0000912057-01-532739.txt : 20011008 0000912057-01-532739.hdr.sgml : 20011008 ACCESSION NUMBER: 0000912057-01-532739 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20010918 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20010919 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXCEL LEGACY CORP CENTRAL INDEX KEY: 0001050671 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS [6510] IRS NUMBER: 330781747 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14609 FILM NUMBER: 1740679 BUSINESS ADDRESS: STREET 1: 17140 BERNARDO CENTER DR STREET 2: SUITE 300 CITY: SAN DIEGO STATE: CA ZIP: 92128 BUSINESS PHONE: 8586759400 MAIL ADDRESS: STREET 1: 16955 VIA DEL CAMPO STREET 2: SUITE 100 CITY: SAN DIEGO STATE: CA ZIP: 92127 8-K 1 a2059542z8-k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): SEPTEMBER 18, 2001 EXCEL LEGACY CORPORATION (Exact Name of Registrant as Specified in Charter) DELAWARE 0-23503 33-0781747 (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 17140 BERNARDO CENTER DRIVE, SUITE 300 SAN DIEGO, CALIFORNIA 92128 (Address of Principal Executive Offices) (Zip Code) (858) 675-9400 (Registrant's telephone number, including area code) NOT APPLICABLE (Former Name or Former Address, if Changed Since Last Report) This Current Report on Form 8-K is filed by Excel Legacy Corporation, a Delaware corporation ("Legacy"), in connection with the transactions described herein. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On September 18, 2001, Legacy completed the previously announced merger with Price Enterprises, Inc., a Maryland corporation ("Enterprises"). The stock-for-stock merger was completed pursuant to an Agreement and Plan of Merger, dated as of March 21, 2001 (the "Merger Agreement"), among Enterprises, PEI Merger Sub, Inc., a Maryland corporation and wholly owned subsidiary of Enterprises ("Merger Sub"), and Legacy, providing for the merger of Merger Sub with and into Legacy (the "Merger"). Upon completion of the Merger, Legacy became a wholly owned subsidiary of Enterprises and the combined company, Price Legacy Corporation ("Price Legacy"), issued an aggregate of approximately 41,029,284 shares of its common stock, par value $0.0001 per share (the "Price Legacy Common Stock"), to the stockholders of Legacy and assumed Legacy's outstanding options. Pursuant to the Merger Agreement, each share of Legacy common stock, par value $0.01 per share (the "Legacy Common Stock"), was exchanged for 0.6667 of a share of Price Legacy Common Stock (the "Exchange Ratio"). The Price Legacy Common Stock will be traded on the American Stock Exchange under the symbol "XLG." Price Legacy's 8 3/4% Series A Cumulative Redeemable Preferred Stock, par value $0.0001 per share (the "Price Legacy Series A Preferred Stock"), will continue to trade on the Nasdaq National Market under the symbol "PRENP." The Legacy Common Stock was delisted from AMEX and will be deregistered under the Securities Exchange Act of 1934, as amended. Pursuant to the Merger Agreement, Legacy's board of directors was decreased from eight to four members, with Richard J. Nordlund, Robert E. Parsons, Jr., Robert S. Talbott, John H. Wilmot and Graham R. Bullick, Ph.D. resigning from the board and James F. Cahill joining the remaining directors Gary B. Sabin, Richard B. Muir and Jack McGrory. Prior to the Merger, Legacy owned approximately 91.3% of the Price Legacy Common Stock, which served as collateral securing the Legacy Debentures and Legacy Notes (as defined below). In connection with the Merger and Consent Solicitation described below, these shares were cancelled. Concurrently with the closing of the Merger was the completion of the previously announced $100 million investment by Warburg, Pincus Equity Partners, L.P. and certain of its affiliates ("Warburg Pincus") in Price Legacy (the "Warburg Investment"). The Warburg Investment was completed pursuant to a Securities Purchase Agreement (the "Securities Purchase Agreement") between Enterprises and Warburg Pincus, pursuant to which Price Legacy sold Warburg Pincus (a) 17,985,612 shares of a new class of preferred stock, 9% Series B Junior Convertible Redeemable Preferred Stock, par value $0.0001 per share (the "Price Legacy Series B Preferred Stock"), and (b) a warrant (the "Warburg Warrant") to purchase an aggregate of 2.5 million shares of Price Legacy Common Stock at an exercise price of $8.25 per share. The Price Legacy Series B Preferred Stock is junior to the Price Legacy Series A Preferred Stock with respect to dividend, liquidation and other rights, and is convertible under certain conditions into Price Legacy Common Stock at $5.56 per share after 24 months from the date of issuance. The 9% coupon will be