FIRST AMENDMENT TO
LETTER OF CREDIT REIMBURSEMENT AGREEMENT
This First Amendment to Letter of Credit Reimbursement Agreement (the
"First Amendment"), dated as of May 30, 1997, among PALOMINO PARK PUBLIC
IMPROVEMENTS CORPORATION, a Colorado nonprofit corporation (the "Bond Issuer");
WELLSFORD RESIDENTIAL PROPERTY TRUST, a Maryland real estate investment trust
("Wellsford REIT") (immediately upon consummation of the Merger described
herein, Wellsford REIT's name shall be changed to Equity Residential Properties
Trust); DRESDNER BANK AG, a banking corporation organized and existing under
the laws of The Federal Republic of Germany, acting by and through its New York
Branch (the "Bank"); and WELLSFORD REAL PROPERTIES, INC., a Maryland
corporation ("WRP"), relates to that certain Letter of Credit Reimbursement
Agreement, dated as of December 1, 1995, by and among the Bond Issuer,
Wellsford REIT and the Bank (the "Reimbursement Agreement"). Except as
otherwise provided herein, capitalized terms used in this First Amendment shall
have the meanings set forth in the Reimbursement Agreement, as amended by this
First Amendment (the "Amended Reimbursement Agreement"), and the rules of
interpretation contained in Sections 1.2 and 1.3 of the Reimbursement Agreement
shall apply equally to this First Amendment.
WHEREAS, the Bond Issuer has issued its Assessment Lien Revenue
Bonds, Series 1995 (the "Bonds") pursuant to the terms of a Trust Indenture,
dated as of September 1, 1995 (the "Bond Indenture"), between the Bond Issuer
and United States Trust Company of New York, as Trustee (the "Bond Trustee");
and
WHEREAS, in order to secure the payment of principal of and interest
on the Bonds, the Bank has issued an irrevocable Letter of Credit (together
with any extensions, renewals or replacements thereof, the "Letter of Credit"),
in accordance with the terms of the Reimbursement Agreement; and
WHEREAS, Wellsford REIT intends to spin-off WRP and merge with Equity
Residential Properties Trust, a Maryland real estate investment trust ("ERP
REIT"), with Wellsford REIT being the surviving entity and being renamed Equity
Residential Properties Trust; and
WHEREAS, Wellsford REIT and WRP intend to enter into that certain
Assignment Agreement dated as of May 30, 1997 (the "Assignment Agreement")
pursuant to which Wellsford REIT assigns all of its right, title and interest
in the Reimbursement Agreement to WRP and WRP assumes all obligations of
Wellsford REIT arising out of or in connection with the Reimbursement Agreement
and covenants and agrees that it shall perform the obligations of Wellsford
REIT thereunder; and
WHEREAS, the Bank and the Bond Issuer have been asked to consent to
the Assignment Agreement and to the Merger; and
WHEREAS, the Bank and the Bond Issuer have been asked to consent to
the replacement of Wellsford REIT with WRP as an Account Party to the
Reimbursement Agreement; and
WHEREAS, in order to induce the Bank to consent to the Assignment
Agreement and to enter into this First Amendment, ERP Operating Limited
Partnership, an Illinois limited partnership (the "Guarantor"), which is a
majority owned subsidiary of ERP REIT and after the Merger will be a majority
owned subsidiary of Wellsford REIT (with Wellsford REIT being renamed "Equity
Residential Properties Trust"), intends to enter into that certain Guaranty
dated as of May 30, 1997 (the "Guaranty;") on behalf of the Bank; and
WHEREAS, the parties desire to amend the Reimbursement Agreement as
hereinafter provided.
NOW THEREFORE for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
11. From and after the effectiveness of this First Amendment, the
Bank hereby consents to the Spin Off, the Merger and the Assignment Agreement.
From and after the effectiveness of this First Amendment, WRP is hereby
constituted as successor account party to Wellsford REIT under the
Reimbursement Agreement, and Wellsford REIT is released from all future
liability to the Bank and the Bond Issuer under the Reimbursement Agreement,
the Letter of Credit, the Bond Indenture, the Remarketing Agreement, the
Promissory Notes, the Pledge Agreement and the Bonds except as set forth below.
