EXHIBIT 5
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SUPPLEMENTAL VOTING AND TENDER AGREEMENT
SUPPLEMENTAL VOTING AND TENDER AGREEMENT, dated as of June 23,
2002 (this "AGREEMENT"), by and between Prometheus Southeast Retail Trust
(including its successors following the PSRT Reorganization Transaction (as
defined in that certain Stockholders Agreement, dated as of June 23, 2002, among
PSRT, PSCO Acquisition Corp. and Kimkon Inc.) ("PSRT"), a Maryland real estate
investment trust, and Konover Property Trust, Inc. ("TARGET"), a Maryland
corporation.
RECITALS
WHEREAS, as of the date hereof, PSCO Acquisition Corp.
("BUYER"), a Maryland corporation, the stockholders of which are PSRT and Kimkon
Inc. ("KI"), a Delaware corporation and a subsidiary of Kimco Realty
Corporation, and Target are entering into an Agreement and Plan of Merger, dated
as of the date hereof (as the same may be amended or modified from time to time
in accordance with its terms, the "MERGER AGREEMENT"), which provides, among
other things, for the merger of Buyer with and into Target, with Target as the
surviving corporation (the "MERGER");
WHEREAS, as of the date hereof, PSRT is the record and
beneficial holder of 21,052,631 shares of common stock, par value $.01 per
share, of Target (collectively, the "SHARES" and, together with such additional
Shares hereafter acquired by PSRT whether by means of purchase, dividend,
distribution or otherwise, PSRT's "OWNED SHARES");
WHEREAS, Target and PSRT (as assignee of Prometheus Southeast
Retail LLC) are parties to a Contingent Value Right Agreement (the "CVR
AGREEMENT"), dated February 24, 1998;
WHEREAS, as of the date hereof, Target, PSRT and KI are
entering into a Voting Agreement, dated as of the date hereof (the "VOTING
AGREEMENT"), pursuant to which, among other things, PSRT agreed to vote its
Owned Shares in favor of the Merger, upon the terms and subject to the
conditions set forth therein; and
WHEREAS, as a condition to the willingness of Target to enter
into the Merger Agreement, Target has requested that PSRT agree, and PSRT has
agreed, to enter into this Agreement, pursuant to which, among other things,
PSRT and Target desire to set forth their agreement with respect to the voting
of the Owned Shares by PSRT in certain circumstances in connection with a
Superior Transaction (as defined herein), upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
(a) Capitalized terms used and not otherwise defined
herein shall have the respective meanings ascribed to them in the Merger
Agreement.
(b) For the purposes of this Agreement, a "SUPERIOR
TRANSACTION" means a bona fide written agreement between Target and a third
party entered into immediately prior to, or concurrently with any termination of
the Merger Agreement pursuant to Section 9.1(h) thereof, which provides for the
third party to acquire, directly or indirectly, all of the shares of common
stock of Target pursuant to a merger or a tender offer followed by a merger (but
expressly excluding any offer to purchase all or substantially all of the assets
of Target and the Target Subsidiaries), and which also meets all of the
following criteria:
(i) such agreement embodies the terms of a bona
fide written offer which is binding on such third party and not
solicited by Target in violation of Section 7.2 of the Merger Agreement
that is received by Target prior to the date the Merger Agreement is
terminated,
(ii) (X) the consideration per share of Target
Common Stock to be paid to holders of Target Common Stock upon and at
the closing of the Superior Transaction consists solely of cash and
such cash amount per share of Target Common Stock exceeds the Common
Stock Price Per Share (as such amount may be increased by Buyer
pursuant to Section 9.1(h) of the Merger Agreement) or (Y) if the terms
of the agreement(s) in respect of the Superior Transaction provide for
the payment to holders of Target Common Stock of consideration
consisting of a combination of cash and Capital Stock of a third party,
the terms of the agreement(s) in respect of the Superior Transaction
must provide PSRT with the right to receive, at PSRT's option, (I) the
form and amount of consideration per share of Target Common Stock
payable to the other holders of Target Common Stock and (II)
consideration per share of Target Common Stock consisting solely of
cash, and, in each such case, such consideration per share of Target
Common Stock must exceed the Common Stock Price Per Share (as such
amount may be increased by Buyer pursuant to Section 9.1(h) of the
Merger Agreement), provided, that if any Superior Transaction includes
any consideration consisting of Capital Stock of a third party to be
paid per share of Target Common Stock (except that it is acknowledged
that PSRT must always have the right, at its option, to receive only
cash), such aggregate consideration to be paid per share of Target
Common Stock must have a value substantially equivalent (as of the date
of determination by PSRT) to the price per share of Target Common Stock
to be received by PSRT (assuming it has elected to receive only cash
for its shares of Target Common Stock)) as determined by PSRT in its
good faith judgment, provided further, that any transaction structured
as provided
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in clause (Y) of this subsection (ii) shall only be able to constitute
