EXHIBIT 2.2
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") dated
as of March 3, 2003 between PREIT ASSOCIATES, L.P. et al, (collectively,
"Sellers") and MPM ACQUISITION CORP. ("Purchaser").
Background.
Sellers and Purchaser have executed a Purchase and Sale Agreement dated
as of March 3, 2003 (the "Original Purchase Agreement") with respect to the
purchase and sale of Sellers' multifamily apartment portfolio. Purchaser has
requested Sellers to modify the Original Purchase Agreement to allow it
additional time to obtain debt and equity commitments to permit it to consummate
the transactions contemplated by the Original Purchase Agreement and Sellers
have agreed to do so upon the terms and conditions set forth herein.
It is intended by Sellers and Purchaser that this Amendment be executed
and delivered simultaneously with the delivery of the Original Purchase
Agreement and the Original Purchase Agreement, as amended by this Amendment, be
treated as a single document. The term "Agreement" as used herein and in the
Original Purchase Agreement shall mean the Original Purchase Agreement as
amended by this Amendment. Other terms which are capitalized herein, but not
defined, shall have their respective meetings set forth in the Original Purchase
Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Initial Deposit. Section (2)(a) of the Original Purchase Agreement shall be
deleted in its entirety and the following shall be substituted in lieu thereof:
"(a) Ten Million Dollars ($10,000,000) (the "Initial Deposit")
simultaneously with the execution and delivery of this Agreement, and
as a condition precedent to the effectiveness of this Agreement, by a
bank wire transfer of immediately available funds to an account
designated by the Title Company. The Initial Deposit shall be held and
disbursed by the Title Company in accordance with the terms of this
Agreement, and shall be non-refundable except as expressly provided in
this Agreement."
2. Additional Deposit; Application of Deposit. Section (2)(b) of the Original
Purchase Agreement shall be deleted in its entirety and the following shall be
substituted in lieu thereof:
"(b) Purchaser shall deposit with the Title Company, by a bank wire
transfer of immediately available funds, the additional sum of Five
Million Dollars ($5,000,000) (the "Additional Deposit") by 12:00 noon
E.S.T. on Friday, April 4, 2003 unless the Agreement is terminated
pursuant to Section 8(a)(i) of the Original Purchase Agreement or
Section 4 of the First Amendment hereto of even date (the "Amendment").
The Additional Deposit shall be deposited in the account containing the
Initial Deposit. The Initial Deposit and the Additional Deposit and all
interest earned thereon shall hereinafter collectively be referred to
as the "Deposit." The Deposit shall be non-refundable except as
expressly provided in this Agreement and shall be held and delivered by
the Title Company in accordance with the provisions of Section 18.
Except as expressly otherwise set forth in this Agreement, the Deposit
shall be applied against the Purchase Prices on the Closing Date. It is
understood that if Purchaser is permitted to terminate this Agreement
with respect to all of the Properties and JV Interests, the Deposit
shall be returned to Purchaser except to the extent provided in Section
4 of the Amendment."
3. Application to GMAC. Promptly upon execution of this Amendment, Purchaser
shall apply to GMAC Commercial Mortgage Corporation and GMAC Institutional
Advisors (collectively, "GMAC") for commitments for debt and equity financing
which would allow Purchaser to consummate the purchase of the Properties and JV
Interests for the Purchase Prices specified in the Agreement, pursue in good
faith the obtaining of such commitments and, if such commitments sustain
Purchase Prices of $420 million for all of the Properties and JV Interests and
are in substantial accordance with Purchaser's applications, to accept such
commitments. Purchaser shall not have any obligation to accept a commitment
which is not substantially in accordance with Purchaser's application. Purchaser
shall provide Sellers copies of such applications to GMAC on a confidential
basis, shall keep Sellers fully informed as to the progress of obtaining such
commitments including, without limitation, reporting to Sellers as to material
developments in Purchaser's negotiations with GMAC and delivering copies to
Sellers of commitment letters issued by GMAC. Sellers shall keep all such
information confidential.
4. Purchaser's Termination Right. If Purchaser does not obtain and accept
commitments from GMAC as provided in Section 3 above on or before 12:00 noon.
E.S.T. on Friday, April 4, 2003, Purchaser shall have the right to terminate the
Agreement by giving written notice thereof to Sellers, which notice shall be
given in a manner such that it shall be received by Sellers at or before 12:00
noon E.S.T. on Friday, April 4, 2003. In the event Purchaser terminates the
Agreement as provided in this Section 4, $3,000,000 of the Deposit shall be paid
to Sellers as liquidated and agreed upon damages for such termination, it being
agreed that Sellers' damages are impractical or extremely difficult to ascertain
and such sum represents a reasonable estimate of the damages Sellers will incur
for having removed the Properties and JV Interests from the market for such
period, the remainder of the Deposit shall be returned to Purchaser, and
thereafter neither Sellers nor Purchaser shall have any further rights,
liabilities or obligations hereunder except for the Surviving Obligations.
