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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
BURNHAM PACIFIC PROPERTIES, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE 12232C108
- --------------------------------------------------------------------------------
(Title of class of securities) (CUSIP number)
JEFFREY J. WEINBERG, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
- --------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
MAY 27, 1999
- --------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 37 Pages)
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NY2:\526869\03\B@J903!.DOC\72825.0006
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------- ---------------------------------------- -------------------------------------------------
CUSIP No. 12232C108 13D Page 2 of 37
- ---------------------------- ---------------------------------------- -------------------------------------------------
- ------------------- ------------------------------------------------- --------------------------------------------------------------
<S> <C>
1 NAMES OF REPORTING PERSONS: JUBILEE LIMITED PARTNERSHIP
I.R.S. IDENTIFICATION NOS. 31-1382356
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: BK
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: OHIO
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 1,386,000
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 1,386,000
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 1,386,000
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 4.3%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: PN
- ------------------- ------------------------------------------------- --------------------------------------------------------------
<PAGE>
- ---------------------------- ---------------------------------------- -------------------------------------------------
CUSIP No. 12232C108 13D Page 3 of 37
- ---------------------------- ---------------------------------------- -------------------------------------------------
- ------------------- ------------------------------------------------- --------------------------------------------------------------
1 NAMES OF REPORTING PERSONS: JUBILEE LIMITED PARTNERSHIP III
I.R.S. IDENTIFICATION NOS. 31-1487226
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: BK
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: OHIO
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 1,219,800
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 1,219,800
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 1,219,800
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 3.8%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: PN
- ------------------- ------------------------------------------------- --------------------------------------------------------------
<PAGE>
- ---------------------------- ---------------------------------------- -------------------------------------------------
CUSIP No. 12232C108 13D Page 4 of 37
- ---------------------------- ---------------------------------------- -------------------------------------------------
- ------------------- ------------------------------------------------- --------------------------------------------------------------
1 NAMES OF REPORTING PERSONS: SCHOTTENSTEIN PROFESSIONAL ASSET MANAGEMENT CORP.
I.R.S. IDENTIFICATION NOS. 31-1289300
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: NOT APPLICABLE
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 2,605,800
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 2,605,800
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 2,605,800
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 8.2%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: CO
- ------------------- ------------------------------------------------- --------------------------------------------------------------
<PAGE>
- ---------------------------- ---------------------------------------- -------------------------------------------------
CUSIP No. 12232C108 13D Page 5 of 37
- ---------------------------- ---------------------------------------- -------------------------------------------------
- ------------------- ------------------------------------------------- --------------------------------------------------------------
1 NAMES OF REPORTING PERSONS: JAY L. SCHOTTENSTEIN
I.R.S. IDENTIFICATION NOS. ###-##-####
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: NOT APPLICABLE
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: USA
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 2,605,800
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 2,605,800
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 2,605,800
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 8.2%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: IN
- ------------------- ------------------------------------------------- --------------------------------------------------------------
<PAGE>
- ---------------------------- ---------------------------------------- -------------------------------------------------
CUSIP No. 12232C108 13D Page 6 of 37
- ---------------------------- ---------------------------------------- -------------------------------------------------
- ------------------- ------------------------------------------------- --------------------------------------------------------------
1 NAMES OF REPORTING PERSONS: SCHOTTENSTEIN STORES CORPORATION
I.R.S. IDENTIFICATION NOS. 31-0820773
OF ABOVE PERSONS:
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [X]
(B) [_]
- ------------------- ----------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------- ------------------------------ ---------------------------------------------------------------------------------
4 SOURCE OF FUNDS: NOT APPLICABLE
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
- ------------------- ------------------------------------------------- --------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
- ---------------------------- ------- --------------------------------------------- -------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
------- --------------------------------------------- -------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 0
OWNED BY
------- --------------------------------------------- -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
------- --------------------------------------------- -------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: 0
- ------------------- -------------------------------------------------------------- -------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 0
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
- ------------------- ----------------------------------------------------------------------------------------- ----------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0%
- ------------------- ------------------------------------------------- --------------------------------------------------------------
14 TYPE OF REPORTING PERSON: CO
- ------------------- ------------------------------------------------- --------------------------------------------------------------
</TABLE>
<PAGE>
This Statement is being filed by Jubilee Limited Partnership
("JLP"), Jubilee Limited Partnership III ("JLPIII"), Schottenstein Professional
Asset Management Corp. ("SPAMC"), Jay L. Schottenstein ("JS") and Schottenstein
Stores Corporation ("SSC"). JLP, JLPIII, SPAMC, JS and SSC (each a "Reporting
Person") constitute a "group" for purposes of Rule 13d-5 under the Securities
Exchange Act of 1934, as amended, with respect to their respective beneficial
ownership of the Shares and are collectively referred to as the "Reporting
Group." This Statement constitutes the original Report of the Reporting Group.
The summary description contained in this statement on
Schedule 13D (this "Statement") of certain documents are qualified in their
entirety by reference to the complete text of such agreements and documents
filed as exhibits hereto. Information contained herein with respect to each
Reporting Person is given solely by such Reporting Person, and no other
Reporting Person has responsibility for the accuracy or completeness of
information supplied by such other Reporting Person.
ITEM 1. SECURITY AND ISSUER.
This Statement relates to shares of common stock, $.01 par
value (the "Shares"), of Burnham Pacific Properties, Inc., a Maryland
corporation (the "Company"). The principal executive offices of the Company are
located at 610 West Ash Street, San Diego, CA 92101.
ITEM 2. IDENTITY AND BACKGROUND.