a Superior Transaction if (A) PSRT has the right to elect to choose
between the forms of consideration described in (I) and (II) above
until the close of business on the third Business Day (as defined in
the Merger Agreement) prior to the closing of such purported Superior
Transaction and (B) any non-cash consideration consists of nothing
other than Capital Stock of the third party,
(iii) the terms and conditions of the agreement in
respect of the Superior Transaction, in the good faith judgment of
PSRT, must be at least as favorable (including, without limitation, as
to certainty of closing) to Target and the holders of the Target Common
Stock than those contained in the Merger Agreement and, in any event,
shall not include any holdback, escrow, earn-out, survival,
indemnification or other comparable provisions, it being understood
that the timing of closing of such Superior Transaction may be
considered by PSRT in making such good faith judgment,
(iv) such agreement in respect of the Superior
Transaction must expressly provide that PSRT shall be entitled to
receive upon and at the closing of the Superior Transaction, in
satisfaction of its rights and interests under the CVR Agreement, an
amount of cash equal to the product of (x) 4,500,000 and (y) the price
per share to be paid per share of Target Common Stock,
(v) both the offer and the agreement in respect
of the Superior Transaction must not be subject to any diligence
contingencies,
(vi) both the offer and the agreement in respect
of the Superior Transaction must not be conditioned on receipt by the
third party of the proceeds of any financing or other capital raising
transaction, and the third party shall have demonstrated to PSRT, in
its good faith judgment, that such third party has sufficient cash on
hand or other liquid assets to pay the consideration payable in such
Superior Transaction, and
(vii) if the Superior Transaction is structured as
provided in clause (Y) of subsection (ii) above, then the third party
must, as a condition to PSRT's obligations hereunder, execute and
deliver to PSRT a binding agreement in form and substance reasonably
acceptable to PRST, providing PSRT with the right to immediately resell
upon closing of the Superior Transaction any shares of Capital Stock it
may elect to receive upon consummation of such Superior Transaction.
Such agreement shall provide for the third party to prepare and file a
"shelf" registration statement with respect to the Capital Stock to be
issued to PSRT on Form S-3 for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (as
defined in the Merger Agreement) and such registration statement shall
be required to become effective concurrently with the closing of the
Superior Transaction and the issuance of Capital Stock to PSRT.
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(c) For purposes of this Agreement, "CAPITAL STOCK" of
any Person (as defined in the Merger Agreement) means any and all shares of
common stock of a Person's capital stock.
SECTION 2. AGREEMENT TO VOTE AND TENDER.
(a) PSRT agrees that, in the event the Merger Agreement
is terminated pursuant to Section 9.1(h) thereof and, immediately prior to such
termination or concurrently therewith, Target enters into an agreement to
effectuate a Superior Transaction, then, at such time as Target conducts a
meeting of, or otherwise seeks a vote or consent of, its stockholders for the
purpose of approving a Superior Transaction, PSRT shall vote, or provide a
consent with respect to, its Owned Shares (i) in favor of the approval of the
Superior Transaction and (ii) against any action or agreement that would compete
with, impede or interfere with the adoption and approval of the Superior
Transaction and the timely consummation of the Superior Transaction.
(b) PSRT further agrees that, in the event the Merger
Agreement is terminated pursuant to Section 9.1(h) thereof and, immediately
prior to such termination or concurrently therewith, Target enters into an
agreement to effectuate a Superior Transaction which consists of a tender offer
followed by a merger, then, (i) PSRT shall validly tender for sale to the third
party offeror, pursuant to the terms of the Superior Transaction and Rule 14d-2
under the Securities Exchange Act of 1934, as amended, no later than the tenth
business day after commencement of the tender offer or, if later, the fifth
business day following receipt of the documents relating to the tender offer,
the Owned Shares and (ii) PSRT shall not, subject to applicable law, withdraw
the tender of its Owned Shares effected in accordance with clause (i) of this
Section 2(b); PROVIDED, HOWEVER, that PSRT may decline to tender, or may
withdraw, any and all of its Owned Shares, if (x) without the prior written
consent of PSRT, Target shall amend or modify any term or condition of the
Superior Transaction or the tender offer contemplated thereby in a manner
adverse to PSRT (including, without limitation, any reduction in the price per
share to be paid or the number of shares subject to the tender offer, any change
to the form of consideration payable in the offer or any reduction in the
payment required to be made in respect of the CVR Agreement) or (y) the Board of
Directors of Target has not recommended to the stockholders of Target, or has
withdrawn its recommendation, that such stockholders approve the Superior
Transaction.
