REDEMPTION AGREEMENT BY AND AMONG WELLSFORD/WHITEHALL GROUP, L.L.C., AND WELLSFORD COMMERCIAL PROPERTIES TRUST
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REDEMPTION AGREEMENT BY AND AMONG WELLSFORD/WHITEHALL GROUP, L.L.C., AND WELLSFORD COMMERCIAL PROPERTIES TRUST |
| TABLE OF CONTENTS | ||
|---|---|---|
| Page | ||
ARTICLE 1 |
Definitions |
2 |
| ARTICLE 2 |
The Agreement |
4 |
| ARTICLE 3 |
Redemption Consideration |
4 |
| ARTICLE 4 |
The Closing |
4 |
| ARTICLE 5 |
Certain Effects of Redemption |
5 |
| ARTICLE 6 |
Representations and Warranties; Covenants |
8 |
| ARTICLE 7 |
Document Deliveries |
17 |
| ARTICLE 8 |
Miscellaneous |
18 |
| EXHIBITS | ||
| Exhibit A | Form of Redeemed Interest Assignment Agreement | |
| Exhibit B | Form of FIRPTA Certificate | |
| Exhibit C | Description of Mt. Bethel Land | |
| Exhibit D | Description of Mountain Heights Parking Loss Reimbursement Indemnity | |
SCHEDULES | ||
| Schedule I | Assigned Interests | |
|
REDEMPTION AGREEMENT |
|
THIS
REDEMPTION AGREEMENT (this “Agreement”) is made and
entered into this 21st day of September, 2005, by and between
Wellsford/Whitehall Group, L.L.C., a Delaware limited liability company (the
“Company”), and Wellsford Commercial Properties Trust
(“WCPT”). |
|
RECITALS: |
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WHEREAS,
each of Wellsford Commercial Properties Trust, WHWEL Real Estate Limited Partnership,
WXI/WWG Realty, L.L.C., W/W Group Holdings, L.L.C. and WP Commercial, L.L.C. are members
of the Company and are parties to the Limited Liability Company Operating Agreement of the
Company, dated as of May 28, 1999, as amended by the First Amendment thereto dated as of
December 21, 2000 and as further amended by the Second Amendment thereto dated as of March
29, 2004 (as so amended, the “Operating Agreement”); WHEREAS, the interests of certain members of the Company formerly known as the “Saracen Members” were redeemed pursuant to a Redemption Agreement, dated July 2, 2004, by and between the Company and the Saracen Members (the “Saracen Agreement”), and as a result thereof, the signatories hereto are the sole members of the Company as of the date hereof; WHEREAS, WCPT desires that the Company redeem, and the Company desires to redeem from WCPT, all of WCPT’s Interest in exchange for the Redemption Payment on the terms and conditions set forth in this Agreement; NOW, THEREFORE, for and in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: |
|
ARTICLE 1 Definitions |
| 1.1. |
Capitalized terms used but not defined in this Agreement shall have the meanings
given to such terms in the Operating Agreement. | |
| 1.2. |
As used in this Agreement, the following terms shall the meanings set forth
below: | |
|
Agreement” shall have the meaning set forth in the preamble to this Agreement. | ||
| “Affiliate” shall mean with respect to any Person (i) any other Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with such Person, (ii) any other Person owning or controlling 10% or more of the outstanding voting securities of, or other ownership interests in, such Person, (iii) any officer, director or member of such Person and (iv) if such Person is an officer, director or member of any company, the company for which such Person acts in any such capacity. For purposes of this definition, “control,” when used with respect to any |
| Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing. |
| Assignment” shall have the meaning set forth in Section 7.1(a). |
| “Business Day” means any day other than Saturday, Sunday, any day that is a legal holiday in the State of New York or any other day on which banking institutions in New York are authorized to close. |
| “Closing” shall mean the delivery of the Closing Documents and the transfer of the Redeemed Interest, and the making of the Redemption Payment in accordance with the terms of this Agreement, which will occur on the date hereof. |
| “Closing Documents” shall mean all documents that are required to be delivered by the Company or WCPT pursuant to the terms of this Agreement. |
| Company” shall have the meaning set forth in the preamble to this Agreement. |
| Company Parties” shall have the meaning set forth in Section 5.2(a). |
| “Definitive Agreements” shall mean this Agreement, the Assignment, and each resignation letter (as referred to and described in Section 7.1(b)). |
| “Liens” shall mean mortgages, liens, encumbrances, pledges, agreements, security interests, restrictions, offsets and other matters that could affect title to the Redeemed Interest. |
| “Mt. Bethel Property” means the property described in Exhibit C attached hereto, and including all buildings and other improvements thereon or used thereon and all property owned or leased in connection therewith. |
| “Person” shall mean any individual, partnership, corporation, limited liability company, trust or other legal entity. |
| “Redeemed Interest” shall have the meaning set forth in Section 2.1. |
| “Redemption Payment” means $8,253,893.00. |
| “Saracen Agreement” shall have the meaning set forth in the recitals to this Agreement. |
| “WCPT Parties” shall have the meaning set forth in Section 5.2(a). |
| “WRP” shall have the meaning set forth in Section 3.2. |
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ARTICLE 2 The Agreement | ||
| 2.1. | Agreement to Convey. For and in consideration of the mutual benefits enjoyed by one another under this Agreement, upon and subject to the terms and conditions hereof, WCPT consents to the full redemption and liquidation of its Interest (including, without limitation, all of WCPT’s Membership Units and Percentage Interest) in the Company, and the Company redeems all of WCPT’s Interest in exchange for the Redemption Payment. WCPT’s Interest is referred to herein as the “Redeemed Interest”. | |
|
ARTICLE 3 Redemption Consideration | ||
| 3.1. |
Redemption Consideration. The aggregate consideration for the
Redeemed Interest shall be the Redemption Payment. | |
| 3.2. |
Payment by WP Commercial, L.L.C. On the date hereof, the parties
acknowledge that WP Commercial, L.L.C. is making a separate disposition fee
payment in the amount of $518,000.00 to Wellsford Real Properties, Inc.