The following information relates to JLP:
(i) Name: Jubilee Limited Partnership
(ii) Place of Organization: Ohio
(iii) Principal Business: Investments in real estate;
JLP also is a general partner in Schottenstein
Bernstein Capital Group, a retail asset management
company
(iv) Principal Business Address: 1800 Moler Road,
Columbus, OH 43207
(7 of 37)
<PAGE>
(v) During the last five years, JLP has not been
convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors), nor
has it been a party to a civil proceeding of a
judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
The following information relates to JLPIII:
(i) Name: Jubilee Limited Partnership III
(ii) Place of Organization: Ohio
(iii) Principal Business: Investments in real estate
(iv) Principal Business Address: 1800 Moler Road,
Columbus, OH 43207
(v) During the last five years, JLPIII has not been
convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors), nor
has it been a party to a civil proceeding of a
judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
The sole general partner of each of JLP and JLPIII is
Schottenstein Professional Asset Management Corp. ("SPAMC").
The following information relates to SPAMC:
(i) Name: Schottenstein Professional Asset Management
Corp.
(8 of 37)
<PAGE>
(ii) Place of Organization: Delaware
(iii) Principal Business: Investments in real estate
(iv) Principal Business Address: 1800 Moler Road,
Columbus, OH 43207
(v) During the last five years, SPAMC has not been
convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors), nor
has it been a party to a civil proceeding of a
judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
Listed in Appendix A hereto are the names, business addresses
and principal occupations of the directors, executive officers and controlling
persons of SPAMC. Each of the persons listed on Appendix A is a citizen of the
United States. During the last five years, none of the persons listed on
Appendix A has been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors), nor has he been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
resulting in a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws. The outstanding common
stock of SPAMC is owned by ten trusts, each with its principal office at 1800
Moler Road, Columbus, OH 43207. JS serves as trustee for each trust.
The following information relates to SSC:
(i) Name: Schottenstein Stores Corporation
(ii) Place of Organization: Delaware
(9 of 37)
<PAGE>
(iii) Principal Business: Owner and operator of retail
operations and owner of real estate
(iv) Principal Business Address: 1800 Moler Road,
Columbus, OH 43207
(v) During the last five years, SSC has not been
convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors), nor
has it been a party to a civil proceeding of a
judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
Listed in Appendix B hereto are the names, business addresses
and principal occupations of the directors, executive officers and controlling
persons of SSC. Each of the persons listed on Appendix B is a citizen of the
United States. During the last five years, none of the persons listed on
Appendix B has been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors), nor has he/she been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
resulting in a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
The following information relates to JS:
(a) Name: Jay L. Schottenstein
(b) Business Address: 1800 Moler Road, Columbus, OH
43207
(c) Principal Occupation: Investor in real estate and
retail operations
(d)/(e) During the last five years, JS has not been
convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors), nor
(10 of 37)
<PAGE>
has it been a party to a civil proceeding of a
judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
(f) Citizenship: USA
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
JLP purchased an aggregate of 1,386,000 Shares for an
aggregate consideration (including brokerage commissions) of approximately
$14,196,630. JLP acquired such Shares by drawing from its existing line of
credit with National City Bank.
JLPIII purchased an aggregate of 1,219,800 Shares for an
aggregate consideration (including brokerage commissions) of approximately
$13,373,480. SSC acquired such Shares by drawing from JLP's line of credit with
National City Bank.
The aggregate purchase price for the acquisition of the
Company and Burnham Pacific Operating Partnership, L.P. ("OP") would be funded
with a combination of debt and equity financing. A newly organized company (the
"Acquisition Company" as described further below) will be capitalized with up to
$300 million of equity and debt financing comprised of the assumption of certain
indebtedness of the Company and up to $800 million of new senior debt currently
contemplated to be provided by an affiliate of Donaldson, Lufkin & Jenrette
Securities Corporation.
ITEM 4. PURPOSE OF TRANSACTION.
On June 7, 1999, SSC, on behalf of the Reporting Group,
transmitted a letter (the "Proposal Letter") to the Company proposing that the
Reporting Group, through the Acquisition Company, acquire by merger all of the
Shares of the Company not owned by the Reporting Group at a price per Share of
$13.00 in cash (the "Offer Price").
(11 of 37)
<PAGE>
The Reporting Group seeks to acquire control of the Company by
merger. The Reporting Group has made a proposal pursuant to which the Company
would merge with and into the Acquisition Company (the "Company Merger"), with
the Acquisition Company as the surviving corporation. Pursuant to the Company
Merger, holders of Shares would receive the Offer Price. In addition,
simultaneously with the Company Merger, a wholly owned subsidiary of the
Acquisition Company would merge (the "OP Merger") with and into OP, with OP as
the surviving entity in the merger. Pursuant to the OP Merger, holders of
limited partnership interests ("OP Units") in OP would be able to elect to
receive either (a) the Offer Price in cash, (b) common OP Units in the OP with a
per unit value equal to the Offer Price; or (c) preferred OP Units in the OP
with a liquidation preference per unit equal to the Offer Price.
The Reporting Group's proposal also contemplates that in
connection with the mergers, the preferred stock of the Company held by
Westbrook Partners, L.L.C. ("Westbrook") and the preferred operating units of OP
held by Blackacre Capital Group, L.P. ("Blackacre") would be acquired for cash.
The Reporting Group has initiated preliminary conversations with both Westbrook
and Blackacre to acquire their preferred stock and preferred OP Units.
The description of the Reporting Group's proposal is qualified
in its entirety by reference to the complete text of the Proposal Letter, a copy
of which is filed as an Exhibit hereto and incorporated by reference herein.
It should be noted that the possible activities of the
Reporting Group are subject to change at any time, and that the Reporting
Persons may purchase additional Shares of the Company from time to time in the
open market, in privately negotiated transactions with third parties or
otherwise or may sell Shares held by them in the open market, in privately
negotiated transactions or otherwise; however, there is no assurance that the
Reporting Persons will actually purchase any additional Shares or dispose of any
Shares.
The information set forth in Item 3 of this Statement is
hereby incorporated by reference.
Except as set forth above, as of the date of this Statement
none of the Reporting Persons has any plans or proposals which relate to or
would result in any of the actions set forth in parts (a) through (j) of Item 4.
