LOAN AGREEMENT
THIS LOAN AGREEMENT dated September 28, 1998 is made by and between THE PRICE
FAMILY CHARITABLE TRUST created under declaration of trust dated March 10, 1984
("Lender") and the SAN DIEGO COMMUNITY FOUNDATION CHARITABLE REAL ESTATE FUND, a
California corporation ("Borrower") with reference to the following facts:
RECITALS
Lender desires to lend to Borrower and Borrower desires to borrow from
Lender the sum of Eleven Million Two Hundred Thousand Dollars ($11,200,000)
("Loan Funds") for the sole purpose of Borrower purchasing eight hundred
thousand (800,000) shares of preferred stock of Price Enterprises, Inc., a
Maryland corporation (the "Shares").
NOW, THEREFORE, for and in consideration of the covenants and agreements,
herein contained and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Agreement To Lend And Borrow Money.
1.1. Lender agrees to lend Borrower Eleven Million Two Hundred Thousand
Dollars ($11,200,000) pursuant to the terms and provisions of this Agreement for
the sole purpose of enabling Borrower to purchase the Shares.
1.2. Borrower agrees that it will use the Loan Funds solely for the
purchase of the Shares and that any funds not used for the purchase of the
Shares will be forthwith repaid to Lender. Borrower further agrees that it will
use the Loan Funds to purchase Eight Hundred Thousand Shares of preferred stock
of Price Enterprises, Inc., said purchase to be completed no later than 5 p.m.
on the Closing Date provided the Loan Funds are made available to Borrower by 11
a.m. on the Closing Date. In the event the Loan Funds are not available to the
Borrower by 11 a.m. on the Closing Date, Borrower shall have the option to
cancel this transaction or postpone the Closing Date one day (the new Closing
Date shall be hereafter referred to as the "Postponed Closing Date"). If
Borrower opts to postpone the Closing Date, Borrower shall then have the
obligation to complete the purchase of the Shares no later than 5 p.m. on the
Postponed Closing Date.
1.3. As security for the loan Borrower agrees to execute and deliver to
Lender each of the following:
(1) A Promissory Note Secured by Pledge of Stock ("Note") in the form
set forth in Exhibit "A" attached in the principal amount of Eleven Million
Two Hundred Thousand Dollars ($11,200,000) and
(2) A Stock Pledge and Security Agreement ("Pledge") in the form set
forth in Exhibit "B" attached.
Section 3. Closing.
The Closing shall take place on the Closing Date which shall be on or
before Sept. 30, 1998 at the offices of Lender, 0000 Xxxxxxx, Xxxxx 000, Xx
Xxxxx, Xx. 00000 or such other time and place as the parties may agree upon in
writing.
At Closing the following shall take place concurrently:
(1) Lender shall deposit the Loan Funds in the Broker Account opened
by Holder pursuant to the terms of the Pledge.
(2) Borrower shall deliver to Lender the Note and Pledge, each fully
executed by Borrower.
Section 4. Representations And Warranties Of Lender.
4.1 Power and Authority
Lender has the requisite power and authority to enter into and carry out
the terms of this Agreement. All action required to be taken by Lender to
consummate and perform this Agreement has been taken, and no approval of any
other person or entity is necessary in order to permit Lender to consummate and
perform this agreement.
4.2 No Other Representations or Warranties.
Except as expressly set forth above, Lender makes no representations or
warranties relating to the Shares, Price Enterprises Inc. or its affairs and
Borrower acknowledges it is not relying on any information from Lender, its
trustees, officers, directors, agents or affiliates in making its decision to
purchase the Shares.
Section 5. Representations, And Warranties Of Borrower.
5.1 Power and Authority
Borrower has the requisite power and authority to enter into and carry out
the terms of this Agreement. All action required to be taken by Borrower to
consummate and perform this Agreement has been taken, no approval of any other
person or entity is necessary in order to permit Borrower to consummate and
perform this agreement, no filing with any governmental authority on part of
Borrower is required in connection with the execution of this agreement and the
execution and delivery of this Agreement by Borrower will not result in a
violation of any mortgage, indenture, material contract, instrument, judgment,
decree, order, statute, rule or regulation to which Borrower is subject.
