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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT No. 4)
Alexander Haagen Properties, Inc.
(Name of Company)
COMMON STOCK, Par Value $.01 Per Share
(Title of Class of Securities)
40443E100
(CUSIP Number)
Lorenzo Lorenzotti, Esq.
Prometheus Western Retail, LLC
LF Strategic Realty Investors L.P.
30 Rockefeller Plaza, 63rd Floor
New York, NY 10020
(212) 632-6000
with a copy to:
Kevin Grehan, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
(212) 474-1490
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 25, 1997
(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(b)(3) or (4), check the
following box [ ].
Note: six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
Page 1 of 6
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SCHEDULE 13D
CUSIP No. 40443E100 Page 2 of 6 Pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO OF ABOVE PERSON
Prometheus Western Retail, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) x
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 15,666,666
BENEFICIALLY
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING -0-
PERSON WITH
9 SOLE DISPOSITIVE POWER
15,666,666
10 SHARED DISPOSITIVE POWER
-0-
- -----------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,666,666 shares of Common Stock*
*Assuming consummation of the purchase of all shares of Common Stock
to be purchased pursuant to the Stock Purchase Agreement incorporated
by reference herein.
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ]
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
56.5%, based upon number of shares of Common Stock outstanding on
March 31, 1997 and assuming consummation of the purchase of all
shares of Common Stock to be purchased pursuant to the Stock
Purchase Agreement incorporated by reference herein.
14 TYPE OF REPORTING PERSON*
OO
- ---------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 6
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SCHEDULE 13D
CUSIP No. 40443E100 Page 3 of 6 Pages
---------- ---- ---
- ---------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO OF ABOVE PERSON
LF Strategic Realty Investors L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) x
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -----------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 15,666,666
BENEFICIALLY
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING -0-
PERSON WITH
9 SOLE DISPOSITIVE POWER
15,666,666
10 SHARED DISPOSITIVE POWER
-0-
- -----------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,666,666 shares of Common Stock*
*Assuming consummation of the purchase of all shares of Common
Stock to be purchased pursuant to the Stock Purchase Agreement
incorporated by reference herein.
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ]
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
56.5%, based upon number of shares of Common Stock outstanding on
March 31, 1997 and assuming consummation of the purchase of all
shares of Common Stock to be purchased pursuant to the Stock
Purchase Agreement incorporated by reference herein.
14 TYPE OF REPORTING PERSON*
PN
- ---------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 6
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This Amendment No. 4 is filed by Prometheus Western Retail, LLC,
a Delaware limited liability company ("Prometheus"), and by LF Strategic
Realty Investors L.P., a Delaware limited partnership ("LF Realty").
Capitalized terms used herein but not defined have the meanings assigned to
them in the Schedule 13D filed June 10, 1997, by Prometheus and LF Realty
(as amended, the "Initial Schedule 13D").
As previously reported in the Initial Schedule 13D, pursuant to a
Stock Purchase Agreement dated as of June 1, 1997, by and among Prometheus,
LF Realty and Alexander Haagen Properties, Inc. (the "Company"), subject to
the terms and conditions thereof, Prometheus agreed to purchase and the
Company agreed to sell 15,666,666 shares of common stock, par value $0.01
per share, of the Company (the "Common Stock"). The Initial Schedule 13D is
amended as follows:
Item 5. Interest in Securities of the Issuer
On November 25, 1997, in a Subsequent Closing made pursuant to
the Stock Purchase Agreement, Prometheus purchased 1,200,000 shares of
Common Stock at a price of $15 per share. As disclosed in Amendments No. 1,
No. 2 and No. 3 to the Initial Schedule 13D, Prometheus had purchased
2,806,434 shares of Common Stock prior to its purchase on November 25,
1997. Upon completing its November 25, 1997 purchase, Prometheus owned
4,006,434 shares of Common Stock.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Company
As described in the Initial Schedule 13D, Prometheus and LF
Realty, concurrent with the execution of the Stock Purchase Agreement,
entered into a Tag-Along Agreement, a Stockholders' Voting Agreement and a
Stockholders' Agreement with Alexander Haagen Sr. and certain members of
the Haagen family together with certain controlled affiliates thereof
(collectively, the "Haagen Family") that set forth various rights and
obligations between the Haagen Family, Prometheus and LF Realty in respect
of the shares of Common Stock owned by them. On November 24, 1997, the
Company, Prometheus, LF Realty, the Haagen Family and certain entities
affiliated with the foregoing (collectively, the "Parties") entered into a
Page 4 of 6
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Separation Agreement and Release (the "Separation Agreement"), providing
for, among other things, the release of relevant Parties from their
obligations under the agreements set forth in the previous sentence as well
as other agreements entered into by certain of the Parties in connection
with the management and ownership interests of the Haagen Family in the
Company. All references to the Separation Agreement are qualified in their
entirety by the full text of such agreement, a copy of which is attached as
an exhibit hereto and incorporated by reference herein.
Item 7. Material to be Filed as Exhibits
Exhibit 1: SEPARATION AGREEMENT AND RELEASE
dated November 24, 1997, by and between
the parties set forth in the preamble
thereof.
Page 5 of 6
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After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete, and correct.
PROMETHEUS WESTERN RETAIL, LLC
by LF STRATEGIC REALTY INVESTORS
L.P., as managing member,
by Lazard Freres Real Estate
Investors L.L.C., its general
partner,
by /s/ Arthur P. Soloman
---------------------------
Name: Arthur P. Soloman
Title: Managing Director
LF STRATEGIC REALTY INVESTORS L.P.
by Lazard Freres Real Estate
Investors L.L.C., its general
partner,
by /s/ Arthur P. Soloman
----------------------------
Name: Arthur P. Soloman
Title: Managing Director
Page 6 of 6
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EXHIBIT A
SEPARATION AGREEMENT AND RELEASE
This SEPARATION AGREEMENT AND RELEASE ("Agreement") is made as of this
24th day of November 1997 by and between ALEXANDER HAAGEN, SR. ("Mr.