(12 of 37)
<PAGE>
Such persons may at any time reconsider and change their plans or proposals
relating to the foregoing.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date of this Statement, the Reporting Persons
beneficially owned the number of Shares respectively set forth below. The
percentages set forth below represent the percentage of the outstanding Shares
(based on a total of 31,960,008 Shares outstanding as reported in the Company's
Quarterly Report on Form 10Q for the quarterly period ended March 31 1999)
represented by the Shares beneficially owned by the Reporting Persons.
Reporting Person Number of Shares Percent
- ---------------- ---------------- -------
JLP 1,386,000 4.3%
JLPIII 1,219,800 3.8%
SPAMC 2,605,800 8.2%
JS 2,605,800 8.2%
SSC 0 0%
As of the date of this Statement, the Reporting Persons
beneficially owned an aggregate of 2,605,800 Shares, or approximately 8.2% of
the Shares deemed outstanding.
Except as set forth in this Paragraph (a) of this Item 5, to
the best knowledge of the Reporting Persons, none of the other persons
identified pursuant to Item 2 above beneficially owns any Shares.
By virtue of their status as a "group" for purposes of Rule
13d-5, each of the members of the Reporting Group may be deemed to have shared
voting and dispositive power over the Shares owned by the other members.
However, the filing of this Statement shall not be construed as an admission
that any of the Reporting Persons is, for the purposes of Section 13(d) or 13(g)
of the Exchange Act, the beneficial owner of any securities held by any other
member of the Reporting Group.
(13 of 37)
<PAGE>
(b) JLP has sole voting power and sole investment power with
respect to all of the 1,386,000 Shares it beneficially owns.
JLPIII has sole voting power and sole investment power with
respect to all of the 1,219,800 Shares it beneficially owns.
By virtue of being the sole general partner of each of JLP and
JLPIII, SPAMC is for purposes of this Statement, a beneficial owner of all the
Shares of which each of JLP and JLPIII is a beneficial owner.
By virtue of being the trustee of each of the trusts which
constitute all of the shareholders of SPAMC, JS may be for purposes of this
Statement, a beneficial owner of all the Shares of which SPAMC is a beneficial
owner.
SPAMC disclaims beneficial ownership of the aggregate
2,605,800 Shares, referred to above, as to which it may be deemed to have shared
voting and dispositive power. JS disclaims beneficial ownership of the aggregate
2,605,800 Shares, referred to above, as to which he may be deemed to have shared
voting and dispositive power.
(c) The information concerning transactions in the Shares
effected by the Reporting Persons during the past 60 days is set forth in
Appendix C hereto and incorporated herein by reference. All such transactions
were effected through the open market.
(d) Except as set forth above in this Item 5, no other person
is known to have the right to receive or the power to direct the receipt of
dividends from or the proceeds from the sale of the securities.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
JLP has entered into a letter agreement, dated May 13, 1999
(the "Engagement Letter"), with Donaldson, Lufkin & Jenrette ("DLJ") pursuant to
which DLJ was retained as JLP's exclusive financial advisor in connection with
any Transaction (as defined in the Engagement Letter) involving the Company. In
(14 of 37)
<PAGE>
consideration of the services to be performed by DLJ pursuant to the Engagement
Letter, JLP agrees (i) to pay DLJ a fee equal to 0.55% of the aggregate value of
outstanding Shares of the Company (treating any Shares issuable upon exercise of
options, warrants or other rights of conversion as outstanding) plus the amount
of any debt assumed, acquired, remaining outstanding, retired or defeased or
preferred stock redeemed or remaining outstanding in connection with the
Transaction, payable at the consummation of a Transaction, and (ii) upon request
by DLJ, to reimburse DLJ for all reasonable and necessary out-of-pocket
expenses, whether or not a Transaction is consummated.
In the event a Transaction is not consummated and JLP is
entitled to receive a "termination fee", "break-up fee", "topping fee" or other
form of compensation (the "Break-up Fee"), then JLP agrees to pay to DLJ in
cash, promptly upon JLP's receipt of such Break-up Fee, an amount equal to
one-third (33.3%) of such Break-up Fee received, less any amounts previously
paid pursuant to clause (ii) above. In the event the Break-up Fee is paid to JLP
in whole or part in securities, the value of such securities shall be calculated
in accordance with the terms of the Engagement Letter.
If within twelve months after the date of the Engagement
Letter, JLP shall (i) sell, dispose of or otherwise transfer any rights to (or
take any action which would result in any such sale, disposition or transfer at
some later date) any securities of the Company which it owned at the date of the
Engagement Letter or which it acquires within twelve months of such date to any
person, or (ii) terminate its effort to effect the Transaction, in addition to
the fees referred to above, JLP agrees to pay DLJ a fee equal to twenty-two and
one-half percent (22.5%) of the profit (as calculated in accordance with the
terms of the Engagement Letter), before taxes, earned by JLP as a result of any
such sale, disposition, transfer or termination, subject to a maximum of $1.0
million. If any such securities of the Company have not been sold, disposed of
or otherwise transferred within eighteen months after the date of the Engagement
Letter, such securities shall be deemed to have been sold at the last sale price
therefor on the preceding trading day.
JLP has also agreed to indemnify DLJ against certain
liabilities and expenses in connection with the performance of its services as
(15 of 37)
<PAGE>
financial advisor under the Engagement Letter. In addition, SSC has also agreed
to unconditionally guarantee to DLJ (i) the discharge by JLP of all of JLP's
obligations under the Engagement Letter and (ii) JLP's obligations to indemnify
DLJ against certain liabilities and expenses. The foregoing description of the
terms of DLJ' retention is qualified in its entirety by reference to the
Engagement Letter, a copy of which is attached as Exhibit 2 hereto and
incorporated by reference herein.
