-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SP2AFDGGfklep6aNWuYaPnrIuULfVvbyp6kPGRd7GdzUvug6ACoJHU8Rx+BIq/r3 XATTBZoKjRlTA12qsY9IgA== /in/edgar/work/0000912057-00-049077/0000912057-00-049077.txt : 20001114 0000912057-00-049077.hdr.sgml : 20001114 ACCESSION NUMBER: 0000912057-00-049077 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20001113 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PRICE ENTERPRISES INC CENTRAL INDEX KEY: 0000929647 STANDARD INDUSTRIAL CLASSIFICATION: [6512 ] IRS NUMBER: 330628740 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-43425 FILM NUMBER: 760899 BUSINESS ADDRESS: STREET 1: 4649 MORENA BLVD CITY: SAN DIEGO STATE: CA ZIP: 92117 BUSINESS PHONE: 6195814679 MAIL ADDRESS: STREET 1: 4649 MORENA BLVD CITY: SAN DIEGO STATE: CA ZIP: 92117 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EXCEL LEGACY CORP CENTRAL INDEX KEY: 0001050671 STANDARD INDUSTRIAL CLASSIFICATION: [6532 ] IRS NUMBER: 330781747 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 17140 BERNARDO CENTER DR STREET 2: SUITE 300 CITY: SAN DIEGO STATE: CA ZIP: 92128 BUSINESS PHONE: 8586759400 MAIL ADDRESS: STREET 1: 16955 VIA DEL CAMPO STREET 2: SUITE 100 CITY: SAN DIEGO STATE: CA ZIP: 92127 SC 13D 1 a2030754zsc13d.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (RULE 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(a) (AMENDMENT NO. 6)(1) PRICE ENTERPRISES, INC. (Name of Issuer) COMMON STOCK, PAR VALUE $.0001 PER SHARE (Title of Class of Securities) 741444 202 AND 741444 103 (CUSIP Number) GARY B. SABIN PRESIDENT AND CHIEF EXECUTIVE OFFICER EXCEL LEGACY CORPORATION 17140 BERNARDO CENTER DRIVE, SUITE 300 SAN DIEGO, CALIFORNIA 92128 (858) 675-9400 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) NOVEMBER 8, 2000 (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: / /. (Continued on the following pages) Page 1 of 9 Pages (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. SCHEDULE 13D CUSIP No. 741444 202 and 741444 103 Page 2 of 9 - ------------------------------------------------------------------------------- (1) Names of Reporting Persons. I.R.S. Identification Nos. of Above Persons (ENTITIES ONLY) Excel Legacy Corporation, IRS ID #33-0781747 - ------------------------------------------------------------------------------- (2) Check the Appropriate Box if a Member (a) / / of a Group (b) / / - ------------------------------------------------------------------------------- (3) SEC Use Only - ------------------------------------------------------------------------------- (4) Source of Funds* OO - ------------------------------------------------------------------------------- (5) Check if Disclosure of Legal Proceedings is Required Pursuant to / / Items 2(d) or 2(e) - ------------------------------------------------------------------------------- (6) Citizenship or Place of Organization DELAWARE - ------------------------------------------------------------------------------- Number of Shares (7) Sole Voting Power Beneficially Owned 12,154,289 SHARES by Each Reporting -------------------------------------------------- Person With (8) Shared Voting Power 0 -------------------------------------------------- (9) Sole Dispositive Power 12,154,289 SHARES -------------------------------------------------- (10) Shared Dispositive Power 0 - ------------------------------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 12,154,289 SHARES - ------------------------------------------------------------------------------- (12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares* / / - ------------------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 91.3% (1) - ------------------------------------------------------------------------------- (14) Type of Reporting Person* CO - ------------------------------------------------------------------------------- (1) BASED ON 13,309,006 SHARES OF THE ENTERPRISES COMMON STOCK OUTSTANDING AS OF NOVEMBER 9, 2000, AS REPORTED IN ENTERPRISES' QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2000 (FILE NO. 0-20449), FILED WITH THE SEC ON NOVEMBER 13, 2000. *SEE INSTRUCTIONS BEFORE FILLING OUT! PAGE 3 OF 9 This Amendment No. 6 to Schedule 13D relating to Price Enterprises, Inc., a Maryland corporation (Enterprises), is being filed on behalf of Excel Legacy Corporation, a Delaware corporation (Legacy), to amend the Schedule 13D filed with the SEC on May 21, 1999, as amended by Amendment No. 1 thereto filed with the SEC on June 11, 1999, Amendment No. 2 thereto (and Schedule 14D-1) filed with the SEC on October 6, 1999, Amendment No. 3 thereto (and Amendment No. 1 to Schedule 