SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 2)
(FINAL AMENDMENT)
Under the Securities Exchange Act of 1934
PRICE ENTERPRISES, INC.
(Name of Issuer)
Common Stock, $.0001 par value per share
(Title of Class of Securities)
741444103
(CUSIP Number of Class of Securities)
Donald E. Burdick, Esq.
Price/Costco, Inc.
10809 120th Avenue NE
Kirkland, Washington 98033
(206) 803-8100
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Joseph J. Giunta, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071-3144
(213) 687-5000
February 9, 1995
(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 which is the
subject of this Statement because of Rule 13d-1(b)(3) or
(4), check the following:
( )
Check the following box if a fee is being paid with this
Statement:
( )
CUSIP No. 741444103 13D
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Price/Costco, Inc.
33-0572969
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
Not applicable.
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ( )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
: 0
: (8) SHARED VOTING
NUMBER OF SHARES BENEFICIALLY : 0
OWNED BY EACH REPORTING :
PERSON WITH : (9) SOLE DISPOSITIVE
: 0
:(10) SHARED DISPOSITIVE
: 0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
0
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0.0%
(14) TYPE OF REPORTING PERSON*
CO
This Amendment No. 2 (Final Amendment) to the
Schedule 13D filed on January 3, 1995 by the Reporting
Person (as amended, the "Schedule 13D") is being filed to
amend and supplement Items 4, 5 and 6.
Unless otherwise indicated, each capitalized
term used but not otherwise defined herein shall have the
meaning assigned to such term in the Schedule 13D. The
information set forth in the Exhibits attached hereto is
hereby expressly incorporated herein by reference and the
response to each item of this Amendment is qualified in
its entirety by the provisions of such Exhibits.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and supplemented as
follows:
On February 9, 1995, pursuant to the Transfer
and Exchange Agreement, the Reporting Person sold to the
Issuer 3,775,972 shares of Price Enterprises Common
Stock, representing all of the shares of Price
Enterprises Common Stock owned by the Reporting Person
(the "Sale"), in exchange for a secured promissory note,
dated February 6, 1995, made by the Issuer in favor of
The Price Company, a wholly owned subsidiary of the
Reporting Person ("Price"), in the principal amount of
$45,925,259.45, a copy of which is attached hereto as
Exhibit 5 (the "Promissory Note"). The Promissory Note
is secured by, and the Issuer has granted Price a first
priority security interest in, 3,775,972 shares of Price
Enterprises Common Stock pursuant to a Security and
Pledge Agreement, dated as of February 6, 1995, between
Price and the Reporting Person, a copy of which is
attached hereto as Exhibit 6.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended and supplemented as
follows:
The Reporting Person is the beneficial owner of
no shares of Price Enterprises Common Stock, or 0.0% of
the shares of Price Enterprises Common Stock outstanding.
As a result of the Sale, the Reporting Person
ceased to be the beneficial owner of more than five
percent of Price Enterprises Common Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER.
Item 6 is hereby amended and supplemented as
follows:
The information set forth in Item 4 hereof is
hereby incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Description
5 Secured Promissory Note, dated February 6,
1995, made by Price Enterprises, Inc. in
favor of The Price Company in the
principal amount of $45,925,259.45.
6 Security and Pledge Agreement, dated as of
February 6, 1995, between The Price
Company and Price Enterprises, Inc.
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: February 10, 1995
PRICE/COSTCO, INC.
By: /s/ Donald E. Burdick
Donald E. Burdick
Vice President
Exhibit Index
Exhibit Description Page
5 Secured Promissory Note, dated
February 6, 1995, made by Price
Enterprises, Inc. in favor of
The Price Company in the
principal amount of
$45,925,259.45
6 Security and Pledge Agreement,
dated as of February 6, 1995,
between The Price Company and
Price Enterprises, Inc.