paid in kind with additional shares of Price Legacy Series B Preferred Stock for the first 45 months from issuance. Immediately following the closing of the Warburg Investment, Price Legacy converted a Legacy promissory note of approximately $9.3 million (the "Legacy Promissory Note") payable to The Price Group LLC, a California limited liability company (the "Price Group"), into 1,681,142 shares of Price Legacy Series B Preferred Stock and a warrant (together with the Warburg Warrant, the "Warrants") to purchase 233,679 shares of Price Legacy Common Stock at an exercise price of $8.25 per share. The conversion of the Legacy Promissory Note was completed pursuant to a Conversion Agreement (the "Conversion Agreement"), effective as of April 12, 2001, among Enterprises, The Sol and Helen Price Trust, Warburg Pincus and Legacy. Pursuant to the Securities Purchase Agreement and the Conversion Agreement, Price Legacy entered into a Registration Rights Agreement (the "Registration Rights Agreement") with Warburg Pincus and the Price Group, by which it granted Warburg Pincus and the Price Group certain registration rights covering the Price Legacy Common Stock underlying the Price Legacy Series B Preferred Stock and the Warrants. ITEM 5. OTHER EVENTS. On September 18, 2001, Price Legacy announced that it had accepted for exchange the 9% Convertible Redeemable Subordinated Secured Debentures due 2004 (the "Legacy Debentures") and 10% Senior Redeemable Secured Notes due 2004 (the "Legacy Notes") of Legacy, pursuant to the terms of its exchange offer commenced on August 10, 2001 (the "Exchange Offer"). Price Legacy also announced that it obtained the requisite consent under the consent solicitation (the "Consent Solicitation") to release the collateral securing the Legacy Debentures and Legacy Notes. The Exchange Offer and Consent Solicitation expired at 5:00 p.m., New York City time, on September 18, 2001. Price Legacy accepted a total of approximately $30.4 million in principal amount of Legacy Debentures and $15.8 million in principal amount of Legacy Notes. All Legacy Debentures and Legacy Notes properly tendered and not withdrawn prior to the expiration of the Exchange Offer were accepted by Price Legacy. In exchange for the Legacy Debentures and Legacy Notes, Price Legacy issued an aggregate of approximately 3,080,754 shares of Price Legacy Series A Preferred Stock. Following the exchange of Legacy Debentures and Legacy Notes, Price Legacy has approximately 27,267,644 shares of Series A Preferred Stock outstanding. In connection with the Merger and Consent Solicitation, Legacy, Price Legacy and Wells Fargo Bank Minnesota, N.A. (the "Trustee") entered into a First Supplemental Indenture, dated as of September 18, 2001, with respect to the Legacy Debentures (the "Supplemental Debenture Indenture"), pursuant to which the Legacy Debentures are no longer secured obligations of Legacy and are now convertible into Price Legacy Common Stock, as adjusted to reflect the Exchange Ratio. Legacy and the Trustee also entered into a First Supplemental Indenture, dated as of September 18, 2001, with respect to the Legacy Notes (the "Supplemental Note Indenture"), pursuant to which the Legacy Notes are no longer secured obligations of Legacy. Attached and incorporated herein by reference as Exhibits 2.1, 4.1, 4.2, 10.1, 10.2, 10.3 and 10.4, respectively, are copies of (a) the Merger Agreement, (b) the Supplemental Debenture Indenture, (c) the Supplemental Note Indenture, (d) the Securities Purchase Agreement, (e) the Conversion Agreement, (f) the Registration Rights Agreement and (g) the form of Warrant. The foregoing descriptions are qualified in their entirety by reference to the full text of such exhibits. A joint press release of Legacy and Enterprises announcing the approval and completion of the Merger and the sale of the Price Legacy Series B Preferred Stock and the expiration of the Exchange Offer and Consent Solicitation is attached to this report as Exhibit 99.1. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired. (i) The Consolidated Financial Statements of Excel Legacy Corporation as of December 31, 2000, and for each of the years ended December 31, 2000 and 1999, are incorporated by reference herein. (ii)The Unaudited Consolidated Financial Statements of Excel Legacy Corporation as of June 30, 2001, and for each of the six months ended June 30, 2001 and 2000, are incorporated by reference herein. (b) Pro Forma Financial Information. The pro forma financial information that is required to be filed pursuant to this item will be filed by amendment not later than 60 days following the due date of this report. (c) Exhibits. 