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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
____________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
JUNE 12, 1997 (JUNE 1, 1997)
ALEXANDER HAAGEN PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 001-12588 95-4444963
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
3500 SEPULVEDA BOULEVARD
MANHATTAN BEACH, CALIFORNIA 90266
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 546-4520
Not Applicable
(former name or former address if changed since last report)
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Item 5: Other Events
On June 1, 1997, Alexander Haagen Properties, Inc. (the "Company")
entered into the following agreements: (i) a Stock Purchase Agreement (the
"Stock Purchase Agreement") with LF Strategic Realty Investors, L.P., a Delaware
limited partnership (the "Advancing Party") and Prometheus Western Retail, LLC,
a Delaware limited liability company ("Buyer"); (ii) a Stockholders Agreement
(the "Stockholders Agreement") among the Company, the Advancing Party, Buyer,
and Lazard Freres Real Estate Investors, LLC, a Delaware limited liability
company ("LFREI"); (iii) a Registration Rights Agreement (the "Registration
Rights Agreement") between the Company and Buyer; (iv) a Registration Rights
Agreement (the "Haagen Registration Rights Agreement") among the Company,
Alexander Haagen, Sr., Charlotte Haagen, and Alexander Haagen III (collectively,
the "Haagen Family Members"), and certain affiliates of the Haagen Family
Members (together with the Haagen Family Members, the "Haagen Stockholders");
(v) a Stockholders Agreement (the "Haagen Stockholders Agreement") among the
Company and the Haagen Stockholders; (vi) Executive Employment Agreements
(collectively, the "Employment Agreements") among the Company, Haagen Property
Management, Inc., and each of the Haagen Family Members. Concurrently, the
Advancing Party, Buyer, and the Haagen Stockholders entered into a Stockholders'
Voting Agreement (the "Stockholders' Voting Agreement") and a Tag-Along
Agreement (the "Tag-Along Agreement").
Subject to the terms and conditions of the Stock Purchase Agreement,
the Company will sell to Buyer up to 15,666,666 shares (the "Shares") of Common
Stock, par value $.01 per share ("Common Stock") of the Company at a purchase
price of $15.00 per share (the "Transaction"), representing an aggregate
investment of $235 million (the "Total Equity Commitment"). Proceeds from the
sale of the Shares will be used to repay indebtedness and to increase the
Company's portfolio of neighborhood and community shopping centers in the
Western United States. The Transaction will be consummated in two phases.
Prior to stockholder approval of the Transaction, at the initial closing of the
Transaction (the "Initial Closing"), which is expected to occur in July 1997,
the Company will sell to Buyer 1,306,434 shares of Common Stock representing an
aggregate investment of approximately $19.6 million ("Phase I"). The shares to
be sold to Buyer at the Initial Closing represent approximately 9.8% of the
outstanding Common Stock.
The Company intends to seek stockholder approval of the transactions
contemplated by the Stock Purchase Agreement ("Stockholder Approval") at a
special meeting of stockholders expected to be held in or around September 1997.
Thereafter, at one or more subsequent closings (each a "Subsequent Closing")
("Phase II"), the Company from time to time at its election may sell additional
Shares to Buyer at $15.00 per share, in minimum increments of $30 million, with
an aggregate of at least $100 million to be funded within six months of
Stockholder Approval, until the Total Equity Commitment is invested or, if
earlier, eighteen months after Stockholder Approval or, if earlier, March 14,
1999 (unless extended by mutual agreement of the parties). When Buyer acquires
all of the Shares, Buyer will own approximately 56.6% of the outstanding Common
Stock (approximately 37.9% on a full-diluted basis, based upon the number of
outstanding shares of Common Stock, the number of outstanding limited
partnership units of Alexander Haagen Properties Operating Partnership, L.P.
(the "OP") that are redeemable for Common Stock, the number of shares of Common
Stock issuable under the convertible debt of the Company and the OP, and the
number of shares of Common Stock issuable under option or other equity-incentive
plans ("fully diluted basis")).
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The Initial Closing will be subject to various conditions, including
(i) a conditional waiver of application to Buyer of the ownership limitations
contained in the Company's charter with respect to the initial purchase, (ii)
the continued treatment of the Company as a real estate investment trust for
federal income tax purposes (a "REIT"), (iii) the confirmation by the Buyer of
the Company's representations and warranties during a twenty business day due
diligence period, and (iv) satisfaction of various customary conditions. In
addition, if the Initial Closing has not occurred on or prior to August 15,
1997, the Stock Purchase Agreement may be terminated by either party, unless
such party is then in default thereunder. The closings of the Second Purchase
and each Subsequent Purchase are subject to various conditions, including (i)
receipt of Stockholder Approval, (ii) the continued treatment of the Company as
a REIT, and (iii) satisfaction of various customary conditions.
In the event that the Company shall not have received Shareholder
Approval prior to December 31, 1997, the Buyer has an option under the Stock
Purchase Agreement to require that the Company repurchase the shares of Common
Stock acquired at the Initial Closing at a price equal to the purchase price
therefor, together with accrued dividends. This option may be exercised at any
time until 11 months after the Initial Closing; provided that the Company shall
not be required to pay for the shares of Common Stock to be so repurchased until
the earlier to occur of (a) 18 months after the Initial Closing and (b) the
consummation by the Company of an issuance of debt or equity securities or a
sale of assets that yields net proceeds to the Company of at least $50 million.
The Stock Purchase Agreement provides that in the event that the
Initial Closing does not occur due to Buyer's termination of the Stock Purchase
Agreement for an uncured material breach by the Company of its representations
and warranties, the Company will pay Buyer's reasonable out of pocket expenses,
which shall serve as liquidated damages and be Buyer's sole remedy in such
event. The Stock Purchase Agreement further provides that the Company will pay
Buyer $1,762,500 as compensation for Buyer's costs and expenses (including
opportunity costs) in the event that the Company's stockholders fail to approve
the transactions contemplated by the Stock Purchase Agreement at the
stockholders' meeting called to vote thereon (or in the event that the Company
fails to hold such meeting on or before December 31, 1997), provided that Buyer
is not in material default under the Stock Purchase Agreement. A break-up fee
of $8,225,000 will be payable in the event that (i) (x) stockholder approval for
the transactions contemplated by the Stock Purchase Agreement is not obtained by
December 31, 1997, (y) a Competing Transaction (as defined below) is proposed
publicly prior to the stockholders' meeting or December 31, 1997 if no
stockholders' meeting is held, and (z) the Company consummates the Competing
Transaction within twelve months after the earlier of the date on which the
stockholders fail to approve the Agreement and December 31, 1997, or (ii) the
Transaction does not close as the result of the Company's wilful breach of a
representation, warranty or covenant contained in the Stock Purchase Agreement.
A "Competing Transaction" is (i) any acquisition in any manner, directly or
indirectly (including through any option, right to acquire or other beneficial
ownership), of more than 15% of the equity securities, on a fully diluted basis,
of the Company, or assets representing a material portion of the
assets of the Company, other than any of the transactions contemplated by the
Stock Purchase Agreement or (ii) any merger, consolidation, sale of assets,
share exchange, recapitalization, other business combination, liquidation, or
other action out of
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the ordinary course of business of the Company, other than any of the
transactions contemplated by the Stock Purchase Agreement.
Exhibit 10.1 is a copy of the Stock Purchase Agreement; Exhibits 10.2,
10.3 and 10.4 are the Stockholders Agreement, Bylaw Provisions, and Registration
Rights Agreement which are Exhibits to the Stock Purchase Agreement, and all are
specifically incorporated herein by reference, and the descriptions herein of
such agreements and bylaw provisions are qualified in their entirety by
reference to such agreements and bylaw provisions.
THE STOCKHOLDERS AGREEMENT. Pursuant to the Stock Purchase Agreement,
the parties entered into a Stockholders Agreement and a Registration Rights
Agreement simultaneously with the Stock Purchase Agreement. Pursuant to the
Stockholders Agreement, Buyer will be entitled to certain rights and will be
subject to certain restrictions, including the following:
(i) from and after the date of Stockholder Approval (the "Stockholder
Approval Date") the Company shall amend its Bylaws, to cause the Company's board
of directors to be structured to consist of eleven members, of which initially
three members will be designees of management of the Company, four members will
be designees of Buyer, three members will be independent directors designated by
the nominating committee and one member will be a new President of the Company;
until the standstill period described below ends, Buyer will have the right to
nominate directors to the Company's board of directors as follows:
(a) so long as Buyer owns at least (x) a number of shares of Common
Stock equal to 50% of the aggregate number of Shares to be acquired
pursuant to the Transaction and (y) 20% of the Common Stock (on a fully
diluted basis), the Buyer shall be entitled to nominate four (4) Directors;
(b) so long as the Buyer does not meet the ownership criteria in
clause (a)(x) or (a)(y) above but owns at least (x) a number of shares of
Common Stock equal to 25% of the aggregate number of Shares to be acquired
pursuant to the Transaction and (y) 15% of the Common Stock of the Company
(on a fully diluted basis), the Buyer shall be entitled to nominate two (2)
Directors; and
(c) so long as the Buyer does not meet the ownership criteria in
clauses (a)(x) or (a)(y) or (b)(x) or (b)(y) above and owns at least 10% of
the Common Stock (on a fully diluted basis), the Buyer shall be entitled to
nominate one (1) Director;
(ii) from and after the date of the Stockholders Agreement until a
"Termination Event" (which shall be when Buyer no longer owns at least (a) 25%
of the aggregate number of Shares to be acquired pursuant to the Transaction and
(b) 15% of the outstanding Common Stock on a fully diluted basis), Buyer will
have the right to obtain certain operating and financial information; and
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(iii) from and after the date of the Stockholders Agreement until a
Termination Event, Buyer will have the right to participate in the Company's
future equity offerings for cash by purchasing its proportionate share (on a
fully diluted basis and limited to 37.5% of any offering) of the securities
offered therein.
During a standstill period of five years (which period is subject to
early termination in certain circumstances but, if not terminated early, shall
be automatically extended for one-year increments unless Buyer gives the Company
90 days' notice canceling such extensions or unless sooner terminated upon
certain events), Buyer will be subject to certain limitations and restrictions
relating to, among other matters: (a) acquisitions of additional shares of
Common Stock (generally limiting Buyer to beneficially owning no more than 49.9%
of the shares of Common Stock on a fully diluted basis, except that shares of
Common Stock issuable upon conversion of the Company's convertible debt or upon
exercise of options granted under management benefit plans shall not be included
("Adjusted Fully Diluted Basis")), (b) voting of its shares of Common Stock
exceeding 40% of the outstanding Common Stock, either as recommended by the
board of directors or proportionately in accordance with the vote of the other
holders of Common Stock), (c) acting in concert with others by becoming a member
of a "group" for purposes of Section 13(d) of the Securities Act of 1934 and the
rules promulgated thereunder, (d) soliciting, encouraging or proposing certain
significant transactions involving the Company, (e) soliciting, initiating,
encouraging or participating in the solicitation of proxies in connection with
any election contest involving the Company's board of directors or initiating or
proposing or participating in or encouraging the making of, or soliciting
stockholder approval of, any stockholder proposal, (f) seeking representation on
the Company's board of directors other than as contemplated by the Stockholders
Agreement, and (g) requesting any waiver of the foregoing restrictions. For a
period of five years after Stockholder Approval or, if earlier, until a
Termination Event, Buyer may not sell any shares of Common Stock except (a) in
transactions pursuant to Rule 144 under the Securities Act of 1933, (b) in
negotiated transfers to third parties, subject to certain conditions, including
that it not result in a person beneficially owning more than 9.8% of the
outstanding Common Stock, (c) to certain Affiliates who agree to be bound by the
terms of the Stockholders Agreement, (d) in accordance with the registration
rights agreement in a bona fide public offering and (e) subject to certain
conditions, to bona fide financial institutions for the purpose of securing bona
fide indebtedness.
The standstill period will terminate prior to its stated term in the
event of certain occurrences such as a material event of default by the Company
or any subsidiary under any debt agreement or the acquisition by any person or
group of beneficial ownership of more than 9.8% of the Company's outstanding
voting securities. Until a Termination Event, the Company may not take certain
specified corporate actions relating to incurrence of indebtedness in excess of
a specified amount, investments outside the shopping center industry, and REIT
termination. Moreover, pursuant to the Stockholders Agreement, from and after
date of the Stockholders Agreement until a Termination Event, Company will
consult with Buyer prior to acting on certain matters including those concerning
the Company's financing arrangements, acquisitions over $10 million,
dispositions over $20 million, and employment of executive management.
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THE BYLAW PROVISIONS. Pursuant to the Stock Purchase Agreement, the
Company adopted resolutions amending the Company's Bylaws to exempt Buyer, the
Stock Purchase Agreement and the transactions contemplated thereby from the
terms of Sections 3-602 and 3-702 of the Maryland General Corporation Law.
THE REGISTRATION RIGHTS AGREEMENT. Pursuant to the Registration
Rights Agreement, the Company has granted Buyer certain demand registration
rights to facilitate the resale of the Common Stock owned by it under certain
conditions and certain piggyback rights to sell a portion of its shares in
connection with certain offerings of securities by the Company.
