SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D/A
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a)
(Amendment No. 3)(1)
PRICE LEGACY CORPORATION
----------------------------------------------------------------------------
(Name of Issuer)
8 3/4% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
----------------------------------------------------------------------------
(Title of Class of Securities)
74144P205
----------------------------------------------------------------------------
(CUSIP Number)
JAMES F. CAHILL
SAN DIEGO REVITALIZATION CORP.
7979 IVANHOE AVENUE, SUITE 520
LA JOLLA, CALIFORNIA 92037
TELEPHONE (858) 551-2303
----------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
DECEMBER 23, 2003
----------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box. [_]
Note. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 pages)
---------------
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 2 OF 9 PAGES
--------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
San Diego Revitalization Corp.
33-0898712
--------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
--------------------------------------------------------------------------------
SEC USE ONLY
3
--------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC, OO
--------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [_]
--------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
--------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
1,450,000 (See Item 5)
SHARES -----------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY -----------------------------------------------------
SOLE DISPOSITIVE POWER
EACH REPORTING 9
1,450,000 (See Item 5)
PERSON -----------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
--------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,450,000 (See Item 5)
--------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
--------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
5.3% (See Item 5)
--------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO - Nonprofit Corporation
--------------------------------------------------------------------------------
* See instructions before filling out!
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 3 OF 9 PAGES
This Amendment No. 3 relates to the 8 3/4% Series A Cumulative Redeemable
Preferred Stock ("Series A Preferred Stock") of Price Legacy Corporation, a
Maryland corporation ("Price Legacy"), and amends the Schedule 13D, filed by San
Diego Revitalization Corp., a California nonprofit corporation ("SDRC"), with
the Securities and Exchange Commission (the "SEC") on January 11, 2002 (the
"Original 13D"), as amended by Amendment No. 1 thereto, filed by SDRC with the
SEC on January 18, 2002, and Amendment No. 2 thereto, filed by SDRC with the SEC
on August 30, 2002 (the Original 13D, as so amended, being the "Schedule 13D").
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Items 5(a), 5(b), and 5(e) of the Schedule 13D are amended and restated as
follows:
(a)-(b) SDRC presently beneficially owns, in the aggregate, 1,450,000
shares of Series A Preferred Stock, which represent approximately
5.3% of the issued and outstanding Series A Preferred Stock.(2)
Of these 1,450,000 shares, SDRC has sole voting and dispositive
power over all of them and shared voting and dispositive power
over none.
SDRC Directors and Officers may be deemed to beneficially own, in
the aggregate, 12,237,160 shares of Series A Preferred Stock,
which represent approximately 44.6% of the issued and outstanding
Series A Preferred Stock. The beneficial ownership of shares of
Series A Preferred Stock by each of the SDRC Directors and
Officers is as follows:(3)
Mr. S. Price may be deemed to beneficially own 8,426,679
shares of Series A Preferred Stock, which represent
approximately 30.7% of the issued and outstanding Series A
Preferred Stock, 4,267,177 shares over which he has sole
voting and dispositive power and 4,159,502 shares over which
he has shared voting and dispositive power.
Mr. R. Price may be deemed to beneficially own 7,547,695
shares of Series A Preferred Stock, which represent
approximately 27.5% of the issued and outstanding Series A
Preferred Stock, 1,609 shares over which he has sole voting
and dispositive power and 7,546,086 shares over which he has
shared voting and dispositive power. Ms. A Price is the wife
of Mr. R. Price.
------------------------
2 All calculations of percentage ownership in this Schedule 13D is based
on approximately 27,434,166 shares of Series A Preferred Stock estimated to be
outstanding as of September 30, 2003, as reported in the Quarterly Report on
Form 10-Q for the Quarter Ended September 30, 2003, filed by Price Legacy with
the SEC on November 12, 2003.
3 Shares of Series A Preferred Stock disclosed for each of the SDRC
Directors and Officers include shares that may be deemed to be beneficially
owned by more than one person. Specifically, the shares disclosed for each of
Mr. S. Price, Mr. R. Price, Mr. Cahill, Mr. McGrory, Mr. Galinson, Mr. Gorham,
Mr. Satz, and Ms. Hillan all include (i) 1,709,502 shares held by the Price
Family Charitable Fund, a private foundation ("PFCF"), an entity for which each
of them serves as a director and/or officer, and the 1,450,000 shares held by
SDRC,. The shares disclosed for each of Mr. S. Price, Mr. R. Price, Mr. Cahill,
Mr. McGrory, Mr. Galinson, Mr. Satz, and Ms. Hillan also all include 1,000,000
shares held by The Price Group LLC, a California limited liability company (the
"Price Group"), an entity for which each of them serves as a manager.
Disclosure of shares with respect to any of the SDRC Directors and Officers
should not be construed as any admission of beneficial ownership of such shares.
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 4 OF 9 PAGES
To the extent that she may be deemed to beneficially own any
shares, those shares are included in the shares reported as
may be deemed to be beneficially owned by Mr. R. Price.
Mr. Cahill may be deemed to beneficially own 4,372,210
shares, which represent approximately 15.9% of the issued
and outstanding Series A Preferred Stock, 115,616 shares
over which he has sole voting and dispositive power and
4,256,594 shares over which he has shared voting and
dispositive power.
Mr. McGrory may be deemed to beneficially own 4,177,896
shares, which represent approximately 15.2% of the issued
and outstanding Series A Preferred Stock, 18,394 shares over
which he has sole voting and dispositive power and 4,159,502
shares over which he has shared voting and dispositive
power.
Mr. Galinson may be deemed to beneficially own 4,305,188
shares, which represent approximately 15.7% of the issued
and outstanding Series A Preferred Stock, no shares over
which he has sole voting and dispositive power and 4,305,188
shares over which he has shared voting and dispositive
power.
Mr. Gorham may be deemed to beneficially own 3,169,002
shares, which represent approximately 11.6% of the issued
and outstanding Series A Preferred Stock, 9,500 shares over
which he has sole voting and dispositive power and 3,159,502
shares over which he has shared voting and dispositive
power.
Mr. Satz may be deemed to beneficially own 4,171,502 shares,
which represent approximately 15.2% of the issued and
outstanding Series A Preferred Stock, 12,000 shares over
which he has sole voting and dispositive power and 4,159,502
shares over which he has shared voting and dispositive
power.
Ms. Hillan may be deemed to beneficially own 4,159,502
shares, which represent approximately 15.2% of the issued
and outstanding Series A Preferred Stock, no shares over
which she has sole voting and dispositive power and
4,159,502 shares over which she has shared voting and
dispositive power.
Except as set forth below, to the extent that any of the SDRC
Directors and Officers shares the power to vote or dispose of any of
the shares disclosed above, such power is shared only with one or more
of the SDRC Directors and Officers. The exceptions are as follows:
Helen Price, the wife of Mr. S. Price, is a director of
PFCF. Accordingly, to the extent that any of the SDRC
Directors and Officers may be deemed to beneficially own any
shares held by PFCF, such person shares the power to vote or
dispose of such shares not only with each of the other SDRC
Directors and Officers but also with Ms. H. Price. Ms. H.
Price is not presently employed. To the extent that Ms. H.
Price may be deemed to beneficially own any shares, those
shares are included in the shares reported as may be deemed
to be beneficially owned by Mr. S. Price.
Mr. R. Price shares voting and dispositive power over 38,556
shares with Sarah Price and 38,556 shares with Rebecca
Price. Ms. S. Price is a student, and Ms. R. Price is
self-employed.
Mr. Cahill shares voting and dispositive power over 36,972
shares with Ben Price, 42,222 shares with Jonas Price, and
12,498 shares with each of Elliot Feuerstein and Ed Spring.
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 5 OF 9 PAGES
Mr. B. Price and Mr. J. Price are each self-employed. Mr.
Feuerstein is a property manager. Mr. Spring is an attorney.
Mr. Galinson may share voting and/or dispositive power over
145,686 shares with his wife Elaine Galinson and/or one or
more third parties. The reporting person presently does not
have Item 2 information for such third parties.
The principal business address of each of Ms. H. Price, Ms.
S. Price, Ms. R. Price, Mr. B. Price, Mr. J. Price, and Ms.
Galinson is 7979 Ivanhoe Avenue, Suite 520, La Jolla,
California 92037. The principal business address of Mr.
Feuerstein is 8294 Mira Mesa Boulevard, San Diego,
California 92126. The principal business address of Mr.
Spring is 10900 N.E. 4th Street, Suite 850, Bellevue,
Washington 98004.
None of Ms. H. Price, Ms. S. Price, Ms. R. Price, Mr. B.
Price, Mr. J. Price, Ms. Galinson, Mr. Feuerstein, and Mr.
Spring has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of
which any such person was or is subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation of such laws.
Each of Ms. H. Price, Ms. S. Price, Ms. R. Price, Mr. B.
Price, Mr. J. Price, Ms. Galinson, Mr. Feuerstein, and Mr.
Spring is a citizen of the United States.
The information set forth in Item 2 above is incorporated herein in
its entirety in response to this Item 5(b).
Except for Price Legacy securities that are directly owned by SDRC,
SDRC disclaims beneficial ownership of all Price Legacy securities
that may be deemed to be beneficially owned by any of the SDRC
Officers and Directors. Each of the SDRC Officers and Directors
disclaims beneficial ownership of all Price Legacy securities that may
be deemed to be beneficially owned by SDRC.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Item 6 of the Schedule 13D is amended to add the following:
As disclosed in Amendment No. 2 to Schedule 13D, filed by SDRC with the SEC
on August 30, 2002, SDRC borrowed $23,200,000 from the Price Family
Charitable Trust ("PFCT") on August 23, 2002 (the "August 2002 Loan") in
connection with its purchase of 1,450,000 shares of Series A Preferred
Stock from PFCT on August 23, 2002. On August 14, 2003, SDRC and PFCT
extended the maturity date of the August 2002 Loan from August 23, 2003 to
August 23, 2004. The current outstanding principal balance of the August
2002 Loan is approximately $16,200,000.
On December 23, 2003, SDRC borrowed (i) $4,000,000 from the Sol & Helen
Price Trust ("SHPT") (the "SHPT Loan"), (ii) $6,000,000 from PFCT (the
"PFCT Loan"), (iii) $1,000,000 from the Robert and Allison Price Trust
("RAPT") (the "RAPT Loan"), (iv) $4,000,000 from the Robert and Allison
Price Charitable Trust ("RAPCT") (the "RAPCT Loan"), and (v) $3,000,000
from the Galinson Family
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 6 OF 9 PAGES
Partnership II, a California limited partnership ("GFP") (the "GFP Loan").
Each of the SHPT Loan, the PFCT Loan, the RAPT Loan, the RAPCT Loan, and
the GFP Loan bears interest at the rate of 7% and matures on December 31,
2004. The foregoing description of the SHPT Loan, the PFCT Loan, the RAPT
Loan, the RAPCT Loan, and the GFP Loan is qualified in its entirety by
reference to the promissory notes evidencing, respectively, the SHPT Loan,
the PFCT Loan, the RAPT Loan, the RAPCT Loan, and the GFP Loan, which are
filed, respectively, as Exhibits B, C, D, E, and F to this Schedule 13D and
which are hereby incorporated herein by reference in their entirety in
response to this Item 3.
In connection with the SHPT Loan, SDRC and SHPT entered into a Pledge and
Security Agreement, dated as of December 23, 2003 (the "SHPT Pledge
Agreement"), pursuant to which SDRC pledged 322,222 shares of Series A
Preferred Stock to SHPT to secure the SHPT Loan. Under the SHPT Pledge
Agreement, SHPT does not have the right to vote or dispose of any of the
shares pledged thereunder unless SDRC is in default under the SHPT Loan.
In connection with the PFCT Loan, SDRC and PFCT entered into a Pledge and
Security Agreement, dated as of December 23, 2003 (the "PFCT Pledge
Agreement"), pursuant to which SDRC pledged 483,333 shares of Series A
Preferred Stock to PFCT to secure the PFCT Loan. Under the PFCT Pledge
Agreement, PFCT does not have the right to vote or dispose of any of the
shares pledged thereunder unless SDRC is in default under the PFCT Loan.
