EXECUTION COPY
LLC INTEREST PURCHASE AGREEMENT
LLC INTEREST PURCHASE AGREEMENT dated as of November 5, 2004, between
WELLSFORD CAPITAL, a Maryland real estate investment trust ("Seller"), and
ROSE HILL FUNDING, LLC, a Delaware limited liability company ("Purchaser").
Purchaser desires to purchase from Seller, and Seller desires to sell
to Purchaser, its 51.0909% Class A Ownership Interest (the "LLC Interest")
in Second Holding Company, LLC, a Delaware limited liability company (the
"Company").
Accordingly, the parties hereby agree as follows:
ARTICLE I
Purchase and Sale of LLC Interest; Closing
SECTION 1.01. Purchase and Sale of the LLC Interest. On the terms and
subject to the conditions of this Agreement, at the Closing (as defined in
Section 1.02), Seller shall sell, transfer and deliver to Purchaser, and
Purchaser shall purchase from Seller, the LLC Interest for an aggregate
purchase price of $15,000,000 (the "Purchase Price"), payable as set forth
below in Section 1.02. The purchase and sale of the LLC Interest is
referred to in this Agreement as the "Acquisition".
SECTION 1.02. Closing Date. The closing of the Acquisition (the
"Closing") shall take place at the offices of Cravath, Swaine & Moore LLP,
825 Eighth Avenue, New York, New York 10019, at 10:00 a.m. on the second
business day following the satisfaction (or, to the extent permitted, the
waiver) of the conditions set forth in Section 5.01, or, if on such day any
condition set forth in Section 5.02 or 5.03 has not been satisfied (or, to
the extent permitted, waived by the party entitled to the benefit thereof),
as soon as practicable after all the conditions set forth in Article V have
been satisfied (or, to the extent permitted, waived by the parties entitled
to the benefits thereof), or at such other place, time and date as shall be
agreed between Seller and Purchaser. The date on which the Closing occurs
is referred to in this Agreement as the "Closing Date".
SECTION 1.03. Transactions To Be Effected at the Closing. At the
Closing:
(a) Seller shall deliver to Purchaser an assignment in form and
substance satisfactory to Purchaser assigning the LLC Interest to
Purchaser, with appropriate transfer tax stamps, if any, affixed
thereto; and
(b) Purchaser shall deliver to Seller, by wire transfer to a bank
account designated in writing by Seller, immediately available funds
in an amount equal to the Purchase Price.
ARTICLE II
Representations and Warranties
of Seller
Seller hereby represents and warrants to Purchaser as of the Closing Date
as follows:
SECTION 2.01. Organization. Seller is duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is organized.
SECTION 2.02. Authority; Execution and Delivery; and Enforceability. Seller
has full power and authority to execute this Agreement and the other agreements
and instruments, if any, executed and delivered in connection with this
Agreement (the "Ancillary Agreements") to which it is, or is specified to be, a
party and to consummate the Acquisition and the other transactions contemplated
hereby and thereby. The execution and delivery by Seller of this Agreement and
the Ancillary Agreements to which it is, or is specified to be, a party and the
consummation by Seller of the Acquisition and the other transactions
contemplated hereby and thereby have been duly authorized by all necessary
investment trust action. Seller has duly executed and delivered this Agreement
and prior to the Closing will have duly executed and delivered each Ancillary
Agreement to which it is, or is specified to be, a party, and this Agreement
constitutes, and each Ancillary Agreement to which it is, or is specified to be,
a party will after the Closing constitute, its legal, valid and binding
obligation, enforceable against it in accordance with its terms
SECTION 2.03. No Conflicts; Consents. The execution and delivery by Seller
of this Agreement do not, the execution and delivery by Seller of each Ancillary
Agreement to which it is, or is specified to be, a party will not, and the
consummation of the Acquisition and the other transactions contemplated hereby
and thereby and compliance by Seller with the terms hereof and thereof will not,
subject to Section 9.3(h) of the Fifth Amended and Restated Operating Agreement