Exhibit 5
SECURED PROMISSORY NOTE
$45,925,259.45 San Diego, California
February 6, 1995
Price Enterprises, Inc. (the "Borrower"), a
Delaware corporation, for value received, hereby promises to
pay to The Price Company (the "Lender"), a Delaware
corporation, or order, the principal sum of FORTY-FIVE
MILLION NINE HUNDRED TWENTY-FIVE THOUSAND TWO HUNDRED AND
FIFTY-NINE and 45/100 DOLLARS ($45,925,259.45) on December
21, 1996. The Borrower further promises to pay interest
monthly in arrears (computed on the basis of the actual
number of days elapsed in a 360-day year) on the unpaid
principal of this Note at a rate per annum equal to the
LIBOR rate for United States dollar deposits in the London
market for a three-month term as published in the western
edition of The Wall Street Journal (which equals 6.25% on
February 6, 1995) plus 15 basis points, adjusted quarterly
(the "Rate"), until such principal amount is paid in full,
to the extent accrued on the date of the maturity of this
Note (by acceleration or otherwise). In the event that a
default in Borrower's obligations to pay interest or
principal on this Note shall have occurred, then the rate of
interest hereunder shall be increased to a rate equal to the
Rate plus 200 basis points.
Each payment on this Note shall be credited first
to interest then due, and then to principal. The principal
of and interest on this Note shall be payable in lawful
money of the United States.
Each payment hereunder shall be made in
immediately available funds, payable to the Lender or to
such other payee or address as may be designated in writing
by the Lender to the Borrower.
The Borrower shall have the right to prepay
principal amount hereof in full or in part, together with
all accrued interest on the amount prepaid to the date of
such prepayment, at any time without penalty.
The obligations of the Borrower hereunder are
secured by the Collateral (as defined in and pursuant to the
Security and Pledge Agreement by and between the Borrower
and the Lender, of even date herewith (the "Security
Agreement"), and the Lender is entitled to the benefits of
the Collateral.
If any of the following events ("Events of
Default") shall have occurred and be continuing for any
reason whatsoever (and whether it shall be voluntary or
involuntary or occur or be effected by operation of law or
otherwise):
(a) The Borrower shall fail to pay when due any
amount payable under this Note;
(b) The Borrower shall fail to observe or perform
any material covenant or agreement contained in this Note
(other than those set forth in clause (a) above) or the
Security Agreement;
(c) Any representation, warranty, certification
or statement made by the Borrower in this Note, the Security
Agreement or in any certificate, financial statement or
other document delivered pursuant to this Note or the
Security Agreement shall prove to have been incorrect in any
material respect when made or deemed made;
(d) The Borrower shall sell, assign, transfer or
otherwise dispose of all or substantially all of its assets;
(e) The Borrower shall become a party to any
merger, amalgamation or consolidation;
(f) The Borrower (i) shall commence a voluntary
case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or in
the future in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, (ii)
shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary
case or other proceeding commenced against it, (iii) shall
make a general assignment for the benefit of creditors, or
(iv) shall take any corporate action to authorize any of the
foregoing;
(g) An involuntary case or other proceeding shall
be commenced against the Borrower seeking liquidation,
reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law
now or in the future in effect or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar
official of its or any substantial part of its property, and
such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or
an order for relief shall be entered against the Borrower
under the federal bankruptcy laws as now or in the future in
effect; or
(h) The Lender shall fail to have a first
priority security interest in the Collateral;
and in every such event the Lender may, by notice in writing
to the Borrower, declare this Note and the principal of and
accrued interest on this Note and all other charges owing to
the Lender to be, and the same shall upon such notice
forthwith become, due and payable.
No failure or delay by the Lender in exercising
any remedy, right, power or privilege under this Note or the
Security Agreement shall operate as a waiver of such remedy,
right, power or privilege nor shall any single or partial
exercise of such remedy, right, power or privilege preclude
any other or further exercise of such remedy, right, power
or privilege. No remedy, right, power or privilege
conferred upon or reserved to the Lender by this Note or the
Security Agreement is intended to be exclusive of any other
remedy, right, power or privilege provided or permitted by
this Note, the Security Agreement or by law, but each shall
be cumulative and in addition to every other remedy, right,
power or privilege so provided or permitted and each may be
exercised concurrently or independently from time to time
and as often as may be deemed expedient by the Lender. Any
provision of this Note which is prohibited or unenforceable
shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
provisions of this Note.
Upon the occurrence of an Event of Default, the
holder of this Note may, in addition to all rights and
remedies available to it at law, exercise any or all of its
rights under the Security Agreement.