SECTION 3. COVENANTS OF PSRT.
(a) PSRT hereby covenants and agrees that, except as
contemplated by this Agreement (including Section 9 hereof), the Merger
Agreement, or the Voting Agreement, PSRT shall not while this Agreement is in
effect:
(i) sell, give, assign or otherwise dispose of
(each, a "TRANSFER"), or agree to Transfer, any Owned Shares (except to
Transfer a portion of its Owned Shares to Buyer immediately prior to
the consummation of the Merger or to Transfer a portion of its Owned
Shares to a Person that agrees to be bound by the provisions of Section
2 of this
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Agreement with respect to the transferred Owned Shares (such agreement
to be evidenced by a written agreement in form and substance reasonably
acceptable to Target));
(ii) enter into any agreement or grant or agree
to grant any proxy or power-of-attorney with respect to any Owned
Shares which is inconsistent with this Agreement; or
(iii) by any action or omission cause any security
interests, liens, claims, pledges, charges, encumbrances, options,
rights of first refusal, agreements or limitations on PSRT's voting
rights to attach to the Owned Shares (except for any pledge of the
Owned Shares or any custodial arrangement with respect to the Owned
Shares under any existing or successor loan agreement or credit
facility (including the ancillary documents relating thereto) to which
PSRT or any Affiliate of PSRT is a party).
(b) PSRT hereby covenants and agrees that, at the written
request of Target and following compliance by Target with the provisions of
Section 4 of this Agreement, PSRT shall confirm in writing to Target whether or
not, in its good faith judgment, the criteria set forth in Section 1(b) of this
Agreement have been satisfied.
SECTION 4. COVENANTS OF TARGET. Target hereby covenants and agrees,
that, in the event Target makes the request contemplated in Section 3(b) of this
Agreement, Target shall provide to PSRT a copy of the agreement in respect of
the proposed Superior Transaction and any information or meetings with
representatives of the third party proposing the Superior Transaction, in each
case as reasonably requested by PSRT in order to enable it to make a
determination as to whether or not, in its good faith judgment, the criteria set
forth in Section 1(b) of this Agreement have been satisfied.
SECTION 5. NO OWNERSHIP INTEREST. Nothing contained in this Agreement
shall be deemed to vest in Target any direct or indirect ownership or incidence
of ownership of or with respect to any Owned Shares. All rights, ownership and
economic benefits of and relating to the Owned Shares shall remain vested in and
belong to PSRT, and Target shall have no power or authority to direct PSRT in
the voting of any of the Owned Shares, except as otherwise provided herein, or
in the performance of PSRT's duties or responsibilities as a stockholder of
Target.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF PSRT. PSRT represents and
warrants to Target as follows:
(a) PSRT has all necessary corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by PSRT and the consummation by PSRT of the transactions
contemplated hereby have been duly and validly authorized by PSRT, and no other
proceedings on the part of PSRT are necessary to authorize this Agreement or to
consummate such
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transactions. This Agreement has been duly and validly executed and delivered by
PSRT and, assuming the due authorization, execution and delivery by Target,
constitutes a legal, valid and binding obligation of PSRT, enforceable against
PSRT 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).
(b) The execution and delivery of this Agreement by PSRT
does not, and the performance of this Agreement by PSRT shall not, (i) conflict
with or violate the organizational documents of PSRT, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to PSRT
or by which the Owned Shares are bound or affected or (iii) except with respect
to any of the following as to which a consent or waiver has already been
obtained, result in any breach of or constitute a default (or an event that with
notice or lapse or time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the Owned Shares pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which PSRT is a party or
by which PSRT or the Owned Shares are bound or affected, except, in the case of
clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults
or other occurrences which would not prevent or delay the performance by PSRT of
its obligations under this Agreement.
(c) The execution and delivery of this Agreement by PSRT
does not, and the performance of this Agreement by PSRT shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any court or arbitrator or any Regulatory Authority except for applicable
requirements, if any, of the Exchange Act and except where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay the performance by PSRT of its
obligations under this Agreement.
(d) As of the date hereof, PSRT is the record and
beneficial owner of 21,052,631 Shares. The Shares are, and the Owned Shares will
be, owned free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreement, limitations on PSRT's voting
rights, charges and other encumbrances of any nature whatsoever, except for any
pledge of the Owned Shares or any custodial arrangement with respect to the
Owned Shares under any existing or successor loan agreement or credit facility
(including the ancillary documents relating thereto) to which PSRT or any
Affiliate of PSRT is a party. PSRT has not appointed or granted any proxy that
is inconsistent with this Agreement, which appointment or grant is still
effective, with respect to the Shares.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF TARGET. Target represents
and warrants to PSRT as follows:
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(a) Target has all necessary power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Target and the consummation by Target of the transactions
contemplated hereby have been duly and validly authorized by Target, and no
other proceedings on the part of Target are necessary to authorize this
Agreement or to consummate such transactions. This Agreement has been duly and
validly executed and delivered by Target and, assuming the due authorization,
execution and delivery by PSRT, constitutes a legal, valid and binding
obligation of Target, enforceable against it 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).
