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EXHIBIT 10.4
Excel Legacy Corporation
00000 Xxx xxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
September __, 1999
Re: Note Purchase Agreement
Gentlemen:
This Agreement will confirm our agreement as to the terms and conditions
on which we (the "Lender") agree to extend a loan of up to $30 million to
Legacy. Capitalized terms in this Agreement have the meaning indicated in item 7
below.
1. Availability. On and subject to the terms contained in this letter
agreement, up to $30 million in funds shall be made available by the Lender to
Legacy in order to facilitate Legacy's purchase of common stock of Enterprises.
2. Note. The obligation of Legacy to repay any funds borrowed under this
Agreement is to be evidenced by the Note. As indicated in the Note, and in the
provisions of this Agreement below (and, to the extent set forth in the Note or
below in this Agreement, subject to the additional provisions so set forth):
A. The Note will be payable with interest on the outstanding
principal balance of the Note at a rate that is 150 basis
points (i.e., 1.5%) in excess of LIBOR as LIBOR is established
from time to time (and shall vary with LIBOR as LIBOR is
changed from time to time).
B. Interest on the Note shall be payable monthly on the 5th day
of each month commencing on the first day of the first month
after any amount of the loan has been extended and outstanding
for 30 calendar days.
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Interest shall be calculated on the basis of actual calendar
days elapsed and a 365-day year.
C. Principal may be prepaid at any time or times, in part or in
full, but to the extent not previously paid shall be due and
payable in full on November 1, 2004 (the "Maturity Date").
D. Payment of principal and interest shall be secured by the
Collateral, which also secures the senior notes and
convertible debentures issued in the Exchange Offer.
3. Borrowings. The initial borrowing of funds under this Agreement shall
take place at a Closing (as described below), to occur on 3 business days'
notice from Legacy to the Lender but not later than November 15, 1999 (if at
all). Thereafter, additional borrowings may be made under this Agreement on 5
business days' notice from Legacy to the Lender, and in each instance shall take
place at a Closing as described below. Borrowings shall only be made under this
Agreement for the purpose of funding a purchase of common stock of Enterprises
by Legacy for consideration that is not less than that described in the Exchange
Offer, and a maximum of $2.25 shall be advanced for each share purchased. Legacy
irrevocably authorizes the Lender to make or cause to be made, at the time of
any borrowing under this Agreement (or at the time of receipt of any payment of
principal), an appropriate notation on the grid attached to the Note reflecting
the amount of such borrowing (or the amount of such payment). The outstanding
amount of the Note set forth on such grid shall be prima facie evidence of the
principal amount thereof outstanding, but the failure to record, or any error in
so recording, shall not limit or otherwise affect the obligations of Legacy to
make payments of principal of or interest on the Note when due.
4. Closings. At each Closing under this Agreement:
A. The Lender shall transfer to Legacy, or as Legacy may direct,
against delivery of the documents identified in this item 4, the
amount of funds identified in the relevant preceding notice from
Legacy to the Lender as described above in Item 3.
B. At the initial Closing, Legacy shall execute and deliver to the
Lender, or as the Lender may direct, the executed Note, in the
form of Exhibit A. At each subsequent Closing, an appropriate
notation shall be made on the grid attached to the Note
reflecting the amount of funds transferred as described in
clause 4A above.
C. Legacy shall deliver to the Collateral Agent, as security (or
additional security if there has previously been a Closing) for
the payment of the Note, all Collateral not previously delivered
to the Collateral Agent (including
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Collateral purchased with the funds transferred as described in
clause 4A above) other than Collateral which is required to be
delivered to the Debenture Collateral Agent or the Senior Notes
Collateral Agent (as such terms are defined in the Pledge
Agreement) in accordance with the Pledge Agreement.
D. Legacy shall deliver to the Lender, or as the Lender may direct,
an Officer's Certificate in the form of Exhibit "B" to this
Agreement confirming that at the time there exists no Default or
Event of Default under this Agreement.
E. Legacy shall deliver to Lender an opinion of Xxxxxx & Xxxxxxx,
San Diego, California, counsel to Legacy, in the form of Exhibit
"C" to this Agreement, confirming (subject to the limitations
set forth therein) that the Note has been duly and validly
executed, issued and delivered by Legacy, and is binding on
Legacy in accordance with its terms, and that the Lender is
entitled to the benefits of the provisions hereof with respect
to, and holds a perfected security interest in, the Collateral.
5. Security Interest. Legacy hereby grants to the Lender a security
interest in the Collateral to secure the performance of Legacy's obligations
under the Note issued under this Agreement and held by the Lender, subject,
however, to the prior rights of holders of the senior notes and the convertible
debentures, as described in the Exchange Offer and issued in the Exchange Offer
or thereafter issued as partial payment for the purchase of shares of common
stock of Enterprises, with respect to the Collateral, and as more fully
described in the Pledge Agreement to be entered into between Legacy, the Lender
and the Collateral Agent concurrently with the execution of this Agreement.
6. Remedies. Without limiting the rights of the Lender or of the
Collateral Agent in any respect, if there shall be an Event of Default, then the
entirety of the then outstanding principal balance of the Note then outstanding,
together with all accrued and unpaid interest thereon, shall be immediately due
and payable in full, and the Collateral Agent shall take such action or actions
as are specified in the Pledge Agreement with respect to the Collateral.
7. Definitions. As used in this Agreement, the terms set forth below
have the meanings indicated:
An "Affiliate" of any specified person is any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
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"Collateral" means the "Price Note Pledged Collateral" as such
term is defined in the Pledge Agreement.
"Collateral Agent" means the "Price Note Collateral Agent" as
such term is defined in the Pledge Agreement.
A "Default" is any event which is, or after notice or passage of
time would be, an Event of Default.
"Enterprises" means Price Enterprises, Inc., a Maryland
corporation.
An "Event of Default" means the occurrence of any of the following:
(1) Legacy fails to make payment of any interest that is due on the
Note on the fifth day of a month, and the Default continues for
a period of 10 days after the date due and payable;
(2) Legacy defaults in the payment of the principal amount of the
Note when the same becomes due and payable, whether at maturity
or otherwise;
(3) Legacy, or any of its Affiliates, materially fails to observe or
perform any covenant, condition or agreement required to be
observed or performed by it pursuant to this Agreement, the
Pledge Agreement, the stockholders agreement as described in the
Exchange Offer or the company agreement as described in the
Exchange Offer, and the Default continues for 10 days after
notice;
(4) Legacy fails to pay when due any (i) interest or principal due
on any senior notes issued in the Exchange Offer, or (ii)
interest or principal due on any debentures issued in the
Exchange Offer, and the Default continues for a period of 10
days after the date due and payable;
(5) (a) Legacy, or any of its Affiliates that are controlled by
Legacy, fails to pay when due any interest or principal on any
outstanding bank debt, or debt that is secured by a mortgage, or
debt issued pursuant to an Indenture, or other debt in principal
amount in excess of $500,000, or (b) any person or entity fails
to pay when due any interest or principal on any outstanding
bank debt, debt that is secured by a mortgage, or debt issued
pursuant to an Indenture, or
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other debt in principal amount in excess of $500,000, the
payment of which is guaranteed by Legacy or any Affiliate
controlled by Legacy, and under either (a) or (b) the default
continues for 30 days after the date due and payable;
(6) the maturity of the principal amount of any outstanding bank
debt, or debt that is secured by a mortgage, or debt issued
pursuant to an indenture, or other debt in principal amount in
excess of $500,000, of Legacy, or any of its Affiliates that are
controlled by Legacy, or any person or entity for whom Legacy or
any such Affiliate has guaranteed the payment of such debt, is
accelerated by the holder thereof or pursuant to the terms under
which it is issued by reason of, or in response to, any default
thereunder;
(7) (a) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction
against Legacy or any Affiliate that is controlled by Legacy
(except any judgment to the extent an insurance company has
accepted liability in writing for the amount of such judgment)
and such remains undischarged for a period (during which
execution shall not be effectively stayed) of 60 days or (b) a
fine or other amount shall become final and payable by Legacy or
any Affiliate that is controlled by Legacy pursuant to any
administrative, governmental or regulatory authority or
proceeding and such fine or other amount remains unpaid for 60
days after notice, provided that the aggregate of all such
judgments (referred to in clause (a) above) and fines and
amounts (referred to in clause (b) above) in excess of insurance
coverage exceeds $100,000;
(8) Legacy, or any Affiliate that is controlled by Legacy, pursuant
to or within the meaning of any bankruptcy law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding,
(C) consents to the filing of a petition seeking
reorganization or relief under any applicable bankruptcy
law, or to the appointment of a
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custodian of it or for all or substantially all of its
property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) admits in writing its inability to pay its debts generally
as they become due;
(9) a court of competent jurisdiction enters an order or decree
under any bankruptcy law that:
(A) is for relief against Legacy or any Affiliate that is
controlled by Legacy in an involuntary case,
(B) appoints a custodian of Legacy or any Affiliate that is
controlled by Legacy or for all or substantially all of
its property, or
(C) orders the liquidation of Legacy or any Affiliate that is
controlled by Legacy,
and the order or decree remains unstayed and in effect for 90 days;
or
(10) The Pledge Agreement shall cease for any reason to be in
full force and effect, or Legacy, or any person acting by
or on behalf of Legacy, shall deny or disaffirm its
obligations under such agreement.
"Exchange Offer" means the exchange offer of Legacy for common
stock of Enterprises as described in the Registration Statement on Form S-4
(Registration No. 333-80339) initially filed with the Securities and Exchange
Commission by Legacy on or about June 9, 1999 and thereafter amended.
"Legacy" means Excel Legacy Corporation, a Delaware corporation.
"Lender" means The Sol and Xxxxx Xxxxx Trust.
"LIBOR" means the London Interbank Offered Rate.
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"Note" means the Secured Promissory Note of Legacy in the form
attached as Exhibit "A" to this Agreement.
"Pledge Agreement" means the agreement dated ______________ among
the Collateral Agent and Legacy providing for the grant of a security interest
in the Collateral to the Collateral Agent and the Lender and related matters, in
the form attached hereto as Exhibit "D."
8. 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 Legacy:
Excel Legacy Corporation
00000 Xxx xxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxx
With a copy to:
Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Lender:
The Sol and Xxxxx Xxxxx Trust
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 00000-0000
Attention: Xxxxx X. Lorne, Esq.
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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.
9. 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.
10. 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.
11. 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.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
13. Modification. This Agreement may not be modified, altered or
amended, except by an Agreement in writing signed by the parties hereto.
14. 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.
15. 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.
Any suspension or waiver by a party hereto of a default under this Agreement
shall not suspend, waive or affect any other default under this Agreement
whether the same is prior or subsequent thereto and whether of the same or of a
different type. Neither any of the undertakings, agreements, warranties,
covenants and representations contained in this Agreement nor any default under
this Agreement shall be deemed to have been suspended or waived by a party
hereto, unless such suspension or waiver is by an instrument in writing signed
by an authorized officer of the party, specifying the specific suspension or
waiver.
16. 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,
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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.
17. Section Titles and Table of Contents. The section titles contained
in this Agreement are merely for convenience and shall be without substantive
meaning or content.
18. Rules of Construction.
Unless the context otherwise requires:
(1) The words "herein," "hereof," "hereinabove,"
"hereinbelow," "therein," "thereof," and words of similar import
refer to the document as a whole, and not to the particular phrase,
clause, sentence, paragraph, section or division of the document in
which such word is used.
(2) An accounting term not otherwise defined has
the meaning ascribed to it in generally accepted accounting
principles as in effect from time to time.
(3) Words in the singular include the plural and
words in the plural include the singular.
