AGREEMENT REGARDING COMMON STOCK
AND PREFERRED STOCK PURCHASE AGREEMENT
THIS AGREEMENT REGARDING COMMON STOCK AND PREFERRED STOCK PURCHASE AGREEMENT
(this "Agreement") dated as of May 30, 1997 is entered into among ERP
OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership (the
"Purchaser"), WELLSFORD REAL PROPERTIES, INC., a Maryland corporation (the
"Borrower"), and BANKBOSTON, N.A., a national banking association ("BKB"), as
Agent for itself and the other "Banks" from time to time party to the "Credit
Agreement" (as such terms are hereinafter defined) (BKB, in its capacity as
Agent is hereinafter referred to as "Agent").
W I T N E S S E T H:
WHEREAS, the Purchaser and Borrower have entered into that certain Common
Stock and Preferred Stock Purchase Agreement, dated as of May 30, 1997 (the
"Stock Purchase Agreement"); and
WHEREAS, pursuant to that certain Revolving Credit Agreement dated of even
date herewith among the Borrower, BKB, Xxxxxx Guaranty Trust Company of New
York and Agent (as the same may be varied, extended, supplemented,
consolidated, amended, renewed, modified or restated, the "Credit Agreement"),
the "Banks" (as defined in the Credit Agreement) have agreed to provide a
revolving credit loan to the Borrower of up to $50,000,000.00 (the "Loan"),
which Loan is evidenced by those certain Notes made by the Borrower to the
order of the Banks in the aggregate principal face amount of $50,000,000.00;
and
WHEREAS, Borrower has requested that the Banks advance certain funds to
Borrower based on amounts available to be funded by Purchaser pursuant to the
Stock Purchase Agreement; and
WHEREAS, Agent and the Banks have required, as a condition to the advance of
proceeds of the Loan against amounts available to be funded under the Stock
Purchase Agreement, that the parties hereto execute and deliver this
Agreement;
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00), to induce the Agent and the Banks to enter into the Credit
Agreement, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto to hereby
covenant and agree as follows:
1. Definitions. Capitalized terms used herein that are not otherwise
defined herein shall have the meaning set forth in the Credit Agreement.
2. Obligations Unconditional. Purchaser hereby agrees with Agent that,
notwithstanding anything in the Stock Purchase Agreement to the contrary, the
obligation of the Purchaser to consummate a "Purchase" (as defined in the
Stock Purchase Agreement) during the "Purchase Term" (as defined in the Stock
Purchase Agreement) and to pay the purchase price in connection with such
purchase pursuant to the Stock Purchase Agreement shall be the absolute,
unconditional and irrevocable obligation of Purchaser, and shall not be
subject to the satisfaction of any condition set forth in the Stock Purchase
Agreement, the absence of any "Potential Event of Default", "Event of Default"
(as such terms are defined in the Stock Purchase Agreement) or any other
default of any nature thereunder, or any set off, counterclaim, defense or
other circumstance whatsoever; provided, however, that Purchaser shall have no
obligation to consummate a "Purchase" (as such term is defined in the Stock
Purchase Agreement) in the event that (x) an involuntary proceeding shall have
been commenced or an involuntary petition shall have been filed in a court of
competent jurisdiction seeking relief in respect of the Borrower under Title
11 of the United States Code, as now constituted or hereafter amended, and
such proceeding or petition shall continue undismissed for ninety (90) days or
an order or decree approving or ordering the foregoing shall be entered, or
(y) the Borrower shall have voluntarily commenced any proceeding or filed any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended (the foregoing events described in (x) and
(y) being hereinafter referred to as the "Bankruptcy Default"). Without
limiting the generality of the foregoing, Purchaser agrees that its
obligations under this Agreement and the Stock Purchase Agreement shall not be
affected or impaired by, and hereby waives and agrees not to assert or take
advantage or any defense based on, (a) any failure by Borrower to satisfy any
conditions set forth in Article 4 of the Stock Purchase Agreement or the
occurrence of any Potential Event of Default or Event of Default (other than a
Bankruptcy Default) under the Stock Purchase Agreement, (b) any lack of
validity or enforceability of the Stock Purchase Agreement, (c) the existence
of any claim, setoff, defense or any right which Purchaser may have at any
time against the Borrower, the Agent or the Banks, (d) any statement,
certificate or any other document presented pursuant to the Stock Purchase
Agreement or hereunder proving to be fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect
whatsoever, (e) any breach of any agreement or dispute among or between
Purchaser and the Borrower, (f) any non-application or misapplication by the
Borrower of the proceeds of any "Purchase" (as such term is defined in the
Stock Purchase Agreement), (g) any extension of time for or delay, renewal or
compromise of other indulgence or modification granted or agreed to by the
Agent or the Banks with or without notice to or approval by the Purchaser with
respect to transactions contemplated by the Agreement, the Credit Agreement or
any other Loan Documents; (h) any other legal or equitable defenses whatsoever
to which Purchaser might otherwise be entitled, or (i) any failure on the part
of Borrower to take any other action in connection with a Purchase or to
deliver to Purchaser the certificate representing shares of Preferred Stock.
Except as provided in Paragraph 3, below, Purchaser shall fund such amounts to
Borrower as required by the terms of this Agreement upon receipt of written
demand for such amounts.
3. Payment to Agent. Purchaser agrees to, and Borrower hereby irrevocably
authorizes and directs Purchaser to, pay directly to Agent in immediately
available funds any and all amounts to be funded or paid by Purchaser pursuant
to the Stock Purchase Agreement upon receipt of a written notice from Agent,
executed by a purported officer of Agent, demanding payment of any and all
amounts to be funded or paid by Purchaser pursuant to the Stock Purchase
Agreement. Agent shall be entitled to, and Borrower hereby irrevocably
consents to and authorizes Agent to, make such demand at any time (whether
before or after the occurrence of a Default or Event of Default) as determined
by Agent in its sole and absolute discretion. No further notice or
authorization shall be required from Borrower in order to authorize the
payment of all such sums directly to Agent. Purchaser shall have no right or
obligation to inquire as to the right of Agent to make such demand, and the
obligation of Purchaser hereunder shall not be affected by any notice or claim
of Borrower to the contrary. Borrower waives any right to require that such
payments be made to Borrower following delivery of such demand by Agent unless
and until such demand is revoked in writing by Agent. Borrower agrees that
Borrower shall have no right or claim against Purchaser for or by reason of
such payments made directly to Agent following the receipt of such written
demand. Upon payment of such amounts to Agent, Borrower shall recognize such
payments as having been made to Borrower pursuant to the Stock Purchase
Agreement. Any such amounts received by Agent shall be applied to the
Obligations in such order as the Agent shall determine.
4. Assignment of Stock Purchase Agreement. Purchaser acknowledges that
the rights of the Borrower pursuant to the Stock Purchase Agreement and this
Agreement have been assigned to Agent, and Purchaser expressly consents to
said assignment and agrees that such assignment shall not constitute a
"Potential Event of Default", "Event of Default" (as such terms are defined in
the Stock Purchase Agreement) or other default of any nature under the Stock
Purchase Agreement, and that upon the transfer to Agent or a nominee of Agent
or the Banks of the rights of Borrower under this Agreement and Stock Purchase
Agreement by foreclosure or transfer in lieu thereof, Agent, the Banks or such
nominee shall be entitled to exercise all rights, powers and privileges under
the Stock Purchase Agreement and this Agreement to collect and receive any and
all amounts to be funded or paid by Purchaser pursuant thereto and this
Agreement; provided that the foregoing shall not limit or impair the rights of
the Agent to receive payments as provided in Paragraph 3, above.
5. Representations of Purchaser. Purchaser hereby represents and warrants
to the Agent as follows: (a) the Stock Purchase Agreement is in full force and
effect and has not been modified, and Borrower is entitled to the benefits
thereof; (b) no default (or event which would with the giving of notice or the
passage of any applicable grace or notice and cure period might become a
default) exists under the Stock Purchase Agreement; (c) there are no setoffs,
defenses or counterclaims in favor of Purchaser with respect to the Stock
Purchase Agreement, and to the extent that any such setoffs, defenses or
counterclaims might be alleged to exist, the same are hereby waived and
released by Purchaser; (d) the execution, delivery and performance of the
Stock Purchase Agreement and this Agreement are within the authority of
Purchaser, have been duly authorized by all necessary proceedings on the part
of Purchaser, do not and will not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
Purchaser is subject or any judgment, order, writ, injunction, license or
permit applicable to Purchaser, do not and will not conflict with or
constitute a default (with the passage of time or the giving of notice or
both) under any provision of the organizational documents of, or any mortgage,
indenture, agreement, contract or other instrument binding upon Purchaser or
any of its properties; and (e) this Agreement and the Stock Purchase Agreement
constitute the valid and legally binding obligations of Purchaser enforceable
in accordance with their respective terms and provisions, except as
enforceability is limited by bankruptcy or other laws relating to or affecting
generally the enforcement of creditors' rights and the effect of general
principles of equity.
6. Covenants of Purchaser. Purchaser hereby covenants and agrees with
Borrower and Agent that it will not modify, amend, cancel, release, surrender
or terminate the Stock Purchase Agreement or this Agreement without the prior
written consent of the Agent, which consent may be withheld by the Agent in
its sole and absolute discretion.
7. Liability of Agent and Banks. Anything herein, in the Stock Purchase
Agreement or any other instrument to the contrary notwithstanding,
(a) Borrower shall remain liable under the Stock Purchase Agreement, for the
performance of its obligations, (b) the exercise by Agent of any of its rights
hereunder or under the Loan Documents shall not release Borrower from any of
its duties or obligations under the Stock Purchase Agreement or under the Loan
Documents, and (c) Agent shall not have any obligations or liability under the
Stock Purchase Agreement or otherwise by reason of this Agreement or the Loan
Documents, nor shall Agent be obligated to perform any of the obligations or
duties of Borrower thereunder; provided, however, that any failure of Borrower
to perform such obligations shall not create a defense to the obligations of
Purchaser hereunder.
8. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement nor consent to any departure therefrom shall in any event be
effective unless the same shall be in writing and signed by all parties
hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No delay or
omission of Agent to exercise any right, power or remedy accruing upon any
Event of Default shall exhaust or impair any such right, power or remedy or
shall be construed to be a waiver of any such Event of Default, or
acquiescence therein; and every right, power and remedy given by this
Agreement to Agent may be exercised from time to time and as often as may be
deemed expedient by Agent.
9. Governing Law; Terms. THIS ASSIGNMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK.
10. Notices. Each notice, demand, election or request provided or
permitted to be given pursuant to this Assignment (hereinafter in this
Paragraph 10 referred to as "Notice"), must be in writing and shall be deemed
to have been properly given or served by personal delivery or by sending same
by overnight courier or by depositing same in the United States Mail, postpaid
and registered or certified, return receipt requested as follows:
If to the Agent:
Bank Boston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Real Estate Division
With a copy to:
Bank Boston, N.A.
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xx. Xxx Xxxxxxx
If to the Borrower:
Wellsford Real Properties, Inc.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
If to Purchaser:
ERP Operating Limited Partnership
c/o Equity Residential Properties Trust
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Each Notice shall be effective upon being personally delivered or upon being
sent by overnight courier or upon being deposited in the United States Mail as
aforesaid. The time period in which a response to such Notice must be given
or any action taken with respect thereto (if any), however, shall commence to
run from the date of receipt if personally delivered or sent by overnight
courier, or if so deposited in the United States Mail, the earlier of three
(3) Business Days following such deposit or the date of receipt as disclosed
on the return receipt. Rejection or other refusal to accept or the inability
to deliver because of changed address for which no notice was given shall be
deemed to be receipt of the Notice sent. By giving at least fifteen (15) days
prior Notice thereof, the parties hereto shall have the right from time to
time and at any time during the term of this Agreement to change their
respective addresses and each shall have the right to specify as its address
any other address within the United States of America.
11. Conflicting Provisions. In the event of a conflict between the terms
of this Agreement and the terms of the Stock Purchase Agreement, the terms of
this Agreement shall be deemed controlling in all respects until such time as
the Obligations are paid in full.
12. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of the parties hereto and the Banks, their
respective legal representatives, successors, successors-in-title and assigns;
provided that as to the Agent and the Banks, this Agreement may only be
assigned to a successor Agent or Bank pursuant to the Credit Agreement, a
nominee of any or all of them or any purchaser (other than Borrower) at a
foreclosure of the collateral pledged pursuant to the Assignment of Common
Stock Agreement.
13. Term. This Agreement shall continue and be effective until the
indefeasible payment in full of the Obligations.
14. Waivers of Purchaser. All of the Obligations shall be deemed to have
been made or incurred in reliance upon this Agreement, and Purchaser expressly
waives all notice of the incurring of the Obligations from time to time under
the Credit Agreement or otherwise and all other notices not specifically
required pursuant to the terms of this Agreement or by law. Purchaser agrees
that Agent and the Banks shall be entitled to manage and supervise the Loans
to Borrower in accordance with such practices as they deem appropriate under
the circumstances. Purchaser agrees that neither Agent nor any Bank has made
any warranties or representations with respect to the due execution, legality,
validity, completeness or enforceability of the Credit Agreement or the other
Loan Documents or the collectability of the Obligations; and that neither the
Agent nor the Banks shall have any responsibility to Purchaser to advise it of
information known to any of them regarding the financial condition of Borrower
or of any circumstances bearing upon the non-payment of the Obligations or any
other indebtedness of Borrower. All agreements and obligations of Purchaser
hereunder shall remain in full force and effect irrespective of: (a) any
change in the time, manner or place of payment of the Obligations, or any
other term of all or any of the Loan Documents; (b) any change, release or
non-perfection of any Collateral, or any release or amendment or waiver of or
consent to the departure from, any of the Loan Documents; or (c) any other
circumstances which might otherwise constitute a defense available to, or a
discharge of, Borrower in respect of the Obligations or Purchaser in respect
to its obligations under this Agreement or the Stock Purchase Agreement.
15. Rights of Borrower. The rights of the Borrower pursuant to the Stock
Purchase Agreement shall not be enlarged by this Agreement, which rights of
Borrower shall continue to be governed by the Stock Purchase Agreement;
provided that the rights of the Agent as a successor of the Borrower shall be
subject to the terms of this Agreement.
16. Miscellaneous. Time is of the essence of this Agreement. Title or
captions of paragraphs hereof are for convenience only and neither limit nor
amplify the provisions hereof. If, for any circumstances whatsoever,
fulfillment of any provision of this Agreement shall involve transcending the
limit of validity presently prescribed by applicable law, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if any clause or
provision herein operates or would prospectively operate to invalidate this
Agreement, in whole or in part, then such clause or provision only shall be
held for naught, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal on the date first above written.
AGENT:
BANK BOSTON, N.A., a national banking association,
individually and as Agent
By:/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxx, Managing Director
[Signatures continued on next page]
BORROWER:
WELLSFORD REAL PROPERTIES, INC., a Maryland
corporation
By:/s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
[CORPORATE SEAL]
[Signatures continued on next page]
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP
By: Equity Residential Properties
Trust, its sole General Partner
By:/s/ Xxxxx Xxxxxx
-------------------------------
Name:
Title:
[CORPORATE SEAL]