In connection with the RAPT Loan, SDRC and RAPT entered into a Pledge and
Security Agreement, dated as of December 23, 2003 (the "RAPT Pledge
Agreement"), pursuant to which SDRC pledged 80,556 shares of Series A
Preferred Stock to RAPT to secure the RAPT Loan. Under the RAPT Pledge
Agreement, RAPT does not have the right to vote or dispose of any of the
shares pledged thereunder unless SDRC is in default under the RAPT Loan.
In connection with the RAPCT Loan, SDRC and RAPCT entered into a Pledge and
Security Agreement, dated as of December 23, 2003 (the "RAPCT Pledge
Agreement"), pursuant to which SDRC pledged 322,222 shares of Series A
Preferred Stock to RAPCT to secure the RAPCT Loan. Under the RAPCT Pledge
Agreement, RAPCT does not have the right to vote or dispose of any of the
shares pledged thereunder unless SDRC is in default under the RAPCT Loan.
In connection with the GFP Loan, SDRC and GFP entered into a Pledge and
Security Agreement, dated as of December 23, 2003 (the "GFP Pledge
Agreement"), pursuant to which SDRC pledged 241,667 shares of Series A
Preferred Stock to GFP to secure the GFP Loan. Under the GFP Pledge
Agreement, GFP does not have the right to vote or dispose of any of the
shares pledged thereunder unless SDRC is in default under the GFP Loan.
The foregoing description of the SHPT Pledge Agreement, the PFCT Pledge
Agreement, the RAPT Pledge Agreement, the RAPCT Pledge Agreement, and the
GFP Pledge Agreement is qualified in its entirety by reference to the SHPT
Pledge Agreement, the PFCT Pledge Agreement, the RAPT Pledge Agreement, the
RAPCT Pledge Agreement, and the GFP Pledge Agreement, which are filed,
respectively, as Exhibits G, H, I, J, and K to this Schedule 13D and which
are hereby incorporated herein by reference in their entirety in response
to this Item 6.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
Item 7 of the Schedule 13D is amended and restated as follows:
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 7 OF 9 PAGES
Exhibit No. Description of Exhibit
----------- ----------------------
A Promissory Note, in the principal amount of $23,200,000,
executed and delivered as of August 23, 2002, by San Diego
Revitalization Corp. in favor the Price Family Charitable
Trust (incorporated by reference to Exhibit A to Amendment
No. 2 to Schedule 13D filed by San Diego Revitalization
Corp. with the SEC on August 30, 2002).
B Promissory Note, in the principal amount of $4,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Sol & Helen Price
Trust.
C Promissory Note, in the principal amount of $6,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Price Family Charitable
Trust.
D Promissory Note, in the principal amount of $1,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Robert and Allison
Price Trust.
E Promissory Note, in the principal amount of $4,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Robert and Allison
Price Charitable Trust.
F Promissory Note, in the principal amount of $3,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Galinson Family
Partnership II.
G Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Sol and Helen Price Trust.
H Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Price Family Charitable Trust.
I Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Robert and Allison Price Trust.
J Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Robert and Allison Price Charitable Trust.
K Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Galinson Family Partnership II.
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 8 OF 9 PAGES
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Dated: January 9, 2004
SAN DIEGO REVITALIZATION CORP.
/s/ James F. Cahill
-------------------------------------
By: James F. Cahill
Title: Executive Vice President
CUSIP NO. 74144P205 SCHEDULE 13D/A PAGE 9 OF 9 PAGES
EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
A Promissory Note, in the principal amount of $23,200,000,
executed and delivered as of August 23, 2002, by San Diego
Revitalization Corp. in favor the Price Family Charitable
Trust (incorporated by reference to Exhibit A to Amendment
No. 2 to Schedule 13D filed by San Diego Revitalization
Corp. with the SEC on August 30, 2002).
B Promissory Note, in the principal amount of $4,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Sol & Helen Price
Trust.
C Promissory Note, in the principal amount of $6,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Price Family Charitable
Trust.
D Promissory Note, in the principal amount of $1,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Robert and Allison
Price Trust.
E Promissory Note, in the principal amount of $4,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Robert and Allison
Price Charitable Trust.
F Promissory Note, in the principal amount of $3,000,000,
executed and delivered as of December 23, 2003, by San Diego
Revitalization Corp. in favor of the Galinson Family
Partnership II.
G Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Sol & Helen Price Trust.
H Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Price Family Charitable Trust.
I Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Robert and Allison Price Trust.
J Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Robert and Allison Price Charitable Trust.
K Pledge and Security Agreement, dated as of December 23,
2003, by and between San Diego Revitalization Corp. and the
Galinson Family Partnership II.
EXHIBIT B
---------
PROMISSORY NOTE
---------------
$4,000,000 December 23, 2003
---------- San Diego, California
FOR VALUE RECEIVED, the undersigned SAN DIEGO REVITALIZATION CORPORATION, a
California non-profit public benefit corporation, (the "Borrower"), promises to
pay to SOL AND HELEN PRICE TRUST, dated February 20, 1970, a California trust,
(the "Lender") or order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla, California
92037, or such other address as may be directed in writing, the principal sum of
Four Million ($4,000,000) Dollars, together with interest thereon at a rate of
seven percent (7%) per annum, computed from the date hereof on the basis of a
three hundred sixty-five day (365) year, actual days elapsed.
1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be paid in
quarter annual installments on May 20th, August 20th, November 20th and February
20th beginning on May 20, 2004 until this Note is paid in full. All unpaid
principal and accrued unpaid interest shall be due and payable in full December
31, 2004.
2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in
the following order: (a) costs, fees, charges and advances paid or incurred by
Lender and for which the Borrower is obligated under the terms herein; (b)
interest payable under this Note; and (c) principal under this Note. All
installments of principal and interest of this Note shall be payable in lawful
money of the United States of America.
3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in
part, and without any premium or penalty therefor, the principal amount hereof
then remaining unpaid, together with accrued unpaid interest on this Note. Any
such prepayment shall be applied first to accrued unpaid interest on this Note
and the balance to principal due hereunder.
4. INTEREST AND DEFAULT. From and after the Maturity Date the entire
unpaid principal balance and accrued unpaid interest shall automatically bear an
annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or
(b) the maximum interest rate allowed by law; in lieu of the rate provided above
herein.
5. ACCELERATION. In the event Borrower defaults in the payment of any
installment of interest or principal of this Note when due and such default is
not cured within ten (10) days after written notice of such default by Lender,
then the entire principal balance and accrued unpaid interest of this Note shall
be immediately due and payable, at the option of the Lender, without further
notice. Failure to exercise said option shall not constitute a waiver of the
right to exercise it in the event of any subsequent default.
6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses,
and attorney fees paid or incurred by Lender, or adjudged by a court: (a)
reasonable costs of collection and costs, expenses, and attorney fees paid or
incurred in connection with the collection or enforcement of this Note, whether
or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or
incurred in connection with representing Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Note; and (c) costs of suit and such sum as the
court may adjudge as attorney fees in any action to enforce payment of this Note
or any part of it.
7. WAIVER. Borrower, endorsers, and all other persons liable or to become
liable on this Note waive presentment, protest, and demand; notice of protest,
demand, and dishonor; and all other notices or matters of a like nature.
8. USURY. All agreements between Borrower and Lender are expressly
limited, so that in no event or contingency, whether because of the advancement
of the proceeds of this Note, acceleration of maturity of the unpaid principal
balance, or otherwise, shall the amount paid or agreed to be paid to Lender for
the use, forbearance, or retention of the money to be advanced under this Note
exceed the highest lawful rate permissible under applicable usury laws. If,
under any circumstances, fulfillment of any provision of this Note or any other
agreement pertaining to this Note, after timely performance of such provision is
due, shall involve exceeding the limit of validity prescribed by law that a
court of competent jurisdiction deems applicable, then, ipso facto, the
obligations to be fulfilled shall be reduced to the limit of such validity. If,
under any circumstances, Lender shall ever receive as interest an amount that
exceeds the highest lawful rate, the amount that would be excessive interest
shall be applied to reduce the unpaid principal balance under this Note and not
to pay interest, or, if such excessive interest exceeds the unpaid principal
balance under this Note, such excess shall be refunded to Borrower. This
provision shall control every other provision of all agreements between Borrower
and Lender.
9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to
exercise any of its rights under this Note, that delay or failure shall not
constitute a waiver of any Lender rights or of any breach, default, or failure
of condition under this Note. No waiver by Lender of any of its rights or of any
such breach, default, or failure of condition shall be effective, unless the
waiver is expressly stated in a writing signed by Lender.
10. ASSIGNMENT. This Note inures to and binds the heirs, legal
representatives, successors, and assigns of Borrower and Lender; provided,
however, that Borrower may not assign this Note or any proceeds of it, or assign
or delegate any of its rights or obligations, without Lender's prior written
consent in each instance. Lender, in its sole discretion, may transfer this
Note, and may sell or assign participations or other interests in all or any
part of this Note, all without notice to or the consent of Borrower.
11. SEVERABILITY. If any provision of this Note, or the application of it
to any party or circumstance, is held void, invalid, or unenforceable by a court
of competent jurisdiction, the remainder of this Note, and the application of
such provision to other parties or circumstances, shall not be affected thereby,
the provisions of this Note being severable in any such instance.
12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all
obligations of Borrower under this Note.
13. GOVERNING LAW. This Note shall be construed and enforceable according
to the laws of the State of California.
14. SECURED OBLIGATION. This note is secured by a Pledge and Security
Agreement dated the same date as this Note and made by Borrower, for the benefit
of the Lender. Any default under said Agreement shall be deemed a default under
this Note.
15. DEMAND PAYMENT OPTION. The Lender shall have the right at any time
prior to the maturity date to require the Borrower to repay the entire principal
balance and accrued unpaid interest due under this Note in the event it is
determined by the Lender, in consultation with Price Legacy Corporation (the
"Company"), the Company's Board of Directors and/or the Company's tax advisors
that this Note could jeopardize the Company's status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended. In the event the
Lender elects to exercise its call option under this paragraph 15, the Lender
shall provide the Borrower with written notice of such election, and the
Borrower shall repay the entire principal balance and accrued unpaid interest
due under this Note to the Lender within fifteen (15) days.
Executed as of the date first written above.
BORROWER
--------
SAN DIEGO REVITALIZATION CORPORATION
BY /S/ JAMES F. CAHILL
------------------------------
JAMES F. CAHILL - MANAGER
BY /S/ JACK MCGRORY
------------------------------
JACK MCGRORY - MANAGER
2
EXHIBIT C
---------
PROMISSORY NOTE
---------------
$6,000,000 December 23, 2003
---------- San Diego, California
FOR VALUE RECEIVED, the undersigned SAN DIEGO REVITALIZATION CORPORATION, a
California non-profit public benefit corporation, (the "Borrower"), promises to
pay to PRICE FAMILY CHARITABLE TRUST, a California trust, (the "Lender") or
order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla, California 92037, or such
other address as may be directed in writing, the principal sum of Six Million
($6,000,000) Dollars, together with interest thereon at a rate of seven percent
(7%) per annum, computed from the date hereof on the basis of a three hundred
sixty-five day (365) year, actual days elapsed.
1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be paid in
quarter annual installments on May 20th, August 20th, November 20th and February
20th beginning on May 20, 2004 until this Note is paid in full. All unpaid
principal and accrued unpaid interest shall be due and payable in full December
31, 2004.
2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in
the following order: (a) costs, fees, charges and advances paid or incurred by
Lender and for which the Borrower is obligated under the terms herein; (b)
interest payable under this Note; and (c) principal under this Note. All
installments of principal and interest of this Note shall be payable in lawful
money of the United States of America.
3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in
part, and without any premium or penalty therefor, the principal amount hereof
then remaining unpaid, together with accrued unpaid interest on this Note. Any
such prepayment shall be applied first to accrued unpaid interest on this Note
and the balance to principal due hereunder.
4. INTEREST AND DEFAULT. From and after the Maturity Date the entire
unpaid principal balance and accrued unpaid interest shall automatically bear an
annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or
(b) the maximum interest rate allowed by law; in lieu of the rate provided above
herein.