5. Sellers' Termination Right. If the condition set forth in Section 8(a)(i) of
the Agreement has been satisfied, Sellers shall nonetheless have the right to
give Purchaser written notice of Sellers' willful default under this Agreement
by giving written notice thereof to Purchaser by 1:00 p.m. on Friday, April 4,
2003, which notice shall be given in a manner such that it shall be received by
Purchaser at or before 1:00 p.m. E.S.T. on Friday, April 4, 2003, in which case
the Deposit shall be returned to Purchaser, Sellers shall pay a termination fee
to Purchaser in the amount of $3,000,000 (instead of $15,000,000 as specified in
Section 15(b) of the Agreement) as liquidated and agreed upon damages for such
willful default, it being agreed that Purchaser's damages are impractical or
extremely difficult to ascertain and such sum represents a reasonable estimate
of the damages Purchaser will incur on account of Sellers' willful default, and
thereafter neither Sellers nor Purchaser shall have any further rights,
liabilities or obligations hereunder except for the Surviving Obligations.
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6. Application of Deposit. Notwithstanding anything in the Agreement to the
contrary, if the Agreement is further amended after the date hereof (other than
as a result of an amendment to Exhibit "A" to delete reference to a Property or
a JV Interest or as provided in Section 6(a)(iii) of the Original Purchase
Agreement) and the Purchase Prices are reduced thereby, the amount of the
Deposit credited at Closing on account of the Purchase Prices shall be reduced
by an amount equal to the reduction in such Purchase Prices, up to the entire
Deposit, such reduction in credit to be in consideration of such subsequent
amendment and reduction in Purchase Prices, and the remaining Deposit shall be
paid to Sellers. As an example, if all of the Properties and JV interests are
included in the purchase and sale at Closing and the Agreement is further
amended (except as provided in the above parenthetical) to reduce the Purchase
Prices to $410,000,000, only $5,000,000 of the Deposit would be credited against
the Purchase Prices and the remaining Deposit would be paid to Sellers in
consideration of such subsequent amendment and reduction in Purchase Prices.
7. Filing of Agreement. The parties acknowledge that the Agreement will be filed
with the Securities and Exchange Commission. Sellers agree that they will not
actively solicit any other offers for Sellers' multi-family apartment portfolios
so long as this Agreement is in full force and effect. Purchaser hereby waives
any right it may have to file a lis pendens with respect to any Property.
8. Escrow Provisions. Section 18(d)(ii) of the Original Purchase Agreement shall
be deleted in its entirety and the following shall be substituted in lieu
thereof:
"(d)(ii) to PREIT, after receipt of PREIT's demand in which PREIT
certifies either that (A) Purchaser has materially defaulted under this
Agreement, or (B) this Agreement has been otherwise terminated or
cancelled, and Sellers are thereby entitled to receive the Deposit;
but, except as set forth below with respect to the Additional Deposit,
Title Company shall not honor PREIT's demand until more than ten (10)
days after Title Company has given a copy of such demand to Purchaser
in accordance with Section 18(e)(i), nor thereafter if Title Company
receives a Notice of Objection from Purchaser within such ten (10) day
period; provided, however, Purchaser shall not have the right to give a
Notice of Objection (i) with respect to the forfeiture of the
$3,000,000 if Purchaser terminates this Agreement pursuant to Section 4
of the Amendment, or (ii) if Purchaser does not terminate this
Agreement pursuant to Section 4 of the Amendment, Sellers do not
terminate this Agreement pursuant to Section 5 of the Amendment or
Section 8(a)(i) of this Agreement, and Purchaser does not make the
Additional Deposit as provided in Section 2(b). The Title Company shall
honor PREIT's demand immediately in such event;"
9. Purchase Agreement Ratified. Except as amended or modified hereby, or
inconsistent with the provisions hereof, the Agreement is hereby ratified and
confirmed by Sellers and Purchaser. If any provision in the Original Purchase
Agreement conflicts or is inconsistent with a provision in this Amendment, the
provision in this Amendment shall prevail.
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IN WITNESS WHEREOF, this Amendment has been duly executed by the
parties as of the day and year set forth above.
PURCHASER:
MPM ACQUISITION CORP.
By: /ss/ Mitchell Morgan
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Name: Mitchell Morgan
Title: President
SELLERS:
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
PREIT ASSOCIATES, L.P.
GP STONES LIMITED PARTNERSHIP
EAGLES NEST ASSOCIATES
NEW REGENCY HILLTOP ASSOCIATES, L.P.
FOX RUN DEL ASSOCIATES
REGENCY ASSOCIATES
PR SHENANDOAH LIMITED PARTNERSHIP
THE WOODS ASSOCIATES
PR COUNTRYWOOD LLC
PR WILL-O-HILL, L.P.
PR FOX RUN LIMITED PARTNERSHIP
By: /ss/ Jonathan B. Weller
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Jonathan B. Weller
Authorized Signatory for All Entities
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