-----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, Hg9wIsIi0UQHdRf8VCkS/Gw7KOxfRl2nGuGlBJp+DqAKSWAGiFGyF3/OoRUye1h9 9mP+TkPkTwL7O6K92qQZVg== 0001188112-04-000030.txt : 20040108 0001188112-04-000030.hdr.sgml : 20040108 20040108161534 ACCESSION NUMBER: 0001188112-04-000030 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20040108 GROUP MEMBERS: BARRY MCCOMIC GROUP MEMBERS: MARK DAITCH FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: 520 GROUP LLC CENTRAL INDEX KEY: 0001274490 IRS NUMBER: 810632131 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 7979 IVANHOE AVE 520 STREET 2: C/O PRICE ENTITIES CITY: LA JOLLA STATE: CA ZIP: 92307 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PRICE LEGACY CORP CENTRAL INDEX KEY: 0000929647 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 330628740 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43425 FILM NUMBER: 04515676 BUSINESS ADDRESS: STREET 1: 17140 BERNARDO CENTER DRIVE, SUITE 300 CITY: SAN DIEGO STATE: CA ZIP: 92128 BUSINESS PHONE: 8586759400 MAIL ADDRESS: STREET 1: 17140 BERNARDO CENTER DRIVE, SUITE 300 CITY: SAN DIEGO STATE: CA ZIP: 92128 FORMER COMPANY: FORMER CONFORMED NAME: PRICE ENTERPRISES INC DATE OF NAME CHANGE: 19940907 SC 13D/A 1 tsc13da-1464.txt SC 13D/A SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D/A (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. 1)(1) PRICE LEGACY CORPORATION ---------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.0001 PER SHARE ---------------------------------------------------------------------------- (Title of Class of Securities) 74144P106 ---------------------------------------------------------------------------- (CUSIP Number) MARK DAITCH THE 520 GROUP, LLC 7979 IVANHOE AVENUE, SUITE 520 LA JOLLA, CALIFORNIA 92037 TELEPHONE (858) 551-2321 ---------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JANUARY 2, 2004 ---------------------------------------------------------------------------- (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. [_] Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 11 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. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 2 OF 11 PAGES - -------------------------------------------------------------------------------- NAME OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) The 520 Group, LLC 81-0632131 - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS 4 WC, OO - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED 5 PURSUANT TO ITEMS 2(d) or 2(e) [_] - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 California - -------------------------------------------------------------------------------- SOLE VOTING POWER NUMBER OF 7 SHARES --------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 29,562,951 (See Item 5) OWNED BY --------------------------------------------------------- SOLE DISPOSITIVE POWER EACH REPORTING 9 PERSON --------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 29,562,951 (See Item 5) - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 29,562,951 (See Item 5) - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 49.9% (See Item 5) - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14 OO - Limited Liability Company - -------------------------------------------------------------------------------- * See instructions before filling out! CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 3 OF 11 PAGES - -------------------------------------------------------------------------------- NAME OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Barry McComic - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS 4 OO - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED 5 PURSUANT TO ITEMS 2(d) or 2(e) [_] - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States of America - -------------------------------------------------------------------------------- SOLE VOTING POWER NUMBER OF 7 SHARES --------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 29,562,951 (See Item 5) OWNED BY --------------------------------------------------------- SOLE DISPOSITIVE POWER EACH REPORTING 9 PERSON --------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 29,562,951 (See Item 5) - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 29,562,951 (See Item 5) - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 49.9% (See Item 5) - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14 IN - -------------------------------------------------------------------------------- * See instructions before filling out! CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 4 OF 11 PAGES - -------------------------------------------------------------------------------- NAME OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Mark Daitch - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS 4 OO - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED 5 PURSUANT TO ITEMS 2(d) or 2(e) [_] - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States of America - -------------------------------------------------------------------------------- SOLE VOTING POWER NUMBER OF 7 SHARES --------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 29,562,951 (See Item 5) OWNED BY --------------------------------------------------------- SOLE DISPOSITIVE POWER EACH REPORTING 9 PERSON --------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 29,562,951 (See Item 5) - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 29,562,951 (See Item 5) - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 49.9% (See Item 5) - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14 IN - -------------------------------------------------------------------------------- * See instructions before filling out! CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 5 OF 11 PAGES This Amendment No. 1 relates to the common stock, par value $0.0001 per share ("Price Legacy Common Stock"), of Price Legacy Corporation, a Maryland corporation ("Price Legacy"), and amends and restates the Schedule 13D, filed by The 520 Group, LLC, a California limited liability company (the "520 Group"), with the Securities and Exchange Commission (the "SEC") on December 29, 2003 (the "Original 13D") (the Original 13D, as so amended, being the "Schedule 13D"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Schedule 13D. The Schedule 13D is amended and restated in its entirety as follows: ITEM 1. SECURITY AND ISSUER This statement on Schedule 13D relates to the common stock, par value $0.0001 per share ("Price Legacy Common Stock"), of Price Legacy Corporation, a Maryland corporation ("Price Legacy"). The address of the principal executive offices of Price Legacy is 17140 Bernardo Center Drive, San Diego, California 92128. ITEM 2. IDENTITY AND BACKGROUND (a), (f) This statement on Schedule 13D is filed by The 520 Group, LLC, a California limited liability company (the "520 Group"), Barry McComic, a citizen of the United States of America, and Mark Daitch, a citizen of the United States of America. Each of Mr. McComic and Mr. Daitch (collectively, the "Managers") is a manager of the 520 Group. The 520 Group disclaims membership in a group with any of the Managers, and each of the Managers disclaims membership in a group with the 520 Group and with any other Manager. The Managers have jointly filed this Schedule 13D with the 520 Group in order to reflect any beneficial ownership they may be deemed to have of Price Legacy securities held by the 520 Group by virtue of their management of the 520 Group. (b) The principal executive office of the 520 Group and the principal business address of Mr. Daitch is 7979 Ivanhoe Avenue, Suite 520, La Jolla, California 92037. The principal business address of Mr. McComic is 7979 Ivanhoe Avenue, Suite 550, La Jolla, California 92037. (c) The principal business of the 520 Group is investment. The principal occupation of Mr. McComic is real estate investment. The principal occupation of Mr. Daitch is Vice President of Price Entities. (d)-(e) During the last five years, neither the 520 Group nor any of the Managers has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which any such person 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 of such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION As disclosed in Amendment No. 2 to Schedule 13D, filed by The Price Group LLC, a California limited liability company (the "Price Group"), with the SEC on September 11, 2003 (the "Price Group 13D"), the Price Group entered into a Purchase Agreement, dated as of September 9, 2003 (the "Purchase Agreement"), with Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership, and CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 6 OF 11 PAGES certain of its affiliates (collectively "Warburg Pincus"), which granted the Price Group or its assignee(s) the right to purchase, on January 5, 