(4) Words expressed in one gender, masculine,
feminine or neuter, include all other genders.
* * *
If the foregoing provisions accurately reflect our agreement,
please so
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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,
The Sol and Xxxxx Xxxxx Trust
By
----------------------------------
ACCEPTED AND AGREED:
Excel Legacy Corporation
By
------------------------------
Its
------------------------------
Date:
------------------------------
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EXHIBIT A
SECURED PROMISSORY NOTE
$30,000,000 ______________ __, 1999
FOR VALUE RECEIVED, the undersigned EXCEL LEGACY CORPORATION ("Maker"),
a Delaware corporation, hereby promises to pay to the order of THE SOL AND XXXXX
XXXXX TRUST ("Holder"), at 0000 Xxxxxxx, Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx 00000,
or at such other place as Holder may designate in writing,
(a) prior to or at the Maturity Date, the principal sum of THIRTY
MILLION DOLLARS ($30,000,000) or, if less, the outstanding principal
balance of this Note; and
(b) interest on the principal balance of this Note from time to time
outstanding, at such times and at the rate provided in that certain Note
Purchase Agreement, dated as of __________, 1999, by and between Maker
and Holder (the "Agreement").
This Note evidences borrowings under and has been issued by Maker in
accordance with the terms of the Agreement. Holder is entitled to the benefits
of the Agreement and the Pledge Agreement, and may enforce the agreements of
Maker contained therein, and may exercise the remedies provided for thereby or
otherwise available in respect thereof, all in accordance with the respective
terms thereof. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Agreement.
Maker irrevocably authorizes Holder to make or cause to be made, at the
time of any borrowing under the Agreement or at the time of receipt of any
payment of principal of this Note, an appropriate notation on the grid attached
to this Note reflecting the amount of such borrowing or the amount of such
payment, as applicable. The outstanding amount of this Note set forth on such
grid shall be prima facie evidence of the principal amount outstanding, but the
failure to record, or any error in so recording, shall not limit or otherwise
affect the obligations of Maker to make payments of principal and interest on
this Note when due.
Maker has the right and, under certain circumstances, the obligation, to
prepay the whole or part of the principal of this Note on the terms and
conditions specified in the Agreement and the Pledge Agreement.
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If any one or more Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Agreement and the Pledge Agreement.
No delay or omission on the part of Holder in exercising any right
hereunder shall operate as a waiver of such right or of any other rights of
Holder, nor shall any delay, omission or waiver on any one occasion be deemed a
bar or waiver of the same or any other right on any further occasion. Maker
hereby waives presentment, demand for payment, protest, notice of protest,
notice of dishonor and all other notices and demands in connection with the
delivery, acceptance, performance, default or enforcement of this Note.
THIS NOTE AND THE OBLIGATIONS OF MAKER HEREUNDER SHALL FOR ALL PURPOSES
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
CALIFORNIA (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). MAKER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN THE
COURTS OF THE STATE OF CALIFORNIA OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON MAKER BY MAIL AT THE ADDRESS SPECIFIED
IN P. 8 OF THE AGREEMENT. MAKER HEREBY WAIVES ANY OBJECTION THAT MAKER MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.
If Holder commences any litigation or takes any enforcement or
collection action to enforce this Note or to collect amounts due hereunder,
Maker shall pay (if Holder is the prevailing party) all costs of such litigation
or enforcement or collection action, including, without limitation, reasonable
attorneys' fees.
IN WITNESS WHEREOF, Maker has executed this Note as of the date and at
the place first set forth above.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By
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Its
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EXHIBIT B
EXCEL LEGACY CORPORATION
Certificate of Officer
This certificate is provided by the undersigned (the "Officer"),
______________________ the Chief _____________ Officer [Chief Financial Officer
or Chief Executive Officer] of Excel Legacy Corporation, a Delaware corporation
(the "Company") pursuant to the Note Purchase Agreement (the "Agreement") dated
September __, 1999 (the "Agreement") between the Company and The Sol and Xxxxx
Xxxxx Trust (the "Lender").
The Officer hereby certifies and confirms to the Lender as follows:
1. This certificate is provided by the Officer in connection with a
borrowing of funds by the Company from the Lender as provided in
Sections 3 and 4 of the Agreement, in order to induce the Lender to
lend such funds to the Company.
2. In delivering this certificate, the Officer has specifically reviewed
the definition of "Event of Default" in the Agreement and has
considered those provisions of the Agreement in relation to his
knowledge of the Company and its affairs.
3. As of the date of this certificate no event has occurred, and no
condition exists, that is an Event of Default (as defined in the
Agreement) regarding the Company.
4. As of the date of this certificate no event has occurred, nor does
any condition exist, which, with the passage of time or the giving of
notice (or both) would become an Event of Default (as defined in the
Agreement) regarding the Company.
Executed by the undersigned at __________________, _____________ this
__________ day of________,____.
The Officer:
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EXHIBIT C
_______________, 1999
The Sol and Xxxxx Xxxxx Trust
0000 Xxxxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Re: Excel Legacy Corporation; Note Purchase Agreement
dated as of ______, 1999 between Excel Legacy
Corporation and The Sol and Xxxxx Xxxxx Trust
Ladies and Gentlemen:
We have acted as counsel to Excel Legacy Corporation, a Delaware
corporation (the "Borrower"), in connection with that certain Note Purchase
Agreement dated as of _______, 1999 (the "Purchase Agreement") between The Sol
and Xxxxx Xxxxx Trust (the "Lender") and the Borrower and the other Loan
Documents (as defined below). This opinion is rendered to you pursuant to Item
4E of the Purchase Agreement. Capitalized terms defined in the Purchase
Agreement, used herein and not otherwise defined herein, shall have the meanings
given them in the Purchase Agreement.
As such counsel, we have examined such matters of fact and
questions of law as we have considered appropriate for purposes of rendering the
opinions expressed below, except where a statement is qualified as to knowledge
or awareness, in which case we have made no or limited inquiry as specified
below. We have examined, among other things, the following:
(a) the Purchase Agreement;
(b) the Secured Promissory Note (the "Note") dated as of
___________, 1999 of the Borrower;
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________, 1999
Page 2
(c) the Pledge Agreement (the "Pledge Agreement") dated as of
________, 1999 between Xxxxx X. Xxxxxx (the "Price Note Collateral Agent") and
the Borrower; and
(d) a photocopy of the UCC-1 financing statement naming the
Borrower as debtor and the Lender as secured party, together with all schedules
and exhibits to such financing statement, to be filed in the Office of the
Secretary of State of the State of California, a copy of which is attached
hereto as Exhibit A and incorporated herein by this reference (the "Financing
Statement").
The documents described in subsections (a) - (c) above are
referred to herein collectively as the "Loan Documents." As used in this
opinion, the "UCC" shall mean the Uniform Commercial Code as now in effect in
the State of California.
In our examination, we have assumed the genuineness of all
signatures (other than those of officers of the Borrower on the Loan Documents),
the legal capacity of all natural persons executing documents, the authenticity
of all documents submitted to us as originals, and the conformity to authentic
original documents of all documents submitted to us as copies. In addition, we
have assumed that the parties to the Loan Documents have not entered into any
agreements of which we are unaware which modify the terms of the Loan Documents
or have otherwise expressly or by implication waived, or agreed to any
modification of the Loan Documents.
We have been furnished with, and with your consent have relied
upon, certificates of officer(s) of the Borrower with respect to certain factual
matters. In addition, we have obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject
transactions only of the federal laws of the United States and the internal laws
of the State of California, and we express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction, or as to any matters of municipal law or the laws of any other
local agencies within any state or any laws which are applicable to the subject
transactions or the parties thereto because of the nature or extent of their
business. Our opinions are based upon our consideration of only those statutes,
rules and regulations which, in our experience, are normally applicable to
borrowers and lenders in secured loan transactions. Whenever a statement herein
is qualified by "to the best of our knowledge" or a similar phrase, it is
intended to indicate that those attorneys in this firm who have rendered legal
services in connection with the Loan Documents do not have current actual
knowledge of the inaccuracy of such statement. However, except as otherwise
expressly indicated, we have not undertaken any independent investigation to
determine the accuracy of any such statement, and no inference that we have any
knowledge of any matters pertaining to such statement should be drawn from our
representation of the Borrower.
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Page 3
Subject to the foregoing and the other matters set forth herein,
and in reliance thereon, it is our opinion that, as of the date hereof:
1. The execution, delivery and performance by the Borrower of the
Note has been duly authorized by all necessary corporate action of the Borrower.
2. The Note constitutes a legally valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms.
3. The provisions of the Pledge Agreement are effective to create
a valid security interest in favor of the Price Note Collateral Agent in that
portion of the collateral described in Section 1 of the Pledge Agreement which
is subject to Article 9 of the UCC (the "Price Note Pledged Collateral") as
security for the payment, to the extent set forth therein, of all obligations of
the Borrower to the Lender under the Loan Documents.
4. The Financing Statement is in appropriate form for filing in
the Office of the Secretary of State of the State of California. Upon (a)
delivery of the certificates representing (i) the Debentures Pledged Shares to
the Debentures Collateral Agent, (ii) the Senior Notes Pledged Shares to the
Senior Notes Collateral Agent, and (iii) the Price Note Pledged Shares, other
than the Debentures Pledged Shares and the Senior Notes Pledged Shares, to the
Price Note Collateral Agent, in the State of California, pursuant to the Pledge
Agreement with undated stock powers duly endorsed to the Debentures Collateral
Agent, the Senior Notes Collateral Agent and the Price Note Collateral Agent, as
applicable, or in blank by an effective endorsement, and (b) the proper filing
of the Financing Statement in the Office of the Secretary of State of the State
of California, the security interest in favor of the Price Note Collateral Agent
in the Price Note Pledged Shares will be perfected to the extent a security
interest in such Price Note Pledged Shares can be perfected in the State of
California under the provisions of the UCC.
