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Sonterra Agreement
between
ERP OPERATING LIMITED PARTNERSHIP
and
WELLSFORD REAL PROPERTIES, INC.
Dated as of May 30, 1997
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SONTERRA AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of May 30,
1997 by and between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
partnership ("ERQ OP"), and WELLSFORD REAL PROPERTIES, INC., a Maryland
corporation ("Newco").
A. Newco has been formed as a wholly owned subsidiary of Wellsford
Residential Property Trust, a Maryland real estate investment trust ("WRPT"),
pursuant to the Contribution Agreement dated as of May 30, 1997 (the
"Contribution Agreement") referred to in that certain Agreement and Plan of
Merger dated as of January 16, 1997 (the "Merger Agreement") by and between
Equity Residential Properties Trust, a Maryland real estate investment trust
that is the general partner of EQR OP ("EQR"), and WRPT.
B. Pursuant to that certain Option Agreement dated as of June 28, 1996
(the "Option Agreement") by and between Specified Properties VIII, L.P., a
Texas limited partnership ("Specified"), and WRPT, a copy of which Option
Agreement is attached hereto as Exhibit A and made a part hereof, Specified
granted WRPT an option to purchase the land (the "Land") which is more fully
described on Exhibit B attached hereto and made a part hereof, together with
the buildings and improvements thereon erected, known as Sonterra at Xxxxxxxx
Centre, an apartment property located in the City of Tucson, County of Pima,
State of Arizona (the "Improvements") (the Land and the Improvements are
collectively referred to herein as the "Premises"), upon the terms and
conditions described in the Option Agreement.
C. Concurrently with the execution of the Option Agreement, WRPT and
Specified entered into that certain Loan Agreement dated as of June 28, 1996
(the "Loan Agreement") pursuant to which WRPT made a loan to Specified in the
original principal amount of $17,800,000.00, which loan is secured by the
Premises.
D. Pursuant to the Contribution Agreement, WRPT has assigned to Newco,
among other things, all of WRPT's rights and obligations under the Option
Agreement.
E. EQR OP and Newco are entering this Agreement pursuant to the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
(1) Assignment of Option. In the event that Newco has decided not to
exercise its option under the Option Agreement to purchase the Premises and
Newco has received an offer (an "Offer") from a prospective assignee, other
than Newco or the Surviving Trust (as defined in the Merger Agreement) or any
affiliate of either of such parties (each, an "Acceptable Assignee"), to
purchase all of Newco's rights and obligations under the Option Agreement,
Newco shall first offer in writing (a "Notice of Proposed Assignment") to
assign the Option Agreement to EQR OP. Any such assignment of the Option
Agreement to EQR OP shall be on the same terms and conditions as the Offer,
which terms and conditions shall be set forth in the Notice of Proposed
Assignment. If EQR OP does not provide Newco with written notice of its
intention to purchase Newco's rights and obligations under the Option
Agreement on or before the earlier of the date when notice of exercise of the
option must be given within thirty (30) days after the Notice of Proposed
Assignment, then Newco shall have the right to assign all of its rights and
obligations under the Option Agreement to such prospective assignee in
accordance with the terms of the Offer. If Newco fails to consummate such
assignment within one hundred fifty (150) days following EQR OP's rejection of
the offer in the Notice of Proposed Assignment, then the Option Agreement
shall again be subject to the restrictions of this Paragraph 1.
(2) Lapse of Option. In the event that Newco has decided not to exercise
its option to the purchase the Premises under the Option Agreement and Newco
has not received an offer to purchase all of Newco's rights and obligations
under the Option Agreement within thirty (30) days prior to the last day for
giving notice of exercise of the expiration of the option, then Newco shall
give EQR OP thirty (30) days written notice of such expiration of the option.
Upon timely giving such notice, EQR OP shall have the right to require Newco
to immediately assign all of its rights and obligations under the Option
Agreement to ERQ OP for One Hundred and 00/100 Dollars ($100.00).
(3) Exercise of Option. In the event that Newco, or the Acceptable
Assignee then holding the option under the Option Agreement, shall elect to
exercise its right under the Option Agreement to purchase the Premises, Newco
(i) as the exercising party, shall cause title to the Premises to be acquired
by Newco or a subsidiary or affiliate of Newco only or (ii) shall cause the
Acceptable Assignee exercising such option to cause the Premises to be so
titled. Newco shall give EQR OP written notice of the acquisition of the
Premises pursuant to the terms of the Option Agreement within ten (10) days
after acquisition. For the purposes hereof, an "affiliate" of Newco shall be
any entity controlled by, controlling or under common control with Newco.
(4) Right of First Offer Agreement. Promptly following (a) the acquisition
of the Premises by Newco or a subsidiary of Newco in accordance with Paragraph
3 hereof or (b) the taking of title to the Premises by Newco or a subsidiary
or affiliate of Newco by virtue of a foreclosure on the Premises, or the
taking of a deed in lieu of foreclosure on the Premises, based upon a default
under the Loan Agreement, Newco shall enter, or shall cause such subsidiary,
as titleholder to the Premises, to enter into, without further consideration,
a Right of First/Last Offer Agreement (the "Right of First/Last Offer
Agreement"), which shall be prepared by counsel to EQR OP and shall be in form
and substance satisfactory to EQR OP in the exercise of EQR OP's commercially
reasonable judgment, which agreement shall be in substantially the same form
as the Right of First/Last Offer Agreements entered into or required to be
entered into pursuant to Article 2 of that certain Agreement Regarding
Palomino Park of even date herewith.
(5) Memorandum. Upon execution of the Right of First/Last Offer Agreement,
Newco shall record, or shall cause the subsidiary of Newco holding title to
the Premises to record, a memorandum thereof against title to the Premises.
(6) 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:
(i) if to Newco: Wellsford Real Properties, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to: 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
(ii) if to EQR OP: 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 to: Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(7) Binding Effect. This Agreement shall become effective when it shall
have been executed by Newco and EQR OP, and thereafter shall be binding upon
and inure to the benefit of Newco, EQR OP and their respective successors and
assigns, except that Newco shall not have the right to assign its rights
hereunder or any interest herein without the prior consent of EQR OP.
(8) Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS.
(9) Waivers; Amendment.
(i) No failure or delay of EQR OP 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 EQR OP for a breach hereof 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
Newco therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No notice or demand on Newco in any case shall entitle Newco to any other or
further notice or demand in similar or other circumstances.
(ii) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by Newco and EQR OP.
(10) Entire Agreement. This Agreement, including any exhibits and schedules
hereto, constitutes the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect
to the subject matter hereof is superseded by this Agreement. Nothing in this
Agreement, expressed or implied, is intended to confer upon any party other
than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
(11) 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.
(12) 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.
(13) Headings. Article and Section headings used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
(14) Time is of the essence of this Agreement.
(15) Nothing in this Agreement shall require Newco to take any action that
would create any default under, or breach of any representations or covenants
under, the Option Agreement or the Loan Agreement or any documents relating to
either of the same.
(16) Jurisdiction; Consent to Service of Process.
(i) NEWCO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY ILLINOIS STATE
COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE CITY
OF CHICAGO OR THE CITY OF NEW YORK, AND ANY APPELLATE COURT THEREFROM, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
ILLINOIS OR NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
IN THE COURTS OF ANY JURISDICTION.
(ii) NEWCO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY ILLINOIS OR
NEW YORK STATE 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, EQR OP and Newco have caused this Agreement to be signed
by their respective officers hereunto duly authorized all as of the date first
written above.
ERQ OP:
ERP OPERATING LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Equity Residential Properties Trust, a Maryland
real estate investment trust and its general
partner
By:/s/ Xxxxx X. Xxxxxx
_________________________________________
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
NEWCO:
WELLSFORD REAL PROPERTIES, INC., a Maryland
corporation
By:/s/ Xxxxxx Xxxxxxxxx
______________________________________________
Name: Xxxxxx Xxxxxxxxx
Title: President
EXHIBIT A
OPTION AGREEMENT
See Exhibit 10.2 to this Registration Statement
EXHIBIT B
DESCRIPTION OF THE LAND
BLOCKS 19, 21, 22, 23 OF THE RESUBDIVISION OF XXXXXXXX CENTRE, PIMA COUNTY,
ARIZONA ACCORDING TO THE PLAT OF RECORD IN THE OFFICE OF THE PIMA COUNTY
RECORDER IN BOOK 39 OF MAPS AT PAGE 28.