Except as disclosed in this Statement, there are no contracts,
arrangements, understandings or relationships with respect to any securities of
the Company (i) among the Reporting Persons and, to the best of their knowledge,
any of the other persons identified pursuant to Item 2 above and (ii) between
(a) the Reporting Persons and, to the best of their knowledge, any of the other
persons identified pursuant to Item 2 above and (b) any other person, other than
the Proposal Letter and the Engagement Letter filed herewith as Exhibit 1 and
Exhibit 2, respectively.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following are filed herewith as exhibits to this
Statement.
Exhibit 1. Proposal Letter, dated June 7, 1999
Exhibit 2. Engagement Letter, dated May 13, 1999, between JLP and DLJ
(16 of 37)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: June 7, 1999
JUBILEE LIMITED PARTNERSHIP
By: SCHOTTENSTEIN PROFESSIONAL ASSET
MANAGEMENT CORP., as sole general
partner
By: /s/ Jay L. Schottenstein
--------------------------------------
Name: Jay L. Schottenstein
Title: President & Chairman
JUBILEE LIMITED PARTNERSHIP III
By: SCHOTTENSTEIN PROFESSIONAL ASSET
MANAGEMENT CORP., as sole general
partner
By: /s/ Jay L. Schottenstein
--------------------------------------
Name: Jay L. Schottenstein
Title: President & Chairman
SCHOTTENSTEIN STORES CORPORATION
By: /s/ Jay L. Schottenstein
------------------------------------------
Name: Jay L. Schottenstein
Title: Chairman & Chief Executive Officer
/s/ Jay L. Schottenstein
-----------------------------------------------
JAY L. SCHOTTENSTEIN
(17 of 37)
<PAGE>
APPENDIX A
NAMES, BUSINESS ADDRESSES AND PRINCIPAL
OCCUPATIONS OF THE DIRECTORS, EXECUTIVE OFFICERS
AND CONTROLLING PERSONS OF
SCHOTTENSTEIN PROFESSIONAL ASSET MANAGEMENT CORP.
<TABLE>
<CAPTION>
Residence or
Business Present Principal
Name Address Directorships Offices Occupation
- ---- ------- ------------- ------- ----------
<S> <C> <C> <C> <C>
Jay L. Schottenstein * Director President and Chairman of Board and
Chairman CEO of SSC(1)
Saul Schottenstein * Director ____ Vice Chairman of VCDS(2)
Thomas R. Ketteler * Director Vice President COO and Executive Vice
Finance and President - Finance
Treasurer and Treasurer of SSC
James Schaye, Jr. * ____ Vice President Same
Benton E. Kraner * ____ Vice President Partner - Swanson,
Kraner & Gesler
1800 Moler Road,
Columbus, OH 43207
Jeffrey D. Swanson * ____ Vice President Partner - Swason,
Kraner and Gesler
1800 Moler Road
Columbus, OH 43207
Dathard V. Steele * ____ Vice President and Same
Assistant Secretary
Irwin A. Bain * ____ Vice President, Vice President,
Secretary and Secretary and General
General Counsel Counsel of SSC
Gerald Greenfield * ____ Vice President, Vice President,
Assistant Assistant Secretary
Secretary and and Assistant General
Assistant General Counsel of SSC
Counsel
Shawn E. Smith * ____ Vice President, Vice President,
Assistant Assistant Secretary
Secretary and and Assistant General
Assistant General Counsel of SSC
Counsel
Tod H. Friedman * ____ Assistant Assistant Secretary
Secretary and and Assistant General
Assistant General Counsel of SSC
Counsel
</TABLE>
(18 of 37)
<PAGE>
* 1800 Moler Road, Columbus, OH 43207
(1) Schottenstein Stores Corporation, 1800 Moler Road, Columbus, OH 43207
(2) Value City Department Stores, Inc., 3241 Westerville Road, Columbus, OH
43224
(19 of 37)
<PAGE>
APPENDIX B
NAMES, BUSINESS ADDRESSES AND PRINCIPAL
OCCUPATIONS OF THE DIRECTORS, EXECUTIVE OFFICERS
AND CONTROLLING PERSONS OF
SCHOTTENSTEIN STORES CORPORATION
<TABLE>
<CAPTION>
Residence or
Business Present Principal
Name Address Directorships Offices Occupation
- ---- ------- ------------- ------- ----------
<S> <C> <C> <C> <C>
Jay L. Schottenstein * Director Chairman of Board Same
& Chief Executive
Officer
Saul Schottenstein * Director President Vice Chairman of Value
City Department
Stores, Inc., 3241
Westerville Road,
Columbus, OH 43224
Geraldine Schottenstein * Director _____ N/A
Susan Diamond * Director _____ N/A
Ari Deshe * Director _____ Chairman & CEO of Safe
Auto Insurance
company, 3883 E. Broad
Street, Columbus, OH
43213
Thomas R. Ketteler * Director C.O.O. & E.V.P. - Same
Finance and
Treasurer
David Thompson * ____ E.V.P. President-Value City
Furniture, 1800 Moler
Road, Columbus, OH
43207
Edward K. Arndt * ____ V.P., Real Estate Same
Irwin A. Bain * ____ V.P., Secretary & Same
General Counsel
Michael Broidy * _____ V.P., Corporate Same
Affairs
Jeff Gould * _____ V.P., Acquisitions Same
(20 of 37)
<PAGE>
Gerald Greenfield * _____ V.P., Assistant Same
Secretary and
Assistant General
Counsel
Benton E. Kraner * _____ Vice President Partners - Swanson,
Kramer & Gesler, 1800
Moler Road, Columbus,
OH 43207
Jeffrey D. Swanson * _____ Vice President Partners - Swanson,
Kramer & Gesler, 1800
Moler Road, Columbus,
OH 43207
Shawn E. Smith * _____ Vice President, Same
Assistant
secretary &
Assistant General
Counsel
Tod H. Friedman * _____ Assistant Same
Secretary &
Assistant General
Counsel
</TABLE>
* 1800 Moler Road, Columbus, OH 43207
(21 of 37)
<PAGE>
APPENDIX C
TRANSACTIONS BY THE REPORTING PERSONS IN
BURNHAM PACIFIC PROPERTIES, INC. SHARES
DURING THE PAST 60 DAYS
Jubilee Limited Partnership
<TABLE>
<CAPTION>
Date Number of Shares Price Per Share ($) Commission ($) Total Cost ($)
- ---- ----------------- ------------------- -------------- --------------
Bought
------
<S> <C> <C> <C> <C>
13-Apr-99 21,200 10.050 1,060.00 213,060.00
14-Apr-99 26,800 10.050 1,340.00 269,340.00
16-Apr-99 1,063,000 10.053 53,150.00 10,686,232.70
21-May-99 275,000 11.011 13,750.00 3,027,997.50
</TABLE>
Jubilee Limited Partnership III
<TABLE>
<CAPTION>