(“WRP”) pursuant to a pre-existing separate agreement by and between
WRP and WP Commercial, L.L.C., and that the Company has no obligation to make
such payment to WCPT or WRP. | |
|
ARTICLE 4 The Closing | ||
| 4.1. |
Time and Location of the Closing. The Closing will occur on the date of
this Agreement at the Company’s offices or at such other location as the
parties hereto may mutually agree. | |
| 4.2. |
Conditions to Closing. | |
| (a)
The Company’s obligation to close is contingent only upon (i) the
performance by WCPT of its obligations hereunder, including the delivery of all
documents set forth in Section 7.1 hereof, (ii) the accuracy in all material
respects of all representations and warranties of WCPT set forth herein, and
(iii) the absence of any judicial order or injunction prohibiting the
consummation of the transactions contemplated hereby. | ||
| (b) WCPT’s obligation to close is contingent only upon (i) the performance by the Company of its obligations hereunder, including the delivery of all documents, payments and other matters set forth in Section 7.2 hereof, (ii) the accuracy in all material respects of all representations and warranties of all of the Company set forth herein, and (iii) the absence of any judicial order or injunction prohibiting the consummation of the transactions contemplated hereby. | ||
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ARTICLE 5 Certain Effects of Redemption | ||
| 5.1. |
Certain Effects of the Redemption. Effective upon Closing, and without
any further action by the Company or any Member (including WCPT): | |
|
(a)
WCPT shall no longer be a Member of the Company or have any interest in the
Company whatsoever; | ||
|
(b)
the Committee Representatives appointed by WCPT to the Management Committee
shall be deemed to have resigned from the Management Committee; | ||
|
(c)
WCPT shall have no further right to designate any Committee Representative; | ||
|
(d)
neither WCPT nor any Committee Representative designated by WCPT shall be
entitled to attend (or to designate any person to attend) any meeting of the
Management Committee or to receive any further information concerning the
Company; | ||
|
(e)
neither WCPT nor any Committee Representative designated by WCPT shall be
entitled to or bound by, as the case may be, any rights, privileges or
obligations under or relating to the Operating Agreement or under any side
agreements, including, without limitation, any notice or consent rights, any
right or obligation to make Capital Contributions to the Company, any preemptive
right or any right to limit the activities of the Company or of any other Member
or their Affiliates; | ||
|
(f)
all provisions of the Operating Agreement granting any rights to WCPT or
obligating WCPT in any respect shall be deleted and deemed to be void and of no
further force or effect. | ||
| 5.2. |
Release. | |
| (a) Effective upon the Closing, WCPT and its Affiliates and each of the past and present officers, directors, employees, agents, representatives, attorneys, consultants, accountants, successors and assigns of WCPT, its Affiliates and/or subsidiaries (collectively, the “WCPT Parties”) hereby releases the Company, each of the other Members, the Manager, Archon Group, L.P., all former managers of the Company and their respective parents, Affiliates, subsidiaries and each of the past and present officers, directors, employees, agents, representatives, attorneys, consultants, accountants, successors and assigns of any of the other Members, their parents, Affiliates and/or subsidiaries (collectively, the “Company Parties”) of and from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, acts or omissions, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands (including attorneys’ fees and costs) of any nature whatsoever (whether known or unknown, accrued or contingent), in law or equity, against the Company Parties that the WCPT Parties ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the date hereof, with respect to the Company or relating to or arising under the Operating Agreement or the Saracen Agreement, | ||
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including any amendments or modifications thereto or any side letters
or other agreements or arrangements, oral or written, with respect thereto, or
any assets, management or operations of the Company or any of the Company
Parties as to the assets, management and operations of the Company, and the WCPT
Parties further agree not to voluntarily institute, instigate, urge, support,
encourage, voluntarily participate in or profit from any lawsuit, complaint or
other action or proceeding of any kind relating to any matter to which this
paragraph (b) pertains; provided, however, that the provisions of this paragraph
(b) shall not apply to the duties or obligations of the Company under this
Agreement or any of the other Definitive Agreements (subject to the limitations
set forth herein). | ||
|
(b)
Effective upon the Closing, each of the Company Parties hereby releases each of
the WCPT Parties of and from all actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, acts or omissions, promises, variances,
trespasses, damages, judgments, extents, executions, claims, and demands
(including attorneys’ fees and costs) of any nature whatsoever (whether
known or unknown, accrued or contingent), in law or equity, against the WCPT
Parties that the Company Parties ever had, now have or hereafter can, shall or
may have, for, upon, or by reason of any matter, cause or thing whatsoever from
the beginning of the world to the date hereof, with respect to the Company or
relating to or arising under the Operating Agreement or the Saracen Agreement,
including any amendments or modifications thereto or any side letters or other
agreements or arrangements, or any assets, management or operations of the
Company or any of the WCPT Parties as to the assets, management or operations of
the Company, oral or written, with respect thereto, or any acts or omissions of
WCPT or any of the WCPT Parties, and the Company Parties further agree not to
voluntarily institute, instigate, urge, support, encourage, voluntarily
participate in or profit from any lawsuit, complaint or other action or
proceeding of any kind relating to any matter to which this paragraph (c)
pertains; provided, however, that the provisions of this paragraph (c) shall not
apply to the duties or obligations of WCPT under this Agreement or any of the
other Definitive Agreements (subject to the limitations set forth herein). | ||
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ARTICLE 6 Representations and Warranties; Covenants | ||
| 6.1. |
Representations by the Company. The Company hereby represents and
warrants to WCPT that each and every one of the following statements is true,
correct and complete in every material respect as of the date of this Agreement: | |
| (a) The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, and, has full right, power and authority to enter into this Agreement and to assume and perform all of its obligations; and the execution and delivery of this Agreement and the performance by the Company of its obligations under this Agreement requires no further action or approval of any other individuals or entities in order to constitute this Agreement as a binding and enforceable obligation of the Company. The individuals and/or entities signing below in the indicated representative capacities are fully authorized so to act. This Agreement is the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, | ||
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fraudulent
conveyance or similar laws affecting the enforcement thereof or relating to
creditors’ rights generally. | ||
|
(b)
The entry into, performance of, or compliance with this Agreement by the Company
has not resulted, and will not result, in any violation of, default under, or
acceleration of any obligation under any existing agreement, including without
limitation, the Operating Agreement, corporate charter, certificate of
incorporation, bylaw, articles of organization, mortgage, indenture, loan
agreement, note, contract, permit, judgment, decree, order, restrictive
covenant, statute, rule or regulation applicable to the Company. | ||
|
(c)
The Company (i) has not made an assignment for the benefit of creditors or
admitted in writing its inability to pay its debts as they mature, and
(ii) has not been adjudicated a bankrupt or filed a petition in voluntary
bankruptcy or a petition or answer seeking reorganization or an arrangement with
creditors under the Federal bankruptcy law or any other similar law or statute
of the United States or any jurisdiction and, to the actual knowledge of the
Company, no such petition has been filed against the Company. After giving
effect to the Redemption Payment, all liabilities of the Company, other than
liabilities to members on account of their limited liability company interests
and liabilities for which the recourse of creditors is limited to specific
property of the Company, do not exceed the fair value of the assets of the
Company, except that the fair value of property that is subject to a liability
for which the recourse of creditors is limited shall be included in the assets
of the Company only to the extent that the fair value of that property exceeds
that liability. | ||
|
(d)
The Company hereby acknowledges and agrees that WCPT and its Affiliates have or
may have material nonpublic information with respect to the Company, including
without limitation results of operations, condition (financial or otherwise),
prospects, plans, recent developments and material transactions. The Company
also acknowledges that it is a sophisticated investor with such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the redemption of the Redeemed Interest. The Company
hereby waives any right to rescind or invalidate the redemption of the Redeemed
Interest or to seek any damages, other remuneration or any other remedy from
WCPT or its Affiliates or their respective successors based on the possession of
such material nonpublic information by WCPT or its Affiliates or the lack of
possession of such information by the Company. | ||
| Subject
to the limitations and other provisions of Section 6.4 hereof, the Company shall
indemnify and defend the WCPT Parties against and hold the WCPT Parties harmless from any
and all losses, costs, damages, liabilities and expenses (including, without limitation,
reasonable counsel fees) arising out of any breach by the Company of its representations
and warranties hereunder, except as limited herein. | ||
| 6.2. |
Representations by WCPT. WCPT hereby represents and warrants to the
Company that each and every one of the following statements is true, correct and
complete in every material respect as of the date of this Agreement: | |
| (a) WCPT is a real estate investment trust duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, and, has full right, | ||
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power and authority to enter into this Agreement and to
assume and perform all of its obligations; and the execution and delivery of
this Agreement and the performance by WCPT of its obligations under this
Agreement requires no further action or approval of any other individuals or
entities in order to constitute this Agreement as a binding and enforceable
obligation of WCPT. The individuals and/or entities signing below in the
indicated representative capacities are fully authorized so to act. This
Agreement is the legal, valid and binding obligation of WCPT, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting the enforcement thereof or relating to
creditors’ rights generally. | ||
|
(b)
WCPT is not a non-resident alien (as such term is defined in the Internal
Revenue Code and United States Income Tax Regulations). | ||
|
(c)
The entry into, the performance of, or compliance with this Agreement by WCPT
has not resulted, and will not result, in any violation of, default under, or
acceleration of any obligation under any existing agreement, including, without
limitation, the Operating Agreement, corporate charter, bylaw, mortgage,
indenture, loan agreement, note, contract, lease, permit, judgment, decree,
order, restrictive covenant, statute, rule or regulation applicable to WCPT. | ||
|
(d)
WCPT (i) has not made an assignment for the benefit of creditors or admitted in
writing its inability to pay its debts as they mature, and (ii) has not
been adjudicated a bankrupt or filed a petition in voluntary bankruptcy or a
petition or answer seeking reorganization or an arrangement with creditors under
the Federal bankruptcy law or any other similar law or statute of the United
States or any jurisdiction and, to the actual knowledge of WCPT, no such
petition has been filed against WCPT. | ||
|
(e)
WCPT has good and valid title to its Interest set forth on Schedule I
hereto, free and clear of all Liens, and has not previously assigned,
encumbered, conveyed, hypothecated or otherwise transferred all or any part of
such Interest or agreed to do any of the foregoing. WCPT acknowledges,
represents and agrees that, effective upon the Closing, it shall have no further
Interest in the Company. | ||
| (f) WCPT hereby acknowledges and agrees that the Company and its Affiliates have or may have material nonpublic information with respect to the Company, including without limitation results of operations, condition (financial or otherwise), prospects, plans, recent developments and material transactions. WCPT also acknowledges that it is a sophisticated investor with such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the redemption of the Redeemed Interest. WCPT hereby waives any right to rescind or invalidate the redemption of the Redeemed Interest or to seek any damages, other remuneration or any other remedy from the Company or its Affiliates or their respective successors based on the possession of such material nonpublic information by the Company or its affiliates or the lack of possession of such information by WCPT. | ||
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(g)
WCPT (either alone or with its advisors) has sufficient knowledge and experience
in financial, tax and business matters to enable it to evaluate the benefits,
detriments, advantages, disadvantages, merits and risks of the redemption of the
Redeemed Interest. WCPT acknowledges that (1) the transactions contemplated by
this Agreement may involve complex legal and tax consequences for WCPT and WCPT
is relying solely on the advice of its own legal and tax advisors in evaluating
such consequences, (2) neither the Company (including any of its Affiliates),
nor the Manager nor the Management Committee of the Company nor any of the other
Members, or their respective legal and tax advisors has made (or shall be deemed
to have made) any representations or warranties as to the legal or tax
consequences of such transactions to WCPT, and (3) WCPT is not relying upon the
Company, any of the other Members or any of their respective tax or legal
advisors (including Xxxxxxxx & Xxxxxxxx LLP and Ernst & Young) with
respect to any structuring, tax, legal, financial or other aspect of the
transactions contemplated by this Agreement. | ||
|
(h)
In connection with this transaction, WCPT has been represented by independent
legal counsel, understands the assumptions of risk and liability set forth in
this Agreement and understands that it will not have any recourse whatsoever
against any the Company or any Company Party, except as expressly set forth in
this Agreement. | ||
| Subject
to the limitations and other provisions of Section 6.4 hereof,WCPT shall indemnify
and defend the Company against and hold the Company harmless from any and all losses,
costs, damages, liabilities and expenses (including, without limitation, reasonable
counsel fees) arising out of any breach by WCPT of its representations and warranties
hereunder, except as limited herein. | ||
| 6.3. |
Post-Closing Adjustments. | |
|
(a)
Mount Bethel. If the Company executes and delivers a legally binding
agreement to sell the Mt. Bethel Property on or before March 21, 2006, and
closes on the sale of such property for net proceeds in excess of $6,000,000.00
on or before September 21, 2006 , the Company hereby covenants and agrees
no later than 30 days from the sale of the Mt. Bethel Property, to pay WCPT
a sum equal to one-half (½) of the net amount WCPT would have received if
the redemption contemplated by this Agreement had not occurred, WCPT had
retained its exact Interest in the Company as in effect on the date hereof, and
the net proceeds of such sale (after all transaction expenses) minus
$6,000,000.00 (i.e., only the incremental portion of the net proceeds
above $6,000,000.00) were distributed pursuant to Section 7.1 of the
Operating Agreement as in effect on the date hereof, and to deliver a schedule
of the calculation of such payment prior to or concurrently therewith. | ||
| (b) Mountain Heights. As of the date hereof, the Company has reserved $400,000.00 (the “Mountain Heights Reserve”), to pay for a potential liability known as the “Mountain Heights Parking Loss Reimbursement Indemnity” and described in more detail in Exhibit C attached hereto. No later than January 31, 2006, the Company agrees to pay WCPT a sum equal to 35.21% of (a) the Mountain Heights Reserve minus (b)(i) any amounts paid to Transwestern Investment Company, L.L.C. under the Mountain Heights Parking Loss Reimbursement Indemnity on or before December 27, 2005 and (ii) any amounts corresponding to claims asserted by Transwestern Investment Company, L.L.C. under the Mountain Heights | ||
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Parking Loss Reimbursement
Indemnity on or before December 27, 2005, together with a schedule of the
calculation of such amount prior to or concurrently therewith. | ||
|
(c)
Right to Audit. Until December 31, 2006, WCPT shall have the right, on
reasonable notice, to audit on a confidential basis the relevant books and
records of the Company to ascertain whether the post-closing adjustments
described in this Section 6.3 were properly determined. Any such audit shall be
conducted by WCPT personnel approved by the Company (such approval not to be
unreasonably withheld) or an independent certified public accountant chosen by
WCPT (other than on a contingent fee basis), and shall be conducted during the
Company’s regular business hours and in such a manner so as not to
interfere with the Company’s regular business activities. The Company shall
make prompt payment of any adjustment to compensate WCPT for any underpayment
disclosed by such audit. The costs of such audit shall be borne by WCPT, unless
the audit shows that WCPT has been underpaid by more than ten percent (10%); in
such case, the costs of the audit shall be paid by the Company. If an audit
discloses that WCPT was overpaid, WCPT shall promptly reimburse the Company for
such overpayment. | ||
| 6.4. |
General Regarding Representations and Warranties. If any party has
knowledge that any representation or warranty made by the other party is untrue
or incorrect at the Closing but nevertheless proceeds with the Closing, then
such party will be deemed to have waived any claim for breach of such
representation or warranty. The representations and warranties set forth in this
Agreement shall survive the Closing until September 21, 2006, after which such
representations and warranties shall be null and void and shall cease to be of
any force or effect and any action brought on the representations and warranties
made by any party or parties hereto shall be commenced by September 21, 2006 or
shall be forever barred and waived. In no event shall any Person be entitled to
make a claim for breach of any representations or warranties and no party shall
have any liability in connection therewith (i) unless and until the aggregate
amount of all such claims exceeds $500,000.00 and then only to the extent such
aggregate amount exceeds $500,000.00, or (ii) for any amount in excess of
$1,000,000.00 in the aggregate. | |
| 6.5. |
Brokers. WCPT hereby represents and warrants to the Company that neither
it nor any of its Affiliates employed or used any broker or finder to arrange or
bring about this transaction, and that there are no claims or rights for
brokerage commissions or finder’s fees in connection with the transactions
contemplated by this Agreement. If any Person brings a claim for a commission or
finder’s fee based upon any contact, dealings, or communication with WCPT
or any of its Affiliates in connection with the transactions contemplated by
this Agreement, then WCPT shall defend the Company from such claim, and shall
indemnify the Company and hold the Company harmless from any and all costs,
damages, claims, liabilities, or expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) incurred by the Company with
respect to the claim. | |
| The Company hereby represents and warrants to WCPT that neither the Company nor any of the Subsidiaries nor any of their Affiliates has employed or used any broker or finder to arrange or bring about this transaction, and there are no claims or rights for brokerage commissions or finders fees in connection with the transactions | ||
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contemplated by this
Agreement. If any Person brings a claim for a commission or finder’s fee based upon
any contact, dealings, or communication with the Company or its Affiliates in connection
with the transactions contemplated by this Agreement, then the Company shall defend WCPT
from such claim, and shall indemnify WCPT and hold WCPT harmless from any and all costs,
damages, claims, liabilities, or expenses (including, without limitation, reasonable
attorneys’ fees and disbursements) incurred by WCPT with respect to the claim. | ||
| 6.6. |
Financial Statements and 2005 Tax Returns. The Company shall provide WCPT
with all federal, state and local tax returns required to be filed for the 2005
fiscal year and completed IRS Schedules K-1 no later than ten (10) days prior to
the due date of the returns, but in no event later than March 1, 2006. The
Company shall provide WCPT with audited financials for the year ended December
31, 2005 no later than February 15, 2006 (in the same form as previously
provided for the year ended December 31, 2004). If it is determined by WRP
by December 31, 2005 that the Company’s financials will not be
included in WRP’s 2005 Form 10-K filing, the Company may submit audited
financials for the year ended December 31, 2005 that include only 2005
results. | |
| 6.7. |
Closing of the Books; Other Tax Matters. | |
|
(a)
Profits and losses for income tax purposes with respect to the Company shall be
apportioned between the periods before and after the date hereof by closing the
books of the Company as of the date hereof. The parties hereto agree and
acknowledge that the Company shall not allocate income, gain, loss or deduction
to WCPT for any period following the date hereof. Notwithstanding the foregoing,
(i) no amendment or other document purporting to modify the Company’s
Operating Agreement that is entered into on or after the date hereof shall
affect the amount of income, gain, loss or deduction allocated to WCPT for
periods ending on or prior to the date hereof and (ii) no Company income
tax return with respect to any period ending prior to the date hereof (or which
ends on or includes the date hereof) shall be amended without the express
written consent of WCPT. | ||
|
(b)
The Redemption Payment (and any amounts deemed distributed to WCPT pursuant to
Section 752(b) of the Internal Revenue Code of 1986, as amended (the
“Code”)) shall be treated, to the maximum extent permissible,
as a distribution made in exchange for the interest of WCPT in Company property
pursuant to Section 736(b)(1) of the Code. | ||
|
c)
The parties hereto agree and acknowledge that (i) the income, gain, loss,
deductions and credits of the Company for the 2005 taxable year shall be
determined in a manner consistent with the manner in which such items were
determined in prior years, and (ii) WCPT’s distributive share of any
income, gain, loss, deductions or credits of the Company for the 2005 taxable
year shall be allocated to WCPT in a manner consistent with the manner in which
such items were allocated to WCPT in prior years and in accordance with the
terms of the Operating Agreement in effect on the date hereof. | ||
|
(d)
The parties hereto shall file all required federal, state and local income tax
returns and related returns and reports in a manner consistent with the
provisions of this Section 6.7. | ||
| (e) The provisions of this Section 6.7 shall survive the Closing. | ||
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ARTICLE 7 Document Deliveries | ||
| 7.1. |
WCPT Closing Documents. On the date hereof, WCPT will execute and deliver
or, as appropriate, cause to be executed and delivered, the following documents: | |
|
(a)
Assignment of Redeemed Interest. An assignment and assumption agreement
from WCPT (the “Assignment”) in the form of
Exhibit A conveying title to WCPT’s Interest, free and clear of
all Liens; | ||
|
(b)
Resignation Letters. Resignation Letters from each of the Committee
Representatives appointed by WCPT to the Management Committee; and | ||
|
(c)
FIRPTA Certificates. An affidavit of WCPT in the form of
Exhibit B certifying that WCPT is not a “foreign person”
within the meaning of Section 1445(f)(3) of the Internal Revenue Code. | ||
| 7.2. |
Company Closing Documents. On the date hereof, the Company will execute
and deliver or, as appropriate, cause to be executed and delivered, the
following documents: | |
|
(a)
Assignment of Redeemed Interest. Counterpart of the Assignment from WCPT,
executed by the Company. | ||
|
(b)
The Redemption Payment, by wire transfer of immediately available funds to an
account designated by WCPT. | ||
| 7.3. |
Survival. The terms, covenants and provisions of this Agreement shall
survive the Closing and the delivery of the documents referred to in this
Article 7. | |
|
ARTICLE 8 Miscellaneous | ||
| 8.1. | Notices. Any notice provided for by this Agreement and any other notice, demand or communication which any party may wish to send to another shall be in writing, addressed to the party for which such notice, demand or communication is intended at such party’s address as set forth in this Section, and sent either (i) by registered or certified mail, return receipt requested, in a sealed envelope, postage prepaid, (ii) by any national overnight receipted courier service, or (iii) by facsimile transmission with express confirmation of receipt delivered by the recipient to the sender by mail, hand delivery or return fax. The Company’s address for all purposes under this Agreement shall be the following: | |
-11-
|
Wellsford/Whitehall Group, L.L.C. c/o Goldman, Xxxxx & Co. 000 Xxxxxxxx Xxxxx, Xxxxx 0000 Xxxxxx, XX 00000 Attention: Xxxxxx Xxxxxxxx Telephone: (000) 000-0000 Telecopier: (000) 000-0000 with a simultaneous copy to: WHWEL Real Estate Limited Partnership c/o Goldman, Xxxxx & Co. 00 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Xxxx Xxxx Telephone: (000) 000-0000 Telecopier: (000) 000-0000 and to: Xxxxxxxx & Xxxxxxxx LLP 000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx X. Xxxxxxxx Telephone: (000) 000-0000 Telecopier: (000) 000-0000 | |
|
The address of WCPT under this Agreement shall be the following: | |
|
Wellsford Commercial Properties Trust c/o Wellsford Real Properties, Inc. Attention: Xxxxxxx Xxxxxxx Telephone: (000) 000-0000 Telecopier: (000) 000-0000 with simultaneous copies to: Xxxxx Xxxx 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000-0000 Attention: Xxxx Xxxxxx Telephone: 000-000-0000 Telecopier: 000-000-0000 | |
| Any address or name or facsimile number specified above may be changed by a notice given by the addressee to the other party. Any notice, demand or other communication shall be deemed given and effective as of the date of delivery in person or receipt set forth on the return receipt or | |
-12-
|
the facsimile
confirmation. The inability to deliver because of changed address or facsimile number of
which no notice was given, or rejection or other refusal to accept any notice, demand or
other communication, shall be deemed to be receipt of the notice, demand or other
communication as of the date of such attempt to deliver or rejection or refusal to accept. | ||
| 8.2. |
Entire Agreement, Modifications and Waivers. This Agreement and the other
agreements referred to herein constitute the entire agreement between the
parties hereto and may not be modified or amended except by an instrument in
writing signed by the parties hereto, and no provisions or conditions may be
waived other than by a writing signed by the party waiving such provisions or
conditions. No delay or omission in the exercise of any right or remedy accruing
to WCPT or the Company upon any breach under this Agreement shall impair such
right or remedy or be construed as a waiver of any such breach theretofore or
thereafter occurring. The waiver by WCPT or the Company of any breach of any
term, covenant or condition herein stated shall not be deemed to be a waiver of
any other breach, or of a subsequent breach of the same or any other term,
covenant or condition herein contained. | |
| 8.3. |
Exhibits and Schedules. All exhibits and schedules referred to in this
Agreement and attached hereto are hereby incorporated in this Agreement by
reference. | |
| 8.4. |
Successors and Assigns. Neither the Company nor WCPT may assign its
rights or obligations under this Agreement to any third party without the prior
written consent of the other party hereto. | |
| 8.5. |
Article Headings. Article and Section headings and Article and Section
numbers are inserted herein only as a matter of convenience and in no way
define, limit or prescribe the scope or intent of this Agreement or any part
thereof and shall not be considered in interpreting or construing this
Agreement. | |
| 8.6. |
Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, without regard to the
conflicts of laws principles thereof. | |
| 8.7. |
Time Periods. If the final day of any time period or limitation set out
in any provision of this Agreement falls on a Saturday, Sunday or legal holiday
under the laws of the State of New York or of the federal government, then the
time of such period shall be extended to the next day which is not a Saturday,
Sunday or legal holiday. | |
| 8.8. |
Counterparts. This Agreement may be executed in any number of
counterparts and by either party hereto on a separate counterpart, each of which
when so executed and delivered shall be deemed an original and all of which
taken together shall constitute but one and the same instrument. | |
| 8.9. | Further Acts. Each of the Company and WCPT shall perform, execute and deliver or cause to be performed, executed and delivered on or after the date hereof, any and all further acts, deeds, instruments and agreements and provide such further assurances as the other party may reasonably request to consummate the transactions contemplated hereunder, provided |
-13-
| that such request does not result in any increase in the costs, liabilities or other obligations of the other party. |
-14-
| IN WITNESS WHEREOF, this Redemption Agreement has been entered into effective as of the date first written above. |
| THE COMPANY: | |||
| WELLSFORD/WHITEHALL GROUP, L.L.C. | |||
| By: | WP Commercial, L.L.C., its Manager | ||
| By: | /s/ Xxxxxx Xxxxxxxx | ||
| Name: Xxxxxx Xxxxxxxx | |||
| Title: Vice President | |||
| WCPT: | |||
| WELLSFORD COMMERCIAL PROPERTIES TRUST, a Maryland real
estate investment trust | |||
| By: | /s/ Xxxxx X. Xxxxx | ||
| Name: Xxxxx X. Xxxxx | |||
| Title: Chief Financial Officer | |||
-15-
| The undersigned hereby join in this Redemption Agreement (i) to consent to and approve of the Company entering into the Redemption Agreement, and (ii) to agree to the provisions of Sections 5.1, and 5.2(a) and (b). |
| WHWEL REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership | |||
| By: | WHATR Gen-Par, Inc., its general partner | ||
| By: | /s/ Xxxxxx Xxxxxxxx | ||
| Name: Xxxxxx Xxxxxxxx | |||
| Title: Vice President | |||
| WXI/WWG REALTY, L.L.C., a Delaware limited liability company | |||
| By: | /s/ Xxxxxx Xxxxxxxx | ||
| Name: Xxxxxx Xxxxxxxx | |||
| Title: Vice President | |||
-16-
| W/W GROUP HOLDINGS, L.L.C., a Delaware limited liability
company | |||
| By: | /s/ Xxxxxx Xxxxxxxx | ||
| Name: Xxxxxx Xxxxxxxx | |||
| Title: Vice President | |||
| W/W GROUP HOLDINGS, L.L.C., a Delaware limited liability
company | |||
| By: | /s/ Xxxxxx Xxxxxxxx | ||
| Name: Xxxxxx Xxxxxxxx | |||
| Title: Vice President | |||
-17-
|
EXHIBIT A Form of Redeemed Interest Assignment Agreement ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTEREST | |
|
This Assignment and Assumption of Membership Interest (this
“Agreement”) is made as of this 21st day of September, 2005
by and between Wellsford Commercial Properties Trust
(“Assignor”) and Wellsford/Whitehall Group, L.L.C., a
Delaware limited liability company (“Assignee”). | |
| RECITALS | |
| WHEREAS,
Assignor currently owns the membership interest described on Schedule
I (the “Membership Interest”) in
Wellsford/Whitehall Group, L.L.C., a Delaware limited liability company (the
“Company”); and | |
| WHEREAS,
the Company is presently governed by that certain Limited Liability Company Operating
Agreement of the Company, dated as of May 28, 1999, as amended by the First Amendment
thereto dated as of December 21, 2000, and as further amended by the Second Amendment
thereto dated as of March 29, 2004; and | |
| WHEREAS,
the interests of certain members of the Company formerly known as the “Saracen
Members” were redeemed pursuant to a Redemption Agreement, dated July 2, 2004,
by and between the Company and the Saracen Members (the “Saracen
Agreement”), and as a result thereof, the signatories hereto are the
sole members of the Company as of the date hereof; | |
| WHEREAS,
Assignee desires to redeem the Membership Interest, all as part of that certain Redemption
Agreement dated September 21, 2005, between the parties hereto, among others (the
“Redemption Agreement”). | |
| NOW
THEREFORE, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows: | |
| 1. |
On the terms and conditions hereinafter set forth, Assignor hereby grants,
conveys, assigns and transfers to Assignee (collectively, the
“Assignment”) all of Assignor’s right, title
and interest, in, to and under the Membership Interest (the “Assigned
Interest”). |
| 2. | Assignee hereby accepts the Assignment and, subject to the provisions of that certain Redemption Agreement dated as of the date hereof between Assignor and Assignee, among others, assumes the obligations of Assignor with respect to the Membership Interest accruing after the date hereof and, subject to the provisions of said Redemption Agreement, hereby releases the Assignor from any and all obligations the Assignor may have to Assignee. |
EXH. A-1
| 3. |
Upon the execution of this Assignment by the parties hereto, Assignor does
hereby withdraw as a member of the Company. |
| 4. |
The representations and warranties made by Assignor in Section 6.1 of the
Redemption Agreement are hereby incorporated by reference and shall be deemed to
be part of this Agreement. |
| 5. |
The representations and warranties made by Assignee in Section 6.2 of the
Redemption Agreement are hereby incorporated by reference and shall be deemed to
be part of this Agreement. |
| 6. |
The provisions (i) in the last paragraph of Section 6.1 of the Redemption
Agreement, (ii) in the last paragraph of Section 6.2 of the Redemption
Agreement and (iii) in Section 6.4 of the Redemption Agreement, are hereby
incorporated by reference and shall be deemed to be part of this Agreement. |
| 7. |
The parties hereto agree that this Agreement shall bind and inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
successors and assigns. |
| 8. |
This Agreement shall be construed under and enforced in accordance with the laws
of the State of Delaware. |
| 9. |
Any modification of this Agreement shall be effective only if in a writing
executed by all parties. |
| 10. |
This Agreement may be executed in counterparts, each of which shall be an
original and all of which, taken together, shall constitute one and the same
instrument. |
| 11. |
Capitalized terms used and not defined in this Agreement shall have the meanings
ascribed thereto in the Redemption Agreement. |
| [signature page follows] | |
EXH. A-2
| IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement as of the day and year first above written. |
| WELLSFORD COMMERCIAL PROPERTIES TRUST | |||
| By: | /s/ Xxxxx X. Xxxxx | ||
| Name: Xxxxx X. Xxxxx | |||
| Title: Chief Financial Officer | |||
| WELLSFORD/WHITEHALL GROUP, L.L.C.,
a Delaware limited liability company | |||
| By: | WP Commercial, L.L.C., its Manager | ||
| By: | /s/ Xxxxxx Xxxxxxxx | ||
| Name: Xxxxxx Xxxxxxxx | |||
| Title: Vice President | |||
EXH. A-3
|
EXHIBIT B Form of FIRPTA Certificate | |
|
This Certificate of Non-Foreign Status (this "Certificate") is made as of the ___ day of
_________, 2005, by ________________, a _______________ (the "Transferor"). This Certificate is made pursuant to Section 1445 of the Internal Revenue Code, which provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including section 1445), the owner of a disregarded entity (which has title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is not required on the disposition of a U.S. real property interest by the Transferor, the undersigned hereby certifies the following on behalf of the Transferor: | |
| 1. |
The Transferor is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate or non-resident alien (as those terms are defined in
the Internal Revenue Code and United States Income Tax Regulations); |
| 2. |
The Transferor is not a disregarded entity, as defined in United States
Income Tax Regulations Section 1.1445-2(b)(2)(iii); |
| 3. | The Transferor’s U.S. employer identification number or social
security number is _________; and |
| 4 | The Transferor’s address is: |
|
______________________________ ______________________________ ______________________________ | |
| The
Transferor understands that this certification may be disclosed to the Internal Revenue
Service by the transferee and that any false statement contained herein could be punished
by fine, imprisonment or both. | |
| Under
penalties of perjury, I declare that I have examined the contents of this Certificate and,
to the best of my knowledge and belief, they are true, correct, and complete, and I
further declare that I have authority to sign this document on behalf of the Transferor. | |
| ___________________________________ | |
EXH. X-0
|
XXXXXXX X XX. XXXXXX |
XXX. C-1
|
EXHIBIT D DESCRIPTION OF MOUNTAIN HEIGHTS PARKING LOSS REIMBURSEMENT INDEMNITY |
|
(excerpted from that certain Purchase and Sale Agreement, dated as of December 27, 2002, by and
between Wellsford/Whitehall Holdings, L.L.C. and Transwestern Investment Company, L.L.C.) 11.22 Mountain Heights Parking Loss Reimbursement Indemnity. The parties acknowledge that there are currently nine hundred fifty-six (956) parking spaces (the “Existing Parking”) at the Property described on Exhibit 1.1.1 as Mountain Heights Center located in the Township of Berkeley Heights, County of Union, State of New Jersey (the “Mountain Heights Property”). If at any time, Purchaser enters into a letter of intent or a lease for the leasing of additional space in the Mountain Heights Property which, (a) when taken together with existing leases, would increase the occupancy of the rentable square footage of the Mountain Heights Property to eighty-eight percent (88%) or more; and (b) in Purchaser’s reasonable judgment, will trigger Deficient Parking at the Mountain Heights Property, Seller shall pay to Purchaser Seller’s Pro-Rata Share of Purchaser’s Parking Losses. The payment obligation under this Section 11.22 shall expire and be of no further effect on that date which is three (3) years after the Effective Date, except with respect to any claims asserted prior to such date. Notwithstanding anything contained herein to the contrary, Seller’s liability to Purchaser pursuant to this indemnity shall not exceed $400,000. |
Sch. D-1
|
SCHEDULE I Assigned Interests Wellsford Commercial Properties Trust 6,276,780 Membership Units |
Sch. I-1