5. ACCELERATION. In the event Borrower defaults in the payment of any
installment of interest or principal of this Note when due and such default is
not cured within ten (10) days after written notice of such default by Lender,
then the entire principal balance and accrued unpaid interest of this Note shall
be immediately due and payable, at the option of the Lender, without further
notice. Failure to exercise said option shall not constitute a waiver of the
right to exercise it in the event of any subsequent default.
6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses,
and attorney fees paid or incurred by Lender, or adjudged by a court: (a)
reasonable costs of collection and costs, expenses, and attorney fees paid or
incurred in connection with the collection or enforcement of this Note, whether
or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or
incurred in connection with representing Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Note; and (c) costs of suit and such sum as the
court may adjudge as attorney fees in any action to enforce payment of this Note
or any part of it.
7. WAIVER. Borrower, endorsers, and all other persons liable or to become
liable on this Note waive presentment, protest, and demand; notice of protest,
demand, and dishonor; and all other notices or matters of a like nature.
8. USURY. All agreements between Borrower and Lender are expressly
limited, so that in no event or contingency, whether because of the advancement
of the proceeds of this Note, acceleration of maturity of the unpaid principal
balance, or otherwise, shall the amount paid or agreed to be paid to Lender for
the use, forbearance, or retention of the money to be advanced under this Note
exceed the highest lawful rate permissible under applicable usury laws. If,
under any circumstances, fulfillment of any provision of this Note or any other
agreement pertaining to this Note, after timely performance of such provision is
due, shall involve exceeding the limit of validity prescribed by law that a
court of competent jurisdiction deems applicable, then, ipso facto, the
obligations to be fulfilled shall be reduced to the limit of such validity. If,
under any circumstances, Lender shall ever receive as interest an amount that
exceeds the highest lawful rate, the amount that would be excessive interest
shall be applied to reduce the unpaid principal balance under this Note and not
to pay interest, or, if such excessive interest exceeds the unpaid principal
balance under this Note, such excess shall be refunded to Borrower. This
provision shall control every other provision of all agreements between Borrower
and Lender.
9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to
exercise any of its rights under this Note, that delay or failure shall not
constitute a waiver of any Lender rights or of any breach, default, or failure
of condition under this Note. No waiver by Lender of any of its rights or of any
such breach, default, or failure of condition shall be effective, unless the
waiver is expressly stated in a writing signed by Lender.
10. ASSIGNMENT. This Note inures to and binds the heirs, legal
representatives, successors, and assigns of Borrower and Lender; provided,
however, that Borrower may not assign this Note or any proceeds of it, or assign
or delegate any of its rights or obligations, without Lender's prior written
consent in each instance. Lender, in its sole discretion, may transfer this
Note, and may sell or assign participations or other interests in all or any
part of this Note, all without notice to or the consent of Borrower.
11. SEVERABILITY. If any provision of this Note, or the application of it
to any party or circumstance, is held void, invalid, or unenforceable by a court
of competent jurisdiction, the remainder of this Note, and the application of
such provision to other parties or circumstances, shall not be affected thereby,
the provisions of this Note being severable in any such instance.
12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all
obligations of Borrower under this Note.
13. GOVERNING LAW. This Note shall be construed and enforceable according
to the laws of the State of California.
14. SECURED OBLIGATION. This note is secured by a Pledge and Security
Agreement dated the same date as this Note and made by Borrower, for the benefit
of the Lender. Any default under said Agreement shall be deemed a default under
this Note.
15. DEMAND PAYMENT OPTION. The Lender shall have the right at any time
prior to the maturity date to require the Borrower to repay the entire principal
balance and accrued unpaid interest due under this Note in the event it is
determined by the Lender, in consultation with Price Legacy Corporation (the
"Company"), the Company's Board of Directors and/or the Company's tax advisors
that this Note could jeopardize the Company's status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended. In the event the
Lender elects to exercise its call option under this paragraph 15, the Lender
shall provide the Borrower with written notice of such election, and the
Borrower shall repay the entire principal balance and accrued unpaid interest
due under this Note to the Lender within fifteen (15) days.
Executed as of the date first written above.
BORROWER
--------
SAN DIEGO REVITALIZATION CORPORATION
BY /S/ JAMES F. CAHILL
------------------------------
JAMES F. CAHILL - MANAGER
BY /S/ JACK MCGRORY
------------------------------
JACK MCGRORY - MANAGER
2
EXHIBIT D
PROMISSORY NOTE
$1,000,000 December 23, 2003
---------- San Diego, California
FOR VALUE RECEIVED, the undersigned SAN DIEGO REVITALIZATION CORPORATION, a
California non-profit public benefit corporation, (the "Borrower"), promises to
pay to ROBERT AND ALLISON PRICE TRUST, dated January 10, 1975, a California
trust, (the "Lender") or order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla,
California 92037, or such other address as may be directed in writing, the
principal sum of One Million ($1,000,000) Dollars, together with interest
thereon at a rate of seven percent (7%) per annum, computed from the date hereof
on the basis of a three hundred sixty-five day (365) year, actual days elapsed.
1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be paid in
quarter annual installments on May 20th, August 20th, November 20th and February
20th beginning on May 20, 2004 until this Note is paid in full. All unpaid
principal and accrued unpaid interest shall be due and payable in full December
31, 2004.
2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in
the following order: (a) costs, fees, charges and advances paid or incurred by
Lender and for which the Borrower is obligated under the terms herein; (b)
interest payable under this Note; and (c) principal under this Note. All
installments of principal and interest of this Note shall be payable in lawful
money of the United States of America.
3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in
part, and without any premium or penalty therefor, the principal amount hereof
then remaining unpaid, together with accrued unpaid interest on this Note. Any
such prepayment shall be applied first to accrued unpaid interest on this Note
and the balance to principal due hereunder.
4. INTEREST AND DEFAULT. From and after the Maturity Date the entire
unpaid principal balance and accrued unpaid interest shall automatically bear an
annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or
(b) the maximum interest rate allowed by law; in lieu of the rate provided above
herein.
5. ACCELERATION. In the event Borrower defaults in the payment of any
installment of interest or principal of this Note when due and such default is
not cured within ten (10) days after written notice of such default by Lender,
then the entire principal balance and accrued unpaid interest of this Note shall
be immediately due and payable, at the option of the Lender, without further
notice. Failure to exercise said option shall not constitute a waiver of the
right to exercise it in the event of any subsequent default.
6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses,
and attorney fees paid or incurred by Lender, or adjudged by a court: (a)
reasonable costs of collection and costs, expenses, and attorney fees paid or
incurred in connection with the collection or enforcement of this Note, whether
or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or
incurred in connection with representing Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Note; and (c) costs of suit and such sum as the
court may adjudge as attorney fees in any action to enforce payment of this Note
or any part of it.
7. WAIVER. Borrower, endorsers, and all other persons liable or to become
liable on this Note waive presentment, protest, and demand; notice of protest,
demand, and dishonor; and all other notices or matters of a like nature.
8. USURY. All agreements between Borrower and Lender are expressly
limited, so that in no event or contingency, whether because of the advancement
of the proceeds of this Note, acceleration of maturity of the unpaid principal
balance, or otherwise, shall the amount paid or agreed to be paid to Lender for
the use, forbearance, or retention of the money to be advanced under this Note
exceed the highest lawful rate permissible under applicable usury laws. If,
under any circumstances, fulfillment of any provision of this Note or any other
agreement pertaining to this Note, after timely performance of such provision is
due, shall involve exceeding the limit of validity prescribed by law that a
court of competent jurisdiction deems applicable, then, ipso facto, the
obligations to be fulfilled shall be reduced to the limit of such validity. If,
under any circumstances, Lender shall ever receive as interest an amount that
exceeds the highest lawful rate, the amount that would be excessive interest
shall be applied to reduce the unpaid principal balance under this Note and not
to pay interest, or, if such excessive interest exceeds the unpaid principal
balance under this Note, such excess shall be refunded to Borrower. This
provision shall control every other provision of all agreements between Borrower
and Lender.
9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to
exercise any of its rights under this Note, that delay or failure shall not
constitute a waiver of any Lender rights or of any breach, default, or failure
of condition under this Note. No waiver by Lender of any of its rights or of any
such breach, default, or failure of condition shall be effective, unless the
waiver is expressly stated in a writing signed by Lender.
10. ASSIGNMENT. This Note inures to and binds the heirs, legal
representatives, successors, and assigns of Borrower and Lender; provided,
however, that Borrower may not assign this Note or any proceeds of it, or assign
or delegate any of its rights or obligations, without Lender's prior written
consent in each instance. Lender, in its sole discretion, may transfer this
Note, and may sell or assign participations or other interests in all or any
part of this Note, all without notice to or the consent of Borrower.
11. SEVERABILITY. If any provision of this Note, or the application of it
to any party or circumstance, is held void, invalid, or unenforceable by a court
of competent jurisdiction, the remainder of this Note, and the application of
such provision to other parties or circumstances, shall not be affected thereby,
the provisions of this Note being severable in any such instance.
12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all
obligations of Borrower under this Note.
13. GOVERNING LAW. This Note shall be construed and enforceable according
to the laws of the State of California.
14. SECURED OBLIGATION. This note is secured by a Pledge and Security
Agreement dated the same date as this Note and made by Borrower, for the benefit
of the Lender. Any default under said Agreement shall be deemed a default under
this Note.
15. DEMAND PAYMENT OPTION. The Lender shall have the right at any time
prior to the maturity date to require the Borrower to repay the entire principal
balance and accrued unpaid interest due under this Note in the event it is
determined by the Lender, in consultation with Price Legacy Corporation (the
"Company"), the Company's Board of Directors and/or the Company's tax advisors
that this Note could jeopardize the Company's status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended. In the event the
Lender elects to exercise its call option under this paragraph 15, the Lender
shall provide the Borrower with written notice of such election, and the
Borrower shall repay the entire principal balance and accrued unpaid interest
due under this Note to the Lender within fifteen (15) days.
Executed as of the date first written above.
BORROWER
--------
SAN DIEGO REVITALIZATION CORPORATION
BY /S/ JAMES F. CAHILL
------------------------------
JAMES F. CAHILL - MANAGER
BY /S/ JACK MCGRORY
------------------------------
JACK MCGRORY - MANAGER
2
EXHIBIT E
---------
PROMISSORY NOTE
---------------
$4,000,000 December 23, 2003
---------- San Diego, California
FOR VALUE RECEIVED, the undersigned SAN DIEGO REVITALIZATION CORPORATION, a
California non-profit public benefit corporation, (the "Borrower"), promises to
pay to ROBERT AND ALLISON PRICE CHARITABLE TRUST, a California trust, (the
"Lender") or order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla, California
92037, or such other address as may be directed in writing, the principal sum of
Four Million ($4,000,000) Dollars, together with interest thereon at a rate of
seven percent (7%) per annum, computed from the date hereof on the basis of a
three hundred sixty-five day (365) year, actual days elapsed.
1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be paid in
quarter annual installments on May 20th, August 20th, November 20th and February
20th beginning on May 20, 2004 until this Note is paid in full. All unpaid
principal and accrued unpaid interest shall be due and payable in full December
31, 2004.
2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in
the following order: (a) costs, fees, charges and advances paid or incurred by
Lender and for which the Borrower is obligated under the terms herein; (b)
interest payable under this Note; and (c) principal under this Note. All
installments of principal and interest of this Note shall be payable in lawful
money of the United States of America.
3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in
part, and without any premium or penalty therefor, the principal amount hereof
then remaining unpaid, together with accrued unpaid interest on this Note. Any
such prepayment shall be applied first to accrued unpaid interest on this Note
and the balance to principal due hereunder.
4. INTEREST AND DEFAULT. From and after the Maturity Date the entire
unpaid principal balance and accrued unpaid interest shall automatically bear an
annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or
(b) the maximum interest rate allowed by law; in lieu of the rate provided above
herein.