Date Number of Shares Price Per Share ($) Commission ($) Total Cost ($)
- ---- ----------------- ------------------- -------------- --------------
Bought
------
<S> <C> <C> <C> <C>
21-May-99 125,000 11.011 6,250.00 1,376,362.50
26-May-99 19,300 10.846 965.00 209,333.59
27-May-99 821,900 10.933 41,095.00 8,985,503.94
01-Jun-99 250,000 11.050 12,500.00 2,762,500.00
04-Jun-99 3,600.00 11.050 180.00 39,780.00
</TABLE>
(22 of 37)
<PAGE>
Exhibit Index
Exhibit Page
- ------- ----
1. Proposal Letter, dated June 7, 1999 24
2. Engagement letter, dated May 13, 1999, between Jubilee Limited
Partnership and Donaldson, Lufkin & Jenrette 27
(23 of 37)
EXHIBIT 1
June 7, 1999
Board of Directors
Burnham Pacific Properties, Inc.
610 West Ash Street, Suite 1600
San Diego, CA 92101
Attention: Chairman of the Board
Gentlemen:
Schottenstein Stores Corporation and certain of its affiliates
("Schottenstein"), through a newly organized company (the "Acquisition
Company"), hereby propose to acquire all of the outstanding capital stock of
Burnham Pacific Properties, Inc. (the "Company") in a transaction pursuant to
which holders of common stock of the Company would receive $13.00 per share in
cash (the "Offer Price").
You should be aware that we have acquired approximately
2,605,800 shares of the Company's common stock, representing approximately
8.155% of the common stock outstanding, in the open market and will shortly be
filing a Schedule 13D reflecting such ownership. We believe our ownership of the
common stock underscores our commitment to this transaction.
Our proposal contemplates that the Company would merge with
and into the Acquisition Company (the "Company Merger"), with the Acquisition
Company as the surviving corporation. Pursuant to the merger, holders of Company
common stock would receive the cash Offer Price. In addition, simultaneously
with the Company merger, a wholly owned subsidiary of the Acquisition Company
would merge (the "OP Merger") with and into Burnham Pacific Operating
Partnership, L.P. ("OP"), with OP as the surviving entity in the merger.
Pursuant to the OP Merger, holders of limited partnership interests ("OP Units")
in OP would be able to elect to receive either (a) the Offer Price in cash, (b)
common OP Units in the OP with a per unit value equal to the Offer Price; or (c)
preferred OP Units in the OP with a liquidation preference per unit equal to the
Offer Price.
Our proposal also contemplates that in connection with the
mergers, the preferred stock of the Company held by Westbrook Partners, L.L.C.
("Westbrook") and the preferred operating units of the OP held by Blackacre
(24 of 37)
<PAGE>
Capital Group, L.P. ("Blackacre") would be acquired for cash. We have initiated
preliminary conversations with both Westbrook and Blackacre to acquire their
preferred stock and preferred OP units.
The aggregate purchase price for the acquisition of the
Company and OP would be funded with a combination of debt and equity financing.
The Acquisition Company will be capitalized with up to $300 million of equity
and debt financing comprised of the assumption of certain indebtedness of the
Company and up to $800 million of new senior debt currently contemplated to be
provided by an affiliate of Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ").
If you are prepared to accept the proposal set forth in our
letter, we would commence due diligence on the Company and OP immediately and
begin to negotiate definitive acquisition agreements with the Company and OP.
Such agreements would contain customary representations, warranties, covenants
and conditions and satisfactory "no-shop" and break-up fee provisions customary
for public merger transactions. In addition, consummation of the proposed
transactions would be conditioned upon the following:
1. approval of the Company Merger by the requisite vote of the
stockholders of the Company and of the OP Merger by the requisite vote of the
holders of OP Units;
2. termination of requisite waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
3. there being no injunction, order, law or regulation
prohibiting or restricting the consummation of the transactions described
herein, no litigation or proceeding threatened or commenced by any governmental
authority seeking nor any litigation threatened or commenced that could have a
material adverse effect with respect to the Company or OP or that could
significantly delay consummation of the Company Merger or OP Merger;
4. there being no material adverse effect on the business,
properties, assets, prospects, results of operations or condition (financial or
otherwise) of the Company or OP;
(25 of 37)
<PAGE>
5. our being satisfied that the Company qualifies and has
qualified since its inception as a REIT for federal income tax purposes and that
the OP qualifies as a partnership that is not a "public traded partnership" for
federal income tax purposes;
6. satisfactory results upon completion of our due diligence,
including determining to our satisfaction that financial information in our
possession is accurate;
7. satisfactory results upon completion of DLJ's due diligence
in connection with the senior debt financing; and
8. other customary conditions to closing.
We believe that we have proposed a transaction in the best
interest of the Company and its stockholders and that we are well positioned to
complete the transaction on a timely basis. Toward that end, the Acquisition
Company, together with its financial advisors and legal counsel, are prepared to
move expeditiously to commence due diligence and negotiations regarding our
proposal. However, until definitive agreements are fully executed, none of the
parties would be bound to complete the proposed transactions.