From and after the effectiveness of this First Amendment, all references in the
Reimbursement Agreement to Wellsford REIT shall be deemed references to WRP
(except for the references contained in Article 3, to the extent such
references relate to conditions precedent satisfied prior to the effectiveness
of this First Amendment.)
12. Section 1.1 of the Reimbursement Agreement shall be amended as
follows:
a. The following definitions contained in Section 1.1 shall be
deleted in their entirety: "Agent," "Base Rate Loans," "Lenders,"
"Loans," "Net Capital Expenditures," "Pro Forma Debt Service Charges,"
"REIT Status," "Unencumbered Operating Properties," and "Wellsford REIT
Loan Obligations";
b. The definition of "Balance Sheet Date" shall be amended by
deleting the words "September 30, 1995" and inserting the words "May 30,
1997 (after the consummation of the Spin Off and the Merger)" in lieu
thereof;
c. The definition of "Base Rate" shall be amended by deleting the
words "Bank of Boston at its head office in Boston, Massachusetts" and
inserting the words "Dresdner Bank AG, New York Branch at its office in
New York, New York";
d. The definition of "Consolidated Operating Cash Flow" shall be
amended and restated in its entirety as follows:
(a) "Consolidated Operating Cash Flow" means, with respect to
any period, an amount equal to the Operating Cash Flow of the
Borrower and its Subsidiaries for such period consolidated in
accordance with generally accepted accounting principles.
e. The definition of "Debt Service" shall be amended and restated
in its entirety as follows:
(a) "Debt Service" means, for any period, the sum of actual
interest expense and mandatory or scheduled principal payments due
and payable during such period with respect to all Indebtedness,
excluding any balloon payments due upon maturity of any Indebtedness,
amortized loan fees and the capitalized interest expense and
principal payments due with respect to the construction loans on the
Development permitted by Section 6.3(a) hereof.
f. The definition of "Deed of Trust" shall be amended by adding the
words "including such amendments, modifications or supplements permitted
pursuant to its terms and Section 6.1" after the words "dated December 1,
1995".
g. The definition of "Development" shall be amended by adding the
words "comprising approximately 182 acres planned for development in five
phases" before the period at the end thereof.
h. The definition of "Distribution" shall be amended by (i)
deleting the words "beneficial interest" and adding the words "common
stock or other equity interests" in lieu thereof each time such words
appear therein and (ii) deleting the words "or partners as such."
i. The definition of "Expiration Date" shall be amended by
replacing the words ""the Maturity Date of the Wellsford REIT Loan
Agreement" with the words "May 30, 2005."
AR The definition of "Federal Funds Effective Rate" shall be
amended by (i) replacing the word "Agent" with the words "the Bank" each
time such word appears therein and (ii) deleting the words "as provided
for in the Wellsford REIT Loan Agreements";
k. The definition of "Operating Cash Flow" shall be amended and
restated in its entirety as follows:
(a) "Operating Cash Flow" means, with respect to any Person (or
any asset of any Person) for any period, an amount equal to the sum
of (a) the Net Income (or Deficit) of such Person (or attributable to
such asset) for such period plus (b) depreciation and amortization,
interest expense, and any extraordinary or non-recurring losses
deducted in calculating such Net Income (or Deficit) minus (c) any
extraordinary or non-recurring gains included in calculating such Net
Income (or Deficit).
l. The definition of "Participant(s)" shall be amended by deleting
the parenthetical "(including without limitation the Intercreditor
Agreement)";
m. The definition of "Pledge Agreement" shall be amended by adding
the words "including, without limitation, the Bond Pledge Amendment"
before the period at the end thereof.
n. The definition of "Promissory Note" shall be amended by adding
the words ", including, without limitation, the Note Amendments" before
the period at the end thereof.
o. The definition of "Reimbursement Agreement" shall be amended by
adding the words ", including, without limitation, the First Amendment"
before the period at the end thereof.