The opinions expressed in paragraph 2 do not include any opinions
with respect to the creation, validity, perfection or priority of any security
interest or lien or any opinions with respect to compliance with laws relating
to permissible rates of interest. The opinions expressed above are further
subject to the following limitations, qualifications and exceptions:
(a) such opinions are subject to the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally including, without limitation, the
effect of Section 548 of the federal Bankruptcy Code and comparable provisions
of state law, and the effect of Section 547 of the federal Bankruptcy Code;
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(b) enforceability of the Loan Documents is subject to the effect
of general principles of equity, including without limitation concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief regardless of
whether considered in a proceeding in equity or at law;
(c) certain rights, remedies and waivers contained in the Loan
Documents may be limited or rendered ineffective by applicable California laws
or judicial decisions governing such provisions, but such laws or judicial
decisions do not render the Loan Documents invalid or unenforceable as a whole;
(d) we express no opinion as to the validity or enforceability of
any provision of the Loan Documents that permit the Lender to increase the rate
of interest, collect a late charge or prepayment premium or impose penalties or
forfeitures in the event of a delinquency or default;
(e) the unenforceability under certain circumstances, under
California or federal law or court decisions, of provisions expressly or by
implication waiving broadly or vaguely stated rights, unknown future rights,
defenses to obligations or rights granted by law, where such waivers are against
public policy or prohibited by law;
(f) the unenforceability under certain circumstances of
provisions to the effect that rights or remedies are not exclusive, that every
right or remedy is cumulative and may be exercised in addition to or with any
other right or remedy, that election of a particular remedy or remedies does not
preclude recourse to one or more other remedies, that any right or remedy may be
exercised without notice, or that failure to exercise or delay in exercising
rights or remedies will not operate as a waiver of any such right or remedy;
(g) the unenforceability under certain circumstances of
provisions indemnifying a party against liability for its own wrongful or
negligent acts or where such indemnification is contrary to public policy or
prohibited by law;
(h) the effect of Section 1717 of the California Civil Code,
which provides that, where a contract permits one party to the contract to
recover attorneys' fees, the prevailing party in any action to enforce any
provision of the contract shall be entitled to recover its reasonable attorneys'
fees;
(i) the effect of California law, which provides that a court may
refuse to enforce, or may limit the application of, a contract or any clause
thereof which the court finds as a matter of law to have been unconscionable at
the time it was made or contrary to public policy;
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Page 5
(j) we express no opinion with respect to the enforceability by a
federal court of any forum selection clause provisions contained in the Loan
Documents;
(k) the effect of Section 631(d) of the California Code of Civil
Procedure, which provides that a court may, in its discretion upon just terms,
allow a trial by jury although there may have been a waiver of trial by jury;
(l) Section 552 of the federal Bankruptcy Code limits the extent
to which property acquired by a debtor after the commencement of a case under
the federal Bankruptcy Code may be subject to a security interest arising from a
security agreement entered into by the debtor before the commencement of such
case;
(m) the unenforceability under certain circumstances of
contractual provisions respecting self-help or summary remedies without notice
or opportunity for hearing or correction;
(n) the effect of the provisions of the UCC which require a
secured party, in any disposition of personal property collateral, to act in
good faith and in a commercially reasonable manner;
(o) we have assumed that the Price Note Pledged Shares are
"certified securities" as defined in the UCC and at all times shall be held by
the Lender in the State of California;
(p) we have assumed that the Borrower has "rights" in the Price
Note Pledged Collateral and that "value" has been given as contemplated by
Section 9203 of the UCC;
(q) we express no opinion as to the creation, validity or
perfection of any security interest that is not governed by, or that is excluded
from coverage by, Division 8 and 9 of the UCC and we express no opinion as to
the priority of any security interest or lien. In particular, we express no
opinion as to the priority of any security interest versus the rights of any
party which may now have or hereafter acquire a perfected security interest in
the Price Note Pledged Shares by means other than the filing of a Financing
Statement. In addition, we express no opinion as to whether the Borrower has the
ability to convey the Price Note Pledged Shares free of any adverse claim;
(r) we call to your attention the fact that the perfection of a
security interest in "proceeds" (as defined in the UCC) of collateral is
governed and restricted by Section 9306 of the UCC; and
(s) we call to your attention the fact that under the UCC, with
certain limited exceptions, the effectiveness of the Financing Statement will
lapse five years after the date of filing thereof.
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________, 1999
Page 6
To the extent that the obligations of the Borrower may be
dependent upon such matters, we assume for purposes of this opinion that: (i)
all parties to the Loan Documents other than the Borrower are duly incorporated,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation; (ii) all parties to the Loan Documents other
than the Borrower have the requisite power and authority to execute and deliver
the Loan Documents and to perform their respective obligations under the Loan
Documents to which they are a party; (iii) the Loan Documents to which such
parties other than the Borrower is a party have been duly authorized, executed
and delivered by such parties, (iv) the Loan Documents to which such parties
other than the Borrower is a party constitute their legally valid and binding
obligations, enforceable against them in accordance with their terms; and (v)
all parties to the Loan Documents have complied with any applicable requirement
to file returns and pay taxes under the Franchise Tax Law of the State of
California.
This opinion is rendered only to you and is solely for your
benefit in connection with the transactions covered hereby. This opinion may not
be relied upon by you for any other purpose, or furnished to, quoted to or
relied upon by any other person, firm or corporation for any purpose, without
our prior written consent.
Very truly yours,
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EXHIBIT D
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into
as of _______, 1999 by Excel Legacy Corporation, a Delaware corporation (the
"Pledgor"), having its principal office at 16955 Xxx Xxx Xxxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxxxxxx, in favor of Xxxxx X. Xxxxxx (the "Price Note Collateral
Agent"), as collateral agent in favor of the holders (the "Holders") of the
Pledgor's Secured Promissory Note (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of _______, 1999 (the "Purchase Agreement"). Capitalized
terms used and not defined herein shall have the meanings given to such terms in
the Purchase Agreement.
W I T N E S S E T H:
WHEREAS, the Pledgor is the legal and beneficial owner of the
shares of common stock, par value $.0001 per share (the "Common Stock"), of
Price Enterprises, Inc., a Maryland corporation (the "Issuer"), set forth on
Schedule I hereto (the "Price Note Pledged Shares");
WHEREAS, the terms of the Purchase Agreement require that the
Pledgor (i) pledge to the Price Note Collateral Agent for the benefit of the
Holders, and grant to the Price Note Collateral Agent for the benefit of the
Holders a security interest in, the Price Note Pledged Shares and certain other
"Price Note Pledged Collateral" (as defined herein) and (ii) execute and deliver
this Agreement in order to secure the payment and performance by the Pledgor of
any principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable by the Pledgor under the Price Note and
the Purchase Agreement (the "Obligations");
WHEREAS, the Pledgor and Norwest Bank Minnesota, National
Association (the "Debentures Collateral Agent"), have entered into (i) that
certain Indenture dated _____, 1999 (the "Debentures Indenture") pertaining to
the Pledgor's 9.0% Convertible Redeemable Subordinated Secured Debentures due
2004 (the "Debentures") and (ii) a Pledge Agreement of even date therewith (the
"Debentures Pledge Agreement") pursuant to which Pledgor has granted to the
Debentures Collateral Agent, as collateral agent for the holders of the
Debentures, a security interest (the "Debentures Security Interest") in, among
other things, a portion of the Price Note Pledged Shares; and
WHEREAS, the Pledgor and Norwest Bank Minnesota, National
Association (the "Senior Note Collateral Agent"), have entered into (i) that
certain Indenture dated _____, 1999 (the "Senior Note Indenture") pertaining to
the Pledgor's 10.0% Senior Redeemable Secured Notes due 2004 (the "Senior
Notes") and (ii) a Pledge Agreement of even date therewith (the "Senior Note
Pledge Agreement") pursuant to which Pledgor has granted to the Senior Notes
Collateral Agent, as collateral agent for the holders of the Senior Notes, a
security interest (the "Senior Note Security Interest") in, among other things,
a portion of the Price Note Pledged Shares.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and the
mutual covenants hereinafter set forth, the parties hereto agree as follows:
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SECTION 1. Pledge. The Pledgor hereby pledges to the Price Note
Collateral Agent for its benefit and for the ratable benefit of the Holders, and
grants to the Price Note Collateral Agent for the ratable benefit of the Holders
a continuing security interest in, all of Pledgor's right, title and interest in
the following (the "Price Note Pledged Collateral"):
(a) the Price Note Pledged Shares (including, without limitation, the
Debentures Pledged Shares (as such term is defined in the Debentures Pledge
Agreement) and the Senior Notes Pledged Shares (as such term is defined in
the Senior Noted Pledge Agreement)) and the certificates representing such
Price Note Pledged Shares, and all products and proceeds of any of such
Price Note Pledged Shares, including, without limitation, all dividends,
cash, options, warrants, rights, instruments, subscriptions and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Price Note
Pledged Shares or any of the foregoing; and
(b) all additional shares of, and all securities convertible into and
all warrants, options or other rights to purchase, Common Stock of the
Issuer from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares (any such additional shares
and other items shall constitute part of the Price Note Pledged Shares under
and as defined in this Agreement), and all products and proceeds of any of
the foregoing, including, without limitation, all dividends, cash, options,
warrants, rights, instruments, subscriptions, and other property or proceeds
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the foregoing.
The pledge and security interest made and granted herein is made and
granted for the purpose of securing all of the Obligations (including, without
limitation, interest and any other obligations accruing after the date of any
filing by the Pledgor of any petition in bankruptcy or the commencement of any
bankruptcy, insolvency or similar proceeding with respect to the Pledgor).
SECTION 2. Delivery of Pledged Collateral. Pledgor hereby agrees that
all certificates or instruments representing or evidencing the Price Note
Pledged Collateral shall be immediately delivered to and held at all times by
the Price Note Collateral Agent, or as he may direct, pursuant hereto in the
State of California or to the Debentures Collateral Agent and the Senior Notes
Collateral Agent in accordance with the provisions of Section 3 below. All Price
Note Pledged Shares shall be in suitable form for transfer by delivery, or
issued in the name of Pledgor and accompanied by instruments of transfer or
assignment duly executed in blank and undated, and in either case having
attached thereto all requisite federal or state stock transfer tax stamps, all
in form and substance satisfactory to the Price Note Collateral Agent; provided,
however, that the Price Note Pledged Shares and such accompanying instruments of
transfer or assignment shall be subject to delivery to the Debentures Collateral
Agent and the Senior Note Collateral Agent in accordance with the provisions of
Section 3 below.
SECTION 3. Senior Security Interests
(a) Debentures and Debentures Security Interest. The Price Note
Collateral Agent acknowledges that Pledgor has the right from time to time
under the Debentures Indenture, and subject to requirements of Section 2.02
thereof, to issue Debentures. The Price Note Collateral Agent further
acknowledges that, until such time as the Obligations with respect to the
Purchase Agreement and the Price Note have been satisfied in full and the
obligations of Pledgor under the Debentures Indenture and the Debentures
have been paid in full, all Debentures shall be secured by a number of
shares of Common Stock equal to 117.647 for each $1,000 in principal amount
of Debentures outstanding (the "Debentures Pledged Shares"), and the
certificates representing such Debentures Pledged Shares, and
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all products and proceeds of any such shares, including, without limitation,
all dividends, cash, options, warrants, rights, instruments, subscriptions and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares. In
order to further implement these understandings, the parties agree as follows:
(i) In connection with any issuance of Debentures pursuant to the
Debentures Indenture, Pledgor shall deliver to the Price Note Collateral
Agent a certificate (a "Debentures Collateral Identification Certificate")
in the form attached hereto as Exhibit A. The Debentures Collateral
Identification Certificate (A) shall have been completed to identify the
principal amount of Debentures to be issued at such time (for purposes of
said Debentures Collateral Identification Certificate, the "Incremental
Debentures"), (B) shall have been completed to identify a portion of the
Price Note Pledged Shares equal to 117.647 shares of Common Stock for each
$1,000 principal amount of Incremental Debentures (the "Incremental
Debentures Pledged Shares"), as well as the appropriate certificate(s)
evidencing the Incremental Debentures Pledged Shares, (C) shall have been
duly executed by the Pledgor, and (D) shall include an Acknowledgment of
Debentures Collateral Agent duly executed by the Debentures Collateral
Agent.
(ii) Substantially concurrently with its receipt of any such Debentures
Collateral Identification Certificate, the Price Note Collateral Agent shall
execute the Acknowledgment of Price Note Collateral Agent included in said
Debentures Collateral Identification Certificate and shall deliver the same
(and all products and proceeds of any such shares), together with the stock
certificate evidencing the Incremental Debentures Pledged Shares, to the
Debentures Collateral Agent. Any such Debentures Pledged Shares (and all
products and proceeds of any such shares) thereafter shall constitute
Debentures Pledged Collateral unless and until the Debentures Security
Interest therein has been released in accordance with the provisions of the
Debentures Pledge Agreement. In the event that the Debentures Security
Interest is released with respect to particular Debentures Pledged Shares
prior to the payment in full of the Price Note, the Pledgor agrees that such
Debentures Pledged Shares (and all products and proceeds of any such shares)
shall be delivered to the Price Note Collateral Agent hereunder and shall
continue to constitute Price Note Pledged Shares hereunder. If for any
reason Pledgor shall come into possession of such Debentures Pledged Shares
(and all products and proceeds of any such shares) prior to the payment in
full of the Obligations, Pledgor promptly shall deliver the same to the
Price Note Collateral Agent.