5. ACCELERATION. In the event Borrower defaults in the payment of any
installment of interest or principal of this Note when due and such default is
not cured within ten (10) days after written notice of such default by Lender,
then the entire principal balance and accrued unpaid interest of this Note shall
be immediately due and payable, at the option of the Lender, without further
notice. Failure to exercise said option shall not constitute a waiver of the
right to exercise it in the event of any subsequent default.
6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses,
and attorney fees paid or incurred by Lender, or adjudged by a court: (a)
reasonable costs of collection and costs, expenses, and attorney fees paid or
incurred in connection with the collection or enforcement of this Note, whether
or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or
incurred in connection with representing Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Note; and (c) costs of suit and such sum as the
court may adjudge as attorney fees in any action to enforce payment of this Note
or any part of it.
7. WAIVER. Borrower, endorsers, and all other persons liable or to become
liable on this Note waive presentment, protest, and demand; notice of protest,
demand, and dishonor; and all other notices or matters of a like nature.
8. USURY. All agreements between Borrower and Lender are expressly
limited, so that in no event or contingency, whether because of the advancement
of the proceeds of this Note, acceleration of maturity of the unpaid principal
balance, or otherwise, shall the amount paid or agreed to be paid to Lender for
the use, forbearance, or retention of the money to be advanced under this Note
exceed the highest lawful rate permissible under applicable usury laws. If,
under any circumstances, fulfillment of any provision of this Note or any other
agreement pertaining to this Note, after timely performance of such provision is
due, shall involve exceeding the limit of validity prescribed by law that a
court of competent jurisdiction deems applicable, then, ipso facto, the
obligations to be fulfilled shall be reduced to the limit of such validity. If,
under any circumstances, Lender shall ever receive as interest an amount that
exceeds the highest lawful rate, the amount that would be excessive interest
shall be applied to reduce the unpaid principal balance under this Note and not
to pay interest, or, if such excessive interest exceeds the unpaid principal
balance under this Note, such excess shall be refunded to Borrower. This
provision shall control every other provision of all agreements between Borrower
and Lender.
9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to
exercise any of its rights under this Note, that delay or failure shall not
constitute a waiver of any Lender rights or of any breach, default, or failure
of condition under this Note. No waiver by Lender of any of its rights or of any
such breach, default, or failure of condition shall be effective, unless the
waiver is expressly stated in a writing signed by Lender.
10. ASSIGNMENT. This Note inures to and binds the heirs, legal
representatives, successors, and assigns of Borrower and Lender; provided,
however, that Borrower may not assign this Note or any proceeds of it, or assign
or delegate any of its rights or obligations, without Lender's prior written
consent in each instance. Lender, in its sole discretion, may transfer this
Note, and may sell or assign participations or other interests in all or any
part of this Note, all without notice to or the consent of Borrower.
11. SEVERABILITY. If any provision of this Note, or the application of it
to any party or circumstance, is held void, invalid, or unenforceable by a court
of competent jurisdiction, the remainder of this Note, and the application of
such provision to other parties or circumstances, shall not be affected thereby,
the provisions of this Note being severable in any such instance.
12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all
obligations of Borrower under this Note.
13. GOVERNING LAW. This Note shall be construed and enforceable according
to the laws of the State of California.
14. SECURED OBLIGATION. This note is secured by a Pledge and Security
Agreement dated the same date as this Note and made by Borrower, for the benefit
of the Lender. Any default under said Agreement shall be deemed a default under
this Note.
15. DEMAND PAYMENT OPTION. The Lender shall have the right at any time
prior to the maturity date to require the Borrower to repay the entire principal
balance and accrued unpaid interest due under this Note in the event it is
determined by the Lender, in consultation with Price Legacy Corporation (the
"Company"), the Company's Board of Directors and/or the Company's tax advisors
that this Note could jeopardize the Company's status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended. In the event the
Lender elects to exercise its call option under this paragraph 15, the Lender
shall provide the Borrower with written notice of such election, and the
Borrower shall repay the entire principal balance and accrued unpaid interest
due under this Note to the Lender within fifteen (15) days.
Executed as of the date first written above.
BORROWER
--------
SAN DIEGO REVITALIZATION CORPORATION
BY /S/ JAMES F. CAHILL
------------------------------
JAMES F. CAHILL - MANAGER
BY /S/ JACK MCGRORY
------------------------------
JACK MCGRORY - MANAGER
2
EXHIBIT F
---------
PROMISSORY NOTE
---------------
$3,000,000 December 23, 2003
---------- San Diego, California
FOR VALUE RECEIVED, the undersigned SAN DIEGO REVITALIZATION CORPORATION, a
California non-profit public benefit corporation, (the "Borrower"), promises to
pay to GALINSON FAMILY PARTNERSHIP II, a California limited partnership, (the
"Lender") or order, at 7979 Ivanhoe Avenue, Suite 520, La Jolla, California
92037, or such other address as may be directed in writing, the principal sum of
Three Million ($3,000,000) Dollars, together with interest thereon at a rate of
seven percent (7%) per annum, computed from the date hereof on the basis of a
three hundred sixty-five day (365) year, actual days elapsed.
1. PAYMENT OF PRINCIPAL AND INTEREST. Interest only shall be paid in
quarter annual installments on May 20th, August 20th, November 20th and February
20th beginning on May 20, 2004 until this Note is paid in full. All unpaid
principal and accrued unpaid interest shall be due and payable in full December
31, 2004.
2. CREDIT OF PAYMENTS. Each payment under this Note shall be credited in
the following order: (a) costs, fees, charges and advances paid or incurred by
Lender and for which the Borrower is obligated under the terms herein; (b)
interest payable under this Note; and (c) principal under this Note. All
installments of principal and interest of this Note shall be payable in lawful
money of the United States of America.
3. PREPAYMENT. The Borrower may prepay in whole, or from time to time in
part, and without any premium or penalty therefor, the principal amount hereof
then remaining unpaid, together with accrued unpaid interest on this Note. Any
such prepayment shall be applied first to accrued unpaid interest on this Note
and the balance to principal due hereunder.
4. INTEREST AND DEFAULT. From and after the Maturity Date the entire
unpaid principal balance and accrued unpaid interest shall automatically bear an
annual interest rate equal to the lessor of: (a) ten percent (10%) per annum or
(b) the maximum interest rate allowed by law; in lieu of the rate provided above
herein.
5. ACCELERATION. In the event Borrower defaults in the payment of any
installment of interest or principal of this Note when due and such default is
not cured within ten (10) days after written notice of such default by Lender,
then the entire principal balance and accrued unpaid interest of this Note shall
be immediately due and payable, at the option of the Lender, without further
notice. Failure to exercise said option shall not constitute a waiver of the
right to exercise it in the event of any subsequent default.
6. ATTORNEY FEES. Borrower agrees to pay the following costs, expenses,
and attorney fees paid or incurred by Lender, or adjudged by a court: (a)
reasonable costs of collection and costs, expenses, and attorney fees paid or
incurred in connection with the collection or enforcement of this Note, whether
or not suit is filed; (b) reasonable costs, expenses, and attorney fees paid or
incurred in connection with representing Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors' rights
and involving a claim under this Note; and (c) costs of suit and such sum as the
court may adjudge as attorney fees in any action to enforce payment of this Note
or any part of it.
7. WAIVER. Borrower, endorsers, and all other persons liable or to become
liable on this Note waive presentment, protest, and demand; notice of protest,
demand, and dishonor; and all other notices or matters of a like nature.
8. USURY. All agreements between Borrower and Lender are expressly
limited, so that in no event or contingency, whether because of the advancement
of the proceeds of this Note, acceleration of maturity of the unpaid principal
balance, or otherwise, shall the amount paid or agreed to be paid to Lender for
the use, forbearance, or retention of the money to be advanced under this Note
exceed the highest lawful rate permissible under applicable usury laws. If,
under any circumstances, fulfillment of any provision of this Note or any other
agreement pertaining to this Note, after timely performance of such provision is
due, shall involve exceeding the limit of validity prescribed by law that a
court of competent jurisdiction deems applicable, then, ipso facto, the
obligations to be fulfilled shall be reduced to the limit of such validity. If,
under any circumstances, Lender shall ever receive as interest an amount that
exceeds the highest lawful rate, the amount that would be excessive interest
shall be applied to reduce the unpaid principal balance under this Note and not
to pay interest, or, if such excessive interest exceeds the unpaid principal
balance under this Note, such excess shall be refunded to Borrower. This
provision shall control every other provision of all agreements between Borrower
and Lender.
9. FORBEARANCE NOT A WAIVER. If Lender delays in exercising or fails to
exercise any of its rights under this Note, that delay or failure shall not
constitute a waiver of any Lender rights or of any breach, default, or failure
of condition under this Note. No waiver by Lender of any of its rights or of any
such breach, default, or failure of condition shall be effective, unless the
waiver is expressly stated in a writing signed by Lender.
10. ASSIGNMENT. This Note inures to and binds the heirs, legal
representatives, successors, and assigns of Borrower and Lender; provided,
however, that Borrower may not assign this Note or any proceeds of it, or assign
or delegate any of its rights or obligations, without Lender's prior written
consent in each instance. Lender, in its sole discretion, may transfer this
Note, and may sell or assign participations or other interests in all or any
part of this Note, all without notice to or the consent of Borrower.
11. SEVERABILITY. If any provision of this Note, or the application of it
to any party or circumstance, is held void, invalid, or unenforceable by a court
of competent jurisdiction, the remainder of this Note, and the application of
such provision to other parties or circumstances, shall not be affected thereby,
the provisions of this Note being severable in any such instance.
12. TIME IS OF THE ESSENCE. Time is of the essence with respect to all
obligations of Borrower under this Note.
13. GOVERNING LAW. This Note shall be construed and enforceable according
to the laws of the State of California.
14. SECURED OBLIGATION. This note is secured by a Pledge and Security
Agreement dated the same date as this Note and made by Borrower, for the benefit
of the Lender. Any default under said Agreement shall be deemed a default under
this Note.
15. DEMAND PAYMENT OPTION. The Lender shall have the right at any time
prior to the maturity date to require the Borrower to repay the entire principal
balance and accrued unpaid interest due under this Note in the event it is
determined by the Lender, in consultation with Price Legacy Corporation (the
"Company"), the Company's Board of Directors and/or the Company's tax advisors
that this Note could jeopardize the Company's status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended. In the event the
Lender elects to exercise its call option under this paragraph 15, the Lender
shall provide the Borrower with written notice of such election, and the
Borrower shall repay the entire principal balance and accrued unpaid interest
due under this Note to the Lender within fifteen (15) days.
Executed as of the date first written above.
BORROWER
--------
SAN DIEGO REVITALIZATION CORPORATION
BY /S/ JAMES F. CAHILL
------------------------------
JAMES F. CAHILL - MANAGER
BY /S/ JACK MCGRORY
------------------------------
JACK MCGRORY - MANAGER
2
EXHIBIT G
---------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Agreement made this 23rd day of December 2003 by and between SOL AND HELEN PRICE
TRUST, dated February 20, 1970 a California Trust (the "Creditor") and SAN DIEGO
REVITALIZATION CORPORATION, a California non-profit public benefit corporation
(the "Debtor").
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties
hereto agree as follows:
1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Creditor a security
interest in all of the Debtor's right, title, and interest now owned or acquired
in the future in and to the following described collateral (the "Collateral") in
order to secure the payment and performance of the obligations described in
paragraph 3 below:
Three hundred twenty-two thousand two hundred twenty-two (322,222) Shares
of Price Legacy Series A preferred stock.
2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK.
A) Debtor agrees that James F. Cahill ("Holder") shall maintain an
account with Morgan Stanley at 1225 Prospect Street, La Jolla, California 92037
in the name of Holder, as Custodian for Debtor ("Broker Account"). Debtor shall
immediately deposit the Collateral to the Broker Account. Debtor acknowledges
and agrees that under the terms of the Broker Account only the Holder shall be
entitled to give instructions regarding the assets held in the Broker Account
and Debtor shall have no ability to withdraw the Collateral from the Broker
Account.
B) Holder agrees to maintain the Broker Account as the custodian of
Debtor and retain the Collateral in the Broker Account until either (i) this
Pledge terminates or (ii) he receives written notice from Creditor that an event
of default under the Promissory Note has occurred and Debtor has failed to cure
said default within five (5) business days from the date of occurrence.
C) In the event of a default, as provided in paragraph 6 herein, Debtor
shall have the right to direct Holder, and Holder shall be obligated at Debtor's
written direction, to sell the Collateral and pay to Creditor the lesser of (i)
the net proceeds of the sale or (ii) the full amount due under the Promissory
Note.
D) Creditor may at any time change the Holder, or appoint additional
Holders.
3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall hereafter
secure the payment to Creditor of all indebtedness now or hereafter owed to
Creditor by Debtor under a promissory note of even date herewith (the
"Promissory Note") given by Debtor in the face amount of Four Million Dollars
($4,000,000), together with any interest thereon and extensions, modifications,
and renewals thereof.
4. CASH DISTRIBUTIONS. So long as no default, and no condition or event which
with notice or lapse of time, or both, would constitute a default, shall have
occurred or exist under this Agreement, Debtor shall be entitled to receive all
distributions (including cash and property) with respect to the Collateral;
provided, however, that any distributions from the liquidation of the Collateral
shall be paid to Creditor to the extent of unpaid principal and accrued unpaid
interest under the Promissory Note. Upon the occurrence of a default or any
condition or event which with notice or lapse of time, or both, would constitute
a default hereunder, Creditor shall thereafter receive and may apply all
distributions with respect to the Collateral against the indebtedness secured
hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents that as of the effective
date of this Pledge and Security Agreement (A) Debtor is the owner of the
Collateral and that Debtor has not otherwise assigned or transferred, and agrees
that Debtor shall not assign or transfer, absolutely or for security, the
Collateral or any interest therein to any other person or entity; (B) there are
no outstanding options, warrants or other agreements with respect to the
Collateral; and (C) the execution and delivery of this Agreement by Debtor will
not result in a violation of any mortgage, indenture, material contract,
instrument, judgment, decree, order, statute, rule or regulation to which Debtor
is subject.
6. DEFAULT AND REMEDIES. Any breach of or event of default under the
Promissory Note or any failure to comply with any of the terms under this
Agreement shall be a default hereunder. Upon any default hereunder, Creditor
shall have the right to exercise its remedies as a secured party with respect to
the Collateral, including, without limitation, the right to use all or any
portion of the Collateral in Creditor's sole and absolute discretion (a) toward
cure of the default; (b) to payment of principal (whether or not otherwise
accelerated) and/or interest; or (c)
in such combination thereof as Creditor may determine. Creditor shall in no
event be required to use proceeds of the Collateral to cure a default.
7. ADMINISTRATION OF COLLATERAL. The provisions set forth below shall govern
the administration of the Collateral:
(a) VOTING. Until there shall have occurred any default hereunder, Debtor
shall be entitled to vote or consent with respect to the Collateral in any
manner not inconsistent with this Agreement, to the extent the Collateral
carries any rights of voting or consent.
(b) FURTHER DOCUMENTS. Debtor will forthwith upon request by Creditor and
in confirmation of the security interest hereby created, execute and deliver to
Creditor such further assignments, transfers, assurances, instruments, notices
and agreements in form and substance as the Creditor shall reasonably request.
(c) REMEDIES. In addition to any rights and remedies otherwise available
in law or in equity, and in addition to the other provisions of this Agreement,
and any other documents or instruments delivered or to be delivered in
connection herewith or therewith, or any document or instrument now in
existence, or which may hereafter be made, with respect to the Promissory Note,
the provisions set forth below shall, to the extent permitted by applicable law,
govern Creditor's rights to foreclose on the Collateral upon a default
hereunder.
(d) CONDUCT OF SALE. Upon giving written notice of default to Debtor
pursuant to the terms of this Agreement, Creditor may sell as much of the
Collateral as is required to produce net funds sufficient to pay Creditor the
full amount of the Promissory Note.
(e) SALE OR DISPOSITION. Upon any sale or disposition, Creditor shall have
the right to deliver, assign, and transfer to the purchaser thereof the
Collateral so sold or disposed. Each purchaser at any such sale or other
disposition shall hold the Collateral free from any claim or right of whatever
kinds, including any equity or right of redemption of the Debtor. The Debtor
specifically waives all rights of redemption, stay or appraisal which it has or
may hereafter have under any rule of law or statute now existing or hereafter
adopted.
(f) ATTORNEY-IN-FACT. Creditor or its designee is hereby appointed
attorney-in-fact for Debtor for the purpose of carrying out the provisions of
this Agreement and taking any action in executing any instrument which Creditor
reasonably may deem necessary and advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and one coupled with an
interest.
8. MISCELLANEOUS.
(a) TERMINATION. This Agreement shall terminate upon Debtor's payment in
full and the performance of the Promissory Note.
(b) AGREEMENT BINDING. This Agreement shall be binding upon Debtor and its
heirs, executors, personal representatives and successors, and shall inure to
the benefit of, and be enforceable by, Creditor and its successors and assigns.
Debtor hereby represents and warrants to Creditor that it has full legal
authority to enter into this Agreement, to pledge the Collateral and to carry
out the provisions hereof and no consent or approval from any other person or
entity is necessary to enter into this Agreement or carry out its terms.
(c) SEVERABILITY. If any provision of this Agreement shall be deemed or\
held to be invalid or unenforceable for any reason, such provision shall be
adjusted, if possible, rather than voided, so as to achieve the intent of the
parties to the fullest extent possible. In any event, such provision shall be
severable from, and shall not be construed to have any effect on, the remaining
provisions of this Agreement, which shall continue in full force and effect.
(d) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts, between residents thereof, to be wholly performed within the State of
California. Debtor hereby irrevocably consents to the jurisdiction of the Courts
of the State of California located in San Diego County and of any Federal Court
located in San Diego County, California in connection with any action or
proceeding arising out of or relating to this Agreement.
(e) RIGHTS CUMULATIVE; NO WAIVER. Creditor's options, powers, rights,
privileges, and immunities specified herein or arising hereunder are in addition
to, and not exclusive of, those otherwise created or existing now or at any
time, whether by contract, by statute or by rule of law. Creditor shall not, by
any act, delay, omission
2
or otherwise, be deemed to have modified, discharged or waived any of Creditor's
options, powers, or rights in respect of this Agreement, and no modification,
discharge or waiver of any such option, power, or right shall be valid unless
set forth in writing signed by Creditor or Creditor's authorized agent, and then
only to the extent therein set forth. A waiver by Creditor of any right or
remedy hereunder on any one occasion shall be effective only in the specific
instance and for the specific purpose for which given, and shall not be
construed as a bar to any right or remedy that Creditor would otherwise have on
any other occasion.
(f) ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Debtor and Creditor with respect to the subject matter herein, and supersedes
all prior communications relating thereto, including, without limitation, all
oral statements or representations. No supplement to or modification of this
Agreement shall be binding unless executed in writing by Debtor and Creditor.
(g) COSTS OF ENFORCEMENT. Debtor shall upon demand pay to Creditor the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of counsel and/or any experts and agents, that Creditor may incur
in connection with (a) the administration of this Agreement, (b) the exercise or
enforcement of any of the rights of Creditor hereunder (including the defense of
any claims or counterclaims asserted against Creditor arising out of this
Agreement or the transactions contemplated hereby) or under any judgment awarded
to Creditor in respect of its rights hereunder (which obligation shall be
severable from the remainder of this Agreement and shall survive the entry of
any such judgment), or (c) the failure by Debtor to perform or observe any of
the provisions hereof. The foregoing shall include any and all expenses and fees
incurred by Creditor in connection with a bankruptcy, reorganization,
receivership, or similar debtor-relief proceeding by or affecting Debtor or the
Collateral.
(h) NOTICES. All notices, demands and other communications required or
permitted hereunder shall be in writing, addressed to the parties at the
following addresses:
CREDITOR: Sol and Helen Price Trust
7979 Ivanhoe Avenue, Suite 520
La Jolla, CA 92037
DEBTOR: San Diego Revitalization Corporation
7979 Ivanhoe Ave, Suite 520
La Jolla, CA 92037
or to such other address as may be designated from time to time by notice to the
other parties in the manner set forth herein.
IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as
of the date first above written.
CREDITOR: DEBTOR:
-------- -------
SOL AND HELEN PRICE TRUST SAN DIEGO REVITALIZATION CORPORATION
By /s/ Sol Price by /s/ Jack Mcgrory
------------------------------ ----------------------------------
Sol Price - Trustee Jack McGrory - Exec. Vice President
by /s/ James Cahill
----------------------------------
James Cahill - Exec. Vice President
3
EXHIBIT H
---------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Agreement made this 23rd day of December 2003 by and between PRICE FAMILY
CHARITABLE TRUST, a California Trust (the "Creditor") and SAN DIEGO
REVITALIZATION CORPORATION, a California non-profit public benefit corporation
(the "Debtor").
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties
hereto agree as follows:
1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Creditor a security
interest in all of the Debtor's right, title, and interest now owned or acquired
in the future in and to the following described collateral (the "Collateral") in
order to secure the payment and performance of the obligations described in
paragraph 3 below:
Four hundred eighty-three thousand three hundred thirty-three (483,333)
Shares of Price Legacy Series A preferred stock.
2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK.
A) Debtor agrees that James F. Cahill ("Holder") shall maintain an
account with Morgan Stanley at 1225 Prospect Street, La Jolla, California 92037
in the name of Holder, as Custodian for Debtor ("Broker Account"). Debtor shall
immediately deposit the Collateral to the Broker Account. Debtor acknowledges
and agrees that under the terms of the Broker Account only the Holder shall be
entitled to give instructions regarding the assets held in the Broker Account
and Debtor shall have no ability to withdraw the Collateral from the Broker
Account.
B) Holder agrees to maintain the Broker Account as the custodian of
Debtor and retain the Collateral in the Broker Account until either (i) this
Pledge terminates or (ii) he receives written notice from Creditor that an event
of default under the Promissory Note has occurred and Debtor has failed to cure
said default within five (5) business days from the date of occurrence.
C) In the event of a default, as provided in paragraph 6 herein, Debtor
shall have the right to direct Holder, and Holder shall be obligated at Debtor's
written direction, to sell the Collateral and pay to Creditor the lesser of (i)
the net proceeds of the sale or (ii) the full amount due under the Promissory
Note.
D) Creditor may at any time change the Holder, or appoint additional
Holders.
3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall hereafter
secure the payment to Creditor of all indebtedness now or hereafter owed to
Creditor by Debtor under a promissory note of even date herewith (the
"Promissory Note") given by Debtor in the face amount of Six Million Dollars
($6,000,000), together with any interest thereon and extensions, modifications,
and renewals thereof.
4. CASH DISTRIBUTIONS. So long as no default, and no condition or event which
with notice or lapse of time, or both, would constitute a default, shall have
occurred or exist under this Agreement, Debtor shall be entitled to receive all
distributions (including cash and property) with respect to the Collateral;
provided, however, that any distributions from the liquidation of the Collateral
shall be paid to Creditor to the extent of unpaid principal and accrued unpaid
interest under the Promissory Note. Upon the occurrence of a default or any
condition or event which with notice or lapse of time, or both, would constitute
a default hereunder, Creditor shall thereafter receive and may apply all
distributions with respect to the Collateral against the indebtedness secured
hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents that as of the effective
date of this Pledge and Security Agreement (A) Debtor is the owner of the
Collateral and that Debtor has not otherwise assigned or transferred, and agrees
that Debtor shall not assign or transfer, absolutely or for security, the
Collateral or any interest therein to any other person or entity; (B) there are
no outstanding options, warrants or other agreements with respect to the
Collateral; and (C) the execution and delivery of this Agreement by Debtor will
not result in a violation of any mortgage, indenture, material contract,
instrument, judgment, decree, order, statute, rule or regulation to which Debtor
is subject.
6. DEFAULT AND REMEDIES. Any breach of or event of default under the
Promissory Note or any failure to comply with any of the terms under this
Agreement shall be a default hereunder. Upon any default hereunder, Creditor
shall have the right to exercise its remedies as a secured party with respect to
the Collateral, including, without limitation, the right to use all or any
portion of the Collateral in Creditor's sole and absolute discretion (a) toward
cure of the default; (b) to payment of principal (whether or not otherwise
accelerated) and/or interest; or (c)
in such combination thereof as Creditor may determine. Creditor shall in no
event be required to use proceeds of the Collateral to cure a default.
7. ADMINISTRATION OF COLLATERAL. The provisions set forth below shall govern
the administration of the Collateral:
(a) VOTING. Until there shall have occurred any default hereunder, Debtor
shall be entitled to vote or consent with respect to the Collateral in any
manner not inconsistent with this Agreement, to the extent the Collateral
carries any rights of voting or consent.
(b) FURTHER DOCUMENTS. Debtor will forthwith upon request by Creditor and
in confirmation of the security interest hereby created, execute and deliver to
Creditor such further assignments, transfers, assurances, instruments, notices
and agreements in form and substance as the Creditor shall reasonably request.
(c) REMEDIES. In addition to any rights and remedies otherwise available
in law or in equity, and in addition to the other provisions of this Agreement,
and any other documents or instruments delivered or to be delivered in
connection herewith or therewith, or any document or instrument now in
existence, or which may hereafter be made, with respect to the Promissory Note,
the provisions set forth below shall, to the extent permitted by applicable law,
govern Creditor's rights to foreclose on the Collateral upon a default
hereunder.
(d) CONDUCT OF SALE. Upon giving written notice of default to Debtor
pursuant to the terms of this Agreement, Creditor may sell as much of the
Collateral as is required to produce net funds sufficient to pay Creditor the
full amount of the Promissory Note.
(e) SALE OR DISPOSITION. Upon any sale or disposition, Creditor shall have
the right to deliver, assign, and transfer to the purchaser thereof the
Collateral so sold or disposed. Each purchaser at any such sale or other
disposition shall hold the Collateral free from any claim or right of whatever
kinds, including any equity or right of redemption of the Debtor. The Debtor
specifically waives all rights of redemption, stay or appraisal which it has or
may hereafter have under any rule of law or statute now existing or hereafter
adopted.
(f) ATTORNEY-IN-FACT. Creditor or its designee is hereby appointed
attorney-in-fact for Debtor for the purpose of carrying out the provisions of
this Agreement and taking any action in executing any instrument which Creditor
reasonably may deem necessary and advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and one coupled with an
interest.
8. MISCELLANEOUS.
(a) TERMINATION. This Agreement shall terminate upon Debtor's payment in
full and the performance of the Promissory Note.
(b) AGREEMENT BINDING. This Agreement shall be binding upon Debtor and its
heirs, executors, personal representatives and successors, and shall inure to
the benefit of, and be enforceable by, Creditor and its successors and assigns.
Debtor hereby represents and warrants to Creditor that it has full legal
authority to enter into this Agreement, to pledge the Collateral and to carry
out the provisions hereof and no consent or approval from any other person or
entity is necessary to enter into this Agreement or carry out its terms.
(c) SEVERABILITY. If any provision of this Agreement shall be deemed or
held to be invalid or unenforceable for any reason, such provision shall be
adjusted, if possible, rather than voided, so as to achieve the intent of the
parties to the fullest extent possible. In any event, such provision shall be
severable from, and shall not be construed to have any effect on, the remaining
provisions of this Agreement, which shall continue in full force and effect.
(d) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts, between residents thereof, to be wholly performed within the State of
California. Debtor hereby irrevocably consents to the jurisdiction of the Courts
of the State of California located in San Diego County and of any Federal Court
located in San Diego County, California in connection with any action or
proceeding arising out of or relating to this Agreement.
(e) RIGHTS CUMULATIVE; NO WAIVER. Creditor's options, powers, rights,
privileges, and immunities specified herein or arising hereunder are in addition
to, and not exclusive of, those otherwise created or existing now or at any
time, whether by contract, by statute or by rule of law. Creditor shall not, by
any act, delay, omission
2
or otherwise, be deemed to have modified, discharged or waived any of Creditor's
options, powers, or rights in respect of this Agreement, and no modification,
discharge or waiver of any such option, power, or right shall be valid unless
set forth in writing signed by Creditor or Creditor's authorized agent, and then
only to the extent therein set forth. A waiver by Creditor of any right or
remedy hereunder on any one occasion shall be effective only in the specific
instance and for the specific purpose for which given, and shall not be
construed as a bar to any right or remedy that Creditor would otherwise have on
any other occasion.
(f) ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Debtor and Creditor with respect to the subject matter herein, and supersedes
all prior communications relating thereto, including, without limitation, all
oral statements or representations. No supplement to or modification of this
Agreement shall be binding unless executed in writing by Debtor and Creditor.
(g) COSTS OF ENFORCEMENT. Debtor shall upon demand pay to Creditor the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of counsel and/or any experts and agents, that Creditor may incur
in connection with (a) the administration of this Agreement, (b) the exercise or
enforcement of any of the rights of Creditor hereunder (including the defense of
any claims or counterclaims asserted against Creditor arising out of this
Agreement or the transactions contemplated hereby) or under any judgment awarded
to Creditor in respect of its rights hereunder (which obligation shall be
severable from the remainder of this Agreement and shall survive the entry of
any such judgment), or (c) the failure by Debtor to perform or observe any of
the provisions hereof. The foregoing shall include any and all expenses and fees
incurred by Creditor in connection with a bankruptcy, reorganization,
receivership, or similar debtor-relief proceeding by or affecting Debtor or the
Collateral.
(h) NOTICES. All notices, demands and other communications required or
permitted hereunder shall be in writing, addressed to the parties at the
following addresses:
CREDITOR: Price Family Charitable Trust
7979 Ivanhoe Avenue, Suite 520
La Jolla, CA 92037
DEBTOR: San Diego Revitalization Corporation
7979 Ivanhoe Ave, Suite 520
La Jolla, CA 92037
or to such other address as may be designated from time to time by notice to the
other parties in the manner set forth herein.
IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as
of the date first above written.
CREDITOR: DEBTOR:
-------- -------
PRICE FAMILY CHARITABLE TRUST SAN DIEGO REVITALIZATION CORPORATION
By /s/ Sol Price by /s/ Jack Mcgrory
------------------------------ ----------------------------------
Sol Price - Trustee Jack McGrory - Exec. Vice President
by /s/ James Cahill
----------------------------------
James Cahill - Exec. Vice President
3
EXHIBIT I
---------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Agreement made this 23rd day of December 2003 by and between ROBERT AND ALLISON
PRICE TRUST, dated January 10, 1975, a California Trust (the "Creditor") and SAN
DIEGO REVITALIZATION CORPORATION, a California non-profit public benefit
corporation (the "Debtor").
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties
hereto agree as follows:
1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Creditor a security
interest in all of the Debtor's right, title, and interest now owned or acquired
in the future in and to the following described collateral (the "Collateral") in
order to secure the payment and performance of the obligations described in
paragraph 3 below:
Eighty thousand five hundred fifty-six (80,556) Shares of Price Legacy
Series A preferred stock.
2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK.
A) Debtor agrees that James F. Cahill ("Holder") shall maintain an
account with Morgan Stanley at 1225 Prospect Street, La Jolla, California 92037
in the name of Holder, as Custodian for Debtor ("Broker Account"). Debtor shall
immediately deposit the Collateral to the Broker Account. Debtor acknowledges
and agrees that under the terms of the Broker Account only the Holder shall be
entitled to give instructions regarding the assets held in the Broker Account
and Debtor shall have no ability to withdraw the Collateral from the Broker
Account.
B) Holder agrees to maintain the Broker Account as the custodian of
Debtor and retain the Collateral in the Broker Account until either (i) this
Pledge terminates or (ii) he receives written notice from Creditor that an event
of default under the Promissory Note has occurred and Debtor has failed to cure
said default within five (5) business days from the date of occurrence.
C) In the event of a default, as provided in paragraph 6 herein, Debtor
shall have the right to direct Holder, and Holder shall be obligated at Debtor's
written direction, to sell the Collateral and pay to Creditor the lesser of (i)
the net proceeds of the sale or (ii) the full amount due under the Promissory
Note.
D) Creditor may at any time change the Holder, or appoint additional
Holders.
3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall hereafter
secure the payment to Creditor of all indebtedness now or hereafter owed to
Creditor by Debtor under a promissory note of even date herewith (the
"Promissory Note") given by Debtor in the face amount of One Million Dollars
($1,000,000), together with any interest thereon and extensions, modifications,
and renewals thereof.
4. CASH DISTRIBUTIONS. So long as no default, and no condition or event which
with notice or lapse of time, or both, would constitute a default, shall have
occurred or exist under this Agreement, Debtor shall be entitled to receive all
distributions (including cash and property) with respect to the Collateral;
provided, however, that any distributions from the liquidation of the Collateral
shall be paid to Creditor to the extent of unpaid principal and accrued unpaid
interest under the Promissory Note. Upon the occurrence of a default or any
condition or event which with notice or lapse of time, or both, would constitute
a default hereunder, Creditor shall thereafter receive and may apply all
distributions with respect to the Collateral against the indebtedness secured
hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents that as of the effective
date of this Pledge and Security Agreement (A) Debtor is the owner of the
Collateral and that Debtor has not otherwise assigned or transferred, and agrees
that Debtor shall not assign or transfer, absolutely or for security, the
Collateral or any interest therein to any other person or entity; (B) there are
no outstanding options, warrants or other agreements with respect to the
Collateral; and (C) the execution and delivery of this Agreement by Debtor will
not result in a violation of any mortgage, indenture, material contract,
instrument, judgment, decree, order, statute, rule or regulation to which Debtor
is subject.
6. DEFAULT AND REMEDIES. Any breach of or event of default under the
Promissory Note or any failure to comply with any of the terms under this
Agreement shall be a default hereunder. Upon any default hereunder, Creditor
shall have the right to exercise its remedies as a secured party with respect to
the Collateral, including, without limitation, the right to use all or any
portion of the Collateral in Creditor's sole and absolute discretion (a) toward
cure of the default; (b) to payment of principal (whether or not otherwise
accelerated) and/or interest; or (c)
in such combination thereof as Creditor may determine. Creditor shall in no
event be required to use proceeds of the Collateral to cure a default.
7. ADMINISTRATION OF COLLATERAL. The provisions set forth below shall govern
the administration of the Collateral:
(a) VOTING. Until there shall have occurred any default hereunder, Debtor
shall be entitled to vote or consent with respect to the Collateral in any
manner not inconsistent with this Agreement, to the extent the Collateral
carries any rights of voting or consent.
(b) FURTHER DOCUMENTS. Debtor will forthwith upon request by Creditor and
in confirmation of the security interest hereby created, execute and deliver to
Creditor such further assignments, transfers, assurances, instruments, notices
and agreements in form and substance as the Creditor shall reasonably request.
(c) REMEDIES. In addition to any rights and remedies otherwise available
in law or in equity, and in addition to the other provisions of this Agreement,
and any other documents or instruments delivered or to be delivered in
connection herewith or therewith, or any document or instrument now in
existence, or which may hereafter be made, with respect to the Promissory Note,
the provisions set forth below shall, to the extent permitted by applicable law,
govern Creditor's rights to foreclose on the Collateral upon a default
hereunder.
(d) CONDUCT OF SALE. Upon giving written notice of default to Debtor
pursuant to the terms of this Agreement, Creditor may sell as much of the
Collateral as is required to produce net funds sufficient to pay Creditor the
full amount of the Promissory Note.
(e) SALE OR DISPOSITION. Upon any sale or disposition, Creditor shall have
the right to deliver, assign, and transfer to the purchaser thereof the
Collateral so sold or disposed. Each purchaser at any such sale or other
disposition shall hold the Collateral free from any claim or right of whatever
kinds, including any equity or right of redemption of the Debtor. The Debtor
specifically waives all rights of redemption, stay or appraisal which it has or
may hereafter have under any rule of law or statute now existing or hereafter
adopted.
(f) ATTORNEY-IN-FACT. Creditor or its designee is hereby appointed
attorney-in-fact for Debtor for the purpose of carrying out the provisions of
this Agreement and taking any action in executing any instrument which Creditor
reasonably may deem necessary and advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and one coupled with an
interest.
8. MISCELLANEOUS.
(a) TERMINATION. This Agreement shall terminate upon Debtor's payment in
full and the performance of the Promissory Note.
(b) AGREEMENT BINDING. This Agreement shall be binding upon Debtor and its
heirs, executors, personal representatives and successors, and shall inure to
the benefit of, and be enforceable by, Creditor and its successors and assigns.
Debtor hereby represents and warrants to Creditor that it has full legal
authority to enter into this Agreement, to pledge the Collateral and to carry
out the provisions hereof and no consent or approval from any other person or
entity is necessary to enter into this Agreement or carry out its terms.
(c) SEVERABILITY. If any provision of this Agreement shall be deemed or
held to be invalid or unenforceable for any reason, such provision shall be
adjusted, if possible, rather than voided, so as to achieve the intent of the
parties to the fullest extent possible. In any event, such provision shall be
severable from, and shall not be construed to have any effect on, the remaining
provisions of this Agreement, which shall continue in full force and effect.
(d) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts, between residents thereof, to be wholly performed within the State of
California. Debtor hereby irrevocably consents to the jurisdiction of the Courts
of the State of California located in San Diego County and of any Federal Court
located in San Diego County, California in connection with any action or
proceeding arising out of or relating to this Agreement.
(e) RIGHTS CUMULATIVE; NO WAIVER. Creditor's options, powers, rights,
privileges, and immunities specified herein or arising hereunder are in addition
to, and not exclusive of, those otherwise created or existing now or at any
time, whether by contract, by statute or by rule of law. Creditor shall not, by
any act, delay, omission
2
or otherwise, be deemed to have modified, discharged or waived any of Creditor's
options, powers, or rights in respect of this Agreement, and no modification,
discharge or waiver of any such option, power, or right shall be valid unless
set forth in writing signed by Creditor or Creditor's authorized agent, and then
only to the extent therein set forth. A waiver by Creditor of any right or
remedy hereunder on any one occasion shall be effective only in the specific
instance and for the specific purpose for which given, and shall not be
construed as a bar to any right or remedy that Creditor would otherwise have on
any other occasion.
(f) ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Debtor and Creditor with respect to the subject matter herein, and supersedes
all prior communications relating thereto, including, without limitation, all
oral statements or representations. No supplement to or modification of this
Agreement shall be binding unless executed in writing by Debtor and Creditor.
(g) COSTS OF ENFORCEMENT. Debtor shall upon demand pay to Creditor the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of counsel and/or any experts and agents, that Creditor may incur
in connection with (a) the administration of this Agreement, (b) the exercise or
enforcement of any of the rights of Creditor hereunder (including the defense of
any claims or counterclaims asserted against Creditor arising out of this
Agreement or the transactions contemplated hereby) or under any judgment awarded
to Creditor in respect of its rights hereunder (which obligation shall be
severable from the remainder of this Agreement and shall survive the entry of
any such judgment), or (c) the failure by Debtor to perform or observe any of
the provisions hereof. The foregoing shall include any and all expenses and fees
incurred by Creditor in connection with a bankruptcy, reorganization,
receivership, or similar debtor-relief proceeding by or affecting Debtor or the
Collateral.
(h) NOTICES. All notices, demands and other communications required or
permitted hereunder shall be in writing, addressed to the parties at the
following addresses:
CREDITOR: Robert and Allison Price Trust
7979 Ivanhoe Avenue, Suite 520
La Jolla, CA 92037
DEBTOR: San Diego Revitalization Corporation
7979 Ivanhoe Ave, Suite 520
La Jolla, CA 92037
or to such other address as may be designated from time to time by notice to the
other parties in the manner set forth herein.
IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as
of the date first above written.
CREDITOR: DEBTOR:
-------- -------
ROBERT AND ALLISON PRICE TRUST SAN DIEGO REVITALIZATION CORPORATION
By /s/ Sol Price by /s/ Jack Mcgrory
------------------------------ ----------------------------------
Sol Price - Trustee Jack McGrory - Exec. Vice President
By /s/ Allison Price by /s/ James Cahill
------------------------------- ----------------------------------
Allison Price - Trustee James Cahill - Exec. Vice President
3
EXHIBIT J
---------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Agreement made this 23rd day of December 2003 by and between ROBERT AND ALLISON
PRICE CHARITABLE TRUST, a California Trust (the "Creditor") and SAN DIEGO
REVITALIZATION CORPORATION, a California non-profit public benefit corporation
(the "Debtor").
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties
hereto agree as follows:
1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Creditor a security
interest in all of the Debtor's right, title, and interest now owned or acquired
in the future in and to the following described collateral (the "Collateral") in
order to secure the payment and performance of the obligations described in
paragraph 3 below:
Three hundred twenty-two thousand two hundred twenty-two (322,222) Shares
of Price Legacy Series A preferred stock.
2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK.
A) Debtor agrees that James F. Cahill ("Holder") shall maintain an
account with Morgan Stanley at 1225 Prospect Street, La Jolla, California 92037
in the name of Holder, as Custodian for Debtor ("Broker Account"). Debtor shall
immediately deposit the Collateral to the Broker Account. Debtor acknowledges
and agrees that under the terms of the Broker Account only the Holder shall be
entitled to give instructions regarding the assets held in the Broker Account
and Debtor shall have no ability to withdraw the Collateral from the Broker
Account.
B) Holder agrees to maintain the Broker Account as the custodian of
Debtor and retain the Collateral in the Broker Account until either (i) this
Pledge terminates or (ii) he receives written notice from Creditor that an event
of default under the Promissory Note has occurred and Debtor has failed to cure
said default within five (5) business days from the date of occurrence.
C) In the event of a default, as provided in paragraph 6 herein, Debtor
shall have the right to direct Holder, and Holder shall be obligated at Debtor's
written direction, to sell the Collateral and pay to Creditor the lesser of (i)
the net proceeds of the sale or (ii) the full amount due under the Promissory
Note.
D) Creditor may at any time change the Holder, or appoint additional
Holders.
3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall hereafter
secure the payment to Creditor of all indebtedness now or hereafter owed to
Creditor by Debtor under a promissory note of even date herewith (the
"Promissory Note") given by Debtor in the face amount of Four Million Dollars
($4,000,000), together with any interest thereon and extensions, modifications,
and renewals thereof.
4. CASH DISTRIBUTIONS. So long as no default, and no condition or event which
with notice or lapse of time, or both, would constitute a default, shall have
occurred or exist under this Agreement, Debtor shall be entitled to receive all
distributions (including cash and property) with respect to the Collateral;
provided, however, that any distributions from the liquidation of the Collateral
shall be paid to Creditor to the extent of unpaid principal and accrued unpaid
interest under the Promissory Note. Upon the occurrence of a default or any
condition or event which with notice or lapse of time, or both, would constitute
a default hereunder, Creditor shall thereafter receive and may apply all
distributions with respect to the Collateral against the indebtedness secured
hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents that as of the effective
date of this Pledge and Security Agreement (A) Debtor is the owner of the
Collateral and that Debtor has not otherwise assigned or transferred, and agrees
that Debtor shall not assign or transfer, absolutely or for security, the
Collateral or any interest therein to any other person or entity; (B) there are
no outstanding options, warrants or other agreements with respect to the
Collateral; and (C) the execution and delivery of this Agreement by Debtor will
not result in a violation of any mortgage, indenture, material contract,
instrument, judgment, decree, order, statute, rule or regulation to which Debtor
is subject.
6. DEFAULT AND REMEDIES. Any breach of or event of default under the
Promissory Note or any failure to comply with any of the terms under this
Agreement shall be a default hereunder. Upon any default hereunder, Creditor
shall have the right to exercise its remedies as a secured party with respect to
the Collateral, including, without limitation, the right to use all or any
portion of the Collateral in Creditor's sole and absolute discretion (a) toward
cure of the default; (b) to payment of principal (whether or not otherwise
accelerated) and/or interest; or (c)
in such combination thereof as Creditor may determine. Creditor shall in no
event be required to use proceeds of the Collateral to cure a default.
7. ADMINISTRATION OF COLLATERAL. The provisions set forth below shall govern
the administration of the Collateral:
(a) VOTING. Until there shall have occurred any default hereunder, Debtor
shall be entitled to vote or consent with respect to the Collateral in any
manner not inconsistent with this Agreement, to the extent the Collateral
carries any rights of voting or consent.
(b) FURTHER DOCUMENTS. Debtor will forthwith upon request by Creditor and
in confirmation of the security interest hereby created, execute and deliver to
Creditor such further assignments, transfers, assurances, instruments, notices
and agreements in form and substance as the Creditor shall reasonably request.
(c) REMEDIES. In addition to any rights and remedies otherwise available
in law or in equity, and in addition to the other provisions of this Agreement,
and any other documents or instruments delivered or to be delivered in
connection herewith or therewith, or any document or instrument now in
existence, or which may hereafter be made, with respect to the Promissory Note,
the provisions set forth below shall, to the extent permitted by applicable law,
govern Creditor's rights to foreclose on the Collateral upon a default
hereunder.
(d) CONDUCT OF SALE. Upon giving written notice of default to Debtor
pursuant to the terms of this Agreement, Creditor may sell as much of the
Collateral as is required to produce net funds sufficient to pay Creditor the
full amount of the Promissory Note.
(e) SALE OR DISPOSITION. Upon any sale or disposition, Creditor shall have
the right to deliver, assign, and transfer to the purchaser thereof the
Collateral so sold or disposed. Each purchaser at any such sale or other
disposition shall hold the Collateral free from any claim or right of whatever
kinds, including any equity or right of redemption of the Debtor. The Debtor
specifically waives all rights of redemption, stay or appraisal which it has or
may hereafter have under any rule of law or statute now existing or hereafter
adopted.
(f) ATTORNEY-IN-FACT. Creditor or its designee is hereby appointed
attorney-in-fact for Debtor for the purpose of carrying out the provisions of
this Agreement and taking any action in executing any instrument which Creditor
reasonably may deem necessary and advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and one coupled with an
interest.
8. MISCELLANEOUS.
(a) TERMINATION. This Agreement shall terminate upon Debtor's payment in
full and the performance of the Promissory Note.
(b) AGREEMENT BINDING. This Agreement shall be binding upon Debtor and its
heirs, executors, personal representatives and successors, and shall inure to
the benefit of, and be enforceable by, Creditor and its successors and assigns.
Debtor hereby represents and warrants to Creditor that it has full legal
authority to enter into this Agreement, to pledge the Collateral and to carry
out the provisions hereof and no consent or approval from any other person or
entity is necessary to enter into this Agreement or carry out its terms.
(c) SEVERABILITY. If any provision of this Agreement shall be deemed or
held to be invalid or unenforceable for any reason, such provision shall be
adjusted, if possible, rather than voided, so as to achieve the intent of the
parties to the fullest extent possible. In any event, such provision shall be
severable from, and shall not be construed to have any effect on, the remaining
provisions of this Agreement, which shall continue in full force and effect.
(d) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts, between residents thereof, to be wholly performed within the State of
California. Debtor hereby irrevocably consents to the jurisdiction of the Courts
of the State of California located in San Diego County and of any Federal Court
located in San Diego County, California in connection with any action or
proceeding arising out of or relating to this Agreement.
(e) RIGHTS CUMULATIVE; NO WAIVER. Creditor's options, powers, rights,
privileges, and immunities specified herein or arising hereunder are in addition
to, and not exclusive of, those otherwise created or existing now or at any
time, whether by contract, by statute or by rule of law. Creditor shall not, by
any act, delay, omission
2
or otherwise, be deemed to have modified, discharged or waived any of Creditor's
options, powers, or rights in respect of this Agreement, and no modification,
discharge or waiver of any such option, power, or right shall be valid unless
set forth in writing signed by Creditor or Creditor's authorized agent, and then
only to the extent therein set forth. A waiver by Creditor of any right or
remedy hereunder on any one occasion shall be effective only in the specific
instance and for the specific purpose for which given, and shall not be
construed as a bar to any right or remedy that Creditor would otherwise have on
any other occasion.