ARRANGEMENTS WITH THE HAAGEN FAMILY MEMBERS. In connection with the
Transaction, the Company has also entered into certain agreements with the
Haagen Family Members including (i) the Employment Agreements, (ii) the Haagen
Registration Rights Agreement, and (iii) the Haagen Stockholders Agreement.
Also in connection with the Transaction, the Advancing Party, Buyer, and the
Haagen Stockholders have entered into the Stockholders' Voting Agreement and the
Tag-Along Agreement. The Employment Agreements have five year terms, are
terminable upon 36 months prior written notice, and set forth the terms and
conditions of employment for Alexander Haagen, Sr. as Chairman of the Board and
Chief Executive Officer, Alexander Haagen III as Vice Chairman of the Board and
Chairman of the Executive Committee, and Charlotte Haagen as Vice President, at
annual salaries of $200,000, $100,000, and $25,000, respectively, with an annual
restricted stock grant of 10,000 shares to each of Messrs. Haagen, Sr. and
Haagen III. Pursuant to the Haagen Registration Rights Agreement, the Company
will grant the Haagen Family Members certain demand registration rights to
facilitate the resale of the Common Stock owned by them under certain conditions
and certain piggyback rights to sell a portion of their shares in connection
with certain offerings of securities by the Company. Pursuant to the Haagen
Stockholders Agreement, the Haagen Family Members are granted the right to
participate in the Company's future equity offerings for cash by purchasing
their proportionate share, and LFREI, the Advancing Party, and Buyer agree to
support the continued election of Alexander Haagen, Sr. as Chairman and Chief
Executive Officer and Alexander Haagen III as Vice Chairman and successor
Chairman of the Company. Under the Stockholders' Voting Agreement, the Haagen
Family Members have agreed to vote for the Transaction. In the Tag-Along
Agreement, Buyer and the Haagen Family Members agree to offer each other certain
rights to participate in a transfer of their shares in the event that the other
transfers some or all of its shares.
INCENTIVE STOCK OPTION GRANTS. In connection with the Transaction,
the Company has also granted certain incentive stock options to members of the
Company's senior management. The Compensation Committee of the Board of
Directors, on May 30, 1997, made stock option grants to seven members of the
Company's senior management for an aggregate of 495,000 shares. The stock
options granted have a $15 exercise price, and one-third of the shares will vest
in each of the next three years if the grantee remains employed by the Company.
In addition, the closing price of the Common Stock must exceed certain target
levels for periods of 90 consecutive days before the options become exercisable.
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Item 7: Financial Statements, Pro Forma Financial Information and Exhibits.
a) Exhibits
Number Exhibit
9.1 Stockholders' Voting Agreement, dated June 1, 1997, among LF
Strategic Realty Investors, L.P.; Prometheus Western Retail, LLC;
Alexander Haagen, Sr.; Charlotte Haagen; Alexander Haagen III; The
Haagen Living Trust dated August 17, 1988; Autumn Haagen; Alexander
Haagen III & Betty Haagen Tr fbo Alexander Haagen IV UA 10/24/88;
Alexander Haagen III & Betty Haagen Tr fbo Andrew Haagen UA 10/28/88;
and Alexander Haagen III & Betty Haagen Tr fbo Autumn Haagen UA
10/24/88; Incorporated herein by reference to Buyer's Schedule 13D
regarding the Company filed on June 11, 1997
10.1 Stock Purchase Agreement, dated as of June 1, 1997, between the
Company, LF Strategic Realty Investors, L.P. and Prometheus Western
Retail, LLC; Incorporated herein by reference to Buyer's Schedule 13D
regarding the Company filed on June 11, 1997
10.2 Stockholders Agreement, dated June 1, 1997, among the Company, LF
Strategic Realty Investors, L.P., Prometheus Western Retail, LLC, and
Lazard Freres Real Estate Investors, LLC; Incorporated herein by
reference to Buyer's Schedule 13D regarding the Company filed on June
11, 1997
10.3 Bylaw Provisions adopted May 30, 1997, by the Company's Board of
Directors exempting Prometheus Western Retail, LLC, the Stock Purchase
Agreement and the transactions contemplated thereby from the terms of
Sections 3-602 and 3-702 of the Maryland General Corporation Law;
filed herewith
10.4 Registration Rights Agreement, dated June 1, 1997, between the Company
and Prometheus Western Retail, LLC; Incorporated herein by reference
to Buyer's Schedule 13D regarding the Company filed on June 11, 1997
10.5 Executive Employment Agreement, dated June 1, 1997, among the Company,
Haagen Property Management, Inc., and Alexander Haagen, Sr.; filed
herewith
10.6 Executive Employment Agreement, dated June 1, 1997, among the Company,
Haagen Property Management, Inc., and Alexander Haagen III; filed
herewith
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Number Exhibit
10.7 Executive Employment Agreement, dated June 1, 1997, among the Company,
Haagen Property Management, Inc., and Charlotte Haagen; filed herewith
10.8 Stockholders Agreement, dated June 1, 1997, among LF Strategic Realty
Investors, L.P., Prometheus Western Retail, LLC, Alexander Haagen,
Sr., Charlotte Haagen, and Alexander Haagen III, The Haagen Living
Trust dated August 17, 1988; Autumn Haagen; Alexander Haagen III &
Betty Haagen Tr fbo Alexander Haagen IV UA 10/24/88; Alexander Haagen
III & Betty Haagen Tr fbo Andrew Haagen UA 10/28/88; and Alexander
Haagen III & Betty Haagen Tr fbo Autumn Haagen UA 10/24/88;
Incorporated herein by reference to Buyer's Schedule 13D regarding the
Company filed on June 11, 1997
10.9 Registration Rights Agreement, dated June 1, 1997, among the Company,
Alexander Haagen, Sr., Charlotte Haagen, and Alexander Haagen III, The
Haagen Living Trust dated August 17, 1988; Autumn Haagen; Alexander
Haagen III & Betty Haagen Tr fbo Alexander Haagen IV UA 10/24/88;
Alexander Haagen III & Betty Haagen Tr fbo Andrew Haagen UA 10/28/88;
and Alexander Haagen III & Betty Haagen Tr fbo Autumn Haagen UA
10/24/88; filed herewith
10.10 Tag-Along Agreement, dated June 1, 1997, among LF Strategic Realty
Investors, L.P., Prometheus Western Retail, LLC, Alexander Haagen,
Sr., Charlotte Haagen, and Alexander Haagen III, The Haagen Living
Trust dated August 17, 1988; Autumn Haagen; Alexander Haagen III &
Betty Haagen Tr fbo Alexander Haagen IV UA 10/24/88; Alexander Haagen
III & Betty Haagen Tr fbo Andrew Haagen UA 10/28/88; and Alexander
Haagen III & Betty Haagen Tr fbo Autumn Haagen UA 10/24/88;
Incorporated herein by reference to Buyer's Schedule 13D regarding the
Company filed on June 11, 1997
99.1 Press Release, dated June 2, 1997, by the Company announcing a
strategic investment in the Company by an affiliate of Lazard Freres
Real Estate Investors, LLC; filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Alexander Haagen Properties, Inc.
Date: June 12, 1997 By: /s/ Steven M. Jaffe
Steven M. Jaffe
Secretary
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EXHIBIT INDEX
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<CAPTION>
Number Exhibit Page
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9.1 Stockholders' Voting Agreement, dated June 1, 1997, Incorporated herein by reference to
among LF Strategic Realty Investors, L.P.; Prometheus Exhibit 5 to the Schedule 13D of
Western Retail, LLC; Alexander Haagen, Sr.; Charlotte Prometheus Western Retail, LLC and
Haagen; Alexander Haagen III; The Haagen Living Trust LF Strategic Realty Investors, L.P.
dated August 17, 1988; Autumn Haagen; Alexander regarding the Company filed on June
Haagen III & Betty Haagen Tr fbo Alexander Haagen IV 11, 1997
UA 10/24/88; Alexander Haagen III & Betty Haagen Tr
fbo Andrew Haagen UA 10/28/88; and Alexander Haagen
III & Betty Haagen Tr fbo Autumn Haagen UA 10/24/88
10.1 Stock Purchase Agreement, dated as of June 1, 1997, Incorporated herein by reference to
between the Company, LF Strategic Realty Investors, Exhibit 1 to the Schedule 13D of
L.P. and Prometheus Western Retail, LLC Prometheus Western Retail, LLC and
LF Strategic Realty Investors, L.P.
regarding the Company filed on June
11, 1997
10.2 Stockholders Agreement, dated June 1, 1997, among the Incorporated herein by reference to
Company, LF Strategic Realty Investors, L.P., Exhibit 2 to the Schedule 13D of
Prometheus Western Retail, LLC, and Lazard Freres Real Prometheus Western Retail, LLC and
Estate Investors, LLC LF Strategic Realty Investors, L.P.
regarding the Company filed on June
11, 1997
10.3 Bylaw Provisions adopted May 30, 1997, by the E-1
Company's Board of Directors exempting Prometheus
Western Retail, LLC, the Stock Purchase Agreement and
the transactions contemplated thereby from the terms of
Sections 3-602 and 3-702 of the Maryland General
Corporation Law
10.4 Registration Rights Agreement, dated June 1, 1997, Incorporated herein by reference to
between the Company and Prometheus Western Retail, Exhibit 3 to the Schedule 13D of
LLC Prometheus Western Retail, LLC and
LF Strategic Realty Investors, L.P.
regarding the Company filed on June
11, 1997
10.5 Executive Employment Agreement, dated June 1, 1997, E-2
among the Company, Haagen Property Management, Inc.,
and Alexander Haagen, Sr.
</TABLE>
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<TABLE>
<CAPTION>
Number Exhibit Page
<S> <C> <C>
10.6 Executive Employment Agreement, dated June 1, 1997, E-11
among the Company, Haagen Property Management, Inc.,
and Alexander Haagen III
10.7 Executive Employment Agreement, dated June 1, 1997, E-21
among the Company, Haagen Property Management, Inc.,
and Charlotte Haagen
10.8 Stockholders Agreement, dated June 1, 1997, among LF Incorporated herein by reference to
Strategic Realty Investors, L.P., Prometheus Western Exhibit 6 to the Schedule 13D of
Retail, LLC, Alexander Haagen, Sr., Charlotte Haagen, Prometheus Western Retail, LLC and
and Alexander Haagen III, The Haagen Living Trust LF Strategic Realty Investors, L.P.
dated August 17, 1988; Autumn Haagen; Alexander regarding the Company filed on June
Haagen III & Betty Haagen Tr fbo Alexander Haagen IV 11, 1997
UA 10/24/88; Alexander Haagen III & Betty Haagen Tr
fbo Andrew Haagen UA 10/28/88; and Alexander Haagen
III & Betty Haagen Tr fbo Autumn Haagen UA 10/24/88
10.9 Registration Rights Agreement, dated June 1, 1997, E-29
among the Company, Alexander Haagen, Sr., Charlotte
Haagen, and Alexander Haagen III, The Haagen Living
Trust dated August 17, 1988; Autumn Haagen; Alexander
Haagen III & Betty Haagen Tr fbo Alexander Haagen IV
UA 10/24/88; Alexander Haagen III & Betty Haagen Tr
fbo Andrew Haagen UA 10/28/88; and Alexander Haagen
III & Betty Haagen Tr fbo Autumn Haagen UA 10/24/88
10.10 Tag-Along Agreement, dated June 1, 1997, among LF Incorporated herein by reference to
Strategic Realty Investors, L.P., Prometheus Western Exhibit 4 to the Schedule 13D of
Retail, LLC, Alexander Haagen, Sr., Charlotte Haagen, Prometheus Western Retail, LLC and
and Alexander Haagen III, The Haagen Living Trust LF Strategic Realty Investors, L.P.
dated August 17, 1988; Autumn Haagen; Alexander regarding the Company filed on June
Haagen III & Betty Haagen Tr fbo Alexander Haagen IV 11, 1997
UA 10/24/88; Alexander Haagen III & Betty Haagen Tr
fbo Andrew Haagen UA 10/28/88; and Alexander Haagen
III & Betty Haagen Tr fbo Autumn Haagen UA 10/24/88
99.1 Press Release, dated June 2, 1997, by the Company E-45
announcing a strategic investment in the Company by an
affiliate of Lazard Freres Real Estate Investors, LLC
</TABLE>
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EXHIBIT 10.3
BYLAW PROVISIONS
Waiver of Maryland Business Combination Statute. The following resolution
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waiving the terms of Section 3-602 of the Maryland General Corporation Law as to
Buyer, the Purchase Agreement and the transactions contemplated thereby are
adopted:
RESOLVED, that pursuant to Section 3-603(e)(1)(ii) of the Maryland
General Corporation Law (the "MGCL"), the Board of Directors hereby
irrevocably exempts from the provisions of Section 3-602 of the MGCL, as it
may be amended from time to time, any and all "business combinations" (as
defined in Section 3-601(e) of the MGCL, as it may be amended from time to
time) that the Corporation may enter into or be a party to or with or
involving Prometheus Western Retail, LLC or any of its existing or future
"affiliates" (as defined in Section 3-601(b) of the MGCL, as it may be
amended from time to time).
Amendment of Bylaws to Waive Maryland Control Share Statute. The following
-----------------------------------------------------------
resolution amending the Company's bylaws to waive the terms of Section 3-702 of
the Maryland General Corporation Law as to Buyer, the Purchase Agreement and the
transactions contemplated thereby are adopted:
RESOLVED, that the bylaws of the Corporation are hereby amended by
adding the following paragraph at the end of Section 9 of Article II:
"Notwithstanding any other provision of the Charter of the
Corporation or these bylaws, Subtitle 7 of Title 3 of the Maryland
General Corporation Law (the "MGCL"), as it may be amended from time
to time, shall not apply to any acquisitions of shares of capital
stock of any class of the Corporation made at any time by Prometheus
Western Retail, LLC or any of its existing or future "affiliates" (as
defined in Section 3-601(b) of the MGCL, as it may be amended from
time to time). Any amendment, modification, alteration or repeal of
any provision of this paragraph shall not eliminate, restrict or
otherwise limit such exemption with respect to any such acquisitions
that have been consummated, or are the subject of an existing
agreement entered into prior to the amendment, modification,
alteration or repeal."
E-1
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EXHIBIT 10.5
CHIEF EXECUTIVE OFFICER EMPLOYMENT AGREEMENT
E-2
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EMPLOYMENT AGREEMENT FOR ALEXANDER HAAGEN
This Employment Agreement (this "Agreement") is made and entered into this
1st day of June, 1997, by and between Alexander Haagen Properties, Inc., a
Maryland corporation (the "Company"), Haagen Property Management, Inc., a
California corporation ("HPMI") and Alexander Haagen ("Executive"). All
references herein to the Company shall be deemed to include references to HPMI,
unless otherwise required by the context.
1. Positions and Duties.
--------------------
(a) The Company hereby employs Executive as the Chairman of the Board
and Chief Executive Officer of the Company during the Term (as hereinafter
defined) of this Agreement, with powers and duties consistent with such position
and Executive's stature and experience. During the Term, Executive shall
perform such additional or different duties, and accept the election or
appointment to such other offices or positions, as may mutually be agreeable to
Executive and the Board of Directors of the Company (the "Duties"). The Duties
shall be generally performed at the offices of the Company in the vicinity of
Manhattan Beach, California. In addition, the Duties may be performed by
Executive from time to time on a temporary travel basis at such other locations
as Company shall reasonably request consistent with its reasonable business
needs. Executive shall report solely to the Board of Directors of the Company.
(b) Executive shall devote his full working time to the promotion of
the Company's business and welfare, and use his best efforts to promote the
Company's products and services. Executive shall be entitled to devote such
reasonable amount of time to certain business activities in addition to
Executive's services to the Company, and that such activities may be conducted
in the real estate and real estate development fields, excluding the area of
retail shopping centers (other than those retail shopping centers listed on
Exhibit A hereto).
2. Term. The term of this Agreement will commence on the date the
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Company's stockholders approve the transactions set forth or contemplated by the
Stock Purchase Agreement among the Company, LF Strategic Realty Investors L.P.
and Prometheus Western Retail, LLC (the "Effective Date") and continue until
terminated by either party giving written notice to the other not less than 36
months prior to such termination (provided, however, that this Agreement will in
any event terminate on the fifth anniversary of the Effective Date).
3. Salary. Commencing on the Effective Date, and for the duration of the
------
Term, the Company shall pay to Executive a fixed annual salary in the amount of
Two Hundred Thousand Dollars ($200,000) per year, payable in equal installments,
no less frequently than monthly, in accordance with the Company's prevailing
payroll policy (the "Fixed Annual Salary"). The fixed Annual Salary of
Executive shall be increased on each anniversary of the Effective Date by a
percentage equal to the greater of (i) 3% of the then current Fixed Annual
Salary or (ii) the increase of the Consumer Price Index published by the United
States Department of Labor, Bureau of Labor Statistics, All Items, Consumer
Price Index for All Urban Consumers from the Effective Date or, if later, the
immediately preceding anniversary of the Effective Date. Any bonus shall be at
the sole discretion of the Board of Directors of the Company or any compensation
or similar committee thereof.
4. Expenses. The Company will promptly reimburse Executive for all
--------
reasonable travel and business expenses paid or incurred by Executive in the
performance of his duties hereunder.
5. Incentive Compensation. As a further inducement to Executive, the
----------------------
Company has granted as of the Effective Date to Executive 10,000 restricted
shares of the Company's common stock ("Restricted Stock Award"), which shall
vest over a three year period, such vesting to accelerate upon a termination of
the Term (provided, no such acceleration may occur if the Term is voluntarily
terminated by Executive within six months of such Restricted
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<PAGE>
Stock Award), subject to Section 8, such Restricted Stock Award being granted
upon such terms as are set forth in that certain Restricted Stock Award
Agreement attached hereto as Exhibit B. The Company will grant an additional
10,000 shares of Company's common stock upon each anniversary of the Effective
Date during the Term on substantially the same terms as forth in Exhibit B (for
aggregate Restricted Stock Award grants of up to an additional 40,000 shares)
provided Executive remains in the Company's employment at such date (except as
provided in Section 8). The number of shares of additional Restricted Stock
Award grants shall be subject to adjustment for stock splits, stock dividends
and combinations of stock.
6. Executive Benefits. Executive shall be entitled to the following
------------------
benefits (collectively, the "Executive Benefits"):
(a) Executive shall be entitled to a paid vacation of three weeks each
year. Such vacation shall be taken at such time or times during the applicable
year as may be determined by Executive subject to the Company's reasonable
business needs.
(b) Executive and his eligible dependents shall be included in group
hospital, surgical, medical and dental benefit plans of the Company.
(c) The Company shall promptly reimburse the Executive for all
reasonable expenses incurred by the Executive with respect to professional
memberships and continuing education upon evidence of receipt.
(d) Except as otherwise provided herein, Executive shall be entitled
to participate in any profit-sharing, stock option, pension or other plans,
benefits or policies generally available to other currently existing officers of
the Company or HPMI on the terms generally applicable to such officers, if and
to the extent that Executive is eligible to participate in accordance with the
provisions of any such plans or benefits, provided, however, that any such
-------- -------
benefits or plans are not duplicative of those provided in this Section 6.
Nothing in this Section 6(d) is intended or shall be construed to require the
Company or HPMI to institute any plan or benefits, or to maintain or refrain
from amending or terminating any such existing plan or benefits.
7. Automobile. The Company shall provide Executive with an automobile
----------
allowance of $500 per month (the "Automobile Benefit").
8. Termination.
-----------
(a) The Company shall have the right, at its election, to terminate
the Term only for "good cause," which shall consist of failure or refusal to
comply with a material term of this Agreement or misfeasance in performing under
this Agreement. Executive will have no right to any further Fixed Annual Salary
from and after termination for "good cause," or to Automobile Benefit or
Executive Benefits accruing thereafter.
Should the Term be terminated by the Company other than for "good
cause" or under Section 9, such termination shall be treated for purposes hereof
as a termination for Company's Material Breach.
(b)(i) Executive shall have the right, at his election, to terminate
the Term only for "Company's Material Breach," which shall consist of the
Company's failure or refusal to comply with a material term of this Agreement.
The Company and Executive hereby agree that the following shall constitute a
"failure or refusal to comply with a material term of this Agreement": (a) the
Company's failure or refusal to comply with the provisions of Sections 3, 4, 5,
6, or 7 hereof unless such failure or refusal to comply arises out of a bona
fide dispute; (b) relocation of Executive out of the Manhattan Beach,
California, area without his consent; (c) failure to elect or maintain Executive
as a member of the Company's Board of Directors (provided Executive is willing
and able to stand for such election or remain as a member of the Board of
Directors); or (d) adverse change in Executive's title
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<PAGE>
or material diminution in Executive's duties. In order to terminate the Term,
Executive shall be required to give written notice specifying the claimed breach
and the Company shall have failed to correct the claimed breach, if such breach
is curable, or alter the objectionable pattern of conduct specified in the
applicable written notice, thirty (30) days (ten (10) days in the case of a
breach based upon non-payment of compensation due under this Agreement) after
the receipt of the applicable notice.
(ii) Subject to the provisions of Section 11 below, should Executive
terminate the Term due to Company's Material Breach in accordance with the
provisions of Section 8 (b)(i) the Company shall pay to Executive, in cash not
later than the effective date of such termination, the sum of $1,000,000 (the
"Termination Fee") plus the aggregate amount of Executive's Fixed Annual Salary
and Automobile Benefit for the remainder of the Term and, for the remainder of
the Term, provide Executive with Executive Benefits. In addition, the
restricted stock awards to be granted pursuant to Section 5 for the remainder of
the Term shall immediately be granted and shall be vested. All other benefits
provided for in this Agreement and compensation payable under this Agreement
shall cease on such date of termination of employment except to the extent
accrued as of such date. To the extent the Termination Fee exceeds the amount
deductible by the Company pursuant to Section 162(m) of the Internal Revenue
Code of 1986, as amended, payment of such excess amount may deferred by the
Company until the beginning of the following year, together with interest
thereon at a rate equal to the prime rate published by Bank of America NT&SA.
9. Death or Disability.
-------------------
(a) The Term shall immediately terminate upon Executive's death as
certified in accordance with the provisions of California law ("Death").
(b) The Term shall immediately terminate upon Executive's Disability
(as hereinafter defined). As used herein, the term "Disability" shall mean such
condition, either mental or physical, which renders Executive unable to perform
the services required of Executive hereunder, with or without reasonable
accommodation, and such condition continues for a period of at least 120
consecutive days or an aggregate of at least 180 days during any 365-day period.
(c) In the event that the Term is terminated by reason of Executive's
Death or Disability, Executive or his estate (as the case may be) shall be
entitled to the full amount of Executive's Fixed Annual Salary For the remainder
of the Term; Executive shall have no right to any further Automobile Benefit or
any Executive Benefits.
10. Treatment. The Company shall not offer or provide employment benefits
---------
(excluding cash and equity compensation) to any other employee of the Company
more favorable than those enjoyed by Executive. Executive shall be entitled to
receive the benefit of any such terms effective upon the first day of employment
by such employee and this Agreement will be deemed to be amended to reflect such
terms. Failure to give effect to such terms by the Company will be deemed to be
Company's Material Breach of this Agreement.
11. Mitigation. The Company and Executive agree that Executive shall have
----------
no duty of mitigation. Accordingly, the parties agree that any compensation
earned by Executive after the date of his termination of employment hereunder
shall not be used to offset any Fixed Annual Salary, Restricted Stock Awards,
Automobile Benefit or Executive Benefits which the Company would otherwise be
required to pay to Executive pursuant to Section 6.
12. Confidential Information. During the Term of Employment the Executive
------------------------
agrees not to disclose to any person not employed by the Company or any
affiliated entity and not engaged to render services to the Company or any
affiliated entity any confidential information obtained while in the employ of
the Company; provided, however, that the restrictions contained herein shall not
-------- -------
apply to information that (i) was in the Executive's
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<PAGE>
possession prior to any disclosure by the Company, (ii) is or becomes generally
available to the public other than as a result of disclosure by the Executive or
his representatives in violation of this Agreement, (iii) is or becomes
available to the Executive on a non-confidential basis from a source other than
the Company or its representatives) which is not, to the Executive's knowledge,
prohibited from transmitting the information to the Executive or his
representatives by a contractual, legal, fiduciary or other obligation, (iv) was
independently acquired or developed by the Executive without violating the
Executive's obligations under this Agreement, or (v) is furnished to a third
party by the Company or any representative of the Company without similar non-
disclosure restrictions on the third party's use of such information. In
addition, this Section 11 shall not preclude the Executive 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 or services
from the Company; industry contracts; and all other secrets and information of a
confidential and proprietary nature.
13. Insurance. During the term of this Agreement, the Company shall use
---------
its best efforts to maintain, at its expense, officers and directors fiduciary
liability insurance that would cover the Executive in an amount of no less that
$5 million.
14. Disputes.
--------
(a) Any dispute or controversy arising under, out of, in connection
with or in relation to this Agreement shall, at the election and upon written
demand of any party to this Agreement, be finally determined and settled by
arbitration in Los Angeles, California, in accordance with the rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court having jurisdiction thereof.
(b) If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief that may be granted; provided,
--------
however, that the Company shall not be entitled to recover more than $10,000
- -------
from the Executive pursuant to this Section 14(b).
15. Binding on Successors. This Agreement shall be binding upon and inure
---------------------
to the benefit of the Company, the Executive and their respective successors,
assigns, personal and legal representatives, executors, administrators, heirs,
distributees, devisees, and legatees, as applicable.
16. Governing Law. This Agreement is being made and executed in and is
-------------
intended to be performed in the State of California and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of California, without regard to the conflict of laws principles
thereof.
17. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
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<PAGE>
18. Notices. Any notice, request, claim, demand, document and other
-------
communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex,
telecopy, or certified or registered mail, postage prepaid, as follows:
(a) If to the Company, addressed to its principal offices to the
attention of President, at 3500 Sepulveda Blvd., Manhattan Beach, California
90266;
(b) If to the Executive, to him at the address set forth below under
this signature; or at any other address as any party shall have specified by
notice in writing to the other parties.
19. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.
20. Entire Agreement. As of the Effective Date, the terms of this
----------------
Agreement are intended by the parties to be the final expression of their
agreement with respect to the employment of the Executive by the Company and may
not be contradicted by evidence of any prior to contemporaneous agreement and
the existing employment agreement between the Executive and the Company, is
hereby terminated on the Effective Date. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding to vary the terms of this Agreement.