(iii) Upon request by the Pledgor and the delivery to the Price Note
Collateral Agent of a Release Certificate in the form attached hereto as
Exhibit C, the Price Note Collateral Agent, if applicable, shall execute the
Acknowledgment of Price Note Collateral Agent included in said Release
Certificate and shall deliver the same to the Debentures Collateral Agent.
(b) Senior Notes and Senior Notes Security Interest. The Price Note
Collateral Agent acknowledges that Pledgor has the right from time to time
under the Senior Notes Indenture, and subject to requirements of Section 2.02
thereof, to issue Senior Notes. The Price Note Collateral Agent further
acknowledges that, until such time as the Obligations with respect to the
Purchase Agreement and the Price Note have been satisfied in full and the
obligations of Pledgor under the Senior Notes Indenture and the Senior Notes
have been paid in full, all Senior Notes shall be secured by a number of
shares of Common Stock equal to 117.647 for each $1,000 in principal amount of
Senior Notes outstanding (the "Senior Notes Pledged Shares"), and the
certificates representing such Senior Notes Pledged Shares, and all products
and proceeds of any such shares, including, without limitation, all dividends,
cash, options, warrants, rights, instruments, subscriptions and other property
or proceeds
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from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such shares. In order to further implement
these understandings, the parties agree as follows:
(i) In connection with any issuance of Senior Notes pursuant to the Senior
Notes Indenture, Pledgor shall deliver to the Price Note Collateral Agent a
certificate (a "Senior Notes Collateral Identification Certificate") in the
form attached hereto as Exhibit B. The Senior Notes Collateral
Identification Certificate (A) shall have been completed to identify the
principal amount of Senior Notes to be issued at such time (for purposes of
said Senior Notes Collateral Identification Certificate, the "Incremental
Senior Notes"), (B) shall have been completed to identify a portion of the
Price Note Pledged Shares equal to 117.647 shares of Common Stock for each
$1,000 principal amount of Incremental Senior Notes (the "Incremental Senior
Notes Pledged Shares"), as well as the appropriate certificate(s) evidencing
the Incremental Senior Notes Pledged Shares, (C) shall have been duly
executed by the Pledgor, and (D) shall include an Acknowledgment of Senior
Notes Collateral Agent duly executed by the Senior Notes Collateral Agent.
(ii) Substantially concurrently with its receipt of any such Senior Notes
Collateral Identification Certificate, the Price Note Collateral Agent shall
execute the Acknowledgment of Price Note Collateral Agent included in said
Senior Notes Collateral Identification Certificate and shall deliver the
same (and all products and proceeds of any such shares), together with the
stock certificate evidencing the Incremental Senior Notes Pledged Shares, to
the Senior Notes Collateral Agent. Any such Senior Notes Pledged Shares (and
all products and proceeds of any such shares) thereafter shall constitute
Senior Notes Pledged Collateral unless and until the Senior Notes Security
Interest therein has been released in accordance with the provisions of the
Senior Notes Pledge Agreement. In the event that the Senior Notes Security
Interest is released with respect to particular Senior Notes Pledged Shares
prior to the payment in full of the Price Note, the Pledgor agrees that such
Senior Notes Pledged Shares (and all products and proceeds of any such
shares) shall be delivered to the Price Note Collateral Agent hereunder and
shall continue to constitute Price Note Pledged Shares hereunder. If for any
reason Pledgor shall come into possession of such Senior Notes Pledged
Shares (and all products and proceeds of any such shares) prior to the
payment in full of the Obligations, Pledgor promptly shall deliver the same
to the Price Note Collateral Agent.
(iii) Upon request by the Pledgor and the delivery to the Price Note
Collateral Agent of a Release Certificate in the form attached hereto as
Exhibit D, the Price Note Collateral Agent, if applicable, shall execute the
Acknowledgment of Price Note Collateral Agent included in said Release
Certificate and shall deliver the same to the Senior Notes Collateral Agent.
SECTION 4. Nonrecourse Notes. Notwithstanding anything in this Agreement,
the Purchase Agreement or the Price Note (collectively, the "Loan Documents") to
the contrary, it is expressly understood and agreed that neither Pledgor, Issuer
nor any of their directors, officers, employees, stockholders or affiliates
shall assume, or be held to, any personal liability for payment of the amounts
evidenced or secured by the Loan Documents, or, except as otherwise expressly
set forth below, for the performance or breach of any of the other Obligations,
covenants, representations and warranties contained in the Loan Documents and
that in the event of any default under the Loan Documents, the recourse of the
Holders and the Price Note Collateral Agent shall be limited to such Price Note
Pledged Collateral, and neither the Holders nor the Price Note Collateral Agent
shall take any action against Pledgor, Issuer or any of their directors,
officers, employees, stockholders or affiliates except such action as may be
necessary (a) to subject to the satisfaction of the Price Note the Pledged
Collateral, or (b) to protect the Price Note Pledged Collateral from waste or
damage; provided, however, that notwithstanding the foregoing, nothing in this
Agreement shall be construed to release the Pledgor from personal liability on
account of fraud,
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intentional misrepresentation or breach by the Pledgor of this Agreement (as
opposed to a Default under, or breach of, the Purchase Agreement). Each Holder,
by accepting a Price Note, agrees to the foregoing.
SECTION 5. Representations and Warranties. The Pledgor hereby makes all
representations and warranties applicable to the Pledgor contained in the
Purchase Agreement. The Pledgor further represents and warrants that:
(a) The Pledgor is the legal, record and beneficial owner of the Price
Note Pledged Collateral, free and clear of any Lien (as defined below) or
claims of any person (as defined below) other than the security interest
created under this Agreement (and, in the case of any Debentures Pledged
Collateral and Senior Notes Pledged Collateral, the Debentures Security
Interest and the Senior Notes Security Interest, respectively).
For purposes of this Agreement, "Lien" means, with respect to any asset,
any mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other
title retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code
(the "UCC") (or equivalent statutes) of any jurisdiction. For purposes of
this Agreement, the term "person" shall mean any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
(b) This Agreement has been duly executed and delivered by the Pledgor
and constitutes a legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms.
(c) Upon (i) the delivery to the Price Note Collateral Agent of the
Price Note Pledged Collateral (other than any Debentures Pledged Collateral
or Senior Notes Pledged Collateral), (ii) the delivery to the Debentures
Collateral Agent of any Debentures Pledged Collateral in accordance with
Section 3 of this Agreement, (iii) the delivery to the Senior Notes
Collateral Agent of any Senior Notes Pledged Collateral in accordance with
Section 3 of this Agreement and (iv) the filing of the UCC financing
statements in the Secretary of State's office for the State of California
referencing Pledgor as debtor thereunder, the Price Note Collateral Agent
(as agent for the Holders) as the secured party thereunder, and the Price
Note Pledged Collateral as the collateral thereunder, the pledge of the
Price Note Pledged Collateral pursuant to this Agreement shall create a
valid and perfected security interest in the Price Note Pledged Collateral,
securing the payment of the Obligations for the benefit of the Price Note
Collateral Agent and the Holders, and enforceable as such against all
creditors of the Pledgor and any persons purporting to purchase any of the
Price Note Pledged Collateral from the Pledgor.
SECTION 6. Further Assurance. Pledgor will at all times cause the
security interests granted pursuant to this Agreement to constitute valid
perfected security interests in the Price Note Pledged Collateral, enforceable
as such against all creditors of Pledgor and (except as otherwise specifically
provided herein) any persons purporting to purchase any Price Note Pledged
Collateral from Pledgor. The Pledgor will, promptly upon request by the Price
Note Collateral Agent, execute and deliver or cause to be executed and
delivered, or use its best efforts to procure, all substitute stock
certificates, stock powers, proxies, tax stamps, assignments, instruments and
other documents, all in form and substance satisfactory to the Price Note
Collateral Agent, deliver any instruments to the Price Note Collateral Agent and
take any
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other actions that are necessary or, in the reasonable opinion of the
Price Note Collateral Agent, desirable to perfect, continue the perfection of,
or protect the Price Note Collateral Agent's security interest in, the Price
Note Pledged Collateral, to protect the Price Note Pledged Collateral against
the rights, claims, or interests of third persons, to enable the Price Note
Collateral Agent to exercise or enforce its rights and remedies hereunder, or
otherwise to effect the purposes of this Agreement. The Pledgor also hereby
authorizes the Price Note Collateral Agent to file any financing or continuation
statements with respect to the Price Note Pledged Collateral without the
signature of the Pledgor to the extent permitted by applicable law. The Pledgor
will pay all costs incurred in connection with any of the foregoing.
SECTION 7. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Price Note Pledged Shares or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or the Purchase Agreement; provided, however, that the Pledgor
shall not exercise or shall refrain from exercising any such right if such
action would have a material adverse effect on the value of the Price Note
Pledged Collateral or any part thereof or be inconsistent with or violate
any provisions of this Agreement or the Purchase Agreement.
(b) So long as no Event of Default shall have occurred and be
continuing, and subject to the other terms and conditions of the Pledge
Agreement, the Pledgor shall be entitled to receive, and to utilize (subject
to the provisions of the Purchase Agreement) free and clear of the Lien of
this Agreement, all cash dividends paid from time to time in respect of the
Price Note Pledged Shares (other than the dividends described in Section
7(c)(ii) below).
(c) Any and all (i) dividends, other distributions, interest and
principal payments paid or payable in the form of instruments and/or other
property (other than cash dividends permitted under Section 7(b) hereof)
received, receivable or otherwise distributed in respect of, or in exchange
for, any Price Note Pledged Collateral, (ii) dividends and other
distributions paid or payable in cash in respect of any Price Note Pledged
Shares in connection with a partial or total liquidation or dissolution or
in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (iii) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Price Note Pledged Collateral, shall
in each case be forthwith delivered to the Price Note Collateral Agent to
hold as Price Note Pledged Collateral and shall, if received by the Pledgor,
be received in trust for the benefit of the Price Note Collateral Agent and
the Holders, be segregated from the other property and funds of the Pledgor
and be forthwith delivered to the Price Note Collateral Agent as Price Note
Pledged Collateral in the same form as so received (with any necessary
endorsements).
(d) The Price Note Collateral Agent shall execute and deliver (or cause
to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to exercise the voting and other rights that it is
entitled to exercise pursuant to Sections 7(a) and 7(b) above.
(e) Upon the occurrence and during the continuance of an Event of
Default, (i) all rights of the Pledgor to exercise the voting and other
consensual rights that it would otherwise be entitled to exercise pursuant
to Section 7(a) shall cease, and all such rights shall thereupon become
vested in the Price Note Collateral Agent with respect to any Price Note
Pledged Shares then in its possession (and with respect to any other Price
Note Pledged Shares which the Price Note Collateral Agent then is entitled
to possess pursuant to this Agreement), which, to the extent permitted by
law, shall thereupon have the
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sole right to exercise such voting and other consensual rights, and (ii) all
dividends payable in respect of such Price Note Pledged Collateral shall be
paid to the Price Note Collateral Agent and the Pledgor's right to receive
such cash payments pursuant to Sections 7(b) hereof shall immediately cease.
The Price Note Collateral Agent acknowledges that following an Event of
Default under the Debentures Pledge Agreement or the Senior Notes Pledge
Agreement, the Debentures Collateral Agent and the Senior Notes Collateral
Agent, respectively, shall have the right to exercise voting rights with
respect to Price Note Pledged Shares then in their respective possession
(and with respect to any other Price Note Pledged Shares which the
Debentures Collateral Agent or the Senior Notes Collateral Agent then are
entitled to possess pursuant to this Agreement).
