preferred Contribution").
(b) The Trust shall be entitled to receive, and the Partnership shall pay,
a distribution (the "Series B Preferred Return") on each Unit of a Series B
Preferred Interest equal to the return applicable to each share of the related
Series B Preferred Shares under the Articles Supplementary. To the extent that
any Series B Preferred Return is not paid when due, such amount shall accrue on
the same terms and conditions as distributions on the applicable Series B
Preferred Shares under the Articles Supplementary. The Series B Preferred Return
shall be due in the same amounts and on the same dates as distributions on the
applicable Series B Preferred Shares are due under the Articles Supplementary.
For purposes hereof, no effect shall be given to (i) the fact that the Series B
Preferred Shares may have been cancelled or (ii) any amendment or modification
of the Articles Supplementary.
3. Capital Account; Allocations. A separate Capital Account shall be
established and maintained with respect to the Series B Preferred Interest, with
adjustments thereto and other allocations of Partnership items made consistent
with the Regulations and the advice of the Partnership's independent
accountants.
4. Distributions.
(a) In the event of liquidation and dissolution of the Partnership, the
holder of any Series B Preferred Interest then outstanding shall be entitled to
receive, prior to distributions to Partners pursuant to Section 15.2 of the
Partnership Agreement and prior to distributions to Partners on Units of
non-voting Series A-1 preferred limited partner interests, an amount equal to
the Liquidation Preference plus accrued and unpaid dividends which would be
payable under the applicable Articles Supplementary to the holder of an equal
amount of the Series B Preferred Shares if on the date of dissolution of the
Partnership the Trust were to dissolve and liquidate.
(b) Except as expressly provided herein, the holders of any Series B
Preferred Interests shall not be entitled to participate in any other
distributions made by the Partnership pursuant to Section 8, Section 15 or
otherwise under the Partnership Agreement.
-3-
<PAGE> 4
5. Redemption and Other Terms.
(a) In the event of any redemption by the Trust of all or any portion of
the Series B Preferred Shares pursuant to the Articles Supplementary, an equal
portion of the Series B Preferred Interest shall be redeemed on the same basis
as such Series B Preferred Shares and permanently retired and cancelled for all
purposes.
(b) Upon any other return to the Trust or other holder of a Series B
Preferred Interest of the Preferred Contribution with respect to all or any
portion of such Series B Preferred Interest (whether in cash or Series B
Preferred Shares), together with payment of any accrued and unpaid Preferred
Return applicable thereto, such Series B Preferred Interest shall to such extent
be permanently retired and cancelled for all purposes.
6. Investment Representations; Transfer Restrictions.
(a) The Trust represents and warrants to the Partnership that (i) it is
acquiring the Series B Preferred Interest for its own account for investment and
not with a view towards the resale, transfer or distribution thereof, nor with
any present intention of distributing the Series B Preferred Interest, (ii) it
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act, and (iii) it understands that the issuance of the Series B
Preferred Interest is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) thereof and Rule 506 thereunder, and
that the Series B Preferred Interests will be "restricted securities" as defined
in Rule 144 under the Securities Act.
(b) The Trust covenants that it will not sell or otherwise transfer the
Series B Preferred Interest (or any interest therein) except pursuant to an
effective registration under the Securities Act or in a transaction which, in
the opinion of counsel in such form and by such counsel satisfactory to the
Partnership, qualifies as an exempt transaction under the Securities Act and the
rules and regulations promulgated thereunder.
(c) The certificates evidencing Units of Series B Preferred Interest shall
bear an appropriate legend reflecting the foregoing restrictions on transfer of
the Series B Preferred Interest.
7. Creation and Issuance of Series A-1 Preferred Interests. From and after
the date of issuance of the Series A-1 Preferred Shares in exchange for the
Series A Preferred Shares, all references contained in Amendment No. 2 to the
Partnership Agreement to the Series A Preferred Shares shall be deemed to refer
to the Series A-1 Preferred Shares.
8. Additional Documents and Actions. The General Partner is expressly
authorized on behalf of the Partnership to (i) execute and deliver all such
other instruments, assignments, assignments, affidavits, notices, agreements,
consents, certificates and other documents, and (ii) take all such further and
other actions as the General Partner shall deem necessary, advisable or
appropriate to carry out the transactions contemplated in this Amendment No. 3.
-4-
<PAGE> 5
9. Construction; Limited Partnership Agreement. Consistent with
Section 6.3(b) of the Partnership Agreement, it is intended that the economic
interests of the Series B Preferred Interest shall be substantially similar to
the Series B Preferred Shares, and this Amendment No. 3 shall be construed as
reasonably required with respect to the preferences and rights of the Series B
Preferred Interest to give effect to such intent. Except as expressly provided
herein or as so reasonably required to give effect to the provisions hereof, the
terms of the Partnership Agreement shall remain in full force and effect and are
hereby ratified and confirmed.
IN WITNESS WHEREOF, the General Partners and the Limited Partners have
executed this Amendment No. 3 effective as of the date first set forth above.
<TABLE>
<CAPTION>
GENERAL PARTNER: LIMITED PARTNERS:
<S> <C>
Glimcher Properties Corporation Glimcher Realty Trust
By: /s/ George A. Schmidt By: /s/ George A. Schmidt
------------------------------------- -----------------------------------------
Title: Sr. V.P., Gen. Counsel & Secretary Title: Sr. V.P., Gen. Counsel & Sec'y.
---------------------------------- -----------------------------------------
All Other Limited Partners
By: Glimcher Properties
Corporation, pursuant to power of
attorney set forth in Section 16 of the
Partnership Agreement
By: /s/ George A. Schmidt
-------------------------------------
Title: Sr. V.P., Gen. Counsel & Sec'y
----------------------------------
</TABLE>
-5-
<PAGE> 6
Exhibits
Exhibit A - Form of Certificate of Preferred Limited Partner Interest
<PAGE> 7
Exhibit A
[Form of]
CERTIFICATE
OF
UNITS OF SERIES ___ PREFERRED
LIMITED PARTNER INTEREST
IN
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
Certificate No.: ___ No. of Units: ____
Glimcher Properties Corporation, as General Partner of Glimcher Properties
Limited Partnership, a Delaware limited partnership (the "Company"), hereby
certifies that Glimcher Realty Trust is the registered owner of _________ (___)
Units of Series ___ Preferred Limited Partner Interest in the Company. The
rights, preferences and limitations of the Units are set forth in (i) the
Company's Limited Partnership Agreement dated November 30, 1993, as previously
amended, (ii) Amendment No. 2 to Limited Partnership Agreement dated as of
November 26, 1996 and (iii) Amendment No. 3 to Limited Partnership Agreement
dated as of November __, 1997 (collectively, the "Agreement"), copies of which
are on file at the Company's principal office at 20 South Third Street,
Columbus, Ohio 43215.
This Certificate and the Units evidenced hereby are not transferable except
in accordance with the terms of the Agreement and applicable federal and state
securities laws.
Glimcher Properties Corporation,
General Partner
Dated: , 1997 By:
------------ ----------------------------
Its:
---------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND, ACCORDINGLY, MAY NOT BE OFFERED FOR SALE, SOLD,
ASSIGNED, OR OTHERWISE TRANSFERRED EXCEPT (i) UPON EFFECTIVE REGISTRATION OF THE
SECURITIES REPRESENTED HEREBY UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE SECURITIES LAWS, OR (ii) UPON ACCEPTANCE BY THE ISSUER OF AN OPINION OF
COUNSEL IN SUCH FORM AND BY SUCH COUNSEL OR OF OTHER DOCUMENTATION SATISFACTORY
TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED.
<PAGE> 1
Exhibit 3.9
AMENDMENT NO. 4
TO
LIMITED PARTNERSHIP AGREEMENT
OF
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
This Amendment No. 4 is made effective as of December 4, 1997 by the
General Partner and the Limited Partners of Glimcher Properties Limited
Partnership, a Delaware limited partnership (the "Partnership").
RECITALS
1. The Partnership was organized pursuant to a Limited Partnership
Agreement dated as of November 30, 1993, as previously amended (the "Partnership
Agreement"). In furtherance of its business and purpose the Partnership and
Glimcher Realty Trust (the "Trust") have entered into a Securities Purchase
Agreement dated as of December 4, 1997 (the "SPA") with Partnership Acquisition
Trust II, a Delaware business trust ("Purchaser"). Capitalized terms not
otherwise defined herein or in the Partnership Agreement shall have the meanings
ascribed to them in the SPA.
2. Pursuant to the SPA, Purchaser has agreed to purchase Series C Preferred
Shares of the Trust, having an aggregate initial Liquidation Preference not to
exceed $56,000,000, for the purposes and upon the terms and conditions set forth
therein, with the proceeds from such series to be contributed (i) by the Trust
to the Partnership in exchange for a series of Preferred Interest in the
Partnership, (ii) by the Partnership to the GRT LLC in exchange for a preferred
interest therein, and (iii) by the GRT LLC to the Property Level LLC in exchange
for a preferred interest therein.
3. Pursuant to Section 6.3(b) of the Partnership Agreement, upon
contribution to the Partnership by the Trust of the proceeds from the issuance
of Preferred Shares of beneficial interest in the Trust, the Partnership shall
issue to the Trust an interest in the Partnership having designations,
preferences and rights such that the economic interests thereof are
substantially similar to the Preferred Shares.
4. Pursuant to Section 18.2(iii) of the Partnership Agreement, the General
Partner has the power, without the consent of the Limited Partners, to amend the
Partnership Agreement with respect to the issuance of additional Partnership
Interests such as those contemplated herein.
5. Pursuant to Section 16 of the Partnership Agreement, the General Partner
has been appointed as attorney-in-fact by each of the Limited Partners for
purposes, inter alia, of effecting amendments to the Partnership Agreement
adopted accordance with Section 18.
<PAGE> 2
AMENDMENT
NOW, THEREFORE, the Partnership Agreement is hereby amended as set forth in
this Amendment No. 4.
1. Creation and Issuance of Preferred Interest.
(a) Upon the issuance by the Trust pursuant to the SPA of the Series C
Preferred Shares, the Partnership is authorized, through the sole action of the
General Partner on its behalf, to create, designate and issue units ("Units") of
non-voting preferred limited partner interest (the "Series C Preferred
Interest") having the same rate of return and other terms as designated in the
Articles Supplementary creating the Series C Preferred Shares; provided, that
the aggregate Preferred Contribution (as defined below) for the Series C
Preferred Interest issued pursuant to this Amendment No. 4 shall not exceed
$56,000,000. Units of Series C Preferred Interest shall be evidenced by a
Certificate of Series C Preferred Limited Partner Interest in the form attached
as Exhibit A.
(b) There is hereby created and designated a series of Preferred Interest
known as the Series C Preferred Interest, consisting of 56,000 Units which shall
correspond to 56,000 shares of Series C Convertible Preferred Shares (the
"Series C Preferred Shares"). On the date hereof 56,000 Units of Series C
Preferred Interest are hereby issued to the Trust contemporaneously with 56,000
Series C Preferred Shares being issued pursuant to the SPA.
2. Preferred Contribution; Preferred Return.
(a) Simultaneously with the sale of Series C Preferred Shares under the
SPA, the Trust shall contribute an amount equal to the gross proceeds of such
sale (the "Preferred Contribution") to the Partnership in consideration of the
issuance of the Series C Preferred Interest.
(b) The Trust shall be entitled to receive, and the Partnership shall pay,
a return (the "Series C Preferred Return") on each Unit of Series C Preferred
Interest equal to the return applicable to each share of Series C Preferred
Shares under the Articles Supplementary. To the extent that any Series C
Preferred Return is not paid when due, the same shall accrue and compound on the
same terms and conditions as dividends on the Series C Preferred Shares accrue
and compound under the Articles Supplementary. The Series C Preferred Return
shall be due in the same amounts on the same dates as dividends on the Series C
Preferred Shares are due under the Articles Supplementary. For purposes hereof,
no effect shall be given to (i) the fact that Series C Preferred Shares may have
been canceled (except through conversion as provided in Section 6 below) or (ii)
any amendment or modification of the Articles Supplementary.
3. Application of Preferred Contribution. The gross amount of Preferred
Contribution received in respect of the Series C Preferred Interest shall be
contributed by the Partnership to the GRT LLC in exchange for a preferred
interest therein, and the Partnership shall cause the GRT LLC in turn directly
or indirectly to contribute such amount to the Property Level LLC in exchange
for a preferred interest therein.
<PAGE> 3
4. Capital Account: Allocations. A separate Capital Account shall be established
and maintained with respect to the Series C Preferred Interest, with adjustments
thereto and other allocations of Partnership items made consistent with the
Regulations and the advice of the Partnership's independent accountants.
5. Distributions.
(a) Notwithstanding any provision of the Partnership Agreement, (i) any
cash received by the Partnership as a distribution from the GRT LLC which was
received by such GRT LLC from the Property Level LLC as a distribution of Net
Cash Flow from Operations (as defined in the Operating Agreement of the Property
Level LLC) shall be applied when received to the payment of any amounts due and
owing on account of the Preferred Return with respect to the Series C Preferred
Interest, and (ii) any cash (or Series C Preferred Shares) received by the
Partnership as a distribution from the GRT LLC which was received by the GRT LLC
from the Property Level LLC as a distribution of Proceeds from Capital
Transactions (as defined in the Operating Agreement of such Property Level LLC),
or following termination and liquidation of such Property Level LLC, shall be
applied when received to the return of the Preferred Contribution, together with
any accrued and unpaid Preferred Return, with respect to the Series C Preferred
Interest. Each Series C Preferred Share distributed hereunder shall be deemed to
have a fair market value equal to its Liquidation Preference plus accrued and
unpaid dividends as determined pursuant to the Articles Supplementary.
(b) In the event any amount received by the Partnership from the GRT LLC as
Cash Flow from Operations or Proceeds from Capital Transactions and
distributable to the holder of any Series C Preferred Interest pursuant to
Section 5.1(a) is less than the amount then required to be paid by the Trust to
the holder of the Series C Preferred Shares, an amount equal to such deficiency
shall be distributed to the holder of such Series C Preferred Interest prior to
any distributions to Partners pursuant to Article 8 of the Partnership
Agreement.
(c) In the event of liquidation and dissolution of the Partnership, the
holder of any Series C Preferred Interest then outstanding shall be entitled to
receive, prior to distributions to Partners pursuant to Section 15.2 of the
Partnership Agreement, an amount equal to the Liquidation Preference plus
accrued and unpaid dividends which would be payable under the Articles
Supplementary to the holder of an equal amount of Series C Preferred Shares if
on the date of dissolution of the Partnership the Trust were to dissolve and
liquidate.
(d) Except as expressly provided herein, the holders of Series C Preferred
Interests shall not be entitled to participate in any other distributions made
by the Partnership pursuant to Section 8, Section 15 or otherwise under the
Partnership Agreement.
6. Conversion Rights and Other Terms.
(a) Pursuant to Section 6.3(b) of the Partnership Agreement, in the event
all or any portion of the Series C Preferred Shares are converted into Common
Shares of the Trust pursuant
<PAGE> 4
to the terms of the Series C Preferred Shares, an equal portion of the Series C
Preferred Interest shall be converted into 0. P. Units on the same basis as the
Series C Preferred Shares are converted into Common Shares, and such Series C
Preferred Interest shall to such extent be permanently retired and canceled for
all purposes.
(b) In the event of any redemption by the Trust of all or any portion of
the Series C Preferred Shares pursuant to the Articles Supplementary, an equal
portion of Series C Preferred Interest shall be redeemed on the same basis as
such Series C Preferred Shares and permanently retired and canceled for all
purposes.
(c) Upon any other return to the Trust or other holder of Series C
Preferred Interest of the Preferred Contribution with respect to all or any
portion of such Series C Preferred Interest (whether in cash or Series C
Preferred Shares), together with payment of any accrued and unpaid Preferred
Return applicable thereto, such Series C Preferred Interest shall to such extent
be permanently retired and canceled for all purposes.
7. Collateral Assignment of Preferred Interest. It is acknowledged and agreed
that the Series C Preferred Interest will be pledged to the purchaser of the
Series C Preferred Shares pursuant to a Collateral Assignment of Preferred
Partnership Interest (the "Collateral Assignment") for the purpose of securing
certain obligations of the Trust under the SPA.
8. Investment Representations; Transfer Restrictions.
(a) The Trust represents and warrants to the Partnership that (i) it is
acquiring the Series C Preferred Interest for its own account for investment and
not with a view towards the resale, transfer or distribution thereof, nor with
any present intention of distributing the Series C Preferred Interest, (ii) it
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act, and (iii) it understands that the issuance of the Series C
Preferred Interest is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) thereof and Rule 506 thereunder, and
that the Series C Preferred Interest will be "restricted securities" as defined
in Rule 144 under the Securities Act.
(b) The Trust covenants that it will not sell or otherwise transfer the
Series C Preferred Interest (or any interest therein) except pursuant to (i) the
Collateral Assignment, or (ii) an effective registration under the Securities
Act or in a transaction which, in the opinion of counsel in such form and by
such counsel satisfactory to the Partnership, qualifies as an exempt transaction
under the Securities Act and the rules and regulations promulgated thereunder.
(c) The certificates evidencing Units of Series C Preferred Interest shall
bear an appropriate legend reflecting the foregoing restrictions on transfer of
the Series C Preferred Interest.
9. Additional Documents and Actions. The General Partner is expressly authorized
on behalf of the Partnership to (i) execute and deliver all such other
instruments, assignments, affidavits, notices, agreements, consents,
certificates and other documents, and (ii) take all such further and
<PAGE> 5
other actions, as the General Partner shall deem necessary, advisable or
appropriate to carry out the transactions contemplated in this Amendment No. 4.
10. Construction; Limited Partnership Agreement. Consistent with Section 6.3(b)
of the Partnership Agreement, it is intended that the economic interests of the
Series C Preferred Interest shall be substantially similar to the Series C
Preferred Shares, and this Amendment No. 4 shall be construed as reasonably
required with respect to the preferences and rights of the Series C Preferred
Interest to give effect to such intent. Except as expressly provided herein or
as so reasonably required to give effect to the provisions hereof, the terms of
the Partnership Agreement shall remain in full force and effect and are hereby
ratified and confirmed.
IN WITNESS WHEREOF, the General Partner and the Limited Partners have
executed this Amendment No. 4 effective as of the date first set forth above.
<TABLE>
<CAPTION>
GENERAL PARTNER: LIMITED PARTNERS:
<S> <C>
Glimcher Properties Corporation Glimcher Realty Trust
By: /s/ George A. Schmidt By: /s/ George A. Schmidt
---------------------------------- -----------------------------------------
George A. Schmidt George A. Schmidt
Title: Senior Vice President Title: Senior Vice President
All Other Limited Partners:
By: Glimcher Properties Corporation,
pursuant to power of attorney set forth in
Section 16 of the Partnership Agreement
By: /s/ George A. Schmidt
------------------------------------------
George A. Schmidt
Title: Senior Vice President
</TABLE>
<PAGE> 6
CERTIFICATE
OF
UNITS OF SERIES C PREFERRED
LIMITED PARTNER INTEREST
IN
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
Certificate No: 1 No. of Units: 56,000
Glimcher Properties Corporation, as General Partner of Glimcher Properties
Limited Partnership, a Delaware limited partnership (the "Company"), hereby
certifies that GLIMCHER REALTY TRUST is the registered owner of Fifty-Six
Thousand (56,000) Units of Series C Preferred Limited Partner Interest in the
Company. The rights, preferences and limitations of the Units are set forth in
(i) the Company's Limited Partnership Agreement dated November 30, 1993, as
previously amended, and (ii) Amendment No. 4 to Limited Partnership Agreement
dated as of December 4, 1997, (collectively, the "Agreement"), copies of which
are on file at the Company's principal office at 20 South Third Street,
Columbus, Ohio 43215.
This Certificate and the Units evidenced hereby are not transferable except
in accordance with the terms of the Agreement and applicable federal and state
securities laws.
Glimcher Properties Corporation,
General Partner
Dated: December 4, 1997 By: /s/ George A. Schmidt
----------------------------
Its: Senior Vice President
---------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND, ACCORDINGLY, MAY NOT BE OFFERED FOR SALE, SOLD,
ASSIGNED, OR OTHERWISE TRANSFERRED EXCEPT (I) UPON EFFECTIVE REGISTRATION OF THE
SECURITIES REPRESENTED HEREBY UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE
STATE SECURITIES LAWS, OR (II) UPON ACCEPTANCE BY THE ISSUER OF AN OPINION OF
COUNSEL IN SUCH FORM AND BY SUCH COUNSEL OR OF OTHER DOCUMENTATION SATISFACTORY
TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED.
<PAGE> 1
Exhibit 4.5
Series C Preferred Number 1 Shares 56,000
GLIMCHER REALTY TRUST
a Real Estate Investment Trust
Formed Under the Laws of the State of Maryland
THIS CERTIFIES THAT Partnership Acquisition Trust II, a Delaware business trust
is the owner of Fifty-Six Thousand (56,000) fully paid and nonassessable Series
C Convertible Preferred Shares of the Beneficial Interest of
GLIMCHER REALTY TRUST
(the "Trust") transferable on the books of the Trust by the holder hereof in
person or by its duly authorized attorney, upon surrender of this Certificate
properly endorsed. This Certificate and the Shares represented hereby are issued
and shall have the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption set forth in Exhibit 1 of
the Articles Supplementary-Classifying and Designating 56,000 Shares of
Beneficial Interest as 56,000 Shares of Series C Convertible Preferred
Beneficial Interest.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
by its duly authorized officers and its seal to be hereunder affixed this 3rd
day of December, 1997.
/s/ George A. Schmidt /s/ David J. Glimcher (SEAL)
- ----------------------------- -------------------------------------
George A. Schmidt, Secretary David J. Glimcher, President
The securities evidenced hereby have not been registered under the Securities
Act of 1933, as amended (the "Act"), and may not be transferred except pursuant
to an effective registration under the Act or in a transaction which, in the
opinion of counsel (who may be inside counsel of the holder of these securities)
reasonably satisfactory to GRT, qualifies as an exempt transaction under the Act
and the rules and regulations promulgated thereunder.
The Trust will furnish to any stockholder, upon request and without charge, a
full statement regarding: (i) the designations and any preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the stock of each
class which the Trust is authorized to issue; (ii) the differences in the
relative rights and preferences between the shares of each series to the extent
they have been set; (iii) the authority of the Board of Trustees to set the
relative rights and preferences of subsequent series; and (iv) restrictions on
transferability.
<PAGE> 1
Exhibit 10.48
SEVERANCE BENEFITS AGREEMENT
AGREEMENT, dated as of June 11, 1997, by and among GLIMCHER REALTY TRUST, a
Maryland real estate investment trust, with offices at 20 South Third Street,
Columbus, Ohio, 43215 ("GRT"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership, with offices at 20 South Third Street, Columbus,
Ohio, 43215 ("GPLP"), and HERBERT GLIMCHER, an individual residing at 10 North
Drexel, Bexley, Ohio, 43209, (the "Executive")
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates, including
entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services to the
Company upon terms and conditions upon which the Company and the Executive have
previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's contributions to the
past and future growth of the Company have been and will be substantial; and
WHEREAS, to induce the Executive to remain in the employ of the Company,
the parties hereto desire to set forth certain severance benefits which GPLP
will pay to the Executive in the event of a Change in Control of GRT (as defined
in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which GPLP and GRT have satisfied
all of their obligations hereunder, or (b) the date on which the Executive is no
longer an employee of the Company for any reason whatsoever including, without
limitation, termination without cause. Notwithstanding the termination of this
Agreement subsequent to a Change in Control of GRT, in the event that the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive all
benefits described hereunder and the provisions hereof related thereto shall
survive such termination.
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement, a "Change in
Control of GRT" shall be deemed to occur if:
<PAGE> 2
(i) there shall have occurred a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not GRT is then subject to such reporting requirement, provided, however,
that there shall not be deemed to be a Change in Control of GRT if
immediately prior to the occurrence of what would otherwise be a Change in
Control of GRT (a) the Executive is the other party to the transaction (a
"Control of GRT Event") that would otherwise result in a Change in Control
of GRT or (b) the Executive is an Executive officer, trustee, director or
more than 5% equity holder of the other party to the Control of GRT Event
or of any entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"), provided,
however, that a Transaction shall not be deemed to result in a Change in
Control of GRT if (a) immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist, or (b) (1) the shareholders of GRT, immediately
before such Transaction own, directly or indirectly, immediately following
such Transaction in excess of fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Transaction constitute
at least a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) GRT acquires assets of another company or a subsidiary of GRT
merges or consolidates with another company (each, an "Other Transaction")
and (a) the shareholders of GRT, immediately before such Other Transaction
own, directly or indirectly, immediately
-2-
<PAGE> 3
following such Other Transaction 50% or less of the combined voting power
of the outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Other Transaction or (b) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Other Transaction
constitute less than a majority of the members of the board of directors or
the board of trustees, as the case may be, of the Other Surviving
Corporation, or of a corporation or other entity beneficially directly or
indirectly owning a majority of the outstanding voting securities of the
Other Surviving Corporation, provided, however, that an Other Transaction
shall not be deemed to result in a Change in Control of GRT if immediately
prior thereto the circumstances in (i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the Executive is an
employee of the Company at the moment immediately prior to a Change in Control
of GRT, the Executive shall be entitled to receive the compensation and benefits
set forth below.
(a) GPLP shall pay to the Executive, not later than the date of any Change
in Control of GRT, unless otherwise agreed to in writing, a lump sum severance
payment (the "Severance Payment") equal to three (3) times the Base Amount (as
defined below). For purposes of this Section 3(a), the Base Amount shall mean
the Executive's annual compensation during the calendar year period preceding
the calendar year in which the Change in Control of GRT occurs. For purposes of
determining annual compensation in the preceding sentence, there shall be
included (i) all base salary and bonuses paid or payable to the Executive by the
Company with respect to the preceding calendar year, (ii) all grants of
restricted common shares of beneficial interest of GRT (the "Shares"), if any,
with respect to such preceding calendar year, which Shares shall be valued based
on their date of grant Fair Market Value (as defined in Section 7.2 of the GRT's
1993 Employee Share Option Plan or 1993 Trustee Share Option Plan, as the case
may be, or any other plan or agreement pursuant to which they are issued), and
(iii) the fair market value of any other property or rights given or awarded to
the Executive by the Company with respect to such preceding calendar year.
(b) Any Shares now or hereafter issued to the Executive pursuant to any
restricted Share grant shall vest on
-3-
<PAGE> 4
the day immediately prior to the date of a Change in Control of GRT and no
longer be subject to repurchase or any other forfeiture restrictions.
(c) GRT and GPLP shall cause the Company to maintain in full force and
effect for the Executive's continued benefit for 18 months following a Change in
Control of GRT, all life, accident, medical and dental insurance benefit plans
and programs or arrangements in which the Executive was entitled to participate
immediately prior to the date of a Change in Control of GRT; provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs; and provided, further, that in the event
that the Executive becomes employed by any third party during such 18-month
period, then upon the date of such employment the Executive shall no longer be
entitled to any of the accident, medical or dental insurance benefits described
in the preceding clause. Subject to the preceding sentence, in the event that
the Executive's participation in any such plan or program is barred, GRT and
GPLP shall arrange to cause the Company to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive under
such plans and programs. Subject to the first sentence of this paragraph, at the
end of the period of coverage, the Executive shall have the option to have
assigned to him at no cost to the Executive and with no apportionment of prepaid
premiums, any assignable insurance policy owned by the Company and relating
specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted to the
Executive shall vest on the day immediately prior to the date of a Change in
Control of GRT and become fully exercisable in accordance with their terms.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 3 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Company, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement or any plan or other
arrangement of the Company and whether or not the Executive's employment with
the Company has terminated) which constitutes an
-4-
<PAGE> 5
"excess parachute payment" within the meaning of Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") (or for which a tax is
otherwise payable under Section 4999 of the Code), then GPLP shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of (i)
all taxes payable by the Executive under Section 4999 of the Code with respect
to all such excess parachute payments (or otherwise), including without
limitation the Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to the Additional Amount. The amounts
payable pursuant to this Section 4 shall be paid by GPLP to the Executive not
later than the date of any Change in Control of GRT, unless otherwise agreed to
in writing.
5. EXPENSES. GPLP shall pay or reimburse the Executive, as the case may be,
for all legal fees and related expenses (including the costs of experts,
evidence and counsel) paid by the Executive as a result of (i) the Executive
seeking to obtain or enforce any right or benefit provided by this Agreement, or
(ii) any action taken by the Company against the Executive in enforcing its
rights hereunder; provided, however, that GPLP shall reimburse the legal fees
and related expenses described in this Section 5 only if and when a final
judgement has been rendered in favor of the Executive and all appeals related to
any such action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained herein shall
confer upon the Executive the right to continue in the employment or service of
the Company or affect any right that the Company may have to terminate the
employment or service of the Executive at any time for any reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all obligations of, and
the full and prompt payment of all amounts payable by, GPLP hereunder. In
addition, GRT guarantees the satisfaction of all obligations of the Company
hereunder.
8. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Maryland,
without regard to Maryland's conflicts of law principles. Any dispute or
controversy arising under this Agreement, or out of the interpretation hereof,
or based upon the breach hereof, shall be resolved by arbitration held at the
offices of the American Arbitration Association in the City of Philadelphia in
accordance with the rules and regulations of such association prevailing at the
time of the demand for arbitration by either party hereto, and the decision of
the arbitrator or arbitrators shall be final and binding upon both parties
hereto, provided, however, that the arbitrator or arbitrators shall only have
the power and authority to interpret,
-5-
<PAGE> 6
and not to modify or amend, the terms and provisions hereof. Judgment upon an
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Notwithstanding anything contained in this Section
8, either party shall have the right to seek preliminary injunctive relief in
any court in the City of Philadelphia in aid of, and pending the final decision
in, the arbitration proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements with respect to the subject matter hereof. No provision of this
Agreement may be waived or changed, except by a writing signed by the party to
be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the
benefit of, be binding upon and be enforceable by GRT and GPLP, their successors
and assigns and the Executive, and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. NOTICES. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 11. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents, agreements,
understandings and arrangements relating to the matters described herein have
been executed by the undersigned representative of GRT in his/her capacity as an
officer or trustee of GRT which has been formed as a Maryland real estate
investment trust pursuant to an Amended and Restated Declaration of Trust of
GRT, as amended, and not individually, and neither the trustees, officers or
shareholders of GRT shall be bound or have any personal liability hereunder or
thereunder. The Executive shall look solely to the assets of GRT for
satisfaction of any liability of GRT in respect of this Agreement and all
documents, agreements, understandings and arrangements
-6-
<PAGE> 7
relating to this transaction and will not seek recourse or commence any action
against any of the trustees, officers or shareholders of GRT or any of their
personal assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLIMCHER REALTY TRUST
By: /s/ David J. Glimcher
-------------------------------------
David J. Glimcher
President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation
------------------------------------
Its: General Partner
------------------------------------
By: /s/ David J. Glimcher
-------------------------------------
David J. Glimcher
President
EXECUTIVE:
/s/ Herbert Glimcher
- ----------------------------------
Herbert Glimcher
-7-
<PAGE> 1
Exhibit 10.49
SEVERANCE BENEFITS AGREEMENT
AGREEMENT, dated as of June 11, 1997, by and among GLIMCHER REALTY TRUST, a
Maryland real estate investment trust, with offices at 20 South Third Street,
Columbus, Ohio, 43215 ("GRT"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership, with offices at 20 South Third Street, Columbus,
Ohio, 43215 ("GPLP"), and WILLIAM G. CORNELY, an individual residing at 215
Woodedge Circle West, Powell, Ohio, 43065, (the "Executive")
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates, including
entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services to the
Company upon terms and conditions upon which the Company and the Executive have
previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's contributions to the
past and future growth of the Company have been and will be substantial; and
WHEREAS, to induce the Executive to remain in the employ of the Company,
the parties hereto desire to set forth certain severance benefits which GPLP
will pay to the Executive in the event of a Change in Control of GRT (as defined
in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which GPLP and GRT have satisfied
all of their obligations hereunder, or (b) the date on which the Executive is no
longer an employee of the Company for any reason whatsoever including, without
limitation, termination without cause. Notwithstanding the termination of this
Agreement subsequent to a Change in Control of GRT, in the event that the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive all
benefits described hereunder and the provisions hereof related thereto shall
survive such termination.
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement, a "Change in
Control of GRT" shall be deemed to occur if:
<PAGE> 2
(i) there shall have occurred a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not GRT is then subject to such reporting requirement, provided, however,
that there shall not be deemed to be a Change in Control of GRT if
immediately prior to the occurrence of what would otherwise be a Change in
Control of GRT (a) the Executive is the other party to the transaction (a
"Control of GRT Event") that would otherwise result in a Change in Control
of GRT or (b) the Executive is an Executive officer, trustee, director or
more than 5% equity holder of the other party to the Control of GRT Event
or of any entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"), provided,
however, that a Transaction shall not be deemed to result in a Change in
Control of GRT if (a) immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist, or (b) (1) the shareholders of GRT, immediately
before such Transaction own, directly or indirectly, immediately following
such Transaction in excess of fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Transaction constitute
at least a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) GRT acquires assets of another company or a subsidiary of GRT
merges or consolidates with another company (each, an "Other Transaction")
and (a) the shareholders of GRT, immediately before such Other Transaction
own, directly or indirectly, immediately
-2-
<PAGE> 3
following such Other Transaction 50% or less of the combined voting power
of the outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Other Transaction or (b) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Other Transaction
constitute less than a majority of the members of the board of directors or
the board of trustees, as the case may be, of the Other Surviving
Corporation, or of a corporation or other entity beneficially directly or
indirectly owning a majority of the outstanding voting securities of the
Other Surviving Corporation, provided, however, that an Other Transaction
shall not be deemed to result in a Change in Control of GRT if immediately
prior thereto the circumstances in (i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the Executive is an
employee of the Company at the moment immediately prior to a Change in Control
of GRT, the Executive shall be entitled to receive the compensation and benefits
set forth below.
(a) GPLP shall pay to the Executive, not later than the date of any Change
in Control of GRT, unless otherwise agreed to in writing, a lump sum severance
payment (the "Severance Payment") equal to three (3) times the Base Amount (as
defined below). For purposes of this Section 3(a), the Base Amount shall mean
the Executive's annual compensation during the calendar year period preceding
the calendar year in which the Change in Control of GRT occurs. For purposes of
determining annual compensation in the preceding sentence, there shall be
included (i) all base salary and bonuses paid or payable to the Executive by the
Company with respect to the preceding calendar year, (ii) all grants of
restricted common shares of beneficial interest of GRT (the "Shares"), if any,
with respect to such preceding calendar year, which Shares shall be valued based
on their date of grant Fair Market Value (as defined in Section 7.2 of the GRT's
1993 Employee Share Option Plan or 1993 Trustee Share Option Plan, as the case
may be, or any other plan or agreement pursuant to which they are issued), and
(iii) the fair market value of any other property or rights given or awarded to
the Executive by the Company with respect to such preceding calendar year.
(b) Any Shares now or hereafter issued to the Executive pursuant to any
restricted Share grant shall vest on
-3-
<PAGE> 4
the day immediately prior to the date of a Change in Control of GRT and no
longer be subject to repurchase or any other forfeiture restrictions.