We hope you will take this opportunity to work with us on the
proposed transaction. Please contact Michael Dana of DLJ, our financial advisor,
at 212-892-3000 or J. Philip Rosen of Weil, Gotshal & Manges, LLP, our legal
advisor, at 212-310-8000 at your earliest convenience to discuss our proposal.
Very truly yours,
SCHOTTENSTEIN STORES CORPORATION
By /s/ Jay L. Schottenstein
----------------------------------
(26 of 37)
EXHIBIT 2
[DLJ LETTERHEAD]
MAY 13, 1999
PRIVATE AND CONFIDENTIAL
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
1800 MOLER ROAD
COLUMBUS, OH 43207
ATTENTION: JAY SCHOTTENSTEIN, CHAIRMAN
GENTLEMEN:
This letter agreement (the "Agreement") confirms our
understanding that Jubilee Limited Partnership (the "Company") has engaged
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") to act as its
exclusive financial advisor for a period of nine months commencing upon your
acceptance of this Agreement, with respect to the possible acquisition (and any
related financing) of Burnham Pacific Properties, Inc. ("Target"), in one or a
series of transactions, by purchase, merger, consolidation or any other business
combination, involving all or a substantial amount of the business, securities
or assets of the Target, or otherwise (each, a "Transaction").
As discussed, we propose to undertake certain services on your
behalf, to the extent requested by you, which shall consist of the following:
(i) assisting you in evaluating the Target, its operations, its historical
performance and its future prospects; (ii) advising on a proposed purchase price
and form of consideration; (iii) assisting you in structuring the Transaction;
and, (iv) negotiating the financial aspects of any Transaction under your
guidance. In addition, we will act as exclusive dealer/manager for the Company
in any tender or exchange offer relating to a Transaction. The specific terms
and conditions, including the dealer/manager fees, of such engagement will be
further delineated in a separate agreement, which agreement shall contain normal
and customary provisions for such agreements entered into by DLJ and other
investment banks of international standing.
As compensation for the services to be provided by DLJ
hereunder, the Company agrees (i) to pay to DLJ a fee equal to 0.55% of the
aggregate value of outstanding common stock of the Target (treating any shares
(27 of 37)
<PAGE>
MR. JAY SCHOTTENSTEIN
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
issuable upon exercise of options, warrants or other rights of conversion as
outstanding) plus the amount of any debt assumed, acquired, remaining
outstanding, retired or defeased or preferred stock redeemed or remaining
outstanding in connection with the Transaction, payable consummation of a
Transaction, and (ii) upon request by DLJ from time to time, to reimburse DLJ
promptly for all reasonable and necessary out-of-pocket expenses (including the
reasonable fees and expenses of counsel) incurred by DLJ in connection with its
engagement hereunder, whether or not a Transaction is consummated. As DLJ will
be acting on your behalf, the Company agrees to the indemnification and other
obligations set forth in Schedule I attached hereto, which Schedule is an
integral part hereof.
For purposes of this Agreement, a Transaction shall be deemed
to have been consummated upon the earliest of any of the following events to
occur: (a) the acquisition by the Company or any of its affiliates of a majority
of the outstanding voting equity securities of the Target calculated on a
fully-diluted basis; (b) a merger or consolidation of the Target with the
Company or an affiliate of the Company; or (c) in the case of any other
Transaction, the consummation thereof.
In the event a Transaction is not consummated and the Company
is entitled to receive a "termination fee", "break-up fee", "topping fee" or
other form of compensation payable in cash or other assets, including, but not
limited to, an option to purchase securities from the Target (such cash,
securities, including, in the case of options, the right to exercise such
options or other assets hereinafter referred to as the "Break-up Fee"), then the
Company shall pay to DLJ in cash, promptly upon the Company's receipt of such
Break-up Fee, an amount equal to one-third (33.3%) of such Break-up Fee
received, less any amounts previously paid pursuant to clause (ii) above.
In the event that the Break-up Fee is paid to the Company in
whole or in part in the form of securities or other assets, the value of such
securities or other assets, for purposes of calculating our fee, shall be the
fair market value thereof, as the parties hereto shall mutually agree, on the
day such Break-up Fee is paid to the Company; provided that, if such Break-up
(28 of 37)
<PAGE>
MR. JAY SCHOTTENSTEIN
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
Fee includes securities with an existing public trading market, the value
thereof shall be determined by the last sales price for such securities on the
last trading day thereof prior to such payment.
If within twelve months after the date hereof the Company
shall (i) sell, dispose of or otherwise transfer any rights to (or take any
action which would result in any such sale, disposition or transfer at some
later date) any securities of the Target which it presently owns or which it
acquires within twelve months of the date hereof to any person, or (ii)
terminate its effort to effect the Transaction, in addition to the fees referred
to above, the Company shall promptly pay to DLJ a fee equal to twenty-two and
one-half percent (22.5%) of the Profit (as hereinafter defined), before taxes,
earned by the Company as a result of any such sale, disposition, transfer or
termination, subject to a maximum of $1.0 million. The term "Profit" shall mean
the difference between the consideration (including any payment which the
Company receives as a result of terminating the Company's effort to effect the
Transaction) received by the Company (which in the case of non-cash
consideration shall be valued at its fair market value as mutually agreed to by
DLJ and the Company) and the Company's actual cost in acquiring such securities
(including as expenses for this purpose customary brokerage commissions and the
reasonable out-of-pocket expenses of the Company in connection with the
Transaction, and any amounts previously paid pursuant to clause (ii) in the
third paragraph) and interest expenses incurred net of dividends paid or payable
to the Company. If any such securities of the Target have not been sold,
disposed of or otherwise transferred within eighteen months after the date
hereof, such securities shall be deemed to have been sold at the last sale price
therefor on the preceding trading day.