(f) Upon the occurrence and during the continuance of an Event of
Default, the Pledgor shall execute and deliver (or cause to be executed and
delivered) to the Price Note Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as the Price Note Collateral
Agent may reasonably request for the purpose of enabling the Price Note
Collateral Agent to exercise the voting and other rights that it is entitled
to exercise, and receive the payments and distributions that it is entitled
to receive, pursuant to Section 7(e) above.
(g) All payments of interest, principal or premium and all dividends and
other distributions that are received by the Pledgor contrary to the
provisions of this Section 7 shall be received in trust for the benefit of
the Price Note Collateral Agent and the Holders, shall be segregated from
the other property or funds of the Pledgor and shall be forthwith delivered
to the Price Note Collateral Agent as Price Note Pledged Collateral in the
same form as so received (with any necessary endorsements); provided that
any such payments pertaining to the Debentures Pledged Collateral or the
Senior Notes Pledged Collateral instead shall be delivered to the Debentures
Collateral Agent or the Senior Notes Pledged Collateral Agent, for holding
pursuant to Debentures Pledge Agreement and the Senior Notes Pledge
Agreement, respectively.
SECTION 8. Covenants. The Pledgor hereby covenants and agrees with the
Price Note Collateral Agent and the Holders that it will comply with all of the
obligations, requirements and restrictions applicable to the Pledgor contained
in the Purchase Agreement. The Pledgor further covenants and agrees, from and
after the date of this Agreement and until the Obligations have been paid in
full, that it will not (i) sell, assign, transfer, convey or otherwise dispose
of, or grant any option or warrant with respect to, any of the Price Note
Pledged Collateral without the prior written consent of the Price Note
Collateral Agent, (ii) create or permit to exist any Lien upon or with respect
to any of the Price Note Pledged Collateral other than the security interest
granted under this Agreement (and, with respect to the Debentures Pledged
Collateral and the Senior Notes Pledged Collateral, respectively, the Debentures
Security Interest and the Senior Notes Security Interest created in accordance
with Section 3 of this Agreement), and Pledgor at all times will be the sole
beneficial owner of the Price Note Pledged Collateral, (iii) other than the
Debentures Pledge Agreement and the Senior Note Pledge Agreement, enter into any
agreement or understanding that purports to or that may restrict or inhibit the
Price Note Collateral Agent's rights or remedies hereunder, including, without
limitation, the Price Note Collateral Agent's right to sell or otherwise dispose
of the Price Note Pledged Collateral, or (iv) fail to pay or discharge any tax,
assessment or levy of any nature not later than five days prior to the date of
any proposed sale under any judgement, writ or warrant of attachment with regard
to the Price Note Pledged Collateral.
SECTION 9. Power of Attorney. In addition to all of the powers granted
to the Price Note Collateral Agent pursuant to Section 5 of the Purchase
Agreement, the Pledgor hereby appoints and constitutes the Price Note Collateral
Agent as the Pledgor's attorney-in-fact to exercise all of the following powers
upon and at any time after the occurrence of an Event of Default: (i) collection
of proceeds of any
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Price Note Pledged Collateral then in the possession of the Price Note
Collateral Agent (and any other Price Note Pledged Collateral which the Price
Note Collateral Agent then is entitled to possess pursuant to the terms of this
Agreement), or any part thereof; (ii) conveyance of any item of Price Note
Pledged Collateral then in the possession of the Price Note Collateral Agent
(and any other Pledged Collateral which the Price Note Collateral Agent then is
entitled to possess pursuant to the terms of this Agreement), or any part
thereof, to any purchaser thereof; (iii) giving of any notices or recording of
any Liens under Section 6 hereof; (iv) making of any payments or taking any acts
under Section 10 hereof and (v) paying or discharging taxes or Liens levied or
placed upon or threatened against the Price Note Pledged Collateral then in the
possession of the Price Note Collateral Agent (and any other Pledged Collateral
which the Price Note Collateral Agent then is entitled to possess pursuant to
the terms of this Agreement), or any part thereof, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by the
Price Note Collateral Agent in its sole discretion, and such payments made by
the Price Note Collateral Agent to become the obligations of the Pledgor to the
Price Note Collateral Agent, due and payable immediately without demand. The
Price Note Collateral Agent's authority hereunder shall include, without
limitation, the authority to endorse and negotiate, for the Price Note
Collateral Agent's own account, any checks or instruments in the name of the
Pledgor, execute and give receipt for any certificate of ownership or any
document, transfer title to any item of Price Note Pledged Collateral then in
the possession of the Price Note Collateral Agent (and any other Pledged
Collateral which the Price Note Collateral Agent then is entitled to possess
pursuant to the terms of this Agreement), or any part thereof, sign the
Pledgor's name on all financing statements or any other documents deemed
necessary or appropriate to preserve, protect or perfect the security interest
in such Price Note Pledged Collateral and to file the same, prepare, file and
sign the Pledgor's name on any notice of Lien, and prepare, file and sign the
Pledgor's name on a proof of claim in bankruptcy or similar document against any
customer of the Pledgor, and to take any other actions arising from or incident
to the powers granted to the Price Note Collateral Agent in this Agreement. This
power of attorney is coupled with an interest and is irrevocable by the Pledgor.
SECTION 10. Collateral Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Price Note Collateral Agent may
itself perform, or cause performance of, such agreement, and the reasonable
expenses of the Price Note Collateral Agent incurred in connection therewith
shall be payable by the Pledgor under Section 15 hereof.
SECTION 11. No Assumption of Duties; Reasonable Care. The rights
and powers granted to the Price Note Collateral Agent hereunder are being
granted in order to preserve and protect the Price Note Collateral Agent's and
the Holders' security interest in and to the Price Note Pledged Collateral
granted hereby and shall not be interpreted to, and shall not, impose any duties
on the Price Note Collateral Agent in connection therewith. The Price Note
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Price Note Pledged Collateral in its possession
if the Price Note Pledged Collateral is accorded treatment substantially equal
to that which the Price Note Collateral Agent accords its own property, it being
understood that the Price Note Collateral Agent shall not have any
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Price Note Pledged Collateral, whether or not the Price Note Collateral Agent
has or is deemed to have knowledge of such matters, or (ii) taking any necessary
steps to preserve rights against any parties with respect to any Price Note
Pledged Collateral.
SECTION 12. Subsequent Changes Affecting Collateral. The Pledgor
represents to the Price Note Collateral Agent and the Holders that the Pledgor
has made its own arrangements for keeping informed of changes or potential
changes affecting the Price Note Pledged Collateral (including, but not limited
to, rights to convert, rights to subscribe, payment of dividends, payments of
interest and/or principal, reorganization or other exchanges, tender offers and
voting rights), and the Pledgor agrees that
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the Price Note Collateral Agent and the Holders shall have no responsibility or
liability for informing the Pledgor of any such changes or potential changes or
for taking any action or omitting to take any action with respect thereto. The
Pledgor covenants that it will not, without the prior written consent of the
Price Note Collateral Agent, vote to enable, or take any other action to permit,
the Issuer to sell or otherwise dispose of, or grant any option with respect to,
any of the Price Note Pledged Collateral or create or permit to exist any Lien
upon or with respect to any of the Price Note Pledged Collateral (except that,
with respect to the Debentures Pledged Collateral and the Senior Notes Pledged
Collateral, respectively, the Pledgor may create and permit to exist the
Debentures Security Interest and the Senior Notes Security Interest in
accordance with Section 3 of this Agreement). The Pledgor will defend the right,
title and interest of the Price Note Collateral Agent and the Holders in and to
the Price Note Pledged Collateral against the claims and demands of all persons.
SECTION 13. Remedies Upon Default. If any Event of Default shall have
occurred and be continuing, the Price Note Collateral Agent and the Holders
shall have, in addition to all other rights given by law or by this Agreement or
the Purchase Agreement, all of the rights and remedies with respect to the Price
Note Pledged Collateral of a secured party under the UCC as in effect in the
State of California at that time. The Price Note Collateral Agent may, without
notice and at its option, transfer or register, and the Pledgor shall register
or cause to be registered upon request therefor by the Price Note Collateral
Agent, the Price Note Pledged Collateral then in the possession of the Price
Note Collateral Agent (and any other Price Note Pledged Collateral which the
Price Note Collateral Agent then is entitled to possess pursuant to the terms of
this Agreement), or any part thereof, on the books of the Issuer into the name
of the Price Note Collateral Agent or the Price Note Collateral Agent's
nominee(s), with or without any indication that such Price Note Pledged
Collateral is subject to the security interest hereunder. In addition, (i) with
respect to any Price Note Pledged Collateral that shall then be in or shall
thereafter come into the possession or custody of the Price Note Collateral
Agent, the Price Note Collateral Agent may sell or cause the same to be sold at
any broker's board or at public or private sale, in one or more sales or lots,
at such price or prices as the Price Note Collateral Agent may deem best, for
cash or on credit or for future delivery, without assumption of any credit risk,
and (ii) with respect to any Price Note Pledged Collateral that shall then be in
or shall thereafter come into the possession or custody of the Debentures
Collateral Agent or the Senior Notes Collateral Agent, the Price Note Collateral
Agent may instruct and otherwise work with the Debentures Collateral Agent or
the Senior Notes Collateral Agent, as appropriate, to sell or cause the same to
be sold at any broker's board or at public or private sale, in one or more sales
or lots, at such price or prices as the Price Note Collateral Agent may deem
best, for cash or on credit or for future delivery, without assumption of any
credit risk. The purchaser of any or all Price Note Pledged Collateral so sold
shall thereafter hold the same absolutely, free from any claim, encumbrance or
right of any kind whatsoever (except that with respect to any such collateral
consisting of Debentures Pledged Collateral or Senior Notes Pledged Collateral,
the Price Note Collateral Agent may instruct the Debentures Collateral Agent and
the Senior Notes Collateral Agent to sell such collateral subject to Liens in
favor of the Price Note Collateral Agent). Unless any of the Price Note Pledged
Collateral threatens to decline speedily in value or is or becomes of a type
sold on a recognized market, the Price Note Collateral Agent will give Pledgor
reasonable notice of the time and place of any public sale thereof, or of the
time after which any private sale or other intended disposition is to be made.
Any sale of the Price Note Pledged Collateral conducted in conformity with
reasonable commercial practices of banks, insurance companies, commercial
finance companies, or other financial institutions disposing of property similar
to the Price Note Pledged Collateral shall be deemed to be commercially
reasonable. Any requirements of reasonable notice shall be met if such notice is
mailed to the Pledgor as provided below in Section 19.1, at least ten days
before the time of the sale or disposition. Any other requirement of notice,
demand or advertisement for sale is, to the extent permitted by law, waived. The
Price Note Collateral Agent or any Holder may, in its own name or in the
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name of a designee or nominee, buy any of the Price Note Pledged Collateral at
any public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Price Note Pledged Collateral.
SECTION 14. Irrevocable Authorization and Instruction to the Issuer. The
Pledgor hereby authorizes and instructs the Issuer to comply with any
instruction received by the Issuer from the Price Note Collateral Agent that (i)
states that an Event of Default has occurred and (ii) is otherwise in accordance
with the terms of this Agreement, without any other or further instructions from
the Pledgor, and the Pledgor agrees that the Issuer shall be fully protected in
so complying.
