Exhibit 2.1
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Second
Amendment") dated as of April 4, 2003 between PREIT ASSOCIATES, L.P. et al,
(collectively, "Sellers") and MPM ACQUISITION CORP. ("Purchaser").
Background
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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. Sellers and
Purchaser executed a First Amendment to Purchase and Sale Agreement (the "First
Amendment") dated as of March 3, 2003 modifying the Original Purchase Agreement
to allow Purchaser additional time to obtain debt and equity commitments to
permit it to consummate the transactions contemplated by the Original Purchase
Agreement.
Pursuant to Section 4 of the First Amendment, Purchaser has exercised
its right to terminate the Agreement and has forfeited Three Million Dollars
($3,000,000) to Sellers as liquidated damages on account thereof. Purchaser has
requested Sellers to reinstate and to further amend the Agreement, and Sellers
have agreed to do so upon the terms and conditions set forth herein.
The term "Agreement" as used herein and in the Original Purchase
Agreement shall mean the Original Purchase Agreement as amended by the First
Amendment and by this Second Amendment. Other terms which are capitalized
herein, but not defined, shall have their respective meanings set forth in the
Original Purchase Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Partial Forfeiture of Deposit. Purchaser acknowledges that it has forfeited
Three Million Dollars ($3,000,000) of the Deposit by reason of the termination
of the Agreement. Such sum shall be non-refundable by Sellers whether or not the
transactions contemplated by the Agreement close and regardless of the reason
therefor. Upon the delivery of a photocopy of an executed copy of this Second
Amendment to the Title Company, the Title Company shall be, and hereby is,
authorized by Sellers and Purchaser to wire transfer said $3,000,000.00 to
Sellers in accordance with Sellers' wire transfer instructions unless the Title
Company has already done so by reason of Sellers notice.
2. Reinstatement of Agreement. Upon execution of this Second Amendment and the
payment of the Additional Deposit in the amount of Five Million Dollars
($5,000,000) by Purchaser, the Agreement shall be reinstated except that
Purchaser shall have no further right to terminate the Agreement pursuant to
Section 4 of the First Amendment. If Closing occurs under the Agreement,
Purchaser shall be entitled to receive credit against the Purchase Price for the
$3,000,000 forfeited by Purchaser by reason of its termination of the Agreement
pursuant to Section 4 of the First Amendment. If Purchaser fails to make the
Additional Deposit by 2:30 p.m. local time on the date this Second Amendment is
executed and delivered by the parties hereto, if executed before 2:30 p.m. on a
business day, otherwise on the next following business day, this Second
Amendment shall be of no force and effect and the Agreement shall not be
reinstated.
3. Seller's Termination Option Waived. Sellers hereby waive Sellers' right to
terminate the Agreement pursuant to Section 5 of the First Amendment.
4. GMAC Funding. A new Section 8(e) is added to the Agreement, as follows:
"(e) Notwithstanding anything to the contrary contained in this
Agreement, it shall be a condition to Purchaser's obligation under this
Agreement to proceed to Closing that GMAC shall have advanced first
mortgage and mezzanine financing to Purchaser or its designees, and
shall have made an equity investment in Purchaser or its designees
(collectively, the "GMAC Funding"), substantially in accordance with,
and in the amounts described in, the commitment letters from GMAC dated
April 3, 2003 and accepted by Purchaser, copies of which accepted
commitment letters have been delivered to Sellers simultaneously with
the execution of the Second Amendment (the "Commitments"), as such
amounts may be adjusted for Properties and JV Interests which are
dropped from the transactions contemplated hereby. Purchaser shall use
good faith efforts to obtain and close the GMAC Funding, including
agreeing to reasonable modifications of the express terms of the
Commitments in the documents implementing the same so long as the same
do not materially alter the economics of the Commitments. Purchaser
shall keep Sellers fully informed as to the progress of obtaining the
GMAC Funding, including, without limitation, reporting to Sellers
material developments in the proposed transaction with GMAC. Sellers
shall keep all such information confidential. If the GMAC Funding is
not made on the dates Closing is required to be held under the
Agreement (other than because of a default by Purchaser under the
Commitments (it being understood that the inability of Purchaser to
satisfy a condition outside of its control shall not be deemed a
default by Purchaser)), then Purchaser may terminate the Agreement, in
which case Three Million Dollars ($3,000,000) of the Deposit shall be
paid to Sellers as liquidated and agreed upon damages for termination
of the Agreement, it being agreed that Sellers' damages are impractical
or extremely difficult to ascertain and such sum presents 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 under the Agreement, except for the
Surviving Obligations."