2.1(1) Agreement and Plan of Merger, dated as of March 21, 2001, by and among Price Enterprises, Inc., PEI Merger Sub, Inc. and Excel Legacy Corporation. 4.1(2) First Supplemental Indenture, dated as of September 18, 2001, by and among Excel Legacy Corporation, Price Legacy Corporation and Wells Fargo Bank Minnesota, N.A. with respect to the 9% Convertible Redeemable Subordinated Secured Debentures due 2004 of Excel Legacy Corporation. 4.2(2) First Supplemental Indenture, dated as of September 18, 2001, by and between Excel Legacy Corporation and Wells Fargo Bank Minnesota, N.A. with respect to the 10% Senior Redeemable Secured Notes due 2004 of Excel Legacy Corporation. 10.1(1) Securities Purchase Agreement, dated as of March 21, 2001, by and among Price Enterprises, Inc., Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg, Pincus Netherlands Equity Partners II, C.V. and Warburg, Pincus Netherlands Equity Partners III, C.V. 10.2(3) Conversion Agreement, dated as of April 12, 2001, by and among Price Enterprises, Inc., The Sol and Helen Price Trust, Warburg, Pincus Equity Partners, L.P. and Excel Legacy Corporation. 10.3(4) Registration Rights Agreement, dated as of September 18, 2001, by and among Price Enterprises, Inc., Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg, Pincus Netherlands Equity Partners II, C.V. and Warburg, Pincus Netherlands Equity Partners III, C.V. 10.4(1) Form of Common Stock Purchase Warrant issued to Warburg, Pincus Equity Partners, L.P. and The Price Group LLC. 99.1(2) Joint Press Release, dated September 18, 2001, of Excel Legacy Corporation and Price Enterprises, Inc. 99.2(5) Financial Statements of Excel Legacy Corporation. -------- (1) Incorporated by reference to Current Report on Form 8-K of Enterprises filed with the SEC on March 23, 2001. (2) Filed herewith. (3) Incorporated by reference to Quarterly Report on Form 10-Q/A of Enterprises filed with the SEC on May 24, 2001. (4) Incorporated by reference to Current Report on Form 8-K of Enterprises filed with the SEC on September 19, 2001. (5) Incorporated by reference to Annual Report on Form 10-K of Legacy filed with the SEC on March 20, 2001, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on April 27, 2001, Amendment No. 2 on Form 10-K/A filed with the SEC on May 25, 2001 and Amendment No. 3 on Form 10-K/A filed with the SEC on July 31, 2001, and Quarterly Report on Form 10-Q of Legacy filed with the SEC on August 14, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EXCEL LEGACY CORPORATION Date: September 19, 2001 By:/s/ James Y. Nakagawa ------------------------------ Name: James Y. Nakagawa Title: Chief Financial Officer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 2.1(1) Agreement and Plan of Merger, dated as of March 21, 2001, by and among Price Enterprises, Inc., PEI Merger Sub, Inc. and Excel Legacy Corporation. 4.1(2) First Supplemental Indenture, dated as of September 18, 2001, by and among Excel Legacy Corporation, Price Legacy Corporation and Wells Fargo Bank Minnesota, N.A. with respect to the 9% Convertible Redeemable Subordinated Secured Debentures due 2004 of Excel Legacy Corporation. 4.2(2) First Supplemental Indenture, dated as of September 18, 2001, by and between Excel Legacy Corporation and Wells Fargo Bank Minnesota, N.A. with respect to the 10% Senior Redeemable Secured Notes due 2004 of Excel Legacy Corporation. 10.1(1) Securities Purchase Agreement, dated as of March 21, 2001, by and among Price Enterprises, Inc., Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg, Pincus Netherlands Equity Partners II, C.V. and Warburg, Pincus Netherlands Equity Partners III, C.V. 10.2(3) Conversion Agreement, dated as of April 12, 2001, by and among Price Enterprises, Inc., The Sol and Helen Price Trust, Warburg, Pincus Equity Partners, L.P. and Excel Legacy Corporation. 10.3(4) Registration Rights Agreement, dated as of September 18, 2001, by and among Price Enterprises, Inc., Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Netherlands Equity Partners I, C.V., Warburg, Pincus Netherlands Equity Partners II, C.V. and Warburg, Pincus Netherlands Equity Partners III, C.V. 10.4(1) Form of Common Stock Purchase Warrant issued to Warburg, Pincus Equity Partners, L.P. and The Price Group LLC. 99.1(2) Joint Press Release, dated September 18, 2001, of Excel Legacy Corporation and Price Enterprises, Inc. 99.2(5) Financial Statements of Excel Legacy Corporation. -------- (1) Incorporated by reference to Current Report on Form 8-K of Enterprises filed with the SEC on March 23, 2001. (2) Filed herewith. (3) Incorporated by reference to Quarterly Report on Form 10-Q/A of Enterprises filed with the SEC on May 24, 2001. (4) Incorporated by reference to Current Report on Form 