Haagen"), ALEXANDER HAAGEN III ("Mr. Haagen III"), CHARLOTTE HAAGEN ("Mrs.
Haagen") (collectively the "Haagens"), AUTUMN HAAGEN ("Autumn"), ALEXANDER
HAAGEN III & BETTY HAAGEN TRUST fbo ALEXANDER HAAGEN IV UA 10/24/88
("Haagen IV Trust"), ALEXANDER HAAGEN III & BETTY HAAGEN TRUST fbo AUTUMN
HAAGEN UA 10/24/88 ("Autumn Trust"), ALEXANDER HAAGEN III & BETTY HAAGEN
TRUST fbo ANDREW HAAGEN UA 10/28/88, ("Andrew Trust"), HAAGEN LIVING TRUST
DATED AUGUST 17, 1988, AS AMENDED AND RESTATED AS OF APRIL 18, 1996 (The
"Family Trust" and, together with the Haagen IV Trust, the Autumn Trust and
the Andrew Trust, the "Haagen Trusts"), HAAGEN LIMITED PARTNERSHIP ("New
Partnership"), and LAZARD FRERES REAL ESTATE INVESTORS, LLC ("LFREI"), LF
STRATEGIC REALTY INVESTORS, L.P. ("LFSRI"), PROMETHEUS WESTERN RETAIL, LLC,
("Prometheus" and, together with LFREI and LFSRI, "Lazard") and ALEXANDER
HAAGEN PROPERTIES, INC. (the "Company"), ALEXANDER HAAGEN PROPERTIES
OPERATING PARTNERSHIP, L.P. (the "Partnership") and HAAGEN PROPERTY
MANAGEMENT, INC. ("HPMI" and, together with the Company, the partnership
and their subsidiaries, the "Company Entities"). The individuals and
entities listed in this paragraph collectively are referred to herein as
the "Parties".
WHEREAS, Mr. Haagen, Mrs. Haagen and Mr. Haagen III each have entered
into separate employment agreements, each dated as of June 1, 1997 with the
Company and HPMI (such agreements individually are referred to herein as,
respectively, the "AH Agreement," the "CH Agreement" and the "AHIII
Agreement" and collectively as the "Employment Agreements"); and
WHEREAS, the Parties have entered into that certain tag-along
agreement (the "Tag-Along Agreement"), dated as of June 1, 1997 between the
Haagens, the shareholders listed on the signature page thereof and LFSRI
and Prometheus; and
WHEREAS, certain of the Parties have entered into that certain
stockholders agreement (the "Stockholders Agreement"), dated as of June 1,
1997 between the Company, the Haagens, the shareholders listed on the
signature page thereof and LFSRI and Prometheus; and
WHEREAS, certain of the parties have entered into that certain
stockholders voting agreement (the "Stockholders
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Voting Agreement") dated as of June 1, 1997 among the Haagens, the
shareholders listed on the signature page thereof and LFSRI and Prometheus;
and
WHEREAS, the parties have entered into that certain registration
rights agreement (the "Registration Rights Agreement") dated as of June 1,
1997 by and among the Company, the Haagens, Autumn and the Haagen Trusts;
and
WHEREAS, certain indemnities are contained in, or listed, attached,
included or referenced as exhibits or schedules to the agreements
identified on Schedule I attached hereto (the "Indemnities" and together
with the Employment Agreements, the Tag-Along Agreement, the Stockholders
Agreement, the Stockholders Voting Agreement, and the Registration Rights
Agreement, the "Agreements"); and
WHEREAS, in addition to the termination of the Agreements, the Parties
wish to provide payment in this Agreement, among other things, for such
terminations, the transfer of the HPMI common stock, the Company Entities'
use of the Alexander Haagen name, the Haagens' past services which may have
been provided at less than the fair value for such services and
supplemental retirement benefits for the Haagens; and
WHEREAS, Mr. Haagen and Mr. Haagen III are express third party
beneficiaries of Section 2.4 of that certain stockholders agreement
("Lazard Stockholders Agreement"), dated as of June 1, 1997 by and among
Lazard and the Company; and
WHEREAS, Haagens desire to retire from the Company, as a result of
which the Company would have no further obligations under the Employment
Agreements; and
WHEREAS, the Parties desire that each of them be released from any
obligations among or between the Parties pursuant to the Agreements or as
otherwise provided herein, such release to be on the terms and conditions
set forth herein;
NOW, THEREFORE, in reliance upon the mutual covenants, releases,
agreements and conditions contained herein and subject to the provisions
and terms of this Agreement and
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for other good and valuable consideration, the receipt and sufficiency of
which hereby are acknowledged, the Parties agree as follows:
1. Headings. The headings contained in this Agreement are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement nor affect the
rights of the Parties.
2. Effectiveness. Except as provided in Section 5(b), this Agreement
shall become binding and effective as of its execution by all of the
Parties, whether in counterpart or upon single instrument (the "Effective
Date").
3. Termination of the Agreements. As a material inducement to enter
into this Agreement, as of the Effective Date, each of the Agreements shall
terminate and be of no further force or effect and the Haagens, Autumn and
the Haagen Trusts fully and irrevocably shall be released and discharged
from all provisions, obligations, terms and conditions of the Agreements.