(c) GRT and GPLP shall cause the Company to maintain in full force and
effect for the Executive's continued benefit for 18 months following a Change in
Control of GRT, all life, accident, medical and dental insurance benefit plans
and programs or arrangements in which the Executive was entitled to participate
immediately prior to the date of a Change in Control of GRT; provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs; and provided, further, that in the event
that the Executive becomes employed by any third party during such 18-month
period, then upon the date of such employment the Executive shall no longer be
entitled to any of the accident, medical or dental insurance benefits described
in the preceding clause. Subject to the preceding sentence, in the event that
the Executive's participation in any such plan or program is barred, GRT and
GPLP shall arrange to cause the Company to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive under
such plans and programs. Subject to the first sentence of this paragraph, at the
end of the period of coverage, the Executive shall have the option to have
assigned to him at no cost to the Executive and with no apportionment of prepaid
premiums, any assignable insurance policy owned by the Company and relating
specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted to the
Executive shall vest on the day immediately prior to the date of a Change in
Control of GRT and become fully exercisable in accordance with their terms.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 3 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Company, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement or any plan or other
arrangement of the Company and whether or not the Executive's employment with
the Company has terminated) which constitutes an
-4-
<PAGE> 5
"excess parachute payment" within the meaning of Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") (or for which a tax is
otherwise payable under Section 4999 of the Code), then GPLP shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of (i)
all taxes payable by the Executive under Section 4999 of the Code with respect
to all such excess parachute payments (or otherwise), including without
limitation the Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to the Additional Amount. The amounts
payable pursuant to this Section 4 shall be paid by GPLP to the Executive not
later than the date of any Change in Control of GRT, unless otherwise agreed to
in writing.
5. EXPENSES. GPLP shall pay or reimburse the Executive, as the case may be,
for all legal fees and related expenses (including the costs of experts,
evidence and counsel) paid by the Executive as a result of (i) the Executive
seeking to obtain or enforce any right or benefit provided by this Agreement, or
(ii) any action taken by the Company against the Executive in enforcing its
rights hereunder; provided, however, that GPLP shall reimburse the legal fees
and related expenses described in this Section 5 only if and when a final
judgement has been rendered in favor of the Executive and all appeals related to
any such action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained herein shall
confer upon the Executive the right to continue in the employment or service of
the Company or affect any right that the Company may have to terminate the
employment or service of the Executive at any time for any reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all obligations of, and
the full and prompt payment of all amounts payable by, GPLP hereunder. In
addition, GRT guarantees the satisfaction of all obligations of the Company
hereunder.
8. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Maryland,
without regard to Maryland's conflicts of law principles. Any dispute or
controversy arising under this Agreement, or out of the interpretation hereof,
or based upon the breach hereof, shall be resolved by arbitration held at the
offices of the American Arbitration Association in the City of Philadelphia in
accordance with the rules and regulations of such association prevailing at the
time of the demand for arbitration by either party hereto, and the decision of
the arbitrator or arbitrators shall be final and binding upon both parties
hereto, provided, however, that the arbitrator or arbitrators shall only have
the power and authority to interpret,
-5-
<PAGE> 6
and not to modify or amend, the terms and provisions hereof. Judgment upon an
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Notwithstanding anything contained in this Section
8, either party shall have the right to seek preliminary injunctive relief in
any court in the City of Philadelphia in aid of, and pending the final decision
in, the arbitration proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements with respect to the subject matter hereof. No provision of this
Agreement may be waived or changed, except by a writing signed by the party to
be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the
benefit of, be binding upon and be enforceable by GRT and GPLP, their successors
and assigns and the Executive, and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. NOTICES. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 11. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents, agreements,
understandings and arrangements relating to the matters described herein have
been executed by the undersigned representative of GRT in his/her capacity as an
officer or trustee of GRT which has been formed as a Maryland real estate
investment trust pursuant to an Amended and Restated Declaration of Trust of
GRT, as amended, and not individually, and neither the trustees, officers or
shareholders of GRT shall be bound or have any personal liability hereunder or
thereunder. The Executive shall look solely to the assets of GRT for
satisfaction of any liability of GRT in respect of this Agreement and all
documents, agreements, understandings and arrangements
-6-
<PAGE> 7
relating to this transaction and will not seek recourse or commence any action
against any of the trustees, officers or shareholders of GRT or any of their
personal assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLIMCHER REALTY TRUST
By: /s/ David J. Glimcher
-----------------------------------
David J. Glimcher
President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation
Its: General Partner
By: /s/ David J. Glimcher
-----------------------------------
David J. Glimcher
President
EXECUTIVE:
/s/ William G. Cornely
- -----------------------------
William G. Cornely
-7-
<PAGE> 1
Exhibit 10.50
SEVERANCE BENEFITS AGREEMENT
AGREEMENT, dated as of June 11, 1997, by and among GLIMCHER REALTY TRUST, a
Maryland real estate investment trust, with offices at 20 South Third Street,
Columbus, Ohio, 43215 ("GRT"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership, with offices at 20 South Third Street, Columbus,
Ohio, 43215 ("GPLP"), and WILLIAM R. HUSTED, an individual residing at 8212
Millhouse Lane, Dublin, Ohio, 43016, (the "Executive")
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates, including
entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services to the
Company upon terms and conditions upon which the Company and the Executive have
previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's contributions to the
past and future growth of the Company have been and will be substantial; and
WHEREAS, to induce the Executive to remain in the employ of the Company,
the parties hereto desire to set forth certain severance benefits which GPLP
will pay to the Executive in the event of a Change in Control of GRT (as defined
in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which GPLP and GRT have satisfied
all of their obligations hereunder, or (b) the date on which the Executive is no
longer an employee of the Company for any reason whatsoever including, without
limitation, termination without cause. Notwithstanding the termination of this
Agreement subsequent to a Change in Control of GRT, in the event that the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive all
benefits described hereunder and the provisions hereof related thereto shall
survive such termination.
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement, a "Change in
Control of GRT" shall be deemed to occur if:
<PAGE> 2
(i) there shall have occurred a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not GRT is then subject to such reporting requirement, provided, however,
that there shall not be deemed to be a Change in Control of GRT if
immediately prior to the occurrence of what would otherwise be a Change in
Control of GRT (a) the Executive is the other party to the transaction (a
"Control of GRT Event") that would otherwise result in a Change in Control
of GRT or (b) the Executive is an Executive officer, trustee, director or
more than 5% equity holder of the other party to the Control of GRT Event
or of any entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"), provided,
however, that a Transaction shall not be deemed to result in a Change in
Control of GRT if (a) immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist, or (b) (1) the shareholders of GRT, immediately
before such Transaction own, directly or indirectly, immediately following
such Transaction in excess of fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Transaction constitute
at least a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) GRT acquires assets of another company or a subsidiary of GRT
merges or consolidates with another company (each, an "Other Transaction")
and (a) the shareholders of GRT, immediately before such Other Transaction
own, directly or indirectly, immediately
-2-
<PAGE> 3
following such Other Transaction 50% or less of the combined voting power
of the outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Other Transaction or (b) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Other Transaction
constitute less than a majority of the members of the board of directors or
the board of trustees, as the case may be, of the Other Surviving
Corporation, or of a corporation or other entity beneficially directly or
indirectly owning a majority of the outstanding voting securities of the
Other Surviving Corporation, provided, however, that an Other Transaction
shall not be deemed to result in a Change in Control of GRT if immediately
prior thereto the circumstances in (i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the Executive is an
employee of the Company at the moment immediately prior to a Change in Control
of GRT, the Executive shall be entitled to receive the compensation and benefits
set forth below.
(a) GPLP shall pay to the Executive, not later than the date of any Change
in Control of GRT, unless otherwise agreed to in writing, a lump sum severance
payment (the "Severance Payment") equal to three (3) times the Base Amount (as
defined below). For purposes of this Section 3(a), the Base Amount shall mean
the Executive's annual compensation during the calendar year period preceding
the calendar year in which the Change in Control of GRT occurs. For purposes of
determining annual compensation in the preceding sentence, there shall be
included (i) all base salary and bonuses paid or payable to the Executive by the
Company with respect to the preceding calendar year, (ii) all grants of
restricted common shares of beneficial interest of GRT (the "Shares"), if any,
with respect to such preceding calendar year, which Shares shall be valued based
on their date of grant Fair Market Value (as defined in Section 7.2 of the GRT's
1993 Employee Share Option Plan or 1993 Trustee Share Option Plan, as the case
may be, or any other plan or agreement pursuant to which they are issued), and
(iii) the fair market value of any other property or rights given or awarded to
the Executive by the Company with respect to such preceding calendar year.
(b) Any Shares now or hereafter issued to the Executive pursuant to any
restricted Share grant shall vest on
-3-
<PAGE> 4
the day immediately prior to the date of a Change in Control of GRT and no
longer be subject to repurchase or any other forfeiture restrictions.
(c) GRT and GPLP shall cause the Company to maintain in full force and
effect for the Executive's continued benefit for 18 months following a Change in
Control of GRT, all life, accident, medical and dental insurance benefit plans
and programs or arrangements in which the Executive was entitled to participate
immediately prior to the date of a Change in Control of GRT; provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs; and provided, further, that in the event
that the Executive becomes employed by any third party during such 18-month
period, then upon the date of such employment the Executive shall no longer be
entitled to any of the accident, medical or dental insurance benefits described
in the preceding clause. Subject to the preceding sentence, in the event that
the Executive's participation in any such plan or program is barred, GRT and
GPLP shall arrange to cause the Company to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive under
such plans and programs. Subject to the first sentence of this paragraph, at the
end of the period of coverage, the Executive shall have the option to have
assigned to him at no cost to the Executive and with no apportionment of prepaid
premiums, any assignable insurance policy owned by the Company and relating
specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted to the
Executive shall vest on the day immediately prior to the date of a Change in
Control of GRT and become fully exercisable in accordance with their terms.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 3 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Company, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement or any plan or other
arrangement of the Company and whether or not the Executive's employment with
the Company has terminated) which constitutes an
-4-
<PAGE> 5
"excess parachute payment" within the meaning of Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") (or for which a tax is
otherwise payable under Section 4999 of the Code), then GPLP shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of (i)
all taxes payable by the Executive under Section 4999 of the Code with respect
to all such excess parachute payments (or otherwise), including without
limitation the Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to the Additional Amount. The amounts
payable pursuant to this Section 4 shall be paid by GPLP to the Executive not
later than the date of any Change in Control of GRT, unless otherwise agreed to
in writing.
5. EXPENSES. GPLP shall pay or reimburse the Executive, as the case may be,
for all legal fees and related expenses (including the costs of experts,
evidence and counsel) paid by the Executive as a result of (i) the Executive
seeking to obtain or enforce any right or benefit provided by this Agreement, or
(ii) any action taken by the Company against the Executive in enforcing its
rights hereunder; provided, however, that GPLP shall reimburse the legal fees
and related expenses described in this Section 5 only if and when a final
judgement has been rendered in favor of the Executive and all appeals related to
any such action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained herein shall
confer upon the Executive the right to continue in the employment or service of
the Company or affect any right that the Company may have to terminate the
employment or service of the Executive at any time for any reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all obligations of, and
the full and prompt payment of all amounts payable by, GPLP hereunder. In
addition, GRT guarantees the satisfaction of all obligations of the Company
hereunder.
8. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Maryland,
without regard to Maryland's conflicts of law principles. Any dispute or
controversy arising under this Agreement, or out of the interpretation hereof,
or based upon the breach hereof, shall be resolved by arbitration held at the
offices of the American Arbitration Association in the City of Philadelphia in
accordance with the rules and regulations of such association prevailing at the
time of the demand for arbitration by either party hereto, and the decision of
the arbitrator or arbitrators shall be final and binding upon both parties
hereto, provided, however, that the arbitrator or arbitrators shall only have
the power and authority to interpret,
-5-
<PAGE> 6
and not to modify or amend, the terms and provisions hereof. Judgment upon an
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Notwithstanding anything contained in this Section
8, either party shall have the right to seek preliminary injunctive relief in
any court in the City of Philadelphia in aid of, and pending the final decision
in, the arbitration proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements with respect to the subject matter hereof. No provision of this
Agreement may be waived or changed, except by a writing signed by the party to
be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the
benefit of, be binding upon and be enforceable by GRT and GPLP, their successors
and assigns and the Executive, and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. NOTICES. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 11. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents, agreements,
understandings and arrangements relating to the matters described herein have
been executed by the undersigned representative of GRT in his/her capacity as an
officer or trustee of GRT which has been formed as a Maryland real estate
investment trust pursuant to an Amended and Restated Declaration of Trust of
GRT, as amended, and not individually, and neither the trustees, officers or
shareholders of GRT shall be bound or have any personal liability hereunder or
thereunder. The Executive shall look solely to the assets of GRT for
satisfaction of any liability of GRT in respect of this Agreement and all
documents, agreements, understandings and arrangements
-6-
<PAGE> 7
relating to this transaction and will not seek recourse or commence any action
against any of the trustees, officers or shareholders of GRT or any of their
personal assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLIMCHER REALTY TRUST
By: /s/ David J. Glimcher
-------------------------------------
David J. Glimcher
President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation
Its: General Partner
By: /s/ David J. Glimcher
-------------------------------------
David J. Glimcher
President
EXECUTIVE:
/s/ William R. Husted
- ----------------------------
William R. Husted
-7-
<PAGE> 1
Exhibit 10.51
SEVERANCE BENEFITS AGREEMENT
AGREEMENT, dated as of June 11, 1997, by and among GLIMCHER REALTY TRUST, a
Maryland real estate investment trust, with offices at 20 South Third Street,
Columbus, Ohio, 43215 ("GRT"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership, with offices at 20 South Third Street, Columbus,
Ohio, 43215 ("GPLP"), and MICHAEL P. GLIMCHER, an individual residing at 216
South Columbia, Columbus, Ohio, 43209 (the "Executive").
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates, including
entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services to the
Company upon terms and conditions upon which the Company and the Executive have
previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's contributions to the
past and future growth of the Company have been and will be substantial; and
WHEREAS, to induce the Executive to remain in the employ of the Company,
the parties hereto desire to set forth certain severance benefits which GPLP
will pay to the Executive in the event of a Change in Control of GRT (as defined
in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which GPLP and GRT have satisfied
all of their obligations hereunder, or (b) the date on which the Executive is no
longer an employee of the Company for any reason whatsoever including, without
limitation, termination without cause. Notwithstanding the termination of this
Agreement subsequent to a Change in Control of GRT, in the event that the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive all
benefits described hereunder and the provisions hereof related thereto shall
survive such termination.
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement, a "Change in
Control of GRT" shall be deemed to occur if:
<PAGE> 2
(i) there shall have occurred a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not GRT is then subject to such reporting requirement, provided, however,
that there shall not be deemed to be a Change in Control of GRT if
immediately prior to the occurrence of what would otherwise be a Change in
Control of GRT (a) the Executive is the other party to the transaction (a
"Control of GRT Event") that would otherwise result in a Change in Control
of GRT or (b) the Executive is an Executive officer, trustee, director or
more than 5% equity holder of the other party to the Control of GRT Event
or of any entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"), provided,
however, that a Transaction shall not be deemed to result in a Change in
Control of GRT if (a) immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist, or (b) (1) the shareholders of GRT, immediately
before such Transaction own, directly or indirectly, immediately following
such Transaction in excess of fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Transaction constitute
at least a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) GRT acquires assets of another company or a subsidiary of GRT
merges or consolidates with another company (each, an "Other Transaction")
and (a) the shareholders of GRT, immediately before such Other Transaction
own, directly or indirectly, immediately
-2-
<PAGE> 3
following such Other Transaction 50% or less of the combined voting power
of the outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Other Transaction or (b) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Other Transaction
constitute less than a majority of the members of the board of directors or
the board of trustees, as the case may be, of the Other Surviving
Corporation, or of a corporation or other entity beneficially directly or
indirectly owning a majority of the outstanding voting securities of the
Other Surviving Corporation, provided, however, that an Other Transaction
shall not be deemed to result in a Change in Control of GRT if immediately
prior thereto the circumstances in (i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the Executive is an
employee of the Company at the moment immediately prior to a Change in Control
of GRT, the Executive shall be entitled to receive the compensation and benefits
set forth below.
(a) GPLP shall pay to the Executive, not later than the date of any Change
in Control of GRT, unless otherwise agreed to in writing, a lump sum severance
payment (the "Severance Payment") equal to three (3) times the Base Amount (as
defined below). For purposes of this Section 3(a), the Base Amount shall mean
the Executive's annual compensation during the calendar year period preceding
the calendar year in which the Change in Control of GRT occurs. For purposes of
determining annual compensation in the preceding sentence, there shall be
included (i) all base salary and bonuses paid or payable to the Executive by the
Company with respect to the preceding calendar year, (ii) all grants of
restricted common shares of beneficial interest of GRT (the "Shares"), if any,
with respect to such preceding calendar year, which Shares shall be valued based
on their date of grant Fair Market Value (as defined in Section 7.2 of the GRT's
1993 Employee Share Option Plan or 1993 Trustee Share Option Plan, as the case
may be, or any other plan or agreement pursuant to which they are issued), and
(iii) the fair market value of any other property or rights given or awarded to
the Executive by the Company with respect to such preceding calendar year.
(b) Any Shares now or hereafter issued to the Executive pursuant to any
restricted Share grant shall vest on
-3-
<PAGE> 4
the day immediately prior to the date of a Change in Control of GRT and no
longer be subject to repurchase or any other forfeiture restrictions.
(c) GRT and GPLP shall cause the Company to maintain in full force and
effect for the Executive's continued benefit for 18 months following a Change in
Control of GRT, all life, accident, medical and dental insurance benefit plans
and programs or arrangements in which the Executive was entitled to participate
immediately prior to the date of a Change in Control of GRT; provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs; and provided, further, that in the event
that the Executive becomes employed by any third party during such 18-month
period, then upon the date of such employment the Executive shall no longer be
entitled to any of the accident, medical or dental insurance benefits described
in the preceding clause. Subject to the preceding sentence, in the event that
the Executive's participation in any such plan or program is barred, GRT and
GPLP shall arrange to cause the Company to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive under
such plans and programs. Subject to the first sentence of this paragraph, at the
end of the period of coverage, the Executive shall have the option to have
assigned to him at no cost to the Executive and with no apportionment of prepaid
premiums, any assignable insurance policy owned by the Company and relating
specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted to the
Executive shall vest on the day immediately prior to the date of a Change in
Control of GRT and become fully exercisable in accordance with their terms.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 3 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Company, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement or any plan or other
arrangement of the Company and whether or not the Executive's employment with
the Company has terminated) which constitutes an
-4-
<PAGE> 5
"excess parachute payment" within the meaning of Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") (or for which a tax is
otherwise payable under Section 4999 of the Code), then GPLP shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of (i)
all taxes payable by the Executive under Section 4999 of the Code with respect
to all such excess parachute payments (or otherwise), including without
limitation the Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to the Additional Amount. The amounts
payable pursuant to this Section 4 shall be paid by GPLP to the Executive not
later than the date of any Change in Control of GRT, unless otherwise agreed to
in writing.
5. EXPENSES. GPLP shall pay or reimburse the Executive, as the case may be,
for all legal fees and related expenses (including the costs of experts,
evidence and counsel) paid by the Executive as a result of (i) the Executive
seeking to obtain or enforce any right or benefit provided by this Agreement, or
(ii) any action taken by the Company against the Executive in enforcing its
rights hereunder; provided, however, that GPLP shall reimburse the legal fees
and related expenses described in this Section 5 only if and when a final
judgement has been rendered in favor of the Executive and all appeals related to
any such action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained herein shall
confer upon the Executive the right to continue in the employment or service of
the Company or affect any right that the Company may have to terminate the
employment or service of the Executive at any time for any reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all obligations of, and
the full and prompt payment of all amounts payable by, GPLP hereunder. In
addition, GRT guarantees the satisfaction of all obligations of the Company
hereunder.
8. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Maryland,
without regard to Maryland's conflicts of law principles. Any dispute or
controversy arising under this Agreement, or out of the interpretation hereof,
or based upon the breach hereof, shall be resolved by arbitration held at the
offices of the American Arbitration Association in the City of Philadelphia in
accordance with the rules and regulations of such association prevailing at the
time of the demand for arbitration by either party hereto, and the decision of
the arbitrator or arbitrators shall be final and binding upon both parties
hereto, provided, however, that the arbitrator or arbitrators shall only have
the power and authority to interpret,
-5-
<PAGE> 6
and not to modify or amend, the terms and provisions hereof. Judgment upon an
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Notwithstanding anything contained in this Section
8, either party shall have the right to seek preliminary injunctive relief in
any court in the City of Philadelphia in aid of, and pending the final decision
in, the arbitration proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements with respect to the subject matter hereof. No provision of this
Agreement may be waived or changed, except by a writing signed by the party to
be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the
benefit of, be binding upon and be enforceable by GRT and GPLP, their successors
and assigns and the Executive, and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. NOTICES. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 11. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents, agreements,
understandings and arrangements relating to the matters described herein have
been executed by the undersigned representative of GRT in his/her capacity as an
officer or trustee of GRT which has been formed as a Maryland real estate
investment trust pursuant to an Amended and Restated Declaration of Trust of
GRT, as amended, and not individually, and neither the trustees, officers or
shareholders of GRT shall be bound or have any personal liability hereunder or
thereunder. The Executive shall look solely to the assets of GRT for
satisfaction of any liability of GRT in respect of this Agreement and all
documents, agreements, understandings and arrangements
-6-
<PAGE> 7
relating to this transaction and will not seek recourse or commence any action
against any of the trustees, officers or shareholders of GRT or any of their
personal assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLIMCHER REALTY TRUST
By: /s/ David J. Glimcher
------------------------------
David J. Glimcher
President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation
Its: General Partner
By: /s/ David J. Glimcher
------------------------------
David J. Glimcher
President
EXECUTIVE:
/s/ Michael P. Glimcher
- ------------------------------
Michael P. Glimcher
-7-
<PAGE> 1
Exhibit 10.52
SEVERANCE BENEFITS AGREEMENT
AGREEMENT, dated as of June 11, 1997, by and among GLIMCHER REALTY TRUST, a
Maryland real estate investment trust, with offices at 20 South Third Street,
Columbus, Ohio, 43215 ("GRT"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership, with offices at 20 South Third Street, Columbus,
Ohio, 43215 ("GPLP"), and GEORGE A. SCHMIDT, an individual residing at 695
Vivian Court, Gahanna, Ohio, 43230 (the "Executive").
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates, including
entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services to the
Company upon terms and conditions upon which the Company and the Executive have
previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's contributions to the
past and future growth of the Company have been and will be substantial; and
WHEREAS, to induce the Executive to remain in the employ of the Company,
the parties hereto desire to set forth certain severance benefits which GPLP
will pay to the Executive in the event of a Change in Control of GRT (as defined
in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which GPLP and GRT have satisfied
all of their obligations hereunder, or (b) the date on which the Executive is no
longer an employee of the Company for any reason whatsoever including, without
limitation, termination without cause. Notwithstanding the termination of this
Agreement subsequent to a Change in Control of GRT, in the event that the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive all
benefits described hereunder and the provisions hereof related thereto shall
survive such termination.
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement, a "Change in
Control of GRT" shall be deemed to occur if:
<PAGE> 2
(i) there shall have occurred a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not GRT is then subject to such reporting requirement, provided, however,
that there shall not be deemed to be a Change in Control of GRT if
immediately prior to the occurrence of what would otherwise be a Change in
Control of GRT (a) the Executive is the other party to the transaction (a
"Control of GRT Event") that would otherwise result in a Change in Control
of GRT or (b) the Executive is an Executive officer, trustee, director or
more than 5% equity holder of the other party to the Control of GRT Event
or of any entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"), provided,
however, that a Transaction shall not be deemed to result in a Change in
Control of GRT if (a) immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist, or (b) (1) the shareholders of GRT, immediately
before such Transaction own, directly or indirectly, immediately following
such Transaction in excess of fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Transaction constitute
at least a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) GRT acquires assets of another company or a subsidiary of GRT
merges or consolidates with another company (each, an "Other Transaction")
and (a) the shareholders of GRT, immediately before such Other Transaction
own, directly or indirectly, immediately
-2-
<PAGE> 3
following such Other Transaction 50% or less of the combined voting power
of the outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Other Transaction or (b) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Other Transaction
constitute less than a majority of the members of the board of directors or
the board of trustees, as the case may be, of the Other Surviving
Corporation, or of a corporation or other entity beneficially directly or
indirectly owning a majority of the outstanding voting securities of the
Other Surviving Corporation, provided, however, that an Other Transaction
shall not be deemed to result in a Change in Control of GRT if immediately
prior thereto the circumstances in (i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the Executive is an
employee of the Company at the moment immediately prior to a Change in Control
of GRT, the Executive shall be entitled to receive the compensation and benefits
set forth below.
(a) GPLP shall pay to the Executive, not later than the date of any Change
in Control of GRT, unless otherwise agreed to in writing, a lump sum severance
payment (the "Severance Payment") equal to three (3) times the Base Amount (as
defined below). For purposes of this Section 3(a), the Base Amount shall mean
the Executive's annual compensation during the calendar year period preceding
the calendar year in which the Change in Control of GRT occurs. For purposes of
determining annual compensation in the preceding sentence, there shall be
included (i) all base salary and bonuses paid or payable to the Executive by the
Company with respect to the preceding calendar year, (ii) all grants of
restricted common shares of beneficial interest of GRT (the "Shares"), if any,
with respect to such preceding calendar year, which Shares shall be valued based
on their date of grant Fair Market Value (as defined in Section 7.2 of the GRT's
1993 Employee Share Option Plan or 1993 Trustee Share Option Plan, as the case
may be, or any other plan or agreement pursuant to which they are issued), and
(iii) the fair market value of any other property or rights given or awarded to
the Executive by the Company with respect to such preceding calendar year.
(b) Any Shares now or hereafter issued to the Executive pursuant to any
restricted Share grant shall vest on
-3-
<PAGE> 4
the day immediately prior to the date of a Change in Control of GRT and no
longer be subject to repurchase or any other forfeiture restrictions.
(c) GRT and GPLP shall cause the Company to maintain in full force and
effect for the Executive's continued benefit for 18 months following a Change in
Control of GRT, all life, accident, medical and dental insurance benefit plans
and programs or arrangements in which the Executive was entitled to participate
immediately prior to the date of a Change in Control of GRT; provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs; and provided, further, that in the event
that the Executive becomes employed by any third party during such 18-month
period, then upon the date of such employment the Executive shall no longer be
entitled to any of the accident, medical or dental insurance benefits described
in the preceding clause. Subject to the preceding sentence, in the event that
the Executive's participation in any such plan or program is barred, GRT and
GPLP shall arrange to cause the Company to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive under
such plans and programs. Subject to the first sentence of this paragraph, at the
end of the period of coverage, the Executive shall have the option to have
assigned to him at no cost to the Executive and with no apportionment of prepaid
premiums, any assignable insurance policy owned by the Company and relating
specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted to the
Executive shall vest on the day immediately prior to the date of a Change in
Control of GRT and become fully exercisable in accordance with their terms.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 3 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Company, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement or any plan or other
arrangement of the Company and whether or not the Executive's employment with
the Company has terminated) which constitutes an
-4-
<PAGE> 5
"excess parachute payment" within the meaning of Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") (or for which a tax is
otherwise payable under Section 4999 of the Code), then GPLP shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of (i)
all taxes payable by the Executive under Section 4999 of the Code with respect
to all such excess parachute payments (or otherwise), including without
limitation the Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to the Additional Amount. The amounts
payable pursuant to this Section 4 shall be paid by GPLP to the Executive not
later than the date of any Change in Control of GRT, unless otherwise agreed to
in writing.
5. EXPENSES. GPLP shall pay or reimburse the Executive, as the case may be,
for all legal fees and related expenses (including the costs of experts,
evidence and counsel) paid by the Executive as a result of (i) the Executive
seeking to obtain or enforce any right or benefit provided by this Agreement, or
(ii) any action taken by the Company against the Executive in enforcing its
rights hereunder; provided, however, that GPLP shall reimburse the legal fees
and related expenses described in this Section 5 only if and when a final
judgement has been rendered in favor of the Executive and all appeals related to
any such action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained herein shall
confer upon the Executive the right to continue in the employment or service of
the Company or affect any right that the Company may have to terminate the
employment or service of the Executive at any time for any reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all obligations of, and
the full and prompt payment of all amounts payable by, GPLP hereunder. In
addition, GRT guarantees the satisfaction of all obligations of the Company
hereunder.
8. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Maryland,
without regard to Maryland's conflicts of law principles. Any dispute or
controversy arising under this Agreement, or out of the interpretation hereof,
or based upon the breach hereof, shall be resolved by arbitration held at the
offices of the American Arbitration Association in the City of Philadelphia in
accordance with the rules and regulations of such association prevailing at the
time of the demand for arbitration by either party hereto, and the decision of
the arbitrator or arbitrators shall be final and binding upon both parties
hereto, provided, however, that the arbitrator or arbitrators shall only have
the power and authority to interpret,
-5-
<PAGE> 6
and not to modify or amend, the terms and provisions hereof. Judgment upon an
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Notwithstanding anything contained in this Section
8, either party shall have the right to seek preliminary injunctive relief in
any court in the City of Philadelphia in aid of, and pending the final decision
in, the arbitration proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements with respect to the subject matter hereof. No provision of this
Agreement may be waived or changed, except by a writing signed by the party to
be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the
benefit of, be binding upon and be enforceable by GRT and GPLP, their successors
and assigns and the Executive, and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. NOTICES. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 11. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents, agreements,
understandings and arrangements relating to the matters described herein have
been executed by the undersigned representative of GRT in his/her capacity as an
officer or trustee of GRT which has been formed as a Maryland real estate
investment trust pursuant to an Amended and Restated Declaration of Trust of
GRT, as amended, and not individually, and neither the trustees, officers or
shareholders of GRT shall be bound or have any personal liability hereunder or
thereunder. The Executive shall look solely to the assets of GRT for
satisfaction of any liability of GRT in respect of this Agreement and all
documents, agreements, understandings and arrangements
-6-
<PAGE> 7
relating to this transaction and will not seek recourse or commence any action
against any of the trustees, officers or shareholders of GRT or any of their
personal assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLIMCHER REALTY TRUST
By: /s/ David J. Glimcher
-----------------------------
David J. Glimcher
President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation
Its: General Partner
By: /s/ David J. Glimcher
-----------------------------
David J. Glimcher
President
EXECUTIVE:
/s/ George A. Schmidt
- -----------------------------
George A. Schmidt
-7-
<PAGE> 1
Exhibit 10.53
SEVERANCE BENEFITS AGREEMENT
AGREEMENT, dated as of June 11, 1997, by and among GLIMCHER REALTY TRUST, a
Maryland real estate investment trust, with offices at 20 South Third Street,
Columbus, Ohio, 43215 ("GRT"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership, with offices at 20 South Third Street, Columbus,
Ohio, 43215 ("GPLP"), and TIMOTHY GETZ, an individual residing at 1201 Clubview
Blvd., N., Columbus, Ohio, 43235, (the "Executive").
WHEREAS, GRT, GPLP and/or their subsidiaries and affiliates, including
entities in which GRT or GPLP own a majority of any non-voting stock
(collectively, the "Company"), have employed, or may employ in the future, the
Executive as an employee of the Company to perform certain services to the
Company upon terms and conditions upon which the Company and the Executive have
previously agreed, or may in the future agree (the "Services");
WHEREAS, the Company recognizes that the Executive's contributions to the
past and future growth of the Company have been and will be substantial; and
WHEREAS, to induce the Executive to remain in the employ of the Company,
the parties hereto desire to set forth certain severance benefits which GPLP
will pay to the Executive in the event of a Change in Control of GRT (as defined
in Section 2 hereof).
IT IS AGREED:
1. TERM. This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which GPLP and GRT have satisfied
all of their obligations hereunder, or (b) the date on which the Executive is no
longer an employee of the Company for any reason whatsoever including, without
limitation, termination without cause. Notwithstanding the termination of this
Agreement subsequent to a Change in Control of GRT, in the event that the
Executive is an employee of the Company at the moment immediately prior to a
Change in Control of GRT, the Executive shall be entitled to receive all
benefits described hereunder and the provisions hereof related thereto shall
survive such termination.
2. CHANGE IN CONTROL OF GRT. For purposes of this Agreement, a "Change in
Control of GRT" shall be deemed to occur if:
<PAGE> 2
(i) there shall have occurred a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date hereof, whether or
not GRT is then subject to such reporting requirement, provided, however,
that there shall not be deemed to be a Change in Control of GRT if
immediately prior to the occurrence of what would otherwise be a Change in
Control of GRT (a) the Executive is the other party to the transaction (a
"Control of GRT Event") that would otherwise result in a Change in Control
of GRT or (b) the Executive is an Executive officer, trustee, director or
more than 5% equity holder of the other party to the Control of GRT Event
or of any entity, directly or indirectly, controlling such other party;
(ii) GRT merges or consolidates with, or sells all or substantially
all of its assets to, another company (each, a "Transaction"), provided,
however, that a Transaction shall not be deemed to result in a Change in
Control of GRT if (a) immediately prior thereto the circumstances in (i)(a)
or (i)(b) above exist, or (b) (1) the shareholders of GRT, immediately
before such Transaction own, directly or indirectly, immediately following
such Transaction in excess of fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other
entity resulting from such Transaction (the "Surviving Corporation") in
substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Transaction and (2) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Transaction constitute
at least a majority of the members of the board of directors or the board
of trustees, as the case may be, of the Surviving Corporation, or of a
corporation or other entity beneficially directly or indirectly owning a
majority of the outstanding voting securities of the Surviving Corporation;
or
(iii) GRT acquires assets of another company or a subsidiary of GRT
merges or consolidates with another company (each, an "Other Transaction")
and (a) the shareholders of GRT, immediately before such Other Transaction
own, directly or indirectly, immediately
-2-
<PAGE> 3
following such Other Transaction 50% or less of the combined voting power
of the outstanding voting securities of the corporation or other entity
resulting from such Other Transaction (the "Other Surviving Corporation")
in substantially the same proportion as their ownership of the voting
securities of GRT immediately before such Other Transaction or (b) the
individuals who were members of GRT's Board of Trustees immediately prior
to the execution of the agreement providing for such Other Transaction
constitute less than a majority of the members of the board of directors or
the board of trustees, as the case may be, of the Other Surviving
Corporation, or of a corporation or other entity beneficially directly or
indirectly owning a majority of the outstanding voting securities of the
Other Surviving Corporation, provided, however, that an Other Transaction
shall not be deemed to result in a Change in Control of GRT if immediately
prior thereto the circumstances in (i)(a) or (i)(b) above exist.
3. COMPENSATION UPON A CHANGE IN CONTROL OF GRT. If the Executive is an
employee of the Company at the moment immediately prior to a Change in Control
of GRT, the Executive shall be entitled to receive the compensation and benefits
set forth below.
