Exhibit 2.5
PREIT ASSOCIATES, L.P., ET AL.
The Bellevue, Third Floor
200 S. Broad Street
Philadelphia, PA 19102
May 30, 2003
MPM Acquisition Corp.
c/o Morgan Properties, Ltd.
160 Clubhouse Road
King of Prussia, PA 19406
Re: Closing Agreement
Gentlemen:
Reference is made to the Purchase and Sale Agreement dated as of March
3, 2003 by and between PREIT Associates, L.P., et al., as Sellers (the
"Sellers"), and MPM Acquisition Corp., as Purchaser (the "Purchaser"), as
amended to date (the "Purchase Agreement"). In connection with the first Closing
under the Purchase Agreement being held today, Sellers and Purchaser agree,
intending to be legally bound, as follows:
1. Application of Deposit. 79.4% of the $12,000,000 deposit
($9,528,000) and 79.4% of the forfeited $3,000,000 which is to be credited
against the Purchase Price ($2,382,000) will be credited against the Purchase
Price payable at the Closing today. $2,472,000 of the Deposit will remain with
the Title Company as a Deposit against the Properties for which Closing will not
occur today and $618,000 of the forfeited amount will be credited at future
closings if, as and when such closings occur. 79.4% of any accrued interest in
the Deposit will be credited today and the balance will remain with the Title
Company in the Deposit. Sellers agree if Purchaser is excused under the Purchase
Agreement from purchasing the Fannie Mae Properties, $618,000 of the forfeited
amount will be refunded to Purchaser by Seller.
2. Deposits, Escrows and Reserves. Notwithstanding the provisions of
Section 3(a) of the Purchase Agreement to the contrary, Sellers and Purchasers
have agreed that any deposits, escrows and reserves required to be maintained by
the mortgagee under mortgage loans which are being assigned to Purchaser at
Closing, but are being prepaid or defeased, shall not be credited to the related
Seller, but such deposits, escrows or reserves shall remain the property of the
related Seller and shall be returned by the mortgage lender or servicer to the
related Seller. Purchaser agrees that if any such funds are delivered or paid to
Purchaser, Purchaser shall promptly deliver or transfer such payments to the
related Seller. Deposits, escrows and reserves on Shenandoah and the Fannie Mae
Properties will be adjusted.
3. Capital Expenditures. Purchaser has requested an adjustment relating
to capital expenditures at the Properties. Sellers believe that Sellers have
performed in all material respects all covenants, undertakings and obligations,
and complied in all material respects with all conditions required by the
Purchase Agreement to be performed or complied with by Sellers at or prior to
Closing, and that no such adjustment is required by the Purchase Agreement or
otherwise warranted. To resolve this issue:
(a) Sellers agree to credit the amount of $247,603 as an
additional closing adjustment in favor of Purchaser at the first Closing; and
(b) Purchaser agrees: (i) Sellers have performed in all
material respects all covenants, undertakings and obligations and complied in
all material respects with all conditions required by the Purchase Agreement to
be performed or complied with by the Sellers at or prior to the date hereof;
(ii) Purchaser will accept a credit of $247,603 as a closing adjustment in favor
of Purchasers at the first Closing; and (iii) there shall be no adjustment with
respect to either of the Fannie Mae Properties at any subsequent closing
relating to the covenants, undertakings and obligations required to be performed
or complied with respect to the Fannie Mae Properties on or before the date
hereof. Nothing in this letter shall be deemed to be a waiver by Purchaser of
any breach of representation or warranty by Sellers under the provisions of the
Purchase Agreement or under the provisions of any document delivered by any
Seller at Closing.
4. Post-Closing Adjustments. Sellers and Purchaser agree that the
post-closing adjustments pursuant to Section 3(g) of the Purchase Agreement
shall include, without limitation: (i) a reconciliation of rents received after
the date as of which paid rents were adjusted at Closing; and (ii) a pro-rated
adjustment, amortized over the five (5) year term of the agreement, of the
up-front payment under the Verizon contract to the extent applicable to the
Properties on which closing is occurring.
5. Intentional Default. From and after the first Closing, the
provisions of Section 15(b) shall be deemed deleted from the Purchase Agreement.
In addition, the final clause in Section 15(a) which refers to Section 15(b)
shall also be deemed deleted from the Purchase Agreement.
6. Raymond Trost. Sellers and Purchaser acknowledge that Raymond Trost
declined Purchaser's offer of employment and will remain an employee of PREIT.
Neither PREIT, Seller nor Purchaser shall have any liability as a result
thereof.
7. Purchase Agreement Ratified. Except as modified hereby, Sellers and
Purchaser hereby ratify and confirm the Purchase Agreement. In the event of a
conflict between this letter and the Purchase Agreement, the terms of this
letter shall prevail.
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If this letter sets forth our mutual understanding and agreement,
kindly sign where indicated below, whereupon this letter shall become a legally
binding agreement between us.
Very truly yours,
PREIT ASSOCIATES, L.P., ET AL.
By: Jonathan B. Weller
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Jonathan B. Weller
Authorized Signatory for all Sellers
AGREED TO:
MPM ACQUISITION CORP.
By: Mitchell L. Morgan
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Name: Mitchell L. Morgan
Title: President
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