Similarly, as of the Effective Date, the Company Entities and Lazard fully
and irrevocably are released and discharged from all provisions,
obligations, terms and conditions of the Agreements.
4. Waiver of Third Party Beneficiary Rights. As of the Effective Date,
Mr. Haagen and Mr. Haagen III agree to waive all rights or remedies granted
to them as express third party beneficiaries of the Lazard Stockholders
Agreement, as set forth in Sections 2.4 and 7.3 of the Lazard Stockholders
Agreement.
5. Mutual Releases.
a. Except for any obligations created by this Agreement, the
Company Entities and Lazard, on behalf of themselves and each of their
respective past, present and future assigns, parents, subsidiaries,
affiliates, divisions, alter egos, predecessors, successors in interest,
purchasers, owners, officers, directors, executives, partners,
shareholders, agents, sureties, insurers, employees, servants, attorneys,
representatives, indemnitors, indemnitees, trustees, and receivers, hereby
completely and forever release, absolve and discharge the Haagens, Autumn
and the Haagen Trusts, and each of them, and each of their respective past,
present and future assigns, subsidiaries, affiliates, alter egos, agents,
employees, servants, attorneys, representatives, indemnitors, indemnitees,
trustees, heirs, administrators, personal
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representatives, executors, estates, and beneficiaries, from any and all
liabilities, suits, actions, causes of action, rights, claims, demands,
disputes, obligations, duties, debts, liens, losses, costs, expenses
(including, without limitation, attorneys' fees), and damages of every
nature, kind and description, whether at law or in equity (including,
without limitation, any right of rescission), know or unknown, anticipated
or unanticipated, suspected or unsuspected, fixed, conditional or
contingent, which are existing, in place, in effect, incurred, commenced,
incipient or accrued as of, or which stem from any events, acts, conduct or
omissions under the Agreements or as of the Effective Date, including but
not limited to any rights, responsibilities, obligations or liabilities
owed or incurred by the Haagens or the Haagens' employees or business
affiliates or the general and limited partnerships, or other affiliates of
the Alexander Haagen Company, Inc. (which partnerships or affiliates
formerly owned the properties contributed or conveyed to the Partnership).
b. Except for any obligations created by this Agreement, the
Haagens, Autumn and the Haagen Trusts, and each of them, on behalf of
themselves and each of their respective past, present and future assigns,
parents, subsidiaries, affiliates, divisions, alter egos, predecessors,
successors in interest, purchasers, owners, officers, directors,
executives, partners, shareholders, agents, sureties, insurers, employees,
servants, attorneys, representatives, indemnitors, indemnitees, trustees,
and receivers, hereby completely and forever release, absolve and discharge
the Company Entities and Lazard, and each of their respective past, present
and further assigns, parents, subsidiaries, affiliates, divisions, alter
egos, predecessors, successors in interest, purchasers, owners, officers,
directors, executives, partners, shareholders, agents, sureties, insurers,
employees, servants, attorneys, representatives, indemnitors, indemnitees,
trustees, and receivers, from any and all liabilities, suits, actions,
causes of action, rights, claims, demands, disputes, obligations, duties,
debts, liens, losses, costs, expenses (including, without limitation,
attorneys' fees), and damages of every nature, kind and description,
whether at law or in equity (including, without limitation, any right of
rescission), known or unknown, anticipated or unanticipated, suspected or
unsuspected, fixed, conditional or contingent, which are existing, in
place, in effect, incurred, commenced, incipient or accrued as of, or which
stem from any events, acts, conduct or omissions under the Agreements or as
of the Effective Date, including, but not limited to, claims under Title
VII of the Civil Rights Act
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of 1964, as amended, the Age Discrimination in Employment Act, as amended,
the Equal Pay Act, as amended, the Fair Labor Standards Act, as amended,
the Employee Retirement Income Security Act, as amended, the Consolidated
Omnibus Budget Reconciliation Act, as amended, the Older Workers Benefit
Protection Act, as amended, the Americans with Disabilities Act, as
amended, the California Fair Employment and Housing Act, as amended, the
California Labor Code, or any other local, state or federal law governing
discrimination in employment or the payment of wages or benefits.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
HAAGENS ARE ADVISED AS FOLLOWS:
i) THE HAAGENS HAVE THE RIGHT TO CONSULT WITH ANY ATTORNEY BEFORE
SIGNING THE RELEASE CONTAINED IN THIS SECTION 5(b);
ii) THE HAAGENS HAVE TWENTY-ONE (21) DAYS FROM NOVEMBER 24, 1997
TO CONSIDER SUCH RELEASE; AND
iii) THE HAAGENS HAVE SEVEN (7) DAYS AFTER SIGNING THIS AGREEMENT
TO REVOKE THE RELEASE SET FORTH IN THIS SECTION 5(b).
THE PARTIES AGREE THAT THE PURCHASE OF STOCK SPECIFIED IN SECTION 13(d) OF
THIS AGREEMENT SHALL NOT BE MADE IN THE EVENT THAT ANY SUCH REVOCATION IS
MADE.
c. THE PARTIES, AND EACH OF THEM, ACKNOWLEDGE THAT THEY HAVE BEEN
ADVISED BY THEIR LEGAL COUNSEL AND ARE FAMILIAR WITH THE PROVISIONS OF
CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH, IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
THE PARTIES, AND EACH OF THEM, BEING AWARE OF SAID CODE SECTION, HEREBY
EXPRESSLY WAIVE ANY RIGHTS THEY MAY HAVE THEREUNDER.
6. HPMI. On December 31, 1997, the Haagens will cause to be
transferred to the Partnership all of the outstanding shares of common
stock of HPMI, free and clear of any liens or encumbrances created by the
Haagens, without further consideration.