14D-1) filed with the SEC on October 25, 1999, Amendment No. 4 thereto (and Amendment No. 2 to Schedule 14D-1) filed with the SEC on November 5, 1999 and Amendment No. 5 thereto filed with the SEC on April 28, 2000. ITEM 1. SECURITY AND ISSUER. This statement relates to the beneficial ownership of 12,154,289 shares of common stock, par value $.0001 per share, of Enterprises. The principal executive offices of Enterprises are located at 17140 Bernardo Center Drive, Suite 300, San Diego, California 92128. ITEM 2. IDENTITY AND BACKGROUND. This statement is being filed on behalf of Legacy. Legacy's principal business is the acquisition, development and management of real property and real estate-related operating companies. The address of the principal office and principal business of Legacy is at 17140 Bernardo Center Drive, Suite 300, San Diego, California 92128. Set forth on Schedule I hereto is the name and present principal employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each of Legacy's directors and executive officers, as of the date hereof. During the last five years, neither Legacy nor, to Legacy's knowledge, any person named in Schedule I hereto has been (1) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of the proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Legacy completed its exchange offer for the Enterprises common stock in November 1999. Enterprises' stockholders who tendered their shares in the exchange offer received from Legacy a total of $8.50, consisting of $4.25 in cash, $2.75 in principal amount of Legacy's 9.0% Convertible Redeemable Subordinated Secured Debentures due 2004 and $1.50 in principal amount of Legacy's 10.0% Senior Redeemable Secured Notes due 2004, for each share of the Enterprises common stock. In the aggregate, Legacy paid approximately $52.9 million in cash and issued approximately $33.3 million in principal amount of the Legacy debentures and approximately $18.1 million in principal amount of the Legacy notes to acquire the Enterprises common stock in the exchange offer. PAGE 4 OF 9 The cash consideration required in the exchange offer was funded from Legacy's general working capital, borrowing from Legacy's credit facility and the proceeds of three transactions: - In August 1999, Legacy sold to Wal Mart Real Estate Business Trust eight properties that were previously under lease to Wal Mart Stores, Inc. for aggregate consideration of approximately $35.0 million comprised of approximately $11.0 million in cash and the assumption of approximately $24.0 million in liabilities. - In October 1999, Legacy sold a property located in Highlands Ranch, Colorado to HRAMC LLC for aggregate consideration of approximately $25.3 million comprised of approximately $7.7 million in cash and the assumption of $17.6 million in liabilities. - In November 1999, The Sol and Helen Price Trust loaned Legacy approximately $27.4 million under a five-year secured loan. The loan bears interest at the London interbank offered rate (LIBOR) plus 1.5% and is secured by certain shares of the Enterprises common stock owned by Legacy. The loan is non-recourse so that the Trust may only look to the Enterprises common stock for repayment of the loan. In March 2000, Legacy repaid $18.0 million of the principal amount borrowed under the loan from The Sol and Helen Price Trust by agreeing to issue to the Trust 5.1 million shares of Legacy common stock. In connection with such repayment, the Trust agreed to release a portion of the shares of Enterprises common stock previously pledged as collateral for the loan. In November 2000, Legacy obtained a $15 million revolving line of credit from Fleet National Bank (and the other banks which may become parties thereto). The line of credit is secured by certain shares of the Enterprises common stock which were released by the Trust. ITEM 4. PURPOSE OF TRANSACTION. Legacy engaged in the exchange offer to acquire a controlling equity interest in Enterprises. (a)-(b) Prior to commencing the exchange offer, Legacy entered into two agreements which governed the actions of Legacy and Enterprises with respect to the exchange offer and continue to govern Legacy's operation of Enterprises. Legacy entered into the first of these agreements on May 12, 1999 with Sol Price, as trustee of several trusts, all of the directors of Enterprises at the time, the President and Chief Executive Officer of Enterprises at the time, and numerous other individuals and entities known to Mr. Price. Legacy entered into the second of these agreements on June 2, 1999 with Enterprises. Legacy and Enterprises also entered into a