8-K of Enterprises filed with the SEC on September 19, 2001. (5) Incorporated by reference to Annual Report on Form 10-K of Legacy filed with the SEC on March 20, 2001, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on April 27, 2001, Amendment No. 2 on Form 10-K/A filed with the SEC on May 25, 2001 and Amendment No. 3 on Form 10-K/A filed with the SEC on July 31, 2001, and Quarterly Report on Form 10-Q of Legacy filed with the SEC on August 14, 2001. EX-4.1 3 a2059542zex-4_1.txt EXHIBIT 4.1 Exhibit 4.1 FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of September 18, 2001, among Excel Legacy Corporation, a Delaware corporation (the "Company"), Price Legacy Corporation, a Maryland corporation ("Price Legacy"), and Wells Fargo Bank Minnesota, N.A. (the "Trustee"). RECITALS WHEREAS, the Company and the Trustee entered into an Indenture, dated as of November 5, 1999 (the "Indenture"), pursuant to which the Company has originally issued its 9.0% Convertible Redeemable Subordinated Secured Debentures due November 5, 2004 (the "Securities"); WHEREAS, Section 9.02 of the Indenture provides that, subject to certain conditions stated therein, the Company and the Trustee may amend the Indenture or the Securities with the written consent of the Holders of a majority in principal amount of the then outstanding Securities (the "Requisite Consents"); WHEREAS, the Company deems it desirable to make certain amendments to the Indenture; WHEREAS, the merger of the Company with and into a wholly-owned subsidiary of Price Legacy (the "Merger") has occurred as of September 18, 2001, and Price Legacy desires to assume the obligations set forth in Section 10 of the Indenture, as appropriately adjusted to reflect that each share of common stock of the Company was converted into 0.6667 of a share of common stock of Price Legacy in the Merger; and WHEREAS, the Company and Price Legacy have determined that all things necessary to make this Supplemental Indenture a valid indenture and agreement according to its terms, including without limitation the receipt of the Requisite Consents, have been done, and the Company has delivered to the Trustee an Officer's Certificate and Opinion of Counsel stating that all conditions precedent provided for in the Indenture relating to executing this Supplemental Indenture have been complied with. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto mutually covenant and agree for the equal and ratable benefit of the Holders of the Securities as follows: ARTICLE ONE AMENDMENTS TO INDENTURE 1.1 GENERAL AMENDMENTS. The Indenture is amended by deleting the term "9.0% Convertible Redeemable Subordinated Secured Debentures due November 5, 2004" throughout the Indenture and substituting the following term therefor: "9.0% Convertible Redeemable Subordinated Debentures due November 5, 2004." 1.2 AMENDMENTS TO ARTICLE 1. (a) Section 1.01 of the Indenture is amended by deleting the following definitions in their entirety: "Collateral Agent" "Pledge Agreement" "Pledged Collateral" (b) Section 1.01 of the Indenture is amended by deleting the definition of "Securities" in its entirety and substituting the following therefor: "Securities" means the 9.0% Convertible Redeemable Subordinated Debentures due 2004 issued under this Indenture in the form of Exhibit A hereto. 1.3 AMENDMENTS TO ARTICLE 6. Section 6.01 of the Indenture is amended by deleting subsection (3) and substituting the following therefor: "(3) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture and the Default continues for the period and after the notice specified below, whether or not such payments shall be prohibited by Article 11;" 1.4 AMENDMENTS TO ARTICLE 11. Section 11.01 of the Indenture is amended to read in its entirety as follows: "The Company agrees, and each Securityholder by accepting a Security agrees, that the indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article, to the prior payment in full of all Senior Debt, and that the subordination is for the benefit of the holders of Senior Debt." 1.5 AMENDMENTS TO ARTICLE 12. Article 12 of the Indenture is amended to read in its entirety as follows: "Article 12. [Intentionally Omitted.]" 1.6 AMENDMENTS TO ARTICLE 13. Section 13.08 of the Indenture is amended to read in its entirety as follows: "A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by excepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities." 