Upon the failure of the Borrower to pay any amount
due hereunder as and when due, the Borrower shall pay on
demand any and all costs and expenses (including, without
limitation, all court costs and attorneys' fees) incurred by
the holder hereof in connection with the collection of any
outstanding principal balance and interest accrued hereunder
(whether or not suit is filed to enforce the terms hereof),
and in connection with the enforcement of any rights or
remedies provided for pursuant to this Note and the Security
Agreement. If not paid on demand, all such costs and
expenses automatically shall be added to the remaining
principal balance hereunder as of the date immediately
following the date of such demand.
The Lender shall have the right, at its option, to
declare the entire unpaid principal balance of this Note,
irrespective of the maturity date of this Note, immediately
due and payable, together with interest accrued thereon to
the date of payment, if the Borrower (or any parent,
subsidiary or affiliate of the Borrower) sells, transfers or
disposes of any portion of the Collateral identified in the
Security Agreement.
The Borrower hereby waives any right it might
otherwise have to require notice or acceptance by any other
person of its obligations or liabilities under this Note
which are unconditional and absolute and waives diligence,
presentment, demand of payment, protest or notice with
respect to any of the obligations of the Borrower under this
Note or with respect to any action under this Note and all
other notices and demands whatsoever, except as specifically
provided for in this Note. This Note may be amended, and
the observance of any term of this Note may be waived, with
(and only with) the written consent of the Lender.
This Note shall be governed by and construed in
accordance with the laws of the State of New York.
Lender shall promptly notify Borrower of any
endorsement, assignment, pledge or hypothecation of this
Note.
Upon notice from the holder of this Note to the
Borrower of the loss, theft, destruction or mutilation of
this Note, and upon receipt of an indemnity reasonably
satisfactory to the Borrower from the holder of this Note
or, in the case of mutilation hereof, upon surrender of the
mutilated Note, the Borrower will make and deliver a new
note of like tenor in lieu of this Note.
All notices and other communications required or
permitted under this Note shall be in writing and shall be
personally delivered or sent by certified first class United
States mail, postage prepaid, return receipt requested, and
if mailed and shall be deemed to have been received on the
third business day after deposit in the mail, addressed to
the Lender, c/o Donald E. Burdick, Esq., Price/Costco, Inc.,
10809 120th Avenue NE, Kirkland, Washington 98033, with a
copy to Joseph J. Giunta, Esq., Skadden, Arps, Slate,
Meagher & Flom, 300 South Grand Avenue, Los Angeles,
California 90071, or to the Borrower at Robert E. Price,
Price Enterprises, Inc., 4649 Morena Boulevard, San Diego,
California 92117, with a copy to Scott N. Wolfe, Esq.,
Latham & Watkins, 701 "B" Street, San Diego, California
92101. Notice of any change of either party's address shall
be given by written notice in the manner set forth in this
paragraph.
PRICE ENTERPRISES, INC.
By: /s/ Daniel T. Carter
Name: Daniel T. Carter
Title: Executive Vice President
Exhibit 6
SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement (the "Agreement") is
made and entered into as of February 6, 1995 by and between The
Price Company ("Pledgee") and Price Enterprises, Inc.
("Pledgor").
WHEREAS, Pledgor has agreed to purchase, and Pledgee
has agreed to sell, the Pledged Securities (as defined below);
and
WHEREAS, in consideration for such purchase, Pledgor
has executed a secured promissory note in the principal amount of
$45,925,259.45 in favor of Pledgee dated as of the date hereof
(the "Note"); and
WHEREAS, Pledgor has agreed to enter into this
Agreement as additional consideration for acceptance by Pledgee
of the Note.
NOW, THEREFORE, based upon the foregoing and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Security Interest in Collateral. Pledgor
hereby grants to Pledgee, as security for all present and future
obligations and liabilities of all kinds of Pledgor to Pledgee
under the Note and this Agreement (collectively referred to as
the "Obligations"), a first priority security interest in the
following described property (collectively referred to as the
"Collateral"):
(a) 3,775,972 shares of common stock of Pledgor
(the "Pledged Shares"), as more fully described in Schedule 1
hereto, and the certificates representing the Pledged Shares and
all of Pledgor's rights and privileges with respect thereto,
together with stock powers executed in blank, each of which has
been delivered to Pledgee concurrently with the execution hereof;
and
(b) the proceeds and accessions of the Pledged
Shares (the "Proceeds").
2. Pledgor's Obligations. At any time and from time to
time, upon request of Pledgee, Pledgor shall give, execute and
file and/or record any notice, financing statement, continuation
statement, instrument, document or agreement that Pledgee shall
consider necessary or desirable to create, preserve, continue,
perfect or validate any security interest granted hereunder or
which Pledgee may consider necessary or desirable to exercise or
enforce its rights hereunder with respect to such security
interest.