(a) GPLP shall pay to the Executive, not later than the date of any Change
in Control of GRT, unless otherwise agreed to in writing, a lump sum severance
payment (the "Severance Payment") equal to three (3) times the Base Amount (as
defined below). For purposes of this Section 3(a), the Base Amount shall mean
the Executive's annual compensation during the calendar year period preceding
the calendar year in which the Change in Control of GRT occurs. For purposes of
determining annual compensation in the preceding sentence, there shall be
included (i) all base salary and bonuses paid or payable to the Executive by the
Company with respect to the preceding calendar year, (ii) all grants of
restricted common shares of beneficial interest of GRT (the "Shares"), if any,
with respect to such preceding calendar year, which Shares shall be valued based
on their date of grant Fair Market Value (as defined in Section 7.2 of the GRT's
1993 Employee Share Option Plan or 1993 Trustee Share Option Plan, as the case
may be, or any other plan or agreement pursuant to which they are issued), and
(iii) the fair market value of any other property or rights given or awarded to
the Executive by the Company with respect to such preceding calendar year.
(b) Any Shares now or hereafter issued to the Executive pursuant to any
restricted Share grant shall vest on
-3-
<PAGE> 4
the day immediately prior to the date of a Change in Control of GRT and no
longer be subject to repurchase or any other forfeiture restrictions.
(c) GRT and GPLP shall cause the Company to maintain in full force and
effect for the Executive's continued benefit for 18 months following a Change in
Control of GRT, all life, accident, medical and dental insurance benefit plans
and programs or arrangements in which the Executive was entitled to participate
immediately prior to the date of a Change in Control of GRT; provided that the
Executive's continued participation is possible under the general terms and
provisions of such plans and programs; and provided, further, that in the event
that the Executive becomes employed by any third party during such 18-month
period, then upon the date of such employment the Executive shall no longer be
entitled to any of the accident, medical or dental insurance benefits described
in the preceding clause. Subject to the preceding sentence, in the event that
the Executive's participation in any such plan or program is barred, GRT and
GPLP shall arrange to cause the Company to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive under
such plans and programs. Subject to the first sentence of this paragraph, at the
end of the period of coverage, the Executive shall have the option to have
assigned to him at no cost to the Executive and with no apportionment of prepaid
premiums, any assignable insurance policy owned by the Company and relating
specifically to the Executive.
(d) All options to purchase Shares now or hereafter granted to the
Executive shall vest on the day immediately prior to the date of a Change in
Control of GRT and become fully exercisable in accordance with their terms.
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 3 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 3 be
reduced by any compensation earned by him as the result of employment by another
employer or by retirement benefits after the date of termination, or otherwise,
except as specifically provided in this Section 3.
4. ADDITIONAL AMOUNT. Whether or not Section 3 hereof is applicable, if in
the opinion of tax counsel selected by the Executive and reasonably acceptable
to the Company, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement or any plan or other
arrangement of the Company and whether or not the Executive's employment with
the Company has terminated) which constitutes an
-4-
<PAGE> 5
"excess parachute payment" within the meaning of Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code") (or for which a tax is
otherwise payable under Section 4999 of the Code), then GPLP shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of (i)
all taxes payable by the Executive under Section 4999 of the Code with respect
to all such excess parachute payments (or otherwise), including without
limitation the Additional Amount, plus (ii) all federal, state and local income
taxes payable by Executive with respect to the Additional Amount. The amounts
payable pursuant to this Section 4 shall be paid by GPLP to the Executive not
later than the date of any Change in Control of GRT, unless otherwise agreed to
in writing.
5. EXPENSES. GPLP shall pay or reimburse the Executive, as the case may be,
for all legal fees and related expenses (including the costs of experts,
evidence and counsel) paid by the Executive as a result of (i) the Executive
seeking to obtain or enforce any right or benefit provided by this Agreement, or
(ii) any action taken by the Company against the Executive in enforcing its
rights hereunder; provided, however, that GPLP shall reimburse the legal fees
and related expenses described in this Section 5 only if and when a final
judgement has been rendered in favor of the Executive and all appeals related to
any such action have been exhausted.
6. NO EMPLOYMENT RIGHTS OR OBLIGATIONS. Nothing contained herein shall
confer upon the Executive the right to continue in the employment or service of
the Company or affect any right that the Company may have to terminate the
employment or service of the Executive at any time for any reason.
7. GRT GUARANTY. GRT guarantees the satisfaction of all obligations of, and
the full and prompt payment of all amounts payable by, GPLP hereunder. In
addition, GRT guarantees the satisfaction of all obligations of the Company
hereunder.
8. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Maryland,
without regard to Maryland's conflicts of law principles. Any dispute or
controversy arising under this Agreement, or out of the interpretation hereof,
or based upon the breach hereof, shall be resolved by arbitration held at the
offices of the American Arbitration Association in the City of Philadelphia in
accordance with the rules and regulations of such association prevailing at the
time of the demand for arbitration by either party hereto, and the decision of
the arbitrator or arbitrators shall be final and binding upon both parties
hereto, provided, however, that the arbitrator or arbitrators shall only have
the power and authority to interpret,
-5-
<PAGE> 6
and not to modify or amend, the terms and provisions hereof. Judgment upon an
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. Notwithstanding anything contained in this Section
8, either party shall have the right to seek preliminary injunctive relief in
any court in the City of Philadelphia in aid of, and pending the final decision
in, the arbitration proceeding.
9. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and is intended to supersede all prior negotiations, understandings and
agreements with respect to the subject matter hereof. No provision of this
Agreement may be waived or changed, except by a writing signed by the party to
be charged with such waiver or change.
10. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the
benefit of, be binding upon and be enforceable by GRT and GPLP, their successors
and assigns and the Executive, and the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. NOTICES. All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when given by telex, telegram or mailgram, or
when mailed first class postage prepaid, by registered or certified mail, return
receipt requested, addressed to the party to receive the same at his or its
address above set forth, or such other address as the party to receive the same
shall have specified by written notice given in the manner provided for in this
Section 11. All notices shall be deemed to have been given as of the date of
personal delivery, transmittal or mailing thereof.
12. SEVERABILITY. If any provision in this Agreement is determined to be
invalid, it shall not affect the validity or enforceability of any of the other
remaining provisions hereof.
13. GRT EXCULPATION. This Agreement and all documents, agreements,
understandings and arrangements relating to the matters described herein have
been executed by the undersigned representative of GRT in his/her capacity as an
officer or trustee of GRT which has been formed as a Maryland real estate
investment trust pursuant to an Amended and Restated Declaration of Trust of
GRT, as amended, and not individually, and neither the trustees, officers or
shareholders of GRT shall be bound or have any personal liability hereunder or
thereunder. The Executive shall look solely to the assets of GRT for
satisfaction of any liability of GRT in respect of this Agreement and all
documents, agreements, understandings and arrangements
-6-
<PAGE> 7
relating to this transaction and will not seek recourse or commence any action
against any of the trustees, officers or shareholders of GRT or any of their
personal assets for the performance or payment of any obligation hereunder or
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLIMCHER REALTY TRUST
By: /s/ David J. Glimcher
-----------------------------
David J. Glimcher
President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation
Its: General Partner
By: /s/ David J. Glimcher
-----------------------------
David J. Glimcher
President
EXECUTIVE:
/s/ Timothy C. Getz
- -------------------------
Timothy Getz
-7-
<PAGE> 1
Exhibit 10.56
EXHIBIT A
ARTICLES SUPPLEMENTARY
CLASSIFYING
5,520,000 SHARES OF
BENEFICIAL INTEREST AS
SERIES B CUMULATIVE REDEEMABLE
PREFERRED SHARES OF BENEFICIAL INTEREST
OF GLIMCHER REALTY TRUST
(Pursuant to Section 8-203(b) of the
Corporations and Associations Article
of the Annotated Code of Maryland)
Glimcher Realty Trust, a real estate investment trust organized and
existing under the laws of the State of Maryland (the "Company"), and having its
executive office at 20 South Third Street, Columbus, Ohio 43215, hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to the authority granted to and vested in the Board of
Trustees of the Company (the "Board of Trustees") under Article VI, Section 6.3
of the Amended and Restated Declaration of Trust of the Company, as amended (the
"Declaration of Trust"), the Board of Trustees at a meeting duly convened and
held on November 5, 1997, adopted resolutions authorizing and establishing a
separate class of preferred shares of beneficial interest, out of the
100,000,000 authorized shares of beneficial interest of the Company (the
"Shares"), consisting of 5,520,000 shares to be known as the "Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest" (the "Series B
Preferred Shares"). Such Series B Preferred Shares shall have a par value of
$.01 per share. The preferences and other rights, voting powers, restrictions,
limitations as to distributions, qualifications, and terms and conditions of
redemption of such shares, which shall be deemed to be part of Article VI,
Section 6.3 of the Declaration of Trust, are as follows:
<PAGE> 2
A. Certain Definitions.
Unless the context otherwise requires, the terms defined in this
paragraph (A) shall have, for all purposes of the provisions of the Declaration
of Trust in respect of the Series B Preferred Shares, the meanings herein
specified (with terms defined in the singular having comparable meanings when
used in the plural).
Business Day. The term "Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law, regulation or
executive order to close.
Capital Shares. The term "Capital Shares" shall mean, with respect to
any Person, any common shares of beneficial interest, preferred shares,
depositary shares, interests, particiption or other ownership interests (however
designated) of such Person and any rights (other than debt securities
convertible into or exchangeable for capital shares), warrants or options to
purchase any thereof.
Code. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Common Equity. The term "Common Equity" shall mean all shares now or
hereafter authorized of any class of common shares of beneficial interest of the
Company, including the Common Shares, and any other shares of beneficial
interest of the Company, howsoever designated, which has the right (subject
always to prior rights of any class or series of preferred shares of beneficial
interest) to participate in the distribution of the assets and earnings of the
Company without limit as to per share amount.
Common Shares. The term "Common Shares" shall mean the Common Shares of
Beneficial Interest, $.01 par value per share, of the Company.
Distribution Payment Date. The term "Distribution Payment Date" shall
have the meaning set forth in subparagraph (2) of paragraph (B) below.
Distribution Period. The term "Distribution Period" shall mean the
period from, and including, the Initial Issue Date to, but not including, the
first Distribution Payment Date and
<PAGE> 3
thereafter, each quarterly period from, and including, the Distribution Payment
Date to, but not including, the next Distribution Payment Date.
Distribution Record Date. The term "Distribution Record Date" shall
mean the date designated by the Board of Trustees of the Company at the time a
distribution is declared, provided, however, that such Distribution Record Date
shall be not more than sixty (60) days nor less than ten (10) days prior to such
Distribution Payment Date.
Junior Shares. The term "Junior Shares" shall mean, as the case may be,
(i) the Common Equity and any other class or series of shares of beneficial
interest of the Company which is not entitled to receive any distributions in
any Distribution Period unless all distributions required to have been paid or
declared and set apart for payment on the Series B Preferred Shares shall have
been so paid or declared and set apart for payment and (ii) the Common Equity
and any other class or series of shares of beneficial interest of the Company
which is not entitled to receive any assets upon liquidation, dissolution or
winding up of the affairs of the Company until the Series B Preferred Shares
shall have received the entire amount to which such Class B Preferred Shares is
entitled upon such liquidation, dissolution or winding up. The term "Junior
Shares" shall include the Nomura Preferred Shares.
Liquidation Preference. The term "Liquidation Preference" shall mean
$25.00 per share.
Nomura Preferred Shares. The term "Nomura Preferred Shares" shall mean
the Series A Preferred Shares and the Series A-1 Preferred Shares collectively
with any other series of preferred shares of beneficial interest of the Company
issued from time to time pursuant to the Securities Purchase Agreement. Nomura
Preferred Shares shall not include any other preferred shares of beneficial
interest issued to Nomura or any other Person on any terms, whether or not
substantially similar to the terms of the Series A Preferred Shares, for any
reason, whether or not such preferred shares of beneficial interest are issued
in connection with the properties contemplated under the Securities Purchase
Agreement.
<PAGE> 4
Original Issue Date. The term "Original Issue Date" shall mean the date
that Series B Preferred Shares are first issued by the Company.
Parity Shares. The term "Parity Shares" shall mean, as the case may be,
(i) any class or series of shares of beneficial interest of the Company which is
entitled to receive payment of distributions on a parity with the Series B
Preferred Shares or (ii) any class or series of shares of beneficial interest of
the Company which is entitled to receive assets upon liquidation, dissolution or
winding up of the affairs of the Company on a parity with the Series B Preferred
Shares.
Person. The term "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust classified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity, and also includes a group as that
term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, but does not include an underwriter which participates in a
public offering of the Series B Preferred Shares, provided that such ownership
by such underwriter would not result in the Company being "closely held" within
the meaning of Section 856(h) of the Code, or otherwise result in the Company
failing to qualify as a REIT.
Preferential Distribution Non-Payment. The term "Preferential
Distribution Non-Payment" shall have the meaning set forth in subparagraph (2)
of paragraph (E) below.
Preferred Shares Trustee. The term "Preferred Shares Trustee" shall
have the meaning set forth in subparagraph (2) of paragraph (E) below.
Redemption Date. The term "Redemption Date" shall have the meaning set
forth in subparagraph (2) of paragraph (D) below.
Redemption Price. The term "Redemption Price" shall mean a price per
Series B Preferred Share equal to $25.00 together with accrued and unpaid
distributions, if any, thereon to the Redemption Date, without interest.
<PAGE> 5
Redemption Record Date. The term "Redemption Record Date" shall mean
the date designated by the Board of Trustees of the Company for redemption of
Series B Preferred Shares, provided, however, that such Redemption Record Date
shall be not more than sixty (60) days nor less than thirty (30) days prior to
such Redemption Date.
REIT. The term "REIT" shall mean a real estate investment trust under
Section 856 of the Code.
Securities Purchase Agreement. The term "Securities Purchase Agreement"
shall mean that certain Securities Purchase Agreement among Partnership
Acquisition Trust II ("Nomura"), Glimcher Properties Limited Partnership (the
"Operating Partnership") and the Company, dated as of November 26, 1996, as
amended from time to time.
Senior Shares. The term "Senior Shares" shall mean, as the case may be,
(i) any class or series of shares of beneficial interest of the Company ranking
senior to the Series B Preferred Shares in respect of the right to receive
distributions or (ii) any class or series of shares of beneficial interest of
the Company ranking senior to the Series B Preferred Shares in respect of the
right to participate in any distribution upon liquidation, dissolution or
winding up of the affairs of the Company.
Series A Preferred Shares. The term "Series A Preferred Shares" shall
mean the Series A Convertible Preferred Shares of Beneficial Interest, par value
$.01 per share, of the Company, issued pursuant to the Securities Purchase
Agreement.
Series A-1 Articles Supplementary. The term "Series A-1 Articles
Supplementary" shall mean the Articles Supplementary clarifying and designating
40,000 shares of Series A-1 Convertible Preferred Shares of Beneficial Interest.
Series A-1 Preferred Shares. The term "Series A-1 Preferred Shares"
shall mean the Series A-1 Convertible Preferred Shares of Beneficial Interest,
par value $.01 per share, of the Company, issued pursuant to the Securities
Purchase Agreement.
<PAGE> 6
B. Distributions.
1. The record holders of Series B Preferred Shares shall be entitled to
receive cash distributions, when, as and if authorized and declared by the Board
of Trustees, out of assets legally available for payment of distributions. Such
distributions shall be payable quarterly by the Company in cash at a rate of 9
1/4% of the Liquidation Preference per annum (equivalent to $2.3125 per Series B
Preferred Share per annum).
2. Distributions on Series B Preferred Shares shall accrue and be
cumulative from the Original Issue Date. Distributions shall be payable
quarterly in arrears when, as and if authorized by the Board of Trustees of the
Company on the 15th day of January, April, July and October of each year (each,
a "Distribution Payment Date"), commencing on the Business Day succeeding
January 15, 1998. If any Distribution Payment Date occurs on a day that is not a
Business Day, any accrued distributions otherwise payable on such Distribution
Payment Date shall be paid on the next succeeding Business Day. The amount of
distributions payable on Series B Preferred Shares for each full Distribution
Period shall be computed by dividing by four (4) the annual distribution rate
set forth in subparagraph (1) of this paragraph (B) above. Distributions payable
in respect of any Distribution Period which is less than a full Distribution
Period in length will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Distributions shall be paid to the holders of record of
the Series B Preferred Shares as their names shall appear on the share records
of the Company at the close of business on the Distribution Record Date for such
distribution. Distributions in respect of any past Distribution Periods that are
in arrears may be declared and paid at any time to holders of record on the
Distribution Record Date therefor. Any distribution payment made on Series B
Preferred Shares shall be first credited against the earliest accrued but unpaid
distribution due which remains payable. The Series B Preferred Shares rank
senior to the Nomura Preferred Shares, as to distributions in the manner and to
the extent provided herein.
3. If any Series B Preferred Shares are outstanding, no distributions
shall be authorized or paid or set apart for payment on any other class or
series of Junior Shares or Parity Shares for any period unless full cumulative
distributions have been or contemporaneously are authorized and paid or
authorized and a sum sufficient for the payment thereof set apart for such
<PAGE> 7
payment on the Series B Preferred Shares for all past Distribution Periods and
the then current Distribution Period. When distributions are not paid in full
(or a sum sufficient for such full payment is not so set apart) upon the Series
B Preferred Shares and any other class or series of Preferred Shares ranking on
a parity as to distributions with the Series B Preferred Shares, all
distributions authorized upon the Series B Preferred Shares and any other such
class or series of Preferred Shares shall be authorized pro rata so that the
amount of distributions authorized per share on the Series B Preferred Shares
and such class or series of Shares shall in all cases bear to each other the
same ratio that accrued and unpaid distributions per share on the Series B
Preferred Shares and such class or series of Shares bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any distribution payment or payments on the Series B Preferred Shares which may
be in arrears. The provisions of this subparagraph (3) shall not prohibit the
mandatory redemption referred to in subparagraph (4) of this paragraph (B).
4. Except as provided in subparagraph (3) of this paragraph (B), unless
full cumulative distributions on the Series B Preferred Shares have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof set apart for payment for all past Distribution Periods and
the then current Distribution Period, no distributions (other than in Junior
Shares) shall be authorized or paid or set apart for payment or other
distribution shall be authorized or made upon any Junior Shares or Parity Shares
nor shall any Junior Shares or Parity Shares be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such shares) by the Company (except by
conversion into or exchange for other Junior Shares); provided, however, that
the foregoing shall not prevent (i) the mandatory redemption by the Company of
Series A-1 Preferred Shares in accordance with the terms set forth in the Series
A-1 Articles Supplementary as in existence on the Original Issue Date, and (ii)
the mandatory redemption by the Company of any other series of Nomura Preferred
Shares issued from time to time pursuant to the Securities Purchase Agreement in
accordance with the terms set forth in the articles supplementary classifying
such series of Nomura Preferred Shares, which terms shall be substantially
similar to the mandatory redemption terms set forth in the Series A-1 Articles
Supplementary as in existence on the Original Issue Date, except
<PAGE> 8
that such articles supplementary shall relate to a different property to be
acquired, constructed and/or developed by a separate entity in which the Company
is either directly or indirectly a co-participant.
5. Notwithstanding anything contained herein to the contrary, no
distributions on Series B Preferred Shares shall be authorized by the Board of
Trustees of the Company or paid or set apart for payment by the Company at such
time as the terms and provisions of any agreement of the Company, including any
agreement relating to its indebtedness, prohibits such authorization, payment or
setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or to the extent such authorization, payment or setting apart for
payment shall be restricted or prohibited by law.
6. Notwithstanding anything contained herein to the contrary,
distributions on the Series B Preferred Shares, if not paid on the applicable
Distribution Payment Date, will accrue whether or not any agreement of the
Company prohibits payment of such distributions, whether or not distributions
are authorized for such Distribution Payment Date, whether or not the Company
has earnings and whether or not there are assets legally available for the
payment of such distributions.
7. If the Board of Trustees determines that it is permissible under
applicable law and that the distributions will qualify for the dividends paid
deduction (within the meaning of Sections 561 and 562 of the Code or any
successor provisions thereto), such distributions shall be paid as follows:
first, from income of the Company other than net capital gains, and the balance,
if any, from net capital gains of the Company. If the Board of Trustees
determines, in its sole discretion, that distributions to be paid in accordance
with the preceding sentence might not qualify for such dividends paid deduction,
or might not be permissible under applicable law, then such distributions shall
be paid in a manner determined by the Board of Trustees.
C. Distributions Upon Liquidation, Dissolution or Winding Up.
1. Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, subject to the prior preferences and
other rights of any Senior Shares as to liquidation preferences, but before any
distribution or payment
<PAGE> 9
shall be made to the holders of any Junior Shares as to the distribution of
assets upon any liquidation, dissolution or winding up of the affairs of the
Company, the holders of Series B Preferred Shares shall be entitled to receive
out of the assets of the Company legally available for distribution to its
shareholders liquidating distributions in cash or property at its fair market
value as determined by the Board of Trustees in the amount of the Liquidation
Preference per share plus an amount equal to all distributions accrued and
unpaid thereon (whether or not declared) to the date of such liquidation,
dissolution or winding up. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred
Shares will have no right or claim to any of the remaining assets of the Company
and shall not be entitled to any other distribution in the event of liquidation,
dissolution or winding up of the affairs of the Company.
2. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the legally available assets of the
Company are insufficient to pay the amount of the Liquidation Preference per
share plus an amount equal to all distributions accrued and unpaid on the Series
B Preferred Shares and the corresponding amounts payable on all shares of Parity
Shares as to the distribution of assets upon liquidation, dissolution or winding
up, then the holders of the Series B Preferred Shares and all such Parity Shares
shall share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they otherwise would be respectively
entitled. The Series B Preferred Shares rank senior to the Nomura Preferred
Shares as to the distribution of assets upon any liquidation, dissolution or
winding up of the affairs of the Company. Neither the consolidation or merger of
the Company into or with another entity nor the dissolution, liquidation,
winding up or reorganization of the Company immediately followed by
incorporation of another corporation to which such assets are distributed, nor
the sale, lease, transfer or conveyance of all or substantially all of the
assets of the Company to another entity shall be deemed a liquidation,
dissolution or winding up of the affairs of the Company within the meaning of
this paragraph (C); provided that, in each case, effective provision is made in
the charter of the resulting or surviving entity or otherwise for the
recognition, preservation and protection of the rights of the holders of the
Series B Preferred Shares.
<PAGE> 10
3. In determining whether a distribution by dividend, redemption or
other acquisition of Shares or otherwise is permitted under Maryland law, no
effect shall be given to amounts that would be needed, if the Company were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights on dissolution are
superior to those receiving the distribution.
D. Redemption by the Company.
1. The Series B Preferred Shares may be redeemed for cash, in whole or
from time to time in part, on any date on or after November 15, 2002 as fixed by
the Board of Trustees of the Company at the Redemption Price. The Redemption
Price of the Series B Preferred Shares (other than any portion thereof
consisting of accrued and unpaid dividends) shall be paid solely from the sale
proceeds of other Capital Shares of the Company or the Operating Partnership and
not from any other source.
2. Each date fixed for redemption pursuant to subparagraph (1) of this
paragraph (D) is called a "Redemption Date". If the Redemption Date is after a
Distribution Record Date and before the related Distribution Payment Date, the
distribution payable on such Distribution Payment Date shall be paid to the
holder in whose name the Series B Preferred Shares to be redeemed are registered
at the close of business on such Distribution Record Date notwithstanding the
redemption thereof between such Distribution Record Date and the related
Distribution Payment Date or the Company's default in the payment of the
distribution.
3. In case of redemption of less than all of the Series B Preferred
Shares at the time outstanding, the shares to be redeemed shall be selected by
the Company pro rata from the holders of record of such shares in proportion to
the number of shares held by such holders (with adjustments to avoid redemption
of fractional shares) or by any other equitable method determined by the Board
of Trustees.
In order to facilitate the redemption of Series B Preferred Shares, the
Board of Trustees may fix a record date for the determination of the shares to
be redeemed, such record date to be not less than thirty (30) nor more than
sixty (60) days prior to the date fixed for such redemption.
4. Notice of any redemption will be given by publication in a newspaper
of general circulation in The City of New York, such
<PAGE> 11
publication to be made once a week for two successive weeks commencing not less
than 30 nor more than 60 days prior to the Redemption Date. A similar notice
will be mailed by the Company, postage prepaid, not less than 30 nor more than
60 days prior to the Redemption Date, addressed to the respective holders of
record of the Series B Preferred Shares to be redeemed at their respective
addressees as they appear on the share transfer records of the Company. No
failure to give such notice or any defect therein or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any Series B
Preferred Shares except as to any holder to whom the Company has failed to give
notice or except as to any holder to whom notice was defective. In addition to
any information required by law or by the applicable rules of any exchange upon
which Series B Preferred Shares may be listed or admitted to trading, such
notice shall state: (i) the Redemption Date; (ii) the Redemption Price; (iii)
the number of Series B Preferred Shares to be redeemed and, if less than all
shares held by the particular holder are to be redeemed, the number of Series B
Preferred Shares to be redeemed from such holder; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the Redemption
Price; and (v) that distributions on the shares to be redeemed will cease to
accrue on the Redemption Date.
5. If notice has been mailed in accordance with subparagraph (4) of
this paragraph (D), and such notice provided that on or before the Redemption
Date specified therein all funds necessary for such redemption shall have been
set aside by the Company, separate and apart from its other funds in trust for
the pro rata benefit of the holders of the shares so called for redemption, so
as to be, and to continue to be available therefor, then, from and after the
Redemption Date, distributions on the Series B Preferred Shares so called for
redemption shall cease to accrue, and said shares shall no longer be deemed to
be outstanding and shall not have the status of Series B Preferred Shares, and
all rights of the holders thereof as shareholders of the Company (except the
right to receive from the Company the Redemption Price) shall cease. Upon
surrender, in accordance with said notice, of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Company shall so
require and the notice shall so state), such shares shall be redeemed by the
Company at the Redemption Price. In case fewer than all the shares represented
by any such certificate are redeemed, a new certificate or certificates shall be
issued
<PAGE> 12
representing the unredeemed shares without cost to the holder thereof.
6. Any funds deposited with a bank or trust company for the purpose of
redeeming Series B Preferred Shares shall be irrevocable except that:
a. the Company shall be entitled to receive from such bank or trust
company the interest or other earnings, if any, earned on any money so deposited
in trust, and the holders of any shares redeemed shall have no claim to such
interest or other earnings; and
b. any balance of monies so deposited by the Company and unclaimed by
the holders of the Series B Preferred Shares entitled thereto at the expiration
of two (2) years from the applicable Redemption Date shall be repaid, together
with any interest or other earnings earned thereon, to the Company, and after
any such repayment, the holders of the shares entitled to the funds so repaid to
the Company shall look only to the Company for payment without interest or other
earnings.
7. No Series B Preferred Shares may be redeemed except with assets
legally available for the payment of the Redemption Price.
8. Unless full cumulative distributions on all Series B Preferred
Shares shall have been or contemporaneously are authorized and paid or
authorized and a sum sufficient for the payment thereof set apart for payment
for all past Distribution Periods and the then current Distribution Period, no
Series B Preferred Shares shall be redeemed unless all outstanding Series B
Preferred Shares are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Series B Preferred
Shares pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding Series B Preferred Shares, provided further, however,
that the foregoing shall not prevent the purchase or acquisition of Series B
Preferred Shares from persons owning in the aggregate 8.0% or more of the lesser
of the number or value of the total outstanding shares of beneficial interest of
the Company or 9.9% or more of the lesser of the number or value of the total
outstanding Series B Preferred Shares pursuant to provisions of the Declaration
of Trust and these Articles Supplementary. Unless full cumulative distributions
on all outstanding Series B Preferred Shares have been or contemporaneously are
authorized
<PAGE> 13
and paid or authorized and a sum sufficient for the payment thereof set apart
for payment for all past Distribution Periods and the then current Distribution
Period, the Company shall not purchase or otherwise acquire directly or
indirectly any Series B Preferred Shares (except by conversion into or exchange
for shares of the Company ranking junior to the Series B Preferred Shares as to
distributions and upon liquidation, dissolution or winding up of the affairs of
the Company).
9. All Series B Preferred Shares redeemed pursuant to this paragraph
(D) shall be retired and shall be reclassified as authorized and unissued
preferred shares, without designation as to class or series, and may thereafter
be reissued as any class or series of preferred shares.
E. Voting Rights.
1. The holders of Series B Preferred Shares shall not be entitled to
vote on any matter except (i) as provided in paragraph (H), (ii) as provided in
subparagraph (2) of this paragraph (E) or (iii) as expressly provided by law.
2. In the event the Company shall have failed to authorize and pay or
set apart for payment in full the distributions accumulated on the outstanding
Series B Preferred Shares for any six or more quarterly Distribution Periods,
regardless of whether such quarterly periods are consecutive (a "Preferential
Distribution Non-Payment"), the number of trustees of the Company shall be
increased by two and the holders of the outstanding Series B Preferred Shares,
voting together as a class with all other classes or series of preferred shares
of the Company ranking on a parity with the Series B Preferred Shares with
respect to distribution rights and then entitled to vote on the election of such
additional two trustees, shall be entitled to elect such two additional trustees
until the full distributions accumulated for the past distribution periods and
the then current distribution period on all outstanding Series B Preferred
Shares have been authorized and paid or set apart for payment. Upon the
occurrence of a Preferential Distribution Non-Payment or a vacancy in the office
of a Preferred Shares Trustee, the Board of Trustees may, and upon the written
request of the holders of record of not less than 20% of the holders of the
Series B Preferred Shares and all holders of other classes or series of
preferred shares of the Company ranking on a parity with the Series B Preferred
Shares with respect to distribution rights who
<PAGE> 14
are then entitled to vote on the election of such additional trustee or trustees
shall call a special meeting of such holders for the purpose of electing the
additional trustee or trustees. In the case of such a written request, such
special meeting shall be held within ninety (90) days after the delivery of such
request and, in either case, at the place and upon the notice provided by law
and in the Bylaws of the Company, provided that the Company shall not be
required to call such a special meeting if such request is received less than
ninety (90) days before the date fixed for the next ensuing annual meeting of
shareholders of the Company and all holders of the Series B Preferred Shares and
shares of any other class or series of preferred shares of the Company ranking
on a parity with the Series B Preferred Shares with respect to distribution
rights are afforded the opportunity to elect such additional trustee or trustees
(or fill any vacancy) at such annual meeting of shareholders.
If and when all accumulated distributions on the Series B Preferred
Shares have been authorized and paid or set aside for payment in full, the
holders of the Series B Preferred Shares shall be divested of the special voting
rights provided by this subparagraph (2) of paragraph (E), subject to revesting
in the event of each and every subsequent Preferential Distribution Non-Payment.
Upon termination of such special voting rights attributable to all holders of
the Series B Preferred Shares and shares of any other class or series of
preferred shares of the Company ranking on a parity with the Series B Preferred
Shares with respect to distribution rights, the term of office of each trustee
elected by the holders of the Series B Preferred Shares and such parity
preferred shares (a "Preferred Shares Trustee") pursuant to such special voting
rights shall forthwith terminate and the number of trustees constituting the
entire Board of Trustees shall be reduced by the number of Preferred Shares
Trustees. Any Preferred Shares Trustee may be removed only by the vote of the
holders of record of a majority of the outstanding Series B Preferred Shares and
all other series of preferred shares of the Company ranking on a parity with the
Series B Preferred Shares with respect to distribution rights who would then be
entitled to vote in such Preferred Shares Trustee's election, voting together as
a separate class, at a meeting called for such purpose.
3. So long as any Series B Preferred Shares are outstanding, the number
of trustees constituting the entire Board of Trustees of the Company shall at
all times be such that the exercise, by
<PAGE> 15
the holders of the Series B Preferred Shares and the holders of preferred shares
of the Company ranking on a parity with the Series B Preferred Shares with
respect to distribution rights, of the right to elect trustees under the
circumstances provided for in subparagraph (2) of this paragraph (E) will not
contravene any provision of the Declaration of Trust restricting the number of
trustees which may constitute the entire Board of Trustees.
4. Trustees elected pursuant to subparagraph (2) of this paragraph (E)
shall serve until the earlier of (x) the next annual meeting of the shareholders
of the Company and the election (by the holders of the Series B Preferred Shares
and the holders of preferred shares of the Company ranking on a parity with the
Series B Preferred Shares with respect to distribution rights) and qualification
of their respective successors or (y) the termination of the term of office of
each Preferred Shares Trustee upon the termination of the special voting rights
as provided for in subparagraph (2) of this paragraph (E) or as otherwise
provided for in subparagraph (2) of this paragraph (E).
5. So long as a Preferential Distribution Non-Payment shall continue,
any vacancy in the office of a Preferred Shares Trustee may be filled by vote of
the holders of record of a majority of the outstanding Series B Preferred Shares
and all other series of preferred shares ranking on a parity with the Series B
Preferred Shares with respect to distribution rights who are then entitled to
vote in the election of such Preferred Shares Trustee as provided above. As long
as the Preferential Distribution Non-Payment shall continue, holders of the
Series B Preferred Shares shall not, as such shareholders, be entitled to vote
on the election or removal of trustees other than Preferred Shares Trustees, but
shall not be divested of any other voting rights provided to such shareholders
by law, the Declaration of Trust and these Articles Supplementary with respect
to any other matter to be acted upon by the shareholders of the Company.
F. Trustees' Right to Refuse to Transfer Series B Preferred Shares;
Limitation on Holdings.
1. The terms and provisions of this paragraph (F) shall apply in
addition to, and not in limitation of, the terms and provisions of Section 6.6
of the Declaration of Trust.
2. Each Person who owns directly or indirectly more
(_______________________) than five percent in number or value of the total
Series B Preferred Shares
<PAGE> 16
outstanding shall, by January 30 of each year, give written notice to the
Company stating the Person's name and address, the number of Series B Preferred
Shares directly or indirectly owned by such Person, and a description of the
capacity in which such Series B Preferred Shares are held. For purposes of these
Articles Supplementary, the number and value of the total Series B Preferred
Shares outstanding shall be determined by the Board of Trustees in good faith,
which determination shall be conclusive for all purposes hereunder. In addition,
each direct or indirect holder of Series B Preferred Shares, irrespective of
such shareholder's percentage ownership of outstanding Series B Preferred
Shares, shall upon demand disclose to the Company in writing such information
with respect to the direct or indirect ownership of Series B Preferred Shares as
the Board of Trustees deems necessary from time to time to enable the Board of
Trustees to determine whether the Company complies with the REIT Provisions of
the Code (as defined in Section 1.5 of the Declaration of Trust), to comply with
the requirements of any taxing authority or governmental agency or to determine
any such compliance or to determine any such compliance with this paragraph (F).
3. If, in the opinion of the Board of Trustees, which shall be binding
upon any prospective acquiror of Series B Preferred Shares, any proposed
transfer or issuance would jeopardize the status of the Company as a REIT under
the REIT Provisions of the Code, the Board of Trustees shall have the right, but
not the duty, to refuse to permit such transfer or issuance or refuse to give
effect to such transfer or issuance and to take any action to void any such
issuance or cause any such transfer not to occur.
4. As a condition to any transfer and/or registration of transfer on
the books of the Company of any Series B Preferred Shares which could result in
direct or indirect ownership (as hereinafter defined) of Series B Preferred
Shares exceeding 9.9% of the lesser of the number or the value of the total
Series B Preferred Shares outstanding (the "Series B Excess Preferred Shares")
by a Person other than a Series B Preferred Excepted Person (as defined in
subparagraph (5) below), such prospective transferee shall give written notice
to the Company of the proposed transfer and shall furnish such opinions of
counsel, affidavits, undertakings, agreements and information as may be required
by the Board of Trustees no later than the 15th day
<PAGE> 17
prior to any transfer which, if consummated, would result in such ownership.
5. Any transfer of Series B Preferred Shares that would (i) create a
direct or indirect owner of Series B Excess Preferred Shares other than a Series
B Preferred Excepted Person; (ii) result in the Series B Preferred Shares being
owned by fewer than 100 Persons for purposes of the REIT provisions of the Code;
or (iii) result in the Company being "closely held" within the meaning of
Section 856(h) of the Code, shall be void ab initio and the prospective acquiror
shall not be entitled to any rights afforded to owners of Series B Preferred
Shares hereunder and shall be deemed never to have had an interest therein. Any
issuance of Series B Preferred Shares that would (i) create a direct or indirect
owner of Series B Excess Preferred Shares other than a Series B Preferred
Excepted Person; or (ii) result in the Company being "closely held" within the
meaning of Section 856(h) of the Code, shall be void ab initio and the
prospective acquiror shall not be entitled to any rights afforded to owners of
Series B Preferred Shares hereunder and shall be deemed never to have had an
interest therein.
"Series B Preferred Excepted Person" shall mean any Person approved by
the Board of Trustees, at their option and in their sole discretion, provided,
however, that such approval shall not be granted to any Person whose ownership
of in excess of 9.9% of the lesser of the number or the value of the total
Series B Preferred Shares outstanding would result, directly, indirectly or as a
result of attribution of ownership, in termination of the status of the Company
as a REIT under the REIT Provisions of the Code.
6. The Company, by notice to the holder thereof, may purchase any or
all Series B Preferred Shares that are proposed to be transferred pursuant to a
transfer which, in the opinion of the Board of Trustees, which shall be binding
upon any proposed transferee of Series B Preferred Shares, would result in any
Person acquiring Series B Excess Preferred Shares, or would otherwise jeopardize
the status of the Company as a real estate investment trust under the REIT
Provisions of the Code. The purchase price for any Series B Excess Preferred
Shares to be transferred shall be equal to the fair market value of the Series B
Preferred Shares on the last trading day immediately preceding the day on which
notice of such proposed transfer is sent, as reflected in the closing sale price
for the Series B Preferred
<PAGE> 18
Shares, if then listed on a national securities exchange, or such price for the
Series B Preferred Shares on the principal exchange if then listed on more than
one national securities exchange, or if the Series B Preferred Shares are not
then listed on a national securities exchange, the latest bid quotation for the
Series B Preferred Shares if then traded over-the-counter, or, if no such
closing sales prices or quotations are available, then the purchase price shall
be equal to the fair market value of such Series B Preferred Shares as
determined by the Board of Trustees in good faith. Prompt payment of the
purchase price shall be made in cash by the Company in such manner as may be
determined by the Board of Trustees. From and after the date fixed for purchase
by the Board of Trustees, and so long as payment of the purchase price for the
Series B Preferred Shares to be so redeemed shall have been made or duly
provided for, the holder of any Series B Excess Preferred Shares so called for
purchase shall cease to be entitled to dividends, distributions, voting rights
and other benefits with respect to such Series B Preferred Shares, excepting
only the right to payment of the purchase price fixed as aforesaid. Any dividend
or distribution paid to a proposed transferee of Series B Excess Preferred
Shares prior to the discovery by the Company that the Series B Preferred Shares
have been transferred in violation of this paragraph (F) shall be repaid to the
Company upon demand. The rights granted to the Company in this subparagraph (6)
shall not limit the effect of, restrictions in, or rights of the Company or the
Board of Trustees under, any other provision of this paragraph (F).
<PAGE> 19
7. Notwithstanding any other provision in these Articles Supplementary,
the Declaration of Trust or the Company's Bylaws, subparagraphs (5), (6), (7)
and (8) of this paragraph (F) may not be amended or repealed without the
affirmative vote of the holders of not less than two-thirds of the Series B
Preferred Shares then outstanding and entitled to vote. If subparagraph (5),
(6), (7) or (8) of this paragraph (F) is determined to be void or invalid by
virtue of any legal decision, statute, rule or regulation, then the acquiror of
Series B Preferred Shares in violation of such sections shall be deemed, at the
option of the Company, to have acted as agent on behalf of the Company in
acquiring such Series B Preferred Shares on behalf of the Company.
8. Subject to subparagraph (12), notwithstanding any other provision of
these Articles Supplementary to the contrary, any purported transfer, sale or
acquisition of Series B Preferred Shares (whether such purported transfer, sale
or acquisition results from the direct or indirect acquisition of ownership of
Series B Preferred Shares) which would result in the termination of the status
of the Company as a real estate investment trust under the REIT Provisions of
the Code shall be null and void ab initio. Any such Series B Preferred Shares
may be treated by the Board of Trustees in the manner prescribed for Series B
Excess Preferred Shares in subparagraph (6) of this paragraph (F).
9. Subject to subparagraphs (11) and (12), nothing contained in this
paragraph (F) or in any other provision of these Articles Supplementary shall
limit the authority of the Board of Trustees to take such other action as it
deems necessary or advisable to protect the Company and the interests of the
shareholders by preservation of the Company's status as a real estate investment
trust under the REIT Provisions of the Code.
10. Subject to subparagraph (11), if any provision of this paragraph
(F) or any application of any such provision is determined to be invalid by any
federal or state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the
determination of such court. To the extent this paragraph (F) may be
inconsistent with any other provision of these Articles Supplementary, this
paragraph (F) shall be controlling.
<PAGE> 20
11. For purposes of these Articles Supplementary, Series B Preferred
Shares not owned directly shall be deemed to be owned indirectly by a person if
that person or a group of which he is a member would be the beneficial owner of
such Series B Preferred Shares, as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, and/or would be considered to own such Series
B Preferred Shares by reason of the REIT Provisions of the Code.
12. Notwithstanding any other provision of paragraph (F), nothing in
these Articles Supplementary shall preclude the settlement of transactions
entered into through the facilities of the New York Stock Exchange. The fact
that the settlement of any transaction takes place or occurs shall not negate
the effect of any other provision of this paragraph (F) and any transferee in
such a transaction shall be subject to all of the provisions and limitations set
forth in this paragraph (F).
G. Ranking.
With regard to rights to receive distributions and amounts payable upon
liquidation, dissolution or winding up of the Company, the Series B Preferred
Shares rank senior to the Common Shares, senior to the Nomura Preferred Shares
in the manner and to the extent provided herein and on a parity with any other
preferred shares issued by the Company, unless the terms of such other preferred
shares provide otherwise and, if applicable, the requirements of paragraph (H)
hereof have been complied with. However, the Company may authorize or increase
any class or series of shares of beneficial interest ranking on a parity with or
junior to the Series B Preferred Shares as to distribution rights or liquidation
preference without the vote or consent of the holders of the Series B Preferred
Shares. Notwithstanding that the Series B Preferred Shares rank senior to the
Nomura Preferred Shares in the manner and to the extent provided herein as to
rights to receive distributions and amounts payable upon liquidation,
dissolution or winding up of the Company, the Company shall have the right
(whether or not distributions on the Series B Preferred Shares for all past
Distribution Periods and the then current Distribution Period have been paid)
(i) to mandatorily redeem Series A-1 Preferred Shares in accordance with the
terms set forth in the Series A-1 Articles Supplementary as in existence on the
Original Issue Date, and (ii) to mandatorily redeem any other Nomura Preferred
Shares issued from time to time in accordance with the terms set forth in the
articles
<PAGE> 21
supplementary classifying such series of Nomura Preferred Shares, which terms
shall be substantially similar to the mandatory redemption terms set forth in
the Series A-1 Articles Supplementary as in existence on the Original Issue
Date, except that such articles supplementary shall relate to a different
property to be acquired, constructed and/or developed by a separate entity in
which the Company is directly or indirectly a co-participant. Furthermore, so
long as the Series B Preferred Shares are outstanding, the Company may only
exercise its optional redemption rights in respect of the Nomura Preferred
Shares (i) up to an amount equal to the value (as determined below) of the
equity securities issued by the Company and the units of partnership interest
issued by the Operating Partnership (other than those units of partnership
interest issued in connection with the issuance by the Company of common equity
securities) junior to the Series B Preferred Shares as to distribution rights
and rights upon liquidation, dissolution and winding up ("Junior Equity") from
and after the date of the consummation of the offering by the Company of its
Series B Preferred Shares and (ii) so long as full cumulative distributions on
the Series B Preferred Shares have been or contemporaneously are authorized and
paid or authorized and a sum sufficient for the payment thereof set apart for
payment. The value of such Junior Equity shall be equal to the product of (A)
the total number of shares or units of Junior Equity issued, and (B) in each
case, as applicable, (i) with respect to issuances of Junior Equity for cash,
the amount of the purchase price therefor, (ii) with respect to issuances of
Junior Equity for property or other consideration, the closing price per Common
Share on the New York Stock Exchange on the date immediately preceding issuance
of such Junior Equity, or (iii) with respect to issuances of Junior Equity which
are not traded on a national exchange or not convertible into equity securities
or units of partnership interest which are traded on a national exchange, as
determined by an investment banking firm.
H. Limitations.
So long as any Series B Preferred Shares are outstanding, the Company
shall not, without the affirmative vote, or the written consent, of the holders
of at least two-thirds of the total number of outstanding Series B Preferred
Shares, voting as a class,
<PAGE> 22
1. authorize, create or issue, or increase the authorized or issued
amount of, any class or series of, or rights to subscribe to or acquire,
any security convertible into, any class or series of shares of beneficial
interest ranking as to distribution rights or liquidation preference,
senior to the Series B Preferred Shares, or reclassify any shares of
beneficial interest into any such shares; or
2. amend, alter or repeal, whether by merger, consolidation or
otherwise, any of the provisions of the Declaration of Trust (including
these Articles Supplementary) that would change the preferences, rights or
privileges with respect to the Series B Preferred Shares so as to affect
the Series B Preferred Shares materially and adversely;
but (except as otherwise expressly required by applicable law) nothing herein
contained shall require such a vote or consent (i) in connection with any
increase in the total number of authorized Common Shares; (ii) in connection
with the authorization or increase of any class or series of shares of
beneficial interest ranking, as to distribution rights and liquidation
preference, on a parity with or junior to the Series B Preferred Shares; (iii)
in connection with any merger or consolidation in which the Company is the
surviving entity if, immediately after the merger or consolidation, there are
outstanding no shares of beneficial interest and no securities convertible into
shares of beneficial interest ranking as to distribution rights or liquidation
preference senior to the Series B Preferred Shares other than the securities of
the Company outstanding prior to such merger or consolidation; (iv) in
connection with any merger or consolidation in which the Company is not the
surviving entity if, as a result of the merger or consolidation, the holders of
Series B Preferred Shares receive shares of stock or beneficial interest or
other equity securities with preferences, rights and privileges substantially
identical to the preferences, rights and privileges of the Series B Preferred
Shares and there are outstanding no shares of stock or beneficial interest or
other equity securities of the surviving entity ranking as to distribution
rights or liquidation preference senior to the Series B Preferred Shares other
than the securities of the Company outstanding prior to such merger or
consolidation; or (v) if, at or prior to the time when the issuance of any such
shares ranking senior to the Series B Preferred Shares is to be made or
<PAGE> 23
any such change is to take effect, as the case may be, the Series B Preferred
Shares have been called for redemption upon proper notice and sufficient funds
have been irrevocably deposited in trust for the redemption of all the then
outstanding Series B Preferred Shares.
I. Exclusion of Other Rights.
The Series B Preferred Shares shall not have any preferences or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption other than
expressly set forth in the Declaration of Trust.
J. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
K. Severability of Provisions.
If any preferences or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of the Series B Preferred Shares set forth in the
Declaration of Trust is invalid, unlawful or incapable of being enforced by
reason of any rule of law or public policy, all other preferences or other
rights, voting powers, restrictions, limitations as to distributions,
qualifications or terms or conditions of redemption of Series B Preferred Shares
set forth in the Declaration of Trust which can be given effect without the
invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain
in full force and effect and no preferences or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
or terms or conditions of redemption of the Series B Preferred Shares herein set
forth shall be deemed dependent upon any other provision thereof unless so
expressed therein.
L. No Preemptive Rights.
No holder of Series B Preferred Shares shall be entitled to any
preemptive rights to subscribe for or acquire any unissued shares of beneficial
interest of the Company (whether now or hereafter authorized) or securities of
the Company convertible
<PAGE> 24
into or carrying a right to subscribe to or acquire shares of beneficial
interest of the Company.
M. Conversion.
The Series B Preferred Shares are not convertible into or exchangeable
for any other property or securities of the Company.
SECOND: The Series B Preferred Shares have been classified by the Board
of Trustees under a power contained in the Declaration of Trust.
THIRD: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the vote required by law.
FOURTH: Each of the undersigned acknowledges these Articles
Supplementary to be the act of the Company and as to all matters or facts
required to be verified under oath, that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and such statement is made under the penalties for perjury.
FIFTH: These Articles Supplementary and all documents, agreements,
understandings and arrangements relating hereto have been entered into or
executed on behalf of the Company by the undersigned in his capacity as a
trustee of the Company, which has been formed as a Maryland real estate
investment trust pursuant to a declaration of trust of the Company dated as of
September 1, 1993, as amended, and not individually, and neither the trustees,
officers nor shareholders of the Company shall be bound or have any personal
liability hereunder or thereunder. Holders of the Series B Preferred Shares
shall look solely to the assets of the Company for satisfaction of any liability
of the Company in respect of these Articles Supplementary and all documents,
agreements, understandings and arrangements relating hereto and will not seek
recourse or commence any action against any of the trustees, officers or
shareholders of the Company or any of their personal assets for the performance
or payment of any obligation hereunder or thereunder. The foregoing shall also
apply to any future documents, agreements, understandings, arrangements or
transactions between the Company and holders of the Series B Preferred Shares.
<PAGE> 25
IN WITNESS WHEREOF, the Company has caused these Articles Supplementary
to be executed under seal in its name and on its behalf by its President and
attested to by its Secretary on this 17th day of November, 1997.
GLIMCHER REALTY TRUST
By: /s/ Herbert Glimcher (Seal)
---------------------------
Herbert Glimcher
President
ATTEST:
By: /s/ George A. Schmidt
------------------------
George A. Schmidt
Secretary
<PAGE> 1
Exhibit 10.57
EXECUTION COPY
GLIMCHER REALTY TRUST
ARTICLES SUPPLEMENTARY
CLASSIFYING AND DESIGNATING 40,000
SHARES OF BENEFICIAL INTEREST AS 40,000
SHARES OF SERIES A-1 CONVERTIBLE PREFERRED BENEFICIAL INTEREST
Glimcher Realty Trust, a Maryland real estate investment trust (the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Under a power contained in Article VI, Section 6.3 of the
Declaration of Trust, as amended, of the Corporation (the "Declaration"), the
Board of Trustees of the Corporation (the "Board of Trustees"), by resolution
duly adopted at a meeting duly called and held on November 5, 1997, classified
and designated 40,000 shares (the "Shares") of beneficial interest (as defined
in the Declaration) as shares of Series A-1 Convertible Preferred Beneficial
Interest, with the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption set forth on Exhibit 1
hereto, which, upon any restatement of the Declaration, shall be deemed to be
part of Article VI, Section 6.3 of the Declaration.
SECOND: The Shares have been classified and designated by the Board of
Trustees under the authority contained in the Declaration.
THIRD: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the vote required by law.
FOURTH: Each of the undersigned Trustees of the Corporation
acknowledges these Articles Supplementary to be the act of the Corporation and,
as to all matters or facts required to be verified under oath, each of the
undersigned acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
<PAGE> 2
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 14th of November, 1997.
ATTEST: GLIMCHER REALTY TRUST
/s/ George A. Schmidt By: /s/ David J. Glimcher (SEAL)
- ---------------------------- -------------------------------
George A. Schmidt, Secretary David J. Glimcher, President
-2-
<PAGE> 3
EXHIBIT 1
SERIES A-1 CONVERTIBLE PREFERRED SHARES
OF BENEFICIAL INTEREST
SECTION 1. DESIGNATION, AMOUNT AND SUBORDINATION. The shares of the series
of preferred shares of beneficial interest established hereunder is "SERIES A-1
CONVERTIBLE PREFERRED SHARES" (the "SERIES A-1 PREFERRED SHARES") and the number
of shares constituting such series shall be 40,000. The date of original
issuance of any of the Series A-1 Preferred Shares is herein called the
"ORIGINAL ISSUANCE DATE". From and after the Dividend Rate Change Date (as
defined in Section 2), except in connection with transfers, exchanges or
replacements, no Series A-1 Preferred Shares shall be issued at any time on or
after the Dividend Rate Change Date. Notwithstanding anything in these Articles
Supplementary to the contrary, the Series A-1 Preferred Shares rank junior as to
rights to receive distributions and amounts payable upon liquidation,
dissolution or winding up of the Corporation to the Series B Cumulative
Redeemable Preferred Shares of Beneficial Interest of the Corporation (the
"SERIES B PREFERRED SHARES") to the extent and in the manner set forth in the
terms of the Series B Preferred Shares set forth in the Articles Supplementary
Classifying 5,520,000 Shares of Beneficial Interest as Series B Cumulative
Redeemable Preferred Shares of Beneficial Interest of the Corporation (the
"SERIES B ARTICLES SUPPLEMENTARY") as such Series B Articles Supplementary are
in effect on the Original Issuance Date.
SECTION 2. DIVIDENDS.
(a) The holders of each Series A-1 Preferred Share shall be entitled to
receive, if, as and when authorized, out of the net profits of the Corporation,
dividends at the annual rate per share of the sum of:
(1) the Applicable Dividend Amount (provided, however, that such
amount shall change on the Dividend Rate Change Date, if any, to the amount
set forth in the Dividend Rate Change Notice), plus
<PAGE> 4
(2) during any Deferral Period (as defined below), including any
portion of a Deferral Period in effect prior to termination thereof, Five
Dollars ($5.00) per annum, plus
(3) for any portion of a Quarterly Dividend Payment Period during
which a Default shall exist, Forty Dollars ($40.00) per annum (the "DEFAULT
DIVIDEND AMOUNT").
Dividends shall be payable in quarterly installments on each April 1, July 1,
October 1 and January 1 (or if any such date is not a Business Day, on the next
succeeding Business Day, such date being herein called a "QUARTERLY PAYMENT
DATE"), commencing on the first such date after the Original Issuance Date. The
term "DIVIDEND RATE CHANGE DATE" shall mean the date set forth in a written
notice from the Corporation to each Holder of Series A-1 Preferred Shares, which
notice shall (i) be irrevocable, (ii) set forth the Dividend Rate Change Date
(which date shall be at least fifteen days after the date of such notice and
which Dividend Rate Change Date shall not be later than the earlier of the date
of the final issuance of shares of Series A-1 Preferred Shares and the date
which is the first anniversary of the Original Issuance Date of shares of the
Series A Convertible Preferred Beneficial Interest) (which anniversary is
November 27, 1997) on and after which the dividend rate per annum per share of
Series A-1 Preferred Shares shall be equal to the sum of:
(1) an amount equal to the product (expressed in dollars and cents
rounded upward to the nearest cent) of (x) the Liquidation Preference in
effect from time to time multiplied by (y) the sum of (i) .02850 plus (ii)
a percentage, expressed as a decimal, and rounded upward to the nearest
hundred thousandth, equal to the yield to maturity of actively traded (on a
basis consistent with other U.S. Treasury fixed rate securities) marketable
U.S. Treasury fixed rate securities (as quoted on the Cantor-Fitzgerald
Treasury Screen) having a remaining maturity of as close to, but not less
than, four years after the second Business Day prior to the Dividend Rate
Change Date, plus
(2) during any Deferral Period, including any portion of a Deferral
Period in effect prior to termination thereof, Five Dollars ($5.00) per
annum, plus
2
<PAGE> 5
(3) for any portion of a Quarterly Dividend Payment Period during
which a Default shall exist, Forty Dollars ($40.00) per annum, plus
(4) for each Quarterly Dividend Payment Period or portion thereof, an
amount equal to the product (expressed in dollars and cents rounded upward
to the nearest cent) of (x) the Liquidation Preference in effect from time
to time multiplied by (y) the Applicable Spread.
Promptly (and in any event within two (2) Business Days after the Dividend Rate
Change Date), the Corporation shall notify each Holder of Series A-1 Preferred
Shares in writing of the dividend rate per share. Such dividends shall be paid
before any dividends shall be set apart for or paid upon the Common Shares or
any other preferred shares ranking on liquidation junior to the Series A-1
Preferred Shares (the "JUNIOR PREFERRED SHARES" and together with the Common
Shares, the "JUNIOR SHARES") in any year. All dividends authorized upon Series
A-1 Preferred Shares shall be authorized pro rata per share. Dividends payable
on the Series A-1 Preferred Shares for any period shall be computed on the basis
of the actual number of days elapsed over a year of 360 days. The Corporation
shall not be required to pay dividends during any Deferral Period (as defined
below) except that, the Default Dividend Amount, if any, accrued during any
Quarterly Dividend Payment Period shall be payable on the related Quarterly
Payment Date.
The term "APPLICABLE DIVIDEND AMOUNT" means an amount equal to the
product (expressed in dollar and cents and rounded upward to the nearest cent)
of (x) the Liquidation Preference times (y) the sum of .02850 plus the
Applicable Spread plus LIBOR (expressed as a decimal rounded upwards to the
nearest hundred thousandth (.00000)) and shall be determined on the applicable
Dividend Determination Date for each Quarterly Dividend Payment Period.
The term "APPLICABLE PREFERRED SHARES AMOUNT" means with respect to any
period the highest aggregate liquidation preference of all Preferred Shares of
Beneficial Interest of the Corporation issued at any time under the Securities
Purchase Agreement dated as of November 26, 1996, as supplemented (as modified,
supplemented or amended from time to time, the "SECURITIES PURCHASE AGREEMENT"),
among Partnership Acquisition Trust II, a Delaware business trust, Nomura Asset
Capital
3
<PAGE> 6
Corporation, the Corporation, and Glimcher Properties Limited Partnership, a
Delaware limited partnership, which were outstanding on any date during such
period.
The term "APPLICABLE SPREAD" shall be determined on the last day of a
Quarterly Dividend Period or other applicable period (and shall be applicable to
every day during such Quarterly Dividend Period or other applicable period) to
be the decimal determined below:
<TABLE>
<CAPTION>
- -------------------- ------------------------------------------------------------------------------------------------
Applicable
Preferred
Shares Adjusted Equity Ratio as of the last day of the Quarterly
Amount Dividend Period or other applicable period
- -------------------- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Greater than or Greater than or Greater than or Greater than or Less than .3200
equal to .47000 equal to .4200 equal to .3700 equal to .3200
but less than but less than but less than
.4700 .4200 .3700
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
Equal to or less .00000 .00250 .01200 .02000 .03200
than $100 million
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
Greater than $100 .00000 .00500 .01700 .02600 .03700
million but less
than $200 million
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
Greater than or .00000 .00750 .02000 .03000 .04000
equal to $200
million
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
</TABLE>
The term "ADJUSTED EQUITY RATIO" shall mean as of any date of
determination, the ratio (expressed as a decimal to the nearest hundred
thousandth (.00000)) of:
(x) the sum of (i) the aggregate liquidation preference of all
outstanding Junior Preferred Shares plus (ii) the product, expressed in
dollars, of (A) the number of outstanding Common Shares as of the
determination date (including without duplication any Common Shares which
would
4
<PAGE> 7
be issuable upon conversion of any limited partnership interests in
Glimcher Properties Limited Partnership, a Delaware limited partnership)
not owned by the Corporation times (B) the average Market Price (as defined
in Section 5(a) hereof) of the Common Shares during the Quarterly Dividend
Period (or portion thereof, if applicable) prior to the determination date,
to
(y) the sum, without duplication, of (i) the amount determined in the
foregoing clause (x), plus (ii) the liquidation preference of all Preferred
Shares of Beneficial Interest of the Corporation (other than Junior
Preferred Shares), plus (iii) the total consolidated debt of the
Corporation determined in accordance with GAAP.
For purposes of computing the Applicable Dividend Rate for any
Quarterly Dividend Period the Adjusted Equity Ratio shall be the ratio on the
last day of such Quarterly Dividend Period (e.g., the ratio in effect for the
entire period January 1 through March 31 shall be the ratio computed on March
31).
The term "BUSINESS DAY" shall mean any day (other than a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City.
The term "COMMON SHARES" means the Common Shares of Beneficial
Interest, $.01 par value per share, of the Corporation.
The term "DEBT" of any Person means indebtedness of such Person for
borrowed money outstanding (including (i) obligations under capitalized leases,
(ii) obligations for the deferred purchase price of property (other than trade
payables), (iii) liabilities evidenced by notes, bonds or similar instruments,
(iv) guarantees by such Person of any of the foregoing incurred by any other
person, and (v) any of the foregoing obligations for which such Person is
otherwise liable in any other manner such as liability resulting from such
Person being a general partner of the partnership incurring the foregoing
obligation).
The term "DEFAULT" shall mean the existence of any of the following
events:
5
<PAGE> 8
(i) The failure of the Corporation to maintain at the end of each
fiscal quarter, commencing September 30, 1997, a ratio of Consolidated Debt of
the Corporation and its consolidated subsidiaries to Consolidated Total Assets
of the Corporation and its consolidated subsidiaries of no more than .60 to 1.00
and such failure shall have continued for a period of 120 consecutive days. The
term "CONSOLIDATED DEBT" of any Person shall mean, as of any date of
determination, without duplication, the total consolidated Debt of such Person
and its consolidated subsidiaries, determined in accordance with generally
accepted accounting principles ("GAAP") except as otherwise provided herein. The
term "CONSOLIDATED TOTAL Assets" of any Person shall mean, as of any date of
determination, the sum, without duplication, of (i) the cash and cash
equivalents (excluding any cash held in escrow) of the Corporation and its
consolidated subsidiaries, (ii) the cost of all Recently Developed Real
Properties included in the consolidated balance sheet of the Corporation in
accordance with GAAP, (iii) the cost of all Recently Acquired Operating Real
Properties included in the consolidated balance sheet of the Corporation in
accordance with GAAP plus (iv) the aggregate value of all real properties (other
than Recently Developed Real Properties and Recently Acquired Operating Real
Properties) owned by the such Person and its consolidated subsidiaries,
determined in accordance with GAAP, except that the value of such real
properties shall be determined by applying a 9.50% capitalization rate to the
Adjusted Net Income of such Person and its consolidated Subsidiaries. The term
"ADJUSTED NET INCOME" as of the end of any fiscal quarter of any Person shall
mean the net income of such Person and its consolidated subsidiaries for the
twelve months then ended computed in accordance with GAAP, but it shall be
computed by (x) excluding from the computation thereof all income and expense
items related to Recently Acquired Operating Real Properties and Recently
Developed Real Properties, general and administrative expenses, minority
interests, interest expenses, depreciation and amortization expenses, income
taxes and items of gain and loss resulting from sales and/or extraordinary
events and (y) including in the computation thereof an assumed management fee
equal to 4% of total revenues. The term "RECENTLY ACQUIRED OPERATING REAL
PROPERTY" shall mean each operating real property acquired by the Corporation
and its consolidated subsidiaries until such property shall have
6
<PAGE> 9
been owned by the Corporation or a consolidated subsidiary for at least
four (4) fiscal quarters, and the term "RECENTLY ACQUIRED DEVELOPMENT
PROPERTY" shall mean any operating real property under development by the
Corporation or any of its consolidated subsidiaries until the earliest of
(i) the date which is 12 months after the date 85% of the total gross
leaseable area of such property has been leased to tenants that are open
for business on the property and paying rent, (ii) 30 months after the
issuance of a permanent certificate of occupancy for any material portion
of such property and (iii) 48 months after the commencement of construction
in connection with the development of such property.
(ii) The failure of the Corporation to maintain at the end of each
fiscal quarter, commencing September 30, 1997, a ratio of Adjusted
Consolidated Debt to Adjusted Consolidated Total Assets of no more than .70
to 1.00 and such failure shall have continued for a period of 120
consecutive days. For purposes of this calculation (a) the term "ADJUSTED
CONSOLIDATED DEBT" shall mean Consolidated Debt of the Corporation and its
consolidated subsidiaries plus, with respect to any Debt of any
unconsolidated entity, the sum, without duplication, of (x) the Corporation
and its consolidated subsidiaries' pro rata share of such unconsolidated
entity's consolidated Debt which is not Debt of the Corporation or any of
its consolidated subsidiaries, (but the amount included pursuant to this
clause (x) with respect to any unconsolidated entity shall not exceed the
amount of the Corporation and its consolidated subsidiaries' pro rata share
of the consolidated assets of such unconsolidated entity using the method
of computation set forth in the definition of Consolidated Total Assets)
plus (y) without duplication, to the extent in excess of the amount
included in the foregoing clause (x), the aggregate amount of the
Corporation and its consolidated subsidiaries' Debt relative to such
unconsolidated entity 's Consolidated Debt; and (b) the term "ADJUSTED
CONSOLIDATED TOTAL ASSETS" shall mean Consolidated Total Assets of the
Corporation and its consolidated subsidiaries plus, with respect to any
consolidated assets of an unconsolidated entity, the Corporation and its
consolidated subsidiaries' pro rata share of the consolidated assets of
such unconsolidated entity using the method of computation set forth in the
definition of Consolidated Total Assets.
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<PAGE> 10
(iii) The indebtedness in the aggregate principal amount of
$181,000,000 incurred under the Amended and Restated Loan Agreement dated
as of March 15, 1994, among Nomura Asset Capital Corporation, Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership and
Grand Central Limited Partnership shall have been refinanced in whole or in
part without the prior written consent of Nomura Asset Capital Corporation.
(iv) The Corporation shall have issued any Shares in violation of
Section 4(b) hereof.
(v) Dividends on any shares of Series A-1 Preferred Shares shall be in
arrears for two or more Quarterly Dividend Payment Periods (except as a
result of a Deferral Period being in effect).
The term "DEFERRAL PERIOD" shall mean a period specified in writing by
the Corporation to the holders of the Series A-1 Preferred Shares during which
the development project to be developed directly or indirectly from the proceeds
of the issuance of the Series A-1 Preferred Shares is under construction and
that the proviso hereto has been satisfied; provided, however, that (i) no such
period may be less than a fiscal quarter and may not extend beyond December 31,
1997, (ii) no such period shall commence during, and any existing period shall
terminate immediately upon (but without affecting the dividend rate in effect
prior to such termination), any Default.
The term "DIVIDEND DETERMINATION DATE" shall mean (i) with respect to
the first Quarterly Dividend Payment Period, the date which is two (2) Business
Days prior to October 1, 1997, and (ii) with respect to all other Quarterly
Dividend Payment Periods, the date which is two (2) Business Days prior to the
first day of such Quarterly Dividend Payment Period.
The term "LIBOR" shall mean, with respect to any Quarterly Dividend
Period, the three month London Interbank Offered Rate for United States dollar
deposits as of 11:00 a.m. (London time) on the Dividend Determination Date as
quoted on Telerate page 3750 or on such replacement system as is then
customarily used to quote LIBOR. If two or more such rates appear on Telerate
page 3750 or associated pages, LIBOR in respect of such Quarterly Dividend
Payment Period shall be the arithmetic mean of
8
<PAGE> 11
such offered rates. If two such rates do not appear on Telerate Page 3750 as of
11:00 a.m., London time, on the applicable Dividend Determination Date, LIBOR
will be the arithmetic mean of the offered rates (expressed as a percentage per
annum) for deposits in U.S. Dollars for a three month period that appear on the
Reuters Screen LIBO Page (as defined below) as of 11:00 a.m., London time, on
such Dividend Determination Date, if at least two such offered rates so appear.
If fewer than two such offered rates appear on the Reuters Screen LIBO Page as
of 11:00 a.m., London time, on such Dividend Determination Date, the Corporation
will request the principal London office of any four major reference banks in
the London interbank market selected by the Corporation in good faith to provide
such bank's offered quotation (expressed as a percentage per annum) to prime
banks in the London interbank market for deposits in U.S. Dollars for a three
month period as of 11:00 a.m., London time, on such Dividend Determination Date
for amounts of not less than U.S. $1,000,000. If at least two such offered
quotations are so provided, LIBOR will be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, the Corporation
will request any three major banks in New York City selected by the Corporation
in good faith to provide such bank's rate (expressed as a percentage per annum)
for loans in U.S. Dollars to leading European banks for a three month period as
of approximately 11:00 a.m., New York City time, on the applicable Dividend
Determination Date for amounts of not less than U.S. $1,000,000. If at least two
such rates are so provided, LIBOR will be the arithmetic mean of such rates. If
fewer than two rates are so provided, then LIBOR will be LIBOR in effect on the
preceding Dividend Determination Date.
The term "LIQUIDATION PREFERENCE" shall mean, as of any date of
determination, (x) if such date is prior to the later of the commencement of the
Conversion Period (without regard to the application of Section 5(g))and the
Conversion Termination Date (as defined in Section 5(g)), $1,000, and (y) at all
times thereafter, the quotient of $1,000 divided by the Applicable Conversion
Percentage as of the date of determination. Every change in the Applicable
Conversion Percentage on or after the later of (x) the commencement of the
Conversion Period (without regard to the application of Section 5(g)) or (y) the
Conversion Termination Date shall effect a change in the Liquidation Preference
as of the date of each such change.
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<PAGE> 12
The term "QUARTERLY DIVIDEND PAYMENT PERIOD" shall mean the period
beginning on and including the last day of each March, June, September and
December of each year and ending on the second to last day of the first to occur
of the next June, September, December and March, respectively, except that the
initial Quarterly Dividend Payment Period shall be the period beginning on the
Original Issuance Date and ending on the next March 31, June 30, September 30
and December 31.
(b) Dividends on the Series A-1 Preferred Shares shall be cumulative,
so that if in any fiscal year or years, dividends in whole or in part are not
paid upon the Series A-1 Preferred Shares, unpaid dividends shall accumulate as
against the holders of the Junior Shares. Dividends on the Series A-1 Preferred
Shares shall accrue whether or not the Corporation has earnings, whether or not
there are funds legally available for the payment of such dividends and whether
or not such dividends are authorized. Accrued but unpaid dividends on the Series
A-1 Preferred Shares will accumulate as of the Quarterly Payment Date on which
they first become payable. Each dividend, to the extent not paid on an
applicable Quarterly Payment Date, shall accrue (whether or not the Corporation
has earnings, whether or not there are funds legally available for the payment
of such dividends and whether or not such dividends are authorized) on a daily
basis additional cumulative dividends at the then applicable dividend rate for
the Series A-1 Preferred Shares. Any dividend payment made on the Series A-1
Preferred Shares shall first be credited against the earliest accrued but unpaid
dividend due which remains payable.
(c) For so long as the Series A-1 Preferred Shares remain outstanding,
the Corporation shall not pay any dividend upon the Junior Shares, whether in
cash or other property (other than shares of Junior Shares), or purchase, redeem
or otherwise acquire any such Junior Shares unless, in addition to the payment
of the dividend to the holders of the Series A-1 Preferred Shares as described
above, the Corporation has redeemed all shares of Series A-1 Preferred Shares
which it would theretofore have been required to redeem under Section 7 hereof.
Notwithstanding the provisions of this Section 2(c), without authorizing or
paying dividends on the Series A-1 Preferred Shares, the Corporation may, (1)
subject to applicable law, repurchase or redeem shares of Common Shares of the
Corporation from current or former officers or employees of the Corporation
pursuant to the terms of repurchase or similar agreements in effect from time to
time,
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<PAGE> 13
provided that such agreements have been approved by the Board of Trustees
of the Corporation and the terms of such agreements provide for a repurchase or
redemption price not in excess of the price per share paid by such employee for
such share, (2) set aside, authorize or pay dividends on the Common Shares of
the Corporation to the extent required in order to maintain the status of the
Corporation as a real estate investment trust under the provisions of Sections
856 through 858 of the Internal Revenue Code of 1986, as amended, but only to
the extent that the foregoing cannot be achieved through the payment of
dividends on the Series A-1 Preferred Shares except that, on only one dividend
payment date with respect to the Common Shares, the amount of such dividends
payable on the Common Shares may be computed based on the assumption that the
foregoing cannot be achieved through the payment of dividends on the Series A-1
Preferred Shares, and (3) redeem Shares pursuant to Section 6.6 of the
Declaration.
(d) Promptly (and in any event within three Business Days) after each
Dividend Determination Date, including any date relating to a Quarterly Dividend
Payment Period during a Deferral Period, the Corporation shall forthwith file at
each office designated for the conversion of Series A-1 Preferred Shares, a
statement, signed by the Chairman of the Board, the President, any Vice
President or Treasurer of the Corporation, setting forth the Applicable Dividend
Amount (including LIBOR and the Applicable Spread) for the following Quarterly
Dividend Payment Period. The Corporation shall also cause a notice setting forth
such information to be sent by mail, first class, postage prepaid, to each
record holder of Series A-1 Preferred Shares at his or its address appearing on
the Preferred Shares register except that such notice need not be sent, unless
requested by a holder of Preferred Shares, if such information has not changed
from the prior Dividend Determination Date.
(e) Notwithstanding anything in this Section 2 to the contrary, so long
as any Series B Preferred Shares shall remain outstanding, the provisions of
Section B(3) of the Series B Preferred Articles Supplementary shall supersede
this Section 2.
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<PAGE> 14
SECTION 3. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series
A-1 Preferred Shares then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its Shareholders, after
and subject to the payment in full of all amounts required to be distributed to
the holders of any other Preferred Shares of the Corporation ranking on
liquidation prior and in preference to the Series A-1 Preferred Shares (such
Preferred Shares being referred to hereinafter as "SENIOR PREFERRED SHARES")
upon such liquidation, dissolution or winding up, but before any payment shall
be made to the holders of Junior Shares, an amount equal to the Liquidation
Preference per share plus any accrued dividends thereon (whether or not there
are funds legally available for the payment of such dividends and whether or not
such dividends are authorized) (subject to adjustment in the event of any
dividend, split, distribution or combination with respect to such shares). If
upon any such liquidation, dissolution or winding up of the Corporation the
remaining assets of the Corporation available for the distribution to its
Shareholders after payment in full of amounts required to be paid or distributed
to holders of Senior Preferred Shares shall be insufficient to pay the holders
of shares of Series A-1 Preferred Shares the full amount to which they shall be
entitled, the holders of shares of Series A-1 Preferred Shares, and any class of
Shares ranking on liquidation on a parity with the Series A-1 Preferred Shares,
shall share ratably in any distribution of the remaining assets and funds of the
Corporation in proportion to the respective amounts which would otherwise be
payable in respect to the shares held by them upon such distribution if all
amounts payable on or with respect to said shares were paid in full.
(b) After the payment of all preferential amounts required to be paid
to the holders of Senior Preferred Shares and Series A-1 Preferred Shares and
any other series of Preferred Shares upon the dissolution, liquidation or
winding up of the Corporation, the holders of shares of Common Shares then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its Shareholders.
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<PAGE> 15
(c) Any merger or consolidation of the Corporation into or with another
corporation, any merger or consolidation of any other corporation into or with
the Corporation, or any sale, conveyance, mortgage, pledge or lease of all or
substantially all the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Section 3 unless approved pursuant to Section 4 (or approval is not required as
set forth in clause (b)(iii)(b) thereof).
(d) In determining whether a distribution (other than upon voluntary or
involuntary liquidation), by dividend, redemption or other acquisition of shares
or otherwise, is permitted under the Maryland General Corporation Law, amounts
that would be needed, if the Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of holders of
Preferred Shares whose preferential rights upon dissolution are superior to
those receiving the distribution shall not be added to the Corporation's total
liabilities.
(e) Notwithstanding anything in this Section 3 to the contrary, so long
as any Series B Preferred Shares shall remain outstanding, the provisions of
Section C of the Series B Preferred Articles Supplementary shall supersede this
Section 3.
SECTION 4. VOTING
(a) Whenever dividends on any shares of Series A-1 Preferred Shares
shall be in arrears for two or more Quarterly Dividend Payment Period (except as
a result of a Deferral Period being in effect) or a Default shall have occurred
and be continuing (either event being herein called a "PREFERRED DEFAULT"), the
number of members of the Board of Trustees of the Corporation shall be increased
by two and the holders of Series A-1 Preferred Shares shall have the exclusive
right, voting separately as a class together with the holders of other shares of
convertible preferred shares issued from time to time pursuant to the Securities
Purchase Agreement dated as of November 26, 1996, between GRT, GPLP and
Partnership Acquisition Trust II, a Delaware business trust, (collectively, the
"PARI PASSU SHARES"), to elect two Trustees (herein referred to as the "SERIES
A-1 Trustees"). All such Series A-1 Trustees shall be elected by the affirmative
vote of the holders of record of a majority of the outstanding Pari Passu Shares
either at meetings of
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<PAGE> 16
Shareholders at which Trustees are elected, a special meeting of holders of Pari
Passu Shares or by unanimous written consent without a meeting in accordance
with the Corporations and Associations Article of the Annotated Code of
Maryland, and at each subsequent meeting until all dividends accumulated on such
shares of Series A-1 Preferred Shares for the past Quarterly Dividend Payment
Periods and the dividend for the then current Quarterly Dividend Payment Period
shall have been fully paid or authorized and a sum sufficient for the payment
thereof set aside for payment and there shall not exist any Default. Each Series
A-1 Trustee so elected shall serve for a term of one year and until his
successor is elected and qualified. Any vacancy in the position of a Series A-1
Trustee may be filled only by the holders of the Pari Passu Shares. Each Series
A-1 Trustee may, during his term of office, be removed at any time, with or
without cause, by and only by the affirmative vote, at a special meeting of
holders of Pari Passu Shares called for such purpose, or the written consent, of
the holders of record of a majority of the outstanding shares of Pari Passu
Shares. Any vacancy created by such removal may also be filled at such meeting
or by such consent. If and when all accumulated dividends and the dividend for
the then current dividend period on the Series A-1 Preferred Shares shall have
been paid in full or set aside for payment in full and there shall exist no
Default, the holders thereof shall be divested of the foregoing voting rights
(subject to revesting in the event of each and every Preferred Default) and, if
all accumulated dividends and the dividend for the then current dividend period
have been paid in full or set aside for payment in full on all Pari Passu Shares
upon which like voting rights have been conferred and are exercisable, the term
of office of each Series A-1 Trustee shall terminate forthwith.
(b) In addition to any other rights provided by law, so long as any
Series A-1 Preferred Shares are outstanding, the Corporation shall not, without
first obtaining the affirmative vote or, if permitted by applicable law, the
written consent of the holders of a majority of the Series A-1 Preferred Shares:
(i) amend or repeal any provision of the Declaration or Bylaws which
would have a dilutive effect on the Series A-1 Preferred Shares, increase
the number of members of the Board of Trustees of the Corporation or
otherwise materially adversely affect the economic rights of the Series A-1
Preferred Shares, including permitting the provisions of Subtitle 7 of
Title 3 of the Maryland General Corporation
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<PAGE> 17
Law, similar provisions and so-called "poison pills" to apply to any holder
of the Series A-1 Preferred Shares as a result of owning such shares or
common shares upon conversion of any or all of such shares;
(ii) issue any Senior Preferred Shares unless all Series A-1 Preferred
Shares are redeemed with the proceeds thereof or issue any Preferred Shares
(other than Pari Passu Shares) unless all the net proceeds are used to
redeem the Series A-1 Preferred Shares and the Pari Passu Shares;
(iii) authorize or effect (a) any sale, lease, transfer or other
disposition of all or substantially all the assets of the Corporation; (b)
any merger or consolidation or other reorganization of the Corporation with
or into another entity, except any such event if, after giving effect
thereto the Corporation shall be in compliance with the ratios set forth in
clauses (i) and (ii) of the definition of Default or (c) a liquidation,
winding up, dissolution or adoption of any plan for the same; or
(iv) enter into any transaction, other than employment agreements on a
basis consistent with past practice, with any officer, director, trustee or
beneficial owner of five percent (5%) or more of the Common Shares of the
Corporation or any Affiliate of any of the foregoing unless such
transaction is on terms no less favorable to the Corporation or such
subsidiary than those that could be obtained in a comparable arm's length
transaction with a person that is not such officer, director, trustee,
owner or Affiliate.
(c) The Corporation shall not amend, alter or repeal the preferences,
conversion or other rights or powers, restrictions, limitations as to dividends
or the rights, limitations, qualifications or terms or conditions of redemption
of the Series A-1 Preferred Shares so as to affect adversely the Series A-1
Preferred Shares, without the written consent or affirmative vote or, if
permitted by applicable law, the written consent, of the holders of at least
66-2/3% of the then outstanding aggregate number of shares of such adversely
affected Series A-1 Preferred Shares, or consenting (as the case may be)
separately as a class.
(d) For all provisions of the Declaration requiring the approval of the
holders of shares of Series A-1 Preferred
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<PAGE> 18
Shares, all Preferred Shares owned by the Corporation or any person in which the
Corporation has directly or indirectly a 10% or more equity interest shall be
disregarded and shall not be deemed to be outstanding.
SECTION 5. CONVERSION. (a) Each share of Series A-1 Preferred Shares
may be converted at any time during the Conversion Period (as defined below), at
the option of the holder thereof, into the number of fully-paid and
nonassessable shares of Common Shares obtained by dividing the then applicable
Liquidation Preference by the Conversion Price (as defined below) then in
effect. The right of conversion given during the Conversion Period shall not be
affected by any notice of redemption. Holders of Series A-1 Preferred Shares at
the close of business on a record date (which shall be the Business Day next
preceding the Quarterly Payment Date) for a corresponding Quarterly Payment Date
will be entitled to receive the dividend payable on such Series A-1 Preferred
Shares on such Quarterly Payment Date notwithstanding the conversion of Series
A-1 Preferred Shares following such record date. Except as provided in the
immediately preceding sentence, the Corporation will make no payment or
allowance for dividends which accrued on the converted Series A-1 Preferred
Shares since the last Quarterly Payment Date prior to conversion. Holders of
Common Shares which are issuable upon conversion made prior to or on a record
date for any dividend or distribution on such shares shall be entitled to
receive the same dividend or distribution as other holders of record of Common
Shares. Each conversion will be deemed to have been effected immediately prior
to the close of business on the day on which the notice of conversion was
received by the Corporation. The "CONVERSION PRICE" per share shall be equal to
the product of (i) the average of Market Price (rounded to the nearest $0.01)
per share over the 30 trading days prior to the date of conversion times (ii)
the Applicable Conversion Percentage. As used herein, the term "MARKET PRICE" as
of any trading day, subject to adjustment pursuant to Section 6, means (i) if
the Common Shares are listed on any national securities exchange, the last sales
price of the Common Shares on such exchange (or the quoted closing bid price if
there shall have been no sales) on such trading day, or (ii) if the Common
Shares shall not be listed, the mean between the closing bid and asked prices on
such trading day for the Common Shares on the date of conversion as reported by
NASDAQ, or its successor, and if there are not such closing bid and asked
prices, on the basis of the fair market value per share on such trading day as
determined by
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<PAGE> 19
an appraiser mutually satisfactory to the Board of Trustees of the Corporation
and the holders of a majority of the outstanding shares of Series A-1 Preferred
Shares who have given notice of conversion. Any change in the Market Price due
to an adjustment pursuant to Section 6 shall take effect on the date of any
Triggering Event (as defined in Section 6).
As used herein, the term "APPLICABLE CONVERSION PERCENTAGE" means (i)
at all times during the occurrence and continuance of a Default, the lesser of
0.80 and the decimal which would otherwise be in effect in clause (ii) of this
definition in the absence of a Default, and (ii) so long as a Default has not
occurred and is continuing (w) at all times after November 27, 1996, to but not
including the sixth anniversary of the November 27, 1996, 0.90, (x) at all times
from and including the sixth anniversary of November 27, 1996, to but not
including the seventh anniversary of November 27, 1996, 0.85, (y) at all times
from and including the seventh anniversary of November 27, 1996, to but not
including the eighth anniversary of November 27, 1996, 0.80 and (z) at all times
from and after the ninth anniversary of November 27, 1996, 0.70.
As used herein, the term "CONVERSION PERIOD" means the period (a)
commencing on the earliest of (i) the date of a Default (it being understood
that an event included in clause (i) or (ii) of the definition of the term
"Default" does not constitute a Default until the 120 day period referred to
therein has lapsed and such event remains) whether or not such Default is
subsequently cured, (ii) the fifth anniversary of the date (November 27, 1996)
when at least 32,000 shares of Series A Convertible Preferred Beneficial
Interests have been issued, (iii) the fifth anniversary of the date on which a
permanent certificate of occupancy is issued in connection with the Great Plains
MetroMall, and (iv) the six anniversary of November 27, 1996 and (b) ending on
the close of business on the Business Day next preceding the date fixed for
redemption or for the payment of any amounts distributable on liquidation to the
holders of the Series A-1 Preferred Shares.
(b) The Corporation shall not issue fractions of shares of Common
Shares upon conversion of Series A-1 Preferred Shares or scrip in lieu thereof.
If any fraction of a share of Common Shares would, except for the provisions of
this Section (b), be issuable upon conversion of any Series A-1 Preferred
Shares, the Corporation shall in lieu thereof pay to the person
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entitled thereto an amount in cash equal to the current value of such fraction,
calculated to the nearest one-hundredth (1/100) of a share, to be computed (i)
if the Common Shares are listed on any national securities exchange on the basis
of the last sales price of the Common Shares on such exchange (or the quoted
closing bid price if there shall have been no sales) on the date of conversion,
or (ii) if the Common Shares shall not be listed, on the basis of the mean
between the closing bid and asked prices for the Common Shares on the date of
conversion as reported by NASDAQ, or its successor, and if there are not such
closing bid and asked prices, on the basis of the fair market value per share on
the date of conversion as determined by an appraiser mutually satisfactory to
the Board of Trustees of the Corporation and the holders of a majority of the
outstanding shares of Series A-1 Preferred Shares who have given notice of
conversion.
(c) Whenever the Conversion Price shall be adjusted as provided in
Section 6 hereof, the Corporation shall forthwith file at each office designated
for the conversion of Series A-1 Preferred Shares, a statement, signed by the
Chairman of the Board, the President, any Vice President or the Treasurer of the
Corporation, showing in reasonable detail the facts requiring such adjustment
and the Conversion Price that will be effective after such adjustment. The
Corporation shall also cause a notice setting forth any such adjustments to be
sent by mail, first class, postage prepaid, to each record holder of Series A-1
Preferred Shares at his or its address appearing on the Shares register. If such
notice relates to an adjustment resulting from an event referred to in Section
6(g), such notice shall be included as part of the notice required to be mailed
and published under the provisions of Section 6(g) hereof.
(d) In order to exercise the conversion privilege, the holder of any
Series A-1 Preferred Shares to be converted shall surrender his or its
certificate or certificates therefor to the transfer agent for the Series A-1
Preferred Shares at the principal office of the transfer agent (or if no
transfer agent be at the time appointed, to the Corporation at its principal
office), and shall give written or facsimile notice (which may be given on the
date of conversion) to the transfer agent, if any, and to the Corporation at
such office that the holder elects to convert the Series A-1 Preferred Shares
represented by such certificates, or any number thereof. Such notice shall also
state the name or names (with address) in which the certificate or certificates
for shares of Common Shares which shall be
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<PAGE> 21
issuable on such conversion shall be issued, subject to any restrictions on
transfer relating to shares of the Series A-1 Preferred Shares or shares of
Common Shares upon conversion thereof. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly authorized in writing. The date of receipt by the transfer
agent (or by the Corporation if the Corporation serves as its own transfer
agent) of the certificates and notice shall be the conversion date. As soon as
practicable after receipt of such notice and the surrender of the certificate or
certificates for Series A-1 Preferred Shares as aforesaid, the Corporation shall
cause to be issued and delivered at such office to such holder, or on his or its
written order, a certificate or certificates for the number of full shares of
Common Shares issuable on such conversion in accordance with the provisions
hereof and cash as provided in Section 5(b) in respect of any fraction of a
share of Common Shares otherwise issuable upon such conversion.
(e) The Corporation shall at all times when the Series A-1 Preferred
Shares shall be outstanding reserve and keep available out of its authorized but
unissued Common Shares, for the purposes of effecting the conversion of the
Series A-1 Preferred Shares, such number of its duly authorized shares of Common
Shares as shall from time to time be sufficient to effect the conversion of all
outstanding Series A-1 Preferred Shares. Before taking any action which would
cause an adjustment reducing the Conversion Price below the then par value of
the shares of Common Shares issuable upon conversion of the Series A-1 Preferred
Shares, the Corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully-paid and nonassessable shares of such Common Shares at such
adjusted conversion price.
(f) All shares of Series A-1 Preferred Shares which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall forthwith cease and terminate except
only the right of the holder thereof to receive shares of Common Shares in
exchange therefor and payment of any accrued and unpaid dividends thereon. Any
shares of Series A-1 Preferred Shares so converted shall be retired and
cancelled and shall not be
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reissued, and the Corporation may from time to time take such appropriate action
as may be necessary to reduce the number of authorized Series A-1 Preferred
Shares accordingly, including the filing of articles supplementary.
(g) Notwithstanding anything to the contrary herein contained, unless
and until approval ("Shareholder Approval") of the holders of the Common Shares
shall have been obtained in compliance with the rules and policies of the New
York Stock Exchange, no holder of Series A-1 Preferred Shares shall have the
right to convert such Series A-1 Preferred Shares into Common Shares if, as a
result of such conversion and all prior or concurrent conversions of Pari Passu
Shares, (1) all Common Shares issued as a result of such conversions would have
voting power equal to or in excess of 20 percent of the voting power of the
Common Shares outstanding (excluding Treasury Shares, shares held by a
subsidiary and shares reserved for issuance upon conversion or exercise of
options or warrants) on November 27, 1996, or (2) the number of Common Shares
issued as a result of such conversions would be equal to or in excess of 20
percent of the number of Common Shares outstanding on November 27, 1996. The
date on and after which conversion shall no longer be permitted as a result of
the operation of this Section 5(g) is herein called the "Conversion Termination
Date", it being understood that if Shareholder Approval is obtained or if any
Pari Passu Shares which are convertible without Shareholder Approval have not
been converted, no Conversion Termination Date shall occur. Promptly, and in any
event within three (3) Business Days, after the Conversion Termination Date, the
Corporation shall forthwith file, at each office designated for the conversion
of Series A-1 Preferred Shares, a statement, signed by the Chairman of the
Board, the President, any Vice President or Treasurer of the Corporation,
stating that the Conversion Termination Date has occurred and setting forth the
reason therefor. The Corporation shall also cause a notice setting forth such
information to be sent by mail, first class, postage prepaid, to each record
holder of Series A-1 Preferred Shares at his or its address appearing on the
Preferred Shares register.
SECTION 6. ANTI-DILUTION PROVISIONS.
(a) The provisions of this Section 6 shall not be applicable except in
connection with a conversion pursuant to Section 5. In order to prevent dilution
of the right granted
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<PAGE> 23
hereunder, the Market Price on any date shall be subject to adjustment from time
to time in accordance with this Section 6(a). For purposes of this Section 6,
the term "NUMBER OF COMMON SHARES DEEMED OUTSTANDING" at any given time shall
mean the sum of (x) the number of shares of the Corporation's Common Shares
outstanding at such time, (y) the number of shares of the Corporation's Common
Shares issuable assuming conversion at such time of the Corporation's Series A-1
Preferred Shares and the Pari Passu Shares and (z) the number of shares of the
Corporation's Common Shares deemed to be outstanding under Sections 6(b)(1) to
(9), inclusive, at such time.
Except as provided in Section 6(c) or 6(f) below, if and whenever on or
after November 27, 1996, the Corporation shall issue or sell, or shall in
accordance with Sections 6(b)(1) to (9), inclusive, be deemed to have issued or
sold, any shares of its Common Shares for a consideration per share less than
the Market Price in effect immediately prior to the time of such issue or sale,
then forthwith upon such issue or sale (the "TRIGGERING TRANSACTION"), the
Market Price for all trading days prior to such Triggering Transaction shall,
subject to Sections 6(b)(1) to 6(b)(9), be reduced to the Market Price
(calculated to the nearest tenth of a cent) determined by dividing (x) an amount
equal to the sum of (1) the product derived by multiplying the Number of Common
Shares Deemed Outstanding immediately prior to such Triggering Transaction by
the Market Price then in effect, plus (2) the consideration, if any, received by
the Company upon consummation of such Triggering Transaction, by (y) an amount
equal to the sum of (1) the Number of Common Shares Deemed Outstanding
immediately prior to such Triggering Transaction plus (2) the number of shares
of Common Shares issued (or deemed to be issued in accordance with Sections
6(b)(1) to 6(b)(9)) in connection with the Triggering Transaction.
(b) This Section 6(b) shall apply only in connection with events
referred to in Sections 6(b)(1) through 6(b)(9) which occur within the 30 days
immediately preceding a notice of conversion and only with respect to the
specific shares of Series A-1 Preferred Shares which are the subject of the
notice of conversion and are in fact converted. For purposes of determining the
adjusted Conversion Price under this Section 6(b), the following Sections
6(b)(1) to 6(b)(9), inclusive, shall be applicable:
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<PAGE> 24
(1) In case the Corporation at any time shall in any manner grant
(whether directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase, or any options for the purchase of, Common
Shares or any Preferred Shares (other than the Series A-1 Shares and the
Pari Passu Shares) or other securities convertible into or exchangeable for
Common Shares (such rights or options being herein called "OPTIONS" and
such convertible or exchangeable Shares or securities being herein called
"CONVERTIBLE SECURITIES"), whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable and the price per share for which the Common Shares is issuable
upon exercise, conversion or exchange (determined by dividing (x) the total
amount, if any, received or receivable by the Corporation as consideration
for the granting of such Options, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon the exercise of
all such Options, plus, in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (y) the total
maximum number of shares of Common Shares issuable upon the exercise of
such Options or the conversion or exchange of such Convertible Securities)
shall be less than the Market Price in effect immediately prior to the time
of the granting of such Option, then the total maximum amount of Common
Shares issuable upon the exercise of such Options or, in the case of
Options for Convertible Securities, upon the conversion or exchange of such
Convertible Securities shall (as of the date of granting of such Options)
be deemed to be outstanding and to have been issued and sold by the
Corporation for such price per share. No adjustment of the Market Price
shall be made upon the actual issue of such shares of Common Shares or such
Convertible Securities upon the exercise of such Options, except as
otherwise provided in Section 6(b)(3) below.
(2) In case the Corporation at any time shall in any manner issue
(whether directly or by assumption in a merger or otherwise) or sell any
Convertible
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<PAGE> 25
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Shares
are issuable upon such conversion or exchange (determined by dividing (x)
the total amount received or receivable by the Corporation as consideration
for the issue or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the
Corporation upon the conversion or exchange thereof, by (y) the total
maximum number of shares of Common Shares issuable upon the conversion or
exchange of all such Convertible Securities) shall be less than the Market
Price in effect immediately prior to the time of such issue or sale, then
the total maximum number of shares of Common Shares issuable upon
conversion or exchange of all such Convertible Securities shall (as of the
date of the issue or sale of such Convertible Securities) be deemed to be
outstanding and to have been issued and sold by the Corporation for such
price per share. No adjustment of the Market Price shall be made upon the
actual issue of such Common Shares upon exercise of the rights to exchange
or convert under such Convertible Securities, except as otherwise provided
in Section 6(b)(3) below.
(3) If the purchase price provided for in any Options referred to in
Section 6(b)(1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
Sections 6(b)(1) or 6(b)(2), or the rate at which any Convertible
Securities referred to in Section 6(b)(1) or 6(b)(2) are convertible into
or exchangeable for Common Shares shall change at any time (other than
under or by reason of provisions designed to protect against dilution of
the type set forth in Sections 6(b) or 6(d)), the Market Price in effect at
the time of such change shall forthwith be readjusted to the Market Price
which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at
the time initially granted, issued or sold. If the purchase price provided
for in any Option referred to in Section 6(b)(1)
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<PAGE> 26
or the rate at which any Convertible Securities referred to in Sections
6(b)(1) or 6(b)(2) are convertible into or exchangeable for Common Shares
shall be reduced at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then in case of the delivery
of Common Shares upon the exercise of any such Option or upon conversion or
exchange of any such Convertible Security, the Market Price then in effect
hereunder shall forthwith be adjusted to such respective amount as would
have been obtained had such Option or Convertible Security never been
issued as to such Common Shares and had adjustments been made upon the
issuance of the shares of Common Shares delivered as aforesaid, but only if
as a result of such adjustment the Market Price then in effect hereunder is
hereby reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Conversion Price then
in effect hereunder shall forthwith be increased to the Conversion Price
which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination, never been
issued.
(5) In case any Options shall be issued in connection with the issue
or sale of other securities of the Corporation, together comprising one
integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed to have
been issued for an amount equal to the fair market value thereof,
determined by allocating to the other securities the market price thereof.
(6) In case any shares of Common Shares, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor. In case any shares of Common
Shares, Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the
24
<PAGE> 27
Corporation shall be the fair value of such consideration as determined in
good faith by the Board of Trustees of the Corporation. In case any shares
of Common Shares, Options or Convertible Securities shall be issued in
connection with any merger in which the Corporation is the surviving
Corporation, the amount of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and business of the
non-surviving Corporation as shall be attributable to such Common Shares,
Options or Convertible Securities, as the case may be.
(7) The number of shares of Common Shares outstanding at any given
time shall not include shares owned or held by or for the account of the
Corporation, and the disposition (but not redemption or retirement) of any
shares so owned or held shall be considered an issue or sale of Common
Shares for the purpose of this Section 6(b).
(8) In case the Corporation shall declare a dividend or make any other
distribution upon the Shares of the Corporation payable in Options or
Convertible Securities, then in such case any Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.
(9) For purposes of this Section 6(b), in case the Corporation shall
take a record of the holders of its Common Shares for the purpose of
entitling them (x) to receive a dividend or other distribution payable in
Common Shares, Options or in Convertible Securities, or (y) to subscribe
for or purchase Common Shares, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the
shares of Common Shares deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or
the date of the granting of such right or subscription or purchase, as the
case may be.
(c) In the event that within the thirty days immediately prior to the
date of conversion of Series A-1
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<PAGE> 28
Preferred Shares the Board of Trustees shall authorize a dividend upon the
Common Shares (other than a dividend payable in Common Shares) payable otherwise
than out of earnings or earned surplus, determined in accordance with generally
accepted accounting principles, including the making of appropriate deductions
for minority interests, if any, in subsidiaries (herein referred to as
"LIQUIDATING DIVIDENDS"), then, as soon as possible after the conversion of any
Series A-1 Preferred Shares, the Corporation shall pay to the person converting
such Series A-1 Preferred Shares an amount equal to the Pro Rata Share of the
aggregate value at the time of such exercise of all Liquidating Dividends
(including but not limited to the Common Shares which would have been issued at
the time of such earlier exercise and all other securities which would have been
issued with respect to such Common Shares by reason of share splits, share
dividends, mergers or reorganizations, or for any other reason). The Pro Rata
Share shall be a fraction, the numerator of which is the number of days within
such thirty day period that are before the record date and the denominator of
which is thirty. For the purposes of this Section 6(c), a dividend other than in
cash shall be considered payable out of earnings or earned surplus only to the
extent that such earnings or earned surplus are charged an amount equal to the
fair value of such dividend as determined in good faith by the Board of Trustees
of the Corporation.
(d) In case the Corporation shall at any time (i) subdivide the
outstanding Common Shares or (ii) pay a dividend on its outstanding Common
Shares in shares of beneficial interests of the Corporation, the number of
shares of Common Shares issuable upon conversion of the Series A-1 Preferred
Shares shall be proportionately increased by the same ratio as the subdivision
or dividend (with appropriate adjustments to the Conversion Price in effect
immediately prior to such subdivision or dividend). In case the Corporation
shall at any time combine its outstanding Common Shares, the number of shares
issuable upon conversion of the Series A-1 Preferred Shares immediately prior to
such combination shall be proportionately decreased by the same ratio as the
combination (with appropriate adjustments to the Conversion Price in effect
immediately prior to such combination).
(e) If any capital reorganization or reclassification of the shares of
beneficial interest of the Corporation, or consolidation or merger of the
Corporation with another entity, or the sale of all or substantially all of its
assets to another
26
<PAGE> 29
entity shall be effected in such a way that holders of Common Shares shall be
entitled to receive stock, securities, cash or other property with respect to or
in exchange for Common Shares, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holders of the Series A-1 Preferred Shares shall have
the right to acquire and receive upon conversion of the Series A-1 Preferred
Shares, which right shall be prior to the rights of the holders of Junior Shares
(but after and subject to the rights of holders of Senior Preferred Shares, if
any), such shares of stock, securities, cash or other property issuable or
payable (as part of the reorganization, reclassification, consolidation, merger
or sale) with respect to or in exchange for such number of outstanding shares of
the Corporation's Common Shares as would have been received upon conversion of
the Series A-1 Preferred Shares at the Conversion Price then in effect. The
Corporation will not effect any such consolidation, merger or sale, unless prior
to the consummation thereof the successor entity (if other than the Corporation)
resulting from such consolidation or merger or the entity purchasing such assets
shall assume by written instrument mailed or delivered to the holders of the
Series A-1 Preferred Shares at the last address of each such holder appearing on
the books of the Corporation, the obligation to deliver to each such holder such
shares of Shares, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase. If a purchase, tender or
exchange offer is made to and accepted by the holders of more than 50% of the
outstanding Common Shares of the Corporation, the Corporation shall not effect
any consolidation, merger or sale with the person having made such offer or with
any Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holders of the Series A-1 Preferred Shares
shall have been given a reasonable opportunity to then elect to receive upon the
conversion of the Series A-1 Preferred Shares either the stock, securities or
assets then issuable with respect to the Common Shares of the Corporation or the
stock, securities or assets, or the equivalent, issued to previous holders of
the Common Shares in accordance with such offer. For purposes hereof, the term
"AFFILIATE" with respect to any given person shall mean any person controlling,
controlled by or under common control with the given person.
(f) The provisions of this Section 6 shall not apply to any Common
Shares issued, issuable or deemed outstanding under
27
<PAGE> 30
Sections 6(b)(1) to (9) inclusive: (i) to any person pursuant to any stock
option, stock purchase or similar plan or arrangement for the benefit of
employees or Trustees of the Corporation or its subsidiaries in effect on
November 27, 1996, or thereafter adopted by the Board of Trustees of the
Corporation and a majority of the Series A-1 Trustees, (ii) pursuant to options,
warrants and conversion rights in existence on November 27, 1996, or (iii) on
the conversion of the Series A-1 Preferred Shares or the sale or conversion of
the Pari Passu Shares.
(g) In the event that during any time when the Series A-1 Preferred
Shares are subject to conversion rights:
(1) the Corporation shall authorize any extraordinary cash dividend
upon its Common Shares, or
(2) the Corporation shall authorize any dividend upon its Common
Shares payable in Shares or make any special dividend or other distribution
to the holders of its Common Shares, or
(3) the Corporation shall offer for subscription pro rata to the
holders of its Common Shares any additional shares of any class or other
rights, or
(4) there shall be any capital reorganization or reclassification of
the shares of beneficial interest of the Corporation, including any
subdivision or combination of its outstanding shares of Common Shares, or
consolidation or merger of the Corporation with, or sale of all or
substantially all of its assets to, another entity, or
(5) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
then, in connection with such event, the Corporation shall give to the holders
of the Series A-1 Preferred Shares:
(i) at least five (5) days prior written notice of the date on which
the books of the Corporation shall close or a record shall be taken for
such dividend, distribution or subscription rights or for determining
rights to vote in respect of any such reorganization, reclassification,
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<PAGE> 31
consolidation, merger, sale, dissolution, liquidation or winding up; and
(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (i) shall
also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Shares shall
be entitled thereto, and such notice in accordance with the foregoing
clause (i) shall also specify the date on which the holders of Common
Shares shall be entitled to exchange their Common Shares for securities or
other property deliverable upon such reorganization, reclassification
consolidation, merger, sale, dissolution, liquidation or winding up, as the
case may be. Each such written notice shall be given by first class mail,
postage prepaid, addressed to the holders of the Series A-1 Preferred
Shares at the address of each such holder as shown on the books of the
Corporation.
(h) If at any time or from time to time on or after November 27, 1996,
the Corporation shall grant, issue or sell any Options, Convertible Securities
or rights to purchase property (the "Purchase Rights") pro rata to the record
holders of Common Shares of the Corporation and such grants, issuances or sales
do not result in an adjustment of the Conversion Price under Section 6(b)
hereof, then each holder of Series A-1 Preferred Shares shall be entitled to
acquire (within thirty (30) days after the later to occur of the initial
exercise date of such Purchase Rights or receipt by such holder of the notice
concerning Purchase Rights to which such holder shall be entitled under Section
6(g)) upon the terms applicable to such Purchase Rights either:
(i) the aggregate Purchase Rights which such holder could have
acquired if it had held the number of shares of Common Shares acquirable
upon conversion of the Series A-1 Preferred Shares immediately before the
grant, issuance or sale of such Purchase Rights; provided that if any
Purchase Rights were distributed to holders of Common Shares without the
payment of additional consideration by such holders, corresponding Purchase
Rights shall be distributed to the exercising holders of the Series A-1
Preferred Shares as
29
<PAGE> 32
soon as possible after such exercise and it shall not be necessary for the
exercising holder of the Series A-1 Preferred Shares specifically to
request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall have expired or
shall expire prior to the end of said thirty (30) day period, the number of
shares of Common Shares or the amount of property which such holder could
have acquired upon such exercise at the time or times at which the
Corporation granted, issued or sold such expired Purchase Rights.
SECTION 7. REDEMPTION.
(a) The Corporation (i) shall on each date (a "MANDATORY REDEMPTION
DATE") on which Net Proceeds (as defined below) are received by the Development
LLC (as defined below), whether or not such Net Proceeds are made available to
the Corporation and (ii) may on any date (an "OPTIONAL REDEMPTION DATE" and each
Mandatory Redemption Date and Optional Redemption Date are herein called a
"REDEMPTION DATE") (unless notice of conversion shall have been previously
given) redeem (to the extent that such redemption shall not violate any
applicable provisions of the laws of the State of Maryland or result in a
failure of the Corporation to qualify as a real estate investment trust under
the provisions of Sections 856 through 858 of the Internal Revenue Code of 1986,
as amended (after taking into account the ability of the Corporation to borrow
funds or raise capital to effect the redemption)) at a price equal to the
Liquidation Preference per share (subject to adjustment in the event of any
share dividend, share split, share distribution or combination with respect to
such shares), plus an amount equal to any dividends accrued but unpaid thereon
(such amount is hereinafter referred to as the "REDEMPTION PRICE"), (x) in the
case of clause (i) above, such maximum number of whole shares of Series A-1
Preferred Shares as may be redeemed at the Redemption Price with the Net
Proceeds and (y) in the case of clause (ii) above, such number of whole shares
of Series A-1 Preferred Shares as determined by the Board of Trustees. If the
Corporation is unable at any Redemption Date to redeem any shares of the Series
A-1 Preferred Shares then required to be redeemed because such redemption would
violate the applicable laws of the State of Maryland or result in such failure
to qualify as a real estate investment trust as aforesaid, then the Corporation
shall redeem
30
<PAGE> 33
such shares as soon thereafter as redemption would not violate such laws.
As used herein, the terms:
(1) "DEVELOPMENT LLC" means Great Plains MetroMall LLC, a Delaware
limited liability company and its successors and assigns; and
(2) "NET PROCEEDS" means the cash proceeds from any Capital Transaction
(as such term is defined in the Operating Agreement) which are available to be
distributed to members pursuant to Section 8.2 of such Operating Agreement.
(3) "OPERATING AGREEMENT" means the Operating Agreement of the
Development LLC, as such agreement is in effect on the Original Issuance Date.
(b) In the event of any redemption of only a part of the then
outstanding Series A-1 Preferred Shares, the Corporation shall effect such
redemption pro rata among the holders thereof (based on the number of shares of
Series A-1 Preferred Shares held on the date of notice of redemption).
(c) At least thirty (30) days prior to each Optional Redemption Date,
written notice shall be mailed, postage prepaid, to each holder of record of
Series A-1 Preferred Shares to be redeemed, at his or its post office address
last shown on the records of the Corporation, notifying such holder of the
number of shares so to be redeemed, specifying the Redemption Date and the date
on which such holder's conversion rights (pursuant to Section 5 hereof) as to
such shares terminate and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, his or its certificate
or certificates representing the shares to be redeemed (such notice is
hereinafter referred to as a "REDEMPTION NOTICE"). On or prior to each
Redemption Date, each holder of Series A-1 Preferred Shares to be redeemed shall
surrender his or its certificate or certificates representing such shares to the
Corporation, in the manner and at the place designated in the Redemption Notice,
and thereupon the Redemption Price of such shares shall be payable to the order
of the person whose name appears on such certificate or certificates as the
owner thereof and each surrendered certificate shall be cancelled. In the event
less than all the shares represented by any such certificate are redeemed, a new
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<PAGE> 34
certificate shall be issued representing the unredeemed shares. From and after
the Redemption Date, unless there shall have been a default in payment of the
Redemption Price, all rights of the holders of the Series A-1 Preferred Shares
designated for redemption in the Redemption Notice as holders of Series A-1
Preferred Shares of the Corporation (except the right to receive the Redemption
Price without interest upon surrender of their certificate or certificates)
shall cease with respect to such shares, and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding for
any purpose whatsoever.
(d) Except as provided in Section (a) above, the Corporation shall have
no right to redeem the shares of Series A-1 Preferred Shares. Any shares of
Series A-1 Preferred Shares so redeemed shall be permanently retired, shall no
longer be deemed outstanding and shall not under any circumstances be reissued,
and the Corporation may from time to time take such appropriate corporate action
as may be necessary to reduce the authorized Series A-1 Preferred Shares
accordingly, including the filing of articles supplementary. Nothing herein
contained shall prevent or restrict the purchase by the Corporation, from time
to time either at public or private sale, of the whole or any part of the Series
A-1 Preferred Shares at such price or prices as the Corporation may determine,
subject to the provisions of applicable law.
SECTION 8. NO RECOURSE TO SHAREHOLDERS, TRUSTEES, OFFICERS OR AGENTS.
It is a condition of the Preferred Shares that any obligations of the
Corporation hereunder shall bind only the Corporation as provided in Section 8.1
of the Declaration and no shareholder, trustee, officer or agent of the
Corporation shall be bound or held to any personal liability in connection
herewith.
SECTION 9. NO PREEMPTIVE OR APPRAISAL RIGHTS.
The Preferred Shares shall not be entitled to any preemptive rights or,
except as specifically required by applicable statute, appraisal rights.
32
<PAGE> 1
EXECUTION COPY
GLIMCHER REALTY TRUST
ARTICLES SUPPLEMENTARY
CLASSIFYING AND DESIGNATING 56,000
SHARES OF BENEFICIAL INTEREST AS 56,000
SHARES OF SERIES C CONVERTIBLE PREFERRED BENEFICIAL INTEREST
Glimcher Realty Trust, a Maryland real estate investment trust (the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Under a power contained in Article VI, Section 6.3 of the
Declaration of Trust, as amended, of the Corporation (the "Declaration"), the
Board of Trustees of the Corporation (the "Board of Trustees"), by resolution
duly adopted at a meeting duly called and held on December 2, 1997, classified
and designated 56,000 shares (the "Shares") of beneficial interest (as defined
in the Declaration) as shares of Series C Convertible Preferred Beneficial
Interest, with the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption set forth on Exhibit 1
hereto, which, upon any restatement of the Declaration, shall be deemed to be
part of Article VI, Section 6.3 of the Declaration, with any necessary or
appropriate changes to the enumeration or lettering of the subsections thereof.
SECOND: The Shares have been classified and designated by the Board of
Trustees under the authority contained in the Declaration.
THIRD: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation acknowledges these
Articles Supplementary to be the act of the Corporation and, as to all matters
or facts required to be verified under oath, each of the undersigned
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
<PAGE> 2
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 3rd of December, 1997.
ATTEST: GLIMCHER REALTY TRUST
/s/ George A. Schmidt By: /s/ David J. Glimcher (SEAL)
- ----------------------------- ---------------------------------
George A. Schmidt, Secretary David J. Glimcher, President
-2-
<PAGE> 3
EXHIBIT 1
SERIES C CONVERTIBLE PREFERRED SHARES
OF BENEFICIAL INTEREST
SECTION 1. DESIGNATION, AMOUNT AND SUBORDINATION. The shares of the
series of preferred shares of beneficial interest established hereunder is
"SERIES C CONVERTIBLE PREFERRED SHARES" (the "SERIES C PREFERRED SHARES") and
the number of shares constituting such series shall be 56,000. Each Series C
Preferred Share shall have a par value of $0.01. The date of original issuance
of any of the Series C Preferred Shares is herein called the "ORIGINAL ISSUANCE
DATE". Notwithstanding anything to the contrary herein, the Series C Preferred
Shares rank junior as to rights to receive distributions and amounts payable
upon liquidation, dissolution or winding up of the Corporation to the Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest of the Corporation
(the "SERIES B PREFERRED SHARES") to the extent and in the manner set forth in
the terms of the Series B Preferred Shares set forth in the Articles
Supplementary Classifying 5,520,000 Shares of Beneficial Interest as Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest of the Corporation
(the "SERIES B ARTICLES SUPPLEMENTARY") as such Series B Articles Supplementary
are in effect on the Original Issuance Date.
SECTION 2. DIVIDENDS.
(a) The holders of each Series C Preferred Share shall be entitled to
receive, if, as and when authorized, out of the net profits of the Corporation,
dividends at the annual rate per share of the sum of:
(1) the Applicable Dividend Amount, plus
(2) for any portion of a Quarterly Dividend Payment Period during
which a Default shall exist, Forty Dollars ($40.00) per annum (the "DEFAULT
DIVIDEND AMOUNT").
Dividends shall be payable in quarterly installments on each April 1, July 1,
October 1 and January 1 (or if any such date is not a Business Day, on the next
succeeding Business Day, such date being herein called a "QUARTERLY PAYMENT
DATE"), commencing on the first such date after the Original Issuance Date.
Such dividends shall be paid before any dividends shall be set apart
for or paid upon the Common Shares or any other preferred shares ranking on
liquidation junior to the Series C Preferred Shares (the "JUNIOR PREFERRED
SHARES" and together with
<PAGE> 4
the Common Shares, the "JUNIOR SHARES") in any year. All dividends authorized
upon Series C Preferred Shares shall be authorized pro rata per share. Dividends
payable on the Series C Preferred Shares for any period shall be computed on the
basis of the actual number of days elapsed over a year of 360 days.
Notwithstanding anything to the contrary herein, in addition to the
dividends otherwise required hereunder, the holders of each Series C Preferred
Share shall be entitled to receive, if, as and when authorized, out of the net
profits of the Corporation, a dividend, payable on June 4, 1998, equal to $25.35
per share.
The term "APPLICABLE DIVIDEND AMOUNT" means an amount equal to the
product (expressed in dollar and cents and rounded upward to the nearest cent)
of (x) the Liquidation Preference times (y) the sum of (i) at all times prior to
June 4, 1998, 0.0285, and at all times on or after June 4, 1998, 0.05 plus (ii)
the Applicable Spread plus (iii) LIBOR (expressed as a decimal rounded upwards
to the nearest hundred thousandth (.00000)) and shall be determined on the
applicable Dividend Determination Date for each Quarterly Dividend Payment
Period.
The term "APPLICABLE PREFERRED SHARES AMOUNT" means with respect to any
period the highest aggregate liquidation preference of all Preferred Shares of
Beneficial Interest of the Corporation issued at any time under the Securities
Purchase Agreement dated as of November 26, 1996, and the Securities Purchase
Agreement dated as of December 4, 1997, as each may have been or may hereafter
be modified supplemented or amended from time to time, (a "SECURITIES PURCHASE
AGREEMENT" and collectively, the "SECURITIES PURCHASE AGREEMENTS"), among
Partnership Acquisition Trust II, a Delaware business trust, Nomura Asset
Capital Corporation, the Corporation, and Glimcher Properties Limited
Partnership, a Delaware limited partnership, which were outstanding on any date
during such period.
The term "APPLICABLE SPREAD" shall be determined on the last day of a
Quarterly Dividend Period or other applicable period (and shall be applicable to
every day during such Quarterly Dividend Period or other applicable period) to
be the decimal determined below:
2
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
- -------------------- ------------------------------------------------------------------------------------------------
Applicable
Preferred
Shares Adjusted Equity Ratio as of the last day of the Quarterly
Amount Dividend Period or other applicable period
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
Greater than or Greater than or Greater than or Greater than or Less than .3200
equal to .47000 equal to .4200 equal to .3700 equal to .3200
but less than but less than but less than
.4700 .4200 .3700
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
Equal to or less .00000 .00250 .01200 .02000 .03200
than $100 million
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
Greater than $100 .00000 .00500 .01700 .02600 .03700
million but less
than $200 million
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
Greater than or .00000 .00750 .02000 .03000 .04000
equal to $200
million
- -------------------- ------------------ ------------------- ------------------ ------------------ -------------------
</TABLE>
The term "ADJUSTED EQUITY RATIO" shall mean as of any date of
determination, the ratio (expressed as a decimal to the nearest hundred
thousandth (.00000)) of:
(x) the sum of (i) the aggregate liquidation preference of all
outstanding Junior Preferred Shares plus (ii) the product, expressed in
dollars, of (A) the number of outstanding Common Shares as of the
determination date (including without duplication any Common Shares which
would be issuable upon conversion of any limited partnership interests in
Glimcher Properties Limited Partnership, a Delaware limited partnership)
not owned by the Corporation times (B) the average Market Price (as defined
in Section 5(a) hereof) of the Common Shares during the Quarterly Dividend
Period (or portion thereof, if applicable) prior to the determination date,
to
(y) the sum, without duplication, of (i) the amount determined in the
foregoing clause (x), plus (ii) the liquidation preference of all Preferred
Shares of Beneficial Interest of the Corporation (other than Junior
Preferred
3
<PAGE> 6
Shares), plus (iii) the total consolidated debt of the Corporation
determined in accordance with GAAP.
For purposes of computing the Applicable Dividend Rate for any
Quarterly Dividend Period, the Adjusted Equity Ratio shall be the ratio on the
last day of such Quarterly Dividend Period (e.g., the ratio in effect for the
entire period January 1 through March 31 shall be the ratio computed on March
31).
The term "BUSINESS DAY" shall mean any day (other than a Saturday,
Sunday or legal holiday in the State of New York) on which banks are open for
business in New York City.
The term "COMMON SHARES" means the Common Shares of Beneficial
Interest, $.01 par value per share, of the Corporation.
The term "DEBT" of any Person means indebtedness of such Person for
borrowed money outstanding (including (i) obligations under capitalized leases,
(ii) obligations for the deferred purchase price of property (other than trade
payables), (iii) liabilities evidenced by notes, bonds or similar instruments,
(iv) guarantees by such Person of any of the foregoing incurred by any other
person, and (v) any of the foregoing obligations for which such Person is
otherwise liable in any other manner such as liability resulting from such
Person being a general partner of the partnership incurring the foregoing
obligation).
The term "DEFAULT" shall mean the existence of any of the following
events:
(i) The failure of the Corporation to maintain at the end of each
fiscal quarter, commencing September 30, 1997, a ratio of Consolidated Debt
of the Corporation and its consolidated subsidiaries to Consolidated Total
Assets of the Corporation and its consolidated subsidiaries of no more than
.60 to 1.00 and such failure shall have continued for a period of 120
consecutive days. The term "CONSOLIDATED DEBT" of any Person shall mean, as
of any date of determination, without duplication, the total consolidated
Debt of such Person and its consolidated subsidiaries, determined in
accordance with generally accepted accounting principles ("GAAP") except as
otherwise provided herein. The term "CONSOLIDATED TOTAL Assets" of any
Person shall mean, as of any date of determination, the sum, without
duplication, of (i) the cash and cash equivalents (excluding any cash held
in escrow) of the Corporation and its consolidated subsidiaries, (ii) the
cost (unrecovered cost in the case of investments) of all Recently
Developed Real Properties included in the consolidated balance sheet of the
4
<PAGE> 7
Corporation in accordance with GAAP, (iii) the cost (unrecovered cost in
the case of investments) of all Recently Acquired Operating Real Properties
included in the consolidated balance sheet of the Corporation in accordance
with GAAP plus (iv) the aggregate value of all real properties and
investments in unconsolidated ventures (other than Recently Developed Real
Properties and Recently Acquired Operating Real Properties) owned by the
such Person and its consolidated subsidiaries, determined in accordance
with GAAP, except that the value of such real properties shall be
determined by applying a 9.50% capitalization rate to the Adjusted Net
Income of such Person and its consolidated Subsidiaries and such Person's
share of Adjusted Net Income of investments in unconsolidated ventures. The
term "ADJUSTED NET INCOME" as of the end of any fiscal quarter of any
Person shall mean the net income of such Person and its consolidated
subsidiaries for the twelve months then ended computed in accordance with
GAAP, but it shall be computed by (x) excluding from the computation
thereof all income and expense items related to Recently Acquired Operating
Real Properties and Recently Developed Real Properties, general and
administrative expenses, minority interests, interest expenses,
depreciation and amortization expenses, income taxes and items of gain and
loss resulting from sales and/or extraordinary events and (y) including in
the computation thereof an assumed management fee equal to 4% of total
revenues. The term "RECENTLY ACQUIRED OPERATING REAL PROPERTY" shall mean
each operating real property (and investments in unconsolidated ventures
owning operating real properties) acquired by the Corporation and its
consolidated subsidiaries until such property shall have been owned by the
Corporation or a consolidated subsidiary (or such unconsolidated venture)
for at least four (4) fiscal quarters, and the term "RECENTLY DEVELOPED
REAL PROPERTY" shall mean any operating real property (and investments in
unconsolidated ventures owning operating real properties) under development
by the Corporation or any of its consolidated subsidiaries (or such
unconsolidated venture) until the earliest of (i) the date which is 12
months after the date 85% of the total gross leaseable area of such
property has been leased to tenants that are open for business on the
property and paying rent, (ii) 30 months after the issuance of a permanent
certificate of occupancy for any material portion of such property and
(iii) 48 months after the commencement of construction in connection with
the development of such property.
(ii) The failure of the Corporation to maintain at the end of each
fiscal quarter, commencing September 30, 1997, a ratio of Adjusted
Consolidated Debt to Adjusted Consolidated Total Assets of no more than .70
to 1.00 and such failure shall have continued for a period of 120
consecutive days.
5
<PAGE> 8
For purposes of this calculation (a) the term "ADJUSTED CONSOLIDATED DEBT"
shall mean Consolidated Debt of the Corporation and its consolidated
subsidiaries plus, with respect to any Debt of any unconsolidated entity,
the sum, without duplication, of (x) the Corporation and its consolidated
subsidiaries' pro rata share of such unconsolidated entity's consolidated
Debt which is not Debt of the Corporation or any of its consolidated
subsidiaries, (but the amount included pursuant to this clause (x) with
respect to any unconsolidated entity shall not exceed the amount of the
Corporation's and its consolidated subsidiaries' pro rata share of the
consolidated assets of such unconsolidated entity using the method of
computation set forth in the definition of Consolidated Total Assets) plus
(y) without duplication, to the extent in excess of the amount included in
the foregoing clause (x), the aggregate amount of the Corporation's and its
consolidated subsidiaries' Debt relative to such unconsolidated entity's
Consolidated Debt; and (b) the term "ADJUSTED CONSOLIDATED TOTAL ASSETS"
shall mean Consolidated Total Assets of the Corporation and its
consolidated subsidiaries plus, with respect to any consolidated assets of
an unconsolidated entity, the Corporation's and its consolidated
subsidiaries' pro rata share of the consolidated assets of such
unconsolidated entity using the method of computation set forth in the
definition of Consolidated Total Assets.
(iii) The indebtedness in the aggregate principal amount of
$181,000,000 incurred under the Amended and Restated Loan Agreement dated
as of March 15, 1994, among Nomura Asset Capital Corporation, Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership and
Grand Central Limited Partnership shall have been refinanced in whole or in
part without the prior written consent of Nomura Asset Capital Corporation.
(iv) The Corporation shall have issued any Shares in violation of
Section 4(b) hereof.
(v) Dividends on any shares of Series C Preferred Shares shall be in
arrears for two or more Quarterly Dividend Payment Periods.
(vi) (a) The Development LLC (as defined below) shall sell or
otherwise dispose of any material asset and the Corporation shall fail to
redeem such number of whole shares of Series C Preferred Shares as may be
redeemed with the amount of Net Proceeds (as defined below) derived from
such sale, whether or not such Net Proceeds are made available to the
Corporation, as required by Section 7(a)(i) hereof or (b) the Corporation
shall fail to comply with the provisions of Section 7(a)(i) hereof.
6
<PAGE> 9
The term "DEVELOPMENT LLC" shall mean Elizabeth MetroMall LLC, a
Delaware limited liability company and its successors and assigns; and
The term "DIVIDEND DETERMINATION DATE" shall mean (i) with respect to
the first Quarterly Dividend Payment Period, the date which is two (2) Business
Days prior to the Original Issuance Date, and (ii) with respect to all other
Quarterly Dividend Payment Periods, the date which is two (2) Business Days
prior to the first day of such Quarterly Dividend Payment Period.
The term "LIBOR" shall mean, with respect to any Quarterly Dividend
Period, the three month London Interbank Offered Rate for United States dollar
deposits as of 11:00 a.m. (London time) on the Dividend Determination Date as
quoted on Telerate page 3750 or on such replacement system as is then
customarily used to quote LIBOR. If two or more such rates appear on Telerate
page 3750 or associated pages, LIBOR in respect of such Quarterly Dividend
Payment Period shall be the arithmetic mean of such offered rates. If two such
rates do not appear on Telerate Page 3750 as of 11:00 a.m., London time, on the
applicable Dividend Determination Date, LIBOR will be the arithmetic mean of the
offered rates (expressed as a percentage per annum) for deposits in U.S. Dollars
for a three month period that appear on the Reuters Screen LIBO Page (as defined
below) as of 11:00 a.m., London time, on such Dividend Determination Date, if at
least two such offered rates so appear. If fewer than two such offered rates
appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on such
Dividend Determination Date, the Corporation will request the principal London
office of any four major reference banks in the London interbank market selected
by the Corporation in good faith to provide such bank's offered quotation
(expressed as a percentage per annum) to prime banks in the London interbank
market for deposits in U.S. Dollars for a three month period as of 11:00 a.m.,
London time, on such Dividend Determination Date for amounts of not less than
U.S. $1,000,000. If at least two such offered quotations are so provided, LIBOR
will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, the Corporation will request any three major banks
in New York City selected by the Corporation in good faith to provide such
bank's rate (expressed as a percentage per annum) for loans in U.S. Dollars to
leading European banks for a three month period as of approximately 11:00 a.m.,
New York City time, on the applicable Dividend Determination Date for amounts of
not less than U.S. $1,000,000. If at least two such rates are so provided, LIBOR
will be the arithmetic mean of such rates. If fewer than two rates are so
provided, then LIBOR will be LIBOR in effect on the preceding Dividend
Determination Date.
The term "LIQUIDATION PREFERENCE" shall mean, as of any date of
determination, (x) if such date is prior to the later of the commencement of the
Conversion Period (without regard to the
7
<PAGE> 10
application of Section 5(g))and the Conversion Termination Date (as defined in
Section 5(g)), $1,000, and (y) at all times thereafter, the quotient of $1,000
divided by the Applicable Conversion Percentage as of the date of determination.
Every change in the Applicable Conversion Percentage on or after the later of
(x) the commencement of the Conversion Period (without regard to the application
of Section 5(g)) or (y) the Conversion Termination Date shall effect a change in
the Liquidation Preference as of the date of each such change.
The term "NET PROCEEDS" shall mean the cash proceeds net of actual
expenses incurred from (i) a sale or other disposition of the whole or any
portion of property owned by the Development LLC, (ii) an insurance recovery
(other than for business interruption or similar claim) or condemnation award,
(iii) a mortgage, deed of trust, sale and leaseback or other financing or
refinancing of all or any portion of any such property, and (iv) any other event
which, under generally accepted accounting principles, would be classified as of
a capital nature.
The term "QUARTERLY DIVIDEND PAYMENT PERIOD" shall mean the period
beginning on and including the last day of each March, June, September and
December of each year and ending on the second to last day of the first to occur
of the next June, September, December and March, respectively, except that the
initial Quarterly Dividend Payment Period shall be the period beginning on the
Original Issuance Date and ending on the next March 31, June 30, September 30 or
December 31.
(b) Dividends on the Series C Preferred Shares shall be cumulative, so
that if in any fiscal year or years, dividends in whole or in part are not paid
upon the Series C Preferred Shares, unpaid dividends shall accumulate as against
the holders of the Junior Shares. Dividends on the Series C Preferred Shares
shall accrue whether or not the Corporation has earnings, whether or not there
are funds legally available for the payment of such dividends and whether or not
such dividends are authorized. Accrued but unpaid dividends on the Series C
Preferred Shares will accumulate as of the Quarterly Payment Date on which they
first become payable. Each dividend, to the extent not paid on an applicable
Quarterly Payment Date, shall accrue (whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are authorized) on a daily
basis additional cumulative dividends at the then applicable dividend rate for
the Series C Preferred Shares. Any dividend payment made on the Series C
Preferred Shares shall first be credited against the earliest accrued but unpaid
dividend due which remains payable.
(c) For so long as the Series C Preferred Shares remain outstanding,
the Corporation shall not pay any dividend upon the Junior Shares, whether in
cash or other property (other
8
<PAGE> 11
than shares of Junior Shares), or purchase, redeem or otherwise acquire any such
Junior Shares unless, in addition to the payment of the dividend to the holders
of the Series C Preferred Shares as described above, the Corporation has
redeemed all shares of Series C Preferred Shares which it would theretofore have
been required to redeem under Section 7 hereof. Notwithstanding the provisions
of this Section 2(c), without authorizing or paying dividends on the Series C
Preferred Shares, the Corporation may, (1) subject to applicable law, repurchase
or redeem shares of Common Shares of the Corporation from current or former
officers or employees of the Corporation pursuant to the terms of repurchase or
similar agreements in effect from time to time, provided that such agreements
have been approved by the Board of Trustees of the Corporation and the terms of
such agreements provide for a repurchase or redemption price not in excess of
the price per share paid by such employee for such share, (2) set aside,
authorize or pay dividends on the Common Shares of the Corporation to the extent
required in order to maintain the status of the Corporation as a real estate
investment trust under the provisions of Sections 856 through 858 of the
Internal Revenue Code of 1986, as amended, but only to the extent that the
foregoing cannot be achieved through the payment of dividends on the Series C
Preferred Shares except that, on only one dividend payment date with respect to
the Common Shares, the amount of such dividends payable on the Common Shares may
be computed based on the assumption that the foregoing cannot be achieved
through the payment of dividends on the Series C Preferred Shares, and (3)
redeem Shares pursuant to Section 6.6 of the Declaration.
(d) Promptly (and in any event within three Business Days) after each
Dividend Determination Date, the Corporation shall forthwith file at each office
designated for the conversion of Series C Preferred Shares, a statement, signed
by the Chairman of the Board, the President, any Vice President or Treasurer of
the Corporation, setting forth the Applicable Dividend Amount (including LIBOR
and the Applicable Spread) for the following Quarterly Dividend Payment Period.
The Corporation shall also cause a notice setting forth such information to be
sent by mail, first class, postage prepaid, to each record holder of Series C
Preferred Shares at his or its address appearing on the Preferred Shares
register except that such notice need not be sent, unless requested by a holder
of Preferred Shares, if such information has not changed from the prior Dividend
Determination Date.
(e) Notwithstanding anything in this Section 2 to the contrary, so long
as any Series B Preferred Shares shall remain outstanding, the provisions of
Section B(3) of the Series B Preferred Articles Supplementary shall supersede
this Section 2 solely to the extent inconsistent with the provisions of this
Section 2.
9
<PAGE> 12
SECTION 3. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series C
Preferred Shares then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its Shareholders, after and
subject to the payment in full of all amounts required to be distributed to the
holders of any other Preferred Shares of the Corporation ranking on liquidation
prior and in preference to the Series C Preferred Shares (such Preferred Shares
being referred to hereinafter as "SENIOR PREFERRED SHARES") upon such
liquidation, dissolution or winding up, but before any payment shall be made to
the holders of Junior Shares, an amount equal to the Liquidation Preference per
share plus any accrued dividends thereon (whether or not there are funds legally
available for the payment of such dividends and whether or not such dividends
are authorized) (subject to adjustment in the event of any dividend, split,
distribution or combination with respect to such shares). If upon any such
liquidation, dissolution or winding up of the Corporation the remaining assets
of the Corporation available for the distribution to its Shareholders after
payment in full of amounts required to be paid or distributed to holders of
Senior Preferred Shares shall be insufficient to pay the holders of shares of
Series C Preferred Shares the full amount to which they shall be entitled, the
holders of shares of Series C Preferred Shares, and any class of Shares ranking
on liquidation on a parity with the Series C Preferred Shares, shall share
ratably in any distribution of the remaining assets and funds of the Corporation
in proportion to the respective amounts which would otherwise be payable in
respect to the shares held by them upon such distribution if all amounts payable
on or with respect to said shares were paid in full.
(b) After the payment of all preferential amounts required to be paid
to the holders of Senior Preferred Shares and Series C Preferred Shares and any
other series of Preferred Shares upon the dissolution, liquidation or winding up
of the Corporation, the holders of shares of Common Shares then outstanding
shall be entitled to receive the remaining assets and funds of the Corporation
available for distribution to its Shareholders.
(c) Any merger or consolidation of the Corporation into or with another
corporation, any merger or consolidation of any other corporation into or with
the Corporation, or any sale, conveyance, mortgage, pledge or lease of all or
substantially all the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Section 3 unless approved pursuant to Section 4 (or approval is not required as
set forth in clause (b)(iii)(b) thereof).
10
<PAGE> 13
(d) In determining whether a distribution (other than upon voluntary or
involuntary liquidation), by dividend, redemption or other acquisition of shares
or otherwise, is permitted under the Maryland General Corporation Law, amounts
that would be needed, if the Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of holders of
Preferred Shares whose preferential rights upon dissolution are superior to
those receiving the distribution shall not be added to the Corporation's total
liabilities.
(e) Notwithstanding anything in this Section 3 to the contrary, so long
as any Series B Preferred Shares shall remain outstanding, the provisions of
Section C of the Series B Preferred Articles Supplementary shall supersede this
Section 3.
SECTION 4. VOTING
(a) Whenever dividends on any shares of Series C Preferred Shares shall
be in arrears for two or more Quarterly Dividend Payment Periods or a Default
shall have occurred and be continuing (either event being herein called a
"PREFERRED DEFAULT"), the number of members of the Board of Trustees of the
Corporation shall be increased by two and the holders of Series C Preferred
Shares shall have the exclusive right, voting separately as a class together
with the holders of other shares of convertible preferred shares issued from
time to time pursuant to the Securities Purchase Agreements (collectively, the
"PARI PASSU SHARES"), to elect two Trustees (herein referred to as the "SERIES C
TRUSTEES"). All such Series C Trustees shall be elected by the affirmative vote
of the holders of record of a majority of the outstanding Pari Passu Shares
either at meetings of Shareholders at which Trustees are elected, a special
meeting of holders of Pari Passu Shares or by unanimous written consent without
a meeting in accordance with the Corporations and Associations Article of the
Annotated Code of Maryland, and at each subsequent meeting until all dividends
accumulated on such shares of Series C Preferred Shares for the past Quarterly
Dividend Payment Periods and the dividend for the then current Quarterly
Dividend Payment Period shall have been fully paid or authorized and a sum
sufficient for the payment thereof set aside for payment and there shall not
exist any Default. Each Series C Trustee so elected shall serve for a term of
one year and until his successor is elected and qualified. Any vacancy in the
position of a Series C Trustee may be filled only by the holders of the Pari
Passu Shares. Each Series C Trustee may, during his term of office, be removed
at any time, with or without cause, by and only by the affirmative vote, at a
special meeting of holders of Pari Passu Shares called for such purpose, or the
written consent, of the holders of record of a majority of the outstanding
shares of Pari Passu Shares. Any vacancy created by
11
<PAGE> 14
such removal may also be filled at such meeting or by such consent. If and when
all accumulated dividends and the dividend for the then current dividend period
on the Series C Preferred Shares shall have been paid in full or set aside for
payment in full and there shall exist no Default, the holders thereof shall be
divested of the foregoing voting rights (subject to revesting in the event of
each and every Preferred Default) and, if all accumulated dividends and the
dividend for the then current dividend period have been paid in full or set
aside for payment in full on all Pari Passu Shares upon which like voting rights
have been conferred and are exercisable, the term of office of each Series C
Trustee shall terminate forthwith.
(b) In addition to any other rights provided by law, so long as any
Series C Preferred Shares are outstanding, the Corporation shall not, without
first obtaining the affirmative vote or, if permitted by applicable law, the
written consent of the holders of a majority of the Series C Preferred Shares:
(i) amend or repeal any provision of the Declaration or Bylaws which
would have a dilutive effect on the Series C Preferred Shares, increase the
number of members of the Board of Trustees of the Corporation or otherwise
materially adversely affect the economic rights of the Series C Preferred
Shares, including permitting the provisions of Subtitle 7 of Title 3 of the
Maryland General Corporation Law, similar provisions and so-called "poison
pills" to apply to any holder of the Series C Preferred Shares as a result
of owning such shares or common shares upon conversion of any or all of
such shares;
(ii) issue any Senior Preferred Shares unless all Series C Preferred
Shares are redeemed with the proceeds thereof or issue any Preferred Shares
(other than Pari Passu Shares) unless all the net proceeds are used to
redeem the Series C Preferred Shares and the Pari Passu Shares;
(iii) authorize or effect (a) any sale, lease, transfer or other
disposition of all or substantially all the assets of the Corporation; (b)
any merger or consolidation or other reorganization of the Corporation with
or into another entity, except any such event if, after giving effect
thereto the Corporation shall be in compliance with the ratios set forth in
clauses (i) and (ii) of the definition of Default or (c) a liquidation,
winding up, dissolution or adoption of any plan for the same; or
(iv) enter into any transaction, other than employment agreements on a
basis consistent with past practice, with any officer, director, trustee or
beneficial owner of five percent (5%) or more of the Common Shares of the
Corporation or any Affiliate of any of the foregoing unless such
transaction is on terms no less favorable to the Corporation
12
<PAGE> 15
or such subsidiary than those that could be obtained in a comparable arm's
length transaction with a person that is not such officer, director,
trustee, owner or Affiliate.
(c) The Corporation shall not amend, alter or repeal the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications or terms or conditions of
redemption of the Series C Preferred Shares so as to affect adversely the Series
C Preferred Shares, without the affirmative vote or, if permitted by applicable
law, the written consent, of the holders of at least 66-2/3% of the then
outstanding aggregate number of shares of such adversely affected Series C
Preferred Shares, voting or consenting (as the case may be) separately as a
class.
(d) For all provisions of the Declaration requiring the approval of the
holders of shares of Series C Preferred Shares, all Preferred Shares owned by
the Corporation or any person in which the Corporation has directly or
indirectly a 10% or more equity interest shall be disregarded and shall not be
deemed to be outstanding.
SECTION 5. CONVERSION. (a) Each share of Series C Preferred Shares may
be converted at any time during the Conversion Period (as defined below), at the
option of the holder thereof, into the number of fully-paid and nonassessable
shares of Common Shares obtained by dividing the then applicable Liquidation
Preference by the Conversion Price (as defined below) then in effect. The right
of conversion given during the Conversion Period shall not be affected by any
notice of redemption. Holders of Series C Preferred Shares at the close of
business on a record date (which shall be the Business Day next preceding the
Quarterly Payment Date) for a corresponding Quarterly Payment Date will be
entitled to receive the dividend payable on such Series C Preferred Shares on
such Quarterly Payment Date notwithstanding the conversion of Series C Preferred
Shares following such record date. Except as provided in the immediately
preceding sentence, the Corporation will make no payment or allowance for
dividends which accrued on the converted Series C Preferred Shares since the
last Quarterly Payment Date prior to conversion. Holders of Common Shares which
are issuable upon conversion prior to or on a record date for any dividend or
distribution on such shares shall be entitled to receive the same dividend or
distribution as other holders of record of Common Shares. Each conversion will
be deemed to have been effected immediately prior to the close of business on
the day on which the notice of conversion was received by the Corporation. The
"CONVERSION PRICE" per share shall be equal to the product of (i) the average of
Market Price (rounded to the nearest $0.01) per share over the 30 trading days
prior to the date of conversion times (ii) the Applicable Conversion Percentage.
As used herein, the term "MARKET PRICE" as of any trading day, subject to
adjustment pursuant to Section 6, means (i) if the Common Shares
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<PAGE> 16
are listed on any national securities exchange, the last sales price of the
Common Shares on such exchange (or the quoted closing bid price if there shall
have been no sales) on such trading day, or (ii) if the Common Shares shall not
be listed, the mean between the closing bid and asked prices on such trading day
for the Common Shares on the date of conversion as reported by NASDAQ, or its
successor, and if there are not such closing bid and asked prices, on the basis
of the fair market value per share on such trading day as determined by an
appraiser mutually satisfactory to the Board of Trustees of the Corporation and
the holders of a majority of the outstanding shares of Series C Preferred Shares
who have given notice of conversion. Any change in the Market Price due to an
adjustment pursuant to Section 6 shall take effect on the date of any Triggering
Event (as defined in Section 6).
As used herein, the term "APPLICABLE CONVERSION PERCENTAGE" means (i)
at all times during the occurrence and continuance of a Default, the lesser of
0.80 and the decimal which would otherwise be in effect in clause (ii) of this
definition in the absence of a Default, and (ii) so long as a Default has not
occurred and is continuing the decimal set forth for such period in the
following table:
<TABLE>
<CAPTION>
Period Decimal
------ -------
<S> <C>
December 4, 1998 to December 3, 1999, both included 0.80
December 4, 1999 to December 3, 2000, both included 0.75
December 4, 2000 and thereafter 0.70
</TABLE>
As used herein, the term "CONVERSION PERIOD" means the period (a)
commencing on the earliest of (i) the date of a Default (it being understood
that an event included in clause (i) or (ii) of the definition of the term
"Default" does not constitute a Default until the 120 day period referred to
therein has lapsed and such event remains) whether or not such Default is
subsequently cured, and (ii) December 4, 1998, and (b) ending on the close of
business on the Business Day next preceding the date fixed for redemption or for
the payment of any amounts distributable on liquidation to the holders of the
Series C Preferred Shares.
The Corporation shall not issue fractions of shares of Common Shares
upon conversion of Series C Preferred Shares or scrip in lieu thereof. If any
fraction of a share of Common Shares would, except for the provisions of this
Section (b), be issuable upon conversion of any Series C Preferred Shares, the
Corporation shall in lieu thereof pay to the person entitled thereto an amount
in cash equal to the current value of such fraction, calculated to the nearest
one-hundredth (1/100) of a share, to be computed (i) if the Common Shares are
listed on any national securities exchange on the basis of the last sales price
of the Common Shares on such exchange (or the quoted
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<PAGE> 17
closing bid price if there shall have been no sales) on the date of conversion,
or (ii) if the Common Shares shall not be listed, on the basis of the mean
between the closing bid and asked prices for the Common Shares on the date of
conversion as reported by NASDAQ, or its successor, and if there are not such
closing bid and asked prices, on the basis of the fair market value per share on
the date of conversion as determined by an appraiser mutually satisfactory to
the Board of Trustees of the Corporation and the holders of a majority of the
outstanding shares of Series C Preferred Shares who have given notice of
conversion.
(c) Whenever the Conversion Price shall be adjusted as provided in
Section 6 hereof, the Corporation shall forthwith file at each office designated
for the conversion of Series C Preferred Shares, a statement, signed by the
Chairman of the Board, the President, any Vice President or the Treasurer of the
Corporation, showing in reasonable detail the facts requiring such adjustment
and the Conversion Price that will be effective after such adjustment. The
Corporation shall also cause a notice setting forth any such adjustments to be
sent by mail, first class, postage prepaid, to each record holder of Series C
Preferred Shares at his or its address appearing on the Shares register. If such
notice relates to an adjustment resulting from an event referred to in Section
6(g), such notice shall be included as part of the notice required to be mailed
and published under the provisions of Section 6(g) hereof.
(d) In order to exercise the conversion privilege, the holder of any
Series C Preferred Shares to be converted shall surrender his or its certificate
or certificates therefor to the transfer agent for the Series C Preferred Shares
at the principal office of the transfer agent (or if no transfer agent be at the
time appointed, to the Corporation at its principal office), and shall give
written or facsimile notice (which may be given on the date of conversion) to
the transfer agent, if any, and to the Corporation at such office that the
holder elects to convert the Series C Preferred Shares evidenced by such
certificates, or any number thereof. Such notice shall also state the name or
names (with address) in which the certificate or certificates for shares of
Common Shares which shall be issuable on such conversion shall be issued,
subject to any restrictions on transfer relating to shares of the Series C
Preferred Shares or shares of Common Shares upon conversion thereof. If so
required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly authorized in writing. The date of
receipt by the transfer agent (or by the Corporation if the Corporation serves
as its own transfer agent) of the certificates and notice shall be the
conversion date. As soon as practicable after receipt of such notice and the
surrender of the certificate or certificates for Series C Preferred Shares as
aforesaid, the Corporation shall cause to be issued and delivered at such office
to such holder, or on his or its written order, a certificate or certificates
for
15
<PAGE> 18
the number of full shares of Common Shares issuable on such conversion in
accordance with the provisions hereof and cash as provided in Section 5(b) in
respect of any fraction of a share of Common Shares otherwise issuable upon such
conversion.
(e) The Corporation shall at all times when the Series C Preferred
Shares shall be outstanding reserve and keep available out of its authorized but
unissued Common Shares, for the purposes of effecting the conversion of the
Series C Preferred Shares, such number of its duly authorized shares of Common
Shares as shall from time to time be sufficient to effect the conversion of all
outstanding Series C Preferred Shares. Before taking any action which would
cause an adjustment reducing the Conversion Price below the then par value of
the shares of Common Shares issuable upon conversion of the Series C Preferred
Shares, the Corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully-paid and nonassessable shares of such Common Shares at such
adjusted conversion price.
(f) All shares of Series C Preferred Shares which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall forthwith cease and terminate except
only the right of the holder thereof to receive shares of Common Shares in
exchange therefor and payment of any accrued and unpaid dividends thereon. Any
shares of Series C Preferred Shares so converted shall be retired and cancelled
and shall not be reissued, and the Corporation may from time to time take such
appropriate action as may be necessary to reduce the number of authorized Series
C Preferred Shares accordingly, including the filing of articles supplementary.
(g) Notwithstanding anything to the contrary herein contained, unless
and until approval ("Shareholder Approval") of the holders of the Common Shares
shall have been obtained in compliance with the rules and policies of the New
York Stock Exchange, no holder of Series C Preferred Shares shall have the right
to convert such Series C Preferred Shares into Common Shares if, as a result of
such conversion and all prior or concurrent conversions of Pari Passu Shares,
(1) all Common Shares issued as a result of such conversions would have voting
power equal to or in excess of 20 percent of the voting power of the Common
Shares outstanding (excluding treasury shares, shares held by a subsidiary and
shares reserved for issuance upon conversion or exercise of options or warrants)
on November 27, 1996, or (2) the number of Common Shares issued as a result of
such conversions would be equal to or in excess of 20 percent of the number of
Common Shares outstanding on November 27, 1996. The date on and after which
conversion shall no longer be permitted as a result of the operation of this
Section 5(g) is herein called the "Conversion Termination Date", it being
16
<PAGE> 19
understood that if Shareholder Approval is obtained or if any Pari Passu Shares
which are convertible without Shareholder Approval have not been converted, no
Conversion Termination Date shall occur. Promptly, and in any event within three
(3) Business Days, after the Conversion Termination Date, the Corporation shall
forthwith file, at each office designated for the conversion of Series C
Preferred Shares, a statement, signed by the Chairman of the Board, the
President, any Vice President or Treasurer of the Corporation, stating that the
Conversion Termination Date has occurred and setting forth the reason therefor.
The Corporation shall also cause a notice setting forth such information to be
sent by mail, first class, postage prepaid, to each record holder of Series C
Preferred Shares at his or its address appearing on the Preferred Shares
register.
SECTION 6. ANTI-DILUTION PROVISIONS.
(a) The provisions of this Section 6 shall not be applicable except in
connection with a conversion pursuant to Section 5. In order to prevent dilution
of the right granted hereunder, the Market Price on any date shall be subject to
adjustment from time to time in accordance with this Section 6(a). For purposes
of this Section 6, the term "NUMBER OF COMMON SHARES DEEMED OUTSTANDING" at any
given time shall mean the sum of (x) the number of shares of the Corporation's
Common Shares outstanding at such time, (y) the number of shares of the
Corporation's Common Shares issuable assuming conversion at such time of the
Corporation's Series C Preferred Shares and the Pari Passu Shares and (z) the
number of shares of the Corporation's Common Shares deemed to be outstanding
under Sections 6(b)(1) to (9), inclusive, at such time.
Except as provided in Section 6(c) or 6(f) below, if and whenever on or
after the Original Issuance Date, the Corporation shall issue or sell, or shall
in accordance with Sections 6(b)(1) to (9), inclusive, be deemed to have issued
or sold, any shares of its Common Shares for a consideration per share less than
the Market Price in effect immediately prior to the time of such issue or sale,
then forthwith upon such issue or sale (the "TRIGGERING TRANSACTION"), the
Market Price for all trading days prior to such Triggering Transaction shall,
subject to Sections 6(b)(1) to 6(b)(9), be reduced to the Market Price
(calculated to the nearest tenth of a cent) determined by dividing (x) an amount
equal to the sum of (1) the product derived by multiplying the Number of Common
Shares Deemed Outstanding immediately prior to such Triggering Transaction by
the Market Price then in effect, plus (2) the consideration, if any, received by
the Company upon consummation of such Triggering Transaction, by (y) an amount
equal to the sum of (1) the Number of Common Shares Deemed Outstanding
immediately prior to such Triggering Transaction plus (2) the number of shares
of Common Shares issued (or deemed to be issued in accordance with Sections
17
<PAGE> 20
6(b)(1) to 6(b)(9)) in connection with the Triggering Transaction.
(b) This Section 6(b) shall apply only in connection with events
referred to in Sections 6(b)(1) through 6(b)(9) which occur within the 30 days
immediately preceding a notice of conversion and only with respect to the
specific shares of Series C Preferred Shares which are the subject of the notice
of conversion and are in fact converted. For purposes of determining the
adjusted Conversion Price under this Section 6(b), the following Sections
6(b)(1) to 6(b)(9), inclusive, shall be applicable:
(1) In case the Corporation at any time shall in any manner grant
(whether directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase, or any options for the purchase of, Common
Shares or any Preferred Shares (other than the Series C Shares and the Pari
Passu Shares) or other securities convertible into or exchangeable for
Common Shares (such rights or options being herein called "OPTIONS" and
such convertible or exchangeable Shares or securities being herein called
"CONVERTIBLE SECURITIES"), whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which the Common Shares is
issuable upon exercise, conversion or exchange (determined by dividing (x)
the total amount, if any, received or receivable by the Corporation as
consideration for the granting of such Options, plus the minimum aggregate
amount of additional consideration payable to the Corporation upon the
exercise of all such Options, plus, in the case of such Options which
relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (y)
the total maximum number of shares of Common Shares issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities) shall be less than the Market Price in effect immediately prior
to the time of the granting of such Option, then the total maximum amount
of Common Shares issuable upon the exercise of such Options or, in the case
of Options for Convertible Securities, upon the conversion or exchange of
such Convertible Securities shall (as of the date of granting of such
Options) be deemed to be outstanding and to have been issued and sold by
the Corporation for such price per share. No adjustment of the Market Price
shall be made upon the actual issue of such shares of Common Shares or such
Convertible Securities
18
<PAGE> 21
upon the exercise of such Options, except as otherwise provided in Section
6(b)(3) below.
(2) In case the Corporation at any time shall in any manner issue
(whether directly or by assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which
Common Shares are issuable upon such conversion or exchange (determined by
dividing (x) the total amount received or receivable by the Corporation as
consideration for the issue or sale of such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable
to the Corporation upon the conversion or exchange thereof, by (y) the
total maximum number of shares of Common Shares issuable upon the
conversion or exchange of all such Convertible Securities) shall be less
than the Market Price in effect immediately prior to the time of such issue
or sale, then the total maximum number of shares of Common Shares issuable
upon conversion or exchange of all such Convertible Securities shall (as of
the date of the issue or sale of such Convertible Securities) be deemed to
be outstanding and to have been issued and sold by the Corporation for such
price per share. No adjustment of the Market Price shall be made upon the
actual issue of such Common Shares upon exercise of the rights to exchange
or convert under such Convertible Securities, except as otherwise provided
in Section 6(b)(3) below.
(3) If the purchase price provided for in any Options referred to in
Section 6(b)(1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
Sections 6(b)(1) or 6(b)(2), or the rate at which any Convertible
Securities referred to in Section 6(b)(1) or 6(b)(2) are convertible into
or exchangeable for Common Shares shall change at any time (other than
under or by reason of provisions designed to protect against dilution of
the type set forth in Sections 6(b) or 6(d)), the Market Price in effect at
the time of such change shall forthwith be readjusted to the Market Price
which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at
the time initially granted, issued or sold. If the purchase price provided
for in any Option referred to in Section 6(b)(1) or the rate at which any
Convertible Securities referred to in Sections 6(b)(1) or 6(b)(2) are
convertible into or exchangeable for Common Shares shall be reduced at any
time under or by reason of provisions with respect thereto designed to
19
<PAGE> 22
protect against dilution, then in case of the delivery of Common Shares
upon the exercise of any such Option or upon conversion or exchange of any
such Convertible Security, the Market Price then in effect hereunder shall
forthwith be adjusted to such respective amount as would have been obtained
had such Option or Convertible Security never been issued as to such Common
Shares and had adjustments been made upon the issuance of the shares of
Common Shares delivered as aforesaid, but only if as a result of such
adjustment the Market Price then in effect hereunder is hereby reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Conversion Price then
in effect hereunder shall forthwith be increased to the Conversion Price
which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination, never been
issued.
(5) In case any Options shall be issued in connection with the issue
or sale of other securities of the Corporation, together comprising one
integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed to have
been issued for an amount equal to the fair market value thereof,
determined by allocating to the other securities the market price thereof.
(6) In case any shares of Common Shares, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor. In case any shares of Common
Shares, Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the Corporation shall be the fair value of such
consideration as determined in good faith by the Board of Trustees of the
Corporation, whose determination shall be conclusive. In case any shares of
Common Shares, Options or Convertible Securities shall be issued in
connection with any merger in which the Corporation is the surviving
Corporation, the amount of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and business of the
non-surviving Corporation as shall be attributable to such Common Shares,
Options or Convertible Securities, as the case may be, as determined in
good
20
<PAGE> 23
faith by the Board of Trustees, whose determination shall be conclusive.
(7) The number of shares of Common Shares outstanding at any given
time shall not include shares owned or held by or for the account of the
Corporation, and the disposition (but not redemption or retirement) of any
shares so owned or held shall be considered an issue or sale of Common
Shares for the purpose of this Section 6(b).
(8) In case the Corporation shall declare a dividend or make any other
distribution upon the Shares of the Corporation payable in Options or
Convertible Securities, then in such case any Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.
(9) For purposes of this Section 6(b), in case the Corporation shall
take a record of the holders of its Common Shares for the purpose of
entitling them (x) to receive a dividend or other distribution payable in
Common Shares, Options or in Convertible Securities, or (y) to subscribe
for or purchase Common Shares, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the
shares of Common Shares deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or
the date of the granting of such right or subscription or purchase, as the
case may be.
(c) In the event that within the thirty days immediately prior to the
date of conversion of Series C Preferred Shares the Board of Trustees shall
authorize a dividend upon the Common Shares (other than a dividend payable in
Common Shares) payable otherwise than out of earnings or earned surplus,
determined in accordance with generally accepted accounting principles,
including the making of appropriate deductions for minority interests, if any,
in subsidiaries (herein referred to as "LIQUIDATING DIVIDENDS"), then, as soon
as possible after the conversion of any Series C Preferred Shares, the
Corporation shall pay to the person converting such Series C Preferred Shares an
amount equal to the Pro Rata Share of the aggregate value at the time of such
exercise of all Liquidating Dividends (including but not limited to the Common
Shares which would have been issued at the time of such earlier exercise and all
other securities which would have been issued with respect to such Common Shares
by reason of share splits, share dividends, mergers or reorganizations, or for
any other reason). The Pro Rata Share shall be a fraction, the numerator of
which is the number of days
21
<PAGE> 24
within such thirty day period that are before the record date and the
denominator of which is thirty. For the purposes of this Section 6(c), a
dividend other than in cash shall be considered payable out of earnings or
earned surplus only to the extent that such earnings or earned surplus are
charged an amount equal to the fair value of such dividend as determined in good
faith by the Board of Trustees of the Corporation.
(d) In case the Corporation shall at any time (i) subdivide the
outstanding Common Shares or (ii) pay a dividend on its outstanding Common
Shares in shares of beneficial interests of the Corporation, the number of
shares of Common Shares issuable upon conversion of the Series C Preferred
Shares shall be proportionately increased by the same ratio as the subdivision
or dividend (with appropriate adjustments to the Conversion Price in effect
immediately prior to such subdivision or dividend). In case the Corporation
shall at any time combine its outstanding Common Shares, the number of shares
issuable upon conversion of the Series C Preferred Shares immediately prior to
such combination shall be proportionately decreased by the same ratio as the
combination (with appropriate adjustments to the Conversion Price in effect
immediately prior to such combination).
(e) If any capital reorganization or reclassification of the shares of
beneficial interest of the Corporation, or consolidation or merger of the
Corporation with another entity, or the sale of all or substantially all of its
assets to another entity shall be effected in such a way that holders of Common
Shares shall be entitled to receive stock, securities, cash or other property
with respect to or in exchange for Common Shares, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the holders of the Series C Preferred
Shares shall have the right to acquire and receive upon conversion of the Series
C Preferred Shares, which right shall be prior to the rights of the holders of
Junior Shares (but after and subject to the rights of holders of Senior
Preferred Shares, if any), such shares of stock, securities, cash or other
property issuable or payable (as part of the reorganization, reclassification,
consolidation, merger or sale) with respect to or in exchange for such number of
outstanding shares of the Corporation's Common Shares as would have been
received upon conversion of the Series C Preferred Shares at the Conversion
Price then in effect. The Corporation will not effect any such consolidation,
merger or sale, unless prior to the consummation thereof the successor entity
(if other than the Corporation) resulting from such consolidation or merger or
the entity purchasing such assets shall assume by written instrument mailed or
delivered to the holders of the Series C Preferred Shares at the last address of
each such holder appearing on the books of the Corporation, the obligation to
deliver to each such holder such shares of Shares, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
22
<PAGE> 25
purchase. If a purchase, tender or exchange offer is made to and accepted by the
holders of more than 50% of the outstanding Common Shares of the Corporation,
the Corporation shall not effect any consolidation, merger or sale with the
person having made such offer or with any Affiliate of such person, unless prior
to the consummation of such consolidation, merger or sale the holders of the
Series C Preferred Shares shall have been given a reasonable opportunity to then
elect to receive upon the conversion of the Series C Preferred Shares either the
stock, securities or assets then issuable with respect to the Common Shares of
the Corporation or the stock, securities or assets, or the equivalent, issued to
previous holders of the Common Shares in accordance with such offer. For
purposes hereof, the term "AFFILIATE" with respect to any given person shall
mean any person controlling, controlled by or under common control with the
given person.
(f) The provisions of this Section 6 shall not apply to any Common
Shares issued, issuable or deemed outstanding under Sections 6(b)(1) to (9)
inclusive: (i) to any person pursuant to any stock option, stock purchase or
similar plan or arrangement for the benefit of employees or Trustees of the
Corporation or its subsidiaries in effect on the Original Issuance Date or
thereafter adopted by the Board of Trustees of the Corporation and a majority of
the Series C Trustees, (ii) pursuant to options, warrants and conversion rights
in existence on the Original Issuance Date, or (iii) on the conversion of the
Series C Preferred Shares or the sale or conversion of the Pari Passu Shares.
(g) In the event that during any time when the Series C Preferred
Shares are subject to conversion rights:
(1) the Corporation shall authorize any extraordinary cash dividend
upon its Common Shares, or
(2) the Corporation shall authorize any dividend upon its Common
Shares payable in Shares or make any special dividend or other distribution
to the holders of its Common Shares, or
(3) the Corporation shall offer for subscription pro rata to the
holders of its Common Shares any additional shares of any class or other
rights, or
(4) there shall be any capital reorganization or reclassification of
the shares of beneficial interest of the Corporation, including any
subdivision or combination of its outstanding shares of Common Shares, or
consolidation or merger of the Corporation with, or sale of all or
substantially all of its assets to, another entity, or
23
<PAGE> 26
(5) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
then, in connection with such event, the Corporation shall give to the holders
of the Series C Preferred Shares:
(i) at least five (5) days prior written notice of the date on which
the books of the Corporation shall close or a record shall be taken for
such dividend, distribution or subscription rights or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up; and
(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (i) shall
also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Shares shall
be entitled thereto, and such notice in accordance with the foregoing
clause (i) shall also specify the date on which the holders of Common
Shares shall be entitled to exchange their Common Shares for securities or
other property deliverable upon such reorganization, reclassification
consolidation, merger, sale, dissolution, liquidation or winding up, as the
case may be. Each such written notice shall be given by first class mail,
postage prepaid, addressed to the holders of the Series C Preferred Shares
at the address of each such holder as shown on the books of the
Corporation.
(h) If at any time or from time to time on or after the Original
Issuance Date, the Corporation shall grant, issue or sell any Options,
Convertible Securities or rights to purchase property (the "Purchase Rights")
pro rata to the record holders of Common Shares of the Corporation and such
grants, issuances or sales do not result in an adjustment of the Conversion
Price under Section 6(b) hereof, then each holder of Series C Preferred Shares
shall be entitled to acquire (within thirty (30) days after the later to occur
of the initial exercise date of such Purchase Rights or receipt by such holder
of the notice concerning Purchase Rights to which such holder shall be entitled
under Section 6(g)) upon the terms applicable to such Purchase Rights either:
(i) the aggregate Purchase Rights which such holder could have
acquired if it had held the number of shares of Common Shares acquirable
upon conversion of the Series C Preferred Shares immediately before the
grant, issuance or sale of such Purchase Rights; provided that if any
Purchase Rights were distributed to holders of Common Shares without
24
<PAGE> 27
the payment of additional consideration by such holders, corresponding
Purchase Rights shall be distributed to the exercising holders of the
Series C Preferred Shares as soon as possible after such exercise and it
shall not be necessary for the exercising holder of the Series C Preferred
Shares specifically to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall have expired or
shall expire prior to the end of said thirty (30) day period, the number of
shares of Common Shares or the amount of property which such holder could
have acquired upon such exercise at the time or times at which the
Corporation granted, issued or sold such expired Purchase Rights.
SECTION 7. REDEMPTION.
(a) The Corporation (i) shall on each date (a "MANDATORY REDEMPTION
DATE") on which Net Proceeds (as defined in Section 2 above) are received by the
Development LLC (as defined in Section 2 above), whether or not such Net
Proceeds are made available to the Corporation (and the Corporation shall,
solely if any Series C Preferred Shares shall remain outstanding on or after
December 4, 1998, cause the Development LLC to sell substantially all of its
assets promptly (and in any event by March 31, 1999) after December 4, 1998 in
order to maximize the Net Proceeds therefrom) and (ii) may on any date (an
"OPTIONAL REDEMPTION DATE" and each Mandatory Redemption Date and Optional
Redemption Date are herein called a "REDEMPTION DATE") (unless notice of
conversion shall have been previously given) redeem (to the extent that such
redemption shall not violate any applicable provisions of the laws of the State
of Maryland or result in a failure of the Corporation to qualify as a real
estate investment trust under the provisions of Sections 856 through 858 of the
Internal Revenue Code of 1986, as amended (after taking into account the ability
of the Corporation to borrow funds or raise capital to effect the redemption)),
at a price equal to the Liquidation Preference per share (subject to adjustment
in the event of any share dividend, share split, share distribution or
combination with respect to such shares), plus an amount equal to any dividends
accrued but unpaid thereon (such amount is hereinafter referred to as the
"REDEMPTION PRICE"), (x) in the case of clause (i) above, such maximum number of
whole shares of Series C Preferred Shares as may be redeemed at the Redemption
Price with the Net Proceeds and (y) in the case of clause (ii) above, such
number of whole shares of Series C Preferred Shares as determined by the Board
of Trustees. If the Corporation is unable at any Redemption Date to redeem any
shares of the Series C Preferred Shares then required to be redeemed because
such redemption would violate the applicable laws of the State of Maryland or
result in such failure to qualify as a real estate
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<PAGE> 28
investment trust as aforesaid, then the Corporation shall redeem such shares as
soon thereafter as redemption would not violate such laws.
(b) In the event of any redemption of only a part of the then
outstanding Series C Preferred Shares, the Corporation shall effect such
redemption pro rata among the holders thereof (based on the number of shares of
Series C Preferred Shares held on the date of notice of redemption).
(c) At least thirty (30) days prior to each Optional Redemption Date,
written notice shall be mailed, postage prepaid, to each holder of record of
Series C Preferred Shares to be redeemed, at his or its post office address last
shown on the records of the Corporation, notifying such holder of the number of
shares so to be redeemed, specifying the Redemption Date and the date on which
such holder's conversion rights (pursuant to Section 5 hereof) as to such shares
terminate and calling upon such holder to surrender to the Corporation, in the
manner and at the place designated, his or its certificate or certificates
representing the shares to be redeemed (such notice is hereinafter referred to
as a "REDEMPTION NOTICE"). On or prior to each Redemption Date, each holder of
Series C Preferred Shares to be redeemed shall surrender his or its certificate
or certificates evidencing such shares to the Corporation, in the manner and at
the place designated in the Redemption Notice, and thereupon the Redemption
Price of such shares shall be payable to the order of the person whose name
appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be cancelled. In the event less than all the
shares evidenced by any such certificate are redeemed, a new certificate shall
be issued evidencing the unredeemed shares. From and after the Redemption Date,
unless there shall have been a default in payment of the Redemption Price, all
rights of the holders of the Series C Preferred Shares designated for redemption
in the Redemption Notice as holders of Series C Preferred Shares of the
Corporation (except the right to receive the Redemption Price without interest
upon surrender of their certificate or certificates) shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books of
the Corporation or be deemed to be outstanding for any purpose whatsoever.
(d) Except as provided in Section (a) above, the Corporation shall have
no right to redeem the shares of Series C Preferred Shares. Any shares of Series
C Preferred Shares so redeemed shall be permanently retired, shall no longer be
deemed outstanding and shall not under any circumstances be reissued, and the
Corporation may from time to time
26
<PAGE> 29
take such appropriate trust action as may be necessary to reduce the authorized
Series C Preferred Shares accordingly, including the filing of articles
supplementary. Nothing herein contained shall prevent or restrict the purchase
by the Corporation, from time to time either at public or private sale, of the
whole or any part of the Series C Preferred Shares at such price or prices as
the Corporation may determine, subject to the provisions of applicable law.
SECTION 8. NO RECOURSE TO SHAREHOLDERS, TRUSTEES, OFFICERS OR AGENTS.
It is a condition of the Preferred Shares that any obligations of the
Corporation hereunder shall bind only the Corporation as provided in Section 8.1
of the Declaration and no shareholder, trustee, officer or agent of the
Corporation shall be bound or held to any personal liability in connection
herewith.
SECTION 9. NO PREEMPTIVE OR APPRAISAL RIGHTS.
The Preferred Shares shall not be entitled to any preemptive rights or,
except as specifically required by applicable statute, appraisal rights.
27
<PAGE> 1
Exhibit 10.61
GLIMCHER REALTY TRUST
1997 INCENTIVE PLAN
GLIMCHER REALTY TRUST, a Maryland real estate investment trust (the
"Company"), hereby establishes and adopts the following 1997 Incentive Plan (the
"Plan").
RECITALS
WHEREAS, the Company desires to encourage high levels of performance by
all employees and trustees of the Company and its affiliates, to attract new
individuals who are highly motivated and who will contribute to the success of
the Company and to encourage such individuals to remain as trustees and/or
employees of the Company and its affiliates by increasing their proprietary
interest in the Company's growth and success.
WHEREAS, to attain these ends, the Company has formulated the Plan
embodied herein to authorize the granting of incentive awards through grants of
share options ("Options"), grants of share appreciation rights, grants of Share
Purchase Awards (hereafter defined), and grants of Restricted Share Awards
(hereafter defined) to those individuals whose judgment, initiative and efforts
are responsible for the success of the Company.
NOW, THEREFORE, the Company hereby constitutes, establishes and adopts
the following Plan and agrees to the following provisions:
<PAGE> 2
ARTICLE 1.
PURPOSE OF THE PLAN
1.1. Purpose. The purpose of the Plan is to assist the Company in
attracting and retaining selected individuals to serve as employees, trustees
and officers of the Company and its affiliates who will contribute to the
Company's success and to achieve long-term objectives which will inure to the
benefit of all shareholders of the Company through the additional incentive
inherent in the ownership of the Company's Common Shares of Beneficial Interest
(the "Shares"). Options granted under the Plan will be either "incentive share
options," intended to qualify as such under the provisions of section 422 of the
Internal Revenue Code of 1986, as from time to time amended (the "Code"), or
"nonqualified share options." For purposes of the Plan, the term "subsidiary"
shall mean "subsidiary corporation," as such term is defined in section 424(f)
of the Code, and "affiliate" shall mean any entity in which the Company directly
or indirectly has an interest, as determined in the sole discretion of the
Committee (hereafter defined). For purposes of the Plan, the term "Award" shall
mean a grant of an Option, a Share Purchase Award, a Restricted Share Award, or
any other award made under the terms of the Plan.
ARTICLE 2.
SHARES SUBJECT TO AWARDS
2.1. Number of Shares. Subject to the adjustment provisions of Section
9.9 hereof, the aggregate number of Shares which may be issued under Awards
under the Plan, whether pursuant to Options, Share Purchase Awards or Restricted
Share Awards shall not exceed 3,000,000. No Options to purchase fractional
Shares shall be granted or issued under the Plan. For purposes of this Section
2.1, the Shares that shall be counted toward such limitation shall include all
Shares:
(1) issued or issuable pursuant to Options that have been or may be
exercised;
(2) issued or issuable pursuant to Share Purchase Awards; and
(3) issued as, or subject to issuance as a Restricted Share Award.
2.2. Shares Subject to Terminated Awards. The Shares covered by any
unexercised portions of terminated Options granted under Articles 4 and 6,
Shares forfeited as provided in
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<PAGE> 3
Section 8.2(a) and Shares subject to any Awards which are otherwise surrendered
by the Participant without receiving any payment or other benefit with respect
thereto may again be subject to new Awards under the Plan. In the event the
purchase price of an Option is paid in whole or in part through the delivery of
Shares, the number of Shares issuable in connection with the exercise of the
Option shall not again be available for the grant of Awards under the Plan.
Shares subject to Options, or portions thereof, which have been surrendered in
connection with the exercise of share appreciation rights shall not again be
available for the grant of Awards under the Plan.
2.3. Character of Shares. Shares delivered under the Plan may be
authorized and unissued Shares or Shares acquired by the Company, or both.
2.4. Limitations on Grants to Individual Participant. Subject to
adjustments pursuant to the provisions of Section 9.9 hereof, the maximum number
of Shares with respect to which Options or share appreciation rights may be
granted hereunder to any employee during any fiscal year shall be 300,000 Shares
(the "Limitation"). If an Option is cancelled, the cancelled Option shall
continue to be counted toward the Limitation for the year granted. An Option (or
a share appreciation right) that is repriced during any fiscal year is treated
as the cancellation of the Option (or share appreciation right) and a grant of a
new Option (or share appreciation right) for purposes of the Limitation for that
fiscal year.
ARTICLE 3.
ELIGIBILITY AND ADMINISTRATION
3.1. Awards to Employees and Trustees. (a) Participants who receive
Options under Articles 4 and 6 hereof (including share appreciation rights under
Article 5) ("Optionees"), Share Purchase Awards under Article 7 or Restricted
Share Awards under Article 8 (in either case, a "Participant") shall consist of
such employees and Trustees (hereinafter defined) of the Company or any of its
subsidiaries or affiliates as the Committee shall select from time to time. The
Committee's designation of an Optionee or Participant in any year shall not
require the Committee to designate such person to receive Awards or grants in
any other year. The designation of an Optionee or Participant to receive Awards
or grants under one portion of the Plan shall not require the Committee to
include such Optionee or Participant under other portions of the Plan.
(b) No Option which is intended to qualify as an "incentive share
option" may be granted to any employee or
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<PAGE> 4
Trustee who, at the time of such grant, owns, directly or indirectly (within the
meaning of sections 422(b)(6) and 424(d) of the Code), shares possessing more
than ten percent (10%) of the total combined voting power of all classes of
shares of the Company or any of its subsidiaries, unless at the time of such
grant, (i) the option price is fixed at not less than 110% of the Fair Market
Value (as defined below) of the Shares subject to such Option, determined on the
date of the grant, and (ii) the exercise of such Option is prohibited by its
terms after the expiration of five (5) years from the date such Option is
granted.
3.2. Administration. (a) The Plan shall be administered by a committee
(the "Committee") consisting of not fewer than two trustees of the Company (the
trustees of the Company being hereinafter referred to as the "Trustees"), as
designated by the Trustees. The Trustees may remove from, add members to, or
fill vacancies in the Committee. Unless otherwise determined by the Trustees,
each member of the Committee will be a "Non-Employee Trustee" within the meaning
of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and an "outside trustee" within the meaning of Section 162(m)(4)(C)(i) of
the Code.
Any Award to a member of the Committee shall be on terms consistent
with Awards made to other Trustees who are not members of the Committee, except
where the Award is approved or ratified by the Compensation Committee (excluding
persons who are also members of the Committee) of the Board of Trustees of the
Company.
(b) The Committee is authorized, subject to the provisions of the Plan,
to establish such rules and regulations as it may deem appropriate for the
conduct of meetings and proper administration of the Plan. All actions of the
Committee shall be taken by majority vote of its members.
(c) Subject to the provisions of the Plan, the Committee shall have
authority, in its sole discretion, to interpret the provisions of the Plan and,
subject to the requirements of applicable law, including Rule 16b-3 of the
Exchange Act, to prescribe, amend, and rescind rules and regulations relating to
it as it may deem necessary or advisable. All decisions made by the Committee
pursuant to the provisions of the Plan shall be final, conclusive and binding on
all persons, including the Company, its shareholders, Trustees and employees,
and Plan participants.
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<PAGE> 5
ARTICLE 4.
OPTIONS
4.1. Grant of Options. The Committee shall determine, within the
limitations of the Plan, the Trustees and employees of the Company and its
subsidiaries and affiliates to whom Options are to be granted under the Plan,
the number of Shares that may be purchased under each such Option and the option
price, and shall designate such Options at the time of the grant as either
"incentive share options" or "nonqualified share options;" provided, however,
that Options granted to an individual who is not an employee of either the
Company or any "subsidiary" may only be "nonqualified share options."
All Options granted pursuant to this Article 4 and Article 6 herein
shall be authorized by the Committee and shall be evidenced in writing by share
option agreements ("Share Option Agreements") in such form and containing such
terms and conditions as the Committee shall determine which are not inconsistent
with the provisions of the Plan, and, with respect to any Share Option Agreement
granting Options which are intended to qualify as "incentive share options," are
not inconsistent with Section 422 of the Code. Granting of an Option pursuant to
the Plan shall impose no obligation on the recipient to exercise such option.