2004, all Price Legacy securities held by Warburg Pincus (collectively the "Warburg Securities") for an aggregate purchase price of $138 million. In connection with the Purchase Agreement, the Price Group paid to Warburg Pincus a deposit of $5,000,000 (the "Deposit"). In addition, and also as disclosed in the Price Group 13D, on September 9, 2003, the Price Group and Price Legacy entered into a letter agreement (the "Letter Agreement") pursuant to which the Price Group confirmed that it executed the Purchase Agreement as a facilitator and agreed, among other things, to assign all of its rights to purchase the Warburg Securities under the Purchase Agreement to one or more third parties in a manner that will ensure that the ownership of the Warburg Securities will be in compliance with the ownership limits in Price Legacy's charter. Under the Letter Agreement, the Price Group also agreed that its assignment of such rights will be on terms such that the aggregate consideration paid by the assignee(s) for the Warburg Securities will not exceed $138 million (reduced proportionately to the extent that Price Group retains any of the Warburg Securities). As disclosed in the Original 13D, on December 18, 2003, the 520 Group and the Price Group entered into an Agreement to Assign Purchase Agreement and an Assignment (collectively, the "Assignment Agreements"), pursuant to which the Price Group assigned to the 520 Group all of the Price Group's rights to purchase the Warburg Securities under the Purchase Agreement in exchange for the 520 Group's agreement to (i) reimburse the Price Group for the Deposit and related attorneys fees, banks fees, and other expenses and (ii) pay interest on the Deposit and such fees and expenses at the rate of 7% per annum from the dates of the Deposit or such fees and expenses, as applicable. The foregoing description of the Assignment Agreements is qualified in its entirety by reference to the Assignment Agreements, which have been incorporated by reference into this Schedule 13D as Exhibits 1 and 2 to this Schedule 13D and which are hereby incorporated herein in their entirety in response to this Item 3. On January 5, 2004, the 520 Group exercised the Purchase Agreement rights that had been assigned to it under the Assignment Agreements and purchased from Warburg Pincus all of the Warburg Securities. In connection with such purchase, the 520 Group paid $133 million to Warburg Pincus, which represented the aggregate purchase price of $138 million less the Deposit. The Warburg Securities consisted of 22,062,951 shares of the Price Legacy 9% Series B Junior Convertible Preferred Stock (the "Series B Preferred Stock"),(2) 5,000,000 shares of Price Legacy Common Stock, and warrants to purchase 2,500,000 shares of Price Legacy Common Stock (the "Warburg Warrants"). In order to fund, in part, its purchase of the Warburg Securities, the 520 Group borrowed, on January 2, 2004, (i) $31,000,000 from the Price Group (the "Price Group Loan"), (ii) $43,000,000 from the Price Family Charitable Fund (the "PFCF Loan"), and (iii) $5,000,000 from the Sol & Helen Price Trust (the "SHPT Loan"). Each of the Price Group Loan, the PFCF Loan, and the SHPT Loan bears interest at the rate of three-month LIBOR plus 325 basis points and matures on December 31, 2006. The foregoing description of the Price Group - ------------------ 2 Effective as of September 18, 2003, the Series B Preferred Stock became convertible pursuant to its terms into Price Legacy Common Stock. The 520 Group believes that, under such terms, each share of Series B Preferred Stock is presently convertible into one share of Price Legacy Common Stock (excluding any additional shares, if any, issuable on account of accrued and unpaid dividends on the Series B Preferred Stock). CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 7 OF 11 PAGES Loan, the PFCF Loan, and the SHPT Loan is qualified in its entirety by reference to the promissory notes evidencing, respectively, the Price Group Loan, the PFCF Loan, and SHPT Loan, which are filed, respectively, as Exhibits 3, 4, and 5 to this Schedule 13D and which are hereby incorporated herein by reference in their entirety in response to this Item 3. In connection with the Price Group Loan, the 520 Group and the Price Group entered into a Pledge and Security Agreement, dated as of January 2, 2004 (the "Price Group Pledge Agreement"), pursuant to which the 520 Group pledged 2,094,595 shares of Price Legacy Common Stock and 7,534,513 shares of Series B Preferred Stock to the Price Group to secure the Price Group Loan. Under the Price Group Pledge Agreement, the Price Group does not have the right to vote or dispose of any of the shares pledged thereunder unless the 520 Group is in default under the Price Group Loan. In connection with the PFCF Loan, the 520 Group and the Price Family Charitable Fund entered into a Pledge and Security Agreement, dated as of January 2, 2004 (the "PFCF Pledge Agreement"), pursuant to which the 520 Group pledged 2,905,405 shares of Price Legacy Common Stock and 10,451,099 shares of Series B Preferred Stock to the Price Family Charitable Fund to secure the PFCF Loan. Under the PFCF Pledge Agreement, the Price Family Charitable Fund does not have the right to vote or dispose of any of the shares pledged thereunder unless the 520 Group is in default under the PFCF Loan. The foregoing description of the Price Group Pledge Agreement and the PFCF Pledge Agreement is qualified in its entirety by reference to The Price Group Pledge Agreement and the PFCF Pledge Agreement, which are filed, respectively, as Exhibits 6 and 7 to this Schedule 13D and which are hereby incorporated herein by reference in their entirety in response to this Item 3. The SHPT Loan is unsecured. All amounts paid by the 520 Group to Warburg Pincus or reimbursed or paid by the 520 Group to Price Group in connection with the transactions described in this Item 3 were funded by (i) proceeds from the Price Group Loan, the PFCF Loan, and the SHPT Loan and (ii) working capital and other funds of the 520 Group, including capital contributions made to the 520 Group by its members. ITEM 4. PURPOSE OF TRANSACTION The information set forth in Item 3 above is incorporated herein in its entirety in response to this Item 4. The securities covered by this Schedule 13D are being purchased for investment purposes only. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a)-(b) After giving effect to the transactions described in Item 3 above, the 520 Group presently beneficially owns, in the aggregate, the equivalent of 29,562,951 shares of Price Legacy Common Stock, which represent approximately 49.9% of the outstanding Price Legacy Common Stock.(3) Of these 29,562,951 shares, the 520 Group has sole voting and dispositive power over all of them and shared voting and dispositive power over none; provided that if the any of the Managers were deemed to beneficially own any of these shares, then the 520 Group would be deemed to share voting and dispositive power over such shares with such Manager. - --------------------- 3 All calculations of percentage ownership in this Schedule 13D (i) is based on approximately 34,732,157 shares of Price Legacy Common Stock estimated to be outstanding as of November 11, 2003, as reported in the Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2003, filed by Price Legacy with the SEC on November 12, 2003, (ii) assumes exercise of the Warburg Warrants for 2,500,000 shares of Price Legacy Common Stock, and (iii) assumes conversion of all Series B Preferred Stock that constitute Warburg Securities into 22,062,951 shares of Price Legacy Common Stock. CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 8 OF 11 PAGES Each Manager does not beneficially own any Price Legacy Common Stock, except to the extent that he may be deemed to beneficially own, by virtue of his position as a manager of the 520 Group, any Price Legacy Common Stock that is beneficially owned by the 520 Group. If such Manager were to be so deemed to beneficially own such Price Legacy Common Stock, then such Manager would be deemed to share voting and dispositive control over such Price Legacy Common Stock with the other Manager and with the 520 Group. The information set forth in Item 2 above is incorporated herein in its entirety in response to this Item 5(b). Each of the Managers disclaims beneficial ownership of all Price Legacy securities that may be deemed to be beneficially owned by the 520 Group. (c) The information set forth in Item 3 above is incorporated herein in its entirety in response to this Item 5(c). The information set forth in Item 6 below is incorporated herein in its entirety in response to this Item 5(c). (d)-(e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The Warburg Securities are subject to a Registration Rights Agreement, dated as of September 18, 2001 (the "Registration Rights Agreement"), among the Price Group, Warburg Pincus, and Price Enterprises, Inc., formerly a Maryland corporation and a predecessor-in-interest of Price Legacy, pursuant to which Price Legacy granted certain registration rights with respect to the Price Legacy Common Stock issuable upon the exercise of the Warburg Warrants or upon the conversion of the Series B Preferred Stock that constitute part of the Warburg Securities. The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the Registration Rights Agreement, which has been incorporated by reference into this Schedule 13D as Exhibit 8 hereto and which is hereby incorporated herein in its entirety in response to this Item 6. The information set forth in Item 3 above is incorporated herein in its entirety in reponse to this Item 6. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS Exhibit No. Description of Exhibit ----------- ---------------------- 1 Agreement to Assign Purchase Agreement, dated as of December 18, 2003, by and between The Price Group LLC and The 520 Group, LLC (incorporated by reference to Exhibit 1 to the Schedule 13D filed by The 520 Group, LLC with the SEC on December 29, 2003). 2 Assignment, dated as of December 18, 2003, by and between The Price Group LLC and The 520 Group, LLC (incorporated by reference to Exhibit 1 to the Schedule 13D filed by The 520 Group, LLC with the SEC on December 29, 2003). 3 Promissory Note, in the principal amount of $31,000,000, executed and delivered as of January 2, 2004, by The 520 Group, LLC in favor of The Price Group LLC. 4 Promissory Note, in the principal amount of $43,000,000, executed and delivered as of January 2, 2004, by The 520 Group, LLC in favor of the Price Family Charitable Fund. CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 9 OF 11 PAGES 5 Promissory Note, in the principal amount of $5,000,000, executed and delivered as of January 2, 2004, by The 520 Group, LLC in favor of the Sol & Helen Price Trust. 6 Pledge and Security Agreement, dated as of January 2, 2004, by and between The 520 Group, LLC and The Price Group LLC. 7 Pledge and Security Agreement, dated as of January 2, 2004, by and between The 520 Group, LLC and the Price Family Charitable Fund. 8 Registration Rights Agreement, dated as of September 18, 2001, by and among Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg, Pincus Netherlands Equity Partners II, C.V., Warburg, Pincus Netherlands Equity Partners III, C.V., The Price Group LLC, and Price Enterprises, Inc. (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by Price Legacy Corporation with the SEC on September 19, 2001). 9 Agreement to File Schedule 13D Jointly, among the Reporting Persons, as required by Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended. CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 10 OF 11 PAGES SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct. Dated: January 8, 2004 THE 520 GROUP, LLC /s/ Mark Daitch ------------------------------------ By: Mark Daitch Title: Manager BARRY MCCOMIC /s/ Barry McComic ------------------------------------ MARK DAITCH /s/ Mark Daitch ------------------------------------ CUSIP NO. 74144P106 SCHEDULE 13D/A PAGE 11 OF 11 PAGES EXHIBIT INDEX Exhibit No. Description of Exhibit ----------- ---------------------- 1 Agreement to Assign Purchase Agreement, dated as of December 18, 2003, by and between The Price Group LLC and The 520 Group, LLC (incorporated by reference to Exhibit 1 to the Schedule 13D filed by The 520 Group, LLC with the SEC on December 29, 2003). 2 Assignment, dated as of December 18, 2003, by and between The Price Group LLC and The 520 Group, LLC (incorporated by reference to Exhibit 1 to the Schedule 13D filed by The 520 Group, LLC with the SEC on December 29, 2003). 3 Promissory Note, in the principal amount of $31,000,000, executed and delivered as of January 2, 2004, by The 520 Group, LLC in favor of The Price Group LLC. 4 Promissory Note, in the principal amount of $43,000,000, executed and delivered as of January 2, 2004, by The 520 Group, LLC in favor of the Price Family Charitable Fund. 5 Promissory Note, in the principal amount of $5,000,000, executed and delivered as of January 2, 2004, by The 520 Group, LLC in favor of the Sol & Helen Price Trust. 6 Pledge and Security Agreement, dated as of January 2, 2004, by and between The 520 Group, LLC and The Price Group LLC. 7 Pledge and Security Agreement, dated as of January 2, 2004, by and between The 520 Group, LLC and the Price Family Charitable Fund. 8 Registration Rights Agreement, dated as of September 18, 2001, by and among Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg, Pincus Netherlands Equity Partners II, C.V., Warburg, Pincus Netherlands Equity Partners III, C.V., The Price Group LLC, and Price Enterprises, Inc. (incorporated by reference to Exhibit 10.3 to the Form 8-K filed by Price Legacy Corporation with the SEC on September 19, 2001). 9 Agreement to File Schedule 13D Jointly, among the Reporting Persons, as required by Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended. EX-3 3 tex3-1464.txt EX-3 EXHIBIT 3 --------- PROMISSORY NOTE --------------- $31,000,000 January 2, 2004 - ----------- San Diego, California FOR VALUE RECEIVED, the undersigned THE 520 GROUP, LLC, a California limited liability company, (the "Borrower"), promises to pay to THE PRICE GROUP, LLC, a California limited liability company, (the "Lender") or order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla, California 92037, or such other address as may be directed in writing, the principal sum of Thirty-One Million ($31,000,000) Dollars, together with interest thereon at a rate equal to the three (3) month London Interbank Offered Rate (LIBOR), as of the date of this Note, adjusted every ninety (90) days thereafter, plus three and one-quarter percent (3.25%); computed from the date hereof on the basis of a three hundred sixty-five day (365) year, actual days elapsed. 1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be payable in quarter annual installments on May 20th, August 20th, November 20th, and February 20th beginning May 20th, 2004 until this Note is paid in full. All unpaid principal and accrued unpaid interest on this Note shall be due and payable in full on December 31, 2006. 2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in the following order: (a) costs, fees, charges and advances paid or incurred by Lender and for which the Borrower is obligated under the terms herein; (b) interest payable under this Note; and (c) principal under this Note. All installments of principal and interest of this Note shall be payable in lawful money of the United States of America. 3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in part, and without any premium or penalty therefor, the principal amount hereof then remaining unpaid, together with accrued unpaid interest on this Note. Any such prepayment shall be applied first to accrued unpaid interest on this Note and the balance to principal due hereunder. 4. INTEREST AND DEFAULT. From and after the Maturity Date the entire unpaid principal balance and accrued unpaid interest shall automatically bear an annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or (b) the maximum interest rate allowed by law; in lieu of the rate provided above herein. 5. ACCELERATION. In the event Borrower defaults in the payment of any installment of interest or principal of this Note when due, and such default is not cured within ten (10) days after Borrower receives a written notice of default from Lender, then the entire principal balance and accrued unpaid interest of this Note shall be immediately due and payable, at the option of the Lender, without further notice. Failure to exercise said option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. 6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses, and attorney fees paid or incurred by Lender, or adjudged by a court: (a) reasonable costs of collection and costs, expenses, and attorney fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or incurred in connection with representing Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Note; and (c) costs of suit and such sum as the court may adjudge as attorney fees in any action to enforce payment of this Note or any part of it. 7. WAIVER. Borrower, endorsers, and all other persons liable or to become liable on this Note waive presentment, protest, and demand; notice of protest, demand, and dishonor; and all other notices or matters of a like nature. 8. USURY. All agreements between Borrower and Lender are expressly limited, so that in no event or contingency, whether because of the advancement of the proceeds of this Note, acceleration of maturity of the unpaid principal balance, or otherwise, shall the amount paid or agreed to be paid to Lender for the use, forbearance, or retention of the money to be advanced under this Note exceed the highest lawful rate permissible under applicable usury laws. If, under any circumstances, fulfillment of any provision of this Note or any other agreement pertaining to this Note, after timely performance of such provision is due, shall involve exceeding the limit of validity prescribed by law that a court of competent jurisdiction deems applicable, then, ipso facto, the obligations to be fulfilled shall be reduced to the limit of such validity. If, under any circumstances, Lender shall ever receive as interest an amount that exceeds the highest lawful rate, the amount that would be excessive interest shall be applied to reduce the unpaid principal balance under this Note and not to pay interest, or, if such excessive interest exceeds the unpaid principal balance under this Note, such excess shall be refunded to Borrower. This provision shall control every other provision of all agreements between Borrower and Lender. 9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to exercise any of its rights under this Note, that delay or failure shall not constitute a waiver of any Lender rights or of any breach, default, or failure of condition under this Note. No waiver by Lender of any of its rights or of any such breach, default, or failure of condition shall be effective, unless the waiver is expressly stated in writing signed by Lender. 10. ASSIGNMENT. This Note inures to and binds the heirs, legal representatives, successors, and assigns of Borrower and Lender; provided, however, that Borrower may not assign this Note or any proceeds of it, or assign or delegate any of its rights or obligations, without Lender's prior written consent in each instance. Lender, in its sole discretion, may transfer this Note, and may sell or assign participations or other interests in all or any part of this Note, all without notice to or the consent of Borrower. 11. SEVERABILITY. If any provision of this Note, or the application of it to any party or circumstance, is held void, invalid, or unenforceable by a court of competent jurisdiction, the remainder of this Note, and the application of such provision to other parties or circumstances, shall not be affected thereby, the provisions of this Note being severable in any such instance. 12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all obligations of Borrower under this Note. 13. GOVERNING LAW. This Note shall be construed and enforceable according to the laws of the State of California. 14. SECURED OBLIGATION. This note is secured by a Pledge and Security Agreement dated the same date as this Note and made by Borrower, for the benefit of the Lender. Any default under said Agreement shall be deemed a default under this Note. 15. DEMAND PAYMENT OPTION. The Lender shall have the right at any time prior to the maturity date to require the Borrower to repay the entire principal balance and accrued unpaid interest due under this Note in the event it is determined by the Lender, in consultation with Price Legacy Corporation (the "Company"), the Company's Board of Directors and/or the Company's tax advisors that this Note could jeopardize the Company's status as a real estate investment trust under the Internal Revenue Code of 1986, as amended. In the event the Lender elects to exercise its call option under this paragraph 15, the Lender shall provide the Borrower with written notice of such election, and the Borrower shall repay the entire principal balance and accrued unpaid interest due under this Note to the Lender within fifteen (15) days. Executed as of the date first written above. BORROWER -------- THE 520 GROUP, LLC By /s/ Barry McComic ------------------------------ Barry McComic - Manager By /s/ Mark Daitch ------------------------------ Mark Daitch - Manager 2 EX-4 4 tex4-1464.txt EX-4 EXHIBIT 4 --------- PROMISSORY NOTE --------------- $43,000,000 January 2, 2004 - ----------- San Diego, California FOR VALUE RECEIVED, the undersigned THE 520 GROUP, LLC, a California limited liability company, (the "Borrower"), promises to pay to PRICE FAMILY CHARITABLE FUND, a California non-profit public benefit corporation, (the "Lender") or order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla, California 92037, or such other address as may be directed in writing, the principal sum of Forty-Three Million ($43,000,000) Dollars, together with interest thereon at a rate equal to the three (3) month London Interbank Offered Rate (LIBOR), as of the date of this Note, adjusted every ninety (90) days thereafter, plus three and one-quarter percent (3.25%); computed from the date hereof on the basis of a three hundred sixty-five day (365) year, actual days elapsed. 1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be payable in quarter annual installments on May 20th, August 20th, November 20th, and February 20th beginning May 20th, 2004 until this Note is paid in full. All unpaid principal and accrued unpaid interest on this Note shall be due and payable in full on December 31, 2006. 2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in the following order: (a) costs, fees, charges and advances paid or incurred by Lender and for which the Borrower is obligated under the terms herein; (b) interest payable under this Note; and (c) principal under this Note. All installments of principal and interest of this Note shall be payable in lawful money of the United States of America. 3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in part, and without any premium or penalty therefor, the principal amount hereof then remaining unpaid, together with accrued unpaid interest on this Note. Any such prepayment shall be applied first to accrued unpaid interest on this Note and the balance to principal due hereunder. 4. INTEREST AND DEFAULT. From and after the Maturity Date the entire unpaid principal balance and accrued unpaid interest shall automatically bear an annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or (b) the maximum interest rate allowed by law; in lieu of the rate provided above herein. 5. ACCELERATION. In the event Borrower defaults in the payment of any installment of interest or principal of this Note when due, and such default is not cured within ten (10) days after Borrower receives a written notice of default from Lender, then the entire principal balance and accrued unpaid interest of this Note shall be immediately due and payable, at the option of the Lender, without further notice. Failure to exercise said option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. 6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses, and attorney fees paid or incurred by Lender, or adjudged by a court: (a) reasonable costs of collection and costs, expenses, and attorney fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or incurred in connection with representing Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Note; and (c) costs of suit and such sum as the court may adjudge as attorney fees in any action to enforce payment of this Note or any part of it. 7. WAIVER. Borrower, endorsers, and all other persons liable or to become liable on this Note waive presentment, protest, and demand; notice of protest, demand, and dishonor; and all other notices or matters of a like nature. 8. USURY. All agreements between Borrower and Lender are expressly limited, so that in no event or contingency, whether because of the advancement of the proceeds of this Note, acceleration of maturity of the unpaid principal balance, or otherwise, shall the amount paid or agreed to be paid to Lender for the use, forbearance, or retention of the money to be advanced under this Note exceed the highest lawful rate permissible under applicable usury laws. If, under any circumstances, fulfillment of any provision of this Note or any other agreement pertaining to this Note, after timely performance of such provision is due, shall involve exceeding the limit of validity prescribed by law that a court of competent jurisdiction deems applicable, then, ipso facto, the obligations to be fulfilled shall be reduced to the limit of such validity. If, under any circumstances, Lender shall ever receive as interest an amount that exceeds the highest lawful rate, the amount that would be excessive interest shall be applied to reduce the unpaid principal balance under this Note and not to pay interest, or, if such excessive interest exceeds the unpaid principal balance under this Note, such excess shall be refunded to Borrower. This provision shall control every other provision of all agreements between Borrower and Lender. 9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to exercise any of its rights under this Note, that delay or failure shall not constitute a waiver of any Lender rights or of any breach, default, or failure of condition under this Note. No waiver by Lender of any of its rights or of any such breach, default, or failure of condition shall be effective, unless the waiver is expressly stated in writing signed by Lender. 10. ASSIGNMENT. This Note inures to and binds the heirs, legal representatives, successors, and assigns of Borrower and Lender; provided, however, that Borrower may not assign this Note or any proceeds of it, or assign or delegate any of its rights or obligations, without Lender's prior written consent in each instance. Lender, in its sole discretion, may transfer this Note, and may sell or assign participations or other interests in all or any part of this Note, all without notice to or the consent of Borrower. 11. SEVERABILITY. If any provision of this Note, or the application of it to any party or circumstance, is held void, invalid, or unenforceable by a court of competent jurisdiction, the remainder of this Note, and the application of such provision to other parties or circumstances, shall not be affected thereby, the provisions of this Note being severable in any such instance. 12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all obligations of Borrower under this Note. 13. GOVERNING LAW. This Note shall be construed and enforceable according to the laws of the State of California. 14. SECURED OBLIGATION. This note is secured by a Pledge and Security Agreement dated the same date as this Note and made by Borrower, for the benefit of the Lender. Any default under said Agreement shall be deemed a default under this Note. 15. DEMAND PAYMENT OPTION. The Lender shall have the right at any time prior to the maturity date to require the Borrower to repay the entire principal balance and accrued unpaid interest due under this Note in the event it is determined by the Lender, in consultation with Price Legacy Corporation (the "Company"), the Company's Board of Directors and/or the Company's tax advisors that this Note could jeopardize the Company's status as a real estate investment trust under the Internal Revenue Code of 1986, as amended. In the event the Lender elects to exercise its call option under this paragraph 15, the Lender shall provide the Borrower with written notice of such election, and the Borrower shall repay the entire principal balance and accrued unpaid interest due under this Note to the Lender within fifteen (15) days. Executed as of the date first written above. BORROWER -------- THE 520 GROUP, LLC By /s/ Barry McComic ------------------------------ Barry McComic - Manager By /s/ Mark Daitch ------------------------------ Mark Daitch - Manager 2 EX-5 5 tex5-1464.txt EX-5 EXHIBIT 5 --------- PROMISSORY NOTE --------------- $5,000,000 January 2, 2004 - ---------- San Diego, California FOR VALUE RECEIVED, the undersigned THE 520 GROUP, LLC, a California limited liability company, (the "Borrower"), promises to pay to SOL AND HELEN PRICE TRUST dated February 20, 1970, a California trust, (the "Lender") or order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla, California 92037, or such other address as may be directed in writing, the principal sum of Five Million ($5,000,000) Dollars, together with interest thereon at a rate equal to the three (3) month London Interbank Offered Rate (LIBOR), as of the date of this Note, adjusted every ninety (90) days thereafter, plus three and one-quarter percent (3.25%); computed from the date hereof on the basis of a three hundred sixty-five day (365) year, actual days elapsed. 1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be payable in quarter annual installments on May 20th, August 20th, November 20th, and February 20th beginning May 20th 2004, until this Note is paid in full. All unpaid principal and accrued unpaid interest on this Note shall be due and payable in full on December 31, 2006. 2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in the following order: (a) costs, fees, charges and advances paid or incurred by Lender and for which the Borrower is obligated under the terms herein; (b) interest payable under this Note; and (c) principal under this Note. All installments of principal and interest of this Note shall be payable in lawful money of the United States of America. 3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in part, and without any premium or penalty therefor, the principal amount hereof then remaining unpaid, together with accrued unpaid interest on this Note. Any such prepayment shall be applied first to accrued unpaid interest on this Note and the balance to principal due hereunder. 4. INTEREST AND DEFAULT. From and after the Maturity Date the entire unpaid principal balance and accrued unpaid interest shall automatically bear an annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or (b) the maximum interest rate allowed by law; in lieu of the rate provided above herein. 5. ACCELERATION. In the event Borrower defaults in the payment of any installment of interest or principal of this Note when due, and such default is not cured within ten (10) days after Borrower receives a written notice of default from Lender, then the entire principal balance and accrued unpaid interest of this Note shall be immediately due and payable, at the option of the Lender, without further notice. Failure to exercise said option shall not constitute a waiver of the right to exercise it in the event of any subsequent default. 6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses, and attorney fees paid or incurred by Lender, or adjudged by a court: (a) reasonable costs of collection and costs, expenses, and attorney fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or incurred in connection with representing Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors' rights and involving a claim under this Note; and (c) costs of suit and such sum as the court may adjudge as attorney fees in any action to enforce payment of this Note or any part of it. 7. WAIVER. Borrower, endorsers, and all other persons liable or to become liable on this Note waive presentment, protest, and demand; notice of protest, demand, and dishonor; and all other notices or matters of a like nature. 8. USURY. All agreements between Borrower and Lender are expressly limited, so that in no event or contingency, whether because of the advancement of the proceeds of this Note, acceleration of maturity of the unpaid principal balance, or otherwise, shall the amount paid or agreed to be paid to Lender for the use, forbearance, or retention of the money to be advanced under this Note exceed the highest lawful rate permissible under applicable usury laws. If, under any circumstances, fulfillment of any provision of this Note or any other agreement pertaining to this Note, after timely performance of such provision is due, shall involve exceeding the limit of validity prescribed by law that a court of competent jurisdiction deems applicable, then, ipso facto, the obligations to be fulfilled shall be reduced to the limit of such validity. If, under any circumstances, Lender shall ever receive as interest an amount that exceeds the highest lawful rate, the amount that would be excessive interest shall be applied to reduce the unpaid principal balance under this Note and not to pay interest, or, if such excessive interest exceeds the unpaid principal balance under this Note, such excess shall be refunded to Borrower. This provision shall control every other provision of all agreements between Borrower and Lender. 9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to exercise any of its rights under this Note, that delay or failure shall not constitute a waiver of any Lender rights or of any breach, default, or failure of condition under this Note. No waiver by Lender of any of its rights or of any such breach, default, or failure of condition shall be effective, unless the waiver is expressly stated in writing signed by Lender. 10. ASSIGNMENT. This Note inures to and binds the heirs, legal representatives, successors, and assigns of Borrower and Lender; provided, however, that Borrower may not assign this Note or any proceeds of it, or assign or delegate any of its rights or obligations, without Lender's prior written consent in each instance. Lender, in its sole discretion, may transfer this Note, and may sell or assign participations or other interests in all or any part of this Note, all without notice to or the consent of Borrower. 11. SEVERABILITY. If any provision of this Note, or the application of it to any party or circumstance, is held void, invalid, or unenforceable by a court of competent jurisdiction, the remainder of this Note, and the application of such provision to other parties or circumstances, shall not be affected thereby, the provisions of this Note being severable in any such instance. 12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all obligations of Borrower under this Note. 13. GOVERNING LAW. This Note shall be construed and enforceable according to the laws of the State of California. 14. DEMAND PAYMENT OPTION. The Lender shall have the right at any time prior to the maturity date to require the Borrower to repay the entire principal balance and accrued unpaid interest due under this Note in the event it is determined by the Lender, in consultation with Price Legacy Corporation (the "Company"), the Company's Board of Directors and/or the Company's tax advisors that this Note could jeopardize the Company's status as a real estate investment trust under the Internal Revenue Code of 1986, as amended. In the event the Lender elects to exercise its call option under this paragraph 14, the Lender shall provide the Borrower with written notice of such election, and the Borrower shall repay the entire principal balance and accrued unpaid interest due under this Note to the Lender within fifteen (15) days. Executed as of the date first written above. BORROWER THE 520 GROUP, LLC By /s/ Barry McComic ------------------------------ Barry McComic - Manager By /s/ Mark Daitch ------------------------------ Mark Daitch - Manager 2 EX-6 6 tex6-1464.txt EX-6 EXHIBIT 6 --------- PLEDGE AND SECURITY AGREEMENT ----------------------------- Agreement made this 2nd day of January 2004 by and between THE PRICE GROUP, LLC, a California limited liability company (the "Creditor") and THE 520 GROUP, LLC, a California limited liability company (the "Debtor"). NOW, THEREFORE, in consideration of the mutual covenants herein, the parties hereto agree as follows: 1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Creditor a security interest in all of the Debtor's right, title, and interest now owned or acquired in the future in and to the following described collateral (the "Collateral") in order to secure the payment and performance of the obligations described in paragraph 3 below: Seven million five hundred thirty-four thousand five hundred thirteen (7,534,513) Shares of Price Legacy Series B junior convertible redeemable preferred stock. Two million ninety-four thousand five hundred ninety-five (2,094,595) shares of Price Legacy common stock 2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK. A) Debtor agrees that James F. Cahill ("Holder") shall maintain an account with Morgan Stanley at 1225 Prospect Street, La Jolla, California 92037 in the name of Holder, as Custodian for Debtor ("Broker Account"). Debtor shall immediately deposit the Collateral to the Broker Account. Debtor acknowledges and agrees that under the terms of the Broker Account only the Holder shall be entitled to give instructions regarding the assets held in the Broker Account and Debtor shall have no ability to withdraw the Collateral from the Broker Account. B) Holder agrees to maintain the Broker Account as the custodian of Debtor and retain the Collateral in the Broker Account until either (i) this Pledge terminates or (ii) he receives written notice from Creditor that an event of default under the Promissory Note has occurred and Debtor has failed to cure said default within five (5) business days from the date of occurrence. C) In the event of a default, as provided in paragraph 6 herein, Debtor shall have the right to direct Holder, and Holder shall be obligated at Debtor's written direction, to sell the Collateral and pay to Creditor the lesser of (i) the net proceeds of the sale or (ii) the full amount due under the Promissory Note. D) Creditor may at any time change the Holder, or appoint additional Holders. 3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall hereafter secure the payment to Creditor of all indebtedness now or hereafter owed to Creditor by Debtor under a promissory note of even date herewith (the "Promissory Note") given by Debtor in the face amount of Thirty-One Million Dollars ($31,000,000), together with any interest thereon and extensions, modifications, and renewals thereof. 4. CASH DISTRIBUTIONS. So long as no default, and no condition or event which with notice or lapse of time, or both, would constitute a default, shall have occurred or exist under this Agreement, Debtor shall be entitled to receive all distributions (including cash and property) with respect to the Collateral; provided, however, that any distributions from the liquidation of the Collateral shall be paid to Creditor to the extent of unpaid principal and accrued unpaid interest under the Promissory Note. Upon the occurrence of a default or any condition or event which with notice or lapse of time, or both, would constitute a default hereunder, Creditor shall thereafter receive and may apply all distributions with respect to the Collateral against the indebtedness secured hereunder. 5. REPRESENTATIONS AND WARRANTIES. Debtor represents that as of January 5, 2004 (A) Debtor is the owner of the Collateral and that Debtor has not otherwise assigned or transferred, and agrees that Debtor shall not assign or transfer, absolutely or for security, the Collateral or any interest therein to any other person or entity; (B) there are no outstanding options, warrants or other agreements with respect to the Collateral; and (C) the execution and delivery of this Agreement by Debtor will not result in a violation of any mortgage, indenture, material contract, instrument, judgment, decree, order, statute, rule or regulation to which Debtor is subject. 6. DEFAULT AND REMEDIES. Any breach of or event of default under the Promissory Note or any failure to comply with any of the terms under this Agreement shall be a default hereunder. Upon any default hereunder, and failure by Debtor to cure such default within ten (10) days after Creditor gives Debtor written notice of such default, Creditor shall have the right to exercise its remedies as a secured party with respect to the Collateral, including, without limitation, the right to use all or any portion of the Collateral in Creditor's sole and absolute discretion (a) toward cure of the default; (b) to payment of principal (whether or not otherwise accelerated) and/or interest; or (c) in such combination thereof as Creditor may determine. Creditor shall in no event be required to use proceeds of the Collateral to cure a default. 7. ADMINISTRATION OF COLLATERAL. The provisions set forth below shall govern the administration of the Collateral: (a) VOTING. Until there shall have occurred any default hereunder, Debtor shall be entitled to vote or consent with respect to the Collateral in any manner not inconsistent with this Agreement, to the extent the Collateral carries any rights of voting or consent. (b) FURTHER DOCUMENTS. Debtor will forthwith upon request by Creditor and in confirmation of the security interest hereby created, execute and deliver to Creditor such further assignments, transfers, assurances, instruments, notices and agreements in form and substance as the Creditor shall reasonably request. (c) REMEDIES. In addition to any rights and remedies otherwise available in law or in equity, and in addition to the other provisions of this Agreement, and any other documents or instruments delivered or to be delivered in connection herewith or therewith, or any document or instrument now in existence, or which may hereafter be made, with respect to the Promissory Note, the provisions set forth below shall, to the extent permitted by applicable law, govern Creditor's rights to foreclose on the Collateral upon a default hereunder. (d) CONDUCT OF SALE. Upon giving written notice of default to Debtor pursuant to the terms of this Agreement, Creditor may sell as much of the Collateral as is required to produce net funds sufficient to pay Creditor the full amount of the Promissory Note. (e) SALE OR DISPOSITION. Upon any sale or disposition, Creditor shall have the right to deliver, assign, and transfer to the purchaser thereof the Collateral so sold or disposed. Each purchaser at any such sale or other disposition shall hold the Collateral free from any claim or right of whatever kinds, including any equity or right of redemption of the Debtor. The Debtor specifically waives all rights of redemption, stay or appraisal which it has or may hereafter have under any rule of law or statute now existing or hereafter adopted. (f) ATTORNEY-IN-FACT. Creditor or its designee is hereby appointed attorney-in-fact for Debtor for the purpose of carrying out the provisions of this Agreement and taking any action in executing any instrument which Creditor reasonably may deem necessary and advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and one coupled with an interest. 8. MISCELLANEOUS. (a) TERMINATION. This Agreement shall terminate upon Debtor's payment in full and the performance of the Promissory Note. (b) AGREEMENT BINDING. This Agreement shall be binding upon Debtor and its heirs, executors, personal representatives and successors, and shall inure to the benefit of, and be enforceable by, Creditor and its successors and assigns. Debtor hereby represents and warrants to Creditor that it has full legal authority to enter into this Agreement, to pledge the Collateral and to carry out the provisions hereof and no consent or approval from any other person or entity is necessary to enter into this Agreement or carry out its terms. (c) SEVERABILITY. If any provision of this Agreement shall be deemed or held to be invalid or unenforceable for any reason, such provision shall be adjusted, if possible, rather than voided, so as to achieve the intent of the parties to the fullest extent possible. In any event, such provision shall be 2 severable from, and shall not be construed to have any effect on, the remaining provisions of this Agreement, which shall continue in full force and effect. (d) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts, between residents thereof, to be wholly performed within the State of California. Debtor hereby irrevocably consents to the jurisdiction of the Courts of the State of California located in San Diego County and of any Federal Court located in San Diego County, California in connection with any action or proceeding arising out of or relating to this Agreement. (e) RIGHTS CUMULATIVE; NO WAIVER. Creditor's options, powers, rights, privileges, and immunities specified herein or arising hereunder are in addition to, and not exclusive of, those otherwise created or existing now or at any time, whether by contract, by statute or by rule of law. Creditor shall not, by any act, delay, omission or otherwise, be deemed to have modified, discharged or waived any of Creditor's options, powers, or rights in respect of this Agreement, and no modification, discharge or waiver of any such option, power, or right shall be valid unless set forth in writing signed by Creditor or Creditor's authorized agent, and then only to the extent therein set forth. A waiver by Creditor of any right or remedy hereunder on any one occasion shall be effective only in the specific instance and for the specific purpose for which given, and shall not be construed as a bar to any right or remedy that Creditor would otherwise have on any other occasion. (f) ENTIRE AGREEMENT. This Agreement contains the entire agreement between Debtor and Creditor with respect to the subject matter herein, and supersedes all prior communications relating thereto, including, without limitation, all oral statements or representations. No supplement to or modification of this Agreement shall be binding unless executed in writing by Debtor and Creditor. (g) COSTS OF ENFORCEMENT. Debtor shall upon demand pay to Creditor the amount of any and all reasonable expenses, including the reasonable fees and disbursements of counsel and/or any experts and agents, that Creditor may incur in connection with (a) the administration of this Agreement, (b) the exercise or enforcement of any of the rights of Creditor hereunder (including the defense of any claims or counterclaims asserted against Creditor arising out of this Agreement or the transactions contemplated hereby) or under any judgment awarded to Creditor in respect of its rights hereunder (which obligation shall be severable from the remainder of this Agreement and shall survive the entry of any such judgment), or (c) the failure by Debtor to perform or observe any of the provisions hereof. The foregoing shall include any and all expenses and fees incurred by Creditor in connection with a bankruptcy, reorganization, receivership, or similar debtor-relief proceeding by or affecting Debtor or the Collateral. (h) NOTICES. All notices, demands and other communications required or permitted hereunder shall be in writing, addressed to the parties at the following addresses: Creditor: The Price Group, LLC -------- 7979 Ivanhoe Avenue, Suite 520 La Jolla, CA 92037 Debtor: The 520 Group, LLC ------ 7979 Ivanhoe Ave, Suite 520 La Jolla, CA 92037 or to such other address as may be designated from time to time by notice to the other parties in the manner set forth herein. IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as of the date first above written. 3 CREDITOR: DEBTOR: - -------- ------- THE PRICE GROUP, LLC THE 520 GROUP, LLC By /s/ Jack McGrory by /s/ Barry McComic ----------------------------- ----------------------------- Jack McGrory - Manager Barry McComic - Manager by /s/ James F. Cahill by /s/ Mark Daitch ----------------------------- ----------------------------- James F. Cahill - Manager Mark Daitch - Manager 4 EX-7 7 tex7-1464.txt EX-7 EXHIBIT 7 --------- PLEDGE AND SECURITY AGREEMENT ----------------------------- Agreement made this 2nd day of January 2004 by and between PRICE FAMILY CHARITABLE FUND, a California non-profit public benefit corporation (the "Creditor") and THE 520 GROUP, LLC, a California limited liability company (the "Debtor"). NOW, THEREFORE, in consideration of the mutual covenants herein, the parties hereto agree as follows: 1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Creditor a security interest in all of the Debtor's right, title, and interest now owned or acquired in the future in and to the following described collateral (the "Collateral") in order to secure the payment and performance of the obligations described in paragraph 3 below: Ten million four hundred fifty-one thousand ninety nine (10,451,099) Shares of Price Legacy Series B junior convertible redeemable preferred stock. Two million nine hundred five thousand four hundred five (2,905,405) shares of Price Legacy common stock. 2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK. A) Debtor agrees that James F. Cahill ("Holder") shall maintain an account with Morgan Stanley at 1225 Prospect Street, La Jolla, California 92037 in the name of Holder, as Custodian for Debtor ("Broker Account"). Debtor shall immediately deposit the Collateral to the Broker Account. Debtor acknowledges and agrees that under the terms of the Broker Account only the Holder shall be entitled to give instructions regarding the assets held in the Broker Account and Debtor shall have no ability to withdraw the Collateral from the Broker Account. B) Holder agrees to maintain the Broker Account as the custodian of Debtor and retain the Collateral in the Broker Account until either (i) this Pledge terminates or (ii) he receives written notice from Creditor that an event of default under the Promissory Note has occurred and Debtor has failed to cure said default within five (5) business days from the date of occurrence. C) In the event of a default, as provided in paragraph 6 herein, Debtor shall have the right to direct Holder, and Holder shall be obligated at Debtor's written direction, to sell the Collateral and pay to Creditor the lesser of (i) the net proceeds of the sale or (ii) the full amount due under the Promissory Note. D) Creditor may at any time change the Holder, or appoint additional Holders. 3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall hereafter secure the payment to Creditor of all indebtedness now or hereafter owed to Creditor by Debtor under a promissory note of even date herewith (the "Promissory Note") given by Debtor in the face amount of Forty Three Million Dollars ($43,000,000), together with any interest thereon and extensions, modifications, and renewals thereof. 4. CASH DISTRIBUTIONS. So long as no default, and no condition or event which with notice or lapse of time, or both, would constitute a default, shall have occurred or exist under this Agreement, Debtor shall be entitled to receive all distributions (including cash and property) with respect to the Collateral; provided, however, that any distributions from the liquidation of the Collateral shall be paid to Creditor to the extent of unpaid principal and accrued unpaid interest under the Promissory Note. Upon the occurrence of a default or any condition or event which with notice or lapse of time, or both, would constitute a default hereunder, Creditor shall thereafter receive and may apply all distributions with respect to the Collateral against the indebtedness secured hereunder. 5. REPRESENTATIONS AND WARRANTIES. Debtor represents that as of January 5, 2004 (A) Debtor is the owner of the Collateral and that Debtor has not otherwise assigned or transferred, and agrees that Debtor shall not assign or transfer, absolutely or for security, the Collateral or any interest therein to any other person or entity; (B) there are no outstanding options, warrants or other agreements with respect to the Collateral; and (C) the execution and delivery of this Agreement by Debtor will not result in a violation of any mortgage, indenture, material contract, instrument, judgment, decree, order, statute, rule or regulation to which Debtor is subject. 6. DEFAULT AND REMEDIES. Any breach of or event of default under the Promissory Note or any failure to comply with any of the terms under this Agreement shall be a default hereunder. Upon any default hereunder, and failure by Debtor to cure such default within ten (10) days after Creditor gives Debtor written notice of such default, Creditor shall have the right to exercise its remedies as a secured party with respect to the Collateral, including, without limitation, the right to use all or any portion of the Collateral in Creditor's sole and absolute discretion (a) toward cure of the default; (b) to payment of principal (whether or not otherwise accelerated) and/or interest; or (c) in such combination thereof as Creditor may determine. Creditor shall in no event be required to use proceeds of the Collateral to cure a default. 7. ADMINISTRATION OF COLLATERAL. The provisions set forth below shall govern the administration of the Collateral: (a) VOTING. Until there shall have occurred any default hereunder, Debtor shall be entitled to vote or consent with respect to the Collateral in any manner not inconsistent with this Agreement, to the extent the Collateral carries any rights of voting or consent. (b) FURTHER DOCUMENTS. Debtor will forthwith upon request by Creditor and in confirmation of the security interest hereby created, execute and deliver to Creditor such further assignments, transfers, assurances, instruments, notices and agreements in form and substance as the Creditor shall reasonably request. (c) REMEDIES. In addition to any rights and remedies otherwise available in law or in equity, and in addition to the other provisions of this Agreement, and any other documents or instruments delivered or to be delivered in connection herewith or therewith, or any document or instrument now in existence, or which may hereafter be made, with respect to the Promissory Note, the provisions set forth below shall, to the extent permitted by applicable law, govern Creditor's rights to foreclose on the Collateral upon a default hereunder. (d) CONDUCT OF SALE. Upon giving written notice of default to Debtor pursuant to the terms of this Agreement, Creditor may sell as much of the Collateral as is required to produce net funds sufficient to pay Creditor the full amount of the Promissory Note. (e) SALE OR DISPOSITION. Upon any sale or disposition, Creditor shall have the right to deliver, assign, and transfer to the purchaser thereof the Collateral so sold or disposed. Each purchaser at any such sale or other disposition shall hold the Collateral free from any claim or right of whatever kinds, including any equity or right of redemption of the Debtor. The Debtor specifically waives all rights of redemption, stay or appraisal which it has or may hereafter have under any rule of law or statute now existing or hereafter adopted. (f) ATTORNEY-IN-FACT. Creditor or its designee is hereby appointed attorney-in-fact for Debtor for the purpose of carrying out the provisions of this Agreement and taking any action in executing any instrument which Creditor reasonably may deem necessary and advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and one coupled with an interest. 8. MISCELLANEOUS. (a) TERMINATION. This Agreement shall terminate upon Debtor's payment in full and the performance of the Promissory Note. (b) AGREEMENT BINDING. This Agreement shall be binding upon Debtor and its heirs, executors, personal representatives and successors, and shall inure to the benefit of, and be enforceable by, Creditor and its successors and assigns. Debtor hereby represents and warrants to Creditor that it has full legal authority to enter into this Agreement, to pledge the Collateral and to carry out the provisions hereof and no consent or approval from any other person or entity is necessary to enter into this Agreement or carry out its terms. (c) SEVERABILITY. If any provision of this Agreement shall be deemed or held to be invalid or unenforceable for any reason, such provision shall be adjusted, if possible, rather than voided, so as to achieve the intent of the parties to the fullest extent possible. In any event, such provision shall be severable from, and shall not be construed to have any effect on, the remaining provisions of this Agreement, which shall continue in full force and effect. (d) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts, between residents thereof, to be wholly performed within the State of California. Debtor hereby irrevocably consents to the jurisdiction of the Courts of the State of California located in San Diego County and of any Federal Court located in San Diego County, California in connection with any action or proceeding arising out of or relating to this Agreement. 2 (e) RIGHTS CUMULATIVE; NO WAIVER. Creditor's options, powers, rights, privileges, and immunities specified herein or arising hereunder are in addition to, and not exclusive of, those otherwise created or existing now or at any time, whether by contract, by statute or by rule of law. Creditor shall not, by any act, delay, omission or otherwise, be deemed to have modified, discharged or waived any of Creditor's options, powers, or rights in respect of this Agreement, and no modification, discharge or waiver of any such option, power, or right shall be valid unless set forth in writing signed by Creditor or Creditor's authorized agent, and then only to the extent therein set forth. A waiver by Creditor of any right or remedy hereunder on any one occasion shall be effective only in the specific instance and for the specific purpose for which given, and shall not be construed as a bar to any right or remedy that Creditor would otherwise have on any other occasion. (f) ENTIRE AGREEMENT. This Agreement contains the entire agreement between Debtor and Creditor with respect to the subject matter herein, and supersedes all prior communications relating thereto, including, without limitation, all oral statements or representations. No supplement to or modification of this Agreement shall be binding unless executed in writing by Debtor and Creditor. (g) COSTS OF ENFORCEMENT. Debtor shall upon demand pay to Creditor the amount of any and all reasonable expenses, including the reasonable fees and disbursements of counsel and/or any experts and agents, that Creditor may incur in connection with (a) the administration of this Agreement, (b) the exercise or enforcement of any of the rights of Creditor hereunder (including the defense of any claims or counterclaims asserted against Creditor arising out of this Agreement or the transactions contemplated hereby) or under any judgment awarded to Creditor in respect of its rights hereunder (which obligation shall be severable from the remainder of this Agreement and shall survive the entry of any such judgment), or (c) the failure by Debtor to perform or observe any of the provisions hereof. The foregoing shall include any and all expenses and fees incurred by Creditor in connection with a bankruptcy, reorganization, receivership, or similar debtor-relief proceeding by or affecting Debtor or the Collateral. (h) NOTICES. All notices, demands and other communications required or permitted hereunder shall be in writing, addressed to the parties at the following addresses: Creditor: Price Family Charitable Fund -------- 7979 Ivanhoe Avenue, Suite 520 La Jolla, CA 92037 Debtor: The 520 Group, LLC ------ 7979 Ivanhoe Ave, Suite 520 La Jolla, CA 92037 or to such other address as may be designated from time to time by notice to the other parties in the manner set forth herein. IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as of the date first above written. CREDITOR: DEBTOR: - -------- ------- PRICE FAMILY CHARITABLE FUND THE 520 GROUP, LLC By /s/ Jack McGrory by /s/ Barry McComic ------------------------------- ------------------------------- Jack McGrory - Exec. Vice Pres Barry McComic - Manager by /s/ Mark Daitch ------------------------------- Mark Daitch - Manager 3 EX-9 8 tex9-1464.txt EX-9 EXHIBIT 9 --------- AGREEMENT TO FILE SCHEDULE 13D JOINTLY (AS REQUIRED BY ITEM 7 OF SCHEDULE 13D) The undersigned persons hereby agree that reports on Schedule 13D, and any amendments thereto, may be filed in a single statement on behalf of all such persons, and each such person designates each of The 520 Group, LLC, Barry McComic, and Mark Daitch as its or his agent and attorney-in-fact for the purpose of executing any and all such reports required to be made by it or him with the Securities and Exchange Commission. Dated: January 8, 2004 THE 520 GROUP, LLC By: /s/ Mark Daitch ------------------------------ Name: Mark Daitch Title: Manager BARRY MCCOMIC /s/ Barry McComic ------------------------------ MARK DAITCH /s/ Mark Daitch ------------------------------ -----END PRIVACY-ENHANCED MESSAGE-----