1.7 AMENDMENTS TO EXHIBIT A. (a) Exhibit A is amended by deleting the term "9.0% Convertible Redeemable Subordinated Secured Debentures due 2004" throughout Exhibit A and substituting the following therefor: "9.0% Convertible Redeemable Subordinated Debentures due 2004." (b) Paragraph 4 of Exhibit A is amended to read in its entirety as follows: "4. Indenture. The Company issued the Securities under an Indenture dated as of November 5, 1999 ("Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA") as in effect on the date of the Indenture. The Securities are subject to, and qualified by, all such terms, certain of which are summarized hereon, and Securityholders are referred to the Indenture and such Act for a statement of such terms. The Securities are general obligations of the Company limited to $36,599,767 in aggregate principal amount." (c) Paragraph 7 of Exhibit A is amended to read in its entirety as follows: " 7. Conversion. A holder of a Security may convert it into Common Stock of the Company at any time before the close of business (New York time) on the day prior to the maturity date. If the Security is called for redemption, the holder may convert it at any time before the close of business (New York time) on the day prior to the redemption date (unless the Company shall default in payment due upon redemption thereof). The conversion price of $8.25 per share is subject to adjustment in certain events. To determine the number of shares issuable upon conversion of a Security, divide the principal amount to be converted by the conversion price in effect on the conversion date. On conversion, no payment or adjustment for interest will be made. However, interest will be paid on any interest payment date with respect to Securities surrendered for conversion after a record date for the payment of interest to the registered holder on such record date. The Company will deliver a check for any fractional share." 1.8 AMENDMENTS TO EXHIBIT B. Exhibit B is hereby terminated in its entirety. ARTICLE TWO ASSUMPTION 2.1 Price Legacy, as the parent corporation of the Company following the Merger, acknowledges and assumes the obligations set forth in Section 10 of the Indenture, as appropriately adjusted to reflect that each share of common stock of the Company was converted into 0.6667 of a share of common stock of Price Legacy in the Merger. ARTICLE THREE MISCELLANEOUS 3.1 Upon the execution and delivery of this Supplemental Indenture by each of the Company, Price Legacy and the Trustee, the Indenture shall be amended and supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby, as hereby amended and supplemented. 3.2 This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes. Except as specifically modified herein, the Indenture and the Securities are in all respects ratified and confirmed and shall remain in full force and effect in accordance with their terms, with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture. 3.3 Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto. 3.4 THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. 3.5 The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement. [NEXT PAGE IS SIGNATURE PAGE] IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above. EXCEL LEGACY CORPORATION, a Delaware corporation By: /s/ Richard B. Muir ----------------------------- Name: Richard B. Muir --------------------------- Title: President -------------------------- PRICE LEGACY CORPORATION, a Maryland corporation By: /s/ Graham R. Bullick ----------------------------- Name: Graham R. Bullick --------------------------- Title: President -------------------------- WELLS FARGO BANK MINNESOTA, N.A. By: /s/ Michael G. Slade ----------------------------- Name: Michael G. Slade --------------------------- Title: Corporate Trust Officer -------------------------- EX-4.2 4 a2059542zex-4_2.txt EXHIBIT 4.2 Exhibit 4.2 FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of September 18, 2001, between Excel Legacy Corporation, a Delaware corporation (the "Company"), and Wells Fargo Bank Minnesota, N.A. (the "Trustee"). RECITALS WHEREAS, the Company and the Trustee entered into an Indenture, dated as of November 5, 1999 (the "Indenture"), pursuant to which the Company has originally issued its 10.0% Senior Redeemable Secured Notes due November 5, 2004 (the "Securities"); WHEREAS, Section 9.02 of the Indenture provides that, subject to certain conditions stated therein, the Company and the Trustee may amend the Indenture or the Securities with the written consent of the Holders of a majority in principal amount of the then outstanding Securities (the "Requisite Consents"); WHEREAS, the Company deems it desirable to make certain amendments to the Indenture; and WHEREAS, the Company has determined that all things necessary to make this Supplemental Indenture a valid indenture and agreement according to its terms, including without limitation the receipt of the Requisite Consents, have been done, and the Company has delivered to the Trustee an Officer's Certificate and Opinion of Counsel stating that all conditions precedent provided for in the Indenture relating to executing this Supplemental Indenture have been complied with. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto mutually covenant and agree for the equal and ratable benefit of the Holders of the Securities as follows: ARTICLE ONE AMENDMENTS TO INDENTURE 1.1 GENERAL AMENDMENTS. The Indenture is amended by deleting the term "10.0% Senior Redeemable Secured Notes due November 5, 2004" throughout the Indenture and substituting the following term therefor: "10.0% Senior Redeemable Notes due November 5, 2004." 1.2 AMENDMENTS TO ARTICLE 1. (a) Section 1.01 of the Indenture is amended by deleting the following definitions in their entirety: "Collateral Agent" "Pledge Agreement" "Pledged Collateral" (b) Section 1.01 of the Indenture is amended by deleting the definition of "Securities" in its entirety and substituting the following therefor: "Securities" means the 10.0% Senior Redeemable Notes due 2004 issued under this Indenture in the form of Exhibit A hereto. 1.3 AMENDMENTS TO ARTICLE 6. Section 6.01 of the Indenture is amended by deleting subsection (3) and substituting the following therefor: "(3) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities or this Indenture and the Default continues for the period and after the notice specified below;" 1.4 AMENDMENTS TO ARTICLE 10. Article 10 of the Indenture is amended to read in its entirety as follows: "Article 10. [Intentionally Omitted.]" 1.5 AMENDMENTS TO ARTICLE 11. Section 11.08 of the Indenture is amended to read in its entirety as follows: "A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by excepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities." 1.6 AMENDMENTS TO EXHIBIT A. (a) Exhibit A is amended by deleting the term "10.0% Senior Redeemable Secured Notes due 2004" throughout Exhibit A and substituting the following therefor: "10.0% Senior Redeemable Notes due 2004." (b) Paragraph 4 of Exhibit A is amended to read in its entirety as follows: "4. Indenture. The Company issued the Securities under an Indenture dated as of November 5, 1999 ("Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA") as in effect on the date of the Indenture. The Securities are subject to, and qualified by, all such terms, certain of which are summarized hereon, and Securityholders are referred to the Indenture and such Act for a statement of such terms. The Securities are general obligations of the Company limited to $19,963,509 in aggregate principal amount." 1.7 AMENDMENTS TO EXHIBIT B. Exhibit B is hereby terminated in its entirety. ARTICLE TWO MISCELLANEOUS 2.1 Upon the execution and delivery of this Supplemental Indenture by each of the Company and the Trustee, the Indenture shall be amended and supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby, as hereby amended and supplemented. 2.2 This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes. Except as specifically modified herein, the Indenture and the Securities are in all respects ratified and confirmed and shall remain in full force and effect in accordance with their terms, with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture. 2.3 Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto. 2.4 THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. 2.5 The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement. [NEXT PAGE IS SIGNATURE PAGE] IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above. EXCEL LEGACY CORPORATION, a Delaware corporation By: /s/ Graham R. Bullick ------------------------------- Name: Graham R. Bullick ----------------------------- Title: Senior Vice President ---------------------------- WELLS FARGO BANK MINNESOTA, N.A. By: /s/ Michael G. Slade ------------------------------- Name: Michael G. Slade ----------------------------- Title: Corporate Trust Officer ---------------------------- EX-99.1 5 a2059542zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 NEWS EXCEL LEGACY CORPORATION AND PRICE ENTERPRISES, INC. -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE: SEPTEMBER 18, 2001 (XLG)(PREN) CONTACT: GRAHAM R. BULLICK, PH.D., PRESIDENT, PRICE LEGACY CORPORATION 17140 BERNARDO CENTER DRIVE, SUITE 300, SAN DIEGO, CA 92128 (858) 675-9400 EXCEL LEGACY CORPORATION AND PRICE ENTERPRISES, INC. ANNOUNCE CLOSING OF MERGER AND $100 MILLION INVESTMENT BY WARBURG PINCUS AND RESULTS OF EXCHANGE OFFER AND TENDER OFFER SAN DIEGO, CA. (September 18, 2001) - Price Legacy Corporation (Amex: XLG) announced today it has completed the merger between Excel Legacy Corporation (Amex: XLG) and Price Enterprises, Inc. (Nasdaq: PREN) effective today. The merger was