merger agreement in December 1999. The merger agreement provided that (1) Legacy would increase its ownership from 91.3% to 100% of the Enterprises common stock through a merger of Enterprises with a wholly-owned subsidiary of Legacy and PAGE 5 OF 9 (2) the remaining holders of the Enterprises common stock other than Legacy would become entitled to receive the same consideration offered for the Enterprises common stock in the exchange offer. However, after careful consideration, Legacy and Enterprises determined not to engage in the proposed merger and to terminate the merger agreement. Legacy and Enterprises may or may not engage in a merger transaction in the future, and the consideration in any such merger may or may not be the same consideration offered for the Enterprises common stock in the exchange offer. (c) Not applicable. (d) Following the exchange offer, Enterprises' board of directors was reduced from six to five members. Gary B. Sabin, Richard B. Muir and Simon M. Lorne were appointed to Enterprises' board, Jack McGrory and James F. Cahill were retained as members of Enterprises' board, and Robert E. Price, Paul A. Peterson, Murray L. Galinson and Anne L. Evans resigned from Enterprises' board. Enterprises' board appointed Gary B. Sabin, Chairman, President and Chief Executive Officer of Legacy, as President and Chief Executive Officer of Enterprises, and appointed the senior officers of Legacy to serve as the senior officers of Enterprises. (e) In connection with the exchange offer, Legacy agreed that no dividend on the Enterprises common stock may be paid from Enterprises to Legacy until all of Enterprises' obligations for interest expense on debt and preferred dividends are paid and a $7.5 million reserve is in place on an annual basis. Legacy and Enterprises have agreed that the $7.5 million reserve may be used for the improvement and/or acquisition of properties, the buy-back of the Enterprises preferred stock or the reduction of Enterprises' debt. (f) Other than as described above, not applicable. (g) After obtaining the requisite approval at Enterprises' 2000 annual meeting of stockholders, Enterprises' charter was amended to allow the holders of the Enterprises preferred stock to elect a majority of Enterprises' board of directors until such time as: - less than 2,000,000 shares of the Enterprises preferred stock remain outstanding, - Legacy makes an offer to purchase any and all outstanding shares of the Enterprises preferred stock at a cash price of $16.00 per share, and purchases all shares duly tendered and not withdrawn, or - the directors of Enterprises (1) issue any equity securities without unanimous approval of the Enterprises board; or (2) fail to pay dividends on the Enterprises common stock in an amount equal to 100% of Enterprises' taxable income or such other amount as may be necessary to maintain Enterprises' status as a REIT, or an amount equal to the excess, if any, of Enterprises' funds from operations, less preferred stock dividends, over $7.5 million. PAGE 6 OF 9 The amendments also permit Enterprises' board of directors to terminate the right of the holders of the Enterprises preferred stock to elect a majority of Enterprises' board, but only if that termination is unanimously approved by the members of Enterprises' board. In connection with the exchange offer, Legacy agreed with Enterprises to cause the substance of these amendments to be formally included as part of Enterprises' charter. (h)-(i) If, as a result of the exchange offer, the number of holders of the Enterprises common stock is reduced below the level required by the Nasdaq National Market, the Enterprises common stock may be delisted from the Nasdaq National Market, and may be eligible for termination of registration pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended. (j) Other than as described above, Legacy currently has no plans or proposals which relate to, or may result in, any of the matters listed in Items 4(a)-(i) (although Legacy reserves the right to develop such plans). ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) Legacy is the beneficial owner of 12,154,289 shares of the Enterprises common stock. These shares represent approximately 91.3% of the currently outstanding shares of the Enterprises common stock, based on 13,309,006 shares of the Enterprises common stock outstanding as of November 9, 2000, as reported in Enterprises' Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 0-20449), filed with the SEC on November 13, 2000. (b) Subject to paragraph (d) below, Legacy has the sole power to vote and sole power to direct the disposition of all Enterprises common stock acquired in the exchange offer. (c) Neither Legacy nor, to the knowledge of Legacy, any person named in Schedule I has effected any transactions in the Enterprises common stock during the past 60 days. (d) Norwest Bank Minnesota, National Association, as trustee under the indentures governing the Legacy debentures and the Legacy notes, The Sol and Helen Price Trust and Fleet National Bank hold security interests in certain shares of the Enterprises common stock owned by Legacy. These shares serve as security for Legacy's obligations under the Legacy debentures, the Legacy notes and the loans from The Sol and Helen Price Trust and Fleet National Bank, respectively. If Legacy defaults in its obligations under the debentures, the notes or the loans, Norwest, the Trust or Fleet, as the case may be, may be entitled to vote and/or sell these shares and apply the proceeds to the payment of Legacy's obligations. (e) Not applicable. PAGE 7 OF 9 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. See the descriptions of the agreements in Items 3 and 4 and the pledge of the Enterprises common stock in Item 5. Except for the agreements listed in Item 7, which are incorporated by reference herein, to the knowledge of Legacy, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between Legacy or any person named in Schedule I and any other person with respect to any securities of Enterprises, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1* Agreement, dated June 2, 1999, by and between Excel Legacy Corporation and Price Enterprises, Inc. Exhibit 2* Agreement, dated May 12, 1999, by and among Excel Legacy Corporation and certain stockholders of Price Enterprises, Inc. listed on the signature pages thereto. Exhibit 3** Letter dated June 2, 1999 from Excel Legacy Corporation to Price Enterprises, Inc. regarding the status of Price Enterprises, Inc. as a REIT. Exhibit 4*** Note Purchase Agreement, dated as of October 6, 1999, between Excel Legacy Corporation and The Sol and Helen Price Trust, including form of Secured Promissory Note and form of Pledge Agreement. Exhibit 5**** Amendments to Note Purchase Agreement, dated March 31, 2000 and May 18, 2000, between Excel Legacy Corporation and The Sol and Helen Price Trust. Exhibit 6*** Indenture, dated as of November 5, 1999, between Excel Legacy Corporation and Norwest Bank Minnesota, National Association, for 9.0% Convertible Redeemable Subordinated Secured Debentures due 2004, including form of Debenture and form of Pledge Agreement. Exhibit 7*** Indenture, dated as of November 5, 1999, between Excel Legacy Corporation and Norwest Bank Minnesota, National Association, for 10.0% Senior Redeemable Secured Notes due 2004, including form of Note and form of Pledge Agreement. PAGE 8 OF 9 ----------- * Incorporated by reference to Annexes A and B to the Offer to Exchange/Prospectus dated October 6, 1999, filed as Exhibit (a)(1) to Legacy's Tender Offer Statement on Schedule 14D-1 (File No. 005-43425) filed with the SEC on October 6, 1999. ** Incorporated by reference to Legacy's Registration Statement on Form S-4 (File No. 333-80339) filed with the SEC on June 9, 1999. *** Incorporated by reference to Legacy's Current Report on Form 8-K (File No. 0-23503) filed with the SEC on November 12, 1999. **** Filed herewith. PAGE 9 OF 9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Excel Legacy Corporation Dated: November 10, 2000 By: /s/ GARY B. SABIN ----------------- Gary B. Sabin President and Chief Executive Officer SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF EXCEL LEGACY CORPORATION The following table sets forth the name, business address and present principal employment of each director and executive officer of Excel Legacy Corporation. Except as indicated below, each such person is a U.S. citizen and the business address of each such person is 17140 Bernardo Center Drive, Suite 300, San Diego, California 92128. BOARD OF DIRECTORS