The Company shall make available to DLJ all financial and
other information concerning its business and operations that DLJ reasonably
requests as well as any other information relating to a Transaction prepared by
the Company or any of its other advisors. In performing its services hereunder,
DLJ shall be entitled to rely without investigation upon all information that is
available from public sources as well as all other information supplied to it by
or on behalf of the Company or its advisors or the Target or its advisors and
(29 of 37)
<PAGE>
MR. JAY SCHOTTENSTEIN
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
shall not in any respect be responsible for the accuracy or completeness of, or
have any obligation to verify, the same or to conduct any appraisal of any
assets or liabilities. To the extent consistent with legal requirements, all
information given to DLJ by the Company, unless publicly available or otherwise
available to DLJ without restriction or breach of any confidentiality agreement,
will be held by DLJ in confidence and will not be disclosed to anyone other than
DLJ `s agents and advisors without the Company's prior approval or used for any
purpose other than those referred to in this Agreement.
Any advice, written or oral, provided by DLJ pursuant to this
Agreement will be treated by the Company and its advisors as confidential, will
be solely for the information and assistance of the Company and its advisors in
connection with its consideration of the Transaction and will not be reproduced,
summarized, described or referred to, or furnished to any other party or used
for any other purpose, except in each case with our prior written consent, which
consent shall not be unreasonably withheld.
Please note that DLJ is a full service securities firm engaged
in securities trading and brokerage activities, as well as providing investment
banking and financial advisory services. In the ordinary course of our trading
and brokerage activities, DLJ or its affiliates may at any time hold long or
short positions, and may trade or otherwise effect transactions, for our own
account or on the accounts of customers, in debt or equity securities or bank or
other senior debt of the Company or other entities that may be involved in the
Transaction. We recognize our responsibility for compliance with Federal laws in
connection with any such activities.
The Company acknowledges and agrees that DLJ has been retained
solely to provide the advice or services set forth in this Agreement. DLJ shall
act as an independent contractor, and any duties of DLJ arising out of its
engagement hereunder shall be owed solely to the Company.
This Agreement may be terminated by either the Company or DLJ
upon receipt of written notice to that effect by the other party. Upon any
termination or expiration of this Agreement, DLJ will be entitled to prompt
(30 of 37)
<PAGE>
MR. JAY SCHOTTENSTEIN
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
payment of all fees accrued prior to such termination or expiration and
reimbursement of all out-of-pocket expenses as described above. The indemnity
and other provisions contained in Schedule I, and the seventh paragraph of this
Agreement, will also remain operative and in full force and effect regardless of
any termination or expiration of this Agreement.
In addition, if at any time prior to twelve months after
termination by the Company or expiration of this Agreement a Transaction is
consummated or the Company is entitled to receive a Break-up Fee, DLJ will be
entitled to payment in full of the compensation described in the third or fifth
paragraph of this Agreement, as the case may be.
It is understood that if the Company completes an acquisition
transaction involving the Target in lieu of any Transaction, or the Company
completes any financing related to a Transaction, either during the term of this
Agreement or at any time prior to twelve months after termination by the Company
or expiration of this Agreement, for which DLJ is entitled to compensation
pursuant to this Agreement, DLJ and the Company will in good faith mutually
agree upon acceptable compensation for DLJ taking into account, among other
things, the results obtained and the custom and practice among investment
bankers of international standing acting in similar transactions.
This Agreement shall be binding upon and inure to the benefit
of the Company, DLJ, each Indemnified Person (as defined in Schedule I) and
their respective successors and assigns.
This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
The Company irrevocably and unconditionally submits to the
exclusive jurisdiction of any State or Federal court sitting in New York City
over any suit, action or proceeding arising out of or relating to this Agreement
(including Schedule I). The Company hereby agrees that service of any process,
summons, notice or document by U.S registered mail addressed to the Company
shall be effective service of process for any action, suit or proceeding brought
(31 of 37)
<PAGE>
MR. JAY SCHOTTENSTEIN
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
in any such court. The Company irrevocably and unconditionally waives any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in such a court has been brought in an inconvenient forum. The Company agrees
that a final judgment in any such suit, action or proceeding brought in any such
court shall be conclusive and binding upon the Company and may be enforced in
any other courts to whose jurisdiction the Company is or may be subject, by suit
upon such judgment. The prevailing party in any suit, action or proceeding
arising out of or relating to this Agreement shall be entitled to recover from
the non-prevailing party all of the attorney fees and other expenses the
prevailing party may incur in such suit, action or proceeding and in any
subsequent suit to enforce a judgment.
If any term, provision, covenant or restriction contained in
this Agreement, including Schedule I, is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
(32 of 37)
<PAGE>
MR. JAY SCHOTTENSTEIN
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
After reviewing this Agreement, please confirm that the
foregoing is in accordance with your understanding by signing and returning to
me the duplicate of this Agreement attached hereto, whereupon it shall be our
binding Agreement.
VERY TRULY YOURS,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BY: /S/ MICHAEL S. DANA
----------------------------------
MICHAEL S. DANA
MANAGING DIRECTOR
ACCEPTED AND AGREED
THIS 19TH DAY OF MAY, 1999
JUBILEE LIMITED PARTNERSHIP
BY: /S/ JAY SCHOTTENSTEIN
-------------------------------------
JAY SCHOTTENSTEIN
CHAIRMAN
Schottenstein Stores Corporation (the "Guarantor") hereby
unconditionally guarantees to (i) DLJ the prompt and full discharge by the
Company of all of the Company's obligations under this Agreement in accordance
with the terms hereof and (ii) DLJ and the other Indemnified Persons referred to
in Schedule I the prompt and full discharge of all of the Company's obligations
under such Schedule I in accordance with the terms thereof.
