Exhibit 2.5
CLOSING AGREEMENT
This Closing Agreement (the "Agreement") is made and entered into as of
the 27th day of June, 2003 (the "Effective Date"), by and among Stonehaven
Realty Trust, a Maryland real estate investment trust ("Stonehaven"), Hampton
Court Associates, L.P., an Illinois limited partnership ("Hampton"), Xxxx
Properties, Inc. ("Xxxx Properties") and WLPT Funding LLC ("WLPT") (collectively
Xxxx Properties and WLPT are referenced herein as the "Optionees").
WHEREAS, Stonehaven is the general partner of Wellington Properties
Investments, L.P., a Delaware limited partnership ("Wellington Properties");
WHEREAS, pursuant to Amendment No. 1 to the Agreement of Limited
Partnership of Wellington Properties dated March 4, 2003 (the "Amendment"), the
Optionees were granted an option to purchase all of Stonehaven's ownership
interest in Wellington Properties (the "Option"), which Option may be exercised
after September 30, 2003 and before March 30, 2004 (the "Exercise Period");
WHEREAS, Stonehaven, Hampton and Paragon Real Estate, L.P., a Delaware
limited partnership, are parties to an Asset Contribution Agreement, effective
as of March 4, 2003 (the "Asset Purchase Agreement"); and
WHEREAS, the parties herein wish to set forth additional details
related to closing the transactions contemplated by the above mentioned option.
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the parties hereto agree as follows:
1. The Optionees hereby agree to exercise their Option on the first day of
the Exercise Period, which day is October 1, 2003, and the parties
agree that October 1, 2003 shall be the "Closing Date". The parties
agree that the Fair Market Value of the Shares to be paid by the
Optionees as part of the Purchase Price is 28 cents per share, which
represents the average closing price of the Shares for the thirty (30)
calendar days from May 27, 2003 to June 26, 2003.
2. The parties hereby acknowledge that the Purchase Price set forth in
Section 11.2(C)(iii) of the Amendment is the Purchase Price.
3. The parties hereby acknowledge that under Section 4 of the Amendment,
amending Section 11.2 of the Agreement of Limited Partnership of
Wellington Properties, dated August 31, 1998 (the "Partnership
Agreement"), all cash held on behalf of Wellington Properties on the
Closing Date, including the restricted cash in the GMAC and tax
accounts, will be distributed in its entirety to Stonehaven on the
Closing Date on a tax-free basis; provided that, the parties hereby
acknowledge that the $311,399.89 previously spent by Xxxx Properties on
behalf of Wellington Properties was set forth in the 2003 budget for
Wellington Properties and approved by the parties; and provided further
that the cash held in the restricted accounts may be retained by Xxxx
Properties at the Closing Date as long as Xxxx Properties pays an equal
amount in immediately available funds to Stonehaven on the Closing Date
on a tax-free basis. The cash distributed to Stonehaven will not be
subject to the proration provisions of Section 4 of the Amendment and
this Section and will not affect the amount of the Purchase Price.
As of the Closing Date (October 1, 2003), Stonehaven and the Optionees
shall prorate typical Closing adjustments, including the following:
a. Interest in arrears for the month of September (and any
previous months, if unpaid) shall be paid by Stonehaven.
b. Rents received for the month of October shall be the
property of Optionees. Rents received for the month of
September and all prior months shall belong to Stonehaven.
Rents received prior to October will include rents from
Insignia.
c. Property taxes through September 30, 2003 shall be paid by
Wellington Properties (Xxxx Properties represents that the
first 1/2 taxes through June 30, 2003 have been paid).
d. Ordinary operating expenses and any other expenses for the
Properties through September 30 shall be paid by Wellington
Properties only to the extent that they are approved in
writing in advance by Stonehaven after the date hereof.
Xxxx Properties will provide to Stonehaven a statement of
proposed expenditures on a monthly basis. Stonehaven shall
provide its written approval or denial to Xxxx Properties
within three business days of receipt of the proposed
expenditures and if no such approval or denial is provided
within the three business days, the expenditures shall be
deemed to be approved.
e. Security Deposits held by Wellington Properties shall be
credited to Optionees, a current schedule of which as
prepared by Xxxx Properties is attached as Exhibit X. Xxxx
Properties represents that the schedule is true and
complete.
4. Xxxx Properties represents that the cash held on behalf Wellington
Properties, including all security deposits and restricted cash, as of
June 25, 2003 is $319,381 consisting of (a) Plymouth Partners II LLC
cash in the amount of $22,567 (b) Nicollet Business Campus 6 cash in
the amount of $16,034 (c) Nicollet Business Campus 6 restricted and
escrowed Reserve Fund cash held by GMAC in the amount of $242,417 and
(d) Nicollet Business Campus 6 property tax and insurance escrows held
by GMAC in the amount of $38,362. Xxxx Properties represents that is
has not spent on behalf of Wellington Properties or obligated
Wellington Properties to spend more than $311,399.89 in 2003 for tenant
improvements or leasing commissions, and that the foregoing cash
balances will not be reduced prior to June 30, 2003.
5. As of the Effective Date, Xxxx Properties is not authorized to expend
any funds from Wellington Properties' accounts or create any
liabilities or commitments for any capital expenditures, tenant
improvements, leasing commissions or any similar costs or expenses;
provided that subject to Sections 3(d) and 6 of this Agreement, Xxxx
Properties may expend funds on behalf of Wellington Properties for
ordinary operating expenses. Subject to the the terms of this
Agreement, the parties agree that Xxxx Properties Inc. shall remain the
Property Manager of the Properties through and including the Closing
Date. Xxxx Properties shall provide to Stonehaven monthly rent rolls
and end of the month account receivable breakdowns as soon after the
end of each month beginning June 30, 2003, as practicable.
6. All control, including signature authority, of Wellington Properties'
bank accounts will be transferred promptly, and in no event later than
July 1, 2003, to Stonehaven, with signature authority being transferred
specifically to Stonehaven's Chief Executive Officer or Chief Financial
Officer. After such transfer and prior to the Closing Date, all cash
generated by the Properties shall be deposited into the applicable
operating or escrow accounts, including the GMAC account, and will be
distributed to Stonehaven in accordance with the first paragraph of
Section 3. Stonehaven agrees to promptly pay ordinary operating
expenses for the Properties as and when requested by the Property
Manager, including interest expense, subject to Section 3(d) of this
Agreement.
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7. Wellington Properties has paid the 1/2% loan origination fees in an
amount of $21,154, and $1,900 in legal fees incurred in connection with
the refinancing of the Wellington Properties real estate.
8. Stonehaven has paid the June rent for the Stonehaven office in
Minneapolis, Minnesota and will pay promptly $552.54 to Xxxxxx X. Xxxx
as a reimbursement for the Interlachen reception.
9. Stonehaven acknowledges that Robins, Kaplan, Xxxxxx & Xxxxxx LLP
represented Stonehaven in connection with the Asset Contribution
Agreement, the Amendment and related transactions and that it will pay
the $85,104.58 in outstanding legal fees and expenses.
10. This Agreement may not be amended except by a written agreement
executed by all of the parties hereto.
11. Neither the failure nor any delay by any party in exercising any right,
power or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right,
power or privilege or the exercise of any other right, power or
privilege.
12. All capitalized terms not otherwise defined herein have the meaning set
forth in the Amendment.
13. All terms and conditions of the Amendment remain in full force and
effect; provided, however, that this Agreement shall serve as a
clarification to such Amendment. To the extent that any provision in
this Agreement appears to contradict or conflict with the provisions in
the Amendment, this Agreement controls.
14. This Agreement shall be governed pursuant to and in accordance with the
laws of the State of Delaware without regard to conflicts-of-laws
principles that would require the application of any other law. Each of
the parties hereby agrees to the exclusive jurisdiction of any state or
federal court in Wilmington, Delaware for any actions, suits or
proceedings arising out of or relating to this Agreement. The parties
each agree not to commence any action, suit or proceeding relating
thereto except in such courts and not to plead or claim that any such
court is inconvenient or otherwise improper or inappropriate forum.
15. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all
of which, when taken together, will be deemed to constitute one and the
same agreement. This Agreement shall become effective when counterparts
have been signed by each party and delivered to the other parties, it
being understood that the parties need not sign the same counterpart.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
STONEHAVEN REALTY TRUST XXXX PROPERTIES, INC.
By: /s/ Xxxx X. Xxx By: /s/ Xxxxxx X. Xxxx
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Xxxx X. Xxx, CFO Xxxxxx X. Xxxx, CEO
HAMPTON COURT ASSOCIATES, L.P. WLPT FUNDING LLC
By: /s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxxxxxxxx, Xxxxx X. Xxxx, Managing Partner
General Partner
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