3. Pledgor's Covenants.
(a) Pledgor agrees hereafter not to encumber or
grant a security interest in or a lien or other encumbrance on
the Collateral.
(b) Pledgor agrees not to dispose of any of the
Collateral except in accordance with the terms of this Agreement.
(c) Pledgor agrees to: (i) pay promptly the
Obligations secured hereby when due; (ii) indemnify Pledgee
against all loss, claims, demands and liabilities of every kind
arising from the Collateral and the transactions and other
agreements and undertakings contemplated hereby; (iii) pay all
expenses, including reasonable attorneys' fees, incurred by
Pledgee in the preservation, realization, enforcement and
exercise of its rights, powers and remedies hereunder; (iv)
execute and deliver such documents as Pledgee deems necessary to
create, perfect and continue the security interest contemplated
hereby; (v) give Pledgee notice of any litigation filed or claim
asserted against Pledgor relating to or potentially affecting the
Collateral; (vi) if requested by Pledgee, to receive and collect
the Proceeds, in trust and as the property of Pledgee, and to
immediately endorse as appropriate and deliver such Proceeds to
Pledgee when requested by Pledgee in the exact form in which they
are received; (vii) not to commingle the Proceeds or collections
thereunder with other property; (viii) to keep complete and
accurate records regarding all of the Proceeds; and (ix) to
provide any service and do other acts or things necessary to keep
the Collateral and the Proceeds free and clear of all defenses,
rights of offset and counterclaim.
4. Payment of Taxes, Charges, Liens and Assessment.
Pledgor agrees to pay, prior to delinquency, all taxes, charges,
liens and assessments against the Collateral and the Proceeds,
and upon the failure of Pledgor to do so, Pledgee, at its option,
may pay any of them. Any such payments made by Pledgee shall be
obligations of Pledgor to Pledgee, due and payable immediately
without demand, together with interest at the stated rate set
forth in the Note, and shall be secured by the Collateral and the
Proceeds, subject to all of the terms and conditions of this
Agreement.
5. Powers of Pledgee. Pledgor appoints Pledgee its
true attorney in fact to perform any of the following powers,
which are coupled with an interest, are irrevocable until
termination of this Agreement and may be exercised from time to
time by Pledgee's officers and employees, or any of them, whether
or not Pledgor is in default: (a) to perform any obligations of
Pledgor hereunder in Pledgor's name or otherwise; (b) to give
notice of Pledgee's right under the Collateral to enforce the
same; (c) to release security; (d) to resort to security in any
order; (e) to prepare, execute, file, record or deliver notes,
assignments, schedules, designation statements, financing
statements, continuation statements, termination statements,
statements of assignment, applications for registration or like
papers to perfect, preserve or release Pledgee's interest in the
Collateral; (f) to verify facts concerning the Collateral by
inquiry of obligers thereon, or otherwise, in its own name or
fictitious name; (g) after an Event of Default by Pledgor and, if
applicable, failure to cure such default, to endorse, collect,
deliver and receive payment under instruments for the payment of
money consisting or relating to the Collateral; (h) after an
Event of Default by Pledgor and, if applicable, failure to cure
such default, to preserve or release the interest evidenced by
chattle paper to which Pledgee is entitled hereunder and to
endorse and deliver evidences of title incidental thereto; (i)
after an Event of Default by Pledgor and, if applicable, failure
to cure such default, to exercise all rights, powers and remedies
which Pledgor would have, but for this Agreement, under all
Collateral subject to this Agreement; and (j) to do all acts and
things and execute all documents in the name of Pledgor or
otherwise, deemed by Pledgee as necessary, proper and convenient
in connection with the preservation, perfection or enforcement of
its rights hereunder.
6. Voting Rights. Pledgor hereby grants to Pledgee an
irrevocable proxy, effective upon the occurrence of an Event of
Default and so long as such Event of Default shall continue, to
vote the Pledged Securities in such manner and for such purposes
as Pledgee shall, in its sole discretion, determine. Such proxy
is coupled with an interest and shall continue in full force and
effect until all of the Obligations shall be paid in full.
