PREFERRED SECURITIES PURCHASE AGREEMENT
among
WELLSFORD REAL PROPERTIES, INC.,
WRP CONVERTIBLE TRUST I
and
ERP OPERATING LIMITED PARTNERSHIP
MAY 5, 2000
TABLE OF CONTENTS
Page
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SECTION 1. PURCHASE AND SALE OF SECURITIES...........................2
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS............2
2.1 Organization; Powers......................................2
2.2 Authorizations............................................3
2.3 The Capital Stock.........................................5
2.4 Company SEC Reports and Filings...........................5
2.5 Company Financial Statements; Material Changes............6
2.6 Absence of Defaults, Conflicts, etc.......................7
2.7 Pending Actions...........................................7
2.8 Private Offering; Integration.............................7
2.9 Brokerage.................................................8
2.10 Subordination.............................................8
2.11 No Material Misstatements.................................8
2.12 Tax Matters...............................................8
2.13 Reservation and Valid Issuance of Shares..................8
2.14 Preferred Securities Guarantee............................9
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR............9
3.1 Certain Representations and Warranties....................9
3.2 Additional Representations and Warranties................10
SECTION 4. COVENANTS................................................10
4.1 Tax Matters..............................................10
SECTION 5. OFFERORS' CLOSING CONDITIONS.............................12
5.1 Compliance with Agreement................................12
5.2 Investor to Close........................................12
5.3 Representations and Warranties...........................12
SECTION 6. INVESTOR'S CLOSING CONDITIONS............................12
6.1 No Material Adverse Effect...............................12
6.2 Representations and Warranties...........................13
6.3 Compliance with Agreement and Purchase Agreement.........13
6.4 Approval of Proceedings..................................13
6.5 Injunction...............................................14
6.6 Additional Agreements....................................14
6.7 Opinions.................................................14
SECTION 7. INDEMNIFICATION..........................................15
7.1 Indemnification Generally................................15
7.2 Indemnification Procedures for Third Party Claims........15
SECTION 8. INTERPRETATION OF THIS AGREEMENT.........................16
8.1 Terms Defined............................................16
8.2 Governing Law............................................18
8.3 Paragraph and Section Headings...........................19
SECTION 9. MISCELLANEOUS............................................19
9.1 Expenses.................................................19
9.2 Notices..................................................19
9.3 Survival.................................................20
9.4 Entire Agreement; Amendment and Waiver...................21
9.5 Counterparts.............................................21
9.6 Successors and Assigns...................................21
9.7 Severability.............................................21
9.8 Jurisdiction; Consent to Service of Process..............21
9.9 Trustee Exculpation......................................22
SCHEDULES
Schedule 2.3(a) Options, Warrants, Etc.
Schedule 2.5(b) Material Adverse Change
Schedule 6.2 Representations and Warranties
EXHIBITS
Exhibit A Form of Amendment to Registration Rights Agreement
Exhibit B Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
Exhibit C Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A.
Exhibit D Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
PREFERRED SECURITIES PURCHASE AGREEMENT
This PREFERRED SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as
of May 5, 2000 among Wellsford Real Properties, Inc., a Maryland corporation
(the "Company"), WRP Convertible Trust I, a Delaware statutory business trust
(the "Trust" and together with the Company, the "Offerors"), as issuer, and ERP
Operating Limited Partnership, an Illinois limited partnership (the "Investor"),
as purchaser.
PRELIMINARY STATEMENT
The Trust is a statutory business trust organized under the Business Trust
Act (the "Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the
Delaware Code, 12 Del. C. Sections 3801 et seq.) pursuant to the Declaration of
Trust, dated and effective as of May 5, 2000, by the Company and the Trustees,
as defined therein, and the holders, from time to time, of undivided beneficial
interests in the assets of the Trust (the "Declaration"). The Offerors confirm
their agreement with the Investor, with respect to the offer and sale by the
Trust and the purchase by the Investor of $25,000,000 in aggregate liquidation
amount of 8.25% Convertible Trust Preferred Securities (Liquidation Amount $25
per Security) representing undivided preferential beneficial interests in the
assets of the Trust (the "Preferred Securities"). The definitions of certain
capitalized terms used herein are set forth in Section 8.1. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
such terms in the Declaration.
The Preferred Securities will be guaranteed by the Company with respect to
distributions and amounts payable upon liquidation or redemption and otherwise
pursuant to the Preferred Securities Guarantee Agreement, dated as of May 5,
2000, of the Company (the "Preferred Securities Guarantee").
The entire proceeds from the sale of the Preferred Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
$775,000 in aggregate liquidation amount of its securities representing common
beneficial interests in the assets of the Trust (the "Common Securities") and
will be used by the Trust to purchase $25,775,000 in aggregate principal amount
of 8.25% Convertible Junior Subordinated Debentures due May 4, 2022 (the
"Subordinated Debentures") issued by the Company pursuant to an Indenture, dated
and effective as of May 5, 2000, by the Company and Wilmington Trust Company
(the "Trustee") (the "Indenture"). The Preferred Securities and the Common
Securities will be issued pursuant to the Declaration.
The Preferred Securities, the Preferred Securities Guarantee and the
Subordinated Debentures are collectively referred to herein as the "Preferred
Instruments." The Declaration, the Indenture, the Preferred Securities
Guarantee, and the Common Securities Guarantee and this Agreement are
hereinafter referred to collectively as the "Operative Documents."
The Preferred Securities are offered and sold to the Investor without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon exemptions therefrom, and Investor may only resell or
otherwise transfer such Preferred Securities if such Preferred Securities are
hereafter registered under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available.
