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Credit Enhancement Agreement
between
ERP OPERATING LIMITED PARTNERSHIP
and
WELLSFORD REAL PROPERTIES, INC.
Dated as of May 30, 1997
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CREDIT ENHANCEMENT AGREEMENT
THIS CREDIT ENHANCEMENT AGREEMENT (this "Agreement") is made and entered
into as of May 30, 1997 by and between ERP OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership ("ERP Operating Partnership"), and WELLSFORD REAL
PROPERTIES, INC., a Maryland corporation ("Newco").
A. Pursuant to a certain Trust Indenture dated as of December 1, 1995
(the "Indenture"), between Palomino Park Public Improvements Corporation, a
Colorado nonprofit corporation ("PPPIC"), and United States Trust Company of
New York, as trustee (the "Trustee"), PPPIC has issued, sold and delivered its
Assessment Lien Revenue Bonds, Series 1995 (the "Bonds"), in the aggregate
principal amount of Fourteen Million Seven Hundred Fifty-Five Thousand and
00/100 Dollars ($14,755,000.00). The Bonds are payable as to principal and
interest in the manner provided in the Indenture. Proceeds of the Bonds are
intended to be applied for the purpose of financing certain public facilities
located within Highlands Ranch Metropolitan District No. 2, Xxxxxxx County,
Colorado, a quasi-municipal corporation organized under the laws of the State
of Colorado. The Indenture, and the other documents and instruments to which
PPPIC is a party, evidencing or securing PPPIC's obligations in connection
with the Bonds (with the exception of the "Letter of Credit Documents"
described below) are referred to herein collectively as the "Bond Documents."
All capitalized terms not otherwise defined herein shall have the meanings set
forth in the Indenture.
B. Pursuant to the Indenture, PPPIC is required to furnish a Letter of
Credit or Alternate Credit Facility satisfying the conditions set forth in the
Indenture, to secure the payment of Bonds that are in the Weekly Mode or the
Term Mode, but not Bonds that are in the Fixed Mode. Pursuant to the terms of
a Letter of Credit Reimbursement Agreement dated as of December 1, 1995 (said
agreement, as the same may be modified pursuant to Section 3.1(h) hereof, the
"Bank Reimbursement Agreement") by and among PPPIC, Wellsford Residential
Property Trust, a Maryland real estate investment trust ("Wellsford Parent"),
and Dresdner Bank, AG, New York Branch (the "Bank"), the Bank has issued to
the Trustee, acting on behalf of the holders of the Bonds, a certain letter of
credit (the "Xxxxxxxx X.X.") in the face principal amount of $15,773,702, for
the purpose of securing the payment of the Bonds. All documents entered into
by PPPIC or Wellsford Parent pursuant to the Bank Reimbursement Agreement are
referred to herein collectively as the "Letter of Credit Documents."
C. PPPIC and Wellsford Parent have entered into a Reimbursement
Agreement dated as of December 1, 1995 (the "Wellsford Parent Reimbursement
Agreement") pursuant to which PPPIC has undertaken certain obligations and
provided certain security for the benefit of Wellsford Parent in consideration
of Wellsford Parent's obligations under the Bank Reimbursement Agreement.
Among other things, pursuant to the Wellsford Parent Reimbursement Agreement,
PPPIC agreed that PPPIC would not convert the Rate Mode of the Bonds without
the express written consent of Wellsford Parent and would, at the request of
Wellsford Parent, convert the Rate Mode of the Bonds. PPPIC has executed and
delivered to Wellsford Parent a certain Palomino Park Promissory Note dated
December 20, 1995 (the "PPPIC Note to Wellsford Parent"), evidencing PPPIC's
payment obligations to Wellsford Parent pursuant to the Wellsford Parent
Reimbursement Agreement.
D. Newco has been formed as a wholly-owned subsidiary of Wellsford
Parent pursuant to the Contribution Agreement ("Contribution Agreement")
referred to in that certain Agreement and Plan of Merger dated as of
January 16, 1997 (the "Merger Agreement") by and between Equity Residential
Properties Trust, a Maryland real estate investment trust that is the general
partner of ERP Operating Partnership ("EQR"), and Wellsford Parent. Pursuant
to the Contribution Agreement, Wellsford Parent has assigned to Newco and
Newco has assumed, or is assuming concurrently herewith, Wellsford Parent's
rights and obligations under the Bank Reimbursement Agreement, the Letter of
Credit Documents, the Wellsford Parent Reimbursement Agreement and the PPPIC
Note to Wellsford Parent.
E. ERP Operating Partnership and Newco are entering into this Agreement
pursuant to the Merger Agreement.