approved by the stockholders of both companies September 11, 2001 but due to the tragic events last week the merger was delayed until after financial markets were reopened. Announced concurrently with the closing of the merger was the successful completion of a $100 million investment by Warburg Pincus in the resultant company of the merger, Price Legacy Corporation. Commenting on the completion of the merger and investment by Warburg Pincus, Gary B. Sabin, Chief Executive Officer of Price Legacy said, "As previously stated, we believe the merger transaction and investment from Warburg Pincus focuses and streamlines our activities and gives Price Legacy a strong financial foundation from which it can continue to grow and operate. We are delighted to effect this merger and welcome Warburg Pincus as a partner to our stockholder base." Beginning on Wednesday, September 19, 2001, Price Legacy's common stock will be traded on the AMEX under the symbol "XLG." Price Legacy's Series A preferred stock will continue to trade on the Nasdaq National Market under the symbol "PRENP." Price Legacy also announced today the results of its exchange offer for Legacy's 9% Convertible Redeemable Subordinated Secured Debentures due 2004 and 10% Senior Redeemable Secured Notes due 2004 and related consent solicitation and its tender offer for shares of Price Enterprises' common stock. Both the exchange offer and the tender offer expired on September 18, 2001. Based on the count provided by Mellon Investor Services LLC, the exchange agent for the exchange offer, Price Legacy accepted for exchange approximately $30.4 million in Legacy debentures and $15.8 million in Legacy notes. Price Legacy also announced that it obtained the requisite consent under the consent solicitation to release the collateral securing the Legacy debentures and Legacy notes. As previously disclosed in the exchange offer, Price Legacy's Series A preferred stock issued in connection with the exchange offer will begin accruing dividends from August 16, 2001. Due to the partial dividends, the Series A preferred stock issued in the exchange offer will be traded on the Nasdaq National Market under the symbol "PRENO" until the close of the current dividend period, and will then be traded with the currently existing Price Legacy Series A preferred stock under the symbol "PRENP." Following the exchange of Legacy debentures and Legacy notes, Price Legacy will have approximately 27.3 million shares of Series A preferred stock outstanding. Based on the count provided by Mellon Investor Services, the depositary for the tender offer, Price Legacy accepted for purchase approximately 762,000 shares of Price Enterprises' common stock. Following the merger and the purchase of shares through the tender offer, Price Legacy will have approximately 40.8 million shares of common stock outstanding. Payment for the debentures, notes and common stock accepted in the exchange offer and the tender offer and the return of securities not accepted will be made promptly by Mellon Investor Services. PRICE LEGACY CORPORATION is a national real estate firm, a REIT, which acquires, operates and develops open-air retail properties. For more information, please visit our website at WWW.PRICELEGACY.COM. EXCEL LEGACY CORPORATION, a wholly-owned subsidiary of Price Legacy, is a real estate company which acquires, sells, develops, manages, invests, finances and operates real property and related businesses. #### Certain statements in this release that are not historical fact may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of Price Legacy and Legacy to differ materially from historical results or from any results expressed or implied by such forward-looking statements, including without limitation: national and local economic conditions; the competitive environment in which the companies operate; financing risks; property management risks; acquisition and development risks; potential environmental and other liabilities; and other factors affecting the real estate industry generally. The companies refer you to the documents they file from time to time with the Securities and Exchange Commission, specifically the section titled "Factors That May Affect Future Performance" in Price Enterprises' Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000 and the section titled "Certain Cautionary Statements" in Legacy's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000, which discuss these and other factors that could adversely affect the companies' results. Please be advised that the safe harbor protections of the Private Securities Litigation Reform Act of 1995 are not available to statements made in connection with the tender offer.