5.2 Non-Reliance on Lender
Borrower is a sophisticated investor, has undertaken due diligence
regarding the Shares and is not relying on any information from Lender, its
trustees, officers, directors, agents or affiliates in making its decision to
purchase the Shares.
Section 6. Notices.
All notices pursuant to this Agreement shall be in writing and shall be
sufficient if delivered, sent or mailed registered or certified mail, postage
prepaid, or by personal delivery, as follows:
If to Borrower:
Xxxxxx Xxxxx
San Diego Community Foundation Charitable Real Estate Fund
0000 Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxx, XX 00000
If to Lender:
Xxx Xxxxx, Trustee
The Price Family Charitable Trust
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Section 7. Attorneys Fees.
If any legal action or any arbitration or other proceeding is brought for
the enforcement of this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of this
agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which they may be entitled.
Section 8. Arbitration.
Any controversy or claim arising out of, or relating to, this Agreement, or
the making, performance, or interpretation of it, shall be settled by
arbitration in San Diego, California under the commercial arbitration rules of
the American Arbitration Association then existing, and judgment on the
arbitration award may be entered in any court having jurisdiction over the
subject matter of the controversy.
Notice: By initialing in the space below you are agreeing to have any
dispute arising out of the matters included in the foregoing arbitration clause
decided by a neutral arbitration as provided by California law and you are
giving up any rights you might possess to have the dispute litigated in a court
or by jury trial. By initialing in the space below you are giving up your
judicial rights to discovery and appeal unless such rights are specifically
included in the Arbitration Clause. If you refuse to submit to arbitration after
agreeing to this provision, you may be compelled to arbitrate under the
authority of the California Code of Civil Procedure. Your agreement to this
arbitration provision is voluntary.
We have read and understand the foregoing and agree to submit disputes
arising out of the matters included in the Arbitration Clause to neutral
arbitration.
/s/ /s/
---------------- ------------------
Lender's initials Borrower's initials
Section 9. Negotiated Agreement.
The terms and provisions of this Agreement represent the results of
negotiations between Borrower and Lender, neither of which have acted under any
duress or compulsion, whether legal, economic or otherwise, Consequently, the
terms and provisions of this Agreement shall be interpreted and construed in
accordance with their usual and customary meanings. The Lender and Borrower
hereby waive any application of any rule of law which would otherwise be
applicable in connection with the interpretation and construction of this
Agreement including without limitation, any rule of law to the effect that
ambiguous or conflicting terms or provisions contained in the executed draft of
this Agreement shall be interpreted or construed against the party whose
attorney prepared the executed draft or any earlier draft thereof.
Section 10. Additional Documents.
Each party agrees to execute such further and additional documents,
instruments and writings as may be necessary, proper, required, desirable or
convenient for the purpose of fully effectuating the terms and provisions of
this Agreement.
Section 11. Entire Agreement.
It is understood and agreed that all understandings and agreements
heretofore had between the parties are merged in this Agreement executed by the
parties hereto and all references and related documents executed in connection
therewith. Neither party has relied upon any statements or representations not
embodied in the aforementioned documents or this Agreement.
Section 12. Modification.
This Agreement may not be changed orally, but only by an agreement, in
writing, signed by the parties.
Section 13. Governing Law.
This Agreement shall be construed in accordance with, and governed by, the
laws of the state of California as applied to contracts that are executed and
performed entirely in California.
Section 14. Agreement Binding; Not Assignable.
This Agreement shall be binding upon the Borrower, its heirs, executors,
personal representatives and successors and shall inure to the benefit of, and
be enforceable by Lender and Lender's successors and assigns. This agreement may
not be assigned by Borrower and any attempt by Borrower to make an assignment
shall render the Agreement null and void.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first written above.
LENDER
The Price Family Charitable Trust created
under declaration of trust dated March 10,
1984
/s/ Xxx Xxxxx
----------------------------
By Xxx Xxxxx, Trustee
BORROWER
The San Diego Community Foundation
Charitable Real Estate Fund, a California
corporation
/s/ Xxxxx Xxxx
----------------------------
By Xxxxx Xxxx
Its President