(b) The execution and delivery of this Agreement by
Target do not, and the performance of this Agreement by Target shall not, (i)
conflict with or violate the organizational documents of Target, (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Target or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse or time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of
any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Target is
a party or by which Target is bound or affected, except, in the case of clauses
(ii) and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay the performance by Target of its
obligations under this Agreement or the Merger Agreement.
(c) The execution and delivery of this Agreement by
Target do not, and the performance of this Agreement by Target shall not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any court or arbitrator or any Governmental Entity except for
applicable requirements, if any, of the Exchange Act and except where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay the performance
by Target of its obligations under this Agreement or the Merger Agreement.
SECTION 8. TERMINATION. This Agreement shall terminate and no party
shall have any rights or duties hereunder upon the earlier of (a) the day on
which the Merger Agreement is terminated in accordance with its terms (other
than a termination pursuant to Section 9.1(h) of the Merger Agreement in which
immediately prior to, or concurrently with such termination, Target enters into
an agreement to effectuate a Superior Transaction), (b) the Effective Time, (c)
any violation or breach of Section 7.2 of the Merger Agreement, (d) any
termination of a merger or other primary transaction agreement entered into by
the Company in respect of a Superior Transaction or any amendment to or
modification of any such agreement that is, in the good faith judgment of PSRT,
adverse to PSRT, (e) the day on which the Merger Agreement is terminated
pursuant to Section 9.1(h) thereof if the Common Stock Price Per Share (as such
amount
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has been increased by Buyer pursuant to Section 9.1(h) of the Merger Agreement)
equals or exceeds the cash price per share of Target Common Stock that PSRT
would have the right to elect to receive pursuant to clause (Y) of subsection
(ii) of Section 1(b) of this Agreement if it elected to receive all cash for its
shares of Target Common Stock in any such transaction and (f) 270 days from the
date hereof. Any such termination shall be without prejudice to liabilities
arising hereunder before such termination.
SECTION 9. SHAREHOLDER CAPACITY. Notwithstanding anything herein to
the contrary: (a) with respect to any Affiliate of PSRT that is or becomes,
during the term hereof, a director or officer of Target, no representation,
warranty, undertaking or agreement herein shall apply to such Affiliate in his
or her capacity as such a director or officer and (b) PSRT has entered into this
Agreement solely in PSRT's capacity as the record and beneficial owner of the
Shares and nothing herein shall limit or affect any actions taken or omitted to
be taken at any time by any of its Affiliates in his or her capacity as an
officer or director of Target.
SECTION 10. NON-SURVIVAL. The representations and warranties made
herein shall terminate upon termination of this Agreement.
SECTION 11. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; ASSIGNMENT. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
The rights and obligations under this Agreement shall not be transferred by any
party without the prior written consent of the other party.
(b) PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and their respective
successors, executors, administrators, heirs and permitted assigns. Nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other person any rights, benefits or remedies of any nature whatsoever under or
by reason of this Agreement.
(c) AMENDMENT. This Agreement may not be amended,
changed, supplemented, or otherwise modified, except upon the execution and
delivery of a written agreement executed by the parties hereto.
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(d) NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be given (and shall be deemed to have been
duly received if given) by hand delivery or by facsimile transmission with
confirmation of receipt, as follows:
if to PSRT:
c/o Lazard Freres Real Estate Investors L.L.C.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
if to Target:
0000 Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxx & Bird LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(e) SEVERABILITY. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction such invalidity, illegality or unenforceability will not affect any
other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
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(f) SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that the provisions of this
Agreement are not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
(g) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state.
(h) JURISDICTION. Each party to this Agreement hereby
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated hereby
shall be brought in the courts of the State of New York and hereby expressly
submits to the personal jurisdiction and venue of such courts for the purposes
thereof and expressly waives any claim of improper venue and any claim that such
courts are an inconvenient forum. Each party hereby irrevocably consents to the
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth or referred to in Section 11(d), such
service to become effective ten (10) days after such mailing.
(i) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(j) HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(k) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same agreement.
(l) FURTHER ASSURANCES. Each party shall cooperate and
take such action as may be reasonably requested by the other party in order to
carry out the provisions and purposes of this Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed as of the day and year first above written.
PROMETHEUS SOUTHEAST RETAIL TRUST
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
KONOVER PROPERTY TRUST, INC.
By: /s/ J. Xxxxxxx Xxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxx
Title: President
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