PRUDENTIAL SECURITIES INCORPORATED
FINANCIAL ADVISORY AGREEMENT
----------------------------
, 1997
Pan Pacific Retail Properties, Inc.
0000-X Xxxxx Xxxxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Chairman, President
and Chief Executive Officer
Gentlemen:
The purpose of this agreement (the "Agreement") is to confirm the
engagement set forth in the engagement letter dated April 1, 1997 (the
"Letter"), between Prudential Securities Incorporated ("Prudential") and a
predecessor of Pan Pacific Retail Properties, Inc. (together with its
affiliates and subsidiaries, the "Company") that Prudential has been retained
as the exclusive financial advisor to the Company to perform such financial
consulting services as the Company may reasonably request in connection with
the initial public offering (the "Offering") of the common stock, par value
$0.01 per share, of the Company (the "Common Stock"). Such services may
include, but are not limited to, the following:
(i) developing a business plan and marketing story, along
with providing advice regarding the Company's Offering
prospectus;
(ii) reviewing the existing and pro forma accounting
statements of the Company, including existing and pro
forma funds from operations, funds available for
distribution and dividend payout ratio strategies;
(iii) providing assistance to the Company in the development of
a financing plan for achieving the Company's immediate
and long-term financial objectives;
(iv) evaluating and recommending financial and strategic
alternatives with respect to the Offering;
(v) advising the Company as to the timing, structure (debt
and equity) and pricing of the Offering, along with an
analysis of comparable existing public real estate
investment trusts ("REITs"); and
(vi) providing such other financial advisory services as are
customary for public REITs and as may be mutually agreed
upon by the Company and Prudential.
The term of this Agreement shall commence on the date hereof and shall
extend through and until the consummation of the Offering, provided, however,
that either the Company or Prudential may terminate this Agreement prior to
such date and as of the end of any month upon no less than 30 days' prior
written notice.
As compensation for Prudential's financial advisory services, the
Company will pay Prudential upon the consummation of the Offering a fee equal
to 0.75% of the total proceeds of the Offering. The Company will further pay
Prudential a fee equal to 0.75% of the total proceeds, if any, attributable
to the exercise by the Underwriters of their over-allotment option at each
time any such option is exercised.
Any fees which Prudential shall become entitled to receive from the
Company in connection with the performance of any investment banking or
underwriting services (as distinguished from financial advisory services) in
connection with the Offering shall be set forth in a separate agreement
between the Company and Prudential and shall be in addition to the
compensation provided for herein.
In order to enable Prudential to render its services hereunder, the
Company agrees to provide to Prudential, among other things, all reasonable
information requested or required by Prudential including, but not limited
to, information concerning historical and projected financial results and
possible and known litigious, environmental and other contingent liabilities.
The Company also agrees to make available to Prudential such representatives of
the Company, including, among others, directors, officers, employees, outside
counsel and independent certified public accountants, as Prudential may
reasonably request. The Company will promptly advise Prudential of any
material changes in its business or finances. The Company represents that all
information made available to Prudential by the Company will be complete and
correct in all material respects and will not contain any untrue statements
of a material fact or omit to state a material fact necessary in order to
make the statement therein not misleading in light of circumstances under
which such statements are made. In rendering its services hereunder,
Prudential will be using and relying primarily on such information without
independent verification
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thereof or independent appraisal of any of the Company's assets. Prudential
does not assume responsibility for the accuracy or completeness of the
information to which reference is made hereto.
The services provided are to be rendered solely to the Company. They are
not being rendered by Prudential as an agent or as a fiduciary of the
shareholders of the Company, and Prudential shall not have any liability or
obligation with respect to its services hereunder to such shareholder or any
other person, firm or corporation. The Company will not permit any third
party to disclose or otherwise refer to the advice or information rendered by
Prudential pursuant to this Agreement in any manner without Prudential's
prior written consent.
The Company hereby agrees to indemnify Prudential in accordance with the
terms and conditions of the indemnification agreement dated April 1, 1997
(the "Indemnification Agreement'), between Prudential and the Company, the
provisions of which are incorporated herein in their entirety.
All communications hereunder shall be in writing and, if sent to
Prudential, shall be delivered or sent by registered or certified mail
(return receipt requested), telex or facsimile transmission and confirmed in
writing to Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Equity Transactions Group; and if sent to the
Company, shall be delivered or sent by registered or certified mail (return
receipt requested), telex or facsimile transmission and confirmed in writing
to the Company at 0000-X Xxxxx Xxxxxxx Xxxxx, Xxxxx, Xxxxxxxxxx 00000,
Attention: Chief Executive Officer.
The benefits of this Agreement, together with the Indemnification
Agreement, shall inure to the respective successors and assigns of the
parties hereto and of the indemnified parties under the Indemnification
Agreement and their successors, assigns and representatives, and the
obligations and liabilities assumed in this Agreement by the parties hereto
shall be binding upon their respective successors and assigns.
This Agreement may not be amended or modified except in writing and
shall be governed by and construed in accordance with the laws of the State
of New York, without regard to principles of conflicts of laws. This
Agreement may be executed in any number of counterparts, all of which
together shall constitute one and the same agreement.
Each of Prudential and the Company waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) related to or arising out of the engagement of Prudential pursuant
to,
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or the performance by Prudential of the services contemplated by this
Agreement.
This Agreement supersedes and replaces all prior understanding, written
or oral, with respect to the matters addressed herein.
Please confirm that the foregoing is in accordance with your
understanding by signing upon behalf of the Company and returning an executed
copy of this Agreement whereupon after the execution by Prudential this
Agreement shall become binding between the Company and Prudential.
Very truly yours,
PRUDENTIAL SECURITIES INCORPORATED
By:
-----------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Managing Director
ACCEPTED AND AGREED TO:
PAN PACIFIC RETAIL PROPERTIES, INC.
By:
---------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman, President
and Chief Executive Officer
Date: , 1997
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