EXHIBIT 1
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AMENDMENT NO.1 TO
AGREEMENT AND PLAN OF MERGER
Amendment No. 1 (the "AMENDMENT NO. 1"), dated as of July 26, 2002, to
the AGREEMENT AND PLAN OF MERGER (the "MERGER AGREEMENT"), dated as of June 23,
2002, by and between PSCO ACQUISITION CORP. ("BUYER"), a Maryland corporation,
and KONOVER PROPERTY TRUST, INC. ("TARGET"), a Maryland corporation. All
capitalized terms which are used but not otherwise defined herein shall have the
meanings specified to such terms in the Merger Agreement.
WHEREAS, Buyer and Target are parties to the Merger Agreement, pursuant
to which Buyer will merge with and into Target, with Target as the surviving
corporation, on the terms and subject to the conditions set forth therein; and
WHEREAS, pursuant to Section 10.4 of the Merger Agreement, Buyer and
Target wish to amend the Merger Agreement as set forth below.
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the receipt and adequacy of which are hereby acknowledged, the parties
hereby agree as follows:
1. EXHIBIT B. Exhibit B of the Merger Agreement is hereby deleted
in its entirety.
2. EXHIBIT B-1. The Merger Agreement is hereby amended by
inserting the exhibit attached hereto as Exhibit B-1 immediately following
Exhibit A of the Merger Agreement. Pursuant to this paragraph 2, Exhibit B-1
attached hereto shall be Exhibit B-1 of the Merger Agreement.
3. EXHIBIT B-2. The Merger Agreement is hereby amended by
inserting the exhibit attached hereto as Exhibit B-2 immediately following
Exhibit B-1 of the Merger Agreement. Pursuant to this paragraph 3, Exhibit B-2
attached hereto shall be Exhibit B-2 of the Merger Agreement.
4. WHEREAS CLAUSE. The fifth (5th) whereas clause in the Merger
Agreement is hereby amended by deleting the reference to "(the "CO-INVESTMENT
AGREEMENT")" in such whereas clause and replacing the reference to "(the
"CO-INVESTMENT AGREEMENT")" with the following:
(as the same may be amended or modified from time to time in accordance
with its terms, the "CO-INVESTMENT AGREEMENT")
5. SECTION 1.4. Section 1.4 of the Merger Agreement is hereby
amended by deleting such section in its entirety and replacing it with the
following:
SECTION 1.4 CHARTER.
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If the Target Charter Amendments Two-Thirds Vote is obtained, the
Charter of Target in effect immediately prior to the Effective Time
shall be amended as of the Effective Time pursuant to the Articles of
Merger to be substantially identical to the form of Charter attached
hereto as Exhibit B-1, and, as so amended, such Charter shall be the
Charter of the Surviving Corporation until duly amended or repealed. If
the Requisite Target Vote is obtained but the Target Charter Amendments
Two-Thirds Vote is not obtained, the Charter of Target in effect
immediately prior to the Effective Time shall be amended as of the
Effective Time pursuant to the Articles of Merger to be substantially
identical to the form of Charter attached hereto as Exhibit B-2, and,
as so amended, such Charter shall be the Charter of the Surviving
Corporation until duly amended or repealed.
6. SECTION 2.1(A). Section 2.1(a) of the Merger Agreement is
hereby amended by deleting such section in its entirety and replacing it with
the following:
(a) (i) Each share of Buyer Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one
fully paid and nonassessable share of common stock of the Surviving
Corporation and (ii) each share of Buyer Preferred Stock issued and
outstanding immediately prior to the Effective Time shall be converted
into one fully paid and nonassessable share of series B redeemable
preferred stock of the Surviving Corporation designated "Series B
Redeemable Preferred Stock" and having the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends
and other terms and conditions set forth in the form of Charter of the
Surviving Corporation attached to this Agreement as Exhibit B-1, in the
case that the Target Charter Amendments Two-Thirds Vote is obtained,
and Exhibit B-2, in the case that the Requisite Target Vote is obtained
but the Target Charter Amendments Two-Thirds Vote is not obtained.
7. SECTION 2.2(F). Section 2.2(f) of the Merger Agreement is
hereby amended by deleting the reference to "Exhibit B" in such section and
replacing the reference to "Exhibit B" with the following:
Exhibit B-1, in the case that the Target Charter Amendments Two-Thirds
Vote is obtained, and Exhibit B-2, in the case that the Requisite
Target Vote is obtained but the Target Charter Amendments Two-Thirds
Vote is not obtained
8. Section 4.2(a). Section 4.2(a) of the Merger Agreement is
hereby amended by deleting such section in its entirety and replacing it with
the following:
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Target has the corporate power and authority necessary to execute,
deliver and, other than with respect to the Merger, perform this
Agreement and with respect to the Merger, subject to obtaining the
approval of this Agreement and the Merger by the affirmative vote of
the holders of a majority of the then outstanding shares of Target
Common Stock (the "REQUISITE TARGET VOTE"), to perform its obligations
under this Agreement and to consummate the transactions contemplated
hereby (other than certain Charter amendments contemplated by Exhibit
B-1 which require obtaining the Target Charter Amendments Two-Thirds
Vote). The execution, delivery and performance of this Agreement and
each instrument required hereby to be executed and delivered by Target
or any Target Subsidiary prior to or at the Effective Time and the
consummation of the transactions contemplated herein, including the
Merger, the OP Transfer, the OP Merger and the OP Distribution, have
been duly and validly authorized by the Special Committee and the Board
of Directors of Target (including, with respect to the OP Merger and
the OP Distribution, on behalf of Target in its capacity as the general
partner of the Target Operating Partnership, and with respect to the OP
Transfer, on behalf of Target in its capacity as the sole stockholder
of KPTPHC) and, except for obtaining the Requisite Target Vote, no
other corporate action on the part of Target is necessary to authorize
the execution, delivery and performance by Target of this Agreement and
the consummation by Target or any Target Subsidiary of the transactions
contemplated herein (other than certain Charter amendments contemplated
by Exhibit B-1 which require obtaining the Target Charter Amendments
Two-Thirds Vote). This Agreement has been duly executed and delivered
by Target and is a legal, valid, and binding obligation of Target,
enforceable against Target in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium,
or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of
specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
9. SECTION 4.19. Section 4.19 of the Merger Agreement is hereby
amended by deleting such section in its entirety and replacing it with the
following:
SECTION 4.19. TARGET VOTING REQUIREMENTS.
Other than the Target Charter Amendments Two-Thirds Vote necessary to
amend certain provisions of Target's Charter pursuant to the Merger as
contemplated by Exhibit B-1, the Requisite Target Vote is the only vote
of the holders of any class or series of the stock
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of the Target necessary under the Target's Charter, the MGCL or any
other Law or the rules of the NYSE, to adopt this Agreement and approve
the transactions contemplated by this Agreement and for consummation by
Target of the transactions contemplated by this Agreement.
10. SECTION 5.1. Section 5.1 of the Merger Agreement is hereby
amended by adding the following sentence immediately before the last sentence in
such section:
Buyer has, on or prior to the date of Amendment No.1, delivered to
Target a true, complete and correct copy of the Charter of Buyer, as
amended and in full force and effect as of the date of Amendment No.1.
11. SECTION 5.5. Section 5.5 of the Merger Agreement is hereby
amended by deleting such section in its entirety and replacing it with the
following:
5.5 CAPITALIZATION.
The authorized stock of Buyer consists of forty million (40,000,000)
shares of Buyer Common Stock and one hundred fifty (150) shares of
Buyer Preferred Stock. As of the date of this Agreement, one thousand
(1000) shares of Buyer Common Stock are validly issued and outstanding
and fully paid and nonassessable, of which five hundred (500) shares
are owned by PSRT and five hundred (500) shares are owned by KI. As of
the date of this Agreement, no shares of Buyer Preferred Stock are
issued and outstanding. After giving effect to the transactions
contemplated by the Co-Investment Agreement, the transactions
contemplated by this Agreement, including the Merger, and the REIT
Subscription Transaction, and assuming that all holders of Series A
Convertible Preferred Stock elect to receive the Preferred Stock
Continued Interest Per Share, the issued and outstanding stock of the
Surviving Corporation immediately after giving effect to the foregoing
will be in all material respects as set forth in Section 5.5 of the
Buyer Disclosure Memorandum.
12. SECTION 10.1(A). Section 10.1(a) of the Merger Agreement is
hereby amended by adding the following definition of "Amendment No. 1"
immediately after the definition of "Agreement":
"AMENDMENT NO. 1" means the Amendment No. 1 to the Merger Agreement,
dated as of July 26, 2002, by and between Buyer and Target.
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13. SECTION 10.1(A). Section 10.1(a) of the Merger Agreement is
hereby amended by adding the following definition of "Buyer Preferred Stock"
immediately after the definition of "Buyer Material Adverse Effect":
"BUYER PREFERRED STOCK" means the Redeemable Preferred Stock, par value
$.01 per share, of Buyer.
14. SECTION 10.1(A). Section 10.1(a) of the Merger Agreement is
hereby amended by deleting the definition of "Exhibit B" in its entirety.
15. SECTION 10.1(A). Section 10.1(a) of the Merger Agreement is
hereby amended by adding the following definition of "Exhibit B-1" immediately
after the definition of "Exhibit A":
"EXHIBIT B-1" means the Exhibit so marked, a copy of which is attached
to this Agreement. Such Exhibit is hereby incorporated by reference
herein and made a part hereof, and may be referred to in this Agreement
and any other related instrument or document without being attached
hereto.
16. SECTION 10.1(A). Section 10.1(a) of the Merger Agreement is
hereby amended by adding the following definition of "Exhibit B-2" immediately
after the definition of "Exhibit B-1":
"EXHIBIT B-2" means the Exhibit so marked, a copy of which is attached
to this Agreement. Such Exhibit is hereby incorporated by reference
herein and made a part hereof, and may be referred to in this Agreement
and any other related instrument or document without being attached
hereto.
17. Section 10.1(a). Section 10.1(a) of the Merger Agreement is
hereby amended by deleting the definition of "REIT Subscription Transaction" in
its entirety and replacing such definition with the following:
"REIT SUBSCRIPTION TRANSACTION" means the purchase by more than 100
individuals of up to one hundred fifty (150) shares of Buyer Preferred
Stock at a price of up to $500 per share immediately prior to the
Effective Time, which purchases will be effectuated for the purpose of
allowing the Surviving Corporation to continue to qualify as a REIT
and, to the extent the form of Charter attached hereto as Exhibit B-2
becomes the Charter of the Surviving Corporation because the Target
Requisite Vote is obtained but the Target Charter Amendments Two-Thirds
Vote is not obtained, complying with subparagraph A(4)(b)(iii) of
Article IV of the Surviving Corporation's Charter.
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18. SECTION 10.1(A). Section 10.1(a) of the Merger Agreement is
hereby amended by adding the following definition of "Target Charter Amendments
Two-Thirds Vote" immediately after the definition of "Target Benefit Plans":
"TARGET CHARTER AMENDMENTS TWO-THIRDS VOTE" means the affirmative vote
of the holders of two-thirds of the shares of Common Stock of Target
outstanding.
19. CONTINUED FORCE AND EFFECT. This Amendment No. 1 shall not
constitute a waiver, amendment or modification of any other provision of the
Merger Agreement not expressly referred to herein. Except as expressly amended
or modified herein, the provisions of the Merger Agreement are and shall remain
in full force and effect. From and after the date hereof, all references to the
Merger Agreement or to "this Agreement" in the Merger Agreement shall be deemed
to mean the Merger Agreement, as amended by this Amendment No. 1.
20. COUNTERPARTS. This Amendment No. 1 may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
21. GOVERNING LAW. Regardless of any conflict of law or choice of
law principles that might otherwise apply, the parties hereto agree that this
Amendment No. 1 shall be governed by and construed in all respects in accordance
with the laws of the State of Maryland. The parties hereto all expressly agree
and acknowledge that the State of Maryland has a reasonable relationship to the
parties and/or this Amendment No. 1.
22. AMENDMENTS. This Amendment No. 1 and any of the provisions
hereof may not be amended, altered or added to in any manner except by a
document in writing and signed by each party hereto.
23. CAPTIONS; ARTICLES AND SECTIONS. The captions contained in
this Amendment No. 1 are for reference purposes only and are not part of this
Amendment No. 1. Unless otherwise indicated, all references to particular
Articles or Sections shall mean and refer to the referenced Articles and
Sections of the Merger Agreement, as amended by this Amendment No. 1.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be executed and delivered by their respective officers
hereunto duly authorized on the first day above written.
PSCO ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
KONOVER PROPERTY TRUST, INC.
By: /s/ J. Xxxxxxx Xxxxxxx
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Name: J. Xxxxxxx Xxxxxxx
Title: President
