WHWEL REAL ESTATE LIMITED PARTNERSHIP
85 Broad Street
New York, New York 10004
July 16, 1998
Wellsford Real Properties, Inc.
610 Fifth Avenue
New York, New York 10020
Ladies and Gentlemen:
We refer to the Limited Liability Company Operating Agreement (the
"LLC Agreement") of Wellsford/Whitehall Properties II, L.L.C.
("Wellsford/Whitehall II") dated as of the date hereof, among Wellsford
Commercial Properties Trust ("WCPT"), WHWEL Real Estate Limited Partnership
("Whitehall") and the Saracen Members. Capitalized terms used and not
defined herein shall have the meanings set forth in the LLC Agreement.
This letter agreement will confirm the agreement of Wellsford Real
Properties, Inc. ("WRP") and Whitehall regarding warrants issued to Whitehall
by WRP. It is hereby agreed by WRP that, within twenty (20) Business Days
after Whitehall has delivered a written request to WRP, WRP will exchange
shares of WRP Common Stock for Excess Membership Units (as defined below)
then held by Whitehall or, at WRP's election, all or part of such Excess
Membership Units shall be exchanged for cash at the fair market value of the
applicable number of shares of WRP Common Stock as determined below. "Excess
Membership Units" shall mean the Membership Units received by Whitehall in
exchange for Capital Contributions made to Wellsford/Whitehall II by
Whitehall in excess of $50,000,000 up to $75,000,000. The number of shares
of WRP Common Stock issued to Whitehall in exchange for each Excess
Membership Unit shall be equal to the quotient of (i) the Membership Unit
Purchase Price (as defined below) divided by (ii) the Closing Price (as
defined in the Warrant Agreement) as of the Trading Day (as defined in the
Warrant Agreement) immediately prior to the date the written request
described above is delivered to WRP. For purposes of this letter agreement
"WRP Common Stock" shall mean the common stock, par value $.01 per share, of
WRP and any other stock of WRP into which such common stock may be converted
or reclassified (other than stock of the Company into which unissued Common
Stock has been reclassified) or that may be issued in resect of, in exchange
for, or in substitution of, such common stock by reason of any stock splits,
stock dividends, distributions, mergers, consolidations, recapitalizations or
other like events. For purposes of this letter agreement, "Membership Unit
Purchase Price" shall mean the aggregate purchase price paid for all Excess
Membership Units held by Whitehall on the date of determination divided by
the number of Excess Membership Units held by Whitehall on such date.
This letter agreement and all rights arising hereunder shall be
governed by the internal laws of the State of New York.
This letter agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly reflects our understanding, please
confirm your acceptance by executing the enclosed counterpart of this letter
agreement and return it to the undersigned, whereupon it will become a
binding agreement between the parties hereto in accordance with its terms.
Very truly yours.
WHWEL REAL ESTATE LIMITED
PARTNERSHIP
By: WHATR Gen-Par, Inc.
By:/s/ Alan S. Kava
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Name: Alan S. Kava
Title: Vice President
Acknowledged and agreed
as of the date first above written:
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Gregory F. Hughes
-----------------------
Name: Gregory F. Hughes
Title: CFO