of the Company dated as of January 1, 2002 (the "Operating Agreement"), by and
among The Liberty Hampshire Company, LLC ("Liberty"), Seller, Bear Investor
Joint Venture, The REIS Reports, Inc., Centre Solutions Holdings (Delaware)
Limited and BPC Company, LLC ("BPC"), conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancelation or acceleration of any obligation or
to loss of a material benefit under, or result in the creation of any mortgage,
lien, security interest, charges, easement, lease, sublease, covenant, right of
way, option, claim, restriction, or encumbrance of any kind (collectively,
"Liens") upon any of the properties or assets of Seller or any of its
subsidiaries under, any provision of (i) the organizational documents of Seller
or any of its subsidiaries, (ii) any contract, lease, license, indenture,
agreement, commitment or other legally binding arrangement (a "Contract") to
which Seller or any of its subsidiaries is a party or by which any of their
respective properties or assets is bound or (iii) any judgment, order or decree
("Judgment") or statute, law, ordinance, rule or regulation ("Applicable Law")
applicable to Seller or any of its subsidiaries or their respective properties
or assets, other than, in the case of clauses (ii) and (iii) above, any such
items that, individually or in the aggregate, have not had and could not
reasonably be expected to have a material adverse effect (A) on the ability of
Seller to perform its obligations under this Agreement and the Ancillary
Agreements or (B) on the ability of Seller to consummate the Acquisition and the
other transactions contemplated hereby (a "Seller Material Adverse Effect"). No
material consent, approval, license, permit, order or authorization ("Consent")
of, or registration, declaration or filing with, any Federal, state, local or
foreign government or any court of competent jurisdiction, administrative agency
or commission or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity") is required to be obtained or made by or with
respect to Seller or any of its subsidiaries in connection with the execution,
delivery and performance of this Agreement or any Ancillary Agreement or the
consummation of the Acquisition or the other transactions contemplated hereby
and thereby, other than those that may be required solely by reason of the
participation of Purchaser (as opposed to any other third party) in the
Acquisition and the other transactions contemplated hereby and by the Ancillary
Agreements.
SECTION 2.04. Litigation. There are not any (a) outstanding Judgments
against or affecting Seller or any of its subsidiaries, (b) suits, actions or
proceedings ("Proceedings") pending or, to the knowledge of Seller, threatened
against or affecting Seller or any of its subsidiaries or (c) investigations by
any Governmental Entity that are, to the knowledge of Seller, pending or
threatened against or affecting Seller or any of its subsidiaries that, in any
case, individually or in the aggregate, have had or could reasonably be expected
to have a Seller Material Adverse Effect.
SECTION 2.05. The LLC Interest. Seller has good and valid title to the LLC
Interest, free and clear of all Liens. Assuming Purchaser has the requisite
power and authority to be the lawful owner of the LLC Interest, upon the
assignment to Purchaser at the Closing of the LLC Interest, and upon Seller's
receipt of the Purchase Price, good and valid title to the LLC Interest will
pass to Purchaser, subject to Section 9.3(h) of the Operation Agreement, free
and clear of any Liens, other than those arising from acts of Purchaser or its
affiliates. Other than this Agreement and the Operating Agreement, the LLC
Interest is not subject to any voting trust agreement or other Contract,
including any Contract restricting or otherwise relating to the voting, dividend
rights or disposition of the LLC Interest.
ARTICLE III
Representations and Warranties
of Purchaser
Purchaser hereby represents and warrants to Seller as of the Closing Date
as follows:
SECTION 3.01. Organization. Purchaser is duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is
organized.
SECTION 3.02. Authority; Execution and Delivery; and Enforceability.
Purchaser has full power and authority to execute this Agreement and the
Ancillary Agreements to which it is, or is specified to be, a party and to
consummate the Acquisition and the other transactions contemplated hereby and
thereby. The execution and delivery by Purchaser of this Agreement and the
Ancillary Agreements to which it is, or is specified to be, a party and the
consummation by Purchaser of the Acquisition and the other transactions
contemplated hereby and thereby have been duly authorized by all necessary
limited liability company action. Purchaser has duly executed and delivered this
Agreement and prior to the Closing will have duly executed and delivered each
Ancillary Agreement to which it is, or is specified to be, a party, and this
Agreement constitutes, and each Ancillary Agreement to which it is, or is
specified to be, a party will after the Closing constitute, its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3.03. No Conflicts; Consents. The execution and delivery by
Purchaser of this Agreement do not, the execution and delivery by such Purchaser
of each Ancillary Agreement to which it is, or is specified to be, a party will
not, and the consummation of the Acquisition and the other transactions
contemplated hereby and thereby and compliance by Purchaser with the terms
hereof and thereof will not, subject to Section 9.3(h) of the Operating
Agreement, conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Purchaser or any of its subsidiaries under, any
provision of (i) the organizational documents of Purchaser or any of its
subsidiaries, (ii) any Contract to which Purchaser or any of its subsidiaries is
a party or by which any of their respective properties or assets is bound or
(iii) any Judgment or Applicable Law applicable to Purchaser or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, have not had and could not reasonably be expected to have a material
adverse effect on the ability of Purchaser to perform its obligations under this
Agreement and the Ancillary Agreements or on the ability of Purchaser to
consummate the Acquisition and the other transactions contemplated hereby (a
"Purchaser Material Adverse Effect"). No consent of or registration, declaration
or filing with any Governmental Entity is required to be obtained or made by or
with respect to Purchaser or any of its subsidiaries in connection with the
execution, delivery and performance of this Agreement or any Ancillary Agreement
or the consummation of the Acquisition or the other transactions contemplated
hereby and thereby, other than those that may be required solely by reason of
the participation of Seller (as opposed to any other third party) in the
Acquisition and other transactions contemplated hereby and by the Ancillary
Agreements.
SECTION 3.04. Litigation. There are not any (a) outstanding Judgments
against or affecting Purchaser or any of its subsidiaries, (b) Proceedings
pending or, to the knowledge of Purchaser, threatened against or affecting
Purchaser or any of its subsidiaries or (c) investigations by any Governmental
Entity that are, to the knowledge of Purchaser, pending or threatened against or
affecting Purchaser or any of its subsidiaries that, in any case, individually
or in the aggregate, have had or could reasonably be expected to have a
Purchaser Material Adverse Effect.
SECTION 3.05. Securities Act. (a) The LLC Interest purchased by Purchaser
pursuant to this Agreement is being acquired for investment only and not with a
view to any public distribution thereof, and Purchaser shall not offer to sell
or otherwise dispose of the LLC Interest so acquired by it in violation of any
of the registration requirements of the Securities Act of 1933.
(b) (i) Purchaser has such knowledge and experience in financial and
business matters that Purchaser is capable of evaluating the merits and
risks of an investment in the Company and making an informed investment
decision with respect thereto; (ii) Purchaser is able to bear the economic
and financial risk of an investment in the Company for an indefinite period
of time; (iii) Purchaser is familiar with the business, operations, risks,
prospects and financial condition of the Company; (iv) Purchaser is
acquiring the LLC Interest "as is" without any representations or
warranties of Seller regarding the business, operations, risks, prospects
and financial condition of the Company; and (v) Purchaser has received all
documents and information regarding the Company and its business that
Purchaser has requested and has had all its questions with respect to the
Company satisfactorily answered.
ARTICLE IV
Covenants
SECTION 4.01. Expenses; Transfer Taxes. (a) Whether or not the
Closing takes place, and except as set forth in Section 7.03, all costs and
expenses incurred in connection with this Agreement and the Ancillary
Agreements and the transactions contemplated hereby and thereby shall be
paid by the party incurring such expense.
(b) All transfer taxes applicable to the transfer of the LLC Interest
shall be paid by Purchaser. Each party shall use reasonable efforts to
avail itself of any available exemptions from any such taxes or fees, and
to cooperate with the other parties in providing any information and
documentation that may be necessary to obtain such exemptions.
SECTION 4.02. Brokers or Finders. Each of Purchaser and Seller represents,
as to itself and its affiliates, that no agent, broker, investment banker or
other firm or person is or will be entitled to any broker's or finder's fee or
any other commission or similar fee in connection with any of the transactions
contemplated by this Agreement.