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7. Termination. As a material inducement to enter into this Agreement,
the Parties hereby agree that, as of the Effective Date, the Indemnities
shall be terminated and without further force or effect, except that the
Indemnities provided by Haagen GDH Partnership and Haagen GDH-2 Partnership
(to which Haagen Alhambra Associates is successor in interest) ("HAA"), or
any successor in interest thereto shall remain in force and effect solely
to the extent provided herein. HAA shall be obligated to use its best
efforts to Remediate any Known Contamination (as such terms are defined in
such Indemnities) in a timely manner in consultation with the Company and
using methods and consultants reasonably acceptable to the Company, in all
cases consistent with past practices. HAA shall reserve in cash the amounts
set forth on Schedule VIII plus any collections from third parties for the
applicable property (the "Cash") to Remediate such Known Contamination on
such properties and HAA shall expend the Cash solely for the purpose of
satisfying such Indemnities, and HAA shall enforce the terms of any
cost-sharing arrangements and other similar agreements with third parties
such that all amounts collectible thereunder are used to Remediate such
Known Contamination. The Parties agree that the Company Entities shall only
have rights pursuant to this section against the Cash and such cost-sharing
and other similar agreements and that the Company Entities shall have no
claim under such Indemnities against any other asset or any general partner
of HAA or other Predecessor Affiliates and any such claims against such
general partners are hereby terminated and waived.
8. Resignation from Board of Directors; Offices. Except as provided
herein, Mr. Haagen, Mrs. Haagen and Mr. Haagen III hereby tender, and the
Company Entities hereby accept, their resignations from the positions held
by each of them, in any capacity as officer, director, member of any
managing board or committee of, and any position of agency, or as
representative on behalf of, the Company Entities as of the Effective Date,
and the Company Entities and Lazard acknowledge that the Haagens doing so
shall not be deemed a breach of the Employment Agreements or any duties or
obligations, fiduciary or otherwise, owned by the Haagens and each of them
to the Company Entities or Lazard. Notwithstanding the foregoing, it
expressly is acknowledged, agreed and understood that, as of the Effective
Date, (i) Mr. Haagen shall be Chairman Emeritus of the Board of Directors
of the Company for so long as he desires, and (ii) Mr. Haagen III shall be
Vice Chairman Emeritus of the Board of Directors of the Company for a
period of ten years from the Effective Date. Mr. Haagen and Mr. Haagen III
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shall both be entitled to receive one-half of the compensation payable to
members of the Board of Directors of the Company. Additionally, the Haagens
shall provide limited consulting services to the Company upon the Company's
reasonable request for so long as both Mr. Haagen and Mr. Haagen III retain
the positions referred to in this Section.
9. Confidential Information. Each of Mr. Haagen and Mr. Haagen III
agree not to disclose to any person not employed by any of the Company
Entities and not engaged to render services to any of the Company Entities
any confidential information obtained while serving in any of the positions
(current or former) set forth in Section 8 of this Agreement for so long as
he retains the emeritus position referred to in Section 8; provided,
however, that the restrictions contained herein shall not apply to
information that (i) was in his possession prior to any disclosure by the
Company Entities to him, (ii) is or becomes generally available to the
public other than as a result of disclosure by him or his representatives
in violation of this Agreement, (iii) is or becomes available to him on a
non-confidential basis from a source other than the Company or its
representatives which is not, to his knowledge, prohibited from
transmitting the information to him or his representatives by a
contractual, legal, fiduciary or other obligation, (iv) was independently
acquired or developed by him without violating his obligations under this
Agreement, or (v) is furnished to a third party by the Company Entities or
any representative of the Company Entities without similar non-disclosure
restrictions on the third party's use of such information. In addition,
this Section 9 shall not preclude him from the use or disclosure of
information known generally to the public or of information not considered
confidential by the Company or any affiliated entity or from making
disclosures required by law or court order.
For purposes of this Agreement, the term "confidential information" shall
include all information of any nature and in any form which is owned by the
Company and which is not publicly available or generally known to persons
engaged in businesses similar to that of the Company, including, but not
limited to, research techniques; patents and patent applications;
inventions and improvements, whether patentable or not; development
projects; computer software and related documentation and materials;
designs, practices, processes, methods, know-how and other facts related to
sales, advertising, promotions, financial matters, customers, customer
lists or customers' purchases of goods
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or services from the Company; industry contracts; and all other secrets and
information of a confidential and proprietary nature.
10. Covenant Not to Solicit. During their respective emeritus status
as described in Section 8 of this Agreement, neither Mr. Haagen nor Mr.
Haagen III shall directly solicit or induce any of the Company Entities'
employees, other than Harvey and Haggard (both as hereinafter defined), to
terminate their employment or relationship with the Company Entities.
11. Predecessor Affiliates Documents. The Company shall continue to
hold and retain all files and documents relating to the entities which were
parties to the Agreements with the Company or the Partnership, as the case
may be, identified on Schedule I (the "Predecessor Affiliates") attached
hereto. Prior to any destruction of such files and documents, the Company
shall provide the Haagens with 30-days' prior written notice and afford the
Haagens the opportunity during normal business hours prior to the date set
for destruction to remove such files and documents.
12. Warehouse Lease. On the Effective Date, the Company shall transfer
and assign, and the Haagens shall assume and be responsible for, the lease
obligation ("Warehouse Lease") for the storage facility identified on
Schedule II ("Warehouse Property") attached hereto. Prior to the expiration
date of the Warehouse Lease, the Company, following a request to the
Haagens, will be afforded access during normal business hours to the
Warehouse Property for the purposes of accessing or removing any files,
documents or furnishings, fixtures, materials and equipment of the Company
contained therein for use at ICSC at no cost. The Company acknowledges and
agrees that the remaining contents of the Warehouse Property are the
property of the Haagens. Prior to the earlier of the first anniversary of
this Agreement or the expiration date of the Warehouse Lease, the Company
shall move or cause to be moved, at the Company's sole cost and expense,
from the Warehouse Property all such files or documents and all
furnishings, fixtures, materials and equipment of the Company contained
therein for use at ICSC.
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13. Payment. Subject to the terms and conditions of this Agreement:
a. Salary and Expenses. Each of the Haagens shall be entitled to
receive on the Effective Date the accrued and unpaid salary payments owing
as of the Effective Date and reimbursement for any business expenses or
expenditures as of the Effective Date as provided in the Employment
Agreements.
b. Cash Payment. The Company agrees to pay to the Haagens on
January 2, 1998, the sum of two million six hundred forty thousand United
States dollars ($2,640,000), plus interest thereon from the Effective Date
at a rate equal to the prime rate (as published by Bank of America NT&SA)
plus two percent, as follows:
i) A certified check made payable to Alexander Haagen Sr. and
Charlotte Haagen or their direction in the amount of one million eight
hundred thousand United States Dollars ($1,800,000) plus accrued but
unpaid interest thereon; and
ii) A certified check made payable to Alexander Haagen III or his
order in the amount of eight hundred forty thousand United States
Dollars ($840,000) plus accrued but unpaid interest thereon; and
c. Stock Options and Awards. The Company shall grant on January
2, 1998 to each of Mr. Haagen and Mr. Haagen III 40,000 restricted shares
(each, a "Restricted Stock Award") of the Company's common stock, $0.01 par
value (the "Common Stock") pursuant to the Amended and Restated 1993 Stock
Option and Incentive Plan for Officers, Directors and Key Employees of the
Company, the Partnership and HPMI, as amended to date (the "Plan"). All
restrictions on such Restricted Stock Awards shall terminate and such
shares shall be fully vested as of January 2, 1998. In addition, the
Company and the Haagens agree all previously granted restricted stock
awards to the Haagens, to the extent not vested, shall be accelerated and
become fully vested as of January 2, 1998, and the Restrictions, as defined
in the restricted stock award agreements covering such shares, shall
terminate.
All options to acquire shares of Common Stock previously granted to the
Haagens pursuant to those stock option agreements listed in Schedule IV
attached hereto, between Mr. Haagen and the Company, Mr. Haagen III and the
Company and Mrs. Haagen and the Company (the "Option Agreements")
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shall be, as of the Effective Date, immediately and fully vested. Such
options shall remain exercisable in accordance with the terms of the Option
Agreements through the Expiration Date, as defined in Section 3.3(a)
thereof.
d. Sale of Common Stock and O.P. Units. Subject to the provisions
of Section 5(b) of this Agreement, on May 25, 1999 (the "Purchase Date")
the Company shall purchase or cause to be purchased in immediately
available funds, and the stockholders listed on Schedule V attached hereto
shall sell to the Company, an aggregate of 3,656,818 shares and Partnership
units (the "Purchased Shares") from the stockholders listed on Schedule V
attached hereto at a price per share (the "Purchase Price") equal to the
greater of (a) seventeen United States Dollars ($17) or (b) the average of
the last reported sales price of the Common Stock on the American Stock
Exchange or such other exchange where the Common Stock is then listed, as
calculated over the twenty trading-day period ending on the day ten
trading-days prior to the Purchase Date. Other than the foregoing sale, no
sale of the Purchased Shares may be made by such stockholders, except that
the Stockholder listed on Schedule V attached hereto shall have the right
to sell the Purchased Shares on the American Stock Exchange or such other
exchange where the Common Stock is then listed prior to the Purchase Date
in amounts not to exceed the limitations set forth in Rule 144(e)(i)
promulgated under the Securities Act of 1933, as amended, whether or not
such rule is then applicable to such sale.
The Purchased Shares shall be subject to adjustment from time to time. In
case at any time, or from time to time, the Company shall: (i) take a
record of the holders of its Common Stock for the purpose of entitling them
to receive a dividend or other distribution payable in shares of capital
stock; (ii) subdivide its outstanding shares of Common Stock into a larger
number of shares; (iii) combine its outstanding shares of Common Stock into
a smaller number of shares; or (iv) issue by reclassification or
recapitalization of its Common Stock into any other class or series of
shares of the Company (including any such reclassification or
recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), the number of Purchased Shares and
the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination,
reclassification or recapitalization shall be adjusted so that the Company,
after such date, shall be required to purchase the same proportionate
interest represented by such shares as
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immediately prior to such time. Any such adjustment in the Purchased Shares
shall include a necessary or appropriate corresponding adjustment in the
Purchase Price. Such adjustments shall be made successively whenever any
event listed above shall occur. In the event that such dividend or
distribution is not so made, the Purchased Shares and Purchase Price shall
again be adjusted to be the Purchased Shares and Purchase Price which would
then be in effect if such record date had not been fixed.
e. Additional Amounts. Subject to the terms and conditions of
this Agreement, the Company hereby agrees to provide the Haagens with the
following benefits:
i) Office Space. The Company shall provide the Haagens with
office space and facilities currently enjoyed by the Haagens and
office space and facilities for Janice Harvey ("Harvey") for so long
as the Company occupies space at 3500 Sepulveda Boulevard, Manhattan
Beach, California. The Company also shall provide the Haagens with one
permanent secretary for use exclusively by the Haagens, which
secretary shall be Mr. Haagen's current secretary, Kay Haggard
("Haggard"), or upon her retirement or voluntary termination of
employment, a person of like ability, training and professional
competence, at the Company's sole cost and expense for a period of
three years from the Effective Date (thereafter, to maintain such
secretary, the Haagens shall pay the Company the cost of such salary
and benefits). The Company also shall provide the Haagens with the
exclusive services of Harvey, for which the Haagens shall pay the
Company the cost of Harvey's salary and benefits. Further, the Company
agrees that the furnishings, equipment, any renderings of properties
not owned by the Company and personal effects now and hereafter
located in the offices of the Haagens, Haggard and Harvey are and
shall remain the property of the Haagens. The Company also agrees that
the furnishings, now and hereafter located in the reception area are
and shall remain the property of the Haagens.
ii) Medical Benefits. The Company shall provide the Haagens and
their designees, as provided on Schedule VII attached hereto, with
medical care and benefits identical to, comparable to or more
comprehensive than those received from time to time by senior
executives of the Company Entities.
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iii) Insurance. Subject to the terms and conditions of this
Agreement, the Haagens shall be entitled to continue to maintain
insurance under the Company Entities' property and casualty liability
policies, to the extent the Company Entities maintain such coverage,
on any property owned by the Haagens or their affiliates or any
replacement or replacements thereof currently insured under the
Company Entities' existing policies listed on Schedule VI attached
hereto, subject to the Haagens continued obligation to pay the Company
the amount of the premiums or the proportionate allocation thereof (if
a single premium) or, if determinable, the increased cost for insuring
such properties on a basis consistent with past practices.
Additionally, subject to the terms and conditions of this Agreement,
the Haagens shall be entitled to continue to maintain automobile
insurance under the Company Entities' liability policy, to the extent
the Company Entities maintain such coverage, on any automobile owned
by the Haagens or their affiliates or any replacement or replacements
thereof currently insured under the Company Entities' existing policy
listed on Schedule VI attached hereto, subject to the Haagens'
obligation to pay the Company the amount of the premiums or the
proportionate allocation thereof (if a single premium) or, if
determinable, the increased cost for insuring such automobiles on a
basis consistent with past practices.
(iv) Alexander Haagen Companies, Inc. Until January 31, 1998 or
as soon thereafter as practicable, the Company shall continue to
provide the services currently provided, including maintaining the
books and records, and facilitate the transition of such services
thereafter to the Haagens for the Haagens or their affiliates,
relating to the business activities of such persons for the year
ending December 31, 1997.
14. Haagen Name. The Company and the Haagens hereby agree that the
Company Entities shall be entitled to use the Alexander Haagen name solely
in the form and for the purpose currently used; i.e., to own and operate
retail shopping centers as a publicly traded real estate investment trust
as Alexander Haagen Properties, Inc. or Alexander Haagen Properties
Operating Partnership, L.P. (the "Names"). Neither the Company, Lazard, nor
any of their respective parents, subsidiaries or affiliates, shall be
entitled to use or license the Names in any other context, combination,
derivation, abbreviation, phrase or other permutation or for any purpose
whatsoever or to any other person or business
12
<PAGE>
entity. Further, in the event that the Company should change, append or
otherwise modify either of the Names, or cease to or suspend from use
either of the Names, the rights granted hereunder with respect to the Names
shall cease and revert to the Haagens and no further use of the Names may
be made by the Company or the Partnership. Any other rights to the Names or
the Alexander Haagen names not expressly granted hereunder are reserved to
and shall remain with the Haagens for all intents and purposes.
15. No Disparagement. The Company, Lazard and the Haagens (including
any of the directors, officers, executives, parents, subsidiaries or
affiliates of any of them (provided that, in the case of the Company, the
only executives and officers covered by this sentence shall be those
individuals named on Schedule III)) expressly agree and promise that they
each shall refrain from making, publishing or engaging in any act, conduct,
statement or course of conduct which disparages or defames, or which tends
to disparage or defame, the person, character, reputation, integrity,
business or good will of the other, whether in connection with this
Agreement or the circumstances culminating in or surrounding this Agreement
or the making of this Agreement or otherwise; provided, however, that the
Parties may make such factual disclosures as, upon the written advice of
its attorneys, may be required by any law, rule or regulation to which it
is subject, and will use its best efforts, subject to the requirements of
applicable law, rule or regulation and subject to the written advice of
counsel, to avoid making any such factual disclosures in a manner which is
disparaging or defamatory to the other or their employees or affiliated
business entities. In addition, the Company shall adopt and vigorously
enforce a mandatory policy requiring all of its employees who are not
covered by the preceding sentence to nevertheless comply with the
provisions of the preceding sentence as if it were applicable to such
employee, and the Company agrees to significantly discipline any employee
who violates the terms of such policy; provided that the Company shall not
be liable for any breach by any such employee of such policy unless such
policy is not enforced.
16. Press Release; References. The Parties will jointly prepare and
issue a press release in the form attached hereto as Exhibit C no later
than the Effective Date. The parties agree that upon execution hereof, the
Company may announce internally to its employees that the Haagens will be
retiring from active management of the Company on the Effective Date. Each
Party agrees not to
13
<PAGE>
make any other public announcement with respect to the Haagen's separation
or to otherwise discuss, disclose or reveal any of the terms or conditions
of this Agreement to any person or entity, except as may be required by law
or by stock exchange rules or non-public disclosure which is necessary for
certain business transactions, prior notice of which shall be provided to
the other Parties.