The parties hereto desire that the foregoing transaction be subject to the
terms and conditions set forth herein. Accordingly, the parties agree as
follows:
SECTION 1. PURCHASE AND SALE OF SECURITIES
(a) Subject to the terms and conditions set forth in this Agreement and in
reliance upon representations and warranties contained in this Agreement, the
Trust agrees to sell to the Investor, and the Investor agrees to purchase from
the Trust, at a purchase price of $25 per Preferred Security, 1,000,000
Preferred Securities.
(b) Such sale and purchase shall be effected at the Closing Time (as
defined below) when delivery of the certificates, duly registered in the
Investor's name evidencing the Preferred Securities being purchased by it, shall
be made against delivery by the Investor to the Trust of the aggregate purchase
price therefor by wire transfer(s) of immediately available funds to such
account as the Trust shall designate prior to the Closing Time.
(c) The closing (the "Closing") of such sale and purchase shall take place
at 11:00 A.M., New York City time, on May 5, 2000, or at such other time not
later than five business days after such date as the Investor and the Offerors
agree to in writing (such time and date of payment and delivery being
hereinafter referred to as the "Closing Time"), at the offices of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other location as the Investor and the Offerors shall
select and agree to.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS
The Offerors, jointly and severally, represent and warrant to the Investor
as of the date hereof and as of the Closing Time referred to in Section (1)(c)
hereof, and agree with the Investor as follows:
2.1 Organization; Powers
(a) The Company and each of its Subsidiaries (a) is an entity duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of its
organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and as proposed to be
conducted, (c) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would not
result in a Company Material Adverse Effect, as defined in Section 2.5(b), and
(d) in the case of the Company, has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) The Trust has been duly created and is validly existing and in good
standing as a business trust under the Delaware Act with the trust power and
authority to own its properties and to conduct its business and to enter into
and perform its obligations under this Agreement, the Preferred Securities
Guarantee, the Common Securities Guarantee, and the Declaration. The Trust is
duly qualified to transact business and is in good standing in each jurisdiction
in which such qualification is necessary, except to the extent that the failure
to so qualify or be in good standing would not have a Trust Material Adverse
Effect, as defined in Section 2.5(b) hereof; and except as set forth on Schedule
2.5(a), the Trust is not a party to or otherwise bound by any agreement other
than documents referred to in this Agreement or entered into in connection with
the transactions referred to in this Agreement. The Trust is and will be, under
current law, classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a corporation. As of the
Closing Time, the Trust is and will be treated as a subsidiary of the Company
pursuant to GAAP.
2.2 Authorizations
(a) The execution, delivery and performance by the Company of this
Agreement and the transactions contemplated hereby (a) have been duly authorized
by all requisite corporate action, and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation to which the Company is subject,
or of the certificate or articles of incorporation, or other constitutive
documents or bylaws of the Company, or any subsidiary thereof, as the case may
be, (B) any order of any Governmental Authority (as defined below) or (C) any
provision of any indenture or other material agreement or instrument to which
the Company, or its Subsidiaries is a party or by which any of them or any of
their property is or may be bound, (ii) be in conflict with, result in a breach
of or constitute (alone or with notice or lapse of time or both) a default under
any such indenture, agreement or other instrument or (iii) result in the
creation or imposition of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right upon or with respect to any property or
assets now owned or hereafter acquired by the Company, or any of its
Subsidiaries (a "Lien").
(b) The execution, delivery and performance by the Trust of this Agreement
and the transactions contemplated hereby (a) have been duly authorized by all
requisite trust action, and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation to which the Trust is subject, or of the certificate
of trust of the Trust, (B) any order of any Governmental Authority or (C) any
provision of any indenture or other material agreement or instrument to
which the Trust is a party or by which it or any of its property is or may be
bound, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (iii) result in the creation or imposition of
any Lien.
(c) This Agreement is a valid and legally binding obligation of the
Offerors, enforceable against the Offerors in accordance with its terms except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting creditors'
rights generally or by general principles of equity, including but not limited
to, principles governing the availability of the remedies of specific
performance and requisite relief (regardless of whether enforcement is
considered in a proceeding at law or in equity) (the "Bankruptcy Exceptions").
(d) The Declaration and the Indenture have been duly authorized by the
Company and, to the Company's knowledge, have been duly authorized by the other
parties thereto, and, at the Closing Time, will have been duly executed and
delivered by the Company and, to the Company's knowledge, by the other parties
thereto, and each agreement will be a valid and legally binding obligation of
the Company, and to the Company's knowledge, of the other parties thereto,
enforceable against the parties thereto in accordance with its terms, except to
the extent that enforcement thereof may be limited by Bankruptcy Exceptions.
(e) The Registration Rights Agreement has been duly authorized by the
Company and, at the Closing Time, will have been duly executed and delivered by
the Company and assuming the due authorization, execution and delivery by the
Investor, the Registration Rights Agreement will, at the Closing Time, be a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) Bankruptcy Exceptions or (ii) the effect of
applicable public policy on the enforceability of provisions relating to
indemnification and contribution.
(f) The Preferred Securities have been duly authorized by the Declaration
and, when issued and delivered by the Trust to the Investor pursuant to this
Agreement against payment therefor as provided herein, will be validly issued
and fully paid and non-assessable undivided preferential beneficial interests in
the assets of the Trust. The issuance of the Preferred Securities is not subject
to preemptive or other similar rights; and (subject to the terms of the
Declaration) holders of Preferred Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit incorporated under the laws of the State of Delaware.
(g) The Common Securities have been duly authorized by the Declaration and,
when issued and delivered by the Trust to the Company against payment therefor,
will be validly issued and will represent undivided common beneficial interests
in the assets of the Trust.
The issuance of the Common Securities is not subject to preemptive or other
similar rights; and, at the Closing Time, all of the issued and outstanding
Common Securities of the Trust will be directly or indirectly owned by the
Company, free and clear of any Lien.
