First Amendment to Securities Purchase Agreement
THIS FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this "Amendment"),
dated as of October 8, 2001, is made by and among Price Legacy Corporation, a
Maryland corporation formerly known as Price Enterprises, Inc. (the "Company"),
and Warburg, Xxxxxx Equity Partners, L.P., a Delaware limited partnership,
Warburg, Xxxxxx Netherlands Equity Partners I, C.V., a Netherlands limited
partnership, Warburg, Xxxxxx Netherlands Equity Partners II, C.V., a Netherlands
limited partnership, and Warburg, Xxxxxx Netherlands Equity Partners III, C.V.,
a Netherlands limited partnership (each, a "Warburg Entity," and collectively,
"Buyer").
RECITALS
WHEREAS, the Company and Buyer entered into a Securities Purchase Agreement
dated as of March 21, 2001 (the "Agreement"); and
WHEREAS, the Company and Buyer desire to amend certain terms and provisions
of the 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 Company and Buyer amend the Agreement as follows:
1. Relation to Agreement. Except as hereby amended, the Agreement shall
continue in full force and effect.
2. Capitalized Terms. Capitalized terms used and not otherwise defined
herein are used with the meanings attributed thereto in the Agreement.
3. REIT Certification. Section 6.7 of the Agreement is hereby amended to
read in its entirety as follows:
From March 21, 2001 through October 7, 2001, each Warburg Entity shall not
take any action, or fail to take any action, that would make any of the
representations, certifications or warranties set forth in Exhibit G to the
Agreement untrue. From and after October 8, 2001, each Warburg Entity shall
not take any action, or fail to take any action, that would make any of the
representations, certifications or warranties set forth in Exhibit A to
this Amendment untrue.
4. Miscellaneous. This Amendment shall be governed and construed on the
same basis as the Agreement, as set forth therein.
5. Counterparts. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
date first above written.
PRICE LEGACY CORPORATION
By: /s/ S. Xxxx Xxxxxxx
--------------------------------------
Name: S. Xxxx Xxxxxxx
Title: Senior Vice President
WARBURG, XXXXXX EQUITY PARTNERS, L.P.
By: Warburg, Xxxxxx & Co., its General
Partner
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS, I, C.V.
By: Warburg, Xxxxxx & Co., its General
Partner
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS, II, C.V.
By: Warburg, Xxxxxx & Co., its General
Partner
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS, III, C.V.
By: Warburg, Xxxxxx & Co., its General
Partner
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Partner
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Exhibit A
---------
CERTIFICATE OF
WARBURG, XXXXXX EQUITY PARTNERS, L.P.,
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS I, C.V.,
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS II, C.V., AND
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS III, C.V.
The undersigned hereby certifies that he is a duly appointed partner of
Warburg, Xxxxxx & Co., which is the general partner of each of the "Exempted
Parties" (as defined below), and does further hereby certify, represent, warrant
and agree that on behalf of Warburg, Xxxxxx Equity Partners, L.P., a Delaware
limited partnership, Warburg, Xxxxxx Netherlands Equity Partners I, C.V., a
Netherlands limited partnership, Warburg, Xxxxxx Netherlands Equity Partners II,
C.V., a Netherlands limited partnership, and Warburg, Xxxxxx Netherlands Equity
Partners III, C.V., a Netherlands limited partnership (collectively, the
"Exempted Parties" and individually, an "Exempted Party"), that:
1. The Exempted Parties acknowledge their understanding that this
certification is made to obtain an exception for the Exempted Parties to the
ownership limit (the "Ownership Limit") set forth in Article TENTH, Paragraphs
(b)(1)a. and (b)(1)b. of the Amended and Restated Articles of Incorporation (the
"Articles") of Price Enterprises, Inc., a Maryland corporation (the "Company"),
and that the Ownership Limit is intended to assist the Company in satisfying the
requirements for qualification as a real estate investment trust (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code").
2. Each of the Exempted Parties is an entity that is taxed for United
States federal income tax purposes as a partnership and not as an association or
publicly traded partnership taxable as a corporation. None of the Exempted
Parties is an organization described in Sections 401(a), 501(c)(17), or 509(a)
of the Code, or a portion of a trust permanently set aside or to be used
exclusively for the purposes described in Section 642(c) of the Code or a
corresponding provision of a prior income tax law.
3. Except for the Exempted Parties, no person will "Actually Own,"
"Beneficially Own" and/or "Constructively Own" (as defined below) Company stock
in excess of the Ownership Limit as a result of the Exempted Parties'
acquisition of (i) up to 17,985,612 shares of 9% Series B Junior Convertible
Preferred Stock of the Company (or the Common Stock of the Company into which
such shares may be converted, the "Series B Preferred Shares"), (ii) warrants
issued to the Exempted Parties to acquire up to 2,500,000 shares of Common Stock
of the Company, $.0001 par value per share, at an exercise price of $8.25 per
share (or the Common Stock of the Company for which such warrants may be
exercised) (the "Common Shares"), and (iii) up to 5,000,000 shares of Common
Stock of the Company, $.0001 par value per share (the "Additional Common
Shares," and together with the Common Shares and the Series B Preferred Shares,
the "Exempted Shares").