7. Events of Default; Remedies.
(a) Each of the following shall constitute an
event of default ("Event of Default") hereunder: (i) if Pledgor
shall fail to make any payment on the Obligations secured hereby
as and when due; (ii) if Pledgor has materially breached any
provisions of this Agreement; (iii) if a receiver or a trustee of
all or any part of Pledgor's property shall be appointed; (iv) if
any assignment for the benefits of Pledgor's creditors shall be
made; (v) if a petition in bankruptcy shall be filed by or
against Pledgor and not dismissed within 180 days; (vi) if any of
the Collateral shall be attached or levied upon at any time
pursuant to any court order or other legal process; (vii)
liquidation or dissolution of Pledgor; and (vii) if Pledgor shall
generally fail to pay debts as they become due.
(b) In case an Event of Default shall have
occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested
in it by this Agreement, the Note or by law and including,
without limitation, all rights and remedies of a secured party of
a debtor in default under the Uniform Commercial Code as in force
in the State of New York) for the protection and enforcement of
its rights in respect of the Collateral.
8. Unregistered Securities. If at the time of any sale
of the Collateral in accordance with the terms of this Agreement
the same or any part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of
1933, as amended, or there is no exemption available under such
Act, then Pledgee, in its sole and absolute discretion, is
authorized to sell such Collateral or such part thereof by
private sale or sales in such manner and under such circumstances
as Pledgee reasonably may deem necessary or advisable in order
that such sale may legally be effected without registration.
Pledgor agrees that private sales so made may be at prices and on
other terms less favorable to the seller than if such Collateral
were sold at public sale, and that Pledgee has no obligation to
delay the sale of any such Collateral for the period of time
necessary to permit the issuer of such Collateral, even if such
issuer would agree, to register such Collateral for public sale
under such Act. Pledgor agrees that private sales made under the
foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner.
9. No Waiver. Failure of Pledgee to exercise any
right or remedy under this Agreement or any other agreement
between Pledgee and Pledgor, or otherwise, or delay by Pledgee in
exercising same, will not operate as a waiver thereof. No waiver
by Pledgee will be effective unless and until it is in writing
and signed by Pledgee. No waiver of any condition or performance
will operate as a waiver of any subsequent condition or
obligation. Pledgee shall have no obligation to resort to the
Collateral or any other security which is or may become available
to it.
10. Miscellaneous.
(a) This Agreement, any amendments or replacement
hereof, and the legality, validity and performance of the terms
hereof, shall be governed by and enforced and construed in
accordance with the laws of the State of New York without regard
to conflicts of laws and principles thereof.
(b) This Agreement and the rights, powers and
duties set forth herein shall be binding upon Pledgor, its
employees, shareholders, agents, officers, directors,
representatives and successors and shall inure to the benefit of
the successors and assigns of Pledgee and, in the event of any
transfer or assignment of rights by Pledgee, the rights and
privileges herein conferred upon Pledgee shall automatically
extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This Agreement may
not be transferred or assigned without written consent.
(c) In the event that any provision of this
Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and
shall be modified to conform with such statute or rule of law.
Any provision hereof which may prove invalid or unenforceable
under any applicable law shall not effect the validity or
enforceability of any other provisions hereof.
(d) Notices required or permitted to be given
under this Agreement shall be in writing and may be delivered
personally or sent to a party by airmail or first class mail,
postage prepaid and addressed to such party at the address set
forth below its signature, or to such other address furnished by
notice given in accordance with this paragraph. Any such notice
shall be deemed to have been given, (i) if sent by mail, five
days after the date mailed, and (ii) if delivered personally, on
the date of delivery.
(e) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all
of which shall together constitute one and the same document.
(f) This Agreement and the security interest and
pledge hereunder shall terminate upon the full and final
performance of all Obligations of Pledgor and payment of all
indebtedness secured hereby. At such time, Pledgee shall promptly
reassign to Pledgor all of the Collateral hereunder which has not
been sold, disposed of, retained or applied by Pledgee in
accordance with the terms hereof.
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed as of the date first written above.
THE PRICE COMPANY
By: /s/ H.E. Kaplan
Name: H.E. Kaplan
Title: Treasurer
PRICE ENTERPRISES, INC.
By: /s/ Daniel T. Carter
Name: Daniel T. Carter
Title: Executive Vice President
SCHEDULE 1
Description of Pledged Shares
Certificate Number Number of Shares
3,775,972