SECTION 15. Fees and Expenses. The Pledgor will upon demand pay to the
Price Note Collateral Agent the amount of any and all reasonable fees and
expenses (including, without limitation, the reasonable fees and disbursements
of its counsel, of any investment banking firm, business broker or other selling
agent and of any other experts and agents retained by the Price Note Collateral
Agent) that the Price Note Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Price Note
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
the Price Note Collateral Agent and the Holders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
SECTION 16. Interest Absolute. All rights of the Price Note Collateral
Agent and the Holders and the security interests created hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Purchase Agreement or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Purchase Agreement;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the Obligations
or of this Agreement.
SECTION 17. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Price Note Pledged Collateral and any
cash held shall be applied by the Price Note Collateral Agent in the following
order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Price Note
Collateral Agent, and all expenses, liabilities and advances incurred or made by
the Price Note Collateral Agent in connection therewith, and any other
unreimbursed fees and expenses for which the Price Note Collateral Agent is to
be reimbursed pursuant to Section 15 hereof;
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second, to the ratable payment (based on the principal amount of the
Price Note deemed by the Purchase Agreement to be outstanding at the time of
distribution) of accrued but unpaid interest on such outstanding Price Note;
third, to the ratable payment (based on the principal amount of the
Price Note deemed by the Purchase Agreement to be outstanding at the time of
distribution) of unpaid principal of such outstanding Price Note;
fourth, to the ratable payment (based on the principal amount of the
Price Note deemed by the Purchase Agreement to be outstanding at the time of
distribution) of all other Obligations, until all Obligations shall have been
paid in full; and
fifth, to the payment to all persons who may be entitled by law thereto,
or as a court of competent jurisdiction may direct, until all obligations to
such persons shall have been paid in full; and
finally, to payment to the Pledgor or its successors or assigns, or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 18. Uncertificated Securities. Notwithstanding anything to the
contrary contained herein, if any Price Note Pledged Shares (whether now owned
or hereafter acquired) are uncertificated Price Note Pledged Shares, the Pledgor
shall promptly notify the Price Note Collateral Agent, and shall promptly take
all actions required to perfect the security interest of the Price Note
Collateral Agent under applicable law. The Pledgor further agrees to take such
actions as the Price Note Collateral Agent deems necessary or desirable to
effect the foregoing and to permit the Price Note Collateral Agent to exercise
any of its rights and remedies hereunder, and agrees to provide an opinion of
counsel reasonably satisfactory to the Price Note Collateral Agent with respect
to any such pledge of uncertificated Price Note Pledged Shares promptly upon
request of the Price Note Collateral Agent.
SECTION 19. Miscellaneous Provisions.
Section 19.1. Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 8 of the Purchase Agreement, and delivered to
the addresses set forth therein, or, in the case of the Price Note Collateral
Agent, to: Xxxxx X. Xxxxxx, 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxx, XX 00000,
Telecopy No. _________.
Section 19.2. No Adverse Interpretation of Other Agreements. This
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor, the Issuer or any subsidiary thereof. No such pledge,
security or debt agreement may be used to interpret this Agreement.
Section 19.3. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
Section 19.4. No Recourse Against Others. No director, officer,
employee, stockholder or affiliate, as such, of the Pledgor or the Issuer shall
have any liability for any obligations of the Pledgor under this Agreement or
for any claim based on, in respect of or by reason of such obligations or their
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creation. Each Holder, by accepting a Price Note, waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Price Note.
Section 19.5. Headings. The headings of the Sections of this
Agreement have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.
Section 19.6. Counterpart Originals. This Agreement may be signed
in two or more counterparts. Each signed copy shall be an original, but all of
them together represent one and the same agreement. Each counterpart may be
executed and delivered by telecopy, if such delivery is promptly followed by the
original manually signed copy sent by overnight courier.
Section 19.7. Benefits of Agreement. Nothing in this Agreement,
express or implied, shall give to any person, other than the parties hereto and
their successors hereunder, and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 19.8. Amendments, Waivers and Consents. Any amendment or
waiver of any provision of this Agreement and any consent to any departure by
the Pledgor from any provision of this Agreement shall be effective only if made
or given in compliance with all of the terms and provisions of the Purchase
Agreement necessary for amendments or waivers of, or consents to any departure
by the Pledgor from any provision of, the Purchase Agreement, as applicable, and
neither the Price Note Collateral Agent nor any Holder shall be deemed, by any
act, delay, indulgence, omission or otherwise, to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. Failure of the Price Note
Collateral Agent or any Holder to exercise, or delay in exercising, any right,
power or privilege hereunder shall not operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Price Note Collateral Agent or any Holder of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Price Note Collateral Agent or such Holder would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
Section 19.9. Interpretation of Agreement. Time is of the essence
in each provision of this Agreement of which time is an element. All terms not
defined herein or in the Purchase Agreement shall have the meaning set forth in
the applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Purchase Agreement and is
not dealt with herein with more specificity, the Purchase Agreement shall
control with respect to the subject matter of such term or provision. Acceptance
of or acquiescence in a course of performance rendered under this Agreement
shall not be relevant to determine the meaning of this Agreement even though the
accepting or acquiescing party had knowledge of the nature of the performance
and opportunity for objection.
Section 19.10. Continuing Security Interest; Transfer of Notes.
This Agreement shall create a continuing security interest in the Price Note
Pledged Collateral and shall (i) remain in full force and effect until the
payment in full of all the Obligations and all the fees and expenses owing to
the Price Note Collateral Agent, (ii) be binding upon the Pledgor, its
successors and assigns, and (iii) inure, together with the rights and remedies
of the Price Note Collateral Agent hereunder, to the benefit of the Price Note
Collateral Agent, the Holders and their respective successors, transferees and
assigns.
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Section 19.11. Reinstatement. This Agreement shall continue to be
effective or be reinstated if at any time any amount received by the Price Note
Collateral Agent or any Holder in respect of the Obligations is rescinded or
must otherwise be restored or returned by the Price Note Collateral Agent or any
Holder upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Pledgor or upon the appointment of any receiver,
intervenor, conservator, trustee or similar official for the Pledgor or any
substantial part of its assets, or otherwise, all as though such payments had
not been made.
Section 19.12. Survival of Provisions. All representations,
warranties and covenants of the Pledgor contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the full
and final payment and performance by the Pledgor of the Obligations.
Section 19.13. Waivers. The Pledgor waives presentment and demand
for payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Purchase Agreement.
Section 19.14. Authority of the Collateral Agent.
(a) The Price Note Collateral Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the Price
Note Collateral Agent by the terms hereof, together with such powers as
are reasonably incident thereto. The Price Note Collateral Agent may
perform any of its duties hereunder or in connection with the Price Note
Pledged Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of
counsel concerning all such matters. Neither the Price Note Collateral
Agent nor any director, officer, employee, attorney or agent of the
Price Note Collateral Agent shall be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Price Note Collateral Agent and its
directors, officers, employees, attorneys and agents shall be entitled
to rely on any communication, instrument or document believed by it or
them to be genuine and correct and to have been signed or sent by the
proper person or persons. The Pledgor agrees to indemnify and hold
harmless the Price Note Collateral Agent, the Holders and any other
person from and against any and all costs, expenses (including the
reasonable fees and disbursements of counsel (including, the allocated
costs of inside counsel)), claims and liabilities incurred by the Price
Note Collateral Agent, the Holders or such person hereunder, unless such
claim or liability shall be due to willful misconduct or gross
negligence on the part of the Price Note Collateral Agent, the Holders
or such person.
(b) The Pledgor acknowledges that the rights and responsibilities
of the Price Note Collateral Agent under this Agreement with respect to
any action taken by the Price Note Collateral Agent or the exercise or
non-exercise by the Price Note Collateral Agent of any option, right,
request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Price
Note Collateral Agent and the Holders, be governed by the Purchase
Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Price Note Collateral
Agent and the Pledgor, the Price Note Collateral Agent shall be
conclusively presumed to be acting as agent for the Holders with full
and valid authority so to act or refrain from acting, and the Pledgor
shall not be obligated or entitled to make any inquiry respecting such
authority.
Section 19.15. Resignation or Removal of the Collateral Agent.
Until such time as the Obligations shall have been paid in full, the Price Note
Collateral Agent may at any time, by giving written
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notice to the Pledgor and Holders, resign and be discharged of the
responsibilities hereby created, such resignation to become effective upon (i)
the appointment of a successor Price Note Collateral Agent and (ii) the
acceptance of such appointment by such successor Price Note Collateral Agent. As
promptly as practicable after the giving of any such notice, the Holders shall
appoint a successor Price Note Collateral Agent, which successor Price Note
Collateral Agent shall be reasonably acceptable to the Pledgor. If no successor
Price Note Collateral Agent shall be appointed and shall have accepted such
appointment within 90 days after the Price Note Collateral Agent gives the
aforesaid notice of resignation, the Price Note Collateral Agent may apply to
any court of competent jurisdiction to appoint a successor Price Note Collateral
Agent to act until such time, if any, as a successor shall have been appointed
as provided in this Section 19.15. Any successor so appointed by such court
shall immediately and without further act be superseded by any successor Price
Note Collateral Agent appointed by the Holders, as provided in this Section
19.15. Simultaneously with its replacement as Price Note Collateral Agent
hereunder, the Price Note Collateral Agent so replaced shall deliver to its
successor all documents, instruments, certificates and other items of whatever
kind (including, without limitation, the certificates and instruments evidencing
the Price Note Pledged Collateral and all instruments of transfer or assignment)
held by it pursuant to the terms hereof. The Price Note Collateral Agent that
has resigned shall be entitled to fees, costs and expenses to the extent
incurred or arising, or relating to events occurring, before its resignation or
removal.
Section 19.6. Release; Termination of Agreement. Subject to the
provisions of Section 19.11 hereof, this Agreement shall terminate upon full and
final payment and performance of the Obligations (and upon receipt by the Price
Note Collateral Agent of the Pledgor's written certification that all such
Obligations have been satisfied, and such other evidence reasonably satisfactory
to the Price Note Collateral Agent that such Obligations have been satisfied,
which may include a certification from the Holders, and the satisfaction of any
additional applicable conditions set forth in the Purchase Agreement) and
payment in full of all fees and expenses owing by the Pledgor to the Price Note
Collateral Agent. At such time, the Price Note Collateral Agent shall, at the
request of the Pledgor, reassign and redeliver to the Pledgor all of the Price
Note Pledged Collateral hereunder (other than Price Note Pledged Collateral that
has been delivered to the Debentures Collateral Agent or the Senior Notes
Collateral Agent in accordance with Section 3 hereof and which has not been
returned to the Price Note Collateral Agent) that has not been sold, disposed
of, retained or applied by the Price Note Collateral Agent in accordance with
the terms hereof. Such reassignment and redelivery shall be without warranty by
or recourse to the Price Note Collateral Agent, except as to the absence of any
prior assignments by the Price Note Collateral Agent of its interest in the
Price Note Pledged Collateral, and shall be at the expense of the Pledgor.
Further, at such time, the Price Note Collateral Agent shall, at the request of
the Pledgor, execute and deliver to the Debentures Collateral Agent and the
Senior Notes Collateral Agent the Payment Certificates in the forms attached
hereto as Exhibit E and Exhibit F, respectively.
Section 19.17. Final Expression. This Agreement, together with
any other agreement executed in connection herewith, is intended by the parties
as a final expression of their Agreement and is intended as a complete and
exclusive statement of the terms and conditions thereof.
Section 19.18. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial; Waiver of Damages.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER THE
LAWS OF THE STATE OF CALIFORNIA, AND ANY DISPUTE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE PLEDGOR,
THE PRICE NOTE COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT,
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EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF
CALIFORNIA.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH
(vi) BELOW, THE PLEDGOR, THE PRICE NOTE COLLATERAL AGENT AND THE HOLDERS AGREE
THAT ALL DISPUTES BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION
WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN
CALIFORNIA, BUT THE PLEDGOR, THE PRICE NOTE COLLATERAL AGENT AND THE HOLDERS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF CALIFORNIA. THE PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS.