(f) ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Debtor and Creditor with respect to the subject matter herein, and supersedes
all prior communications relating thereto, including, without limitation, all
oral statements or representations. No supplement to or modification of this
Agreement shall be binding unless executed in writing by Debtor and Creditor.
(g) COSTS OF ENFORCEMENT. Debtor shall upon demand pay to Creditor the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of counsel and/or any experts and agents, that Creditor may incur
in connection with (a) the administration of this Agreement, (b) the exercise or
enforcement of any of the rights of Creditor hereunder (including the defense of
any claims or counterclaims asserted against Creditor arising out of this
Agreement or the transactions contemplated hereby) or under any judgment awarded
to Creditor in respect of its rights hereunder (which obligation shall be
severable from the remainder of this Agreement and shall survive the entry of
any such judgment), or (c) the failure by Debtor to perform or observe any of
the provisions hereof. The foregoing shall include any and all expenses and fees
incurred by Creditor in connection with a bankruptcy, reorganization,
receivership, or similar debtor-relief proceeding by or affecting Debtor or the
Collateral.
(h) NOTICES. All notices, demands and other communications required or
permitted hereunder shall be in writing, addressed to the parties at the
following addresses:
CREDITOR: Robert and Allison Price Charitable Trust
7979 Ivanhoe Avenue, Suite 520
La Jolla, CA 92037
DEBTOR: San Diego Revitalization Corporation
7979 Ivanhoe Ave, Suite 520
La Jolla, CA 92037
or to such other address as may be designated from time to time by notice to the
other parties in the manner set forth herein.
IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as
of the date first above written.
CREDITOR: DEBTOR:
-------- -------
ROBERT AND ALLISON PRICE SAN DIEGO REVITALIZATION CORPORATION
CHARITABLE TRUST
By /s/ Sol Price by /s/ Jack Mcgrory
------------------------------ ----------------------------------
Sol Price - Trustee Jack McGrory - Exec. Vice President
By /s/ Allison Price by /s/ James Cahill
------------------------------- ----------------------------------
Allison Price - Trustee James Cahill - Exec. Vice President
3
EXHIBIT K
---------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Agreement made this 23rd day of December 2003 by and between GALINSON FAMILY
PARTNERSHIP II, a California limited partnership (the "Creditor") and SAN DIEGO
REVITALIZATION CORPORATION, a California non-profit public benefit corporation
(the "Debtor").
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties
hereto agree as follows:
1. CREATION OF SECURITY INTEREST. Debtor hereby grants to Creditor a security
interest in all of the Debtor's right, title, and interest now owned or acquired
in the future in and to the following described collateral (the "Collateral") in
order to secure the payment and performance of the obligations described in
paragraph 3 below:
Two hundred forty-one thousand six hundred sixty-seven (241,667) Shares of
Price Legacy Series A preferred stock.
2. BROKERAGE ACCOUNT AND POSSESSION OF STOCK.
A) Debtor agrees that James F. Cahill ("Holder") shall maintain an
account with Morgan Stanley at 1225 Prospect Street, La Jolla, California 92037
in the name of Holder, as Custodian for Debtor ("Broker Account"). Debtor shall
immediately deposit the Collateral to the Broker Account. Debtor acknowledges
and agrees that under the terms of the Broker Account only the Holder shall be
entitled to give instructions regarding the assets held in the Broker Account
and Debtor shall have no ability to withdraw the Collateral from the Broker
Account.
B) Holder agrees to maintain the Broker Account as the custodian of
Debtor and retain the Collateral in the Broker Account until either (i) this
Pledge terminates or (ii) he receives written notice from Creditor that an event
of default under the Promissory Note has occurred and Debtor has failed to cure
said default within five (5) business days from the date of occurrence.
C) In the event of a default, as provided in paragraph 6 herein, Debtor
shall have the right to direct Holder, and Holder shall be obligated at Debtor's
written direction, to sell the Collateral and pay to Creditor the lesser of (i)
the net proceeds of the sale or (ii) the full amount due under the Promissory
Note.
D) Creditor may at any time change the Holder, or appoint additional
Holders.
3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall hereafter
secure the payment to Creditor of all indebtedness now or hereafter owed to
Creditor by Debtor under a promissory note of even date herewith (the
"Promissory Note") given by Debtor in the face amount of Three Million Dollars
($3,000,000), together with any interest thereon and extensions, modifications,
and renewals thereof.
4. CASH DISTRIBUTIONS. So long as no default, and no condition or event which
with notice or lapse of time, or both, would constitute a default, shall have
occurred or exist under this Agreement, Debtor shall be entitled to receive all
distributions (including cash and property) with respect to the Collateral;
provided, however, that any distributions from the liquidation of the Collateral
shall be paid to Creditor to the extent of unpaid principal and accrued unpaid
interest under the Promissory Note. Upon the occurrence of a default or any
condition or event which with notice or lapse of time, or both, would constitute
a default hereunder, Creditor shall thereafter receive and may apply all
distributions with respect to the Collateral against the indebtedness secured
hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents that as of the effective
date of this Pledge and Security Agreement (A) Debtor is the owner of the
Collateral and that Debtor has not otherwise assigned or transferred, and agrees
that Debtor shall not assign or transfer, absolutely or for security, the
Collateral or any interest therein to any other person or entity; (B) there are
no outstanding options, warrants or other agreements with respect to the
Collateral; and (C) the execution and delivery of this Agreement by Debtor will
not result in a violation of any mortgage, indenture, material contract,
instrument, judgment, decree, order, statute, rule or regulation to which Debtor
is subject.
6. DEFAULT AND REMEDIES. Any breach of or event of default under the
Promissory Note or any failure to comply with any of the terms under this
Agreement shall be a default hereunder. Upon any default
hereunder, Creditor shall have the right to exercise its remedies as a secured
party with respect to the Collateral, including, without limitation, the right
to use all or any portion of the Collateral in Creditor's sole and absolute
discretion (a) toward cure of the default; (b) to payment of principal (whether
or not otherwise accelerated) and/or interest; or (c) in such combination
thereof as Creditor may determine. Creditor shall in no event be required to use
proceeds of the Collateral to cure a default.
7. ADMINISTRATION OF COLLATERAL. The provisions set forth below shall govern
the administration of the Collateral:
(a) VOTING. Until there shall have occurred any default hereunder, Debtor
shall be entitled to vote or consent with respect to the Collateral in any
manner not inconsistent with this Agreement, to the extent the Collateral
carries any rights of voting or consent.
(b) FURTHER DOCUMENTS. Debtor will forthwith upon request by Creditor and
in confirmation of the security interest hereby created, execute and deliver to
Creditor such further assignments, transfers, assurances, instruments, notices
and agreements in form and substance as the Creditor shall reasonably request.
(c) REMEDIES. In addition to any rights and remedies otherwise available
in law or in equity, and in addition to the other provisions of this Agreement,
and any other documents or instruments delivered or to be delivered in
connection herewith or therewith, or any document or instrument now in
existence, or which may hereafter be made, with respect to the Promissory Note,
the provisions set forth below shall, to the extent permitted by applicable law,
govern Creditor's rights to foreclose on the Collateral upon a default
hereunder.
(d) CONDUCT OF SALE. Upon giving written notice of default to Debtor
pursuant to the terms of this Agreement, Creditor may sell as much of the
Collateral as is required to produce net funds sufficient to pay Creditor the
full amount of the Promissory Note.
(e) SALE OR DISPOSITION. Upon any sale or disposition, Creditor shall have
the right to deliver, assign, and transfer to the purchaser thereof the
Collateral so sold or disposed. Each purchaser at any such sale or other
disposition shall hold the Collateral free from any claim or right of whatever
kinds, including any equity or right of redemption of the Debtor. The Debtor
specifically waives all rights of redemption, stay or appraisal which it has or
may hereafter have under any rule of law or statute now existing or hereafter
adopted.
(f) ATTORNEY-IN-FACT. Creditor or its designee is hereby appointed
attorney-in-fact for Debtor for the purpose of carrying out the provisions of
this Agreement and taking any action in executing any instrument which Creditor
reasonably may deem necessary and advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and one coupled with an
interest.
8. MISCELLANEOUS.
(a) TERMINATION. This Agreement shall terminate upon Debtor's payment in
full and the performance of the Promissory Note.
(b) AGREEMENT BINDING. This Agreement shall be binding upon Debtor and its
heirs, executors, personal representatives and successors, and shall inure to
the benefit of, and be enforceable by, Creditor and its successors and assigns.
Debtor hereby represents and warrants to Creditor that it has full legal
authority to enter into this Agreement, to pledge the Collateral and to carry
out the provisions hereof and no consent or approval from any other person or
entity is necessary to enter into this Agreement or carry out its terms.
(c) SEVERABILITY. If any provision of this Agreement shall be deemed or
held to be invalid or unenforceable for any reason, such provision shall be
adjusted, if possible, rather than voided, so as to achieve the intent of the
parties to the fullest extent possible. In any event, such provision shall be
severable from, and shall not be construed to have any effect on, the remaining
provisions of this Agreement, which shall continue in full force and effect.
(d) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts, between residents thereof, to be
2
wholly performed within the State of California. Debtor hereby irrevocably
consents to the jurisdiction of the Courts of the State of California located in
San Diego County and of any Federal Court located in San Diego County,
California in connection with any action or proceeding arising out of or
relating to this Agreement.
(e) RIGHTS CUMULATIVE; NO WAIVER. Creditor's options, powers, rights,
privileges, and immunities specified herein or arising hereunder are in addition
to, and not exclusive of, those otherwise created or existing now or at any
time, whether by contract, by statute or by rule of law. Creditor shall not, by
any act, delay, omission or otherwise, be deemed to have modified, discharged or
waived any of Creditor's options, powers, or rights in respect of this
Agreement, and no modification, discharge or waiver of any such option, power,
or right shall be valid unless set forth in writing signed by Creditor or
Creditor's authorized agent, and then only to the extent therein set forth. A
waiver by Creditor of any right or remedy hereunder on any one occasion shall be
effective only in the specific instance and for the specific purpose for which
given, and shall not be construed as a bar to any right or remedy that Creditor
would otherwise have on any other occasion.
(f) ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Debtor and Creditor with respect to the subject matter herein, and supersedes
all prior communications relating thereto, including, without limitation, all
oral statements or representations. No supplement to or modification of this
Agreement shall be binding unless executed in writing by Debtor and Creditor.
(g) COSTS OF ENFORCEMENT. Debtor shall upon demand pay to Creditor the
amount of any and all reasonable expenses, including the reasonable fees and
disbursements of counsel and/or any experts and agents, that Creditor may incur
in connection with (a) the administration of this Agreement, (b) the exercise or
enforcement of any of the rights of Creditor hereunder (including the defense of
any claims or counterclaims asserted against Creditor arising out of this
Agreement or the transactions contemplated hereby) or under any judgment awarded
to Creditor in respect of its rights hereunder (which obligation shall be
severable from the remainder of this Agreement and shall survive the entry of
any such judgment), or (c) the failure by Debtor to perform or observe any of
the provisions hereof. The foregoing shall include any and all expenses and fees
incurred by Creditor in connection with a bankruptcy, reorganization,
receivership, or similar debtor-relief proceeding by or affecting Debtor or the
Collateral.
(h) NOTICES. All notices, demands and other communications required or
permitted hereunder shall be in writing, addressed to the parties at the
following addresses:
CREDITOR: Galinson Family Partnership II
7979 Ivanhoe Avenue, Suite 520
La Jolla, CA 92037
DEBTOR: San Diego Revitalization Corporation
7979 Ivanhoe Ave, Suite 520
La Jolla, CA 92037
or to such other address as may be designated from time to time by notice to the
other parties in the manner set forth herein.
IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as
of the date first above written.
CREDITOR: DEBTOR:
-------- -------
GALINSON FAMILY PARTNERSHIP II SAN DIEGO REVITALIZATION CORPORATION
By /s/ Murray Galinson by /s/ Jack Mcgrory
--------------------------------- -----------------------------------
Murray Galinson - General Partner Jack McGrory - Exec. Vice President
by /s/ James Cahill
-----------------------------------
James Cahill - Exec. Vice President
3