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
CREDIT ENHANCEMENT
1.1 (a) Upon and subject to the satisfaction of the conditions
precedent set forth in Article 3 hereof, ERP Operating Partnership shall
execute and deliver to the Bank a guaranty (the "Initial ERP Operating
Partnership Guaranty") pursuant to which ERP Operating Partnership shall
guarantee to the Bank the payment by Newco of any and all "Overdue
Reimbursement Amounts" (as such term is hereinafter defined). As
employed herein, the term "Overdue Reimbursement Amounts" shall mean any
and all sums due and owing from time to time by Newco to the Bank
pursuant to the Bank Reimbursement Agreement that are not paid to the
Bank by Newco when due (after the expiration of any cure periods under
the Bank Reimbursement Agreement) pursuant to the Bank Reimbursement
Agreement. The Initial ERP Operating Partnership Guaranty:
(i) shall not require security for ERP Operating Partnership's
obligations pursuant to the Initial ERP Operating
Partnership Guaranty;
(ii) shall obligate ERP Operating Partnership to pay all
Overdue Reimbursement Amounts to the Bank upon demand or,
if the Bank shall agree, in its sole and absolute
discretion, then within a period of up to three (3)
business days following the making of a written demand
upon ERP Operating Partnership by the Bank and shall
provide that the payment by ERP Operating Partnership to
the Bank within said period of time shall, at ERP
Operating Partnership's election, constitute a cure with
respect to Newco's obligations to the Bank under the Bank
Reimbursement Agreement;
(iii) shall not impose upon ERP Operating Partnership any
financial covenants (collectively, "financial covenants")
consisting of net worth requirements, financial tests,
financial reporting requirements (other than customary
quarterly and annual statements) or covenants generally
recognized as financial covenants with respect to ERP
Operating Partnership, or any other covenants regarding
the nature or manner of operation of ERP Operating
Partnership's businesses; provided, however, that the
Initial ERP Operating Partnership Guaranty may be cross-
defaulted to such corporate-level financial covenants, if
any, as ERP Operating Partnership may be subject to from
time to time under any of ERP Operating Partnership's
corporate-level unsecured debt instruments, to the extent
that the enforcement of said covenants is not waived or
released by the financial institutions in whose favor said
covenants primarily run (upon request from the Bank, ERP
Operating Partnership shall furnish the Bank with evidence
satisfactory to the Bank of such financial covenants to
which ERP Operating Partnership may from time to time be
subject);
(iv) shall not contain a waiver of any rights of subrogation
that ERP Operating Partnership may otherwise have by
reason of making payment to the Bank under the Initial ERP
Operating Partnership Guaranty, shall grant ERP Operating
Partnership full rights of subrogation with respect
thereto upon the payment in full to the Bank by ERP
Operating Partnership of Newco's obligations under the
Letter of Credit Documents, and shall contain the Bank's
agreement to assign to ERP Operating Partnership (without
warranty, representation or recourse, and without
releasing Newco from any obligations or defaults
thereunder) the Bank's rights and remedies under the
Letter of Credit Documents following the payment in full
by ERP Operating Partnership of Newco's obligations under
the Letter of Credit Documents;
(v) shall provide for an absolute and unconditional guaranty
of payment by ERP Operating Partnership containing such
terms and conditions as are usual and customary for the
Bank to impose in transactions of the type herein
contemplated with third party guarantors of comparable net
worth which are unaffiliated with the party whose
obligations they are guaranteeing, which guaranty may
include an express statement to the effect of any one or
more of the following: ERP Operating Partnership shall
not be released by any bankruptcy (voluntary or
involuntary) of any obligor with respect to the Letter of
Credit Documents, any fact, matter or circumstance,
whether or not denominated in the Letter of Credit
Documents; and that ERP Operating Partnership shall
expressly waive or be deemed to have waived any suretyship
defenses; and may permit the Bank to seek sole and
immediate enforcement of the Initial ERP Operating
Partnership Guaranty without first proceeding against
Newco, PPPIC or any obligor or collateral; provided,
however, that the Initial ERP Operating Partnership
Guaranty shall provide that ERP Operating Partnership
shall be released fully and absolutely from liability
under the Initial ERP Operating Partnership Guaranty in
the event that the Bank Reimbursement Agreement or the
other Letter of Credit Documents or any of Newco's
obligations in connection therewith shall be modified
without the prior written consent of ERP Operating
Partnership, which shall not be unreasonably withheld,
provided that such modification shall not increase the
amount of the Letter of Credit or otherwise increase ERP
Operating Partnership's obligations under the Initial ERP
Operating Partnership Guaranty, increase the likelihood
that ERP Operating Partnership will be required to make a
payment pursuant to the Initial ERP Operating Partnership
Guaranty, or diminish the remedies or collateral to which
ERP Operating Partnership will become subrogated upon
payment as contemplated under Section 1.1(a)(iv)
hereinabove; and
(vi) shall provide that the term of the Initial ERP Operating
Partnership Guaranty or any Alternate Credit Facility
shall not extend beyond the eighth (8th) anniversary of
the date of this Agreement (the "Expiration Date") or, if
the term of the Initial ERP Operating Partnership Guaranty
or any Alternate Credit Facility shall extend beyond the
Expiration Date, then such guaranty document shall make it
clear that the guaranty afforded under this Agreement
shall expire on the Expiration Date.
(b) The form of the Initial ERP Operating Partnership Guaranty
shall be subject to ERP Operating Partnership's review and approval,
which shall not be unreasonably withheld or delayed if the terms and
conditions thereof conform to the parameters set forth in Section 1.1(a)
hereof.
1.2 For so long as a Letter of Credit or Alternate Credit Facility is
required to be furnished to the Trustee pursuant to the terms of the
Indenture, Newco shall cause PPPIC to do so and, in particular, shall cause
PPPIC to furnish to the Trustee a Letter of Credit or Alternate Credit
Facility in accordance with Section 5.15(b) of the Indenture prior to the
expiration of any then-existing Letter of Credit so as to cause the Trustee to
surrender for cancellation the previously held Letter of Credit to the issuer
thereof, not less than thirty (30) days prior to the expiry of said existing
Letter of Credit.
1.3 In connection with any Alternate Letter of Credit or Alternate
Credit Facility that may be furnished to the Trustee from time to time
pursuant to the Indenture, ERP Operating Partnership acknowledges that PPPIC
or Newco may desire or be required to undertake certain obligations or provide
certain financial accommodations (collectively the "Alternate Reimbursement
Obligations") to the issuer of said Alternate Letter of Credit or Alternate
Credit Facility. The documents evidencing or securing Newco's Alternate
Reimbursement Obligations are referred to herein collectively as the
"Alternate Reimbursement Documents". The parties acknowledge that the issuer
of the Alternate Letter of Credit or the Alternate Credit Facility may be one
or more institutions, selected by Newco, meeting the requirements of the
Indenture. If Newco undertakes any Alternate Reimbursement Obligations, then
ERP Operating Partnership shall enter into a guaranty of the payment of
Newco's Alternate Reimbursement Obligations by executing and delivering to the
issuer of said Alternate Letter of Credit or Alternate Credit Facility a
guaranty in favor of said issuer (the "Alternate ERP Operating Partnership
Guaranty"), upon and subject to the satisfaction of the conditions precedent
set forth in Sections 3.1(d), 3.1(f), 3.1(i), 3.1(k) and 3.2 hereof, and
subject also to the satisfaction of the following additional conditions
precedent:
(a) The terms and conditions of said Alternate Letter of Credit or
Alternate Credit Facility shall be subject to ERP Operating Partnership's
review and approval in ERP Operating Partnership's sole and absolute
discretion; provided, however, that ERP Operating Partnership shall not
unreasonably withhold or delay its approval with respect thereto if the
terms and conditions thereof shall not be materially less favorable to
Newco than the terms and conditions of the Letter of Credit Documents, as
the same have been modified pursuant to this Agreement, and are otherwise
commercially reasonable in the circumstances;
(b) The terms and conditions of the Alternate ERP Operating
Partnership Guaranty shall be subject to ERP Operating Partnership's
review and approval in ERP Operating Partnership's sole and absolute
discretion; provided, however, that ERP Operating Partnership shall not
unreasonably withhold or delay its approval with respect thereto if the
scope and nature thereof is limited in substantially the same manner as
the Initial ERP Operating Partnership Guaranty and if the Alternate ERP
Operating Partnership Guaranty is not otherwise on terms materially less
favorable than the Initial ERP Operating Partnership Guaranty;
(c) The Initial ERP Operating Partnership Guaranty (or, as the case
may be, any pre-existing Alternate ERP Operating Partnership Guaranty)
shall be returned to ERP Operating Partnership, and ERP Operating
Partnership shall be released fully and absolutely from all liability
thereunder, prior to or concurrently with the execution and delivery of
the Alternate ERP Operating Partnership Guaranty;
(d) The Alternate Letter of Credit or Alternate Credit Facility
shall satisfy the requirements of the Indenture; and
(e) Newco and PPPIC shall have executed and delivered documents
relating to the Alternate Credit Facility or Alternate Letter of Credit,
as the case may be, which are in substantially the same form as the
Wellsford Parent Reimbursement Agreement and the PPPIC Note to Wellsford
Parent, respectively, and PPPIC and Newco shall have executed and
delivered to ERP Operating Partnership an instrument or agreement with
respect thereto in substantially the same form as the Collateral
Assignment and Consent described in Section 4.6 hereof.
1.4 Newco shall furnish drafts of all Alternate Reimbursement Documents
to ERP Operating Partnership not less than sixty (60) days prior to the date
on which any Alternate Letter of Credit or Alternate Credit Facility is
required or proposed to be furnished to the Trustee. If ERP Operating
Partnership is not satisfied with the terms of the proposed Alternate
Reimbursement Documents for any reason whatsoever, or if ERP Operating
Partnership, in its sole discretion, shall otherwise prefer to do so, ERP
Operating Partnership may itself arrange for an Alternate Letter of Credit or
Alternate Credit Facility in lieu of the one proposed by Newco or PPPIC;
provided, however, that if the terms of the proposed documents are such that
ERP Operating Partnership would otherwise be obligated to execute and deliver
an Alternate ERP Operating Partnership Guaranty pursuant to Section 1.3 of
this Agreement in connection with an Alternate Letter of Credit or Alternate
Credit Facility proposed by Newco or PPPIC, and ERP Operating Partnership
nevertheless desires not to do so, then (i) ERP Operating Partnership shall be
obligated to arrange for an Alternate Letter of Credit or Alternate Credit
Facility in lieu of the one proposed by Newco or PPPIC, and (ii) under such
circumstances, ERP Operating Partnership shall bear all costs and expenses
arising in connection with such Alternate Letter of Credit or Alternate Credit
Facility including, without limitation, any fees, costs, attorneys' fees or
charges imposed or incurred by the Bank, the Trustee, or the rating service
rating the Bonds. If ERP Operating Partnership arranges for such an Alternate
Letter of Credit or Alternate Credit Facility, then Newco covenants and agrees
that PPPIC and Newco shall be the parties primarily liable on a joint and
several basis with respect to the Alternate Reimbursement Documents arranged
by ERP Operating Partnership, and ERP Operating Partnership agrees, subject to
the satisfaction of the conditions set forth in this Agreement, to execute and
deliver an Alternate ERP Operating Partnership Guaranty with respect to
Newco's payment obligations under said Alternate Reimbursement Documents. Any
Alternate Reimbursement Documents proposed by ERP Operating Partnership shall
be on terms that are not materially less favorable to Newco or PPPIC than the
Alternate Reimbursement Documents proposed by Newco or PPPIC.
1.5 ERP Operating Partnership shall have no liability to Newco or any
other party to maintain any given rating with respect to the Bonds, it being
acknowledged and agreed that (i) ERP Operating Partnership has no obligation
whatsoever to PPPIC, the Trustee, the holders of the Bonds or any party paying
assessments to PPPIC, and (ii) ERP Operating Partnership's sole obligation in
connection with the Bonds is to provide certain financial accommodations to
the issuer of a Letter of Credit or Alternate Credit Facility, as the case may
be, solely in accordance with the terms of this Agreement.
1.6 For informational purposes, from time to time upon reasonable prior
notice, ERP Operating Partnership shall cooperate reasonably in furnishing
information concerning itself to the Bank or the issuer of any Alternate
Letter of Credit or Alternate Credit Facility whether prior or subsequent to
entering into the Initial ERP Operating Partnership Guaranty or any Alternate
ERP Operating Partnership Guaranty, as the case may be.
1.7 Newco shall have the right at any time prior to the Expiration Date
to obtain a full release of the Initial ERP Operating Partnership Guaranty or
the Alternate ERP Operating Partnership Guaranty, as the case may be, and
terminate this Agreement.
ARTICLE 2
FEES AND EXPENSES
2.1 With respect to each period (each, an "Annual Period") commencing on
the date hereof or on any anniversary of the date hereof and ending on the
immediately preceding day of the same month in the next calendar year, Newco
shall pay to ERP Operating Partnership a fee (the "Credit Enhancement Fee"),
in an amount equal to one-half of one percent (0.5%) of the face amount of any
Letter of Credit (or the maximum principal amount of any Alternate Credit
Facility) in existence on the first day of said Annual Period. The Credit
Enhancement Fee for any given Annual Period shall be payable quarterly in
advance (in equal fourths of the Credit Enhancement Fee for the entire Annual
Period in which said quarter falls) on the first day of each quarter of said
Annual Period, shall be earned in full for said quarter as of the first day of
said quarter and shall not be refundable for any reason whatsoever, including,
without limitation, the occurrence of any of the following prior to the end of
the said quarter: (i) the repayment in full of the Bonds; (ii) the termination
or expiration of this Agreement; (iii) the release of the Initial ERP
Operating Partnership Guaranty or any Alternate ERP Operating Partnership
Guaranty; or (iv) the conversion of the Bonds to the Fixed Mode. With respect
to each Annual Period, a "quarter" shall be any of the four periods commencing
on the first day of said Annual Period or on the dates that are three, six or
nine months thereafter, respectively, and ending on the day prior to the
commencement of the next quarter.
2.2 Newco shall be solely responsible for paying (i) all costs, fees,
charges, penalties and other expenses charged by the Bank or the issuer of any
Alternate Letter of Credit or Alternate Credit Facility, and (ii) to the
extent the same are reasonable in the circumstances, all costs, fees and
expenses, including without limitation attorneys' fees and expenses, incurred
by ERP Operating Partnership in connection with the Letter of Credit, any
Alternate Letter of Credit or Alternate Credit Facility, the Initial ERP
Operating Partnership Guaranty or any Alternate ERP Operating Partnership
Guaranty.
ARTICLE 3
CONDITIONS PRECEDENT
3.1 As conditions precedent to ERP Operating Partnership's obligations
pursuant to Article 1 of this Agreement, Newco shall furnish to ERP Operating
Partnership:
(a) evidence, satisfactory to ERP Operating Partnership in the
exercise of ERP Operating Partnership's commercially reasonable judgment,
of the consent of PPPIC, the Bank, the Trustee and all other parties
having a right of consent in connection with the Bonds or the Letter of
Credit with respect to the assumption by Newco of Wellsford Parent's
obligations pursuant to the Bank Reimbursement Agreement and the Letter
of Credit Documents, and the release of Wellsford Parent therefrom.
(b) an instrument in form and substance satisfactory to ERP
Operating Partnership in the exercise of ERP Operating Partnership's
commercially reasonable judgment, executed by the Bank, releasing ERP
Operating Partnership and Wellsford Parent from any and all obligations
in connection with the Bank Reimbursement Agreement and the Letter of
Credit Documents, other than those obligations expressly undertaken by
ERP Operating Partnership pursuant to the Initial ERP Operating
Partnership Guaranty.
(c) an instrument, in form and substance satisfactory to ERP
Operating Partnership in the exercise of ERP Operating Partnership's
commercially reasonable judgment, releasing ERP Operating Partnership and
Wellsford Parent from any and all obligations under (i) that certain
Second Amended and Restated Revolving Credit Agreement date as of
June 30, 1995, as amended, with the First National Bank of Boston and the
other parties listed therein, and (ii) that certain Intercreditor
Agreement dated as of June 30, 1995, as amended, by and among said
parties (collectively, the documents described in this Section 3.1(c) are
referred to herein as the "Bank of Boston Documents");
(d) a current certificate from the Trustee that, to the knowledge
of Trustee, there has not occurred and shall not be continuing any
default or event of default beyond any applicable grace period under the
Indenture or the Bond Documents;
(e) a current certificate, in form and substance satisfactory to
ERP Operating Partnership in the exercise of ERP Operating Partnership's
commercially reasonable judgment, executed by an officer of the Bank, to
the effect that, to the knowledge of the Bank, there is no continuing
default or event of default beyond any applicable grace period under the
Bank Reimbursement Agreement or the Letter of Credit Documents;
(f) a certificate, in form and substance satisfactory to ERP
Operating Partnership, executed by an officer or director of PPPIC, to
the effect that the Bond Documents shall not have been modified in any
respect, from the forms submitted to ERP Operating Partnership prior to
the execution of the Merger Agreement, without ERP Operating
Partnership's written consent, which shall not be unreasonably withheld;
(g) a certificate, in form and substance satisfactory to ERP
Operating Partnership, executed by an officer or director of PPPIC, to
the effect that the Letter of Credit Documents have not been modified in
any respect from the forms submitted to ERP Operating Partnership prior
to the execution of the Merger Agreement, without ERP Operating
Partnership's written consent (which shall not be unreasonably withheld),
except as provided in Section 3.1(h) hereinbelow;
(h) the Bank Reimbursement Agreement and the Letter of Credit
Documents shall have been amended so that (x) all covenants relating to
the financial status and operations and personnel of Wellsford Parent
have either been deleted or have been modified so as to reflect the
status and business operations of Newco, as Wellsford Parent's assignee
thereunder, (y) all references to the Bank of Boston Documents (including
cross-defaults thereto and all references to any line or lines of credit
available to Wellsford Parent pursuant thereto) shall have been deleted,
and (z) such other provisions as Newco and the Bank may agree upon shall
have been modified without the prior written consent of ERP Operating
Partnership, which shall not be unreasonably withheld; provided that no
such modification shall alter the basic business terms and procedures set
forth in Articles 1, 2, 6.15, 6.19, 6.20, 6.21, 7.2, 8 and 9 of the Bank
Reimbursement Agreement, relieve Newco and PPPIC of their obligations as
the sole "Account Parties" (as such term is defined in the Bank
Reimbursement Agreement) or increase the amount of the Letter of Credit
or otherwise increase ERP Operating Partnership's obligations under the
Initial ERP Operating Partnership Guaranty, increase the likelihood that
ERP Operating Partnership will be required to make a payment pursuant to
the Initial ERP Operating Partnership Guaranty, or diminish the remedies
or collateral to which ERP Operating Partnership will become subrogated
upon payment as contemplated under Section 1.1(a)(iv) hereinabove;
(i) a Reimbursement and Indemnification Agreement, executed by
Newco, described in Section 4.3 hereof;
(j) the acknowledgement and agreement of PPPIC described in
Section 5.1(b) hereof, the irrevocable power of attorney from PPPIC
described in Section 5.1(c) hereof, and the Trustee's consent and
acknowledgement described in Section 5.1(c) hereof;
(k) the covenant and agreement of PPPIC described in Section 4.5
hereof;
(l) evidence, satisfactory to ERP Operating Partnership in the
exercise of ERP Operating Partnership's commercially reasonable judgment,
of the consent of PPPIC with respect to the assumption by Newco of
Wellsford Parent's rights and obligations under the Wellsford Parent
Reimbursement Agreement and the release of Wellsford Parent therefrom and
the assignment to Newco of the PPPIC Note to Wellsford Parent;
(m) the Collateral Assignment and Consent described in Section 4.6
hereof; and
(n) evidence, satisfactory to ERP Operating Partnership in the
exercise of ERP Operating Partnership's commercially reasonable judgment,
that Newco was formed, established and capitalized in accordance with the
terms of the Contribution Agreement.
3.2 It shall be a condition precedent to ERP Operating Partnership's
obligations pursuant to Article 1 of this Agreement that no Event of Default
beyond all applicable cure periods shall have occurred under this Agreement.
3.3 The consummation of the transactions contemplated under the Merger
Agreement shall be a condition precedent to ERP Operating Partnership's
obligations pursuant to Article 1 of this Agreement.
3.4 Newco shall use its best efforts to ensure that all conditions
precedent to ERP Operating Partnership's obligations pursuant to Article 1 of
this Agreement shall be satisfied as of the date of the consummation of the
transactions contemplated by the Merger Agreement. In the event that Newco is
unable to satisfy any condition precedent to ERP Operating Partnership's
obligations pursuant to Article 1 of this Agreement by the date of the
consummation of the transactions contemplated by the Merger Agreement, after
the exercise of its best efforts to satisfy such condition, ERP Operating
Partnership shall have the right, in its sole and absolute discretion, (i) to
satisfy such condition precedent, at its cost and expense, or (ii) to waive
compliance with any such condition precedent.
ARTICLE 4
OTHER OBLIGATIONS OF NEWCO
4.1 On the same day, if any, as ERP Operating Partnership is required to
make any payment from time to time under the Initial ERP Operating Partnership
Guaranty or any Alternate ERP Operating Partnership Guaranty, Newco shall
repay said amounts to ERP Operating Partnership in full. All amounts required
to be reimbursed to ERP Operating Partnership pursuant to the foregoing
sentence shall be interest at the rate of the "Prime Rate" (as such term is
hereinafter defined) plus three percent (3%) per annum until paid in full,
which interest shall be due and payable to ERP Operating Partnership on
demand. Said interest shall be in the nature of default rate interest and the
payment of said interest shall not excuse Newco from the obligation of
repaying the amounts due and payable to ERP Operating Partnership pursuant to
the first sentence of this Section 4.1 when said amounts are due pursuant to
said sentence. As employed herein, the term "Prime Rate" shall mean, from
time to time, the rate of interest per annum then most recently announced by
The First National Bank of Chicago in Chicago, Illinois as its corporate base
rate. If The First National Bank of Chicago shall not announce such a rate,
then the term "Prime Rate" shall mean the prime rate or base rate from time to
time announced by an American money center bank designated by ERP Operating
Partnership.
4.2 (a) Newco shall indemnify and hold harmless ERP Operating
Partnership, its general and limited partners, and the officers,
directors, trustees, agents and employees of any of the foregoing (each,
a "ERP Operating Partnership Indemnified Party") from and against any and
all claims, demands, damages, losses, liabilities, and costs or expenses
whatsoever (including reasonable attorneys' fees) which the ERP Operating
Partnership Indemnified Party may incur (or which may be claimed against
the ERP Operating Partnership Indemnified Party by any person or entity
whatsoever) by reason of or in connection with the execution, delivery
and performance of this Agreement, the Initial ERP Operating Partnership
Guaranty or any Alternate ERP Operating Partnership Guaranty, except to
the extent of claims, demands, damages, losses, liabilities and costs and
expenses arising by reason of ERP Operating Partnership's breach of its
obligations under this Agreement or by reason of the gross negligence or
willful misconduct of the Indemnified Party.
(b) ERP Operating Partnership shall indemnify and hold harmless
Newco and its officers, directors, agents and employees (each, a "Newco
Indemnified Party") from and against any and all claims, demands,
damages, losses, liabilities, and costs or expenses whatsoever (including
reasonable attorneys' fees) to the extent they arise from ERP Operating
Partnership's breach of its obligations under this Agreement or by reason
of the gross negligence or willful misconduct of ERP Operating
Partnership.
4.3 The rights and obligations of ERP Operating Partnership and Newco
with respect to the matters set forth in Sections 4.1 and 4.2 shall be set
forth in a Reimbursement and Indemnification Agreement to be prepared by ERP
Operating Partnership and to be entered into concurrently with the execution
and delivery of the Initial ERP Operating Partnership Guaranty and any
Alternate ERP Operating Partnership Guaranty, which shall be in form and
substance satisfactory to ERP Operating Partnership in the exercise of its
commercially reasonable judgment.
4.4 Newco covenants and agrees to comply in all material respects, and
to cause PPPIC to comply in all material respects, with all terms and
conditions of (i) the Indenture and the other Bond Documents, (ii) the Bank
Reimbursement Agreement and the other Letter of Credit Documents, and
(iii) any Alternate Reimbursement Documents.
4.5 Newco shall cause PPPIC to covenant and agree (i) to furnish ERP
Operating Partnership concurrently with copies of all documentation furnished
to the Trustee or its agents by PPPIC in connection with the draw-down of any
Bond proceeds to fund the construction of the Public Improvements or other
expenses and (ii) except as may be required by or in order to comply with
existing law, that the Public Improvements that are constructed from time to
time shall be only those Public Improvements reasonably required from time to
time to service the improvements existing or under development on the
Property.
4.6 As security for Newco's obligations under this Agreement, Newco
shall collaterally assign to ERP Operating Partnership all of Newco's rights,
title and interest under the Wellsford Parent Reimbursement Agreement, and
shall pledge to ERP Operating Partnership the PPPIC Note to Wellsford Parent.
Said collateral assignment and pledge shall be evidenced by an instrument (the
"Collateral Assignment") in form and substance satisfactory to ERP Operating
Partnership in the exercise of its commercially reasonable judgment. The
Collateral Assignment shall include a provision pursuant to which Newco
agrees: (i) not to consent to any modification of the Bank Reimbursement
Agreement, the Indenture, or any documents executed by PPPIC in connection
therewith which would have the effect of increasing the amount of the Letter
of Credit or otherwise increasing ERP Operating Partnership's obligations
under the Initial ERP Operating Partnership Guaranty, increasing the
likelihood that ERP Operating Partnership will be required to make a payment
pursuant to the Initial ERP Operating Partnership Guaranty, or diminishing the
remedies or collateral to which ERP Operating Partnership will become
subrogated upon payment as contemplated under Section 1.1(a)(iv) hereinabove;
(ii) not to consent to the exercise by PPPIC of any rights of optional
redemption under the Indenture without the prior written consent of ERP
Operating Partnership, which consent shall not be unreasonably withheld;
(iii) not to direct or consent to any conversion of the Rate Mode of the Bonds
that is inconsistent with ERP Operating Partnership's rights under Section 5.1
of this Agreement; and (iv) that all rights of consent, and all rights to
direct the actions of PPPIC which Newco has pursuant to the Wellsford Parent
Reimbursement Agreement, shall be exercisable solely by ERP Operating
Partnership solely upon the occurrence of an Event of Default described in
Section 7.1. Newco shall cause PPPIC to execute a consent and acknowledgment
(the "Consent"), pursuant to which PPPIC consents to the Collateral Assignment
and agrees that all rights of consent, and all rights to direct the actions of
PPPIC, which Newco has pursuant to the Wellsford Parent Reimbursement
Agreement, shall be exercisable solely by ERP Operating Partnership solely
upon the occurrence of an Event of Default described in Section 7.1 unless and
until written notice of the release of said right is received from ERP
Operating Partnership.
ARTICLE 5
RATE MODE OF BONDS;
EXPIRATION OF ERP OPERATING PARTNERSHIP'S OBLIGATIONS
5.1 Newco acknowledges that, pursuant to the Collateral Assignment and
the Consent, ERP Operating Partnership shall have the exclusive right, subject
to the rights of the Bank under the Bank Reimbursement Agreement, upon and
following the occurrence of an Event of Default beyond all applicable cure
periods or at any time after the Expiration Date (provided that ERP Operating
Partnership shall not have previously been released from all of its
obligations under the Initial ERP Operating Partnership Guaranty by the
Alternate ERP Operating Partnership Guaranty, as the case may be), to direct
PPPIC with respect to establishing the Rate Modes from time to time of the
Bonds. ERP Operating Partnership hereby agrees to permit the Bonds to remain
in the Weekly Mode; provided that, at any time on or after the Expiration Date
(provided that ERP Operating Partnership shall not have previously been
released from all of its obligations under the Initial ERP Operating
Partnership Guaranty or the Alternate ERP Operating Partnership Guaranty, as
the case may be) or at any time after the occurrence of an Event of Default
under this Agreement beyond all applicable cure periods, ERP Operating
Partnership shall have the right to direct PPPIC to exercise its option (the
"Rate Conversion Option"), at the earliest possible time thereafter pursuant
to the Indenture, to convert all the Bonds to the Fixed Mode. ERP Operating
Partnership shall not cause the Bonds to be converted to the Term Mode without
the approval of Newco and ERP Operating Partnership shall have no obligation
at any time to cause or permit a conversion of the Bonds to a Term Mode with a
duration of longer than two hundred and ten (210) days or which ends after the
Expiration Date or the expiration date or maturity date of the Letter of
Credit, any Alternate Letter of Credit or any Alternate Credit Facility.
5.2 On and as of the Expiration Date, Newco shall cause ERP Operating
Partnership to be released from the Initial ERP Operating Partnership Guaranty
and any Alternate ERP Operating Partnership Guaranty then in effect as of the
Expiration Date, and ERP Operating Partnership shall have no further
obligations pursuant to this Agreement from and after the Expiration Date.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of Newco. Newco hereby represents
and warrants to ERP Operating Partnership as follows:
(a) Newco (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization,
(ii) has all requisite corporate power and authority to own its property
and assets and to carry on its business as now conducted and as proposed
to be conducted by Newco, (iii) 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 "Material Adverse Effect on
Newco" (as such term is hereinafter defined), and (iv) has the corporate
power and authority to execute, deliver and perform its obligations under
this Agreement. As employed herein, the term "Material Adverse Effect on
Newco" shall mean (i) a materially adverse effect on the financial
condition of Newco, or (ii) material impairment of the ability of Newco
to pay any amount due, or to perform any other material obligation, under
any Letter of Credit Document or Alternate Reimbursement Document.
(b) The execution, delivery and performance by Newco of this
Agreement and the transactions contemplated hereby (i) have been duly
authorized by all requisite corporate and, if required, stockholder
action and (ii) will not (A) violate (x) any provision of law, statute,
rule or regulation to which Newco or any of its "Affiliates" (as such
term is defined in Section 7.2) shall be subject, or of the certificate
or articles of incorporation or other constitutive documents or by-laws
of Newco, (y) any order of any governmental authority or quasi-
governmental authority, or (z) any provision of any indenture or other
material agreement or instrument to which Newco is a party or by which it
or any of its property is or may be bound, (B) 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 (C) result in the creation or imposition of any lien upon
or with respect to any property or assets now owned or hereafter acquired
by Newco, except for the lien, if any, created pursuant to the terms of
this Agreement.
(c) This Agreement has been duly executed and delivered by Newco
and constitutes a legal, valid and binding obligation of Newco
enforceable against Newco in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally, or by general
equity principles, including but not limited to principles governing the
availability of the remedies of specific performance and injunctive
relief.
(d) All of the Bonds are in the Weekly Mode.
6.2 Representations and Warranties of ERP Operating Partnership. ERP
Operating Partnership hereby represents and warrants to Newco as follows:
(a) ERP Operating Partnership (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its organization, (ii) has all requisite corporate power and authority
to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted by ERP Operating Partnership,
(iii) 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 "Material Adverse Effect on ERP Operating Partnership"
(as such term is hereinafter defined), and (iv) has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement. As employed herein, the term "Material Adverse Effect on ERP
Operating Partnership" shall mean a materially adverse effect on the
financial condition of ERP Operating Partnership.
(b) The execution, delivery and performance by ERP Operating
Partnership of this Agreement and the transactions contemplated hereby
(i) have been duly authorized by all requisite corporate and, if
required, stockholder action, and (ii) will not (A) violate (x) any
provision of law, statute, rule or regulation to which ERP Operating
Partnership or any of its "Affiliates" (as such term is defined in
Section 7.2) shall be subject, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of ERP Operating
Partnership, (y) any order of any governmental authority or quasi-
governmental authority, or (z) any provision of any indenture or other
material agreement or instrument to which ERP Operating Partnership is a
party or by which it or any of its property is or may be bound, (B) 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 (C) result in the creation or imposition of any
lien upon or with respect to any property or assets now owned or
hereafter acquired by ERP Operating Partnership.
(c) This Agreement has been duly executed and delivered by ERP
Operating Partnership and constitutes a legal, valid and binding
obligation of ERP Operating Partnership enforceable against ERP Operating
Partnership in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights generally, or by general equity
principles, including but not limited to principles governing the
availability of the remedies of specific performance and injunctive
relief.
ARTICLE 7
EVENTS OF DEFAULT
7.1 Events of Default. The happening of any of the following events
shall be an "Event of Default" hereunder:
(a) any representation or warranty made or deemed made in this
Agreement by Newco shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any amounts due under
this Agreement and such default is not cured within five (5) business
days of written notice from ERP Operating Partnership of such default;
(c) material default shall be made in the due observance or
performance by Newco or PPPIC of any covenant, condition or agreement
contained in this Agreement, the Bond Documents, the Letter of Credit
Documents, any Alternate Reimbursement Documents and any Reimbursement
and Indemnification Agreement entered into pursuant to Section 4.3
hereof, other than a default in the payment of any amount due under this
Agreement, and such material default shall not be cured within fifteen
(15) business days of written notice from ERP Operating Partnership of
such default;
(d) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of Newco or PPPIC, or of a substantial part of the
property or assets of Newco or PPPIC under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for Newco or PPPIC or for a substantial part of the
property or assets of Newco or PPPIC, or (iii) the winding-up or
liquidation of Newco or PPPIC; and such proceeding or petition shall
continue undismissed for 90 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(e) Newco or PPPIC shall (i) voluntarily commence any proceeding or
file any petition seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) consent
to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in (d)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
Newco or PPPIC or for a substantial part of the property or assets of
Newco or PPPIC, (iv) file an answer admitting the material allegations of
a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, or (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;
(f) one or more judgments for the payment of money in an aggregate
amount in excess of $250,000 shall be rendered against Newco or PPPIC and
the same shall remain unbonded or undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed,
or any judgment creditor shall levy upon assets or properties of Newco or
PPPIC to enforce any such judgment; or
(g) there shall have occurred a Change in Control with respect to
Newco or PPPIC.
7.2 Definitions. As employed herein, the following terms shall have the
following meanings:
"Affiliate" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.
A "Change in Control" shall be deemed to have occurred with
respect to Newco, as the case may be, if (a) any Person or group
(within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in effect on the date hereof other than ERP Operating
Partnership or ERP Operating Partnership's Affiliate) shall own,
directly or indirectly, beneficially or of record, shares
representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Newco; or
(b) a change shall occur during any period in the Board of Directors
of Newco in which the individuals who constituted the Board of
Directors of Newco at the beginning of such period (together with
any other director whose election by the Board of Directors of Newco
or whose nomination for election by the stockholders of Newco was
approved by a vote of at least two-thirds of the directors then in
office who either were directors at the beginning of such period or
whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
directors of Newco then in office. With respect to PPPIC, a "Change
in Control" shall mean that the members of the Board of Directors of
PPPIC are no longer the nominees of Newco.
"Control", when used with respect to any specified Person,
means the power to direct the management and policies of such
Person, whether through the ownership of voting securities, by
contract or otherwise. The term "controlled" has a meaning
correlative to the foregoing.
"Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
7.3 Remedies. Upon the occurrence of an Event of Default described in
Section 7.1 hereof, ERP Operating Partnership shall have any and all remedies
available to it at law, in equity or pursuant to statute. Without limitation
of the foregoing,the occurrence of an Event of Default shall have the
consequences set forth in Sections 3.2 and 5.1 of this Agreement.
ARTICLE 8
AGREEMENT REGARDING PALOMINO PARK
Notwithstanding anything to the contrary contained herein, if at any time
Newco shall breach the terms of Article 7 of that certain Agreement Regarding
Palomino Park of even date herewith by and between ERP Operating Partnership
and Newco, then ERP Operating Partnership shall have no further obligations
under this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 Notices. Notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service,
mailed or sent by telecopy, as follows:
(a) if to Newco: Wellsford Real Properties, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to: Brownstein, Hyatt, Xxxxxx & Strichland P.C.
000 Xxxxxxxxxxx Xx., Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) if to ERP Operating
Partnership: ERP Operating Limited Partnership
c/o Equity Residential Properties Trust
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Telecopy No.: (000) 000-0000
with a copy to: Equity Residential Properties Trust
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq., General Counsel
Telecopy No.: (000) 000-0000
and: Xxxxxxx & Xxxxx
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Such notice will be deemed given when received.
9.2 Survival of Agreement. All covenants, agreements, representations
and warranties made by Newco herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by ERP Operating
Partnership and shall survive the date of this Agreement, regardless of any
investigation made by ERP Operating Partnership or on its behalf, and shall
continue in full force and effect so long as ERP Operating Partnership retains
any obligations or liability under this Agreement, the Initial ERP Operating
Partnership Guaranty or any Alternate ERP Operating Partnership Guaranty.
9.3 Binding Effect. This Agreement shall become effective when it shall
have been executed by Newco and ERP Operating Partnership, and thereafter
shall be binding upon and inure to the benefit of Newco, ERP Operating
Partnership and their respective successors and assigns, except that neither
Newco nor ERP Operating Partnership shall have the right to assign its rights
hereunder or any interest herein without the prior consent of the other.
9.4 Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS.
9.5 Waivers; Amendment.
(a) No failure or delay of ERP Operating Partnership or Newco in
exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of ERP
Operating Partnership and Newco hereunder are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by
either party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on either party in any case
shall entitle such party to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in
writing entered into by Newco and ERP Operating Partnership.
9.6 Entire Agreement. This Agreement, including any exhibits and
schedules hereto, constitutes the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement. Nothing
in this Agreement, expressed or implied, is intended to confer upon any party
other than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9.7 Waiver of Jury Trial. Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any litigation directly or indirectly arising out of,
under or in connection with this Agreement.
9.8 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. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
9.9 Headings. Article and Section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
9.10 Jurisdiction; Consent to Service of Process.
(a) NEWCO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY ILLINOIS
OR NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA
SITTING IN THE CITY OF CHICAGO OR THE CITY OF NEW YORK, AND ANY APPELLATE
COURT THEREFROM, 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 ILLINOIS OR NEW YORK STATE COURT 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) NEWCO 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
ILLINOIS OR NEW YORK STATE COURT OR FEDERAL COURT SITTING IN THE CITY OF
NEW YORK. 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.
IN WITNESS WHEREOF, ERP Operating Partnership and Newco have caused this
Agreement to be signed by their respective officers hereunto duly authorized
all as of the date first written above.
ERP OPERATING LIMITED PARTNERSHIP
BY: EQUITY RESIDENTIAL PROPERTIES TRUST,
its general partner
By:/s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
and General Counsel
WELLSFORD REAL PROPERTIES, INC.
By:/s/ Xxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