5. Survey and Title. Purchaser's counsel has delivered a letter dated March 31,
2003 to Sellers regarding title and survey issues. Although Sellers will use
good faith efforts to help Purchaser resolve such issues, Purchaser acknowledges
that each of the Properties has been previously financed and Purchaser hereby
waives all objections set forth in such letter and in any other communications
subsequently delivered to Sellers regarding title or survey issues. Such waiver
shall not affect Sellers' obligation to deliver title in accordance with Section
5(a) of the original Purchase Agreement. Sellers also acknowledge that GMAC has
not approved title and Purchaser's waiver herein does not bind GMAC.
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6. Closing Date. Section 4(d) of the Original Purchase Agreement is hereby
deleted and the following inserted in lieu thereof:
"(d) Closing. The delivery of the Deeds and the consummation of the
transactions contemplated by this Agreement (the "Closing") shall take
place at the offices of Drinker Biddle & Reath LLP, One Logan Square,
18th & Cherry Streets, Philadelphia, Pennsylvania 19107-6996 at 10:00
A.M. on May 30, 2003; provided, however, that Purchaser may postpone
the date for Closing upon not less than ten (10) days' prior notice to
a date specified in such notice not later than June 13, 2003, in which
case, the liquidated damage amount set forth in Section 8(e) of the
Agreement (as added by Section 4 of this Second Amendment) shall be
increased to $6,000,000; and provided further that Sellers, upon not
less than ten (10) days prior notice, may postpone the date for Closing
with respect to any Properties on which the mortgage debt is to be
assumed and for which the Mortgagee's consent has not been obtained, to
the date not later than July 31, 2003. Such date(s) of Closing each, a
"Closing Date." Unless the context requires otherwise, references in
the Agreement to the "Closing Date" shall be deemed to refer to the
Closing Date for the appropriate JV Interest or Property."
7. Remedies. Section 15(b) of the Original Purchase Agreement is hereby amended
by deleting the liquidated damage amount of $15,000,000 and by inserting the sum
of $9,000,000 in lieu thereof; provided, however, if Purchaser extends the
Closing Date beyond May 30, 2003 pursuant to Section 4(d) of the Agreement (as
amended by Section 6 of this Second Amendment), the liquidated damage amount
shall be increased to $12,000,000.
8. Announcement. Upon the execution hereof, Purchaser and Sellers shall each
issue a press release to the effect that GMAC has issued debt and equity
commitments to Purchaser in the full amount necessary to close the transactions
contemplated by the Agreement, and Purchaser has accepted such commitments, and
containing such other provisions and statements from Purchaser and Sellers as
shall be appropriate. Prior to the issuance of any press release by either
Sellers or Purchaser, a copy thereof shall be given to GMAC for review and
comment, and the reasonable comments of GMAC will be taken into account.
9. Filing of Agreement. The parties acknowledge that this Second Amendment may
be filed with the Securities and Exchange Commission.
10. 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, 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 with respect to
the forfeiture of $3,000,000 (or $6,000,000 if Purchaser extends the
Closing Date beyond May 30, 2003 as above provided) if Purchaser
terminates this Agreement pursuant to Section 4 of the Second
Amendment. The Title Company shall honor PREIT's demand immediately in
such event;"
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11. Joint Venture Properties. Sellers have received letters from the partners in
the Joint Ventures for Countrywood Apartments and Will-O-Hill Apartments
withholding their consent to the sale by Sellers of the partnership interests in
such entities to Purchaser. Accordingly, Exhibit "A" is hereby amended to delete
reference to such Properties.
12. 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 or the First Amendment conflicts or is inconsistent with a provision
in this Second Amendment, the provision in this Second Amendment shall prevail.
13. Execution; Facsimile Signatures. This Second Amendment may be executed in
counterparts, all of which when taken together shall constitute a single
instrument. In addition, a facsimile of a party's signature shall be given the
same force and effect as an original signature.
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: /s/ 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 WILL-O-HILL, L.P.
PR FOX RUN LIMITED PARTNERSHIP
By: /s/ Jonathan B. Weller
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