21. Amendments; Waivers. This Agreement may not be modified, amended, or
-------------------
terminated except by an instrument in writing, approved by the Board and signed
by the Executive and the Company. By an instrument in writing similarly
executed, the Executive or the Company may waive compliance by the other party
or parties with any provision of this Agreement that such other party was or is
obligated to comply with or perform; provided, however, that such waiver shall
-------- -------
not operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. No failure to exercise and no delay in exercising any right, remedy or
power hereunder shall preclude any other or further exercise of any other right,
remedy or power provided herein or by law or in equity.
22. No Effect on Other Contractual Rights. Notwithstanding Section 20,
-------------------------------------
the provisions of this Agreement, and any other payment provided for hereunder,
shall not reduce any amounts otherwise payable to the Executive under any other
agreement between the Executive and the Company or other officers of the
Company, or in any way diminish the Executive's rights under any other agreement
with the Company or other officers of the Company, or employee benefit plan,
program or arrangement of the Company to which he may be entitled as an employee
of the Company.
23. No Inconsistent Actions. The parties hereto shall not voluntarily
-----------------------
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it is the
intent of the parties hereto to act in a fair and reasonable manner with respect
to the interpretation and application of the provisions of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
EXECUTIVE:
/s/Alexander Haagen, Sr.
------------------------
ALEXANDER HAAGEN
2701 Via Elevado
----------------
Street Address
Palos Verdes Estates, CA 90274
------------------------------
City State Zip
ALEXANDER HAAGEN PROPERTIES, INC.,
a Maryland corporation
By: /s/ Alexander Haagen, Sr.
-------------------------
HAAGEN PROPERTY MANAGEMENT, INC.,
a Maryland corporation
By: /s/ Alexander Haagen, Sr.
-------------------------
Its: Chief Executive Officer
-----------------------
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<PAGE>
EXHIBIT A
LIST OF RETAIL SHOPPING CENTERS OWNED BY THE HAAGEN FAMILY
Sears - Oakland
Sears - Pico
Kmart - Stone Mountain
Martin Luther King Shopping Center (Southeast/Beta)
Manhattan Hacienda/Corporate Office
Rowland Heights
Thomas Road - Phoenix 808 (former Gemco)
Fontana Land
Sweetwater Square
El Monte Shopping Center
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<PAGE>
EXHIBIT B
FORM OF RESTRICTED STOCK AWARD
E-10
<PAGE>
EXHIBIT 10.6
VICE CHAIRMAN EMPLOYMENT AGREEMENT
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<PAGE>
EMPLOYMENT AGREEMENT FOR ALEXANDER HAAGEN III
This Employment Agreement (this "Agreement") is made and entered into this
lst day of June, 1997, by and between Alexander Haagen Properties, Inc., a
Maryland corporation (the "Company"), Haagen Property Management, Inc., a
California corporation ("HPMI") and Alexander Haagen III ("Executive"). All
references herein to the Company shall be deemed to include references to HPMI,
unless otherwise required by the context.
24. Positions and Duties.
--------------------
(a) The Company hereby employs Executive as the Vice Chairman of the
Board and Chairman of the Executive Committee of the Board of Directors of the
Company during the Term (as hereinafter defined) of this Agreement, with powers
and duties consistent with such position and Executive's stature and experience.
If, during the Term, Alexander Haagen shall cease to serve as Chairman of the
Board, Executive shall be named to such position. During the Term, Executive
shall perform such additional or different duties, and accept the election or
appointment to such other offices or positions, as may mutually be agreeable to
Executive and the Board of Directors of the Company (the "Duties"). The Duties
shall be generally performed at the offices of the Company in the vicinity of
Manhattan Beach, California, or, at Executive's election, in Indio, California
(but no more than one day per week). In addition, the Duties may be performed
by Executive from time to time on a temporary travel basis at such other
locations as Company shall reasonably request consistent with its reasonable
business needs. Executive shall report solely to the Chairman of the Board of
Directors of the Company.
(b) Executive shall devote his full working time to the promotion of
the Company's business and welfare, and use his best efforts to promote the
Company's products and services. Executive shall be entitled to devote such
reasonable amount of time to certain business activities in addition to
Executive's services to the Company, and that such activities may be conducted
in the real estate and real estate development fields, excluding the area of
retail shopping centers (other than those retail shopping centers listed on
Exhibit A hereto).
25. Term. The term of this Agreement will commence on the date the
----
Company's stockholders approve the transactions set forth or contemplated by the
Stock Purchase Agreement among the Company, LF Strategic Realty Investors L.P.
and Prometheus Western Retail, LLC (the "Effective Date") and continue until
terminated by either party giving written notice to the other not less than 36
months prior to such termination (provided, however, that this Agreement will in
any event terminate on the fifth anniversary of the Effective Date).
26. Salary. Commencing on the Effective Date, and for the duration of the
------
Term, the Company shall pay to Executive a fixed annual salary in the amount of
One Hundred Thousand Dollars ($100,000) per year, payable in equal installments,
no less frequently than monthly, in accordance with the Company's prevailing
payroll policy (the "Fixed Annual Salary"). The fixed Annual Salary of
Executive shall be increased on each anniversary of the Effective Date by a
percentage equal to the greater of (i) 3% of the then current Fixed Annual
Salary or (ii) the increase of the Consumer Price Index published by the United
States Department of Labor, Bureau of Labor Statistics, All Items, Consumer
Price Index for All Urban Consumers from the Effective Date or, if later, the
immediately preceding anniversary of the Effective Date. Any bonus shall be at
the sole discretion of the Board of Directors of the Company or any compensation
or similar committee thereof.
27. Expenses. The Company will promptly reimburse Executive for all
--------
reasonable travel and business expenses paid or incurred by Executive in the
performance of his duties hereunder.
28. Incentive Compensation. As a further inducement to Executive, the
----------------------
Company has granted as of the Effective Date to Executive 10,000 restricted
shares of the Company's common stock ("Restricted Stock Award"), which shall
vest equally over a three year period, such vesting to accelerate upon a
termination of the Term (provided no such acceleration may occur if the Term is
voluntarily terminated by Executive within six months of
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<PAGE>
such Restricted Stock Award), subject to Section 8, such Restricted Stock Award
being granted upon such additional terms as are set forth in that certain
Restricted Stock Award Agreement attached hereto as Exhibit B. The Company will
grant an additional 10,000 shares of Company's common stock upon each
anniversary of the Effective Date during the Term on substantially the same
terms as forth in Exhibit B (for aggregate Restricted Stock Award grants of up
to an additional 40,000 shares) provided Executive remains in the Company's
employment at such date (except as provided in Section 8). The number of shares
of additional Restricted Stock Award grants shall be subject to adjustment for
stock splits, stock dividends and combinations of stock.
As a further inducement to Executive, the Company has granted Executive
options to acquire 200,000 shares of the Company's common stock at a price per
share equal to $15.00 ("Options"), which was greater than the market price of
the Company's Common Stock on May 30, 1997 the date agreement was reached as to
the terms thereof ("Award Date"), such Options being granted upon such terms as
are set forth in that certain Stock Option Award Agreement of even date herewith
attached hereto as Exhibit C. The number of shares of additional option grants
shall be subject to adjustment for stock splits, stock dividends and
combinations of stock.
29. Executive Benefits. Executive shall be entitled to the following
------------------
benefits (collectively, the "Executive Benefits"):
(a) Executive shall be entitled to a paid vacation of three weeks each
year. Such vacation shall be taken at such time or times during the applicable
year as may be determined by Executive subject to the Company's reasonable
business needs.
(b) Executive and his eligible dependents shall be included in group
hospital, surgical, medical and dental benefit plans of the Company.
(c) The Company shall promptly reimburse the Executive for all
reasonable expenses incurred by the Executive with respect to professional
memberships and continuing education upon evidence of receipt.
(d) Except as otherwise provided herein, Executive shall be entitled
to participate in any profit-sharing, stock option, pension or other plans,
benefits or policies generally available to other currently existing officers of
the Company or HPMI on the terms generally applicable to such officers, if and
to the extent that Executive is eligible to participate in accordance with the
provisions of any such plans or benefits, provided, however, that any such
-------- -------
benefits or plans are not duplicative of those provided in this Section 6.
Nothing in this Section 6(d) is intended or shall be construed to require the
Company or HPMI to institute any plan or benefits, or to maintain or refrain
from amending or terminating any such existing plan or benefits.
30. Automobile. The Company shall provide Executive with an automobile
----------
allowance of $500 per month (the "Automobile Benefit").
31. Termination.
-----------
(a) The Company shall have the right, at its election, to terminate
the Term only for "good cause," which shall consist of failure or refusal to
comply with a material term of this Agreement or misfeasance in performing under
this Agreement. Executive will have no right to any further Fixed Annual Salary
from and after termination for "good cause," or to Automobile Benefit or
Executive Benefits accruing thereafter.
Should the Term be terminated by the Company other than for "good
cause" or under Section 9, such termination shall be treated for purposes hereof
as a termination for Company's Material Breach.
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<PAGE>
(b)(i) Executive shall have the right, at his election, to terminate
the Term only for "Company's Material Breach," which shall consist of the
Company's failure or refusal to comply with a material term of this Agreement.
The Company and Executive hereby agree that the following shall constitute a
"failure or refusal to comply with a material term of this Agreement": (a) the
Company's failure or refusal to comply with the provisions of Sections 3, 4, 5,
6, or 7 hereof unless such failure or refusal to comply arises out of a bona
fide dispute; (b) relocation of Executive out of the Manhattan Beach,
California, area without his consent; (c) failure to elect or maintain Executive
as a member of the Company's Board of Directors (provided Executive is willing
and able to stand for such election or remain as a member of the Board of
Directors); or (d) adverse change in Executive's title or material diminution in
Executive's duties. In order to terminate the Term, Executive shall be required
to give written notice specifying the claimed breach and the Company shall have
failed to correct the claimed breach, if such breach is curable, or alter the
objectionable pattern of conduct specified in the applicable written notice,
thirty (30) days (ten (10) days in the case of a breach based upon non-payment
of compensation due under this Agreement) after the receipt of the applicable
notice.
(ii) Subject to the provisions of Section 11 below, should Executive
terminate the Term due to Company's Material Breach in accordance with the
provisions of Section 8 (b)(i)the Company shall pay to Executive, in cash not
later than the effective date of such termination, the sum of $500,000 plus the
aggregate amount of Executive's Fixed Annual Salary and Automobile Benefit for
the remainder of the Term and, for the remainder of the Term, provide Executive
with Executive Benefits. In addition, the restricted stock awards to be granted
pursuant to Section 5 for the remainder of the Term shall immediately be granted
and shall be vested and the Options granted pursuant to Section 5 shall vest
according to their terms. All other benefits provided for in this Agreement and
compensation payable under this Agreement shall cease on such date of
termination of employment except to the extent accrued as of such date.
32. Death or Disability.
-------------------
(a) The Term shall immediately terminate upon Executive's death as
certified in accordance with the provisions of California law ("Death").
(b) The Term shall immediately terminate upon Executive's Disability
(as hereinafter defined). As used herein, the term "Disability" shall mean such
condition, either mental or physical, which renders Executive unable to perform
the services required of Executive hereunder, with or without reasonable
accommodation, and such condition continues for a period of at least 120
consecutive days or an aggregate of at least 180 days during any 365-day period.
(c) In the event that the Term is terminated by reason of Executive's
Death or Disability, Executive or his estate (as the case may be) shall be
entitled to the full amount of Executive's Fixed Annual Salary For the remainder
of the Term; Executive shall have no right to any further Automobile Benefit or
any Executive Benefits.
33. Treatment. The Company shall not offer or provide employment benefits
---------
(excluding cash and equity compensation) to any other employee of the Company
more favorable than those enjoyed by Executive. Executive shall be entitled to
receive the benefit of any such terms effective upon the first day of employment
by such employee and this Agreement will be deemed to be amended to reflect such
terms. Failure to give effect to such terms by the Company will be deemed to be
Company's Material Breach of this Agreement.
34. Mitigation. The Company and Executive agree that Executive shall have
----------
no duty of mitigation. Accordingly, the parties agree that any compensation
earned by Executive after the date of his termination of employment hereunder
shall not be used to offset any Fixed Annual Salary, Restricted Stock Awards,
Options,
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<PAGE>
Automobile Benefit or Executive Benefits which the Company would otherwise be
required to pay to Executive pursuant to Section 6.
35. Confidential Information. During the Term of Employment the Executive
------------------------
agrees not to disclose to any person not employed by the Company or any
affiliated entity and not engaged to render services to the Company or any
affiliated entity any confidential information obtained while in the employ of
the Company; provided, however, that the restrictions contained herein shall not
-------- -------
apply to information that (i) was in the Executive's possession prior to any
disclosure by the Company, (ii) is or becomes generally available to the public
other than as a result of disclosure by the Executive or his representatives in
violation of this Agreement, (iii) is or becomes available to the Executive on a
non-confidential basis from a source other than the Company or its
representatives) which is not, to the Executive's knowledge, prohibited from
transmitting the information to the Executive or his representatives by a
contractual, legal, fiduciary or other obligation, (iv) was independently
acquired or developed by the Executive without violating the Executive's
obligations under this Agreement, or (v) is furnished to a third party by the
Company or any representative of the Company without similar non-disclosure
restrictions on the third party's use of such information. In addition, this
Section 11 shall not preclude the Executive 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 or services
from the Company; industry contracts; and all other secrets and information of a
confidential and proprietary nature.
36. Insurance. During the term of this Agreement, the Company shall use
---------
its best efforts to maintain, at its expense, officers and directors fiduciary
liability insurance that would cover the Executive in an amount of no less that
$5 million.
37. Disputes.
--------
(a) Any dispute or controversy arising under, out of, in connection
with or in relation to this Agreement shall, at the election and upon written
demand of any party to this Agreement, be finally determined and settled by
arbitration in Los Angeles, California, in accordance with the rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court having jurisdiction thereof.
(b) If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief that may be granted; provided,
--------
however, that the Company shall not be entitled to recover more than $10,000
- -------
from the Executive pursuant to this Section 14(b).
38. Binding on Successors. This Agreement shall be binding upon and inure
---------------------
to the benefit of the Company, the Executive and their respective successors,
assigns, personal and legal representatives, executors, administrators, heirs,
distributees, devisees, and legatees, as applicable.
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<PAGE>
39. Governing Law. This Agreement is being made and executed in and is
-------------
intended to be performed in the State of California and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of California, without regard to the conflict of laws principles
thereof.
40. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
41. Notices. Any notice, request, claim, demand, document and other
-------
communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex,
telecopy, or certified or registered mail, postage prepaid, as follows:
(a) If to the Company, addressed to its principal offices to the
attention of President, at 3500 Sepulveda Blvd., Manhattan Beach, California
90266;
(b) If to the Executive, to him at the address set forth below under
this signature; or at any other address as any party shall have specified by
notice in writing to the other parties.
42. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.
43. Entire Agreement. As of the Effective Date, the terms of this
----------------
Agreement are intended by the parties to be the final expression of their
agreement with respect to the employment of the Executive by the Company and may
not be contradicted by evidence of any prior to contemporaneous agreement and
the existing employment agreement between the Executive and the Company, is
hereby terminated on the Effective Date. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding to vary the terms of this Agreement.
44. Amendments; Waivers. This Agreement may not be modified, amended, or
-------------------
terminated except by an instrument in writing, approved by the Board and signed
by the Executive and the Company. By an instrument in writing similarly
executed, the Executive or the Company may waive compliance by the other party
or parties with any provision of this Agreement that such other party was or is
obligated to comply with or perform; provided, however, that such waiver shall
-------- -------
not operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. No failure to exercise and no delay in exercising any right, remedy or
power hereunder shall preclude any other or further exercise of any other right,
remedy or power provided herein or by law or in equity.
45. No Effect on Other Contractual Rights. Notwithstanding Section 20,
-------------------------------------
the provisions of this Agreement, and any other payment provided for hereunder,
shall not reduce any amounts otherwise payable to the Executive under any other
agreement between the Executive and the Company or other officers of the
Company, or in any way diminish the Executive's rights under any other agreement
with the Company or other officers of the Company, or employee benefit plan,
program or arrangement of the Company to which he may be entitled as an employee
of the Company.
46. No Inconsistent Actions. The parties hereto shall not voluntarily
-----------------------
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it is the
intent of the parties hereto to act in a fair and reasonable manner with respect
to the interpretation and application of the provisions of this Agreement.
E-16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
EXECUTIVE:
/s/ Alexander Haagen III
------------------------
ALEXANDER HAAGEN III
811 N. Bedford Drive
--------------------
Street Address
Beverly Hills, CA 90210
-----------------------
City State Zip
ALEXANDER HAAGEN PROPERTIES, INC.,
a Maryland corporation
By: /s/ Alexander Haagen, Sr.
-------------------------
HAAGEN PROPERTY MANAGEMENT, INC.,
a Maryland corporation
By: /s/ Alexander Haagen, Sr.
-------------------------
Its: Chief Executive Officer
-----------------------
E-17
<PAGE>
EXHIBIT A
LIST OF RETAIL SHOPPING CENTERS OWNED BY THE HAAGEN FAMILY
Sears - Oakland
Sears - Pico
Kmart - Stone Mountain
Martin Luther King Shopping Center (Southeast/Beta)
Manhattan Hacienda/Corporate Office
Rowland Heights
Thomas Road - Phoenix 808 (former Gemco)
Fontana Land
Sweetwater Square
El Monte Shopping Center
E-18
<PAGE>
EXHIBIT B
FORM OF RESTRICTED STOCK AWARD
E-19
<PAGE>
EXHIBIT C
FORM OF OPTION AGREEMENT
E-20
<PAGE>
EXHIBIT 10.7
VICE PRESIDENT EMPLOYMENT AGREEMENT
E-21
<PAGE>
EMPLOYMENT AGREEMENT FOR CHARLOTTE HAAGEN
This Employment Agreement (this "Agreement") is made and entered into this
1st day of June, 1997, by and between Alexander Haagen Properties, Inc., a
Maryland corporation (the "Company"), Haagen Property Management, Inc., a
California corporation ("HPMI") and Charlotte Haagen ("Executive"). All
references herein to the Company shall be deemed to include references to HPMI,
unless otherwise required by the context.
47. Positions and Duties.
--------------------
(a) The Company hereby employs Executive as a Vice President of the
Company during the Term (as hereinafter defined) of this Agreement, with powers
and duties consistent with such position and Executive's stature and experience.
During the Term, Executive shall perform such additional or different duties,
and accept the election or appointment to such other offices or positions, as
may mutually be agreeable to Executive and the Board of Directors of the Company
(the "Duties"). The Duties shall be generally performed at the offices of the
Company in the vicinity of Manhattan Beach, California. In addition, the Duties
may be performed by Executive from time to time on a temporary travel basis at
such other locations as Company shall reasonably request consistent with its
reasonable business needs. Executive shall report solely to the Chairman of the
Board of Directors of the Company.
(b) Executive shall devote her full working time to the promotion of
the Company's business and welfare, and use her best efforts to promote the
Company's products and services. Executive shall be entitled to devote such
reasonable amount of time to certain business activities in addition to
Executive's services to the Company, and that such activities may be conducted
in the real estate and real estate development fields, excluding the area of
retail shopping centers (other than those retail shopping centers listed on
Exhibit A hereto).
48. Term. The term of this Agreement will commence on the date the
----
Company's stockholders approve the transactions set forth or contemplated by the
Stock Purchase Agreement among the Company, LF Strategic Realty Investors L.P.
and Prometheus Western Retail, LLC (the "Effective Date") and continue until
terminated by either party giving written notice to the other not less than 36
months prior to such termination (provided, however, that this Agreement will in
any event terminate on the fifth anniversary of the Effective Date).
49. Salary. Commencing on the Effective Date, and for the duration of the
------
Term, the Company shall pay to Executive a fixed annual salary in the amount of
Twenty-Five Thousand Dollars ($25,000) per year, payable in equal installments,
no less frequently than monthly, in accordance with the Company's prevailing
payroll policy (the "Fixed Annual Salary"). The fixed Annual Salary of
Executive shall be increased on each anniversary of the Effective Date by a
percentage equal to the greater of (i) 3% of the then current Fixed Annual
Salary or (ii) the increase of the Consumer Price Index published by the United
States Department of Labor, Bureau of Labor Statistics, All Items, Consumer
Price Index for All Urban Consumers from the Effective Date or, if later, the
immediately preceding anniversary of the Effective Date. Any bonus shall be at
the sole discretion of the Board of Directors of the Company or any compensation
or similar committee thereof.
50. Expenses. The Company will promptly reimburse Executive for all
--------
reasonable travel and business expenses paid or incurred by Executive in the
performance of her duties hereunder.
51. Executive Benefits. Executive shall be entitled to the following
------------------
benefits (collectively, the "Executive Benefits"):
(a) Executive shall be entitled to a paid vacation of three weeks each
year. Such vacation shall be taken at such time or times during the applicable
year as may be determined by Executive subject to the Company's reasonable
business needs.
E-22
<PAGE>
(b) Executive and her eligible dependents shall be included in group
hospital, surgical, medical and dental benefit plans of the Company.
(c) The Company shall promptly reimburse the Executive for all
reasonable expenses incurred by the Executive with respect to professional
memberships and continuing education upon evidence of receipt.
(d) Except as otherwise provided herein, Executive shall be entitled
to participate in any profit-sharing, stock option, pension or other plans,
benefits or policies generally available to other currently existing officers of
the Company or HPMI on the terms generally applicable to such officers, if and
to the extent that Executive is eligible to participate in accordance with the
provisions of any such plans or benefits, provided, however, that any such
-------- -------
benefits or plans are not duplicative of those provided in this Section 5.
Nothing in this Section 5(d) is intended or shall be construed to require the
Company or HPMI to institute any plan or benefits, or to maintain or refrain
from amending or terminating any such existing plan or benefits.
52. Automobile. The Company shall provide Executive with an automobile
----------
allowance of $_______ per month (the "Automobile Benefit").
53. Termination.
-----------
(a) The Company shall have the right, at its election, to terminate
the Term only for "good cause," which shall consist of failure or refusal to
comply with a material term of this Agreement or misfeasance in performing under
this Agreement. Executive will have no right to any further Fixed Annual Salary
from and after termination for "good cause," or to Automobile Benefit or
Executive Benefits accruing thereafter.
Should the Term be terminated by the Company other than for "good
cause" or under Section 8, such termination shall be treated for purposes hereof
as a termination for Company's Material Breach.
(b)(i) Executive shall have the right, at her election, to terminate
the Term only for "Company's Material Breach," which shall consist of the
Company's failure or refusal to comply with a material term of this Agreement.
The Company and Executive hereby agree that the following shall constitute a
"failure or refusal to comply with a material term of this Agreement": (a) the
Company's failure or refusal to comply with the provisions of Sections 3, 4, 5
or 6 hereof unless such failure or refusal to comply arises out of a bona fide
dispute; (b) relocation of Executive out of the Manhattan Beach, California,
area without her consent; or (c) adverse change in Executive's title or material
diminution in Executive's duties. In order to terminate the Term, Executive
shall be required to give written notice specifying the claimed breach and the
Company shall have failed to correct the claimed breach, if such breach is
curable, or alter the objectionable pattern of conduct specified in the
applicable written notice, thirty (30) days (ten (10) days in the case of a
breach based upon non-payment of compensation due under this Agreement) after
the receipt of the applicable notice.
(ii) Subject to the provisions of Section 11 below, should Executive
terminate the Term due to Company's Material Breach in accordance with the
provisions of Section 8 (b)(i)the Company shall pay to Executive, in cash not
later than the effective date of the termination of the Term, the aggregate
amount of Executive's Fixed Annual Salary and Automobile Benefit for the
remainder of the Term and, for the remainder of the Term, provide Executive with
Executive Benefits. All other benefits provided for in this Agreement and
compensation payable under this Agreement shall cease on such date of
termination of employment except to the extent accrued as of such date.
E-23
<PAGE>
54. Death or Disability.
-------------------
(a) The Term shall immediately terminate upon Executive's death as
certified in accordance with the provisions of California law ("Death").
(b) The Term shall immediately terminate upon Executive's Disability
(as hereinafter defined). As used herein, the term "Disability" shall mean such
condition, either mental or physical, which renders Executive unable to perform
the services required of Executive hereunder, with or without reasonable
accommodation, and such condition continues for a period of at least 120
consecutive days or an aggregate of at least 180 days during any 365-day period.
(c) In the event that the Term is terminated by reason of Executive's
Death or Disability, Executive or her estate (as the case may be) shall be
entitled to the full amount of Executive's Fixed Annual Salary for the remainder
of the Term; Executive shall have no right to any further Automobile Benefit or
any Executive Benefits.
55. Treatment. The Company shall not offer or provide employment benefits
---------
(excluding cash and equity compensation) to any other employee of the Company
more favorable than those enjoyed by Executive. Executive shall be entitled to
receive the benefit of any such terms effective upon the first day of employment
by such employee and this Agreement will be deemed to be amended to reflect such
terms. Failure to give effect to such terms by the Company will be deemed to be
Company's Material Breach of this Agreement.
56. Mitigation. The Company and Executive agree that Executive shall have
----------
no duty of mitigation. Accordingly, the parties agree that any compensation
earned by Executive after the date of her termination of employment hereunder
shall not be used to offset any Fixed Annual Salary, Automobile Benefit or
Executive Benefits which the Company would otherwise be required to pay to
Executive pursuant to Section 5.
57. Confidential Information. During the Term of Employment the Executive
------------------------
agrees not to disclose to any person not employed by the Company or any
affiliated entity and not engaged to render services to the Company or any
affiliated entity any confidential information obtained while in the employ of
the Company; provided, however, that the restrictions contained herein shall not
-------- -------
apply to information that (i) was in the Executive's possession prior to any
disclosure by the Company, (ii) is or becomes generally available to the public
other than as a result of disclosure by the Executive or her representatives in
violation of this Agreement, (iii) is or becomes available to the Executive on a
non-confidential basis from a source other than the Company or its
representatives) which is not, to the Executive's knowledge, prohibited from
transmitting the information to the Executive or her representatives by a
contractual, legal, fiduciary or other obligation, (iv) was independently
acquired or developed by the Executive without violating the Executive's
obligations under this Agreement, or (v) is furnished to a third party by the
Company or any representative of the Company without similar non-disclosure
restrictions on the third party's use of such information. In addition, this
Section 11 shall not preclude the Executive 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 or services
from the Company; industry contracts; and all other secrets and information of a
confidential and proprietary nature.
E-24
<PAGE>
58. Insurance. During the term of this Agreement, the Company shall use
---------
its best efforts to maintain, at its expense, officers and directors fiduciary
liability insurance that would cover the Executive in an amount of no less that
$5 million.
59. Disputes.
--------
(a) Any dispute or controversy arising under, out of, in connection
with or in relation to this Agreement shall, at the election and upon written
demand of any party to this Agreement, be finally determined and settled by
arbitration in Los Angeles, California, in accordance with the rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court having jurisdiction thereof.
(b) If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief that may be granted; provided,
--------
however, that the Company shall not be entitled to recover more than $10,000
- -------
from the Executive pursuant to this Section 13 (b).
60. Binding on Successors. This Agreement shall be binding upon and inure
---------------------
to the benefit of the Company, the Executive and their respective successors,
assigns, personal and legal representatives, executors, administrators, heirs,
distributees, devisees, and legatees, as applicable.
61. Governing Law. This Agreement is being made and executed in and is
-------------
intended to be performed in the State of California and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of California, without regard to the conflict of laws principles
thereof.
62. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
63. Notices. Any notice, request, claim, demand, document and other
-------
communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex,
telecopy, or certified or registered mail, postage prepaid, as follows:
(a) If to the Company, addressed to its principal offices to the
attention of President, at 3500 Sepulveda Blvd., Manhattan Beach, California
90266;
(b) If to the Executive, to her at the address set forth below under
this signature; or at any other address as any party shall have specified by
notice in writing to the other parties.
64. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.
65. Entire Agreement. As of the Effective Date, the terms of this
----------------
Agreement are intended by the parties to be the final expression of their
agreement with respect to the employment of the Executive by the Company and may
not be contradicted by evidence of any prior or contemporaneous agreement and
the existing employment agreement between the Executive and the Company is
hereby terminated on the Effective Date. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative or other legal proceeding to vary the terms of this Agreement.
E-25
<PAGE>
66. Amendments; Waivers. This Agreement may not be modified, amended, or
-------------------
terminated except by an instrument in writing, approved by the Board and signed
by the Executive and the Company. By an instrument in writing similarly
executed, the Executive or the Company may waive compliance by the other party
or parties with any provision of this Agreement that such other party was or is
obligated to comply with or perform; provided, however, that such waiver shall
-------- -------
not operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. No failure to exercise and no delay in exercising any right, remedy or
power hereunder shall preclude any other or further exercise of any other right,
remedy or power provided herein or by law or in equity.
67. No Effect on Other Contractual Rights. Notwithstanding Section 19,
-------------------------------------
the provisions of this Agreement, and any other payment provided for hereunder,
shall not reduce any amounts otherwise payable to the Executive under any other
agreement between the Executive and the Company or other officers of the
Company, or in any way diminish the Executive's rights under any other agreement
with the Company or other officers of the Company, or employee benefit plan,
program or arrangement of the Company to which he may be entitled as an employee
of the Company.
68. No Inconsistent Actions. The parties hereto shall not voluntarily
-----------------------
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it is the
intent of the parties hereto to act in a fair and reasonable manner with respect
to the interpretation and application of the provisions of this Agreement.
E-26
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
EXECUTIVE:
/s/ Charlotte Haagen
--------------------------------------
CHARLOTTE HAAGEN
2701 Via Elevado
--------------------------------------
Street Address
Palos Verdes Estates, CA
--------------------------------------
City State Zip
ALEXANDER HAAGEN PROPERTIES, INC.,
a Maryland corporation
By: /s/ Alexander Haagen, Sr.
-----------------------------------
HAAGEN PROPERTY MANAGEMENT, INC.,
a Maryland corporation
By: /s/ Alexander Haagen, Sr.
-----------------------------------
Its: Chief Executive Officer
-----------------------
E-27
<PAGE>
EXHIBIT A
LIST OF RETAIL SHOPPING CENTERS OWNED BY THE HAAGEN FAMILY
Sears - Oakland
Sears - Pico
Kmart - Stone Mountain
Martin Luther King Shopping Center (Southeast/Beta)
Manhattan Hacienda/Corporate Office
Rowland Heights
Thomas Road - Phoenix 808 (former Gemco)
Fontana Land
Sweetwater Square
El Monte Shopping Center
E-28
<PAGE>
EXHIBIT 10.9
REGISTRATION RIGHTS AGREEMENT
by and among
ALEXANDER HAAGEN PROPERTIES, INC.
and
ALEXANDER HAAGEN, CHARLOTTE HAAGEN,
ALEXANDER HAAGEN III and the other parties named herein
dated as of
June 1, 1997
E-29
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 1. Definitions........................... 1
-----------
(a) "Agreement"........................... 1
(b) "Commencement Date"................... 1
(c) "Company"............................. 1
(d) "Company Registration Expenses"....... 1
(e) "Commission".......................... 2
(f) "Demand Registration"................. 2
(g) "Exchange Act"........................ 2
(i) "Lazard".............................. 2
(j) "NASD"................................ 2
(l) "Registrable Securities".............. 2
(m) "Registration Expenses"............... 2
(n) "Registration Suspension Period"...... 3
(o) "Securities Act"...................... 3
(p) "Stockholders' Agreement"............. 3
(q) "Stock Purchase Agreement"............ 3
(r) "Suspension Notice"................... 3
(s) "Underwritten/Placed Offering"........ 3
Section 2. Demand Registration................... 3
-------------------
(a) Obligation to File.................... 3
(b) Black-Out Periods of the Haagen Family 4
(c) Number of Demand Registrations........ 5
(d) Notice................................ 5
(e) Expenses.............................. 5
(f) Selection of Underwriters............. 5
Section 3. Incidental Registrations.............. 5
------------------------
(a) Notification and Inclusion............ 5
(b) Cut-back Provisions................... 6
(c) Expenses.............................. 7
(d) Duration of Effectiveness............. 7
Section 4. Registration Procedures............... 7
-----------------------
Section 5. Requested Underwritten Offerings...... 10
--------------------------------
Section 6. Preparation; Reasonable Investigation. 10
--------------------------------------
Section 7. Indemnification....................... 11
---------------
(a) Indemnification by the Company........ 11
(b) Indemnification by the Haagen Family.. 12
(c) Notices of Claims, etc. .............. 12
</TABLE>
E-30
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(d) Other Indemnification................. 13
(e) Indemnification Payments.............. 13
(f) Contribution.......................... 13
Section 8. Covenants Relating to Rule 144........ 13
------------------------------
Section 9. Miscellaneous......................... 14
-------------
(a) Counterparts.......................... 14
(b) Governing Law......................... 14
(c) Entire Agreement...................... 14
(d) Notices............................... 14
(e) Successors and Assigns................ 15
(f) Headings.............................. 15
(g) Amendments and Waivers................ 16
(h) Interpretation; Absence of Presumption 16
(i) Severability.......................... 16
</TABLE>
E-31
<PAGE>
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June 1,
1997, by and among Alexander Haagen Properties, Inc., a Maryland corporation
(the "Company") and Alexander Haagen, Charlotte Haagen, Alexander Haagen III, or
a controlled affiliate thereof (the "Haagen Family"). Capitalized terms not
otherwise defined herein have the meaning ascribed to them in the Stock Purchase
Agreement (as herein after defined).
WHEREAS, the Company and LF Strategic Realty Investors L.P. and
Prometheus Western Retail, LLC (collectively, "Lazard") have entered into a
Stock Purchase Agreement, dated as of June 1, 1997 (the "Stock Purchase
Agreement"), that provides for the purchase by Lazard and sale by the Company to
Lazard of shares of Company Common Stock; and
WHEREAS, the Company, Lazard and the Haagen Family have entered into
various agreements, including a voting agreement dated as of June 1, 1997 (the
"Voting Agreement"), that provides for the Haagen Family to vote in favor of the
Stock Purchase Agreement and the Stockholders' Agreement, dated as of June 1,
1997 (the "Stockholders' Agreement")
WHEREAS, in order to induce the Haagen Family to enter into the Voting
Agreement, the Company has agreed to provide the registration rights set forth
herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
Section 1. Definitions. As used herein, the following terms shall
-----------
have the following meanings:
(a) "Agreement" shall have the meaning set forth in the first
paragraph hereof.
(b) "Commencement Date" shall mean the first anniversary of the date
of this Agreement.
(c) "Company" shall have the meaning set forth in the first paragraph
hereof.
(d) "Company Registration Expenses" shall mean the fees and
disbursements of counsel and independent public accountants for the Company
incurred in connection with the Company's performance of or compliance with
this Agreement, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and
compliance, and any premiums and other costs of policies of insurance
obtained by the Company against liabilities arising out of the sale of any
securities.
(e) "Commission" shall mean the Securities and Exchange Commission,
and any successor thereto.
(f) "Demand Registration" shall have the meaning set forth in Section
2(a).
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor thereto, and the rules and regulations
thereunder.
(h) "Haagen Family" shall have the meaning set forth in the first
paragraph hereof.
E-32
<PAGE>
(i) "Lazard" shall have the meaning set forth in the second paragraph
hereof.
(j) "NASD" shall mean the National Association of Securities Dealers,
Inc.
(k) "OP Units" shall mean the units of limited partnership interest in
Alexander Haagen Properties Operating Partnership, L.P., a California
limited partnership.
(l) "Registrable Securities" shall mean (i) any and all shares of
Company Common Stock held by the Haagen Family, (ii) any and all shares of
Company Common Stock issuable upon exchange of OP Units or upon exercise of
Company stock options , (iii) any and all securities acquired by the Haagen
Family pursuant to Section 1 of the Stockholders Agreement, and (iv) any
securities issued or issuable with respect to any Company Common Stock or
other securities referred to in clause (i) or (iii) by way of conversion,
exchange, stock dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization
or otherwise. As to any particular Registrable Securities, once issued
such securities shall cease to be Registrable Securities when (A) a
registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (B)
such securities shall have been sold in accordance with Rule 144 (or any
successor provision) under the Securities Act or (C) such securities are
eligible to be resold pursuant to Rule 144(k).
(m) "Registration Expenses" shall mean all registration, filing and
stock exchange or NASD fees, all fees and expenses of complying with
securities or blue sky laws, all printing expenses, messenger and delivery
expenses, any fees and disbursements of any separate counsel retained by
the Haagen Family, and transfer taxes, if any, and any premiums and other
costs of policies of insurance obtained by the Haagen Family against
liabilities arising out of the public offering of securities, including
Company Registration Expenses, but specifically excludes any fees and
disbursements of underwriters customarily paid by sellers of securities who
are not the issuers of such securities and all underwriting discounts and
commissions.
(n) "Registration Suspension Period" shall have the meaning set forth
in Section 2(b).
(o) "Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor thereto, and the rules and regulations
thereunder.
(p) "Stockholders' Agreement" shall have the meaning set forth in the
third paragraph hereof.
(q) "Stock Purchase Agreement" shall have the meaning set forth in the
second paragraph hereof.
(r) "Suspension Notice" shall have the meaning set forth in Section
2(b).
(s) "Underwritten/Placed Offering" shall mean a sale of securities of
the Company to an underwriter or underwriters for reoffering to the public
or on behalf of a person other than the Company through an agent for sale
to the public.
Section 2. Demand Registration
-------------------
E-33
<PAGE>
(a) Obligation to File. At any time following the Commencement Date,
------------------
promptly upon the written request of the Haagen Family, the Company will
use its reasonable best efforts to file with the Commission a registration
statement under the Securities Act for the offering of all of the
Registrable Securities which the Haagen Family requests to be registered
(the "Demand Registration"). The Demand Registration shall be on an
appropriate form and the Demand Registration and any form of prospectus
included therein shall reflect such plan of distribution or method of sale
as the Haagen Family notifies the Company, including the sale of some or
all of the Registrable Securities in a public offering or, if requested by
the Haagen Family, subject to receipt by the Company of such information
(including information relating to purchasers) as the Company reasonably
may require, (i) in a transaction constituting an offering outside the
United States which is exempt from the registration requirements of the
Securities Act in which the seller undertakes to effect registration after
the completion of such offering in order to permit such shares to be freely
tradeable in the United States, (ii) in a transaction constituting a
private placement under Section 4(2) of the Securities Act in connection
with which the seller undertakes to effect a registration after the
conclusion of such placement to permit such shares to be freely tradeable
by the purchasers thereof, or (iii) in a transaction under Rule 144A of the
Securities Act in connection with which the seller undertakes to effect a
registration after the conclusion of such transaction to permit such shares
to be freely tradeable by the purchasers thereof. The Company shall use its
reasonable best efforts to cause the Demand Registration to become
effective, and, upon the request of the Haagen Family, keep the Demand
Registration effective for up to 90 days, unless the distribution of
securities registered thereunder has been earlier completed; provided,
however, that if such Demand Registration will require the Company to
prepare or file audited financial statements with respect to any fiscal
year by a date prior to the date on which the Company would otherwise be
required to prepare and file such audited financial statements, then the
Haagen Family must notify the Company at least thirty days in advance of
the date upon which such audited financial statements will be required to
be filed. During the period during which the Demand Registration is
effective, the Company shall supplement or make amendments to the Demand
Registration, if required by the Securities Act or if reasonably requested
by the Haagen Family or an underwriter of Registrable Securities, including
to reflect any specific plan of distribution or method of sale, and shall
use its reasonable best efforts to have such supplements and amendments
declared effective, if required, as soon as practicable after filing.
(b) Black-Out Periods of the Haagen Family. Notwithstanding anything
--------------------------------------
herein to the contrary, (i) the Company shall have the right from time to
time to require the Haagen Family not to sell under the Demand Registration
or to suspend the effectiveness thereof during the period starting with the
date 30 days prior to the Company's good faith estimate, as certified in
writing by an executive officer of the Company to the Haagen Family, of the
proposed date of filing of a registration statement or a preliminary
prospectus supplement relating to an existing shelf registration statement,
in either case, pertaining to an underwritten public offering of equity
securities of the Company for the account of the Company, and ending on the
date 75 days following the effective date of such registration statement or
the date of filing of the final prospectus supplement, and (ii) the Company
shall be entitled to require the Haagen Family not to sell under the Demand
Registration or to suspend the effectiveness thereof (but not for a period
exceeding 75 days in any calendar year) if the Company determines, in its
good faith judgment, that such offering or continued effectiveness would
interfere with any material financing, acquisition, disposition, corporate
reorganization or other material transaction involving the Company or any
of its subsidiaries or public disclosure thereof would be required prior to
the time such disclosure might otherwise be required, or when the Company
is in possession of material information that it deems advisable not to
disclose in a registration statement.
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<PAGE>
Once any registration statement filed pursuant to this Section 2 or in
which Registrable Securities are included pursuant to Section 3 has been
declared effective, any period during which the Company fails to keep such
registration statement effective and usable for resale of Registrable
Securities for the period required by Section 4(b) shall be referred to as
a "Registration Suspension Period". A Registration Suspension Period shall
commence on and include the date that the Company gives written notice to
the Haagen Family of its determination that such registration statement is
no longer effective or usable for resale of Registrable Securities (the
"Suspension Notice") to and including the date when the Company notifies
the Haagen Family that the use of the prospectus included in such
registration statement may be resumed for the disposition of Registrable
Securities.
(c) Number of Demand Registrations. The Company shall be obligated to
------------------------------
effect, under this Section 2, only three Demand Registrations. A Demand
Registration shall not be deemed to have been effected, nor shall it be
sufficient to reduce the number of Demand Registrations available to the
Haagen Family under this Section 2, if such registration cannot be used by
the Haagen Family for more than 60 days as a result of any stop order,
injunction or other order of the Commission or other Government Authority
for any reason other than an act or omission of the Haagen Family and all
the Registerable Securities registered thereunder are not sold.
(d) Notice. The Company shall give the Haagen Family prompt notice in
------
the event that the Company has suspended sales of Registrable Securities
under Section 2(b).
(e) Expenses. All Registration Expenses incurred in connection with
--------
the first Demand Registration which may be requested under this Section 2
shall be borne by the Company, with the Haagen Family only paying
underwriting fees and discounts. The Registration Expenses incurred in
connection with the second Demand Registration which may be requested under
this Section 2 shall be borne equally by the Company and the Haagen Family.
All Registration Expenses and underwriting fees and discounts incurred in
connection with the remaining Demand Registration which may be requested
under this Section 2 shall be borne by the Haagen Family.
(f) Selection of Underwriters. Any and all underwriters or other
-------------------------
agents involved in any sale of Registrable Securities pursuant to a
registration statement contemplated by this Section 2 shall include such
underwriter(s) or other agent(s) as selected by the Haagen Family and
approved of by the Company, which approval shall not be unreasonably
withheld.
Section 3. Incidental Registrations
------------------------
(a) Notification and Inclusion. If the Company proposes to register
--------------------------
for its own account any common equity securities of the Company or any
securities convertible into common equity securities of the Company under
the Securities Act (other than a registration relating solely to the sale
of securities to participants in a dividend reinvestment plan, a
registration on Form S-4 relating to a business combination or similar
transaction permitted to be registered on such Form S-4, a registration on
Form S-8 relating solely to the sale of securities to participants in a
stock or employee benefit plan, a registration permitted under Rule 462
under the Securities Act registering additional securities of the same
class as were included in an earlier registration statement for the same
offering, and declared effective), the Company shall, at each such time
after the Commencement Date until the Haagen Family no longer holds
Registerable Securities, promptly give written notice of such registration
to the Haagen Family. Upon the written request of the Haagen Family given
within 10 days after receipt of such notice by the Haagen Family, the
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<PAGE>
Company shall seek to include in such proposed registration such
Registrable Securities as the Haagen Family shall request be so included
and shall use its reasonable best efforts to cause a registration statement
covering all of the Registrable Securities that the Haagen Family has
requested to be registered to become effective under the Securities Act.
The Company shall be under no obligation to complete any offering of
securities it proposes to make under this Section 3 and shall incur no
liability to the Haagen Family for its failure to do so. If, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the
Company may, at its election, give written notice of such determination to
the Haagen Family and, thereupon, (i) in the case of a determination not to
register, the Company shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from
its obligation to pay the Registration Expenses incurred in connection
therewith) and (ii) in the case of a determination to delay registering,
the Company shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities.
(b) Cut-back Provisions. If a registration pursuant to this Section 3
-------------------
involves an Underwritten/Placed Offering of the securities so being
registered, whether or not solely for sale for the account of the Company,
which securities are to be distributed by or through one or more
underwriters of recognized standing under underwriting terms customary for
such transaction, and the underwriter or the managing underwriter, as the
case may be, of such Underwritten/Placed Offering shall inform the Company
of its belief that the amount of securities requested to be included in
such registration or offering exceeds the amount which can be sold in (or
during the time of) such offering without delaying or jeopardizing the
success of the offering (including the price per share of the securities to
be sold), then the Company will include in such registration (i) first, all
the securities of the Company which the Company proposes to sell for its
own account or the account of others (other than the Haagen Family)
requesting inclusion in such registration on request and (ii) second, to
the extent of the amount which the Company is so advised can be sold in (or
during the time of) such offering, Registrable Securities and other
securities requested to be included in such registration, pro rata among
the Haagen Family and others exercising incidental registration rights, on
the basis of the shares of Company Common Stock owned by all such persons.
(c) Expenses. The Company shall bear and pay all Company Registration
--------
Expenses incurred in connection with any registration of Registrable
Securities pursuant to this Section 3 for the Haagen Family, and all
Registration Expenses incurred in connection with any registration of any
securities sold for the account of the Company referred to in the first
sentence of Section 3(a), and the Haagen Family shall bear and pay all
Registration Expenses (other than Company Registration Expenses) and all
underwriting fees and discounts incurred in connection with any
registration of Registrable Securities pursuant to this Section 3 for the
Haagen Family.
(d) Duration of Effectiveness. At the request of the Haagen Family,
-------------------------
the Company shall, subject to Section 2(b), use its reasonable best efforts
to keep any registration statement for which Registrable Securities are
included under this Section 3 effective and usable for up to 90 days
(subject to extension for the length of any Registration Suspension
Period), unless the distribution of securities registered thereunder has
been earlier completed; provided, however, that in no event will the
Company be required to prepare or file audited financial statements with
respect to any fiscal year by a date prior to the date on which the Company
would be so required to prepare and file such audited financial statements
if such registration statement were no longer effective and usable.
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<PAGE>
Section 4. Registration Procedures. In connection with the filing of
-----------------------
any registration statement as provided in Section 2 or 3, the Company shall use
its reasonable best efforts to, as expeditiously as reasonably practicable:
(a) prepare and file with the Commission the requisite registration
statement (including a prospectus therein) to effect such registration and
use its reasonable best efforts to cause such registration statement to
become effective, provided that before filing such registration statement
or any amendments or supplements thereto, the Company will furnish to the
counsel selected by the Haagen Family copies of all such documents proposed
to be filed, which documents will be subject to the review of such counsel
before any such filing is made, and the Company will comply with any
reasonable request made by such counsel to make changes in any information
contained in such documents relating to the Haagen Family;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to maintain the effectiveness of
such registration and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until the earlier of such time as all of such
securities have been disposed of and the date which is 90 days after the
date of initial effectiveness of such registration statement;
(c) furnish to the Haagen Family such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statements (including each
complete prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, including
documents incorporated by reference, as the Haagen Family may reasonably
request;
(d) register or qualify all Registrable Securities under such other
securities or blue sky laws of such jurisdictions as the Haagen Family
shall reasonably request, to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and
take any other action which may be reasonably necessary or advisable to
enable the Haagen Family to consummate the disposition in such
jurisdictions of the securities owned by the Haagen Family, except that the
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would
not but for the requirements of this paragraph be obligated to be so
qualified, or to consent to general service of process in any such
jurisdiction, or to subject the Company to any material tax in any such
jurisdiction where it is not then so subject;
(e) cause all Registrable Securities covered by such registration
statement to be registered with or approved by such other Government
Authority as may be reasonably necessary to enable the Haagen Family to
consummate the disposition of such Registrable Securities;
(f) furnish to the Haagen Family a signed counterpart, addressed to
the Haagen Family (and the underwriters, if any), of
(i) an opinion of counsel for the Company, dated the effective
date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in
form and substance to the Haagen Family, and
E-37
<PAGE>
(ii) to the extent permitted by then applicable rules of
professional conduct, a "comfort" letter, dated the effective date of
such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement, covering substantially the same matters with
respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' letter, with respect to
events subsequent to the date of such financial statements, all as are
customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in underwritten
public offerings of securities;
(g) immediately notify the Haagen Family at any time when the Company
becomes aware that a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
under which they were made, and at the request of the Haagen Family
promptly prepare and furnish to the Haagen Family a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(h) comply or continue to comply in all material respects with the
Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission, and make available to its security holders,
as soon as reasonably practicable, an earnings statement covering the
period of at least 12 months, but not more than 18 months, beginning with
the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act, and not file any amendment or supplement to
such registration statement or prospectus to which the Haagen Family shall
have reasonably objected on the grounds that such amendment or supplement
does not comply in all material respects with the requirements of the
Securities Act, having been furnished with a copy thereof at least five
Business Days prior to the filing thereof;
(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement; and
(j) list all Company Common Stock covered by such registration
statement on any securities exchange on which any of the Company Common
Stock is then listed.
the Haagen Family shall furnish in writing to the Company such information
regarding the Haagen Family (and any of its affiliates), the Registrable
Securities to be sold, the intended method of distribution of such Registrable
Securities, and such other information requested by the Company as is necessary
for inclusion in the registration statement relating to such offering pursuant
to the Securities Act and the rules of the Commission thereunder. Such writing
shall expressly state that it is being furnished to the Company for use in the
preparation of a registration statement, preliminary prospectus, supplementary
prospectus, final prospectus or amendment or supplement thereto, as the case may
be.
the Haagen Family agrees by acquisition of the Registrable Securities that
upon receipt of any notice from the Company of the happening of any event of the
kind described in paragraph (g) of this
E-38
<PAGE>
Section 4, the Haagen Family will forthwith discontinue its disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until the Haagen Family's receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (g) of this
Section 4.
Section 5. Requested Underwritten Offerings. If requested by the
--------------------------------
underwriters for any underwritten offerings by the Haagen Family, under a
registration requested pursuant to Section 2(a), the Company will enter into a
customary underwriting agreement with such underwriters for such offering, to
contain such representations and warranties by the Company and such other terms
as are customarily contained in agreements of this type, including indemnities
to the effect and to the extent provided in Section 6. the Haagen Family shall
be a party to such underwriting agreement and may, at its option, require that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
the Haagen Family. the Haagen Family shall not be required to make any
representations or warranties to or agreement with the Company or the
underwriters other than representations, warranties or agreements regarding the
Haagen Family and the Haagen Family's intended method of distribution and any
other representation or warranty required by law.
Section 6. Preparation; Reasonable Investigation. In connection with
-------------------------------------
the preparation and filing of the registration statement under the Securities
Act, the Company will give the Haagen Family, its underwriters, if any, and
their respective counsel, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers, its counsel and the independent
public accountants who have certified its financial statements as shall be
necessary, in the opinion of the Haagen Family's and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
Section 7. Indemnification
---------------
(a) Indemnification by the Company. In the event of any registration
------------------------------
of any Registrable Securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless the Haagen
Family, each other person who participates as an underwriter in the
offering or sale of such securities and each other person who controls any
such underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which the
Haagen Family or any such underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in the registration statement under which such Registrable
Securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or
any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, and the Company will reimburse the Haagen Family
and each such underwriter and controlling person for any reasonable legal
or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceedings; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus,
E-39
<PAGE>
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Haagen Family or any other
person who participates as an underwriter in the offering or sale of such
securities, in either case, specifically stating that it is for use in the
preparation thereof, and provided, further, that the Company shall not be
liable to any person who participates as an underwriter in the offering or
sale of Registrable Securities or any other person, if any, who controls
such underwriter within the meaning of the Securities Act in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of such person's
failure to send or give a copy of the final prospectus or supplement to the
persons asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the
sale of Registrable Securities to such person if such statement or omission
was corrected in such final prospectus or supplement. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on behalf of the Haagen Family or any such underwriter or controlling
person and shall survive the transfer of such securities by the Haagen
Family.
(b) Indemnification by the Haagen Family. The Haagen Family will, and
------------------------------------
hereby does, indemnify and hold harmless (in the same manner and to the
same extent as set forth in paragraph (a) of this Section 7) the Company,
each director of the Company, each officer of the Company and each other
person, if any, who controls the Company within the meaning of the
Securities Act, and each other person who participates as an underwriter in
the offering or sale of such securities and each other person who controls
any such underwriter within the meaning of the Securities Act, with respect
to any untrue statement or alleged untrue statement of a material fact in
or omission or alleged omission to state a material fact from such
registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto, if such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by the Haagen Family
specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer, or controlling person and shall
survive the transfer of such securities by the Haagen Family.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
-----------------------
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 7, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of
this Section 7, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to the
indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable
costs of investigation.
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<PAGE>
(d) Other Indemnification. Indemnification similar to that specified
---------------------
in the preceding paragraphs of this Section 7 (with appropriate
modifications) shall be given by the Company and the Haagen Family with
respect to any required registration or other qualification of securities
under any federal or state law or regulation of Governmental Authority
other than the Securities Act.
(e) Indemnification Payments. The indemnification required by this
------------------------
Section 7 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received
or expense, loss, damage or liability is incurred.
(f) Contribution. If, for any reason, the foregoing indemnity is
------------
unavailable, or is insufficient to hold harmless an indemnified party, then
the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of the expense, loss, damage or
liability, (i) in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and the indemnified party
on the other (determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission relates
to information supplied by the indemnifying party or the indemnified party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission), or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law or provides a lesser sum to the indemnified party than the
amount hereinafter calculated, in the proportion as is appropriate to
reflect not only the relative fault of the indemnifying party and the
indemnified party, but also the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other,
as well as any other relevant equitable considerations. No indemnified
party guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation.
Section 8. Covenants Relating to Rule 144. The Company will file in
------------------------------
a timely manner (taking into account any extensions granted by the Commission),
information, documents and reports in compliance with the Exchange Act and will,
at its expense, forthwith upon the request of the Haagen Family, deliver to the
Haagen Family a certificate, signed by the Company's principal financial
officer, stating (a) the Company's name, address and telephone number (including
area code), (b) the Company's Internal Revenue Service identification number,
(c) the Company's Commission file number, (d) the number of shares of Company
Common Stock and the number of shares of Company Preferred Stock outstanding as
shown by the most recent report or statement published by the Company, and (e)
whether the Company has filed the reports required to be filed under the
Exchange Act for a period of at least 90 days prior to the date of such
certificate and in addition has filed the most recent annual report required to
be filed thereunder. If at any time the Company is not required to file reports
in compliance with either Section 13 or Section 15(d) of the Exchange Act, the
Company will, at its expense, forthwith upon the written request of the Haagen
Family, make available adequate current public information with respect to the
Company within the meaning of paragraph (c)(2) of Rule 144 of the General Rules
and Regulations promulgated under the Securities Act.
Section 9. Miscellaneous
-------------
(a) Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other party. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section 9, provided receipt of copies of such counterparts
is confirmed.
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<PAGE>
(b) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REFERENCE TO
THE CHOICE OF LAW PRINCIPLES THEREOF.
(c) Entire Agreement. This Agreement (including agreements
----------------
incorporated herein) contains the entire agreement between the parties with
respect to the subject matter hereof and there are no agreements or
understandings between the parties other than those set forth or referred
to herein. This Agreement is not intended to confer upon any person not a
party hereto (and their successors and assigns) any rights or remedies
hereunder.
(d) Notices. All notices and other communications hereunder shall be
-------
sufficiently given for all purposes hereunder if in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices
to the Company shall be addressed to:
Alexander Haagen Properties, Inc.
3500 Sepulveda Boulevard
Manhattan Beach, CA 90266
Attention: Chief Executive Officer
Telecopy Number: (310) 546-8455
with a copy to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, CA 90071
Attention: John M. Newell
Telecopy Number: (213) 891-8763
or at such other address and to the attention of such other person as the
Company may designate by written notice to the Haagen Family. Notices to the
Haagen Family shall be addressed to:
Alexander Haagen
c/o Alexander Haagen Properties, Inc.
3500 Sepulveda Boulevard
Manhattan Beach, CA 90266
Telecopy Number: (310) 545-6354
with a copy to:
Stroock & Stroock & Lavan
2029 Century Park East
Suite 1800
Los Angeles, CA 90067
Attention: Glenn D. Smith
Telecopy Number: (310) 556-5959
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<PAGE>
(e) Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors.
Neither party shall be permitted to assign any of its rights hereunder to
any third party, except that if (i) the Haagen Family transfers or pledges
any or all Registrable Securities to a bona fide financial institution as
security for any bona fide indebtedness of any the Haagen Family and such
financial institution agrees to be bound by the Stockholders Agreement, the
pledgee of the Registrable Securities shall be considered an intended
beneficiary hereof and may exercise all rights of the Haagen Family
hereunder, and (ii) any person included within the definition of the term
the Haagen Family shall be permitted to assign its rights hereunder to any
other person included within such definition.
(f) Headings. The Section and other headings contained in this
--------
Agreement are inserted for convenience of reference only and will not
affect the meaning or interpretation of this Agreement. All references to
Sections or other headings contained herein mean Sections or other headings
of this Agreement unless otherwise stated.
(g) Amendments and Waivers. This Agreement may not be modified or
----------------------
amended except by an instrument or instruments in writing signed by the
party against whom enforcement of any such modification or amendment is
sought. Either party hereto may, only by an instrument in writing, waive
compliance by the other party hereto with any term or provision hereof on
the part of such other party hereto to be performed or complied with. The
waiver by any party hereto of a breach of any term or provision hereof
shall not be construed as a waiver of any subsequent breach.
(h) Interpretation; Absence of Presumption. For the purposes hereof,
--------------------------------------
(i) words in the singular shall be held to include the plural and vice
versa and words of one gender shall be held to include the other gender as
the context requires, (ii) the terms "hereof", "herein", and "herewith" and
words of similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, paragraph or other references are to the
Sections, paragraphs, or other references to this Agreement unless
otherwise specified, (iii) the word "including" and words of similar import
when used in this Agreement shall mean "including, without limitation,"
unless the context otherwise requires or unless otherwise specified, (iv)
the word "or" shall not be exclusive, and (v) provisions shall apply, when
appropriate, to successive events and transactions.
This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
(i) Severability. Any provision hereof which is invalid or
------------
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions
hereof.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties hereto as of the day first above written.
ALEXANDER HAAGEN PROPERTIES, INC.
By: /s/ Alexander Haagen, Sr.
------------------------------------------------
Name:Alexander Haagen, Sr.
-------------------------------------------
Title: Chairman, President and Chief
Executive Officer
-----------------------------------------
ALEXANDER HAAGEN
/s/ Alexander Haagen, Sr.
-----------------------------------------------------
CHARLOTTE HAAGEN
/s/ Charlotte Haagen
-----------------------------------------------------
ALEXANDER HAAGEN, III
/s/ Alexander Haagen, III
-----------------------------------------------------
THE HAAGEN LIVING TRUST DATED
AUGUST 17, 1988
By: /s/ Alexander Haagen, Sr.
-----------------------------------------------------
Alexander Haagen, Sr., Co-Trustee
/s/ Autumn Haagen
-----------------------------------------------------
AUTUMN HAAGEN
/s/ Alexander Haagen III/Betty Haagen
-----------------------------------------------------
ALEXANDER HAAGEN III & BETTY HAAGEN
TR FBO ALEXANDER HAAGEN IV UA 10/24/88
/s/ Alexander Haagen III/Betty Haagen
-----------------------------------------------------
ALEXANDER HAAGEN III & BETTY HAAGEN
TR FBO ANDREW HAAGEN UA 10/28/88
/s/ Alexander Haagen III/Betty Haagen
-----------------------------------------------------
ALEXANDER HAAGEN III & BETTY HAAGEN
TR FBO AUTUMN HAAGEN UA 10/24/88
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<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
On 6/2 Contact: After 6/4:
Principal Communications Alexander Haagen Properties, Inc.
Doug Donsky/(212) 303-7608 Fred W. Bruning or Stuart Gulland
Owen Blicksilver/(212) 303-7603 (310) 546-4520
MANHATTAN BEACH, CA, June 2, 1997--Alexander Haagen Properties, Inc. [ASE:ACH],
a self-managed real estate investment trust, today announced that it has entered
into an agreement providing for a strategic investment in the company by a fund
managed by Lazard Freres Real Estate Investors LLC ("LFREI"), a real estate
investment affiliate of Lazard Freres & Co. LLC, a leading global investment
bank.
Alexander Haagen Properties, Inc. ("Haagen") is one of the largest and most
experienced shopping center development and management companies in the Western
United States. Since its founding in 1963 by Alexander Haagen, the Haagen
organization has acquired, developed and redeveloped more than 100 shopping
centers. The company's core portfolio and operations are currently focused in
the strengthening Southern California marketplace and in selected other Western
markets.
The investment evidences Haagen's and LFREI's confidence in the continued
recovery of California's retail property markets and demonstrates LFREI's
commitment to a strategy of partnering with leading real estate operating
companies. LFREI's investment in Alexander Haagen Properties will complement
its portfolio of investments in leading real estate operating companies active
in the office, industrial and multi-family housing sectors.
Pursuant to the transaction, LFREI has committed to purchase $235 million in
newly issued common shares at a purchase price of $15.00 per share, representing
a premium over the REIT's recent trading range. The investment will be made in
stages over a two-year period, allowing the company to draw down capital as
needed to fund its future growth and to improve its balance sheet by retiring
debt. Upon full funding, LFREI will own an equity interest in Alexander Haagen
Properties Inc. of approximately 38% on a fully diluted basis (57% of the
outstanding common stock, subject to certain voting restrictions and a
negotiated standstill agreement). The investment is expected to reduce
significantly the company's debt-to-equity ratio.
The strategic capital alliance with LFREI will enable the company to capitalize
on its historical market leadership by acquiring, redeveloping and developing
new neighborhood, community and power centers in its traditional core markets on
the West Coast and in selected other Western markets. Haagen will use the
capital provided by the LFREI investment to significantly strengthen its balance
sheet and to expand its portfolio of owned shopping centers.
The terms of the agreement call for LFREI to make an initial purchase of 1.3
million REIT shares for approximately $20 million within the next 30 days.
Following shareholder approval of the transaction, expected in September, the
company will draw down the remaining investment through the first quarter of
1999.
Alexander Haagen, the company's 78-year-old founder, will continue as CEO and
chairman, and his son, Alexander Haagen III, will remain vice chairman. In
addition, the Haagen management team will be expanded to include a to-be-named
real estate executive recruited to serve as president of the company and to
provide a clear succession plan for the Haagen family. Following shareholder
approval, LFREI will have
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<PAGE>
the right to designate four representatives to a restructured 10 member
Board of Directors. An eleventh Board seat has been reserved for the incoming
president, whose appointment is expected by year end.
"Today's strategic alliance with LFREI is a watershed moment in our company's
history, combining the expertise of one of the preeminent shopping center owners
and developers in California with the capital markets sophistication of a
leading global real estate investor," said Chairman Alexander Haagen. "This
substantial infusion of new equity capital positions our company for future
growth, allowing us to take full advantage of exciting opportunities available
to us in recovering retail markets on the West Coast. Our association with
LFREI will also give us a unique competitive advantage by providing us with
superior strategic advice and efficient access to capital."
"As one of the most experienced retail real estate operators in California,
Alexander Haagen and his management team have demonstrated a history of success
in retail development and an unmatched understanding of local property markets,"
said Arthur P. Solomon, Chairman of Lazard Freres Real Estate Investors, LLC and
Senior Managing Director of Real Estate at Lazard Freres & Co. LLC. "The company
has long been one of the strongest retail operators in California. As a result
of our investment, it will now have the access to capital necessary to grow its
core property portfolio in the recovering Western markets."
Prudential Securities Incorporated acted as advisor to Alexander Haagen
Properties, Inc. and provided a fairness opinion in connection with the
transaction.
Alexander Haagen Properties, Inc., a fully integrated, self-managed and self-
advised real estate investment trust, is a leading developer, owner and manager
of retail shopping centers, primarily in Southern California. The company,
based in Manhattan Beach, California, currently owns or controls an 8.3 million
square foot portfolio consisting of 38 properties and has a total market
capitalization before the LFREI investment in excess of $650 million. The Haagen
portfolio includes two regional malls, eight promotional and power centers, 14
neighborhood and community shopping centers and 14 single-tenant retail
facilities.
Lazard Freres Real Estate Investors, LLC is a real estate investment affiliate
of Lazard Freres & Co. LLC, a leading global investment bank. LFREI manages
several realty investment funds including LF Strategic Realty Investors, LP, a
strategic investment fund capitalized with almost $1 billion, which is
committing to the Haagen investment. Since its inception, LFREI has acquired
sizable investment stakes in a select group of leading real estate operating
companies, including American Apartment Communities; RF&P Corporation (renamed
Commonwealth Atlantic Properties); Dermody Properties; and Bell Atlantic
Properties (renamed Atlantic American Properties Trust).
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