The Guarantor hereby agrees that, if the Company fails to
perform and discharge promptly all such obligations and liabilities in
accordance with such terms, the Guarantor will forthwith, upon demand, perform
and discharge the same. The unconditional obligation of the Guarantor hereunder
will not be affected, impaired or released by any termination or expiration
hereof or by any extension, waiver, amendment or other circumstance whatsoever
(33 of 37)
<PAGE>
MR. JAY SCHOTTENSTEIN
JUBILEE LIMITED PARTNERSHIP
C/O SCHOTTENSTEIN STORES CORPORATION
which would release a guarantor (other than performance). This guarantee will be
governed by and construed in accordance with New York law.
SCHOTTENSTEIN STORES CORPORATION
BY: /S/ JAY SCHOTTENSTEIN
----------------------------------------
JAY SCHOTTENSTEIN
CHAIRMAN
(34 of 37)
<PAGE>
SCHEDULE I
This Schedule I is a part of and is incorporated into that
certain letter agreement (together, the "Agreement") dated May 13, 1999 by and
between Jubilee Limited Partnership (the "Company") and Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ").
The Company will indemnify and hold harmless DLJ and its
affiliates, and the respective directors, officers, agents and employees of DLJ
and its affiliates (DLJ and each such entity or person, an "Indemnified Person")
from and against any losses, claims, damages, judgments, assessments, costs and
other liabilities (collectively, "Liabilities"), and will reimburse each
Indemnified Person for all fees and expenses (including the reasonable fees and
expenses of counsel) (collectively, "Expenses") as they are incurred in
investigating, preparing, pursuing or defending any claim, action, proceeding or
investigation, whether or not in connection with pending or threatened
litigation or arbitration and whether or not any Indemnified Person is a party
(collectively, "Actions"), arising out of or in connection with advice or
services rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated hereby or any Indemnified Person's
actions or inactions in connection with any such advice, services or
transactions; provided that the Company will not be responsible for any
Liabilities or Expenses of any Indemnified Person that are determined by a
judgment of a court of competent jurisdiction which is no longer subject to
appeal or further review to have resulted solely from such Indemnified Person's
negligence or willful misconduct in connection with any of the advice, actions,
inactions or services referred to above. The Company also agrees to reimburse
each Indemnified Person for all Expenses as they are incurred in connection with
enforcing such Indemnified Person's rights under this Agreement (including,
without limitation, its rights under this Schedule I).
Upon receipt by an Indemnified Person of actual notice of an
Action against such Indemnified Person with respect to which indemnity may be
sought under this Agreement, such Indemnified Person shall promptly notify the
Company in writing; provided that failure so to notify the Company shall not
relieve the Company from any liability which the Company may have on account of
(35 of 37)
<PAGE>
this indemnity or otherwise, except to the extent the Company shall have been
materially prejudiced by such failure The Company shall, if requested by DLJ,
assume the defense of any such Action including the employment of counsel
reasonably satisfactory to DLJ. Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless: (i) the Company has failed promptly to assume
the defense and employ counsel or (ii) the named parties to any such Action
(including any impleaded parties) include such Indemnified Person and the
Company, and such Indemnified Person shall have been advised by counsel that
there may be one or more legal defenses available to it which are different from
or in addition to those available to the Company; provided that the Company
shall not in such event be responsible hereunder for the fees and expenses of
more than one firm of separate counsel in connection with any Action in the same
jurisdiction, in addition to any local counsel. The Company shall not be liable
for any settlement of any Action effected without its written consent. In
addition, the Company will not, without prior written consent of DLJ, settle,
compromise or consent to the entry of any judgment in or otherwise seek to
terminate any pending or threatened Action in respect of which indemnification
or contribution may be sought hereunder (whether or not any Indemnified Person
is a party thereto) unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Person from all
Liabilities arising out of such Action.
In the event the foregoing indemnity is unavailable to an
Indemnified Person other than in accordance with this Agreement, the Company
shall contribute to the Liabilities and Expenses paid or payable by such
Indemnified Person in such proportion as is appropriate to reflect (i) the
relative benefits to the Company and its shareholders, on the one hand, and to
DLJ, on the other hand, of the matters contemplated by this Agreement or (ii) if
the allocation provided by the immediately preceding clause is not permitted by
the applicable law, not only such relative benefits but also the relative fault
of the Company, on the one hand, and DLJ, on the other hand, in connection with
the matters as to which such Liabilities or Expenses relate, as well as any
(36 of 37)
<PAGE>
other relevant equitable considerations; provided that in no event shall the
Company contribute less than the amount necessary to ensure that all Indemnified
Persons, in the aggregate, are not liable for any Liabilities and Expenses in
excess of the amount of fees actually received by DLJ pursuant to this
Agreement. For purposes of this paragraph, the relative benefits to the Company
and its shareholders, on the one hand, and to DLJ, on the other hand, of the
matters contemplated by this Agreement shall be deemed to be in the same
proportion as (a) the total value paid or contemplated to be paid or received or
contemplated to be received by the Company or the Company's shareholders, as the
case may be, in the transaction or transactions that are within the scope of
this Agreement, whether or not any such transaction is consummated, bears to (b)
the fees paid or contemplated to be paid to DLJ under this Agreement.
The Company also agrees that no Indemnified Person shall have
any liability (whether direct or indirect, in contract or tort or otherwise) to
the Company for or in connection with advice or services rendered or to be
rendered by any Indemnified Person pursuant to this Agreement, the transactions
contemplated hereby or any Indemnified Person's actions or inactions in
connection with any such advice, services or transactions except for Liabilities
(and related Expenses) of the Company that are determined by a judgment of a
court of competent jurisdiction which is no longer subject to appeal or further
review to have resulted solely from such Indemnified Person's negligence or
willful misconduct in connection with any such advice, actions, inactions or
services.
The reimbursement, indemnity and contribution obligations of
the Company set forth herein shall apply to any modification of this Agreement
and shall remain in full force and effect regardless of any termination of, or
the completion of any Indemnified Person's services under or in connection with,
this Agreement.
(37 of 37)