(h) The Preferred Securities Guarantee has been duly authorized by the
Company and, at the Closing Time, the Preferred Securities Guarantee will have
been duly executed and delivered by the Company and will constitute a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(i) The Subordinated Debentures have been duly authorized by the Company
and, at the Closing Time, the Subordinated Debentures will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits provided by
the Indenture, enforceable in accordance with their terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
2.3 The Capital Stock
(a) Pursuant to the Articles of Amendment and Restatement, dated May 30,
1997, the Company is authorized to issue 199,650,000 shares of Common Stock,
16,636,955 of which are issued and outstanding. Pursuant to the Articles
Supplementary of the Company, dated May 30, 1997, the Company is authorized to
issue 2,000,000 shares of Preferred Stock, none of which have been issued as of
the date hereof and 350,000 shares of Class A Common Stock, 339,806 of which are
issued and outstanding as of the date hereof. Upon consummation of the
transactions contemplated by the Operative Documents: (i) no shares of the Class
A Common Stock will be issued and outstanding, (ii) the Company will be
authorized to issue 350,000 shares of Class A-1 Common Stock, and (iii) the
Company will have issued 339,806 shares of Class A-1 Common Stock. Except as
disclosed on Schedule 2.3(a) hereto and in a letter agreement of even date
herewith relating to the issuance by the Company of shares of Class A-1 Common
Stock of the Company executed by the Company and the Investor, and as issued or
entered into with current or former directors or employees, there are no
existing options, warrants, calls, subscriptions, convertible securities, or
other rights, agreements or commitments which obligate the Company to issue,
transfer or sell any shares of stock or equity interest of the Company.
(b) As of the date hereof, there are no issued and outstanding beneficial
interests in the Trust. Upon consummation of the transaction contemplated by the
Operative Documents and a Subscription Agreement of even date herewith executed
by the Company, the Trust will have issued and outstanding $25,000,000 of
Preferred Securities and $775,000 of Common Securities. Except as provided for
in the Operative Documents, there are no existing options, warrants, calls,
subscriptions, convertible securities, or other rights, agreements or
commitments which obligate the Trust to issue, transfer or sell any beneficial
interests in the Trust.
2.4 Company SEC Reports and Filings
(a) The Company has caused to be delivered to the Investor copies of the
following documents, without exhibits thereto (collectively, the "SEC Reports
and Filings"):
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 (File No. 001-12917), as filed with the Commission on March
29, 2000;
(ii) The Company's Proxy Statement for the June 9, 2000 annual meeting of
shareholders, as filed with the Commission; and
(iii) The Company's registration statement on Form S-3, Registration No.
33356763, as filed with the Commission on June 12, 1998, and declared effective
on June 29, 1998.
(b) The SEC Reports and Filings, when filed, complied in all material
respects with all applicable requirements of the Securities Act and the
Securities Exchange Act of 1934 and the rules and regulations of the Commission
promulgated thereunder. None of the SEC Reports and Filings, at the time of
filing contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading in light of the circumstances in which they
were made.
2.5 Company Financial Statements; Material Changes
(a) The audited consolidated balance sheet of the Company as at December
31, 1999 included in the SEC Reports and Filings fairly presents in all material
respects the consolidated financial position of the Company and its Subsidiaries
at the date thereof, and the related consolidated statements of operations,
equity and cash flows for the year ended December 31, 1999 included in the SEC
Reports and Filings fairly present in all material respects the results of
operations and other information therein of the Company and its Subsidiaries for
the respective periods indicated (collectively, the "Financial Statements"). All
such Financial Statements, including the schedules and notes thereto, were
prepared in accordance with generally accepted accounting principles ("GAAP")
applied consistently throughout the periods involved.
(b) Since December 31, 1999 with respect to the Company and since the date
of its formation with respect to the Trust, (A) there has been no material
adverse change in or affecting the management, assets, business, business
prospects, earnings or condition (financial
or otherwise) of the Trust (a "Trust Material Adverse Effect") or the Company
and its Subsidiaries considered as one enterprise (a "Company Material Adverse
Effect," together with a Trust Material Adverse Effect, a "Material Adverse
Effect"), whether or not arising in the ordinary course of business, (B) there
have been no transactions entered into by the Trust or the Company or any of its
Subsidiaries which are material with respect to the Trust or the Company and its
Subsidiaries considered as one enterprise, other than those in the ordinary
course of business, (C) except as set forth in Schedule 2.5(b), there has not
been any material change in the total assets, except assets acquired in the
ordinary course of business, or long term debt of the Company and (D) neither
the Trust nor the Company nor any of its Subsidiaries has sustained any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree.
2.6 Absence of Defaults, Conflicts, etc.
The execution and delivery of the Operative Documents and the Registration
Rights Agreement, the issuance, sale and delivery of the Preferred Instruments
and the consummation of the transactions contemplated herein and therein do not
and will not conflict with, or result in a breach or violation of any of the
terms, conditions or provisions of, or constitute a default under, or permit the
acceleration of rights under or termination of, any of the Key Agreements and
Instruments of the Company, or any of its Subsidiaries or the Trust or result in
the creation or imposition of any Lien, charge or encumbrance upon any property
or assets of the Company or any of its Subsidiaries or the Trust, and will not
result in any violation of the Organizational Documents of the Company or any of
its Subsidiaries or the Trust, or any existing Requirements of Law applicable to
the Company, or any of its Subsidiaries or the Trust.
2.7 Pending Actions
There is no action, suit, investigation or proceeding pending or, to the
Company's knowledge, threatened or contemplated against the Company or any of
its properties or assets by or before any Governmental Authority, which
questions the validity of the Operative Documents, the issuance or validity of
the Preferred Securities or any action taken or to be taken pursuant hereto or
thereto, or which could reasonably be expected individually or in the aggregate
to result in any Material Adverse Effect.
2.8 Private Offering; Integration
(a) None of the Offerors, their affiliates (as such term is defined in Rule
501(b) under the Securities Act for any person or entity) ("Affiliates"), or any
person acting on their or any of their Affiliates' behalf has engaged, or will
engage, in connection with the offering of the Preferred Securities, in any
communication or other form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act. Based upon the
representations of the Investor set forth in Section 3, the offer, issuance and
sale of the Preferred Securities in the manner contemplated by this Agreement
are exempt from the registration and prospectus delivery requirements of the
Securities Act, and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws.
(b) The Offerors have not, directly or indirectly, solicited any offer to
buy or offered to sell, and will not, directly or indirectly, solicit any offer
to buy or offer to sell, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Preferred Securities in a manner that would require the Preferred Securities to
be registered under the Securities Act.
2.9 Brokerage
There are no claims for brokerage commissions or finder's fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement made by or on behalf of the Company or the Trust with
any other person.
2.10 Subordination
The Subordinated Debentures, upon issuance, will be subordinate and
junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) of the Company.
2.11 No Material Misstatements
No representation or warranty herein or in any Exhibit or Schedule hereto
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they are made not misleading.
2.12 Tax Matters
(a) The Company is taxed under Subchapter C of the Code as a corporation
for United States federal income tax purposes.
(b) The Trust, at the Closing Time, will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation.
(c) The Subordinated Debentures, at the Closing Time, will be classified
for United States federal income tax purposes as indebtedness of the Company.
2.13 Reservation and Valid Issuance of Shares
The Common Shares issuable upon conversion of the Subordinated Debentures
and the Preferred Securities have been duly and validly reserved for issuance
and, upon issuance in accordance with the terms of the Indenture and the
Declaration, will be duly and validly issued, fully paid and non-assessable and
free of restrictions on transfer other than restrictions on transfer under the
Indenture and under applicable federal and state securities laws. Holders of
Common Shares shall not be personally liable as such for any liabilities, debts
or obligations of, or claims against, the Company, whether arising before or
after such holder became the owner or holder of the Common Shares.
2.14 Preferred Securities Guarantee
The Preferred Securities Guarantee, when taken together with the Company's
obligations under the Subordinated Debentures, the Declaration and the
Indenture, including its obligations to pay costs, expenses, debts and other
obligations of the Trust, provides a full and unconditional guarantee on a
subordinated basis by the Company of amounts due on the Preferred Securities and
the Subordinated Debentures. The obligations of the Company under the Preferred
Securities Guarantee and under the Subordinated Debentures, upon execution and
delivery thereof, will be subordinate and junior in right of payment to all
present and future Senior Indebtedness (as defined in the Indenture) of the
Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
3.1 Certain Representations and Warranties
The Investor represents and warrants to the Offerors as follows:
(a) It is acquiring the Preferred Securities for its own account for
investment and not with a view towards the resale, transfer or distribution
thereof, nor with any present intention of distributing the Preferred
Securities, but subject, nevertheless, to any requirement of law that the
disposition of the Investor's property shall at all times be within the
Investor's control, and without prejudice to the Investor's right at all times
to sell or otherwise dispose of all or any part of such securities under a
registration under the Securities Act or under an exemption from said
registration available under the Securities Act.
(b) It has full power and legal right to execute and deliver this Agreement
and to perform its obligations hereunder.
(c) It has taken all action necessary for the authorization, execution,
delivery, and performance of this Agreement and its obligations hereunder, and,
upon execution and delivery by the Company, this Agreement shall constitute the
valid and binding obligations of
the Investor, enforceable against the Investor in accordance with its terms,
except as such enforcement may be limited by Bankruptcy Exceptions.
(d) There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of the Investor.
(e) It has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of its investment in the
Trust and the Company as contemplated by this Agreement, and is able to bear the
economic risk of such investment for an indefinite period of time. It has been
furnished access to such information and documents as it has requested and has
been afforded an opportunity to ask questions of and receive answers from
representatives of the Company and the Trust concerning the terms and conditions
of this Agreement and the purchase of the Preferred Securities contemplated
hereby and the business and financial condition of the Company and the Trust.
(f) It is an "accredited investor" as such term is defined in Rule 501
under the Securities Act.
(g) It acknowledges that the Preferred Securities have not been registered
under the Securities Act and may not be offered or sold within the United
States, except pursuant to an exemption from, or in a transaction not subject to
or pursuant to, the registration requirements of the Securities Act. It has not
offered or sold, and will not offer or sell, the Preferred Securities within the
United States, except pursuant to an exemption from, or in a transaction not
subject to or pursuant to, the registration requirements of the Securities Act.
3.2 Additional Representations and Warranties
The Investor represents and warrants to the Offerors that it is a limited
partnership, duly authorized and existing under the laws of the State of
Illinois and has the requisite power and authority to carry on its business as
now being conducted.
SECTION 4. COVENANTS
4.1 Tax Matters.
(a) The Company shall not cause itself to be taxable for federal income tax
purposes as (i) a partnership, or (ii) a "publicly traded partnership" (as
defined in Section 7704(b) of the Code).
(b) The Company and the Trust shall treat the Subordinated Debentures as
indebtedness for United States federal income tax purposes unless otherwise
required by a determination made by the Internal Revenue Service or the Investor
receives an opinion of counsel in a form which is reasonably acceptable to
Investor that as a result of a change in law or applicable legal authority, the
Subordinated Debentures are required to be treated for federal income tax
purposes as something other than indebtedness.
(c) The Company (or any successor thereto) will file a joint election,
together with Equity Residential Properties Trust ("EQR") (or any successor
thereto), a Maryland real estate investment trust and the general partner of
Investor, to be treated as a taxable REIT subsidiary (as defined in Section
856(l) of the Code) of EQR to be effective beginning January 1, 2001.
Thereafter, except as provided in section 10.2 (e) of the Indenture, if
requested by any party, any successor to the Company shall make such a joint
election with EQR (or any successor thereto) and any successor to EQR shall make
such a joint election with the Company (or any successor thereto). From and
after January 1, 2001, unless Investor has received an opinion of counsel in a
form which is reasonably acceptable to Investor that the Company qualifies as a
REIT under Section 856(a) of the Code or the provisions of Section 10.2(e)(2) of
the Indenture apply, (a) the Company shall not take any of the actions listed in
Section 856(l)(3)(A) or (B) or any other action that would cause it to not
constitute a taxable REIT subsidiary under Code Section 856(l)(1), and (b)
within five (5) days prior to the close of each quarter of each of EQR's taxable
years which begins after December 31, 2000, the Company shall deliver to EQR
written certification in a form reasonably acceptable to EQR that the Company
qualifies as a taxable REIT subsidiary under Code Section 856(l)(1).
(d) In the following circumstances, EQR shall, upon receipt of a written
request of the Company, revoke its election to treat the Company as a taxable
REIT subsidiary or, if such an election has not already been made, waive in
writing all future obligations of the Company to become a taxable REIT
subsidiary or a REIT or to deliver any opinions to that effect:
(i) that (A) the total value of the Preferred Securities, Subordinated
Debentures and Common Shares into which any Preferred Securities or Subordinated
Debentures have been converted that are owned by EQR or any of its Affiliates
constitute 1% or less of the total value of the outstanding securities of the
Company and (B) the total amount of the Preferred Securities and Subordinated
Debentures on an as converted basis and Common Shares into which any Preferred
Securities or Subordinated Debentures have been converted then owned by EQR or
any of its Affiliates would constitute 1% or less of the total outstanding
voting securities of the Company; or
(ii) that the events described in Sections 10.2(e)(1), 10.2(e)(2) or
10.2(e)(3) of the Indenture have occurred and the Company has satisfied all of
its obligations under such Sections 10.2(e)(1), 10.2(e)(2) or 10.2(e)(3), as the
case may be.
(1) The Company shall file all applicable tax returns and information
reports required to be filed in order for the Company to qualify for any
exemption from any federal, state or local withholding taxes.
(2) To the extent not terminated in accordance with their terms, all of the
covenants set forth in this Agreement shall terminate when none of the
Subordinated Debentures or Preferred Securities are outstanding; provided,
however, if EQR or any of its Affiliates has acquired any Common Shares in
conversion of the Subordinated Debentures or the Preferred Securities, then
before the Company shall cease to comply with any of such covenants, the Company
shall give EQR at least ninety (90) days prior written notice following the
declaration by the Securities and Exchange Commission of an effective
registration statement with respect to all such Common Shares, so EQR or any of
its Affiliates can dispose of such Common Shares, as contemplated by that
Registration Rights Agreement.
SECTION 5. OFFERORS' CLOSING CONDITIONS
The obligation of the Offerors to sell the Preferred Securities at the
Closing Time, as provided in Section 1 hereof shall be subject to:
5.1 Compliance with Agreement
The Investor shall have performed and complied with in all material
respects all of its obligations and conditions contained in this Agreement which
are required to be performed or complied with by the Investor prior to or at the
Closing Time.
5.2 Investor to Close
The Investor shall have purchased and paid for the Preferred Securities
at the Closing Time pursuant to Section 1 hereof.
5.3 Representations and Warranties
The representations and warranties of the Investor contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Time as though such representations and warranties were made at such
time (unless any such representation and warranty is made as of a specific date
and then it shall be true and correct as of such date).
SECTION 6. INVESTOR'S CLOSING CONDITIONS
The obligation of the Investor to purchase and pay for the Preferred
Securities at the Closing Time, as provided in Section 1 hereof, shall be
subject, in its discretion, to the performance by the Offerors of all of their
agreements theretofore to be performed hereunder and to the satisfaction, prior
thereto or concurrently therewith, of the following further conditions:
6.1 No Material Adverse Effect
At the Closing Time, there shall not have occurred since the date of the
Common Stock and Preferred Stock Purchase Agreement dated May 30, 1997 between
ERP Operating Limited Partnership and Wellsford Real Properties, Inc. (the
"Purchase Agreement") any change which has resulted in or could be expected to
result in a Company Material Adverse Effect other than an event which can be
completely cured by applying the proceeds of the sale of the Subordinated
Debentures, in which case the Company covenants and agrees to apply the proceeds
of the sale of the Subordinated Debentures to the extent required to effect such
cure. On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or on
Nasdaq; (ii) a suspension or material limitation in trading in the Company's
securities on the American Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by federal, Illinois or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war.
6.2 Representations and Warranties
(a) The representations and warranties of the Offerors contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing Time as though such representations and warranties were made at such
time (unless any such representation and warranty is made as of a specific date
and then it shall be true and correct as of such date).
(b) The representations and warranties contained in Article 3 of the
Purchase Agreement, are true and correct in all material respects, except as
otherwise disclosed in this Agreement or any Schedule hereto.
6.3 Compliance with Agreement and Purchase Agreement
(a) The Offerors shall have performed and complied in all material respects
with all of their obligations and conditions contained in this Agreement which
are required to be performed or complied with by the Offerors prior to or at the
Closing Time.
(b) The Company shall be in compliance in all material respects with all
the terms and provisions on its part to be observed or performed under the
Purchase Agreement, and at the time of and as a result of the Closing, no
Company Material Adverse Effect shall have occurred and be continuing, other
than an event which can be completely cured by applying the proceeds of the sale
of the Subordinated Debentures, in which case the Company covenants and agrees
to apply the proceeds of the sale of the Subordinated Debentures to the extent
required to effect such cure and shall provide notice to Investor of any such
use of proceeds.
6.4 Approval of Proceedings
All proceedings to be taken in connection with the transactions
contemplated by the Operative Documents and the Registration Rights Agreement
and the other Preferred Instruments and all documents incident thereto, shall be
reasonably satisfactory in form and substance to the Investor and its counsel;
and the Investor shall have received copies of all documents or other evidence
which it and such counsel may reasonably request in connection with such
transactions and of all records of corporate proceedings in connection therewith
in form and substance reasonably satisfactory to the Investor and its counsel.
6.5 Injunction
There shall be no effective injunction, writ, preliminary restraining order
or any order of any nature issued by a court of competent jurisdiction directing
that the transactions provided for herein or in the other Operative Documents or
any of them not be consummated as herein or therein provided.
6.6 Additional Agreements.
The Company and the Investor shall have entered into this Agreement and the
Registration Rights Agreement, as required thereby. The Company and Wilmington
Trust Company shall have entered into the Indenture, and the Company and the
trustees shall have entered into the Declaration. The Company shall have entered
into the Preferred Securities Guarantee.
6.7 Opinions
(a) The Investor shall have received an opinion of counsel, dated as of the
Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, in the form set forth
in Exhibit B hereto.
In rendering such opinion, such counsel may rely as to matters involving
the application of laws other than the laws of Maryland, to the extent they deem
proper and specified in such opinion, upon the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, P.A.
(b) The Investor shall have received an opinion of counsel, dated as of the
Closing Time, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A. in the form set forth in
Exhibit C hereto.
In rendering such opinion, such counsel may rely as to matters involving
the application of laws other than the laws of Delaware and federal law of the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP.
(c) The Investor shall receive an opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special tax counsel to the Offerors, in the form set
forth in Exhibit D hereto.
Such opinion may be conditioned on, among other things, the initial and
continuing accuracy of the facts, financial and other information, covenants and
representations set forth in certificates of officers of the Company and the
Trust and other documents deemed necessary for such opinion.
SECTION 7. INDEMNIFICATION
7.1 Indemnification Generally
The Offerors and the Investor (each an "Indemnifying Party"), shall
indemnify the other from and against any and all losses, damages, liabilities,
claims, charges, actions, proceedings, demands, judgments, settlement costs and
expenses of any nature whatsoever (including, without limitation, attorneys'
fees and expenses) or deficiencies resulting from any breach of a
representation, warranty or covenant by the Indemnifying Party and all claims,
charges, actions or proceedings incident to or arising out of the foregoing.
Except with respect to third party claims being defended in good faith or claims
for indemnification with respect to which there exists a good faith dispute, the
Indemnifying Party shall satisfy its obligations hereunder within thirty (30)
days of receipt of a notice of claim under this Section 6.1.
7.2 Indemnification Procedures for Third Party Claims
If a claim by a third party is made against a Person entitled to
indemnification under this Section (an "Indemnified Party") and such Indemnified
Party intends to seek indemnity with respect thereto from any Indemnifying
Party, such Indemnified Party shall give notice in writing as promptly as
reasonably practicable to each such Indemnifying Party of any action commenced
against or by it in respect of which indemnity may be sought hereunder, but
failure to so notify an Indemnified Party shall not relieve such Indemnifying
Party from any liability that it may have otherwise than on account of this
indemnity agreement so long as such failure shall not have materially prejudiced
the position of the Indemnifying Party. Upon such notification, the Indemnifying
Party shall assume the defense of such action brought by a third party, and
after such assumption the Indemnified Party shall not be entitled to
reimbursement of any expenses incurred by it in connection with such action
except as described below. In any such action, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party shall have failed to promptly assume and thereafter with reasonable
diligence conduct such defense, (ii) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the contrary or (iii) the named parties in
any such action (including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing or
conflicting interests between them. No Indemnifying Party, in the defense of a
third party claim shall, except with the consent of the Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect of such
claim. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent which shall not be unreasonably
withheld or delayed by such Indemnifying Party, but if settled with such consent
or if there be final judgment for the plaintiff, the Indemnifying Party shall
indemnify the Indemnified Party from and against any loss, damage or liability
by reason of such settlement or judgment.
SECTION 8. INTERPRETATION OF THIS AGREEMENT
8.1 Terms Defined
As used in this Agreement, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:
Affiliates: shall have the meaning set forth in Section 2.8(a).
Bankruptcy Exceptions: shall have the meaning set forth in Section 2.2(b).
Business Day: shall mean a day other than a Saturday, Sunday or other day
on which banking institutions in New York, New York are permitted or required by
any applicable law to close.
Certificate of Trust: shall mean the organizational document filed on May
5, 2000 in Delaware with respect to the Trust.
Code: shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
Closing: shall mean the consummation of the purchase and sale of the
Preferred Securities described in Section 1(c).
Closing Time: shall have the meaning set forth in Section 1(c).
Commission: shall mean the Securities and Exchange Commission.
Common Securities: shall have the meaning set forth in the preliminary
statement hereof.
Common Shares: shall mean the shares of common stock of the Company, par
value $.01 per share.
Company: shall have the meaning set forth in the preamble hereof.
Company Material Adverse Effect: shall have the meaning set forth in
Section 2.5(b).
Controlled: shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Declaration: shall have the meaning set forth in the preliminary statement
hereof.
Delaware Act: shall have the meaning set forth in the preliminary statement
hereof.
Financial Statements: shall have the meaning set forth in Section 2.5(a).
GAAP: shall have the meaning set forth in Section 2.5(a).
Governmental Authority: shall mean any nation or government, any state or
other political subdivision thereof, and any department, agency,
instrumentality, bureau, entity or official exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Indemnified Party: shall have the meaning set forth in Section 7.2.
Indemnifying Party: shall have the meaning set forth in Section 7.1.
Indenture: shall have the meaning set forth in the preliminary statement
hereof.
Investor: shall have the meaning set forth in the preamble hereof.
Key Agreements and Instruments: shall mean as to any Person any indenture,
mortgage, declaration, deed of trust, credit agreement, note or other evidence
of indebtedness, or other material agreement or instrument to which such Person
is a party or by which it is bound or, to which any of its property or assets is
subject.
Lien: shall have the meaning set forth in Section 2.2(a).
Material Adverse Effect: shall have the meaning set forth in Section
2.5(b).
Offerors: shall have the meaning set forth in the preamble hereof.
Operative Documents: shall have the meaning set forth in the preliminary
statement hereof.
Organizational Documents: shall mean as to any Person the articles or
certificate of incorporation, declaration of trust, bylaws, partnership
agreement or other organizational or governing documents of such Person.
Person: shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company or other entity, a
government or agency or political subdivision thereof.
Preferred Instruments: shall have the meaning set forth in the preliminary
statement hereof.
Preferred Securities: shall have the meaning set forth in the preliminary
statement hereof.
Preferred Securities Guarantee: shall have the meaning set forth in the
preliminary statement hereof.
Purchase Agreement: Shall have the meaning set forth in Section 6.1.
Registration Rights Agreement: shall mean the Amendment to Registration
Rights Agreement in the form attached hereto as Exhibit A.
Requirements of Law: means as to any Person, any domestic or foreign and
federal, state or local law, rule, regulation, statute or ordinance or judgment,
order, decree or determination of any arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its properties or to which such Person or any of its property is
subject.
SEC Reports and Filings: shall have the meaning set forth in Section
2.4(a).
Securities Act: shall have the meaning set forth in the preliminary
statement.
Share: shall mean a share of common stock, $.01 par value per share, of the
Company.
Subordinated Debentures: shall have the meaning set forth in the
preliminary statement hereof.
Subsidiary: shall mean, with respect to any Person (herein referred to as
the "Parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, Controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled, by the Parent or one or more
subsidiaries of the Parent or by the Parent and one or more subsidiaries of the
Parent.
Trust: shall have the meaning set forth in the preamble hereof.
Trust Material Adverse Effect: shall have the meaning set forth in Section
2.5(b).
8.2 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to its principles of conflicts of
law.
8.3 Paragraph and Section Headings
The headings of the sections and subsections of this Agreement are inserted
for convenience only and shall not be deemed to constitute a part thereof.
SECTION 9. MISCELLANEOUS
9.1 Expenses
Each party to this Agreement shall bear its own respective costs and
expenses incurred in connection with the preparation, execution and delivery of
this Agreement and the agreements and transactions contemplated hereby except
that the Company agrees to reimburse the Investor for that portion of its legal
fees attributable solely to the review of the Key Agreements and Instruments in
connection with the transactions referred to in this Agreement by paying an
amount equal to $ 110,000 directly to ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ on the date
of the Closing.
9.2 Notices.
All notices or other communications under this Agreement shall be
sufficient if in writing and delivered by hand or sent by telecopy, or sent,
postage prepaid by registered, certified or express mail, or by recognized
overnight air courier service and shall be deemed given when so delivered by
hand or telecopied, or if mailed or sent by overnight courier service, on the
third (3rd) Business Day after mailing (one Business Day in the case of express
mail or overnight courier service) to the parties at the following addresses:
(a) if to the Investor, to:
ERP Operating Limited Partnership
c/o Equity Residential Properties Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(b) if to the Company, to:
Wellsford Real Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
(c) if to the Trust, to:
WRP Convertible Trust I
c/o Wellsford Real Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
or at such other address as the addressee may have furnished in writing to the
sender as provided herein.
9.3 Survival
All warranties, representations, and covenants made by the Investor and the
Offerors herein or in any certificate or other instrument delivered by the
Investor or the Offerors under this Agreement shall be considered to have been
relied upon by the Offerors or the Investor, as the case may be, and shall
survive for a period of one year from the closing of the sale to the Investor of
the Preferred Securities, or payment by the Investor for such Preferred
Securities, regardless of any investigation made by the Offerors or the
Investor, as the case may be, or on the Offerors' or the Investor's behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Offerors or the Investor, as the case may
be, hereunder.
9.4 Entire Agreement; Amendment and Waiver
This Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of each of the parties. This Agreement and the agreements
attached as Exhibits hereto constitute the entire understandings of the parties
hereto and supersede all prior agreements or understandings with respect to the
subject matter hereof between such parties. This Agreement may be amended, and
the observance of any term of this Agreement may be waived, with (and only with)
the written consent of the Offerors and the Investor.
9.5 Counterparts
This Agreement may be executed in one or more counterparts with the same
effect as if the parties executing the counterparts had each executed one
instrument as of the day and year first above written.
9.6 Successors and Assigns
This Agreement and all of the provisions hereof, including all of the
rights of the Investor hereunder, shall inure to the benefit of the parties
hereto and their respective successors and assigns.
9.7 Severability
In the event any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby.
9.8 Jurisdiction; Consent to Service of Process
(a) Each of the Investor and the Company hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any Delaware, Illinois or New York State court or Federal court
of the United States of America sitting in the City of Wilmington, Chicago or
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Delaware, Illinois or New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any jurisdiction.
(b) Each of the Purchaser and the Company hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any Delaware, Illinois or New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
9.9 Trustee Exculpation
This Agreement and all documents, agreements, understandings and
arrangements relating hereto and to the transactions contemplated by this
Agreement have been executed or entered into by a trustee of the Trust in his
capacity as a trustee of the Trust which has been formed as a Delaware trust
pursuant to a Certificate of Trust dated as of May 5, 2000, as amended, and not
individually, and the trustees of the Trust shall not be bound or have any
personal liability hereunder or thereunder. All persons dealing with the Trust
shall look solely to the assets of the Trust for satisfaction of any liability
of the Trust in respect of this Agreement and all documents, agreements,
understandings and arrangements relating hereto and to the transactions
contemplated by this Agreement and will not seek recourse or commence any action
against any of the trustees of the Trust or any of their personal assets for the
performance or payment of any obligation hereunder or thereunder. The foregoing
shall also apply to any future documents, agreements, understandings,
arrangements and transactions between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OFFERORS:
WELLSFORD REAL PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
WRP CONVERTIBLE TRUST I
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Regular Trustee
INVESTOR:
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential Properties Trust,
as its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
EQUITY RESIDENTIAL PROPERTIES TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
SCHEDULE 2.3(A)
OPTIONS, WARRANTS, ETC.
Warrant Agreement, dated as of August 28, 1997, by and between Wellsford Real
Properties, Inc. ("Wellsford"), and the United States Trust Company of New York
("U.S. Trust")(the "Warrant Agreement"), pursuant to which Wellsford issued to
WHWEL Real Estate Limited Partnership warrants to purchase 4,132,230 shares of
Wellsford's common stock, as amended by Amendment No. 1 to Warrant Agreement,
dated July 16, 1998, and Amendment No. 2 to Warrant Agreement, dated May 28,
1999.
Warrant Agreement, dated as of May 28, 1999, by and between Wellsford and U.S.
Trust, pursuant to which Wellsford issued to W/W Group Holdings, L.L.C. warrants
to purchase 123,967 shares of Wellsford's common stock.
Letter Agreement between Wellsford and WHWEL Real Estate Limited Partnership,
dated May 28, 1999, pursuant to which Wellsford agrees to exchange shares of its
common stock for Excess Membership Units (as defined therein) issued with
respect to Capital Contributions (as defined therein) made to
Wellsford/Whitehall Properties Group, L.L.C. in excess of $50,000,000 and up to
$75,000,000.
Warrant Agreement, dated January 20, 1998, by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇▇▇▇▇") and Wellsford, pursuant to which Wellsford issued a warrant to ▇▇▇▇▇▇
to purchase up to 74,000 shares of Wellsford's common stock, at an exercise
price of $15.1750.
Warrant Agreement, dated January 20, 1998, by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
("▇▇▇▇▇▇▇") and Wellsford, pursuant to which Wellsford issued a warrant to
▇▇▇▇▇▇▇ to purchase up to 74,000 shares of Wellsford's common stock, at an
exercise price of $15.1750.
SCHEDULE 2.5(B)
MATERIAL CHANGE
On February 25, 2000, the Company repurchased 2,573,632 shares of its
outstanding common stock from an institutional investor for approximately
$20,589,000.
EXHIBIT A
FORM OF AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
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Agreement dated as of May 5, 2000 by and between Wellsford
Real Properties, Inc. a Maryland corporation (the "Company"), and ERP Operating
Limited Partnership, an Illinois limited partnership ("ERPOLP")
W I T N E S S E T H
WHEREAS, the Company and ERPOLP entered into a Registration Rights
Agreement dated as of May 30, 1997 (the "RR Agreement");
WHEREAS, the Company does not intend to issue and ERPOLP does not intend to
acquire, the Preferred Stock, as defined in the RR Agreement;
WHEREAS, pursuant to a Declaration of Trust of WRP Convertible Trust I (the
"Trust"), dated May 5, 2000, the Trust intends to issue to ERPOLP $25,000,000 of
8.25% Preferred Securities (as defined below) which are convertible into Common
Stock as defined in the RR Agreement; and
WHEREAS, the parties hereto wish to amend the RR Agreement to eliminate the
registration rights granted therein to ERPOLP to have registered Common Stock
issuable upon conversion of Preferred Stock and to grant to ERPOLP the
registration rights previously granted with respect to Common Stock issuable
upon the conversion of the Preferred Stock to the Common Stock issuable upon
conversion of the Securities.
WHEREAS, all of the Company's shares of Class A Common Stock are being
exchanged for an equal number of shares of the Company's Class A-1 Common Stock.
NOW THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to and on the terms
and conditions herein set forth, the parties hereto agree as follows:
1. The definition of Shares in the RR Agreement is hereby
deleted and a new definition of shares to read as follows is
hereby inserted in lieu thereof:
"Shares shall mean Common Stock issuable or issued upon
conversion of all or any portion of the Preferred Securities
or Class A-1 common stock, par value $.01 per share, of the
Company of May 5, 2000".
2. The definition of "Preferred Stock" in the RR Agreement is
hereby deleted. A new definition of "Preferred Securities"
to read as follows is hereby inserted:
"Preferred Securities" shall mean the 8.25% Convertible
Trust Preferred Securities issued by WRP Convertible Trust
I.
3. Section 7 of the RR Agreement is amended to state that the
address of the Company to which notice shall be sent is
Wellsford Real Properties, Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Chairman; Fax
No. (▇▇▇) ▇▇▇-▇▇▇▇.
4. The RR Agreement shall remain in full force and effect as
hereby modified.
This Agreement may be executed in one or more counterparts with the same
effect as if the parties executing the counterparts had each executed one
instrument as of the day and year first above written.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ERP OPERATING LIMITED PARTNERSHIP WELLSFORD REAL PROPERTIES, INC.
By: Equity Residential Properties Trust, By:
its general partner ---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
EXHIBIT B
OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
EXHIBIT C
OPINION OF ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & FINGER, P.A.
EXHIBIT D
OPINION OF ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP