EXHIBIT 6
The Price Group LLC
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
September 9, 2003
Price Legacy Corporation
00000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxxxxxx
00000
Gentlemen:
We ("TPG") intend in the very near future to enter into a contract with
Warburg Pincus Equity Partners, L.P. and related entities (collectively
"Warburg") that are owners of Common Stock, Series B Junior Convertible
Redeemable Preferred Stock and Warrants to purchase Common Stock (collectively,
the Securities") of Price Legacy Corporation (the "Company") to purchase all the
Securities for an aggregate price of $138 million. A form of the agreement
related to purchase the Securities, in substantially the form in which it is to
be executed (the "Agreement"), is attached.
TPG understands that the transfer and ownership of the Securities is
subject to restrictions (the "Ownership Limits") set forth in the Company's
Articles of Amendment and Restatement (the "Articles"), which are intended to
assist the Company in continuing to qualify as a REIT under the Internal Revenue
Code. However, TPG does not intend to be the purchaser of the Securities.
Rather, TPG intends to assign the contractual right to purchase the Securities
to third parties, as specifically authorized by the Agreement, in a manner that,
among other things, will ensure that the ownership of the Securities will be in
compliance with the Ownership Limits. We view retention of REIT status as
important to TPG and to other, public, security holders of the Company. At the
same time, we view the goals and desires of Warburg for the Company as
incompatible with the goals and desires of TPG, and this incompatibility is
clearly to the detriment of the operations of the Company. Accordingly, after
negotiations, TPG has entered into an agreement that obligates TPG to pay for
the Securities under the Agreement, solely in order to provide Warburg with
assurance satisfactory to Warburg that it has the right to receive $138 million
for the Securities from a party capable of performance.
Accordingly, and as a partial inducement to the Company to execute the
ACKNOWLEDGEMENT AND AGREEMENT BY THE COMPANY attached to the Agreement, this
will confirm and represent to the Company as follows:
1. Prior to either (1) consummation of the Agreement by its terms or (2)
any entry by a court of a decision awarding specific performance under the
Agreement, TPG will assign all of its rights to purchase Securities under the
Agreement to one or more third parties, as specifically permitted by the
Agreement, and such third parties' ownership of the Securities will be in
compliance with the Ownership Limits.
2. TPG agrees that its assignment to other persons of rights to receive
any or all of the Securities under the Agreement shall be on terms such that the
aggregate of all of the consideration directly or indirectly paid by all of the
assignees for all of the Securities (including for such assignment) to any and
all persons, will be not more than $138,000,000 (reduced proportionately if and
to the extent that any portion of the Securities is retained by TPG in
accordance with paragraph 5 below). If TPG violates the provisions of the
preceding sentence and TPG would therefore, but for this provision, itself be in
a position to receive directly or indirectly any profit from such assignments,
such profit shall be, and hereby is, transferred to the trust established under
Article TENTH of the Articles, and shall be promptly transferred by the trustee
to the "Charitable Beneficiary" (as defined in the Articles).
3. TPG agrees that the Company shall be entitled to all remedies
available under applicable law with respect to any breach of the agreement by
TPG including, without limitation, specific performance, an injunction or the
remedies set forth in the Articles. TPG and the Company agree that monetary
damages alone are an inadequate remedy for a breach of the TPG obligations set
forth in this letter agreement.
4. This letter agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Maryland.
5. In the event that TPG desires to retain any of the Securities, the
Company agrees to modify this agreement if and to the extent reasonably
appropriate to permit such retention without violation of the Ownership Limits,
determined without regard to any actual or constructive dispositions of Company
securities after the date of this letter.
6. Without the Company's prior written consent, which will not be
unreasonably withheld, TPG will not agree to any modification or amendment to
the Agreement in a manner which is inconsistent with the interests of the
Company.
Very truly yours,
The Price Group, LLC
By /s/ Xxxx XxXxxxx
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AGREED AND ACCEPTED:
Price Legacy Corporation
By: /s/ Xxxx Xxxxx
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Date: 9-9-03
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