NAME PRESENT PRINCIPAL EMPLOYMENT - ---- ---------------------------- Gary B. Sabin................. Chairman, President and Chief Executive Officer of Excel Legacy Corporation and President and Chief Executive Officer of Price Enterprises, Inc. Richard B. Muir............... Executive Vice President, Chief Operating Officer and Secretary of Excel Legacy Corporation and Executive Vice President and Chief Operating Officer of Price Enterprises, Inc. Kelly D. Burt................. Executive Vice President--Development of each of Excel Legacy Corporation and Price Enterprises, Inc. Jack McGrory.................. Managing Director of The Price Group. Mr. McGrory's business address is 7979 Ivanhoe Avenue, Suite 520, La Jolla, California 92037. Richard J. Nordlund........... President of RJN Management. Mr. Nordlund's business address is 615 Hot Springs Road, Santa Barbara, California 93108. Robert E. Parsons, Jr......... Executive Vice President and Chief Financial Officer of Host Marriott Corporation. Mr. Parson's business address is 10400 Fernwood Road, Bethesda, Maryland 20817. Robert S. Talbott............. President of Holrob Investments, LLC. Mr. Talbott's business address is 2607 Kingston Pike, Knoxville, Tennessee 37919. John H. Wilmot................ President of Exeter Development Corporation. Mr. Wilmot's business address is 7201 E. Camelback Road, Suite 222, Phoenix, Arizona 85251.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
NAME PRESENT PRINCIPAL EMPLOYMENT - ---- ---------------------------- Graham R. Bullick............. Senior Vice President--Capital Markets of each of Excel Legacy Corporation and Price Enterprises, Inc. Mark T. Burton................ Senior Vice President--Acquisitions of each of Excel Legacy Corporation and Price Enterprises, Inc. S. Eric Ottesen............... Senior Vice President, General Counsel and Assistant Secretary of Excel Legacy Corporation and Senior Vice President, General Counsel and Secretary of Price Enterprises, Inc. James Y. Nakagawa............. Chief Financial Officer of each of Excel Legacy Corporation and Price Enterprises, Inc.
EXHIBIT INDEX Exhibit 1* Agreement, dated June 2, 1999, by and between Excel Legacy Corporation and Price Enterprises, Inc. Exhibit 2* Agreement, dated May 12, 1999, by and among Excel Legacy Corporation and certain stockholders of Price Enterprises, Inc. listed on the signature pages thereto. Exhibit 3** Letter dated June 2, 1999 from Excel Legacy Corporation to Price Enterprises, Inc. regarding the status of Price Enterprises, Inc. as a REIT. Exhibit 4*** Note Purchase Agreement, dated as of October 6, 1999, between Excel Legacy Corporation and The Sol and Helen Price Trust, including form of Secured Promissory Note and form of Pledge Agreement. Exhibit 5**** Amendments to Note Purchase Agreement, dated March 31, 2000 and May 18, 2000, between Excel Legacy Corporation and The Sol and Helen Price Trust. Exhibit 6*** Indenture, dated as of November 5, 1999, between Excel Legacy Corporation and Norwest Bank Minnesota, National Association, for 9.0% Convertible Redeemable Subordinated Secured Debentures due 2004, including form of Debenture and form of Pledge Agreement. Exhibit 7*** Indenture, dated as of November 5, 1999, between Excel Legacy Corporation and Norwest Bank Minnesota, National Association, for 10.0% Senior Redeemable Secured Notes due 2004, including form of Note and form of Pledge Agreement. ----------- * Incorporated by reference to Annexes A and B to the Offer to Exchange/Prospectus dated October 6, 1999, filed as Exhibit (a)(1) to Legacy's Tender Offer Statement on Schedule 14D-1 (File No. 005-43425) filed with the SEC on October 6, 1999. ** Incorporated by reference to Legacy's Registration Statement on Form S-4 (File No. 333-80339) filed with the SEC on June 9, 1999. *** Incorporated by reference to Legacy's Current Report on Form 8-K (File No. 0-23503) filed with the SEC on November 12, 1999. **** Filed herewith. EX-5 2 a2030754zex-5.txt EXHIBIT 5 EXHIBIT 5 March 31, 2000 Excel Legacy Corporation 17140 Bernardo Center Drive, Suite 300 San Diego, California 92128 Re: AMENDMENT TO NOTE PURCHASE AGREEMENT Gentlemen: This Amendment will confirm our agreement to amend the Note Purchase Agreement dated October 6, 1999 (the "AGREEMENT") between Legacy and Lender and the Note issued under the Agreement. Capitalized terms used and not otherwise defined herein are used with the meanings assigned to them in the Agreement. 1. RELATION TO AGREEMENT. Except as hereby amended, the Agreement shall continue in full force and effect. 2. PREPAYMENT IN PART OF OUTSTANDING BORROWINGS. The parties hereby agree that $18,000,000 (the "PREPAYMENT AMOUNT") of the $27,347,150.25 in principal outstanding under the Note as of the date hereof shall be deemed prepaid under Section 2.C. of the Agreement upon Legacy's issuance to Lender of 5,100,000 shares of Legacy's Common Stock, par value $0.01 per share (the "SHARES"). Notwithstanding any requirement that payment of outstanding borrowings under the Agreement or the Note be made in cash, upon issuance of the Shares, principal borrowings under the Note in an amount equal to the Prepayment Amount shall be deemed paid-in-full, and Lender agrees to make appropriate notation on the grid attached to the Note reflecting such prepayment. 