SECTION 4.03. Certain Related Arrangements. From time to time, as and when
requested by Purchaser or its affiliates, Seller shall, and shall cause its
affiliates to (i) execute and deliver, or cause to be executed and delivered,
all such documents and instruments and (ii) take, or cause to be taken, all such
further or other actions, as Purchaser or its affiliates may reasonably deem
necessary or desirable to dissolve and wind up the business of BPC.
SECTION 4.04. Further Assurances. From time to time, as and when requested
by any party, each party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions, as such other party may reasonably
deem necessary or desirable to consummate the transactions contemplated by this
Agreement.
ARTICLE V
Conditions Precedent
SECTION 5.01. Conditions to Seller's and the Purchaser's Obligation. The
obligation of Purchaser to purchase and pay for the LLC Interest and the
obligation of Seller to sell the LLC Interest to Purchaser is subject to the
satisfaction or waiver on or prior to the Closing of the following conditions:
(a) Governmental Approvals. All authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of waiting
periods imposed by, any Governmental Entity necessary for the consummation
of the Acquisition shall have been obtained or filed or shall have
occurred.
(b) No Injunctions or Restraints. No Applicable Law or injunction
enacted, entered, promulgated, enforced or issued by any Governmental
Entity or other legal restraint or prohibition preventing the consummation
of the Acquisition shall be in effect.
(c) Termination. The Services Agreement dated as of April 7, 1999, by
and among Belford Capital Holdings, LLC, Liberty and Seller, shall have
been terminated.
(d) Operating Agreement Conditions. Seller and Purchaser shall have
executed and delivered to the Company any written instruments required by
the Company in connection with the Acquisition in form and substance
satisfactory to the Company's board of managers.
(e) Board Approval. The execution and delivery by Seller of this
Agreement and the Ancillary Agreements to which it is, or is specified to
be, a party and the consummation by Seller of the Acquisition and the other
transactions contemplated hereby and thereby have been duly authorized by
the board of directors of Wellsford Real Properties, Inc.
SECTION 5.02. Conditions to Obligation of Purchaser. The obligation of
Purchaser to purchase and pay for the LLC Interest is subject to the
satisfaction (or waiver by Purchaser) on or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. The representations and warranties
of Seller in this Agreement and the Ancillary Agreements shall be true and
correct in all material respects as of the Closing Date.
(b) Performance of Obligations of Seller. Seller shall have performed
or complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by Seller by
the time of the Closing.
(c) Admission to Company. Purchaser shall have been admitted to the
Company as a member with respect to the LLC Interest.
(d) Other Documents. Seller shall have furnished to Purchaser such
other documents relating to investment trust existence and authority,
absence of Liens, and such other matters as Purchaser or its counsel may
reasonably request.
SECTION 5.03. Conditions to Obligation of Seller. The obligation of Seller
to sell the LLC Interest is subject to the satisfaction (or waiver by Seller) on
or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Purchaser made in this Agreement and the Ancillary Agreements shall be
true and correct in all material respects as of the Closing Date.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with
Purchaser by the time of the Closing.
SECTION 5.04. Frustration of Closing Conditions. Neither Purchaser nor
Seller may rely on the failure of any condition set forth in this Article V to
be satisfied if such failure was caused by such party's failure to act in good
faith or to use its reasonable efforts to cause the Closing to occur.
ARTICLE VI
Termination, Amendment and Waiver
SECTION 6.01. Termination. Notwithstanding anything to the contrary in this
Agreement, this Agreement may be terminated and the Acquisition and the other
transactions contemplated by this Agreement abandoned at any time prior to the
Closing:
(i) by mutual written consent of Seller and Purchaser;
(ii) by Seller if any of the conditions set forth in Section 5.01 or
5.03 shall have become incapable of fulfillment, and shall not have been
waived by Seller;
(iii) by Purchaser if any of the conditions set forth in Section 5.01
or 5.02 shall have become incapable of fulfillment, and shall not have been
waived by Purchaser; or
(iv) by Seller or Purchaser, if the Closing does not occur on or prior
to December 1, 2004;
provided, however, that the party seeking termination pursuant to clause(ii),
(iii) or (iv) is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.