4. Other than the Exempted Shares, none of the Exempted Parties do, or
will, Actually, Beneficially or Constructively Own any capital stock of the
Company.
5. Except as described on Exhibit C attached hereto, none of the Exempted
Parties Actually Own or Constructively Own, or will so own at any time during
which this
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exemption is outstanding, an equity interest in any tenant of the Company or of
any subsidiary of the Company. A current list of tenants of the Company and its
subsidiaries is attached as Exhibit A and the Company will provide an updated
list to the Exempted Parties from time to time. If at any time any one or more
Exempted Parties expects to acquire or obtain Actual or Constructive Ownership
of any stock, securities, or other ownership interest in any tenant of the
Company (set forth on Exhibit A, as such exhibit may be updated by the Company
from time to time) other than as set forth on Exhibit C (i) the Exempted Parties
shall notify the Company in writing of such fact and provide the Company with
such information as the Company may reasonably request in order to determine the
effect, if any, on the Company's status as a REIT, and (ii) if the amount of
rent received by the Company from such tenant and the tenants then set forth on
Exhibit C is in the aggregate more than $500,000 per calendar year, such
Exempted Party will either (a) obtain written consent from the Company, based
upon the determination of the Board of Directors of the Company that such Actual
or Constructive Ownership of such tenant could not adversely affect the
Company's ability to qualify as a REIT, in which case Exhibit C will be amended
to reflect such Ownership, or (b) if such written assurance is not obtained from
the Company, dispose of that portion of its Exempted Shares that are in excess
of the Ownership Limit prior to the time such Exempted Party acquires or obtains
Actual or Constructive Ownership of an interest in such a tenant. For purposes
of clause (ii)(a) of this Paragraph 5, by signing below the Company agrees to
furnish such written consent to such Exempted Party if the Board of Directors of
the Company determines that such Actual or Constructive Ownership of such tenant
could not adversely affect the Company's ability to qualify as a REIT.
6. The Exempted Parties agree that if, from time to time and for any
reason, (i) any of the above certifications, representations, warranties or
agreements is violated or any attempt is made to violate the same, then that
portion of the shares of capital stock of the Company Actually, Beneficially
and/or Constructively Owned by the Exempted Parties (including, without
limitation, the Exempted Shares) that causes or would cause the Exempted Parties
(or any of them) to violate the above certifications, representations,
warranties and agreements (rounded up to the nearest whole share) shall be
subject to the remedies set forth in the Articles, including, without
limitation, the transfer of such shares of capital stock to a trust in
accordance with Section (b)(2) of Article TENTH of the Articles (or any
successor provision of similar import), or (ii) the ownership of the Exempted
Shares violates Section (b)(1)c. of Article TENTH of the Articles, then that
portion of the Exempted Shares that otherwise would cause the Exempted Parties
to violate Section (b)(1)c. of Article TENTH of the Articles (rounded up to the
nearest whole share) shall be subject to the remedies set forth in the Company's
Articles, including, without limitation, the transfer of the Exempted Shares to
a trust in accordance with Section (b)(2) of Article TENTH of the Articles (or
any successor provision of similar import).
7. The undersigned is authorized to make the certifications,
representations, warranties and agreements set forth herein on behalf of the
Exempted Parties.
8. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in Exhibit B.
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9. With respect to all periods from and after October 8, 2001, this
Certificate replaces and supercedes in its entirety the certificate on the same
subject matter dated September 18, 2001 and signed by the undersigned.
[Remainder of Page Intentionally Left Blank]
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Dated: ____________________
WARBURG, 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.,
General Partner
__________________________________
Name:_____________________________
Title:____________________________
ACKNOWLEDGED AND AGREED TO
FOR PURPOSES OF CLAUSE (ii)(a)
OF PARAGRAPH 5 ONLY:
PRICE ENTERPRISES, INC.
By:__________________________
Name:_____________________
Title:____________________
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Exhibit A
to the Certificate
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Exhibit B
to the Certificate
"Actual Owner" : the term "Actual Owner" with respect to shares of Company
stock refers to the person who is required to include in gross income on his,
her or its federal income tax return the dividends paid (or deemed paid under
the Internal Revenue Code of 1986, as amended (the "Code")) with respect to such
stock. The terms "Actual Ownership," "Actually Owning" and "Actually Own" shall
have the correlative meanings.
