EXHIBIT 10.56
December 5, 2000
Xx. Xxxxx X. Xxxxxx
President
Xxxxxxx Pacific Properties, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Dear Xxxxx:
Pursuant to our recent discussions, the purpose of this letter is to memorialize
certain agreements between Xxxxxxx Pacific Properties, Inc. ("BPP"), Developers
Diversified Realty Corp. ("DDRC"), DDR Real Estate Services, Inc. ("DDR") and
Coventry Real Estate Partners ("Coventry").
In return for the agreement made by DDRC, Coventry and Prudential Real Estate
Investors ("PREI") (collectively referred to as the "Purchaser") to accelerate
the closing of the San Diego Factory Outlet Center and Meridian Village (the
"Properties"), BPP agrees to the following:
(i) to delete the event of default set forth in Section 8.2(g) of the
Liquidation Services Agreement ("LSA") which provides that DDR is in
default under the LSA if DDR does not timely purchase 10% of BPP's
common stock before January 31, 2001, and BPP confirms that DDR shall
have no obligation to purchase any BPP stock; and
(ii) to pay the Purchaser an incremental $39,000 to compensate the Purchaser
for the excess legal and administrative costs associated with the early
closing of the Properties and the closing of additional properties in
an additional closing tranche, which amount shall be payable upon the
execution of this letter and close of escrow of the Properties on or
before December 5, 2000.
In addition to the foregoing, the parties hereby confirm that the fee structure
agreed to in the LSA will remain in place with DDR/Coventry receiving, on a
monthly basis, 4% of gross revenues and 2% of gross revenues for property
management and asset management services,
respectively, which fees shall be payable in accordance with the terms of the
LSA following approval by BPP's shareholders of the plan of liquidation (such
approval expected to be granted at the annual shareholder meeting on December
15, 2000). DDR would not be responsible for payment of existing third party
managers and would not credit BPP for any personnel costs. BPP shall remain
liable for the payment of all fees under all existing third party property
management contracts until such property management contracts are terminated;
provided, however, that Purchaser shall be liable for any on going obligations
under property management contracts for properties acquired by Purchaser to the
extent Purchaser elects not to terminate such property management contracts or
engages such third party property manager beyond closing.
In addition to the foregoing, in order to allow BPP to deliver termination
notices to all its third party property managers on December 1, 2000, if BPP
does not obtain shareholder approval of its plan of liquidation, DDR hereby
agrees to manage all of BPP's remaining properties in accordance with the terms
of the LSA and under the economic terms of the existing third party management
contracts upon termination of such contracts; provided, however, that DDR and
BPP shall have no right to terminate such management obligation except by
delivery of 180 days notice to the other party. In consideration for BPP's
ability to terminate early the third party property management agreements and
DDR's agreement to assume such management obligations, BPP agrees to pay
DDR/Coventry $150,000, payable upon execution of this letter and close of escrow
of the Properties on or before December 5, 2000.
All parties agree that any resulting amendments required to the LSA to reflect
the deletion of Section 8.2(g) will be made subsequent to the execution of this
letter but in accordance with its terms.
If you are in agreement with the terms of this letter, please execute where
indicated.
Thank you.
Sincerely,
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Managing Principal
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
President
Xxxxxxx Pacific Properties, Inc.
