Exhibit 2.1
FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
This First Amendment (this "Amendment") to that certain
Agreement and Plan of Merger (the "Merger Agreement"), dated as of July 8, 2003,
by and between Prime Outlets Acquisition Company, LLC (the "Buyer") and Prime
Retail, Inc. (the "Company") is entered into as of September 3, 2003, by and
between the Buyer and the Company. Capitalized terms used, but not otherwise
defined, herein shall have the meanings ascribed to them in the Merger
Agreement.
W I T N E S S E T H
WHEREAS, the Buyer and the Company have entered into the Merger
Agreement, which provides that the Company will merge with and into the Buyer
(the "Merger");
WHEREAS, subject to certain concessions by the Company's officers and
financial advisors and the Buyer's approval to increase the aggregate merger
consideration, the board of directors of the Company, upon the recommendation of
the special committee, approved a reallocation of the merger consideration among
the classes of the Company's preferred and common stock to allocate $18.400 a
share to the series A preferred stockholders, $8.169 a share to the series B
preferred stockholders and $0.170 a share to the common stockholders;
WHEREAS, pursuant to that certain letter dated as of August 27, 2003,
Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Capital ("Xxxxxxxx Xxxxx") agreed to reduce the
fee otherwise payable to Xxxxxxxx Xxxxx in connection with the consummation of
the Merger by $105,000 (the "Financial Advisor Concessions");
WHEREAS, pursuant to that certain letter dated as of September 2, 2003,
certain officers of the Company agreed to reduce the benefits otherwise payable
to them under the Company's Long-Term Incentive Plan by an aggregate amount of
$409,000 (the "Management LTIP Concessions" and, together with the Financial
Advisor Concessions, the "Concessions");
WHEREAS, the Buyer agreed to increase the aggregate consideration
payable to the Company's stockholders in the Merger by an amount equal to the
Concessions;
WHEREAS, pursuant to those certain option cancellation agreements dated
as of September 2, 2003 and subject to the terms and conditions contained
therein, certain officers of the Company agreed to cancel for no consideration
options to acquire 1,892,524 shares of the Company's common stock in the
aggregate at an exercise price of $0.11 per share upon the consummation of the
Merger; and
WHEREAS, the Buyer and the Company wish to enter into this Amendment to
make certain amendments to the Merger Agreement as more fully set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements, covenants
and considerations contained herein, the parties hereto agree as follows:
1. MERGER CONSIDERATION.
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Section 1.2(a) of the Merger Agreement is hereby amended by
deleting the section in its entirety and inserting in lieu thereof the
following:
"(a) CONVERSION OF COMPANY COMMON STOCK, COMPANY SERIES A
PREFERRED STOCK AND COMPANY SERIES B PREFERRED STOCK. Except as
otherwise provided herein, each share of Company Common Stock, Company
Series A Preferred Stock and Company Series B Preferred Stock issued
and outstanding immediately prior to the Effective Time (other than
shares cancelled pursuant to SECTION 1.2(b) hereof and Dissenting
Shares) shall be converted into the following (collectively, the
"MERGER CONSIDERATION");
(i) for each share of Company Common Stock, the right
to receive in cash an amount equal to $0.170 per share
("COMMON STOCK MERGER CONSIDERATION");
(ii) for each share of Company Series A Preferred
Stock, the right to receive in cash an amount equal to $18.400
per share; and
(iii) for each share of Company Series B Preferred
Stock, the right to receive in cash an amount equal to $8.169
per share.
provided, however that the aggregate amount of Common Stock Merger
Consideration (and the corresponding amount of Common Stock Merger
Consideration per share) shall be reduced by the aggregate amount of
Option Cancellation Expense and Warrant Cancellation Expense determined
pursuant to SECTION 1.7 hereof.
2. COUNTERPARTS.
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This Amendment may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
3. EFFECTIVENESS AND EFFECT UPON THE MERGER AGREEMENT.
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This Amendment shall become effective as of the date first
written above. Upon the effectiveness of this Amendment, each reference in the
Merger Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of similar import shall mean and be a reference to the Merger Agreement as
amended hereby.
4. OTHER TERMS AND CONDITIONS.
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All other terms and conditions of the Merger Agreement shall
remain in full force and effect.
* * * * *
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IN WITNESS WHEREOF, the Buyer and the Company have caused this
Amendment to be executed as of the date first written above by their respective
officers thereunto duly authorized.
PRIME OUTLETS ACQUISITION COMPANY, LLC
By: /s/ XXXXX XXXXXXXXXXXX
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a duly authorized signatory
PRIME RETAIL, INC.
By: /s/ XXXXX X. XXXXXXX
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a duly authorized signatory
Amended and Accepted for
purposes of Section 4 hereof only:
LIGHTSTONE GROUP, LLC
By: /s/ XXXXX XXXXXXXXXXXX
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a duly authorized signatory
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