SECTION 6.02. Effect of Termination. If this Agreement is terminated and
the transactions contemplated hereby are abandoned as described in Section 6.01,
this Agreement shall become null and void and of no further force and effect,
except for the provisions of (i) Section 4.01 relating to certain expenses,
(ii) Section 4.02 relating to finder's fees and broker's fees and
(iii) Section 6.01 and this Section 6.02. Nothing in this Section 6.02 shall be
deemed to release any party from any liability for any breach by such party of
the terms and provisions of this Agreement or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement.
(a) Amendments and Waivers. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.
By an instrument in writing Purchaser or Seller may waive compliance by the
other with any term or provision of this Agreement that such other party
was or is obligated to comply with or perform.
ARTICLE VII
General Provisions
SECTION 7.01. Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by a party hereto (including
by operation of law in connection with a merger or consolidation of such party)
without the prior written consent of the other party hereto; provided, however,
without the consent of Seller, Purchaser may assign or transfer its rights and
obligations hereunder to an affiliate of Purchaser, and such affiliate may
assume Purchaser's obligations hereunder. Any attempted assignment in violation
of this Section 7.01 shall be void.
SECTION 7.02. No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
expressed or implied shall give or be construed to give to any person, other
than the parties hereto and such assigns, any legal or equitable rights
hereunder.
SECTION 7.03. Attorney Fees. A party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such other
party by reason of the enforcement and protection of its rights under this
Agreement. The payment of such expenses is in addition to any other relief to
which such other party may be entitled.
SECTION 7.04. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or sent, postage prepaid, by registered, certified or
express mail or overnight courier service and shall be deemed given when so
delivered by hand or facsimile, or if mailed, three days after mailing (one
business day in the case of express mail or overnight courier service), as
follows:
(i) if to Seller,
Wellsford Capital
c/o Wellsford Real Properties, Inc.
535 Madison Avenue, 26th Floor
New York, New York 10022
Attention: Jeffrey H. Lynford
(ii) if to Purchaser,
Rose Hill Funding, LLC
c/o The Liberty Hampshire Company, LLC
227 W. Monroe Street, Suite 4000
Chicago, IL 60606
Attention: Counsel
SECTION 7.05. Interpretation; Certain Definitions. (a) The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. When a reference is
made in this Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated.
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person.
"including" means including, without limitation.
"person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity
or other entity.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person or by another
subsidiary of such first person.
SECTION 7.06. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 7.07. Entire Agreement. This Agreement and the Ancillary Agreements
contain the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter. Neither of the parties shall be
liable or bound to the other party in any manner by any representations,
warranties or covenants relating to such subject matter except as specifically
set forth herein or in the Ancillary Agreements.
SECTION 7.08. Severability. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.
SECTION 7.09. Consent to Jurisdiction. Each party irrevocably submits to
the jurisdiction of (a) the Supreme Court of the State of New York, New York
County, and (b) the United States District Court for the Southern District of
New York, for the purposes of any suit, action or other proceeding arising out
of this Agreement, any Ancillary Agreement or any transaction contemplated
hereby or thereby.
SECTION 7.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
SECTION 7.11. Waiver of Jury Trial. Each party hereby waives to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect to any litigation directly or indirectly arising out of, under or in
connection with this Agreement, any Ancillary Agreement or any transaction
contemplated hereby or thereby. Each party (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement and the Ancillary Agreements, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 7.11.
SECTION 7.12. Limitation on Recourse. This Agreement and all documents,
agreements, understandings and arrangements relating to the signing of the
Agreement have been executed or entered into by an officer of Seller in his/her
capacity as an officer of Seller which has been formed as a Maryland real estate
investment trust, and not individually, and neither the trustees, officers or
shareholders of Seller shall be bound or have any personal liability hereunder
or thereunder. All persons dealing with Seller shall look solely to the assets
of Seller for satisfaction of any liability of Seller in respect to this
Agreement and all documents, agreements, understanding and arrangements relating
to this transaction and will not seek recourse or commence any action against
any of the trustees, officers or shareholders of Seller or any of their personal
assets for the performance or payment of any obligations hereunder or
thereunder.
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IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Agreement
as of the date first written above.
WELLSFORD CAPITAL,
by
---------------------------------
Name:
Title:
ROSE HILL FUNDING, LLC,
by
--------------------------------
Name:
Title: