$28,500,000
COMMON STOCK AND PREFERRED STOCK PURCHASE AGREEMENT
Dated as of May 30, 1997
between
ERP OPERATING LIMITED PARTNERSHIP
as Purchaser,
and
WELLSFORD REAL PROPERTIES, INC.
as Company
TABLE OF CONTENTS
Article Page
1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . 7
2 THE AGGREGATE COMMITMENTS. . . . . . . . . . . . . . . . . . . . . . . 7
2.1 The Closing Date Purchase Commitment. . . . . . . . . . . . . . . 7
2.2 Payment of the Closing Date Purchase Commitment . . . . . . . . . 9
2.3 Term Purchase Commitment. . . . . . . . . . . . . . . . . . . . . 9
2.4 Notice of Purchase. . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Right of Purchaser to Purchase Uncalled Term Purchase
Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 10
3.1 Organization; Powers. . . . . . . . . . . . . . . . . . . . . . . 10
3.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 The Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . 11
3.4 Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.5 Governmental Approvals. . . . . . . . . . . . . . . . . . . . . . 12
3.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 12
3.7 Title to Properties; Default Under Agreements . . . . . . . . . . 12
3.8 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.9 Litigation; Compliance with Laws. . . . . . . . . . . . . . . . . 12
3.10 Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11 Investment Company Act; Public Utility Holding Company Act. . . . 13
3.12 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 No Material Misstatements . . . . . . . . . . . . . . . . . . . . 13
3.14 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . 13
3.15 Environmental and Safety Matters. . . . . . . . . . . . . . . . . 13
4 CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 First Purchase.. . . . . . . . . . . . . . . . . . . . . . . 14
4.2 All Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5 AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Existence: Businesses and Properties. . . . . . . . . . . . . . . 16
5.2 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Obligations and Taxes . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Financial Statements, Reports, etc. . . . . . . . . . . . . . . . 17
5.5 Litigation and Other Notices. . . . . . . . . . . . . . . . . . . 18
5.6 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.7 Maintaining Records; Access to Properties and Inspections . . . . 18
5.8 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 Issuance of Preferred Stock and Class A Common Stock. . . . . . . 18
5.10 Closing Date Director . . . . . . . . . . . . . . . . . . . . . . 18
5.11 Nomination as Director; Appointment of Person to Attend and
Observe Meetings. . . . . . . . . . . . . . . . . . . . . . . . . 18
5.12 Election as Director. . . . . . . . . . . . . . . . . . . . . . . 20
5.13 Voting of Stock . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.14 Sale of Common Stock or Preferred Stock . . . . . . . . . . . . . 21
5.15 Confidentiality.. . . . . . . . . . . . . . . . . . . . . . . . . 22
6 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1 Termination of the Agreement. . . . . . . . . . . . . . . . . . . 24
7.2 Securities Law Matters. . . . . . . . . . . . . . . . . . . . . . 24
7.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Survival of Agreement . . . . . . . . . . . . . . . . . . . . . . 27
7.5 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.6 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.7 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.8 Waivers; Amendment. . . . . . . . . . . . . . . . . . . . . . . . 27
7.9 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 28
7.10 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . 28
7.11 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.12 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.13 Jurisdiction; Consent to Service of Process.. . . . . . . . . . . 28
INDEX OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Articles Supplementary Classifying Preferred Stock
Exhibit B - Purchase Notice
Exhibit C - Charter and Bylaws of the Company
Exhibit D - Opinion of Counsel
Exhibit E - Registration Rights Agreement
Exhibit F - Class A Common Stock Terms
SCHEDULES
Schedule 3.3 - Capital Stock
Schedule 3.5 - Governmental Approvals
Schedule 3.8 - Subsidiaries
Schedule 3.9 - Litigation
Schedule 3.15 - Environmental and Safety Matters
COMMON STOCK AND PREFERRED STOCK PURCHASE AGREEMENT
THIS COMMON STOCK AND PREFERRED STOCK PURCHASE AGREEMENT dated as of May 30,
1997, (this "Agreement") is entered into between ERP OPERATING LIMITED
PARTNERSHIP, an Illinois limited partnership (the "Purchaser"), and WELLSFORD
REAL PROPERTIES, INC., a Maryland corporation (the "Company").
In accordance with the terms and subject to the conditions set forth in this
Agreement, the Purchaser has agreed to purchase from the Company (i) on the
Closing Date the number of shares of Class A common stock, par value $.01 per
share, of the Company (the "Class A Common Stock") equal to the Closing Date
Purchase Commitment divided by the Issuance Price, and (ii) at any time during
the Purchase Term, the aggregate number of shares of Series A Convertible
Redeemable Preferred Stock of the Company (the "Preferred Stock") having the
terms set forth in Exhibit A hereto, not in excess of the Term Purchase
Commitment at the Purchase Price on the date of any such purchase.
Accordingly, the Company and the Purchaser agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the meanings specified below:
"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.
"Aggregate Purchase Commitment" shall mean the Purchaser's Closing
Date Purchase Commitment and Term Purchase Commitment.
"Agreement" shall have the meaning ascribed to such term in the
preamble hereto.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of Illinois) on which banks
are open for business in Chicago.
"Capital Lease" shall mean any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for
as capital leases on a balance sheet under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with
GAAP.
"Capital Lease Obligations" of any Person shall mean the obligations
of such Person to pay rent or other amounts under any Capital Lease.
A "Change in Control" shall be deemed to have occurred with respect
to the Company 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 the Purchaser or any of its Affiliates 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 the Company; or (b) a change shall
occur during any period in the Board of Directors of the Company in which
the individuals who constituted the Board of Directors of the Company at
the beginning of such period (together with any other director whose
election by the Board of Directors of the Company or whose nomination for
election by the stockholders of the Company 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 the Company then in office.
"Closing Date" shall mean May 30, 1997.
"Closing Date Purchase Commitment" shall mean the commitment of
Purchaser to purchase the number of shares of Class A Common Stock equal
to $3,500,000 divided by the Issuance Price on the Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"Class A Common Stock" shall have the meaning set forth in the
preamble hereto.
"Common Stock" shall mean shares of common stock, par value $.01 per
share, of the Company.
"Control" including the terms "Controlling", "Controlled by" and
"under common Control with", 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.
"ERISA" shall mean Employment Retirement Income Securities Act, 29
USC 1001, et. seq. (1974), as amended.
"ERISA Affiliate" shall mean an affiliate as defined in Section
407(d)(7) of ERISA.
"Event of Default" shall have the meaning given such term in
Article 6.
"Fiscal Year" shall mean the fiscal year of the Company as provided
in the Bylaws of the Company.
"GAAP" shall mean generally accepted accounting principles, applied
on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Gross Sales Price Per Share of Common Stock" shall mean (a) the
gross proceeds from all sales of Common Stock to institutional purchasers
taking place on or prior to the Closing Date and subject to written
commitments to purchase from institutional purchasers received on or prior
to the Closing Date, divided by (b) the aggregate number of shares so sold
and subject to such commitments.
"Guarantee," when used with respect to any Person, shall mean the
incurrence of any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purpose or payment of) such Indebtedness or to purchase (or
to advance or supply funds for the purchase of) any security for the
payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness;
provided, however, that the term "Guarantee" shall not include
endorsements of items by any Person for collection or deposit in the
ordinary course of business.
"Indebtedness" as applied to any Person shall mean (without
duplication) (a) any indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed, including, without
limitation, Capital Lease Obligations of such Person, (b) any indebtedness
incurred other than in the ordinary course of business, whether or not for
borrowed money, secured by any Lien in respect of property owned by such
Person, whether or not such Person has assumed or become liable for the
payment of such indebtedness, (c) any indebtedness, whether or not for
borrowed money, with respect to which such Person has become directly or
indirectly liable and which represents or has been incurred to finance the
purchase price (or a portion thereof) of any property or services or
business acquired by such Person, whether by purchase, consolidation,
merger or otherwise, (d) any Indebtedness of the character referred to in
clauses (a), (b) or (c) of this definition deemed to be extinguished under
generally accepted accounting principles but for which such Person remains
legally liable and (e) any Indebtedness of any other Person of the
character referred to in subdivision (a), (b), (c) or (d) of this
definition with respect to which the Person whose Indebtedness is being
determined has become liable by way of a Guarantee, including, without
limitation, any such Indebtedness of any partnership in which such Person
is a general partner.
"Issuance Price" shall mean the Gross Sales Price Per Share of Common
Stock determined as of the Closing Date or, in the event no sales of
Common Stock to any institutional purchaser take place on or prior to the
Closing Date or are subject to a written commitment to purchase from any
institutional purchaser received on or prior to the Closing Date,
"Issuance Price" shall mean the Net Book Value Per Share of Common Stock
determined as of the Closing Date.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right
of a third party with respect to such securities.
"Material Adverse Effect" shall mean a materially adverse effect on
the business, assets, prospects, operations or financial condition of the
Company and its Subsidiaries taken as a whole.
"Merger Agreement" shall mean that certain Agreement and Plan of
Merger by and between Equity Residential Properties Trust and Wellsford
Residential Property Trust ("Wellsford"), dated as of January 16, 1997.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or accruing an
obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.
"Net Book Value Per Share of Common Stock" shall mean the
stockholders' equity of the Company determined in accordance with GAAP as
adjusted for all liabilities, including all costs related to the formation
of the Company as set forth in the financial statements of the Company,
less the liquidation value of all outstanding shares of preferred stock
including the Preferred Stock, divided by the number of shares of Common
Stock of the Company outstanding on such date, excluding the shares of
Class A Common Stock being purchased by the Purchaser on the Closing Date.
Net Book Value Per Share of Common Stock shall be determined in accordance
with Section 2.1 of this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any
agency or political subdivision thereof.
"Potential Event of Default" shall mean any event or condition which
upon notice, lapse of time or both would constitute an Event of Default.
"Preferred Stock" shall have the meaning set forth in the preamble
hereto.
"Purchase" shall have the meaning given such term in Article 4.
"Purchase Notice" shall have the meaning given such term in Section
2.4.
"Purchase Price" shall mean $25.00 per share of Preferred Stock.
"Purchase Term" shall mean the period of time beginning on the
Closing Date and ending three years from the Closing Date.
"Purchaser" shall have the meaning given to such term in the preamble
hereto.
"Purchaser Director" shall mean the director which the holders of the
Class A Common Stock are entitled to elect pursuant to the Charter of the
Company.
"Registration Rights Agreement" shall mean that certain Registration
Rights Agreement between the Purchaser and the Company dated as of the
date hereof.
"Responsible Officer" of any corporation shall mean any executive
officer of such corporation, and any other officer or similar official
thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.
"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.
"Subsidiary" shall mean any subsidiary of the Company.
"Term Closing Date" shall have the meaning given to such term in
Section 2.4.
"Term Purchase Commitment" shall mean the commitment of Purchaser to
purchase 1,000,000 shares of Preferred Stock at the Purchase Price per
share. The Term Purchase Commitment is in addition to the Closing Date
Purchase Commitment.
"Warrant" shall mean any warrant issued pursuant to the Articles
Supplementary classifying the Preferred Stock.
"Wellsford" shall mean Wellsford Residential Property Trust, a
Maryland real estate investment trust.
1.2 Terms Generally. The definitions in Section 1.1 shall apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time;
provided, however, that, for purposes of determining compliance with any
covenant set forth in Article 5, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the application used in preparing the Company's audited
financial statements; provided, further, that in making any calculation
required by this Agreement, for the purpose of determining the net income or
deficit or item of expense of or for any Subsidiary, notwithstanding any
reference herein to any period, the income, deficit or expense included in
such calculation with respect to such Subsidiary shall be included only from
the date such Subsidiary became a Subsidiary.
ARTICLE 2
THE AGGREGATE COMMITMENTS
2.1 The Closing Date Purchase Commitment. Subject to the terms and
conditions set forth in this Agreement, the Purchaser hereby agrees to
purchase from the Company on the Closing Date, Class A Common Stock, having
the terms set forth on Exhibit G hereto, and having an aggregate purchase
price of $3,500,000 at a price per share equal to the Issuance Price. The
number of shares of Class A Common Stock to be issued on the Closing Date will
be $3,500,000 divided by the Issuance Price, unless the Issuance Price is the
Net Book Value Per Share of Common Stock. In such event, the number of shares
issued on the Closing Date will be 350,000 based upon an estimated Issuance
Price of $10.00 per share and such number of shares shall be subject to
adjustment after the Closing Date in accordance with the following procedures:
(a) Within 30 days after the Closing Date, the Company shall furnish
to Purchaser (a) the balance sheet of the Company as of the Closing Date
("Closing Balance Sheet"), showing in reasonable detail the assets and
liabilities of the Company, accompanied by the report thereon of Ernst &
Young LLP stating that the Closing Balance Sheet has been prepared in
conformity with GAAP applied consistently with the principles used in
preparing the pro forma financial statements of the Company included in the
information furnished to the shareholders of Wellsford in connection with
Wellsford's distribution of the capital stock of the Company to the
shareholders of Wellsford, and (b) the Company's determination of Net Book
Value Per Share of Common Stock in accordance with this Agreement based upon
the Closing Balance Sheet.
(b) Purchaser shall have the right to object to the Company's
determination of the Net Book Value Per Share of Common Stock as not being
determined in accordance with this Agreement. If Purchaser does not object
to the Company's determination of the Net Book Value Per Share of Common
Stock within 15 days after delivery of the Closing Balance Sheet and such
determination to Purchaser (such period being referred to as the "Contest
Period"), then the Company's determination of the Net Book Value Per Share
of Common Stock shall be final, binding and conclusive on the parties. If
Purchaser objects to the Company's determination of Net Book Value Per Share
of Common Stock, it shall do so by notifying the Company thereof within the
Contest Period, which notice shall specify the grounds for such objection in
reasonable detail. The parties shall endeavor in good faith to resolve
promptly the matters to which Purchaser has objected. If the parties are
unable to resolve Purchaser's objections within ten (10) days after
Purchaser notified the Company of its objections, the Company shall engage
the Chicago, Illinois offices of Ernst & Young LLP (the "Independent
Accountants") to examine the calculation of the Net Book Value Per Share of
Common Stock in accordance with this Agreement. The Independent Accountants'
determination of the Net Book Value Per Share of Common Stock shall be
final, binding and conclusive on the parties.
(c) The fees of the Independent Accountants for making such
determination shall be borne by the parties in the proportion that the
difference between the ultimate determination of the Issuance Price by the
Independent Accountants and each party's position as to the Issuance Price
bears to each other. For example, if one party's position was that the
Issuance Price was $2.50 and the other party's was $3.00 and the Independent
Accounts' determination was $2.75, each party would bear 50% of the
Independent Accountants' fees.
(d) The actual number of shares of Class A Common Stock to be
purchased by Purchaser shall be $3,500,000 divided by the Issuance Price as
finally determined pursuant to clause (b) of this Section (the "Final
Number"). If the Final Number is more than 350,000 shares of Class A Common
Stock, within 10 days after the Issuance Price has been so finally
determined, the Company shall issue to Purchaser a certificate dated the
Closing Date evidencing the number of shares of Class A Common Stock equal
to the difference. If the Final Number is less than 350,000 shares of Class
A Common Stock, within 10 days after the Issuance Price has been so finally
determined, Purchaser shall surrender to the Company the certificate for
350,000 shares of Class A Common Stock issued to the Company on the Closing
Date in exchange for a new certificate, dated the Closing Date, evidencing
the Final Number of shares of Class A Common Stock.
(e) The Purchaser and the Company hereby agree that the Net Book Value
Per Share of Common Stock determined in accordance with this Section 2.1
shall be the Net Book Value Per Share of Common Stock for all purposes of
the Articles Supplementary Classifying the Preferred Stock attached hereto
as Exhibit A.
2.2 Payment of the Closing Date Purchase Commitment. Subject to
fulfillment of the conditions precedent set forth in Section 4.1, on the
Closing Date, Purchaser shall pay $3,500,000 to the Company on the Closing
Date by wire transfer of immediately available funds to such account as has
been designated to Purchaser by the Company prior to the Closing Date.
2.3 Term Purchase Commitment.
(a) Each Purchase of Preferred Stock pursuant to the Term Purchase
Commitment shall be in a minimum aggregate purchase price of $1,000,000 and
in multiples of $500,000 in excess thereof.
(b) Subject to the fulfillment of the conditions precedent set forth
in Section 4.2, on each Term Closing Date during the Purchase Term,
Purchaser shall purchase the number of shares of Preferred Stock equal to
the dollar amount of the Purchase requested divided by the Purchase Price.
Notwithstanding anything to the contrary in this Agreement, the aggregate
dollar amount of Purchases pursuant to the Term Purchase Commitment shall
not exceed $25,000,000.
2.4 Notice of Purchase. The Company shall give the Purchaser written or
telecopy notice (each a "Purchase Notice") ten (10) days before a proposed
Purchase pursuant to the Term Purchase Commitment in the event of a Purchase
in the amount of $5,000,000 or less, and twenty (20) days before a proposed
Purchase pursuant to the Term Purchase Commitment in the event of a Purchase
in an amount greater than $5,000,000. Each such notice shall be in
substantially the form of Exhibit B. Such notice shall be irrevocable if not
revoked within five (5) days after delivery and shall in each case refer to
this Agreement and specify a date (the "Term Closing Date") on which the
Purchase shall occur.
2.5 Certificates.
(a) The Company shall deliver to the Purchaser on the Closing Date a
certificate or certificates representing 350,000 shares of Class A Common
Stock, representing the estimated number of shares of Class A Common Stock
purchased by the Purchaser on the Closing Date.
(b) The Company shall deliver to the Purchaser on each Term Closing
Date a certificate or certificates representing the aggregate number of
shares of Preferred Stock purchased by the Purchaser on such Term Closing
Date.
2.6 Right of Purchaser to Purchase Uncalled Term Purchase Commitment. If
at the end of the Purchase Term Purchaser has purchased Preferred Stock having
an aggregate purchase price of less than $25,000,000 (the excess of
$25,000,000 over the aggregate purchase price paid by Purchaser for Preferred
Stock during the Purchase Term being referred to herein as the "Uncalled
Commitment"), then provided that Purchaser is not in breach of its obligation
to purchase Preferred Stock pursuant to a Purchase Notice delivered during the
Purchase Term, Purchaser shall have the right to purchase up to that number of
shares of Preferred Stock equal to the Uncalled Commitment divided by the
Purchase Price, exercisable at any time during the thirty (30) days following
the expiration of the Purchase Term by giving the Company written notice
("Subscription Notice") stating that Purchaser has elected to purchase shares
of Preferred Stock pursuant to this Section and specifying the number of
shares to be purchased (which may not exceed the Uncalled Commitment divided
by the Purchase Price). Such notice shall be irrevocable.
The closing of the purchase pursuant to the Subscription Notice shall take
place five (5) business days after the date the Subscription Notice was
delivered to the Company (the "Subscription Closing Date"). On the
Subscription Closing Date, Purchaser shall pay the aggregate Purchase Price
for the number of shares of Preferred Stock which Purchaser elected to
purchase pursuant to the Subscription Notice by wire transfer to such account
as has been designated to Purchaser by the Company prior to the Subscription
Closing Date, and the Company shall deliver to Purchaser (a) a certificate or
certificates representing the aggregate number of shares of Preferred Stock
purchased by Purchaser on the Subscription Closing Date; and (b) an opinion of
counsel to the Company licensed to practice in Maryland and reasonably
satisfactory to Purchaser dated the Subscription Closing Date in form and
substance reasonably satisfactory to Purchaser stating that the shares of
Preferred Stock issued to Purchaser on the Subscription Closing Date are duly
and validly issued, fully paid and nonassessable.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Purchaser that:
3.1 Organization; Powers. The Company and each of the Subsidiaries (a) is
a an entity duly organized, validly existing and in good standing under the
laws of the 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 by the Company and the Subsidiaries,
(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
Material Adverse Effect, and (d) in the case of the Company, has the corporate
power and authority to execute, deliver and perform its obligations under this
Agreement (including, without limitation, the offering, issuance, sale and
delivery to the Purchaser of the shares of Preferred Stock and the issuance of
Common Stock upon conversion of any of the shares of Preferred Stock). The
Charter and Bylaws of the Company as amended to date, which are attached as
Exhibit C hereto, are complete and correct as of the date hereof and contain
the provisions attached hereto as Exhibit F.
3.2 Authorization. The execution, delivery and performance by the Company
of this Agreement and the transactions contemplated hereby, (including,
without limitation, the offering, issuance, sale and delivery to the Purchaser
of the shares of Preferred Stock, Class A Common Stock and the issuance of
Common Stock upon conversion of any shares of Preferred Stock or Class A
Common Stock), (a) have been duly authorized by all requisite corporate and,
if required, stockholder action and (b) will not (i) violate (A) any provision
of law, statute, rule or regulation to which the Company or any of its
Affiliates shall be subject, or of the certificate or articles of
incorporation or other constitutive documents or bylaws of the Company or any
Subsidiary, (B) any order of any Governmental Authority or (C) any provision
of any indenture or other material agreement or instrument to which the
Company or any Subsidiary 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 Lien upon or with respect to any property or
assets now owned or hereafter acquired by the Company or any Subsidiary.
3.3 The Capital Stock. Pursuant to the Charter of the Company, the Company
is authorized to issue 2,000,000 shares of Preferred Stock, none of which have
been issued as of the date hereof, 350,000 shares of Class A Common Stock,
339,806 of which have been issued as of the date hereof, and 17,650,000 shares
of Common Stock, 4,596,313 of which have been issued as of the date hereof.
Except as disclosed on Schedule 3.3 hereto, 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.
GAR Enforceability. This Agreement has been duly executed and delivered by
the Company and constitutes a legal, valid and binding obligation of the
Company enforceable against the Company 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.
3.5 Governmental Approvals. Except as set forth in Schedule 3.5, the
Company and the Company's Affiliates are not required to obtain any consent or
approval of, registration or filing with or any other action by any
Governmental Authority in connection with the execution, delivery and
performance of this Agreement, except such as have been made or obtained and
are in full force and effect.
3.6 Financial Statements. Any financial statements delivered pursuant to
Section 5.4 hereof (collectively, the "Financial Statements") have been
prepared in accordance with GAAP, and fairly present the financial condition
of the Company and its Subsidiaries as of the dates shown and the results of
their operations for the periods indicated.
3.7 Title to Properties; Default Under Agreements.
(a) Each of the Company and the Subsidiaries has good and valid title
to, or valid leasehold interests in, all its material properties and assets,
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties
and assets for their intended purposes.
(b) Each of the Company and the Subsidiaries has complied with all
material obligations under all material agreements to which it is a party
and all such agreements are in full force and effect and the Company is not
in default under any of such agreements, except for defaults that would not
be likely, individually or in the aggregate, to result in a Material Adverse
Effect.
3.8 Subsidiaries. All Subsidiaries as of the date of this Agreement are
listed on Schedule 3.8 hereto. Except as set forth on Schedule 3.8 hereto, as
of the date of this Agreement, all the issued and outstanding capital stock of
each Subsidiary is owned by the Company or any other Subsidiary. There are no
other Persons in which the Company has an ownership interest or a right to
acquire an ownership interest as of the date of this Agreement.
3.9 Litigation; Compliance with Laws.
(a) Except as set forth in Schedule 3.9, there are not any actions,
suits or proceedings at law or in equity or by or before any Governmental
Authority now pending or, to the actual knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any business, property
or rights of any such Person (i) which involve this Agreement or (ii) as to
which there is a likelihood of an adverse determination and which, if
adversely determined, would be likely, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) Neither the Company nor any of the Subsidiaries is in violation of
any law, rule or regulation, or in default with respect to any judgment,
writ, injunction or decree of any Governmental Authority, where such
violation or default would be likely to result in a Material Adverse Effect.
3.10 Agreements. Neither the Company nor any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement
or instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default would be likely to result in a
Material Adverse Effect.
3.11 Investment Company Act; Public Utility Holding Company Act. Neither
the Company nor any Subsidiary is (a) an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
3.12 Tax Returns. The Company and each of the Subsidiaries has filed or
caused to be filed all Federal, state and local tax returns required to have
been filed by it and has paid or caused to be paid all taxes shown to be due
and payable on such returns or on any assessments received by it, except taxes
that are being contested in good faith by appropriate proceedings and for
which the Company or such Subsidiary, as the case may be, shall have set aside
on its books adequate reserves.
3.13 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.
3.14 Employee Benefit Plans. Each of the Company and each ERISA Affiliate
is in compliance in all material respects with the applicable provisions of
ERISA and the regulations and published interpretations thereunder.
3.15 Environmental and Safety Matters. Except as set forth in
Schedule 3.15, each of the Company and the Subsidiaries has complied with all
Federal, state, local and other statutes, ordinances, orders, judgments,
rulings and regulations relating to environmental pollution or to
environmental regulation or control or to employee health or safety, except
for instances of non-compliance that, individually or in the aggregate, are
not reasonably likely to result in a Material Adverse Effect. Except as set
forth in Schedule 3.15, neither the Company nor any Subsidiary has received
written notices of any material failure so to comply, which, if adversely
determined, individually or in the aggregate, would be reasonably likely to
result in a Material Adverse Effect. Except as set forth in Schedule 3.15,
the Company and the Subsidiaries do not generate, treat, store, transport,
dispose of or release at any facility owned or operated by any of them any
hazardous wastes, hazardous substances, hazardous materials, toxic substances,
toxic pollutants or substances similarly denominated, as those terms or
similar terms are used in the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Toxic Substance Control Act, the
Clean Air Act, the Clean Water Act or any other applicable law relating to
environmental pollution in violation of any law or any regulations promulgated
pursuant thereto, except for violations that, individually or in the
aggregate, would not be reasonably likely to result in a Material Adverse
Effect. Except as set forth in Schedule 3.15, the Company is aware of no
events, conditions or circumstances involving environmental pollution or
contamination or employee health or safety that could reasonably be expected
to result in liability on the part of the Company or any Subsidiary, except
for such events, conditions or circumstances that, individually or in the
aggregate, would not be reasonably likely to result in a Material Adverse
Effect.
ARTICLE 4
CONDITIONS PRECEDENT
The obligations of the Purchaser to purchase any shares of Preferred Stock
and Class A Common Stock (each of such events being called a "Purchase") on
and after the Closing Date, are subject to the condition precedent that the
Spin-Off and Merger (as defined in the Merger Agreement) shall have occurred
and to the satisfaction of all of the applicable conditions set forth below:
4.1 First Purchase. On the Closing Date:
(a) The Purchaser shall have received from the Company the following
documents:
(i) a good standing certificate of the Company issued by the
Secretary of State of Maryland and the Secretary of State of each state
in which the Company owns any property, except for any state in which
the failure of the Company to be in good standing will not have a
Material Adverse Effect;
(ii) Charter of the Company, and all amendments and supplements
thereto, certified by the Maryland Secretary of State;
(iii) Bylaws of the Company, as amended, certified as true and
correct by a Responsible Officer of the Company; and
(iv) the resolutions adopted by the Board of Directors of the
Company authorizing its execution, delivery and performance of its
obligations under this Agreement, certified by the Secretary of the
Company.
(b) The Purchaser shall have received an opinion of Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxxxxx dated the Closing Date in form and substance reasonably
satisfactory to Purchaser addressing the matters set forth in Exhibit D
hereto.
(c) The Purchaser and the Company shall have entered into the
Registration Rights Agreement.
4.2 All Purchases. On the date of each Purchase:
(a) Except in connection with the Purchase on the Closing Date, the
Purchaser shall have received a Purchase Notice with respect to each such
other Purchase as required by Section 2.4.
(b) The representations and warranties set forth in Article 3 hereof
shall be true and correct in all material respects on and as of the date of
each Purchase with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to
an earlier date.
(c) The Company shall be in compliance with all the terms and
provisions set forth herein on its part to be observed or performed, and at
the time of and as a result of each Purchase no Potential Event of Default
or Event of Default shall have occurred and be continuing, other than an
event which can be completely cured by applying the proceeds of such
Purchase, in which case the Company covenants and agrees to apply the
proceeds of the requested Purchase to the extent required to effect such
cure.
(d) There shall not have occurred, since the date of this Agreement,
any change that has resulted in or could reasonably be expected to result in
a Material Adverse Effect other than an event which can be completely cured
by applying the proceeds of such Purchase, in which case the Company
covenants and agrees to apply the proceeds of the requested Purchase to the
extent required to effect such cure.
(e) Purchaser shall have received an opinion of counsel to the Company
licensed to practice in Maryland and reasonably satisfactory to Purchaser
dated the Term Closing Date in form and substance reasonably satisfactory to
Purchaser stating that the shares of Preferred Stock issued to Purchaser on
the Term Closing Date are duly and validly issued, fully paid and
nonassessable.
Each Purchase shall be deemed to constitute a representation and warranty by
the Company on the Closing Date or applicable Term Closing Date relating to
such Purchase as to the matters specified in paragraphs (b), (c) and (d) of
this Section 4.2.
ARTICLE 5
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Purchaser that so long as this
Agreement shall remain in effect, the Company will, and will cause each of the
Subsidiaries to, and the Purchaser will, where applicable:
5.1 Existence: Businesses and Properties.
(a) Keep in full force and effect its legal existence.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and
trade names material to the conduct of its business; comply in all material
respects with all applicable laws, rules, regulations and orders of any
Governmental Authority, whether now in effect or hereafter enacted; and at
all times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition
(reasonable wear and tear excepted) and from time to time make, or cause to
be made, all needful and proper repairs thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times, except in each case described in this Section 5.1(b) where the
failure to do so would not result in a Material Adverse Effect.
5.2 Insurance. Keep its material insurable real properties adequately
insured at all times by financially sound and reputable insurers; maintain
such other insurance, to such extent and against such risks, including fire
and other risks insured against by extended coverage and public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it as is customary with companies in the same
or similar businesses; and maintain such other insurance as may be required by
law.
5.3 Obligations and Taxes. Pay its material Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such Indebtedness, tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Company or the Subsidiary, as the case may be, shall have
set aside on its books adequate reserves with respect thereto.
5.4 Financial Statements, Reports, etc. Furnish to the Purchaser:
(a) as soon as available, but not later than 90 days (60 days for a
preliminary copy of such statements) after the end of each Fiscal Year, the
consolidated and consolidating balance sheets and statements of operations,
stockholders' equity and cash flows, showing the financial condition of the
Company and its consolidated subsidiaries as of the close of such Fiscal
Year and the results of its operations and the operations of such
subsidiaries during such year, all audited by independent public accountants
of recognized national standing and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to the
effect that such consolidated financial statements fairly present the
financial condition and results of operations of the Company on a
consolidated basis in accordance with GAAP consistently applied;
(b) as soon as available, but not later than 45 days (30 days for a
preliminary copy of such statements) after the end of each of the first
three fiscal quarters of each Fiscal Year, the consolidated and
consolidating balance sheets and statements of operations, stockholders'
equity and cash flows, showing the financial condition of the Company and
its consolidated subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such subsidiaries during
such fiscal quarter and the then elapsed portion of the Fiscal Year, all
certified by one of its Responsible Officers as fairly presenting the
financial condition and results of operations of the Company on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;
(c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate of the accounting firm (in the case of
paragraph (a) above) or Responsible Officer of the Company (in the case of
paragraph (b) above) certifying that no Event of Default or Potential Event
of Default has occurred or, if such an Event of Default or Potential Event
of Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto;
(d) within five (5) Business Days after the same become publicly
available, copies of all periodic and other reports, proxy statements and
other materials filed by the Company with the Securities and Exchange
Commission, or any governmental authority succeeding to any of or all the
functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(e) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Company or any
Subsidiary, or compliance with the terms of this Agreement, as the Purchaser
may reasonably request.
5.5 Litigation and Other Notices. Furnish to the Purchaser prompt written
notice of the following:
(a) any Event of Default or Potential Event of Default, specifying the
nature and extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority,
against the Company or any Affiliate of the Company which could reasonably
be anticipated to result in a Material Adverse Effect; and
(c) any other development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Effect.
5.6 ERISA. Comply in all material respects with the applicable provisions
of ERISA.
5.7 Maintaining Records; Access to Properties and Inspections. Maintain
all financial records in accordance with GAAP and so long as Purchaser is
obligated to purchase any shares of Preferred Stock pursuant to this
Agreement, permit any representatives designated by any Purchaser to visit and
inspect the financial records and the properties of the Company or any
Subsidiary at reasonable times during business hours and as often as requested
upon reasonable written notice, and permit any representatives designated by
the Purchaser to discuss the affairs, finances and condition of the Company or
any Subsidiary with the senior officers thereof and the independent
accountants therefor with prior written notice to and, if requested by
Company, participation of a Responsible Officer of the Company.
5.8 Use of Proceeds. The proceeds of any Purchase hereunder shall be used
by the Company for any proper corporate purpose.
5.9 Issuance of Preferred Stock and Class A Common Stock. The Company
shall issue Preferred Stock and Class A Common Stock solely to the Purchaser
pursuant to this Agreement and not to any other Person.
5.10 Closing Date Director. On the Closing Date, the Company agrees to
elect Xxxxxxx Xxxxxxx XX to the Board of Directors of the Company for a term
expiring in 1999, and Xx. Xxxxxxx shall be deemed to be the nominee for
election to the Board of Directors of the Company during such period for
purposes of Section B(2) of the Company's Articles Supplementary for Class A
Common Stock.
5.11 Nomination as Director; Appointment of Person to Attend and Observe
Meetings.
(a) During the period specified in Section B(2) of the Articles
Supplementary of the Company for Class A Common Stock, at each annual
meeting of shareholders of the Company at which the Board seat of the
nominee of Purchaser is up for election, the Purchaser agrees to nominate
Xxxxxxx Xxxxxxx XX for election to the Board of Directors of the Company, or
if Xxxxxxx Xxxxxxx XX is unable or unwilling to serve, such member of senior
management of the Purchaser ("Senior Officer Nominee") as Purchaser and the
Company shall mutually agree. If the Company and the Purchaser cannot agree
on such Senior Officer Nominee to be nominated at least thirty (30) days
prior to the date on which the proxy statement relating to such annual
meeting of shareholders is proposed by the Company to be mailed to the
shareholders of the Company, Purchaser shall provide written notice (the
"Nominee Designation Notice") at least twenty-five (25) days prior to the
proposed mailing date to the Company of Purchaser's proposed Senior Officer
Nominee to be nominated for election to the Board of Directors of the
Company and three (3) alternative Senior Officer Nominees. Within three (3)
days after the Company's receipt of such notice from the Purchaser, the
Company shall give Purchaser written notice of which of such four Senior
Officer Nominees the Company designates from the Purchaser's written list of
Senior Officer Nominees to be nominated for election to the Board of
Directors of the Company (the "Designated Senior Officer Nominee") and the
Purchaser shall nominate such Designated Senior Officer Nominee for election
to the Board of Directors of the Company. If the Company does not provide
the Purchaser with written notice of its Designated Senior Officer Nominee
within three (3) days after the Company's receipt of the Nominee Designation
Notice, the Purchaser may nominate the proposed Senior Officer Nominee of
its choice for election to the Board of Directors of the Company. The
Company agrees to solicit proxies for Xx. Xxxxxxx or such other Senior
Officer Nominee nominated for election to the Board of Directors of the
Company by the Purchaser pursuant to this Section 5.11 in the same manner as
the Company solicits proxies for all other nominees for election to the
Board of Directors of the Company.
(b) In the event Xx. Xxxxxxx (or such other person subsequently
nominated by the Purchaser for election to the Board of Directors of the
Company ("Purchaser Nominee")), is unable or unwilling to serve as a
director if elected by the shareholders of the Company or is no longer
employed by Purchaser during such time as such person is a director of the
Company, Xx. Xxxxxxx or such Purchaser Nominee shall resign as a director of
the Company and a member of senior management of Purchaser (determined in
the manner set forth below) shall have the right to attend and observe all
special and regular meetings and other formal or informal proceedings of the
Board of Directors of the Company to which all members of the Board have
been invited until the next annual meeting of shareholders of the Company.
In the event that the Purchaser Nominee is not elected to the Board of
Directors of the Company at any annual meeting of the shareholders of the
Company, such Purchaser Nominee or another member of senior management of
Purchaser (as determined in the manner set forth below) shall have the right
to attend and observe all special and regular meetings and other formal or
informal proceedings of the Board of Directors of the Company to which all
members of the Board have been invited until such time as a Purchaser
Nominee is elected to the Board of Directors of the Company by the
shareholders of the Company. In the event the Purchaser shall have a right
to cause a member of its senior management to attend and observe regular and
special meetings and other formal or informal proceedings of the Board of
Directors of the Company under this Section 5.11(b), the Purchaser shall
deliver written notice to the Company of the member of its senior management
it desires to attend and observe such meetings or informal proceedings (the
"Senior Officer Observer"). In the event the Purchaser and the Company
cannot agree upon the Senior Officer Observer within three (3) days after
delivery of such notice to the Company, Purchaser shall provide written
notice (the "Observer Designation Notice") to the Company of Purchaser's
proposed Senior Officer Observer and three (3) alternative Senior Officer
Observers. Within three (3) days after the Company's receipt of such notice
from the Purchaser, the Company shall deliver written notice to Purchaser of
which of such four Senior Officer Observers the Company designates from the
Purchaser's written list of Senior Officer Observers (the "Designated Senior
Officer Observer"). If the Company does not provide the Purchaser with
written notice of its Designated Senior Officer Observer within three (3)
days after the Company's receipt of the Observer Designation Notice, the
Purchaser may select the proposed Senior Officer Observer of its choice.
5.12 Election as Director.
(a) Upon the occurrence and continuation of an Event of Default, if
Xxxxxxx Xxxxxxx XX or such other Purchaser Nominee is not a member of the
Board of Directors of the Company, the Company agrees (i) to amend the
Bylaws of the Company to provide that the Board of Directors of the Company
shall consist of not less than eleven (11) directors; and (ii) that Section
5.12(b) hereof shall apply in lieu of Section 5.11 hereof.
(b) Upon the receipt by Purchaser of a ruling by the Internal Revenue
Service or an opinion of counsel satisfactory to the Purchaser, that the
right to elect the Purchaser Director will not cause EQR to lose its status
as a real estate investment trust under the Code Section 5.11 hereof shall
not apply and the Purchaser agrees to elect Xxxxxxx Xxxxxxx XX to the Board
of Directors of the Company as the Purchaser Director. In the event Xx.
Xxxxxxx (or such other person subsequently elected by the Purchaser to the
Board of Directors of the Company), is unable or unwilling to serve as a
director or is no longer employed by Purchaser, the Purchaser agrees to
elect such member of senior management of the Purchaser ("Senior Officer")
to the Board of Directors of the Company as Purchaser and the Company shall
mutually agree. If the Company and the Purchaser cannot agree on such Senior
Officer to be elected within five (5) days after the date on which the
office of the Purchaser Director becomes vacant, Purchaser shall provide
written notice (the "Designation Notice") to the Company of Purchaser's
proposed Senior Officer to be elected and three (3) alternative Senior
Officers. Within three (3) days after the Company's receipt of such notice
from the Purchaser, the Company shall give Purchaser written notice of which
of such four Senior Officers the Company designates from the Purchaser's
written list of Senior Officers to be elected to the Board of Directors of
the Company (the "Designated Senior Officer") and the Purchaser shall elect
such Designated Senior Officer as the Purchaser Director. If the Company
does not provide the Purchaser with written notice of its Designated Senior
Officer within three (3) days after the Company's receipt of the Designation
Notice, the Purchaser may elect its proposed Senior Officer as the Purchaser
Director. The Company agrees not to hold any meeting of the Board of
Directors or take any Board of Directors' action if the Purchaser Director
office is vacant; provided, however, this sentence shall not be applicable
if Purchaser has failed within five (5) Business Days of written notice from
the Company that it proposes to hold a Board of Directors meeting or have
the Board of Directors otherwise act to provide the Company with the
Designation Notice. Notwithstanding the foregoing, if an Event of Default
has occurred, Purchaser may elect any person it chooses to serve as the
Purchaser Director and shall not be required to comply with the procedures
set forth in this Section.
5.13 Voting of Stock. So long as any shares of Preferred Stock, Class A
Common Stock or Common Stock are owned by Purchaser and any of its Affiliates
during the period ten (10) years from the Closing Date, the Company shall have
the right to direct the voting of all of such shares held by Purchaser and any
of its Affiliates, except as to the election of the Purchaser Director or any
matter relating to rights, preferences and privileges of the Preferred Stock
or Class A Common Stock. During such ten (10) year period, Purchaser agrees
to vote, and to cause its Affiliates to vote, such shares as directed by the
Company, except as to the election of the Purchaser Director or any matter
relating to rights, preferences and privileges of the Preferred Stock or Class
A Common Stock.
5.14 Sale of Common Stock or Preferred Stock. During the period beginning
on the Closing Date and ending ten (10) years from the Closing Date, Purchaser
shall first offer, in writing (a "Notice of Proposed Sale") to sell any shares
of Common Stock, Class A Common Stock, Preferred Stock or warrants to purchase
Common Stock owned by it to the Company prior to selling such shares to any
Person. The Notice of Proposed Sale shall specify the terms and conditions of
any sale. If the Company has not agreed, within twenty (20) days of receipt of
the Notice of Proposed Sale to purchase the shares of Common Stock, Class A
Common Stock or Preferred Stock offered by Purchaser upon the terms and
conditions set forth in the Notice of Proposed Sale, Purchaser shall have the
right to sell such shares offered to the Company to any other Person for a
period of ninety (90) days provided any sale is made on terms and conditions
no more favorable to such person than specified in the Notice of Proposed
Sale. If the Company agrees to purchase shares of Common Stock, Class A Common
Stock or Preferred Stock from the Purchaser, unless otherwise agreed by the
Company and the Purchaser, such purchase shall be consummated within twenty
(20) days of such agreement.
5.15 Confidentiality. The receipt of any information which is not publicly
available pursuant to Sections 5.4(e) and 5.7 shall be subject to such
reasonable confidentiality provisions (in writing signed by the Purchaser
and/or its representative effecting an inspection pursuant to Section 5.7 of
this Agreement, as the case may be) as the Company may reasonably require.
ARTICLE 6
EVENTS OF DEFAULT
6.1 Events of Default. The happening of any of the following events shall
be an "Event of Default" hereunder:
(a) any representation or warranty made in this Agreement, 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 due observance or performance by the
Company or any Subsidiary of any material covenant, condition or agreement
contained in this Agreement, or under the terms of the Articles
Supplementary Classifying the Preferred Stock attached hereto as Exhibit A,
after written notice of such default is given to the Company and such
default is not cured within fifteen (15) days of receipt of such notice;
(c) 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 the Company or any Subsidiary, or of a substantial
part of the property or assets of the Company or a Subsidiary, 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 the Company or any
Subsidiary or for a substantial part of the property or assets of the
Company or a Subsidiary or (iii) the winding-up or liquidation of the
Company or any Subsidiary; 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;
(d) the Company or any Subsidiary 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) apply for
or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any
Subsidiary or for a substantial part of the property or assets of the
Company or any Subsidiary, (iii) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (iv) make
a general assignment for the benefit of creditors, (v) become unable, admit
in writing its inability or fail generally to pay its debts as they become
due or (vi) take any action for the purpose of effecting any of the
foregoing;
(e) one or more judgments for the payment of money in an aggregate
amount in excess of $250,000 shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall remain 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 the Company or any Subsidiary to enforce any such judgment
which shall not be effectively stayed within 30 days;
(f) any material breach of any obligation under ERISA or any plan
under ERISA or any liability under ERISA in an amount exceeding $250,000,
which is not discharged within 60 days after the Company becomes aware of
same;
(g) there shall have occurred a Change in Control with respect to the
Company;
(h) there shall have occurred an Event of Default as defined in clause
(i) of the definition of an "Event of Default" in the Articles Supplementary
Classifying the Preferred Stock attached hereto as Exhibit A; or
(i) There shall have occurred a change that has resulted or could
reasonably be expected to result in a Material Adverse Effect.
6.2 Remedies. Upon the occurrence of an Event of Default described in
Article 6, all obligations of the Purchaser to purchase any shares of
Preferred Stock hereunder shall automatically terminate unless the Purchase by
the Purchaser of shares of Preferred Stock pursuant to a Purchase Notice
received by Purchaser would cure such Event of Default (in which case the
Company covenants to apply the proceeds of the sale of such Preferred Stock to
the extent required to effect such cure), and (with respect to Events of
Default described in Section 6.1(c), (d), and (h)), the Purchaser shall have
the right to have the Company redeem the outstanding Preferred Stock upon the
terms and conditions set forth in the Articles Supplementary Classifying the
Preferred Stock attached hereto as Exhibit A. Notwithstanding the foregoing,
the occurrence of an Event of Default shall not be considered an Event of
Default for purposes of any Section of this Agreement if the Company, within
five (5) days of the occurrence of such Event of Default, delivers to
Purchaser a Purchase Notice and the proceeds of such related Purchase will
completely cure such Event of Default, in which case Purchaser shall use such
proceeds to the extent required to effect such cure.
ARTICLE 7
MISCELLANEOUS
7.1 Termination of the Agreement. Unless otherwise agreed by each of the
parties to this Agreement, if the Merger Agreement shall have been terminated,
all obligations of the Purchaser under this Agreement shall automatically
terminate at such time without notice to the Company. The Company shall have
the right at any time to terminate Purchaser's obligation to purchase any
additional Preferred Stock by giving notice thereof to Purchaser. Upon the
giving of such notice (which shall be irrevocable), Purchaser shall be
relieved of its commitment to purchase any Preferred Stock from the Company.
The termination of such commitment shall not relieve the parties of their
respective obligations under Sections 5.10, 5.11 and 5.12 of this Agreement.
7.2 Securities Law Matters. The Purchaser acknowledges and understands
that:
(a) The Purchaser has been furnished with and has carefully reviewed
the information relating to the Company set forth in the Equity Residential
Properties Trust and Wellsford Residential Property Trust Joint Proxy
Statement/Equity Residential Properties Trust Prospectus/Wellsford Real
Properties, Inc. Information Statement, dated April 25, 1997.
(b) The Purchaser has been afforded full and complete access to all
information and other materials relating to the Company and its affiliates,
and the properties and financial condition of the foregoing, and any other
matters relating to the Preferred Stock, Class A Common Stock, Common Stock
and Warrants of the Company which the Purchaser has requested, or deems
necessary in evaluating the merits and risks of acquiring the Preferred
Stock, Class A Common Stock, Common Stock and Warrants, and has been
afforded the opportunity to obtain any additional information necessary to
verify the accuracy of any representations or information set forth in the
Information.
(c) The Purchaser has had the opportunity to have answered any
questions concerning the financial condition or business or other
information with respect to the Company and its affiliates and the business,
properties and financial condition of the foregoing or with respect to the
merits and risks of an acquisition of the Preferred Stock, Class A Common
Stock, Common Stock and Warrants, and the undersigned has received complete
and satisfactory answers to all such questions.
(d) The Purchaser has not relied upon any information or
representation not contained in the Information. Neither the Company nor any
of its agents nor anyone purporting to act on their behalf have made any
representation to the undersigned with respect to any tax or economic
benefits to be derived from an investment in the Preferred Stock, Class A
Common Stock, Common Stock and Warrants. The Purchaser is relying solely
upon its own knowledge and upon the advice of its advisors with respect to
the tax, economic and other aspects of an investment in the Preferred Stock,
Class A Common Stock, Common Stock and Warrants.
(e) The Purchaser has carefully reviewed and understands the risks of,
and other considerations relating to, the acquisition of the Preferred
Stock, Class A Common Stock, Common Stock and Warrants and an investment in
the Company.
(f) An owner of Preferred Stock, Class A Common Stock, Common Stock
and Warrants must bear the economic risk of ownership thereof for an
indefinite period of time since purchase of Preferred Stock, Class A Common
Stock, Common Stock and Warrants involves the purchase of securities that
have not been registered under the Securities Act of 1933, as amended, and
therefore cannot be Transferred (as defined below) except as provided below.
(g) No federal or state agency has passed upon the Preferred Stock,
Class A Common Stock, Common Stock or Warrants or made any finding or
determination as to the fairness of an investment in the Preferred Stock,
Class A Common Stock, Common Stock or Warrants.
(h) Purchaser hereby covenants and agrees that the Preferred Stock,
Class A Common Stock, Common Stock and Warrants, including any Common Stock
issued upon conversion of the Preferred Stock or Class A Common Stock, or
any portion thereof, or upon exercise of the Warrants, may not be pledged,
encumbered, sold, transferred or otherwise disposed of (each a "Transfer")
except (a) pursuant to an effective registration statement under the
Securities Act of 1993, as amended (the "Act") or (b) pursuant to an
exemption from such registration pursuant to the Act and in compliance with
state securities and blue sky laws and an opinion of counsel provided to the
Company to the effect of this subparagraph (b), which opinion shall be in
form and substance reasonably satisfactory to the Company. The Purchaser
agrees that any Transfer of the Preferred Stock, Class A Common Stock,
Common Stock or Warrants in violation of this Agreement will be null and
void and the certificates representing the Preferred Stock, Class A Common
Stock, Common Stock and Warrants will bear an appropriate restrictive
legend.
(i) The Purchaser represents and warrants to the Company that:
(i) It is able to bear the economic risk of the acquisition of
the Preferred Stock, Class A Common Stock, Common Stock and Warrants.
(ii) It is an "accredited investor" as defined in Regulation D
promulgated under the Act.
(iii) The representatives of the Purchaser have been furnished
with and have carefully reviewed the Information. Such representatives
have such knowledge and experience in financial, business, securities
and real estate matters that they are capable of evaluating the merits
and risks of the acquisition of the Preferred Stock, Class A Common
Stock, Common Stock and Warrants and of making an informed investment
decision.
(iv) The Purchaser is acquiring and will acquire the Preferred
Stock, Class A Common Stock, Common Stock and Warrants, including any
Common Stock issuable upon conversion of the Preferred Stock or Class A
Common Stock or upon exercise of the Warrants for its own account, as
principal, for investment and not with a view to a Transfer thereof.
7.3 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 the Company: 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: Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP
1290 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) if to the Purchaser: 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.
Telecopy No.: (000) 000-0000
and: Xxxxxxx & Xxxxx
000 X. XxXxxxx Xx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Such notice will be deemed given when received.
7.4 Survival of Agreement. All covenants, agreements, representations and
warranties made by the Company 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 the Purchaser and
shall survive the date of this Agreement, regardless of any investigation made
by the Purchaser or on its behalf, and shall continue in full force and effect
so long as the Aggregate Purchase Commitment has not been fulfilled or
terminated.
7.5 Binding Effect. This Agreement shall become effective when it shall
have been executed by the Company and the Purchaser.
7.6 Assignment. Neither the Company nor the Purchaser shall have the right
to assign its rights hereunder or any interest herein; provided, however, the
foregoing provision shall not limit the Purchaser's right to sell, transfer or
assign any shares of Common Stock, Class A Common Stock or Preferred Stock
owned by it subject to the provisions of Section 5.12 of this Agreement and
applicable securities laws.
7.7 Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF MARYLAND.
7.8 Waivers; Amendment.
(a) No failure or delay of the Purchaser 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 the Purchaser 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 the
Company 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.
Unless otherwise specifically required, no notice or demand on the Company
in any case shall entitle the Company 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 the Company and the Purchaser.
7.9 Entire Agreement. This Agreement, including the exhibits and schedules
thereto, constitute 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 any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
7.10 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.
7.11 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.
7.12 Headings. Article and Section headings and the Table of Contents 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.
7.13 Jurisdiction; Consent to Service of Process.
(a) EACH OF THE PURCHASER AND THE COMPANY 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 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 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 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.
IN WITNESS WHEREOF, the Company and the Purchaser have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
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
WELLSFORD REAL PROPERTIES, INC.
By:/s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
EXHIBIT A
See Exhibit 3.3 to this Registration Statement
EXHIBIT B
FORM OF NOTICE OF DRAW
TO: ERP OPERATING LIMITED PARTNERSHIP
-------------------------
-------------------------
Attention: --------------------
Telephone: (---) --------------
Telecopy: (---) -------------------
Pursuant to Section 4.2 of that certain Common Stock and Preferred Stock
Purchase Agreement (the "Agreement") dated as of ------------, 1997 by and
among WELLSFORD REAL PROPERTIES, INC., a Maryland corporation (the "Company")
and ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser"), this notice represents the Company's notice to Purchaser to
cause Purchaser to purchase --------- shares of Preferred Stock pursuant to
the Purchaser's Term Purchase Commitment on ---------------, 199-- (the "Term
Closing Date"). The aggregate purchase price of such Purchase shall be $------
.
The Company hereby certifies as follows:
(i) the representations and warranties as set forth in
Article 3 (except to the extent that such statements expressly are
made only as of an earlier date) of the Agreement are and shall be
true and correct in all material respects on and as of the date
hereof and the Term Closing Date specified herein; and
(ii) the Company has and shall have performed, or shall have
caused to be performed, in all material respects all agreements
and satisfied all conditions set forth in Section 4.2 of the
Agreement.
Unless otherwise defined herein, terms used herein shall have the
meanings in the Agreement.
Dated: --------------, 199--
WELLSFORD REAL PROPERTIES, INC.
By:---------------------------------
Name:---------------------------
Title:--------------------------
EXHIBIT C
See Exhibits 3.1 and 3.4 to this Registration Statement.
EXHIBIT D
1. The Company is a corporation
duly organized and existing and in good standing under the laws of the State
of Maryland and has the corporate power to own its properties and to carry on
its business as presently conducted by it.
2. The Company has the requisite
corporate power and authority to execute, deliver and perform the obligations
set forth in the Agreement and the Registration Rights Agreement, each of
which has been duly authorized by all necessary corporate action, and the
execution and performance of which will not conflict with, or result in a
breach of the Company's Charter or Bylaws or, to the best of our knowledge and
belief without any duty of inquiry, any order, writ, injunction or decree of
any court or governmental authority, or any of the material terms, conditions
or provisions of any agreement or instrument to which the Company is a party
or by which the Company is bound.
3. The Agreement and the
Registration Rights Agreement have been duly executed and delivered by a duly
authorized officer of the Company and constitute the valid and binding
obligations of the Company, enforceable in accordance with their respective
terms. [BANKRUPTCY EXCEPTION]
4. The Class A Common Stock issued
to Purchaser on the date of this opinion pursuant to the terms of the
Agreement shall be duly and validly issued, fully paid and nonassessable.
5. The Preferred Stock issuable
pursuant to the terms of the Agreement has been duly and validly reserved for
issuance and, upon issuance in accordance with the terms of the Agreement,
shall be duly and validly issued, fully paid and nonassessable.
6. The Common Stock issuable upon
conversion of the Class A Common Stock and Preferred Stock and upon exercise
of the Warrants has been duly and validly reserved for issuance and, upon
issuance in accordance with the terms of the Company's Charter and the
Articles Supplementary, shall be duly and validly issued, fully paid and
nonassessable.
EXHIBIT E
See Exhibit 10.27 to this Registration Statement
EXHIBIT F
See Exhibit 3.2 to this Registration Statement
SCHEDULE 3.3
CAPITAL STOCK
1. Options being assumed by the
Company pursuant to the Contribution and Distribution Agreement, dated as of
the date hereof, between the Company and Wellsford Residential Property Trust.
2. Options described in the Equity
Residential Properties Trust and Wellsford Residential Property Trust Joint
Proxy Statement/Equity Residential Properties Trust Prospectus/ Wellsford Real
Properties, Inc. Information Statement, dated April 25, 1997, under the
heading "Management of WRP Newco--Compensation of Directors."
3. Options issued to lower level
employees of the Company to purchase 12,000 shares of Common Stock in the
aggregate.
4. The shares of Common Stock to
be issued pursuant to purchase agreements to be executed on the date hereof in
connection with the Company's private placement of shares of Common Stock.
5. Shares of Common Stock issuable
under the Warrant issued to Purchaser on the date hereof.
SCHEDULE 3.5
GOVERNMENTAL APPROVALS
Appropriate blue sky filings, if any.
SCHEDULE 3.8
SUBSIDIARIES
Wellsford Chatham Corp.
Wellsford Xxxxx Corp.
Wellsford Greenbrook Corp.
Wellsford Park Highlands Corp.
Park at Highlands, L.L.C.
Red Canyon at Polomino Park L.L.C.
North American Medical Research Corp.
SCHEDULE 3.9
LITIGATION; COMPLIANCE WITH LAWS
None
SCHEDULE 3.15
ENVIRONMENTAL AND SAFETY MATTERS
Spray-on asbestos fireproofing is located at the Serpentine Building (part of
the Point View Complex).
