[Price Enterprises, Inc. Letterhead]
The Price Group LLC
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
July 26, 2001
Re: Conversion of Excel Legacy Corporation Note
-------------------------------------------
Gentlemen:
This Agreement will confirm our agreement, effective as of April 12, 2001,
as to the terms and conditions on which Price Enterprises, Inc. ("Enterprises")
agrees to convert that certain Secured Promissory Note of Excel Legacy
Corporation ("Legacy") to The Price Group LLC ("The Price Group"), as the
assignee of The Sol and Xxxxx Xxxxx Trust, in the principal amount of $9,347,150
(the "Price Note"), into 1,681,142 shares of Series B Preferred Stock and a
warrant to purchase 233,679 shares of Enterprises common stock. This Agreement
amends and restates that certain letter agreement of the parties hereto dated
April 12, 2001, which shall be of no further force and effect.
Certain capitalized terms in this Agreement have the meaning indicated in
item 6 below.
1. Conversion. In consideration for the cancellation and delivery to
Enterprises of the Price Note and all related documentation, including without
limitation the pledge agreement and collateral relating thereto, immediately
following the consummation of the Merger and the Warburg Issuance:
1.1. Issuance of Shares and Warrants. Enterprises shall (i) issue to
The Price Group, or its designee, 1,681,142 shares of Series B Preferred
Stock (the "Price Group Share Issuance"), (ii) issue to The Price Group, or
its designee, a warrant (the "Price Group Warrant") to purchase 233,679
shares of Enterprises common stock at a purchase price of $8.25 per share
and otherwise in the form and on the terms set forth in the form of warrant
agreement attached as Exhibit D to the Warburg Agreement (the "Price Group
Warrant Issuance"), and (iii) pay to The Price Group, or its designee, in
cash, all accrued but unpaid interest on the Price Note through the date of
such Price Group Share Issuance and Price Group Warrant Issuance.
1.2. Registration Rights Agreement. The Price Group, or its designee,
shall be made a party to the Registration Rights Agreement, which shall be
modified to provide that, except for purposes of the provisions of Sections
2(a)(i) and 2(c) thereof which relate to the right to assert demand
registration rights, The Price Group, or its designee, shall be an
"Investor" for all purposes under the Registration Rights Agreement and
shall
have all of the rights and obligations of an "Investor" set forth therein,
including, without limitation, the right to include all or part of its
Registrable Securities in a registration pursuant to either such Section on
the same basis as an Investor.
2. Authority; Consents. Each party to this Agreement hereby represents and
warrants that (subject, in the case of Enterprises, to the approvals to be
obtained by it as a condition to the consummation of the Merger and/or the
Warburg Issuance) (i) such party has all requisite power and authority to enter
into this Agreement and to perform its obligations hereunder, (ii) this
Agreement has been duly and validly executed and delivered by such party and
constitutes a valid and binding agreement of such party, enforceable against
such party in accordance with its terms, and (iii) the execution, delivery and
performance of this Agreement, and the performance by such party of its
obligations hereunder, do not and will not contravene any order or decree
presently in effect which affects or binds such party, or require the
authorization, consent or approval of any third party.
3. Share Issuance. Enterprises represents and warrants that (i) the shares
of Series B Preferred Stock to be issued pursuant to the Price Group Share
Issuance, and the shares of Enterprises common stock issuable upon conversion of
such shares and upon exercise of the Price Group Warrant, when so issued, will
be duly authorized, validly issued, fully paid, and nonassessable and (ii) such
shares of Enterprises common stock, when issued, will be approved for listing on
The Nasdaq Stock Market or, if applicable, such other national securities
exchange(s) where Enterprises common stock is listed.
4. Warburg Consent. The Warburg Entities hereby acknowledge and consent to
the transactions contemplated by this Agreement for all purposes under the
Warburg Agreement and related documentation.
5. Further Assurances. The parties hereby 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 the transactions
contemplated by this Agreement.
6. Definitions.
"Merger" means the merger of a subsidiary of Enterprises with and into
Legacy pursuant to the Merger Agreement.
"Merger Agreement" means that certain Agreement and Plan of Merger,
dated as of March 21, 2001, by and among Enterprises, Legacy and PEl Merger
Sub, Inc.
"Registration Rights Agreement" means the Price Enterprises, Inc.
Registration Rights Agreement in the form attached as Exhibit C to the
Warburg Agreement.
"Series B Preferred Stock" means the 9% Series B Junior Convertible
Redeemable Preferred Stock having the rights, preferences, privileges and
restrictions set forth in the Amended Articles of Incorporation attached as
Exhibit F to the Warburg Agreement.
"Warburg Agreement" means that certain Securities Purchase Agreement,
dated as of March 21, 2001, by and among Enterprises and the Warburg
Entities.
2
"Warburg Entities" means Warburg, Xxxxxx Equity Partners, L.P. and
certain of its affiliates who are parties to the Warburg Agreement.
"Warburg Issuance" means the sale by Enterprises to the Warburg
Entities of shares of Series B Preferred Stock and warrants to purchase
shares of Enterprises common stock pursuant to the Warburg Agreement.
7. Notices. Notices provided hereunder, or given pursuant hereto, shall be
given by messenger or courier service (with appropriate receipt requested) or by
certified or registered mail, return receipt requested, and shall be effective
one day after the date on which sent if given by messenger or courier service,
and five days after the date on which sent if given by certified or registered
mail. Such notices shall be addressed as follows:
If to Enterprises or Legacy:
----------------------------
Price Enterprises, Inc.
00000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxx
With a copy to:
Xxxxxx & Xxxxxxx
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
and
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-1560
Attention: Xxxxx X. Xxxxx, Esq.
If to The Price Group:
----------------------
The Price Group LLC
0000 Xxxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Attention: Xxx Xxxxx
With a copy to:
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-1560
Attention: Xxxxx X. Xxxxx, Esq.
3
If to the Warburg Entities:
---------------------------
Warburg, Xxxxxx Equity Partners, L.P.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
or, in any case, to such other or additional person or persons and address or
addresses as may be set forth in a notice given in accordance with the foregoing
provision.
8. Applicable Law. This Agreement is made under and shall be enforced in
accordance with the internal laws of the State of California without regard to
the laws and rules of said state relating to conflicts of laws.
9. Time of Essence. Time is of the essence of all provisions in this
Agreement in which a date or period of time is set forth or established.
10. Entire Agreement. This Agreement contains the entire and complete
Agreement of the parties hereto related to the subject matter hereof, replaces
and supersedes any and all prior representations and understandings of either
party to the other relating to the subject matter hereof, and shall not be
modified by parol evidence or otherwise except by a subsequent writing duly
executed by the parties hereto.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
12. Modification. This Agreement may not be modified, altered or amended,
except by an agreement in writing signed by the parties hereto.
13. Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law.
If, however, any provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity and the remaining provisions of this Agreement
shall remain unaffected and in full force and effect.
14. Waiver. Any failure by a party hereto, at any time or times hereafter,
to require strict performance by the other party or parties hereto of any
provisions of this Agreement shall not waive, affect or diminish any right of
such party thereafter to demand strict compliance and performance herewith.
4
15. Public Disclosures. Each party hereto agrees not to issue any press
release, make any filing or otherwise give publicity to the contents of this
Agreement except to the extent it is reasonably required to do so by law or
regulation and, in any event, without first giving the other party or parties
hereto reasonable opportunity to review, and to make reasonable revisions to,
the content of such public disclosure.
* * *
If the foregoing provisions accurately reflect our agreement, please so
indicate by executing this Agreement as indicated in the space below, at which
point it shall become a binding agreement between us.
Very truly yours,
Price Enterprises, Inc.
By /s/ S. Xxxx Xxxxxxx
-------------------------
Its S.V.P.
5
ACCEPTED AND AGREED:
The Price Group LLC
By /s/ Xxxxx Xxxxxx
--------------------------
Its Manager
Excel Legacy Corporation
By /s/ Xxxxxxx X. Xxxx
---------------------------
Its Executive Vice President
Xxxxxxx, Xxxxxx Equity Partners, X.X.
Xxxxxxx, Xxxxxx Netherlands Equity Partners I, X.X.
Xxxxxxx, Xxxxxx Netherlands Equity Partners II, X.X.
Xxxxxxx, Xxxxxx Netherlands Equity Partners III, C.V.
By: Warburg, Xxxxxx & Co., its General Partner
By /s/ Xxxxxx X. Xxxxxxxxx
Its Partner
6