3. REPRESENTATIONS OF LENDER. Lender represents to Legacy as follows: - Lender has all requisite power and authority to execute and deliver this Amendment and to consummate the transactions contemplated hereby and to perform its obligations hereunder. This Amendment constitutes a legally valid and binding obligation of Lender, enforceable against Lender in accordance with its terms. - Lender is an "accredited investor" as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "SECURITIES ACT"). - The Shares are being acquired by Lender for its own account, not as a nominee or agent, and not with a view to the sale or other disposition of any part thereof, and Lender has no present intention of selling, granting any participation in, or otherwise disposing of the Shares or any interest therein. - Lender is acquiring the Shares hereunder "solely for the purpose of investment" within the meaning of Section 801.1(i)(1) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with no intention of participating in the formulation, determination or direction of the basic business decisions of Legacy. - Lender understands that the exemptions from registration and certain government approvals relied upon by Legacy depend upon, among other things, the bona fide nature of Lender's investment intent expressed above and Lender's other representations herein. 1 - Upon Lender's receipt of Legacy's irrevocable instruction to its transfer agent to issue 5.1 million shares to Lender, Lender agrees to immediately release 4,363,522 of the 7,272,538 PEI shares which had been previously pledged as security under the Agreement. 4. REPRESENTATIONS OF LEGACY. Legacy represents to Lender as follows: - Legacy has all requisite corporate power and authority to execute and deliver this Amendment and to consummate the transactions contemplated hereby and to perform its obligations hereunder. The execution, delivery and performance by Legacy of this Amendment has been duly authorized by all necessary corporate action of Legacy. This Amendment constitutes a legally valid and binding obligation of Legacy, enforceable against Legacy in accordance with its terms. - The Shares to be issued and delivered under the Amendment will be duly and validly issued, fully paid and nonassessable. 5. REGISTRATION RIGHTS. The parties agree to enter into a Registration Rights Agreement in the form attached hereto as Exhibit A. 6. EFFECT ON FUTURE BORROWINGS. Although Lender acknowledges that Legacy has the right to borrow an additional $2,652,849.75 under the Agreement as provided in, and subject to the terms and conditions of, the Agreement, nothing herein shall constitute consent from Lender to payment of any amounts borrowed under the Agreement in the form of shares of Common Stock of Legacy other than the Prepayment Amount. 7. FURTHER ASSURANCES. The parties hereto agree to use all reasonable efforts to take, or cause to be taken and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Amendment. 8. MISCELLANEOUS. This Amendment shall be governed and construed on the same basis as the Agreement, as set forth therein. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [Signatures Follow] 2 If the foregoing provisions accurately reflect our agreement, please so indicate by executing this Amendment as indicated in the space below, at which point it shall become binding between us. Very truly yours, The Sol and Helen Price Trust By: /s/ SOL PRICE ------------------------- Name: SOL PRICE ----------------------- Title: TRUSTEE ---------------------- Accepted and Agreed: Excel Legacy Corporation By: /s/ S. ERIC OTTESEN ------------------------- Name: S. ERIC OTTESEN ----------------------- Title: SENIOR VICE PRESIDENT ---------------------- 3 May 18, 2000 Excel Legacy Corporation 17140 Bernardo Center Drive, Suite 300 San Diego, California 92128 Re: SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT Gentlemen: This Second Amendment will confirm our agreement to amend the Note Purchase Agreement dated October 6, 1999, as amended March 31, 2000 (the "FIRST AMENDMENT," and together with the Note Purchase Agreement, the "AGREEMENT") between Legacy and Lender. Capitalized terms used and not otherwise defined herein are used with the meanings assigned to them in the Agreement. 1. RELATION TO AGREEMENT. Except as hereby amended, the Agreement shall continue in full force and effect. To the extent any amendment herein or in the First Amendment to the Pledge Agreement attached hereto as Exhibit A shall modify the definition of any term contained in the Agreement, such modified definition shall apply to the Agreement. 2. RELEASE OF PEI SHARES. a) The parties acknowledge that pursuant to paragraph six of Section 3 of the First Amendment Lender agreed to release 4,363,522 of the 7,272,538 PEI shares that had been previously pledged by Legacy as security under the Agreement. b) The parties acknowledge that both numbers relating to the PEI shares (i.e., 4,363,522 and 7,272,538) identified in paragraph six of Section 3 of the First Amendment were incorrect. The parties hereby agree that the correct number of PEI shares to be released hereunder shall be 4,016,940 of the 6,102,880 PEI shares that had been previously pledged by Legacy as collateral under the Agreement. c) Lender hereby acknowledges and confirms that, in accordance with Section 3 of the First Amendment, Legacy has issued 5.1 million shares of common stock of Legacy, par value $0.01 per share, and Lender accordingly has released the security interest granted in favor of Lender in 4,016,940 of the 6,102,880 PEI shares that had been previously pledged by Legacy as security under the Agreement. 3. FURTHER ASSURANCES. In order to more fully evidence Lender's release of the 4,016,940 PEI shares, the parties hereto agree to use all reasonable efforts to take, or cause to be taken, and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Second Amendment, including, without limitation, the following: - Lender shall cause James F. Cahill (the "PRICE NOTE COLLATERAL AGENT") to execute the First Amendment to Pledge Agreement in the form attached hereto as Exhibit A. - Lender shall cause the Price Note Collateral Agent to surrender, or cause to be surrendered, to the transfer agent of PEI (the "TRANSFER AGENT") Share Certificate Number 0045 (the "SHARE Certificate"), which certifies that Legacy is the owner of 6,102,880 shares of PEI 1 common stock, and surrender, or cause to be surrendered, to Legacy that certain Assignment Separate from Certificate dated November 11, 1999. - Promptly following surrender of the Share Certificate by the Price Note Collateral Agent to the Transfer Agent and the Assignment Separate from Certificate to Legacy, Legacy shall cause to be delivered to the Price Note Collateral Agent a certificate that certifies that Legacy is the owner of 2,085,940 shares of PEI common stock, together with an executed Assignment Separate from Certificate with respect to such shares. - Lender (or the Price Note Collateral Agent on behalf of Lender) and Legacy shall execute and file with the California Secretary of State a Form UCC-2, in the form attached hereto as Exhibit B. - The parties shall attach a grid in the form attached hereto as Exhibit C to the Secured Promissory Note as contemplated by the Agreement and the Secured Promissory Note. 4. REPRESENTATIONS OF LENDER. a) Lender represents to Legacy that Lender has all requisite power and authority to execute and deliver this Second Amendment and to consummate the transactions contemplated hereby and to perform its obligations hereunder. This Second Amendment constitutes a legally valid and binding obligation of Lender, enforceable against Lender in accordance with its terms. b) Lender represents, warrants and covenants that the 4,016,940 PEI shares released by Lender shall be returned to Legacy free and clear of any claims of interests of any party arising through Lender. 5. REPRESENTATION OF LEGACY. Legacy represents to Lender that Legacy has all requisite corporate power and authority to execute and deliver this Second Amendment and to consummate the transactions contemplated hereby and to perform its obligations hereunder. The execution, delivery and performance by Legacy of this Second Amendment have been duly authorized by all necessary corporate action of Legacy. This Second Amendment constitutes a legally valid and binding obligation of Legacy, enforceable against Legacy in accordance with its terms. 6. MISCELLANEOUS. This Second Amendment shall be governed and construed on the same basis as the Agreement, as set forth therein. This Second Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 2 If the foregoing provisions accurately reflect our agreement, please so indicate by executing this Second Amendment as indicated in the space below, at which point it shall become binding between us. Very truly yours, The Sol and Helen Price Trust By: /s/ SOL PRICE ------------------------- Name: Sol Price ----------------------- Title: Trustee ---------------------- Accepted and Agreed: Excel Legacy Corporation By: /s/ S. ERIC OTTESEN ---------------------------- Name: S. Eric Ottesen -------------------------- Title: Senior Vice President ------------------------- 3 EXHIBIT A FIRST AMENDMENT TO PLEDGE AGREEMENT This FIRST AMENDMENT TO PLEDGE AGREEMENT (this "AMENDMENT") is made and entered into as of May __, 2000, by and between Excel Legacy Corporation, a Delaware corporation (the "PLEDGOR"), and James F. Cahill (the "PRICE NOTE COLLATERAL AGENT"), as collateral agent in favor of the Holders (the "HOLDERS") of the Pledgor's Secured Promissory Note issued pursuant to that certain Note Purchase Agreement by and between the Pledgor and the Sol and Helen Price Trust dated as of October 6, 1999. RECITALS WHEREAS, the Pledgor made and entered into that certain Pledge Agreement (the "PLEDGE AGREEMENT") as of October 6, 1999 in favor of the Price Note Collateral Agent, as collateral agent in favor of the Holders; and WHEREAS, the Pledgor and the Price Note Collateral Agent, with the consent of the Holders, desire to amend certain terms and provisions of the Pledge Agreement as set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Pledgor and the Price Note Collateral Agent amend the Pledge Agreement as follows: 1. RELATION TO PLEDGE AGREEMENT. Except as hereby amended, the Pledge Agreement shall continue in full force and effect. 2. CAPITALIZED TERMS. Capitalized terms used and not otherwise defined herein are used with the meaning attributed to them in the Pledge Agreement. 3. PLEDGE. Section 1(b) of the Pledge Agreement is hereby amended and restated as follows: (b) all additional shares of, and all securities convertible into and all warrants, options or other rights to purchase, Common Stock of the Issuer from time to time acquired after the date of this Amendment by the Pledgor in any manner, and the certificates representing such additional shares (any such additional shares and other items shall constitute part of the Price Note Pledged Shares under and as defined in this Agreement), and all products and proceeds of any of the foregoing, including, without limitation, all dividends, cash, options, warrants, rights, instruments, subscriptions, and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing. A-1 4. SCHEDULE I. Schedule I to the Pledge Agreement is hereby amended and restated as follows: SCHEDULE I PLEDGED SHARES
NUMBER OF PRICE NOTE SHARE CERTIFICATE ISSUER PLEDGED SHARES(1) NUMBER(S) ------ -------------------- ----------------- Price Enterprises, Inc. 3,918,939 0830 Price Enterprises, Inc. 2,132,470 0831 Price Enterprises, Inc. 2,085,940 [0__]
- -------- (1) Notations shall be made from time to time on this Schedule I by the parties to the Pledge Agreement with respect to any Price Note Pledged Shares which are the subject of any Debentures Collateral Identification Certificate or Senior Notes Collateral Identification Certificate and upon redelivery, if applicable, of any shares that were previously the subject of any such certificates. A-2 5. REPRESENTATION OF THE PRICE NOTE COLLATERAL AGENT. The Price Note Collateral Agent Lender represents to the Pledgor that the Price Note Collateral Agent has all requisite power and authority to execute and deliver this Amendment and to consummate the transactions contemplated hereby and to perform its obligations hereunder. This Agreement constitutes a legally valid and binding obligation of the Price Note Collateral Agent, enforceable against the Price Note Collateral Agent in accordance with its terms. 6. REPRESENTATION OF THE PLEDGOR. The Pledgor represents to the Price Note Collateral Agent that the Pledgor has all requisite corporate power and authority to execute and deliver this Amendment. The execution, delivery and performance by the Pledgor of this Amendment have been duly authorized by all necessary corporate action of the Pledgor. This Amendment constitutes a legally valid and binding obligation of the Pledgor, enforceable against the Pledgor in accordance with its terms. 7. FURTHER ASSURANCES. The parties hereto agree to use all reasonable efforts to take, or cause to be taken and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Amendment. 8. MISCELLANEOUS. This Amendment shall be governed and construed on the same basis as the Pledge Agreement, as set forth therein. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A-3 IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date first set forth above. PLEDGOR EXCEL LEGACY CORPORATION, a Delaware Corporation By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- PRICE NOTE COLLATERAL AGENT ---------------------------------------- JAMES F. CAHILL, as Price Note Collateral Agent A-4 -----END PRIVACY-ENHANCED MESSAGE-----