(iii) THE PLEDGOR AGREES THAT THE PRICE NOTE COLLATERAL AGENT
SHALL, IN ITS OWN NAME OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE
RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PRICE
NOTE PLEDGED COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD
FAITH TO ENABLE THE PRICE NOTE COLLATERAL AGENT TO REALIZE ON SUCH PROPERTY, OR
TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE PRICE NOTE
COLLATERAL AGENT. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE PRICE NOTE COLLATERAL AGENT TO
REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF THE PRICE NOTE COLLATERAL AGENT. THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE PRICE NOTE COLLATERAL AGENT HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS.
(iv) THE PLEDGOR, THE PRICE NOTE COLLATERAL AGENT AND THE HOLDERS
EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
(v) THE PLEDGOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO THE PLEDGOR AT ITS ADDRESS SET FORTH IN SECTION 8 OF THE PURCHASE AGREEMENT,
SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH MAILING.
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(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PRICE NOTE
COLLATERAL AGENT OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN
ANY OTHER JURISDICTION.
(vii) THE PLEDGOR HEREBY AGREES THAT NEITHER THE PRICE NOTE
COLLATERAL AGENT NOR ANY HOLDER SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS
CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY
A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE PRICE NOTE
COLLATERAL AGENT OR SUCH HOLDER, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE
RESULT OF ACTS OR OMISSIONS ON THE PART OF THE PRICE NOTE COLLATERAL AGENT OR
SUCH HOLDER, AS THE CASE MAY BE, CONSTITUTING GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
(viii) THE PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY
KIND PRIOR TO THE EXERCISE BY THE PRICE NOTE COLLATERAL AGENT OR ANY HOLDER OF
ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE
COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE PLEDGOR WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE PRICE NOTE COLLATERAL AGENT OR ANY HOLDER
IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS,
TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE PRICE NOTE
COLLATERAL AGENT OR ANY HOLDER, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, THE PRICE NOTE COLLATERAL AGENT
AND THE HOLDERS.
Section 19.19. Acknowledgments. The Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement;
(b) neither the Price Note Collateral Agent nor any Holder has
any fiduciary relationship to the Pledgor, and the relationship between
the Price Note Collateral Agent and the Holders, on the one hand, and
the Pledgor, on the other hand, is solely that of a secured party and a
creditor; and
(c) no joint venture exists among the Holders or among the
Pledgor and the Holders.
[Signature Page Follows]
16
36
[Pledge Agreement Signature Page]
PLEDGOR:
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:
------------------------------------------
Name:
Title:
PRICE NOTE COLLATERAL AGENT:
------------------------------------------
XXXXX X. XXXXXX,
as Price Note Collateral Agent
17
37
SCHEDULE I
PLEDGED SHARES
Number of Price Note Share Certificate
Issuer Pledged Shares(1) Number(s)
------ -------------------- -----------------
Price Enterprises, Inc.
--------
(1) Notations shall be made from time to time on this Schedule I by the parties
to the Pledge Agreement with respect to any Price Note Pledged Shares
which are the subject of any Debentures Collateral Identification Certificate
or Senior Notes Collateral Identification Certificate and upon redelivery, if
applicable, of any shares that were previously the subject of any such
certificates.
38
EXHIBIT A
[FORM OF DEBENTURES COLLATERAL IDENTIFICATION CERTIFICATE]
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Debentures Pledge Agreement")
dated as of _______, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Debentures Collateral Agent"), pursuant to which
Pledgor has granted to the Debentures Collateral Agent, as collateral agent for
the holders of the Pledgor's 9.0% Convertible Redeemable Subordinated Secured
Debentures due 2004 (the "Debentures") issued pursuant to an Indenture (the
"Debentures Indenture") dated as of _______, 1999 by and between Pledgor and the
Debentures Collateral Agent, a security interest (the "Debentures Security
Interest") in certain property of the Pledgor (the "Debentures Pledged
Collateral"), including certain shares (the "Debentures Pledged Shares") of the
common stock, par value $.0001 per share of Price Enterprises Inc., a Maryland
corporation ("the Common Stock"), in order to secure the obligations of the
Pledgor under the Debentures Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of _________, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of _______, 1999 (the "Price Note Purchase Agreement"), a
security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
Pledgor hereby certifies and confirms to the Debentures Collateral Agent
and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is issuing $_______ principal amount
of Debentures in accordance with the Debentures Indenture (for purposes of
this Certificate, the "Incremental Debentures");
(b) In accordance with Section 3 of the Debentures Pledge Agreement and
Section 3(a) of the Price Note Pledge Agreement, Pledgor confirms that the
property identified on Schedule 1 hereto constitutes Incremental Debentures
Pledged Shares pledged to the Debentures Collateral Agent, and that such
Incremental Debentures Pledged Shares, together with any Incremental
Debentures Pledged Shares identified in any previous Debentures Collateral
Identification Certificate, constitute "Debentures Pledged Shares" for
purposes of the Debentures Pledge Agreement and the Price Note Pledge
Agreement.
(c) The Pledgor consents to the agreements of the Debentures Collateral
Agent and the Price Note Collateral Agent confirmed below in this
Certificate, and the Pledgor waives any right to object to the performance
of any of said agreements.
39
(d) Pledgor acknowledges and agrees that the Debentures Collateral Agent
and the Price Note Collateral Agent shall rely upon the foregoing
certifications in taking actions under the Debentures Pledge Agreement and
the Price Note Pledge Agreement, respectively.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of ________,
______.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:
-----------------------------------
Name:
Title:
40
ACKNOWLEDGMENT OF DEBENTURES COLLATERAL AGENT
The undersigned hereby certifies and confirms to the Price Note
Collateral Agent as follows:
(a) The undersigned is the "Collateral Agent" under the Debentures
Pledge Agreement referenced above,
(b) The Debentures Collateral Agent acknowledges the security interest
and pledge of the Debentures Pledged Collateral pursuant to the Price Note
Pledge Agreement. Until the earlier to occur of the termination of the
Debentures Pledge Agreement or the Price Note Pledge Agreement, the
Debentures Collateral Agent agrees to hold the Debentures Pledged Collateral
for itself and for the Price Note Collateral Agent, in order to perfect the
security interest in the Debentures Pledged Collateral for itself under the
Debentures Pledge Agreement and for the Price Note Collateral Agent under
the Price Note Pledge Agreement. The Debentures Collateral Agent shall not
be required to hold, and agrees that it will not hold, the Debentures
Pledged Collateral for any person other than the Holders and the Price Note
Collateral Agent in order to perfect a security interest in the Debentures
Pledged Collateral.
(c) The Debentures Collateral Agent agrees to not release any Debentures
Pledged Collateral except pursuant to a Release Certificate and, if
applicable, an accompanying Acknowledgment of Price Note Collateral Agent,
as provided for by Section 4 of the Debentures Pledge Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
as of __________,________.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
By:
----------------------------------
Name:
Title:
41
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Debentures Collateral Agent under the
Debentures Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The security interest granted in favor of the undersigned, as Price
Note Collateral Agent, in the property described in (i) Schedule 1 attached
to this Certificate or (ii) any previous Debentures Collateral
Identification Certificate executed by the Price Note Collateral Agent, is
subject and subordinate to the security interest granted in such property to
the Debentures Collateral Agent under the Debentures Pledge Agreement. Said
priority shall be applicable irrespective of the time or order of attachment
or perfection of the respective security interests or the time of filing of
any financing statements pertaining thereto, or any statutes, rules of law,
or court decisions to the contrary.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
as of __________,________.
----------------------------------
XXXXX X. XXXXXX
42
EXHIBIT B
[FORM OF SENIOR NOTES COLLATERAL IDENTIFICATION CERTIFICATE]
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Senior Notes Pledge Agreement")
dated as of _______, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Senior Notes Collateral Agent"), pursuant to which
Pledgor has granted to the Senior Notes Collateral Agent, as collateral agent
for the holders of the Pledgor's 10.0% Senior Redeemable Secured Notes due 2004
(the "Senior Notes") issued pursuant to an Indenture (the "Senior Notes
Indenture") dated as of _______, 1999 by and between Pledgor and the Senior
Notes Collateral Agent, a security interest (the "Senior Notes Security
Interest") in certain property of the Pledgor (the "Senior Notes Pledged
Collateral"), including certain shares (the "Senior Notes Pledged Shares") of
the common stock, par value $.0001 per share of Price Enterprises Inc., a
Maryland corporation ("the Common Stock"), in order to secure the obligations of
the Pledgor under the Senior Notes Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of _________, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of _______, 1999 (the "Price Note Purchase Agreement"), a
security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
Pledgor hereby certifies and confirms to the Senior Notes Collateral
Agent and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is issuing $_______ principal amount
of Senior Notes in accordance with the Senior Notes Indenture (for purposes
of this Certificate, the "Incremental Senior Notes");
(b) In accordance with Section 3 of the Senior Notes Pledge Agreement
and Section 3(b) of the Price Note Pledge Agreement, Pledgor confirms that
the property identified on Schedule 1 hereto constitutes Incremental Senior
Notes Pledged Shares pledged to the Senior Notes Collateral Agent, and that
such Incremental Senior Notes Pledged Shares, together with any Incremental
Senior Notes Pledged Shares identified in any previous Senior Notes
Collateral Identification Certificate, constitute "Senior Notes Pledged
Shares" for purposes of the Senior Notes Pledge Agreement and the Price Note
Pledge Agreement.
(c) The Pledgor consents to the agreements of the Senior Notes
Collateral Agent and the Price Note Collateral Agent confirmed below in this
Certificate, and the Pledgor waives any right to object to the performance
of any of said agreements.
43
(d) Pledgor acknowledges and agrees that the Senior Notes Collateral
Agent and the Price Note Collateral Agent shall rely upon the foregoing
certifications in taking actions under the Senior Notes Pledge Agreement and
the Price Note Pledge Agreement, respectively.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of ________,
______.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By
---------------------------------------------
Name:
Title:
44
ACKNOWLEDGMENT OF SENIOR NOTES COLLATERAL AGENT
The undersigned hereby certifies and confirms to the Price Note
Collateral Agent as follows:
(a) The undersigned is the "Collateral Agent" under the Senior Notes
Pledge Agreement referenced above,
(b) The Senior Notes Collateral Agent acknowledges the security interest
and pledge of the Senior Notes Pledged Collateral pursuant to the Price Note
Pledge Agreement. Until the earlier to occur of the termination of the
Senior Notes Pledge Agreement or the Price Note Pledge Agreement, the Senior
Notes Collateral Agent agrees to hold the Senior Notes Pledged Collateral
for itself and for the Price Note Collateral Agent, in order to perfect the
security interest in the Senior Notes Pledged Collateral for itself under
the Senior Notes Pledge Agreement and for the Price Note Collateral Agent
under the Price Note Pledge Agreement. The Senior Notes Collateral Agent
shall not be required to hold, and agrees that it will not hold, the Senior
Notes Pledged Collateral for any person other than the Holders and the Price
Note Collateral Agent in order to perfect a security interest in the Senior
Notes Pledged Collateral.