Any individual who is granted an Option pursuant to this Article 4 and Article 6
herein may hold more than one Option granted pursuant to such Articles at the
same time and may hold both "incentive share options" and "nonqualified share
options" at the same time. To the extent that any Option does not qualify as an
"incentive share option" (whether because of its provisions, the time or manner
of its exercise or otherwise) such Option or the portion thereof which does not
so qualify shall constitute a separate "nonqualified share option."
4.2. Option Price. (a) Subject to Section 3.1(b), the option price per
each Share purchasable under any "incentive share option" granted pursuant to
this Article 4 and any "nonqualified share option" granted pursuant to Article 6
herein shall not be less than 100% of the Fair Market Value (as hereinafter
defined) of such Share on the date of the grant of such Option.
(b) The option price per share of each Share purchasable under any
"nonqualified share option" granted pursuant to this Article 4 shall be such
amount as the Committee shall determine at the time of the grant of such Option.
4.3. Other Provisions. Options granted pursuant to this Article 4 shall
be made in accordance with the terms and provision of Article 9 hereof and any
other applicable terms and provisions of the Plan.
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<PAGE> 6
ARTICLE 5.
SHARE APPRECIATION RIGHTS
5.1. Grant and Exercise. Share appreciation rights may be granted in
conjunction with all or part of any Option granted under the Plan provided such
rights are granted at the time of the grant of such Option. A "share
appreciation right" is a right to receive cash or Shares, as provided in this
Article 5, in lieu of the purchase of a Share under a related Option. A share
appreciation right or applicable portion thereof shall terminate and no longer
be exercisable upon the termination or exercise of the related Option, and a
share appreciation right granted with respect to less than the full number of
Shares covered by a related Option shall not be reduced until, and then only to
the extent that, the exercise or termination of the related Option exceeds the
number of Shares not covered by the share appreciation right. A share
appreciation right may be exercised by the holder thereof (the "Holder"), in
accordance with Section 5.2 of this Article 5, by giving written notice thereof
to the Company and surrendering the applicable portion of the related Option.
Upon giving such notice and surrender, the Holder shall be entitled to receive
an amount determined in the manner prescribed in Section 5.2 of this Article 5.
Options which have been so surrendered, in whole or in part, shall no longer be
exercisable to the extent the related share appreciation rights have been
exercised.
5.2. Terms and Conditions. Share appreciation rights shall be subject
to such terms and conditions, not inconsistent with the provisions of the Plan,
as shall be determined from time to time by the Committee, including the
following:
(a) share appreciation rights shall be exercisable only at such time
or times and to the extent that the Options to which they relate shall be
exercisable in accordance with the provisions of the Plan.
(b) Upon the exercise of a share appreciation right, a Holder shall be
entitled to receive up to, but no more than, an amount in cash or whole
Shares equal to the excess of the then Fair Market Value of one Share over
the option price per Share specified in the related Option multiplied by
the number of Shares in respect of which the share appreciation right shall
have been exercised. The Holder shall specify in his written notice of
exercise, whether payment shall be made in cash or in whole Shares. Each
share appreciation right may be exercised only at the time and so long as a
related Option, if any, would be
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<PAGE> 7
exercisable or as otherwise permitted by applicable law.
(c) Upon the exercise of a share appreciation right, the Option or
part thereof to which such share appreciation right is related shall be
deemed to have been exercised for the purpose of the limitation of the
number of Shares to be issued under the Plan, as set forth in Section 2.1
of the Plan.
(d) With respect to share appreciation rights granted in connection
with an Option that is intended to be an "incentive share option," the
following shall apply:
(i) No share appreciation right shall be transferable by a Holder
otherwise than by will or by the laws of descent and distribution, and
share appreciation rights shall be exercisable, during the Holder's
lifetime, only by the Holder.
(ii) Share appreciation rights granted in connection with an Option
may be exercised only when the Fair Market Value of the Shares subject to
the Option exceeds the option price at which Shares can be acquired
pursuant to the Option.
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<PAGE> 8
ARTICLE 6.
RELOAD OPTIONS
6.1. Authorization of Reload Options. Concurrently with the award of
any Option (such Option hereinafter referred to as the "Underlying Option") to
any participant in the Plan, the Committee may grant one or more reload options
(each, a "Reload Option") to such participant to purchase for cash or Shares a
number of Shares as specified below. A Reload Option shall be exercisable for an
amount of Shares equal to (i) the number of Shares delivered by the Optionee to
the Company to exercise the Underlying Option, and (ii) to the extent authorized
by the Committee, the number of Shares used to satisfy any tax withholding
requirement incident to the exercise of the Underlying Option, subject to the
availability of Shares under the Plan at the time of such exercise. Any Reload
Option may provide for the grant, when exercised, of subsequent Reload Options
to the extent and upon such terms and conditions consistent with this Article 6,
as the Committee in its sole discretion shall specify at or after the time of
grant of such Reload Option. The grant of a Reload Option will become effective
upon the exercise of an Underlying Option or Reload Option by delivering to the
Company Shares in payment of the exercise price and/or tax withholding
obligations. Notwithstanding the fact that the Underlying Option may be an
"incentive share option," a Reload Option is not intended to qualify as an
"incentive share option" under Section 422 of the Code.
6.2. Reload Option Amendment. Each Share Option Agreement shall state
whether the Committee has authorized Reload Options with respect to the
Underlying Option. Upon the exercise of an Underlying Option or other Reload
Option, the Reload Option will be evidenced by an amendment to the underlying
Share Option Agreement.
6.3. Reload Option Price. The option price per Share deliverable upon
the exercise of a Reload Option shall be the Fair Market Value of a Share on the
date the grant of the Reload Option becomes effective.
6.4. Term and Exercise. Each Reload Option is fully exercisable
immediately upon its grant. The term of each Reload Option shall be equal to the
remaining option term of the Underlying Option.
6.5. Termination of Employment. No additional Reload Options shall be
granted to Optionees when Options and/or Reload Options are exercised pursuant
to the terms of this Plan following termination of the Optionee's employment
unless the Committee, in its sole discretion, shall determine otherwise.
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<PAGE> 9
6.6. Applicability of Other Sections. Except as otherwise provided in
this Article 6, the provisions of Article 9 applicable to Options shall apply
equally to Reload Options.
ARTICLE 7.
SHARE PURCHASE AWARDS
7.1. Grant of Share Purchase Award. The term "Share Purchase Award"
means the right to purchase Shares of the Company and to pay for such Shares
through a loan made by the Company to the Participant (a "Purchase Loan") as set
forth in this Article 7.
7.2. Terms of Purchase Loans.
(a) Purchase Loan. Each Purchase Loan shall be evidenced by a
promissory note. The term of the Purchase Loan shall be for a period of years,
as determined by the Committee, and the proceeds of the Purchase Loan shall be
used exclusively by the Participant for purchase of Shares from the Company at a
purchase price equal to the Fair Market Value on the date of the Share Purchase
Award.
(b) Interest on Purchase Loan. A Purchase Loan shall be non-interest
bearing or shall bear interest at whatever rate the Committee shall determine
(but not in excess of the maximum rate permissible under applicable law),
payable in a manner and at such times as the Committee shall determine. Those
terms and provisions as the Committee shall determine shall be incorporated into
the promissory note evidencing the Purchase Loan.
(c) Forgiveness of Purchase Loan. Subject to Section 7.4 hereof, the
Company may forgive the repayment of up to 100% of the principal amount of the
Purchase Loan, subject to such terms and conditions as the Committee shall
determine and set forth in the promissory note evidencing the Purchase Loan. A
Participant's Purchase Loan can be prepaid at any time, and from time to time,
without penalty.
7.3. Security for Loans.
(a) Share Power and Pledge. Purchase Loans granted to Participants
shall be secured by a pledge of the Shares acquired pursuant to the Share
Purchase Award. Such pledge shall be evidenced by a pledge agreement (the
"Pledge Agreement") containing such terms and conditions as the Committee shall
determine. The share certificates for the Shares purchased by a Participant
pursuant to a Share Purchase Award shall be
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<PAGE> 10
issued in the Participant's name, but shall be held by the Company as security
for repayment of the Participant's Purchase Loan together with a share power
executed in blank by the Participant (the execution and delivery of which by the
Participant shall be a condition to the issuance of the Share Purchase Award).
The Participant shall be entitled to exercise all rights applicable to such
Shares, including, but not limited to, the right to vote such Shares and the
right to receive dividends and other distributions made with respect to such
Shares. When the Purchase Loan and any accrued but unpaid interest thereon has
been repaid or otherwise satisfied in full, the Company shall deliver to the
Participant the share certificates for the Shares purchased by a Participant
under the Share Purchase Award. Purchase Loans shall be recourse or non-recourse
with respect to a Participant, as determined by the Committee.
(b) Release and Delivery of Share Certificates During the Term of the
Purchase Loan. The Company shall release and deliver to each Participant
certificates for Shares purchased by a Participant pursuant to a Share Purchase
Award, in such amounts and on such terms and conditions as the Committee shall
determine, which shall be set forth in the Pledge Agreement.
(c) Release and Delivery of Share Certificates Upon Repayment of the
Purchase Loan. The Company shall release and deliver to each Participant
certificates for the Shares purchased by the Participant under the Share
Purchase Award and then held by the Company, provided the Participant has paid
or otherwise satisfied in full the balance of the Purchase Loan and any accrued
but unpaid interest thereon. In the event the balance of the Purchase Loan is
not repaid, forgiven or otherwise satisfied within ninety (90) days after (i)
the date repayment of the Purchase Loan is due (whether in accordance with its
term, by reason of acceleration or otherwise), or (ii) such longer time as the
Committee, in its discretion, shall provide for repayment or satisfaction, the
Company shall retain those Shares then held by the Company in accordance with
the Pledge Agreement.
(d) Recourse Purchase Loans. Notwithstanding Sections 7.3(a), (b) and
(c) above, in the case of a recourse Purchase Loan, the Committee may make such
Purchase Loan on such terms as it determines, including without limitation, not
requiring a pledge of the acquired Shares.
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<PAGE> 11
7.4. Termination of Employment.
(a) Termination of Employment by Death, Disability or by the Company
Without Cause; Change of Control. In the event of a Participant's termination of
employment by reason of death, "disability" or by the Company without "cause",
or in the event of a "change of control", the Committee shall have the right
(but shall not be required) to forgive the remaining unpaid amount (principal
and interest) of the Purchase Loan in whole or in part as of the date of such
occurrence. "Change of Control", "disability" and "cause" shall have the
respective meanings as set forth in the promissory note evidencing the Purchase
Loan.
(b) Other Termination of Employment. Subject to Section 7.4(a) above,
in the event of a Participant's termination of employment for any reason, the
Participant shall repay to the Company the entire balance of the Purchase Loan
and any accrued but unpaid interest thereon, which amounts shall become
immediately due and payable, provided, however, that if the Participant
voluntarily resigns as an employee in good standing, such amounts will become
due and payable on the ninetieth (90th) day after the effective date of such
resignation.
7.5. Restrictions on Transfer. No Share Purchase Award or Shares
purchased through such an Award and pledged to the Company as collateral
security for the Participant's Purchase Loan (and accrued by unpaid interest
thereon) may be otherwise pledged, sold, assigned or transferred (other than by
will or by the laws of descent and distribution).
ARTICLE 8.
RESTRICTED SHARE AWARDS
8.1. Restricted Share Awards. (a) A grant of Shares made pursuant to
this Article 8 is referred to as a "Restricted Share Award." The Committee may
grant to any Participant an amount of Shares in such manner, and subject to such
terms and conditions relating to vesting, forfeitability and restrictions on
delivery and transfer (whether based on performance standards, periods of
service or otherwise) as the Committee shall establish (such Shares, "Restricted
Share"). The terms of any Restricted Share Award granted under this Plan shall
be set forth in a written agreement (a "Restricted Share Agreement") which shall
contain provisions determined by the Committee and not inconsistent with this
Plan. The provisions of Restricted Share Awards need not be the same for each
Participant receiving such Awards.
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<PAGE> 12
(b) Issuance of Restricted Shares. As soon as practicable after the
date of grant of a Restricted Share Award by the Committee, the Company shall
cause to be transferred on the books of the Company, Shares registered in the
name of the Company, as nominee for the Participant, evidencing the Restricted
Shares covered by the Award, but subject to forfeiture to the Company
retroactive to the date of grant, if a Restricted Share Agreement delivered to
the Participant by the Company with respect to the Restricted Shares covered by
the Award is not duly executed by the Participant and timely returned to the
Company. All Restricted Shares covered by Awards under this Article 8 shall be
subject to the restrictions, terms and conditions contained in the Plan and the
Restricted Share Agreement entered into by and between the Company and the
Participant. Until the lapse or release of all restrictions applicable to an
Award of Restricted Shares, the share certificates representing such Restricted
Shares shall be held in custody by the Company or its designee.
(c) Shareholder Rights. Beginning on the date of grant of the
Restricted Share Award and subject to execution of the Restricted Share
Agreement as provided in Sections 8.1(a) and (b), the Participant shall become a
shareholder of the Company with respect to all Shares subject to the Restricted
Share Agreement and shall have all of the rights of a shareholder, including,
but not limited to, the right to vote such Shares and the right to receive
distributions made with respect to such Shares; provided, however, that any
Shares distributed as a dividend or otherwise with respect to any Restricted
Shares as to which the restrictions have not yet lapsed shall be subject to the
same restrictions as such Restricted Shares and shall be represented by book
entry and held as prescribed in Section 8.1(b).
(d) Restriction on Transferability. None of the Restricted Shares may
be assigned or transferred (other than by will or the laws of descent and
distribution), pledged or sold prior to lapse or release of the restrictions
applicable thereto.
(e) Delivery of Shares Upon Release of Restrictions. Upon expiration or
earlier termination of the forfeiture period without a forfeiture and the
satisfaction of or release from any other conditions prescribed by the
Committee, the restrictions applicable to the Restricted Shares shall lapse. As
promptly as administratively feasible thereafter, subject to the requirements of
Section 10.1, the Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's beneficiary, one or more share
certificates for the appropriate number of Shares, free of all such
restrictions, except for any restrictions that may be imposed by law.
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<PAGE> 13
8.2. Terms of Restricted Shares.
(a) Forfeiture of Restricted Shares. Subject to Section 8.2(b), all
Restricted Shares shall be forfeited and returned to the Company and all rights
of the Participant with respect to such Restricted Shares shall terminate unless
the Participant continues in the service of the Company as an employee until the
expiration of the forfeiture period for such Restricted Shares and satisfies any
and all other conditions set forth in the Restricted Share Agreement. The
Committee in its sole discretion, shall determine the forfeiture period (which
may, but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Share Award.
(b) Waiver of Forfeiture Period. Notwithstanding anything contained in
this Article 8 to the contrary, the Committee may, in its sole discretion, waive
the forfeiture period and any other conditions set forth in any Restricted Share
Agreement under appropriate circumstances (including the death, disability or
retirement of the Participant or a material change in circumstances arising
after the date of an Award) and subject to such terms and conditions (including
forfeiture of a proportionate number of the Restricted Shares) as the Committee
shall deem appropriate.
ARTICLE 9.
GENERALLY APPLICABLE PROVISIONS
9.1. Option Period. Subject to Section 3.1(b), the period for which an
Option is exercisable shall not exceed ten (10) years from the date such Option
is granted, provided, however, in the case of an Option that is not intended to
be an "incentive share option", the Committee may prescribe a period in excess
of ten years. After the Option is granted, the option period may not be reduced.
9.2. Fair Market Value. If the Shares are listed or admitted to trading
on a securities exchange registered under the Exchange Act, the "Fair Market
Value" of a Share as of a specified date shall mean the average of the high and
low price of the shares for the day immediately preceding the date as of which
Fair Market Value is being determined (or if there was no reported sale on such
date, on the last preceding date on which any reported sale occurred) reported
on the principal securities exchange on which the Shares are listed or admitted
to trading. If the Shares are not listed or admitted to trading on any such
exchange but are listed as a national market security on the National
Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ"),
traded in the over-the-counter market
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or listed or traded on any similar system then in use, the Fair Market Value of
a Share shall be the average of the high and low sales price for the day
immediately preceding the date as of which the Fair Market Value is being
determined (or if there was no reported sale on such date, on the last preceding
date on which any reported sale occurred) reported on such system. If the Shares
are not listed or admitted to trading on any such exchange, are not listed as a
national market security on NASDAQ and are not traded in the over-the-counter
market or listed or traded on any similar system then in use, but are quoted on
NASDAQ or any similar system then in use, the Fair Market Value of a Share shall
be the average of the closing high bid and low asked quotations on such system
for the Shares on the date in question. If the Shares are not publicly traded,
Fair Market Value shall be determined by the Committee in its sole discretion
using appropriate criteria. An Option shall be considered granted on the date
the Committee acts to grant the Option or such later date as the Committee shall
specify.
9.3. Exercise of Options. Options granted under the Plan shall be
exercised by the Optionee thereof (or by his or her executors, administrators,
guardian or legal representative, or by a Permitted Assignee, as provided in
Sections 9.6 and 9.7 hereof) as to all or part of the Shares covered thereby, by
the giving of written notice of exercise to the Company, specifying the number
of Shares to be purchased, accompanied by payment of the full purchase price for
the Shares being purchased. Full payment of such purchase price shall be made
within five (5) business days following the date of exercise and shall be made
(i) in cash or by certified check or bank check, (ii) with the consent of the
Committee, by delivery of a promissory note in favor of the Company upon such
terms and conditions as determined by the Committee, (iii) with the consent of
Committee, by tendering previously acquired Shares (valued at its Fair Market
Value, as determined by the Committee as of the date of tender), or (iv) with
the consent of the Committee, any combination of (i), (ii) and (iii). In
connection with a tender of previously acquired Shares pursuant to clause (iii)
above, the Committee, in its sole discretion, may permit the Optionee to
constructively exchange Shares already owned by the Optionee in lieu of actually
tendering such Shares to the Company, provided that adequate documentation
concerning the ownership of the Shares to be constructively tendered is
furnished in form satisfactory to the Committee. The notice of exercise,
accompanied by such payment, shall be delivered to the Company at its principal
business office or such other office as the Committee may from time to time
direct, and shall be in such form, containing such further provisions consistent
with the provisions of the Plan, as the Committee may from time to time
prescribe. In no event may any Option granted hereunder be exercised for a
fraction of a Share. The Company shall effect the transfer of Shares purchased
pursuant to an Option as soon as practicable, and, within a
-14-
<PAGE> 15
reasonable time thereafter, such transfer shall be evidenced on the books of the
Company. No person exercising an Option shall have any of the rights of a holder
of Shares subject to an Option until certificates for such Shares shall have
been issued following the exercise of such Option. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the
date of such issuance.
9.4. Transferability. No Option that is intended to qualify as an
"incentive share option" under Section 422 of the Code shall be assignable or
transferable by the Optionee, other than by will or the laws of descent and
distribution, and such Option may be exercised during the life of the Optionee
only by the Optionee or his guardian or legal representative. With the prior
written consent of the Committee, "nonqualified share options" and any share
appreciation rights granted in tandem therewith may be transferred (together and
not separately) by the Optionee or Holder, as the case may be, to any one or
more of the following persons (each, a "Permitted Assignee"): (i) the spouse,
parent, issue, spouse of issue, or issue of spouse ("issue" shall include all
descendants whether natural or adopted) of such Optionee or Holder, as the case
may be; (ii) a trust for the benefit of one or more of those persons described
in clause (i) above or for the benefit of such Optionee or Holder, as the case
may be, or for the benefit of any such persons and such Optionee or Holder, as
the case may be; or (iii) an entity in which the Optionee or Holder or any
Permitted Assignee thereof is a beneficial owner; provided, however, that such
Permitted Assignee shall be bound by all of the terms and conditions of this
Plan and shall execute an agreement satisfactory to the Company evidencing such
obligation; and provided further, however, that such Optionee or Holder shall
remain bound by the terms and conditions of this Plan. The Company shall
cooperate with an Optionee's Permitted Assignee and the Company's transfer agent
in effectuating any transfer permitted pursuant to this Section 9.4.
9.5. Termination of Employment. In the event of the termination of
employment of an Optionee or the separation from service of a Trustee (who is an
Optionee) for any reason (other than death or disability as provided below), any
Option(s) held by such Optionee (or its Permitted Assignee) under this Plan and
not previously exercised or expired shall be deemed cancelled and terminated on
the day of such termination or separation, unless the Committee decides, in its
sole discretion, to extend the term of the Option for a period not to exceed
three months after the date of such termination or separation, provided,
however, that in no instance may the term of the Option, as so extended, exceed
the maximum term set forth in Section 3.1(b)(ii) or 9.1 above. Notwithstanding
the foregoing, in the event of the separation from service of a non-employee
Trustee (who is an Optionee) by reason of death, disability or under conditions
satisfactory to
-15-
<PAGE> 16
both the Trustee and the Company, any nonqualified share options held by such
Trustee (or its Permitted Assignee) under the Plan and not previously exercised
or expired shall be exercisable for a period not to exceed five (5) years after
the date of such separation, provided, however, that in no instance may the term
of the Option, as so extended, exceed the maximum term set forth in Sections
3.1(b)(ii) or 9.1 above.
9.6. Death. In the event an Optionee (other than a non-employee
Trustee) dies while employed by the Company or any of its subsidiaries or
affiliates any Option(s) held by such Optionee (or its Permitted Assignee) and
not previously expired or exercised shall, to the extent exercisable on the date
of death, be exercisable by the estate of such Optionee or by any person who
acquired such Option by bequest or inheritance, or by the Permitted Assignee at
any time within one year after the death of the Optionee, unless earlier
terminated pursuant to its terms, provided, however, that if the term of such
Option would expire by its terms within six months after the Optionee's death,
the term of such Option shall be extended until six months after the Optionee's
death, provided further, however, that in no instance may the term of the
Option, as so extended, exceed the maximum term set forth in Section 3.1(b)(ii)
or 9.1 above.
9.7. Disability. In the event of the termination of employment of an
Optionee (other than a non-employee Trustee) due to total disability, the
Optionee, or his guardian or legal representative, or a Permitted Assignee shall
have the unqualified right to exercise any Option(s) which have not been
previously exercised or expired and which the Optionee was eligible to exercise
as of the first date of total disability (as determined by the Committee), at
any time within one (1) year after such termination, unless earlier terminated
pursuant to its terms, provided, however, that if the term of such Option would
expire by its terms within six months after such termination, the term of such
Option shall be extended until six months after such termination, provided
further, however, that in no instance may the term of the Option, as so
extended, exceed the maximum term set forth in Section 3.1(b)(ii) or 9.1 above.
The term "total disability" shall, for purposes of this Plan, be defined in the
same manner as such term is defined in Section 22(e)(3) of the Code.
9.8. Amendment and Modification of the Plan. The Compensation Committee
of the Board of Trustees of the Company may, from time to time, alter, amend,
suspend or terminate the Plan as it shall deem advisable, subject to any
requirement for shareholder approval imposed by applicable law or any rule of
any share exchange or quotation system on which Shares are listed or quoted.
Notwithstanding the foregoing, no amendments to, or termination of, the Plan
shall in any way impair the rights of an Optionee or a Participant (or a
Permitted Assignee thereof) under
-16-
<PAGE> 17
any Award previously granted without such Optionee's or Participant's consent.
9.9. Adjustments. In the event that the Committee shall determine that
any dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, share split, reverse share
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities, the issuance of warrants
or other rights to purchase Shares or other securities, or other similar
corporate transaction or event affects the Shares with respect to which Options
have been or may be issued under the Plan, such that an adjustment is determined
by the Committee to be appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under the
Plan, then the Committee shall, in such manner as the Committee may deem
equitable, adjust any or all of (i) the number and type of Shares that
thereafter may be made the subject of Options, (ii) the number and type of
Shares subject to outstanding Options and share appreciation rights, and (iii)
the grant or exercise price with respect to any Option, or, if deemed
appropriate, make provision for a cash payment to the holder of any outstanding
Option; provided, in each case, that with respect to "incentive share options,"
no such adjustment shall be authorized to the extent that such adjustment would
cause such options to violate Section 422(b) of the Code or any successor
provision; and provided further, that the number of Shares subject to any Option
denominated in Shares shall always be a whole number. In the event of any
reorganization, merger, consolidation, split-up, spin-off, or other business
combination involving the Company (collectively, a "Reorganization"), the
Compensation Committee of the Board of Trustees or the Board of Trustees may
cause any Award outstanding as of the effective date of the Reorganization to be
cancelled in consideration of a cash payment or alternate Award made to the
holder of such cancelled Award equal in value to the fair market value of such
cancelled Award. The determination of fair market value shall be made by the
Compensation Committee of the Board of Trustees or the Board of Trustees, as the
case may be, in their sole discretion.
9.10. Change of Control. The terms of any Award may provide in the
Share Option Agreement, Restricted Share Agreement, Purchase Loan or other
document evidencing the Award, that upon a "Change of Control" of the Company
(as that term may be defined therein), (i) Options (and share appreciation
rights) accelerate and become fully exercisable, (ii) restrictions on Restricted
Shares lapse and the shares become fully vested, (iii) Purchase Loans are
forgiven in whole or in part, and (iv) such other additional benefits as the
Committee deems appropriate shall apply.
-17-
<PAGE> 18
ARTICLE 10.
MISCELLANEOUS
10.1. Tax Withholding. The Company shall notify an Optionee or
Participant (or a Permitted Assignee thereof) of any income tax withholding
requirements arising as a result of the grant of any Award, exercise of an
Option or share appreciation rights or any other event occurring pursuant to
this Plan. The Company shall have the right to withhold from such Optionee or
Participant (or a Permitted Assignee thereof) such withholding taxes as may be
required by law, or to otherwise require the Optionee or Participant (or a
Permitted Assignee thereof) to pay such withholding taxes. If the Optionee or
Participant (or a Permitted Assignee thereof) shall fail to make such tax
payments as are required, the Company or its subsidiaries or affiliates shall,
to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Optionee or Participant or to take
such other action as may be necessary to satisfy such withholding obligations.
In satisfaction of the requirement to pay withholding taxes, the Optionee (or
Permitted Assignee) make a written election which may be accepted or rejected in
the discretion of the Committee, (i) to have withheld a portion of the Shares
then issuable to the Optionee (or Permitted Assignee) pursuant to the Option, or
(ii) to timely deliver other Shares to the Company, in either case having an
aggregate Fair Market Value equal to the withholding taxes.
10.2. Right of Discharge Reserved. Nothing in the Plan nor the grant of
an Award hereunder shall confer upon any employee, Trustee or other individual
the right to continue in the employment or service of the Company or any
subsidiary or affiliate of the Company or affect any right that the Company or
any subsidiary or affiliate of the Company may have to terminate the employment
or service of (or to demote or to exclude from future Options under the Plan)
any such employee, Trustee or other individual at any time for any reason.
Except as specifically provided by the Committee, the Company shall not be
liable for the loss of existing or potential profit from an Award granted in the
event of termination of an employment or other relationship even if the
termination is in violation of an obligation of the Company or any subsidiary or
affiliate of the Company to the employee or Trustee.
10.3. Nature of Payments. All Awards made pursuant to the Plan are in
consideration of services performed for the Company or any subsidiary or
affiliate of the Company. Any income or gain realized pursuant to Awards under
the Plan and any share appreciation rights constitutes a special incentive
payment to the Optionee, Participant or Holder and shall not be taken into
account, to the extent permissible under applicable law, as
-18-
<PAGE> 19
compensation for purposes of any of the employee benefit plans of the Company or
any subsidiary or affiliate of the Company except as may be determined by the
Committee or by the Trustees or trustees of the applicable subsidiary or
affiliate of the Company.
10.4. Severability. If any provision of the Plan shall be held unlawful
or otherwise invalid or unenforceable in whole or in part, such unlawfulness,
invalidity or unenforceability shall not affect any other provision of the Plan
or part thereof, each of which remain in full force and effect. If the making of
any payment or the provision of any other benefit required under the Plan shall
be held unlawful or otherwise invalid or unenforceable, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.
10.5. Gender and Number. In order to shorten and to improve the
understandability of the Plan document by eliminating the repeated usage of such
phrases as "his or her" and any masculine terminology herein shall also include
the feminine, and the definition of any term herein in the singular shall also
include the plural except when otherwise indicated by the context.
10.6. Governing Law. The Plan and all determinations made and actions
taken thereunder, to the extent not otherwise governed by the Code or the laws
of the United States, shall be governed by the laws of the State of New York and
construed accordingly.
10.7. Termination of Plan. The Plan shall be effective on the date of
the approval of the Plan by the Board of Trustees. No Option intended to qualify
as an incentive share option shall be granted hereunder until the Plan shall be
approved by the holders of a majority of the shares entitled to vote thereon,
provided such approval is obtained within 12 months after the date of adoption
of the Plan by the Board of Trustees. Awards may be granted under the Plan at
any time and from time to time on or prior to December 11, 2007, on which date
the Plan will expire except as to Awards and related share appreciation rights
then outstanding under the Plan. Such outstanding Awards and share appreciation
rights shall remain in effect until they have been exercised or terminated, or
have expired.
-19-
<PAGE> 20
10.8. Captions. The captions in this Plan are for convenience of
reference only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.
-20-
<PAGE> 1
Exhibit 10.62
EXHIBIT A
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
SCHEDULE OF OP UNIT HOLDERS AS OF JANUARY 9, 1998
<TABLE>
<CAPTION>
PERCENTAGE
PARTNERS OP UNITS INTEREST
-------- -------- --------
<S> <C> <C>
GENERAL PARTNER:
Glimcher Properties Corporation 209,186 0.7850%
LIMITED PARTNERS:
Glimcher Realty Trust 23,460,774 88.0403%
Herbert Glimcher 958,230 3.5959%
David J. Glimcher 599,582 2.2500%
Michael Glimcher 157,189 0.5899%
Ellen Glimcher 48,162 0.1807%
Robert Glimcher 261,305 0.9806%
Diane Glimcher 120,404 0.4518%
David J. Glimcher Company 3,582 0.0134%
Ellen Glimcher Trust 102,683 0.3853%
Michael Glimcher Trust 102,683 0.3853%
Fred Zantello 95,406 0.3580%
A. Kirk Hinman 7,134 0.0268%
William R. Husted 16,088 0.0604%
Douglas W. Campbell 7,988 0.0300%
John Hicks 5,565 0.0209%
Gary B. Gitlitz 2,954 0.0111%
Amy J. Michalkiewicz 935 0.0035%
Richard Smith 2,671 0.0100%
George Harmanis 460 0.0017%
Sally Dunker 153 0.0006%
Douglas Leeds 460 0.0017%
Gerald Swedlow 21,200 0.0796%
Scott Farrell 4,447 0.0167%
Walter Samuels 83,260 0.3124%
George Schmidt 1,000 0.0038%
William Cornely 300 0.0011%
Kathleen G. Benua * 32,135 0.1206%
Thomas L. Kaplin * 12,938 0.0486%
Shirley Voorhees * 8,034 0.0301%
Lee H. Hess * 5,759 0.0216%
Fairway Boulevard II, Limited * 70,674 0.2652%
Wango Limited * 35,349 0.1327%
WSS Limited Partnership * 17,617 0.0661%
Williams-Fair Investment Co. * 25,662 0.0963%
George W. and Linda R. Wallingford Company, Ltd. * 89,207 0.3348%
KEW Investment Company * 76,582 0.2874%
-----------------------------------------
Total Operating Partnership Units 26,647,758 100.0000%
=========================================
</TABLE>
* Received OP units for contribution of land on January 9,1998.
<PAGE> 1
Exhibit 21.1
LIST OF SUBSIDIARIES
GLIMCHER REALTY TRUST ("GRT") HAS THE FOLLOWING SUBSIDIARIES:
1. Glimcher Properties Corporation, a Delaware corporation (100% shareholder);
2. Glimcher Properties Limited Partnership, a Delaware limited partnership
(approximately 90% limited partnership interest);
3. Glimcher Johnson City, Inc., a Delaware corporation (100% shareholder);
4. Glimcher Dayton Mall, Inc. a Delaware corporation (100% shareholder);
5. Glimcher Colonial Trust, a Delaware business trust (100% shareholders);
6. Glimcher Colonial Park Mall, Inc., a Delaware corporation (100% shareholder);
and
7. Glimcher Tampa, Inc., a Delaware corporation (100% shareholder ).
GLIMCHER PROPERTIES CORPORATION HAS THE FOLLOWING SUBSIDIARIES:
1. Glimcher Holdings, Inc., a Delaware corporation (100% shareholder);
2. Glimcher Centers, Inc., a Delaware corporation (100% shareholder);
3. Glimcher Grand Central, Inc., a Delaware corporation (100% shareholder);
4. Glimcher York, Inc., a Delaware corporation (100% shareholder).
GLIMCHER PROPERTIES LIMITED PARTNERSHIP HAS THE FOLLOWING SUBSIDIARIES:
1. Glimcher Holdings Limited Partnership, a Delaware limited partnership (99%
limited partnership interest);
2. Glimcher Centers Limited Partnership, a Delaware limited partnership (99%
limited partnership interest);
3. Grand Central Limited Partnership, a Delaware limited partnership (99%
limited partnership interest);
4. Glimcher York Associates Limited Partnership, a Delaware limited partnership
(99% limited partnership interest);
5. Glimcher University Mall Limited Partnership, a Delaware limited partnership
(99% limited partnership interest);
6. Morgantown Mall Associates Limited Partnership, an Ohio Limited partnership
(99% limited partnership interest);
7. Olathe Mall LLC, a Colorado limited liability company (approximately 82%
member interest);
8. Johnson City Venture LLC, a Delaware limited liability company (approximately
32% member interest);
<PAGE> 2
9. Dayton Mall Venture LLC, a Delaware limited liability company (39% member
interest);
10. Colonial Park Mall Limited Partnership, a Delaware limited partnership (39%
limited partners);
11. Glimcher New Jersey Metro Mall LLC, a Delaware limited liability company
(50% member interest); and
12. Glimcher Development Corporation, a Delaware corporation (95% shareholder).
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Glimcher Realty Trust on Forms S-3 (File Nos. 33-90730, 33-91084, 333-43317 and
333-43319) and on Forms S-8 (File Nos. 33-94542 and 333-10221) of our report
dated February 20, 1998, on our audits of the consolidated financial statements
and financial statement schedule of Glimcher Realty Trust as of December 31,
1997 and 1996, and for the years ended December 31, 1997, 1996 and 1995, which
is included in this Annual Report on Form 10-K of Glimcher Realty Trust.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
March 20, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 7,434
<SECURITIES> 0
<RECEIVABLES> 23,938
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,091,422
<DEPRECIATION> 107,611
<TOTAL-ASSETS> 1,164,229
<CURRENT-LIABILITIES> 0
<BONDS> 591,688
90,000
127,950
<COMMON> 237
<OTHER-SE> 282,868
<TOTAL-LIABILITY-AND-EQUITY> 1,164,229
<SALES> 0
<TOTAL-REVENUES> 140,138
<CGS> 0
<TOTAL-COSTS> 29,548
<OTHER-EXPENSES> 33,913
<LOSS-PROVISION> 2,242
<INTEREST-EXPENSE> 42,146
<INCOME-PRETAX> 29,793
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,793
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.12
</TABLE>