17. Cooperation With Respect To Subsequent Administrative Steps and
Documents. The Parties recognize that in the future, certain administrative
steps or additional documentation may be required to effectuate the matters
intended to be encompassed by this Agreement. The Parties agree that they
will cooperate in the future should any such administrative steps be
required or documents, papers and instruments need to be prepared and
signed, in order to carry out the terms and intent of this Agreement.
18. Indemnity And Attorneys' Fees Regarding Breach Of This Agreement.
Subject to the terms and conditions of this Agreement:
a. The Parties expressly agree that in the event of any breach or
default under this Agreement, the defaulting or breaching party will
indemnify and hold harmless the non-defaulting or non-breaching party or
parties against any and all consequences, losses, claims, damages or
liabilities, joint or several (and actions in respect thereof), to which
such party may become subject, under federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon this
Agreement or the breach thereof. In the event that any proceeding, suit or
action is brought to enforce the provisions of this Agreement, in
connection with any breach of or default under this Agreement, the
prevailing party shall be entitled to recovery and an award of costs and
expenses, including attorneys' fees, in addition to any other relief to
which that party may be entitled.
b. The Company Entities hereby expressly agree to indemnify and
hold harmless the Haagens, Autumn and the Haagen Trusts from the
consequences of any claim or proceeding initiated or commenced by a third
party arising out of or relating to this Agreement, the subject matter
covered by this Agreement or any liabilities related to the properties now
owned or managed by the Company Entities (except to the extent set forth in
Section 7).
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<PAGE>
c. The Company Entities will reimburse, as incurred, an
indemnified party under subparagraph (b) of this Section in connection with
investigating, defending or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action brought
by a third party. The indemnity provided in this paragraph shall be in
addition to any liability which a party may have at common law or
otherwise.
d. Promptly after receipt by an indemnified party under
subparagraph (b) of this Section of notice of the commencement of any
action or proceeding by a third party, such indemnified party will, if a
claim in respect thereof is to be made against one or more indemnifying
parties under this Section, notify such indemnifying party or parties of
the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under paragraph (a) or (b) of this Section
or to the extent that the indemnifying party was not adversely affected by
such omission. In case any such action is brought against an indemnified
party and it notifies an indemnifying party or parties of the commencement
thereof, the indemnifying party or parties against which a claim is to be
made will be entitled to participate therein and, to the extent that it or
they may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party has reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to assume such legal defenses and otherwise to
participate in the defense of such action on behalf of such indemnified
party or parties, in which case the indemnifying party shall only be
responsible for the fees and expenses of one counsel (in addition to local
counsel) for all similarly situated indemnified parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 18 for any legal or other
expenses (other than the reasonable costs of investigation) subsequently
incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party has employed such counsel in connection
with the assumption of such different or additional legal
15
<PAGE>
defenses in accordance with the proviso to the immediately preceding
sentence, (ii) the indemnifying party has not employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, or
(iii) the indemnifying party has authorized in writing the employment of
counsel for the indemnified party at the expense of the indemnifying party.
19. Binding On Successors. This Agreement, and the covenants and
conditions herein, is binding on each of the Parties and also shall be
binding upon and inure to the benefit of their respective heirs,
administrators, executors, representatives, officers, directors, employees,
assigns, successors, agents, and subsidiaries. No Party to this Agreement
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the express written consent.
20. Entire Understanding; Integrated Instrument. This Agreement
contains and constitutes the entire agreement and understanding of the
Parties concerning the subject matter hereof, and supersedes and replaces
all prior discussions and negotiations, proposed agreements or agreements,
written or oral, pertaining to such subject matters. Each of the Parties
acknowledges that no other party or any agent or attorney of any other
party has made any promise, representation or warranty whatsoever, express
or implied, written or oral, not contained herein and concerning the
subject matters hereof, to induce he, she or it to execute this Agreement,
and each of the Parties acknowledges that he, she or it has not executed
this Agreement in reliance on any promise, representation or warranty not
contained herein.
21. Representations And Warranties. Each of the Parties represents and
warrants to the other Parties that he, she or it has not assigned or
transferred, or purported to assign or transfer, to any person, entity or
institution any liability, suit, action, cause of action, right, claim,
demand, dispute, obligation, duty, debt, lien, loss, cost, expense, or
damage, or any part or portion thereof, encompassed by, involved or
referred to in this Agreement.
22. Supplement, Amendment, Waiver, Etc. This Agreement cannot be
supplemented, modified, amended, waived, released or terminated except by a
writing executed by the party or parties to be bound thereby.
16
<PAGE>
23. Construction. This Agreement in all respects shall be interpreted,
construed, enforced and governed by and under the laws of the State of
California without regard to any internal conflicts of law principles in
such jurisdiction. This Agreement shall be deemed to have been prepared by
the Parties jointly, and any uncertainty or ambiguity existing in this
Agreement shall not be interpreted against any of the Parties by reason of
such party having been the draftsperson hereof. Accordingly, any rule of
law, including, but not limited to, Section 1654 of the Civil Code of the
State of California, or any legal decision that would require
interpretation of any ambiguities in this Agreement against the party that
has drafted it, is of no application and hereby is expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the Parties and of this Agreement.
24. Consent To Jurisdiction. Each of the Parties hereby (i)
irrevocably submits to the jurisdiction of any California State court
sitting in the City of Los Angeles or the United States District Court for
the Central District of California in any action arising out of this
Agreement, (ii) agrees that all claims in such action may be decided in
such court, (iii) waives, to the fullest extent it may effectively do so,
the defense of an inconvenient forum, and (iv) consents to the service of
process by mail. A final judgment in any such action shall be conclusive
and may be enforced in other jurisdictions. Nothing herein shall affect the
right of any party to serve legal process in any manner permitted by law or
shall affect its right to bring any action in any other court.
25. Execution; Counterparts. This Agreement may be executed as a
single original or in any number of counterparts, each of which shall be
deemed to be an original and which taken together shall be deemed to be one
and the same instrument.
26. Notices. All notices required under this Agreement shall be in
writing and shall be deemed to have been made and duly delivered on the
date of actual delivery,
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<PAGE>
if delivered in person or by messenger (whether through overnight delivery
service or messenger service) or telefacsimile transmission, to the
following addresses:
a. If to the Haagens:
Alexander Haagen Sr.
Alexander Haagen III
3500 Sepulveda Boulevard
Manhattan Beach, CA 90266
Telecopy: (310) 546-6345
With a copy to:
Stroock & Stroock & Lavan
2029 Century Park East, 18th Floor
Los Angeles, California 90067
Attention: Glenn D. Smith
Telecopy: (310) 556-5959
b. If to the Company:
Alexander Haagen Properties, Inc.
3500 Sepulveda Boulevard
Manhattan Beach, CA 90266
Attention: General Counsel
Telecopy: (310) 546-8455
With a copy to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, CA 90071
Attention: John M. Newell
Telecopy: (213) 891-8763
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c. If to Lazard:
Lazard Freres Real Estate Investors, LLC
30 Rockefeller Plaza, 63rd Floor
New York, NY 10020
Attention: Arthur P. Solomon
Telecopy: (212) 632-6052
With a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Kevin J. Grehan
Telecopy: (212) 474-3700
27. Consultation With Counsel. This Agreement has been negotiated at
arm's length between persons knowledgeable in the matters dealt with
herein. In addition, each of the Parties has been represented by, and has
consulted with, experienced and knowledgeable independent legal counsel
with respect to this Agreement and its provisions. Each of the Parties
acknowledges that his, her or its counsel has fully explained the terms and
conditions of this Agreement, and that he, she or it has had adequate
opportunity to make whatever investigation or inquiry was deemed necessary
or desirable in connection with the subject matters of this Agreement prior
to the execution hereof.
IN WITNESS WHEREOF, each of the Parties further states that he, she or
it has carefully read the foregoing Agreement and knows the contents
thereof, that he, she or it
19
<PAGE>
signs the same of his, her or its own free act, and that the Parties have
executed this Agreement as of the date set forth above.
ALEXANDER HAAGEN, SR.
/s/ Alexander Haagen
---------------------------------
CHARLOTTE HAAGEN
/s/ Charlotte Haagen
---------------------------------
ALEXANDER HAAGEN, III
/s/ Alexander Haagen III
---------------------------------
AUTUMN HAAGEN
/s/ Autumn Haagen
---------------------------------
ALEXANDER HAAGEN III & BETTY HAAGEN
TRUST FBO ALEXANDER HAAGEN IV UA
10/24/88
By: /s/ Alexander Haagen III
------------------------------
/s/ Betty Haagen
------------------------------
Its:
------------------------------
20
<PAGE>
ALEXANDER HAAGEN III & BETTY HAAGEN
TRUST FBO AUTUMN HAAGEN UA 10/24/88
By: /s/ Alexander Haagen III
------------------------------
/s/ Betty Haagen
------------------------------
Its:
ALEXANDER HAAGEN III & BETTY HAAGEN
TRUST FBO ANDREW HAAGEN UA
10/28/88
By: /s/ Alexander Haagen III
------------------------------
/s/ Betty Haagen
------------------------------
Its:
HAAGEN LIVING TRUST DATED
AUGUST 17, 1988, AS AMENDED AND
RESTATED AS OF APRIL 18, 1996
By: /s/ Alexander Haagen
-----------------------------
Its:
HAAGEN LIMITED PARTNERSHIP
By: /s/ Alexander Haagen
-----------------------------
Its: General Partner
21
<PAGE>
LAZARD FRERES REAL ESTATE
INVESTORS, LLC
By: /s/ Arthur P. Solomon
------------------------------
Its: Managing Director
LF STRATEGIC REALTY INVESTORS, L.P.
By: Lazard Freres Real
Estate Investors, LLC,
its general partner
By: /s/ Arthur P. Solomon
-----------------------------
Name: Arthur P. Solomon
Title: Managing Director
22
<PAGE>
PROMETHEUS WESTERN RETAIL, LLC
By: LF Strategic Realty
Investors, L.P.,
its member
By: Lazard Freres Real
Estate Investors,
LLC, its general
partner
By: /s/ Arthur P. Solomon
-----------------------------
Name: Arthur P. Solomon
Title: Managing Director
ALEXANDER HAAGEN PROPERTIES, INC.
By: /s/ Stuart J.S. Gulland
-----------------------------
Its: Senior Vice President and
Chief Financial Officer
ALEXANDER HAAGEN PROPERTIES
OPERATING PARTNERSHIP, L.P.
By: Alexander Haagen
Properties, Inc.,
its General Partner
By: /s/ Stuart J.S. Gulland
-----------------------------
Its: Senior Vice President and
Chief Financial Officer
23
<PAGE>
HAAGEN PROPERTY MANAGEMENT, INC.
By: /s/ Alexander Haagen
-----------------------------
Its:
ACKNOWLEDGED AND AGREED AS
TO SECTION 7 HEREOF
HAAGEN ALHAMBRA ASSOCIATES
AS SUCCESSOR IN INTEREST TO
HAAGEN GDH PARTNERSHIP AND
HAAGEN GDH-2 PARTNERSHIP
By: /s/ Alexander Haagen
-----------------------------
Alexander Haagen, Sr.
Managing General Partner
24