(c) The Senior Notes Collateral Agent agrees to not release any Senior
Notes Pledged Collateral except pursuant to a Release Certificate and, if
applicable, an accompanying Acknowledgment of Price Note Collateral Agent,
as provided for by Section 4 of the Senior Notes Pledge Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________,.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
By:
---------------------------
Name:
Title:
45
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Senior Notes Collateral Agent under the
Senior Notes Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The security interest granted in favor of the undersigned, as Price
Note Collateral Agent, in the property described in (i) Schedule 1 attached
to this Certificate or (ii) any previous Senior Notes Collateral
Identification Certificate executed by the Price Note Collateral Agent, is
subject and subordinate to the security interest granted in such property to
the Senior Notes Collateral Agent under the Senior Notes Pledge Agreement.
Said priority shall be applicable irrespective of the time or order of
attachment or perfection of the respective security interests or the time of
filing of any financing statements pertaining thereto, or any statutes,
rules of law, or court decisions to the contrary.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________,_______.
----------------------------------
XXXXX X. XXXXXX
46
EXHIBIT C
[FORM OF RELEASE CERTIFICATE]
[FOR DEBENTURES PLEDGED SHARES]
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Debentures Pledge Agreement")
dated as of _______, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Debentures Collateral Agent"), pursuant to which
Pledgor has granted to the Debentures Collateral Agent, as collateral agent for
the holders of the Pledgor's 9.0% Convertible Redeemable Subordinated Secured
Debentures due 2004 (the "Debentures") issued pursuant to an Indenture (the
"Debentures Indenture") dated as of _______, 1999 by and between Pledgor and the
Debentures Collateral Agent, a security interest (the "Debentures Security
Interest") in certain property of the Pledgor (the "Debentures Pledged
Collateral"), including certain shares (the "Debentures Pledged Shares") of the
common stock, par value $.0001 per share of Price Enterprises Inc., a Maryland
corporation ("the Common Stock"), in order to secure the obligations of the
Pledgor under the Debentures Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of _________, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of _______, 1999 (the "Price Note Purchase Agreement"), a
security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
Pledgor hereby certifies and confirms to the Debentures Collateral Agent
and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is repurchasing, redeeming or
defeasing Debentures, or the holders thereof are converting Debentures, in
the aggregate principal amount of:
$__________________________________________________________;
and, in accordance with Section 4 of the Debentures Pledge Agreement,
instructs the Debentures Collateral Agent to release from the pledge and
security interest created by Section 1 of the Debentures Pledge Agreement
the following number of Debentures Pledged Shares (equal to 117.647
Debentures Pledged Shares for each $1,000 in principal amount of Debentures
subject to such repurchase, redemption, defeasance or conversion):
______________________________________________________ shares.
47
(b) Pledgor represents to the Debentures Collateral Agent and instructs
as follows (check applicable box):
[ ] The Pledgor has satisfied all obligations under the Price
Note and the Price Note Purchase Agreement. The Pledgor
instructs the Debentures Collateral Agent to deliver the
Debentures Pledged Shares to the Pledgor in accordance with
the Debentures Pledge Agreement.
The Pledgor has not satisfied all obligations under the
[ ] Price Note and the Price Note Purchase Agreement. The Pledgor
instructs the Debentures Collateral Agent to deliver the
Debentures Pledged Shares to the Price Note Collateral Agent.
The Pledgor waives any right to receive the Debentures
Pledged Shares from the Debentures Collateral Agent.
(c) Pledgor acknowledges and agrees that the Debentures Collateral Agent
shall rely upon the foregoing certifications in taking actions under the
Debentures Pledge Agreement.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of ________,
______.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:
---------------------------------
Name:
Title:
48
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Debentures Collateral Agent under the
Debentures Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The representation of the Pledgor in Paragraph (b) of the above
Release Certificate is true and correct, and the Debentures Pledged Shares
which are the subject of the above Release Certificate shall be delivered in
accordance with the instructions contained in said Paragraph.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of __________,__________.
----------------------------------
XXXXX X. XXXXXX
49
EXHIBIT D
[FORM OF RELEASE CERTIFICATE]
[FOR SENIOR NOTES PLEDGED SHARES]
This Certificate is provided by Excel Legacy Corporation, a Delaware
corporation (the "Pledgor"), pursuant to:
(i) that certain Pledge Agreement (the "Senior Notes Pledge Agreement")
dated as of _______, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Senior Notes Collateral Agent"), pursuant to which
Pledgor has granted to the Senior Notes Collateral Agent, as collateral agent
for the holders of the Pledgor's 10.0% Senior Redeemable Secured Notes due 2004
(the "Senior Notes") issued pursuant to an Indenture (the "Senior Notes
Indenture") dated as of _______, 1999 by and between Pledgor and the Senior
Notes Collateral Agent, a security interest (the "Senior Notes Security
Interest") in certain property of the Pledgor (the "Senior Notes Pledged
Collateral"), including certain shares (the "Senior Notes Pledged Shares") of
the common stock, par value $.0001 per share of Price Enterprises Inc., a
Maryland corporation ("the Common Stock"), in order to secure the obligations of
the Pledgor under the Senior Notes Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of _________, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of _______, 1999 (the "Price Note Purchase Agreement"), a
security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
Pledgor hereby certifies and confirms to the Senior Notes Collateral
Agent and the Price Note Collateral Agent as follows:
(a) Concurrently herewith, Pledgor is repurchasing, redeeming or
defeasing Senior Notes in the aggregate principal amount of:
$__________________________________________________________;
and, in accordance with Section 4 of the Senior Notes Pledge Agreement,
instructs the Senior Notes Collateral Agent to release from the pledge and
security interest created by Section 1 of the Senior Notes Pledge Agreement the
following number of Senior Notes Pledged Shares (equal to 117.647 Senior Notes
Pledged Shares for each $1,000 in principal amount of Senior Notes subject to
such repurchase, redemption or defeasance):
______________________________________________________ shares.
(b) Pledgor represents to the Senior Notes Collateral Agent and
instructs as follows (check applicable box):
[ ] The Pledgor has satisfied all obligations under the Price
Note and the Price Note
50
Purchase Agreement. The Pledgor instructs the Senior Notes
Collateral Agent to deliver the Senior Notes Pledged Shares
to the Pledgor in accordance with the Senior Notes Pledge
Agreement.
[ ] The Pledgor has not satisfied all obligations under the
Price Note and the Price Note Purchase Agreement. The
Pledgor instructs the Senior Notes Collateral Agent to
deliver the Senior Notes Pledged Shares to the Price Note
Collateral Agent. The Pledgor waives any right to receive
the Senior Notes Pledged Shares from the Senior Notes
Collateral Agent.
(c) Pledgor acknowledges and agrees that the Senior Notes Collateral
Agent shall rely upon the foregoing certifications in taking actions under
the Senior Notes Pledge Agreement.
IN WITNESS WHEREOF, Pledgor has executed this Certificate as of ________,
_________.
EXCEL LEGACY CORPORATION,
a Delaware corporation
By:
-----------------------------
Name:
Title:
51
ACKNOWLEDGMENT OF PRICE NOTE COLLATERAL AGENT
The undersigned certifies to the Senior Notes Collateral Agent under the Senior
Notes Pledge Agreement referenced above as follows:
(a) The undersigned is the "Collateral Agent" under the Price Note
Pledge Agreement referenced above,
(b) The representation of the Pledgor in Paragraph (b) of the above
Release Certificate is true and correct, and the Senior Notes Pledged Shares
which are the subject of the above Release Certificate shall be delivered in
accordance with the instructions contained in said Paragraph.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
as of __________,_________.
----------------------------------
XXXXX X. XXXXXX
52
EXHIBIT E
[FORM OF PAYMENT CERTIFICATE]
[TO DEBENTURES COLLATERAL AGENT]
This Certificate is provided by Xxxxx X. Xxxxxx, (the "Price Notes
Collateral Agent"), pursuant to:
(i) that certain Pledge Agreement (the "Debentures Pledge Agreement")
dated as of _______, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Debentures Collateral Agent"), pursuant to which
Pledgor has granted to the Debentures Collateral Agent, as collateral agent for
the holders of the Pledgor's 9.0% Convertible Redeemable Subordinated Secured
Debentures due 2004 (the "Debentures") issued pursuant to an Indenture (the
"Debentures Indenture") dated as of _______, 1999 by and between Pledgor and the
Debentures Collateral Agent, a security interest (the "Debentures Security
Interest") in certain property of the Pledgor (the "Debentures Pledged
Collateral"), including certain shares (the "Debentures Pledged Shares") of the
common stock, par value $.0001 per share of Price Enterprises Inc., a Maryland
corporation ("the Common Stock"), in order to secure the obligations of the
Pledgor under the Debentures Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of _________, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of _______, 1999 (the "Price Note Purchase Agreement"), a
security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
The Price Note Collateral Agent hereby certifies and confirms to the
Debentures Collateral Agent as follows:
The Pledgor has satisfied all obligations under the Price Note and
the Price Note Purchase Agreement. The Debentures Collateral Agent
shall, from and after the date of this Certificate, deliver the
Debentures Pledged Shares to the Pledgor in accordance with the
Debentures Pledge Agreement and the Price Note Collateral Agent
hereby waives any right to receive the Debentures Pledged Shares from
the Debentures Collateral Agent.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
as of __________,_________.
----------------------------------
XXXXX X. XXXXXX
53
EXHIBIT F
[FORM OF PAYMENT CERTIFICATE]
[TO SENIOR NOTES COLLATERAL AGENT]
This Certificate is provided by Xxxxx X. Xxxxxx, (the "Price Notes
Collateral Agent"), pursuant to:
(i) that certain Pledge Agreement (the "Senior Notes Pledge Agreement")
dated as of _______, 1999 by and between Pledgor and Norwest Bank Minnesota,
National Association (the "Senior Notes Collateral Agent"), pursuant to which
Pledgor has granted to the Senior Notes Collateral Agent, as collateral agent
for the holders of the Pledgor's 10.0% Senior Redeemable Secured Notes due 2004
(the "Senior Notes") issued pursuant to an Indenture (the "Senior Notes
Indenture") dated as of _______, 1999 by and between Pledgor and the Senior
Notes Collateral Agent, a security interest (the "Senior Notes Security
Interest") in certain property of the Pledgor (the "Senior Notes Pledged
Collateral"), including certain shares (the "Senior Notes Pledged Shares") of
the common stock, par value $.0001 per share of Price Enterprises Inc., a
Maryland corporation ("the Common Stock"), in order to secure the obligations of
the Pledgor under the Senior Notes Indenture; and
(ii) that certain Pledge Agreement (the "Price Note Pledge Agreement")
dated as of _________, 1999 by and between Pledgor and Xxxxx X. Xxxxxx (the
"Price Note Collateral Agent"), pursuant to which the Pledgor has granted to the
Price Note Collateral Agent, as collateral agent in favor of the holders of the
Pledgor's Secured Promissory Notes (the "Price Note") issued pursuant to that
certain Note Purchase Agreement by and between the Pledgor and The Sol and Xxxxx
Xxxxx Trust dated as of _______, 1999 (the "Price Note Purchase Agreement"), a
security interest in certain property of the Pledgor (the "Price Note Pledged
Collateral"), including all of the shares of Common Stock of Price Enterprises,
Inc. (the "Price Note Pledged Shares"), in order to secure the obligations of
the Pledgor under the Price Note and the Price Note Purchase Agreement.
The Price Note Collateral Agent hereby certifies and confirms to the
Senior Notes Collateral Agent as follows:
The Pledgor has satisfied all obligations under the Price Note and
the Price Note Purchase Agreement. The Senior Notes Collateral Agent
shall, from and after the date of this Certificate, deliver the
Senior Notes Pledged Shares to the Pledgor in accordance with the
Senior Notes Pledge Agreement and the Price Note Collateral Agent
hereby waives any right to receive the Senior Notes Pledged Shares
from the Senior Notes Collateral Agent.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
__________,_________.
----------------------------------
XXXXX X. XXXXXX