"Beneficial Owner": the term "Beneficial Owner" with respect to shares of
Company stock refers to each person who is a constructive owner of such stock
determined under the rules of section 544 of the Code, as modified by section
856(h)(1)(B) of the Code. Generally, these rules provide the following:
(a) stock owned actually or constructively by or for a corporation,
partnership, limited liability company, estate, or trust shall be considered as
being owned proportionately by its shareholders, partners, members, or
beneficiaries;
(b) an individual shall be considered as owning the stock owned, actually
or constructively by or for his family - for purposes of this subparagraph (b)
the family of an individual includes only his brothers and sisters (whether by
the whole or half blood), spouse, ancestors, and lineal descendants;
(c) if any person has an option to acquire stock, such stock shall be
considered as owned by such person;
(d) stock constructively owned by a person by reason of the application of
subparagraphs (a) or (c) shall, for purposes of applying subparagraph (a) or
(b), be treated as actually owned by such person; but stock constructively owned
by an individual by reason of the application of subparagraph (b)shall not be
treated as owned by him for purposes of again applying such subparagraph in
order to make another the constructive owner of such stock;
(e) if stock may be considered as owned by an individual under either
subparagraph (b) or (c) it shall be considered as owned by him under
subparagraph (c); and
(f) outstanding securities convertible into stock (whether or not
convertible during the taxable year) shall be considered as outstanding stock.
Subparagraphs (b), (c) and (f) shall only be applied to the extent the
effect is to cause five or fewer individuals (as defined in the Code) to be the
Actual or Beneficial Owner of more than fifty percent (50%) (by value or by
number of shares, whichever is more restrictive) of the Company's outstanding
stock during the last half of any of its taxable years. The terms "Beneficial
Ownership," "Beneficially Own," and "Beneficially Owning" shall have the
correlative meanings.
"Constructive Owner": the term "Constructive Owner" with respect to shares
of Company stock refers to each person who is a constructive owner of such stock
determined under the rules of section 318 of the Code, as modified by section
856(d)(5) of the Code. Generally, these rules provide the following:
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(a) an individual is considered as owning the Ownership Interest that is
owned, actually or constructively, by or for his spouse, his children, his
grandchildren, and his parents;
(b) an Ownership Interest that is owned, actually or constructively, by or
for a partnership, limited liability company, or estate is considered as owned
proportionately by its partners or beneficiaries;
(c) an Ownership Interest that is owned, actually or constructively, by or
for a trust is considered as owned by its beneficiaries in proportion to the
actuarial interest of such beneficiaries (provided, however, that in the case of
a "grantor trust" the Ownership Interest will be considered as owned by the
grantors);
(d) if ten percent (10%) or more in value of the stock in a corporation is
owned, actually or constructively, by or for any person, such person shall be
considered as owning the Ownership Interest that is owned, actually or
constructively, by or for such corporation in that proportion which the value of
the stock which such person so owns bears to the value of all the stock in such
corporation;
(e) an Ownership Interest that is owned, actually or constructively, by or
for a partner of a partnership, member of a limited liability company, or a
beneficiary of an estate or trust shall be considered as owned by the
partnership, estate, or trust; provided, however, that the rule described in
this subparagraph (e) shall be applied in the case of a partnership (or a
limited liability company treated as a partnership for federal income tax
purposes) by taking into account only partners (or members of such a limited
liability company) who own (actually or constructively) twenty-five percent
(25%) or more of the capital interest, or the profits interest, in the
partnership (or the limited liability company, as the case may be);
(f) if ten percent (10%) or more in value of the stock in a corporation is
owned, actually or constructively, by or for any person, such corporation shall
be considered as owning the Ownership Interest that is owned, actually or
constructively, by or for such person;
(g) if any person has an option to acquire an Ownership Interest, such
Ownership Interest shall be considered as owned by such person;
(h) an Ownership Interest that is constructively owned by a person by
reason of the application of the rules described in subparagraphs (a) through
(g) above shall, for purposes of applying subparagraphs (a) through (g), be
considered as actually owned by such person provided, however, that: (i) an
Ownership Interest Constructively owned by an individual by reason of
subparagraph (a) shall not be considered as owned by him for purposes of again
applying subparagraph (a) in order to make another the constructive owner of
such Ownership Interest; (ii) an Ownership Interest Constructively owned by a
partnership, limited liability company, estate, trust, or corporation by reason
of the application of subparagraphs (e) or (f) shall not be considered as owned
by it for purposes of applying subparagraphs (b), (c), or (d) in order to make
another the constructive owner of such Ownership Interest; (iii) if an Ownership
Interest may be considered as owned by an individual under subparagraphs (a) or
(g), it shall be considered as owned by him under subparagraph (g); and (iv) for
purposes of the above described rules, an S corporation shall be treated as a
partnership and any shareholder of the S corporation shall be treated as a
partner of such partnership except that this rule shall not apply for purposes
of determining whether stock in the S corporation is Constructively owned by any
person.
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The terms "Constructive Ownership," "Constructively Own," and
"Constructively Owning" shall have the correlative meanings.
For purposes of the above summary of the constructive ownership rules, the
term "Ownership Interest" means the ownership of stock with respect to a
corporation and, with respect to any other type of entity, the ownership of an
interest in either its assets or net profits.
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Exhibit C
to the Certificate
None.
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