p. The definition of "Related Documents" shall be amended by
deleting the words "the Wellsford REIT Loan Agreement, the Intercreditor
Agreement and the Loan Documents" and inserting the words "the First
Amendment, the Assignment Agreement, the Note Amendments, the Guaranty,
the Bond Pledge Amendment, the Indenture Supplement, the Assessment
Agreement Amendment, the Assessment and Lien Amendment and the Deed of
Trust Amendment";
q. The definition of "Wellsford Reimbursement Agreement" shall be
amended by adding the words "and all exhibits, instruments or agreements
relating thereto or contemplated thereby, including without limitation
that certain Wellsford Bond Pledge and Security Agreement dated as of
December 20, 1995, that certain First Amendment to Wellsford Bond Pledge
and Security Agreement dated as of May 30, 1997, that certain Palomino
Park Promissory Note from the Bond Issuer to Wellsford REIT dated as of
December 20, 1995, and that certain Endorsement of Palomino Park
Promissory Note by Wellsford REIT to WRP dated May 30, 1997, in each case
including such amendments, modifications or supplements permitted pursuant
to this respective terms and Section 6.1.
r. The following definitions shall be added to Section 1.1 in the
proper alphabetical order:
(a) "Adjustment Date" means the earlier to occur of (i) May 30,
1998, (ii) the date on which an Equity Offering is completed having
raised an amount of not less than $50,000,000; and (iii) the date on
which the Point View Office Complex is 90% leased pursuant to
bona-fide arms-length leases requiring the payment of current rent
with tenants in actual occupancy.
(b) "Assessment and Lien Amendment" means that certain First
Amendment to Public Improvements Assessment and Lien, dated as of May
[30], 1997, by and between the Bond Issuer and Highlands.
(c) "Assessment Agreement Amendment" means that certain First
Amendment to Assessment Agreement, dated as of May [30], 1997, by and
between the Bond Issuer and Highlands.
(d) "Assignment Agreement" means that certain Assignment and
Assumption Agreement, dated as of May [30], 1997, by and between
Wellsford REIT and WRP.
(e) "Bond Pledge Amendment" means that certain First Amendment
to Bond Pledge and Security Agreement, dated as of May [30], 1997,
among WRP, Wellsford REIT, the Bond Issuer, the Bank and the Bond
Trustee.
(f) "Capital Improvement Reserve" means, for any period, an
amount equal to thirty cents ($0.30) multiplied by the weighted
average of rentable square footage of Real Estate owned by the
Borrower and its Subsidiaries during such period.
(g) "Deed of Trust Amendment" means that certain First
Amendment to Deed of Trust, Security Agreement, Financing Statement
and Assignment of Rents and Leases dated as of May [30], 1997, by and
among the Bond Issuer, the Bond Trustee and the Bank.
(h) "Drawing Date" has the meaning set forth in Section 2.1(1).
(i) "Equity Offering" means the issuance and sale by WRP of any
of its equity securities.
(j) "Final LC Loan Payment Date" has the meaning set forth in
Section 2.2(1).
(k) "First Amendment" means that certain First Amendment to
Letter of Credit Reimbursement Agreement, dated as of May [30], 1997,
among the Bond Issuer, Wellsford REIT, the Bank and WRP.
(l) "First Amendment Effective Date" means that date when all
of the conditions to the effectiveness of the First Amendment have
been satisfied or waived by the Bank and the First Amendment has
become effective. The First Amendment Effective Date is May 30,
1997.
(m) "Guarantor" means ERP Operating Limited Partnership, an
Illinois limited partnership.
(n) "Guarantor's Loan Agreement" means that certain Amended and
Restated Revolving Credit Agreement dated as of December 9, 1996
among Guarantor, the banks listed therein, ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Lead Agent, Bank of America Illinois, as Co-
Lead Agent, The First National Bank of Chicago, as Co-Lead Agent,
First Bank National Association, as Co-Lead Agent, and Nationsbank of
Texas, N.A., as Co-Agent.
(o) "Guaranty" means that certain Guaranty dated as of May 30,
1997 made by the Guarantor on behalf of the Bank.
(p) "Interest Payment Date" means the 1st day of every month.
(q) "Indenture Supplement" means that certain First Amendment
to Trust Indenture, dated as of May 30, 1997, between the Bond Issuer
and the Bond Trustee.
(r) "Merger" means the transactions contemplated by that
certain Agreement and Plan of Merger dated as of January 16, 1997,
pursuant to which Wellsford REIT and Equity Residential Properties
Trust will merge, with Wellsford REIT being the surviving entity and
being renamed "Equity Residential Properties Trust."
(s) "Net Cash Proceeds" means, with respect to the sale or
issuance of any capital stock or other equity securities, notes,
bonds, debentures, debt securities or other similar instruments, any
securities convertible into or exchangeable for capital stock or any
warrants, rights or options to acquire capital stock by any Person,
the aggregate amount of cash in connection with such transaction
after deducting therefrom only (a) actual costs of such sale or
issuance, including brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees and other similar fees and
commissions and (b) the amount of taxes payable in connection with or
as a result of such transaction, in each case to the extent, but only
to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid or earmarked for payment to a
Person that is not an Affiliate and are properly attributable to such
transaction or to the asset that is the subject hereof in accordance
with generally accepted accounting principles consistently applied."
(t) "Note Amendments" means that certain Amended and Restated
Promissory Note dated as of May 30, 1997 made by WRP and that certain
Allonge to Promissory Note dated as of May 30, 1997 made by the Bond
Issuer.
(u) "Point View Office Complex" means certain real property and
improvements located in Wayne, New Jersey consisting of the
following: (i) a main campus of two office buildings and (ii) two
smaller office buildings located at 1700 and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
(v) "Proxy Statement" means that certain Equity Residential
Properties Trust and Wellsford Residential Property Trust Joint Proxy
Statement, Equity Residential Properties Trust Prospectus and
Wellsford Real Properties, Inc. Information Statement dated April 25,
1997.
:\E "Red Canyon" means Red Canyon at Palomino Park LLC, a
Colorado limited liability company, the members of which are
Wellsford Park Highlands Corp. (99%) and ▇▇ ▇▇▇▇ (1%).
(x) "Shareholder's Equity" means, at any date, the total
consolidated shareholder's equity of WRP and its Subsidiaries,
determined in conformity with generally accepted accounting
principles consistently applied.
(y) "Spin Off" means the transactions contemplated by that
certain Contribution and Distribution Agreement dated as of May 30,
1997 by and between Wellsford REIT and WRP, pursuant to which, among
other things, certain assets are contributed and certain obligations
are assumed by WRP, including, among others, 80% of the shares of
WPHC (which represents an approximately 80% interest in the
Development) and WRP's common stock is distributed to Wellsford
REIT's shareholders.
(z) "Spin Off Agreements" means the Contribution and
Distribution Agreement dated as of May 30, 1997 by and between
Wellsford REIT and WRP, the Credit Enhancement Agreement dated as of
May 30, 1997 by and between Guarantor and WRP, the Agreement
Regarding Palomino Park by and between Guarantor and WRP, those
certain Right of First/Last Offer Agreements contemplated by the
Agreement Regarding Palomino Park, those certain Restrictive Covenant
Agreements contemplated by the Agreement Regarding Palomino Park, the
Tri-Party Agreement (the "Highlands Tri-Party Agreement"), dated as
of December 29, 1995 by and among Nationsbank of Texas, N.A.,
Highlands, WPHC, Wellsford REIT, ▇▇ ▇▇▇▇ and the ▇▇▇▇ Company, the
Assignment and Assumption of Tri-Party Agreement dated as of May 30,
1997 by and among Wellsford REIT, Guarantor, and the other Persons
party to the Highlands Tri-Party Agreement, the Tri-Party Agreement
(the "Red Canyon Tri-Party Agreement") dated as of May 29, 1997 by
and among Nationsbank of Texas, N.A., Red Canyon, WPHC, Wellsford
REIT, ▇▇ ▇▇▇▇ and the ▇▇▇▇ Company, the Assignment and Assumption of
Tri-Party Agreement dated as of May 30, 1997, by and among Wellsford
REIT, Guarantor and the other Persons party to the Red Canyon Tri-
Party Agreement, the Standby Option Agreement dated as of May 30,
1997 by and between WPHC and Guarantor, the Reimbursement and
Indemnification Agreement dated as of May 30, 1997 by and between WRP
and Guarantor, the Pledge of Promissory Note and Collateral
Assignment of Reimbursement Agreement dated as of May 30, 1997 by WRP
in favor of Guarantor, the Shareholder's Agreement dated as of May
30, 1997 by and between WRP, Guarantor, and WPHC, the Affirmative
Covenant Agreement dated as of May 30, 1997 by the Bond Issuer in
favor of Guarantor and, in each case, all exhibits, instruments or
agreements relating to each.
(aa) "Tangible Net Worth" means the excess of total assets over
total liabilities, total assets and total liabilities to be
determined in accordance with generally accepted accounting
principles consistently applied, minus intangible assets (including,
without limitation, franchises, patents, patent applications,
trademarks, brand names, goodwill and capitalized research and
development cost), determined in conformity with generally accepted
accounting principles consistently applied.
(ab) "WPHC" means Wellsford Park Highlands Corp., a Colorado
corporation.
(ac) "WRP" means Wellsford Real Properties, Inc., a Maryland
corporation.
(ad) "WRP Loan Agreement" means that certain Revolving Credit
Agreement dated as of May 30, 1997 among WRP and Bank Boston and
▇▇▇▇▇▇ Guaranty Trust Company of New York pursuant to which a
revolving line of credit in the amount of up to $50 million will be
made available to WRP, as described in the Proxy Statement.
13. Section 2.1 of the Reimbursement Agreement shall be amended as
follows:
a. Subsection (2) shall be deleted in its entirety and the
following subsection (2) shall be inserted in lieu thereof:
(a) "(2) To the extent permitted by law all amounts required
to be reimbursed to the Bank pursuant to the foregoing clause (1) of
this Section 2.1 shall bear interest at the Base Rate for three days
from the date such amounts are required to be reimbursed, and
thereafter at the Default Rate until paid in full. Such amounts
shall be due and payable on demand."
b. The last sentence of Section 2.1 shall be deleted in its
entirety.
14. Section 2.2 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 2.2 shall be inserted in lieu thereof:
(a) "Section 2.2 Reimbursement of Liquidity Drawing Amounts and LC
Loans. The Account Parties agree that they shall reimburse the Bank for
amounts drawn under Liquidity Drawings (the "Liquidity Drawing Amounts")
in accordance with the following provision of this Section 2.2:
(b) (1) At the written request of both Account Parties received by
the Bank no later than 8:00 a.m. New York time on the Business Day next
succeeding the Drawing Date (the "LC Loan Eligibility Date") stating that
no Default exists and is continuing or would result from the conversion of
a Liquidity Drawing into an LC Loan as set forth herein and that the
representations and warranties contained in Article IV of this
Reimbursement Agreement are true and correct on and as of the date of such
conversion as if made on and as of such date, and requesting a conversion
to an LC Loan as set forth herein, to the extent not repaid in full,
including interest thereon in accordance with clause (2) of Section 2.1,
Liquidity Drawings may be converted into a short-term loan under this
Reimbursement Agreement (an "LC Loan"). From and after the LC Loan
Eligibility Date and until the LC Loans have been repaid in full, the LC
Loans shall bear interest at the Base Rate plus one and three-quarters
percent (1.75%) for the period commencing on the LC Loan Eligibility Date
and ended fourteen days following the Drawing Date for the Liquidity
Drawing that became such LC Loan, at the Base Rate plus two and one-half
percent (2.5%) for the next fourteen days thereafter, and at the Base Rate
plus three and one-half percent (3.5%) for the next fourteen days
thereafter (the "Final LC Loan Payment Date"). Interest on such LC Loans
shall be payable in arrears on the earlier of each Interest Payment Date
or the applicable Final LC Loan Payment Date. On the Final LC Loan
Payment Date for any LC Loan, such LC Loan shall be immediately due and
payable in full, including all accrued and unpaid interest. LC Loans may
be prepaid in accordance with Section 2.4. Any Liquidity Drawing that is
not converted into a LC Loan in accordance with this Section 2.2(1) shall
be due and payable at the time, and bear interest at the rates set forth
in Section 2.1.
(c) (2) Notwithstanding the foregoing, all unreimbursed Liquidity
Drawings and LC Loans shall be accelerated and become immediately due and
payable on the first to occur of the end of the Final LC Loan Interest
Period (for LC Loans only) and the Expiration Date. To the extent
permitted by law, any unreimbursed Liquidity Drawings or LC Loan, and any
interest accruing thereon, that are not paid when due thereafter shall
bear interest at the Default Rate. While held by or for the benefit of
the Bank, the Pledged Bonds shall bear interest at the Base Rate plus one
and three-quarters percent (1.75%)."
15. Section 2.4 of the Reimbursement Agreement shall be amended as
follows:
a. The first sentence thereof shall be amended by deleting the
words "and the Lenders";
b. The third sentence thereof shall be amended by deleting the
parenthetical;
c. Subsection (2) shall be amended by deleting the parenthetical
which immediately follows the words "the Bank shall receive a payment."
16. Section 2.8 of the Reimbursement Agreement shall be amended by
(i) replacing the word "arrears" with the word "advance" each time such word
appears therein, (ii) replacing the phrase "each Wellsford REIT Loan Agreement
Interest Payment Date" with the phrase "January 1, April 1, July 1 and October
1 of each year until the Expiration Date" each time such phrase appears
therein, and (iii) replacing the percentage "0.50%" with the percentage "0.95%"
each time such percentage appears therein.
17. Section 2.10 of the Reimbursement Agreement shall be amended by
deleting the parenthetical contained in the first sentence thereof.
18. Section 2.15 shall be deleted in its entirety.
19. Section 4.1 of the Reimbursement Agreement shall be amended by
amending subsection (1) by deleting subsection (a) in its entirety and
inserting the following subsection (a) in lieu thereof:
(1) "(a) WRP: (i) is a Maryland corporation duly organized,
incorporated, validly existing and in good standing under the laws of
Maryland, (ii) has all requisite power to own its property, to
conduct its business as now conducted and as presently contemplated
and to enter into and satisfy its obligations under this
Reimbursement Agreement and the other Related Documents to which it
is a party, and (iii) is in good standing as a foreign entity and is
duly authorized to do business in Denver, Colorado and in each other
jurisdiction where failure to be so qualified in such other
jurisdiction could have a materially adverse effect on the business,
assets or financial condition of WRP.".
20. Section 4.4 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 4.4 shall be inserted in lieu thereof:
(a) "Section 4.4 Financial Statements. WRP and Highlands have
furnished to the Bank: pro forma income projections and pro forma summary
balance sheets of WRP as of the Balance Sheet Date satisfactory in form
and substance to the Bank and certified by WRP's chief financial officer
as fairly presenting reasonable estimates of the matters set forth
therein. Such balance sheet and statements of income and stockholder's
equity and all other financial statements delivered to the Bank by WRP or
Wellsford REIT in connection with the Spin Off, the Merger and the First
Amendment, and all other financial statements delivered to the Bank by WRP
on or after the Balance Sheet Date pursuant to Section 5.4 hereof, have
been prepared in accordance with generally accepted accounting principles,
are complete, true and correct and fairly present the financial condition
of WRP and its Subsidiaries and Highlands and its Subsidiaries,
respectively, as of such dates and the results of the operations of each
of them. There are no liabilities, contingent or otherwise, of WRP or
Highlands or any of their respective Subsidiaries involving material
amounts not disclosed in said financial statements and the related notes
thereto, or financial statements and the related notes thereto delivered
to the Bank in accordance with Section 5.4 hereof."
21. Section 4.7 of the Reimbursement Agreement shall be amended by
deleting the phrase ", or of Wellsford REIT to pay and perform the Wellsford
REIT Loan Obligations in the manner contemplated by the Wellsford REIT Loan
Agreement and the Loan Documents" in its entirety.
22. Section 4.14 of the Reimbursement Agreement shall be amended by
(i) adding the words ", or assumption, as the case may be," after the words
"execution and delivery" and (ii) adding the words ", limited liability
operating agreements or" after the words "articles of incorporation."
23. Section 4.15 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 4.15 shall be inserted in lieu thereof:
(a) "Section 4.15. [Reserved]"
24. Section 4.17 of the Reimbursement Agreement shall be amended by
(i) adding the word "or" immediately after the words "Liquidity Drawing Amount"
and immediately after the words "this Reimbursement Agreement," (ii) deleting
the phrase "or any Loan (as that term is defined in the Wellsford REIT Loan
Agreement)" and (iii) deleting the phrase "or the Wellsford REIT Loan
Agreement."
25. Section 4.23 of the Reimbursement Agreement shall be amended by
deleting the words "of the Wellsford REIT Loan Obligations."
26. Section 4.25 of the Reimbursement Agreement shall be amended by
(i) adding the word "or" immediately before the words "any other Related
Document" and (ii) deleting the words "the Wellsford REIT Loan Agreement or the
Loan Documents related thereto."
27. Section 5.4 of the Reimbursement Agreement shall be amended by
deleting subsection (h) thereof and replacing it with the following:
(a) "(i) concurrently with the delivery thereof pursuant to the WRP
Loan Agreement, copies of all certificates, reports, financials and other
documents delivered to the Lenders pursuant to the WRP Loan Agreement;
and"
28. Section 5.5 of the Reimbursement Agreement shall be amended by
deleting subsection (4) in its entirety and replacing it with the following
subsection (4):
(a) "(4) [Reserved.]".
29. Section 5.6 of the Reimbursement Agreement shall be amended by
replacing the words "real estate investment trust" with the word "corporation"
in the first sentence thereof.
30. Section 5.8 of the Reimbursement Agreement shall be amended by
deleting the last sentence thereof in its entirety.
31. Sections 5.12, 5.13 and 5.14 shall be deleted in their entirety.
32. Section 6.1 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 6.1 shall be inserted in lieu thereof:
(a) "Section 6.1 Amendments. Each Account Party shall not, and
WRP shall not permit Highlands, Red Canyon, or any other Subsidiary of WRP
to, amend, modify, or supplement, or agree to any amendment or
modification of, or supplement to, any of the Related Documents or the
Wellsford Reimbursement Agreement to which it is a party. Each Account
Party shall not, and WRP shall not permit Highlands, Red Canyon, or any
other Subsidiary of WRP, to amend, modify or supplement, or agree to any
amendment or modification of, or supplement to, that certain Operating
Agreement of Red Canyon, dated as of April 17, 1996, that certain
Operating Agreement of Highlands, dated as of April 27, 1995 (as amended
by that certain First Amendment to Operating Agreement of Highlands, dated
December 29, 1995), and that certain Deposit and Contract Administration
Agreement, made as of May 2, 1995, by and between the ▇▇▇▇ Company and
Wellsford Park Highlands Corp. if such amendment, modification or
supplement would have an adverse effect on the Bank or on any Account
Party's ability to satisfy its obligations under this Reimbursement
Agreement or any Related Document or on Guarantor's ability to satisfy its
obligations under the Guaranty. The Account Parties shall not amend, and
shall not permit WPHC, Highlands, Red Canyon or any of their other
respective Subsidiaries to amend, modify or supplement any Spin Off
Agreement if such amendment, modification or supplement would have an
adverse effect on the Bank or on any Account Party's ability to satisfy
its obligations under this Reimbursement Agreement or any Related Document
or on Guarantor's ability to satisfy its obligations under the Guaranty."
33. Section 6.3 of the Reimbursement Agreement shall be amended as
follows:
a. Subsection (a) shall be amended by deleting the words
"Indebtedness to the bank group under the Wellsford REIT Loan Agreement
and the Loan Documents related thereto" and adding the words "Indebtedness
under the WRP Loan Agreement and the documents related thereto,
Indebtedness of Red Canyon in a principal amount not to exceed
$29,500,000, on terms similar to those applicable to the construction
financing for Phase I of the Development provided by Nationsbank, the
proceeds of which will be used to construct Phase II of the Development,"
in lieu thereof;
b. Subsection (f) shall be deleted in its entirety and the
following subsection (f) shall be inserted in lieu thereof:
(a) "(f) [reserved]"
c. Subsection (g) shall be deleted in its entirety and the
following subsection (g) shall be inserted in lieu thereof:
(a) "(g) [reserved]"
d. Subsection (h) shall be deleted in its entirety and the
following Subsection (h) shall be inserted in lieu thereof:
(a) "(h) [reserved]"
e. Subsection (i) shall be deleted in its entirety and the
following subsection (i) shall be inserted in lieu thereof:
(a) "(i) [reserved]"
f. Subsection (j) shall be deleted in its entirety and the
following subsection (j) shall be inserted in lieu thereof:
(a) "(j) [reserved]"
34. Section 6.4, subsection (f) shall be amended by deleting the
words ",liens in favor of the Lenders under the Wellsford REIT Loan Agreement
and Loan Documents."
35. Section 6.5 shall be amended by (i) adding the word "and" after
the semi-colon in Subsection (i); and (ii) deleting Subsections (j) and (k) in
their entirety and inserting the following Subsection (j) in lieu thereof:
(a) "(j) with respect to WRP and its Subsidiaries, investments
consistent with the certain Section entitled "Lines of Business" in the
Form S-11 Registration Statement for WRP delivered to the Bank in
connection with the First Amendment."
36. Section 6.9 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 6.9 shall be inserted in lieu thereof:
(a) "Section 6.9 Distributions. WRP will not make any
Distributions which would cause it to violate the provisions of Section
6.17."
37. Section 6.10 of the Reimbursement Agreement shall be amended as
follows:
a. Subsection (1) shall be deleted in its entirety and the
following subsection (1) shall be inserted in lieu thereof:
(a) "(1) WRP shall not sell, transfer or otherwise dispose of
any interest in WPHC unless after giving effect to such disposition,
WRP shall hold at least fifty-one percent (51%) of the Voting
Interests of WPHC, and WPHC shall not sell, transfer, or otherwise
dispose of any interest in Highlands, Red Canyon or any other limited
liability company formed to develop any phase of the Development that
is or will be subject to the Assessment and Lien, unless, after
giving effect to such disposition, WPHC shall hold at least fifty-one
percent (51%) of the Voting Interests of Highlands, Red Canyon and
such other limited liability company (as applicable), in any case,
unless consented to in writing by the Bank.";
b. Subsection (2) shall be amended by (i) adding the words ",
whether direct or indirect," immediately before the words "in Highlands,"
and (ii) adding the words ", WPHC and/or Red Canyon" after the words "in
Highlands".
38. Section 6.11 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 6.11 shall be inserted in lieu thereof:
(a) "Section 6.11. [Reserved]"
39. Section 6.12 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 6.12 shall be inserted in lieu thereof:
(a) "Section 6.12. [Reserved]"
40. Section 6.13 of the Reimbursement Agreement shall be amended by
(i) deleting the "(i)" immediately following the words "of any Indebtedness
other than the obligations" and (ii) deleting the words "and (ii) to the Agent
and the Lenders under the Wellsford REIT Loan Agreement and the other Loan
Documents."
41. Section 6.14 of the Reimbursement Agreement shall be deleted in
its entirety and the following Section 6.14 shall be inserted in lieu thereof:
(a) "Section 6.14. [Reserved]"
42. Section 6.17 of the Reimbursement Agreement shall be amended as
follows:
a. Subsection (1) shall be deleted in its entirety and the
following subsection (1) shall be inserted in lieu thereof:
(a) "(1) Minimum Shareholder's Equity. (a) From May 30, 1997
through June 4, 1997, WRP will not permit its Shareholder's Equity to
be less than $45,000,000; and (b) from and after June 4, 1997, WRP
will not, at the end of any fiscal quarter, permit its Shareholder's
Equity to be less than the sum of (x) $35,000,000 plus (y) eight
percent (80%) of the Net Cash Proceeds of all Equity Offerings
funding on or after May 30, 1997.
b. Subsection (2) shall be deleted in its entirety and the
following subsection (2) shall be inserted in lieu thereof:
(a) "(2) Consolidated Operating Cash Flow Coverage. WRP will
not, at the end of any fiscal quarter, (a) until the occurrence of
the Adjustment Date, permit its Consolidated Operating Cash Flow for
any period of four consecutive fiscal quarters (treated as a single
accounting period) (the "Test Period"), minus the Capital Improvement
Reserve for the Test Period to be less than 1.3 times the Debt
Service for the Test Period; and (b) after the occurrence of the
Adjustment Date, permit Consolidated Operating Cash Flow for the Test
Period minus the Capital Improvement Reserve for the Test Period to
be less than 1.5 times the Debt Service for the Test Period. Until
four consecutive fiscal quarters have been completed after July 1,
1997, the Consolidated Operating Cash Flow Coverage calculation shall
be based on those consecutive fiscal quarters ending after July 1,
1997, even if there are less than four such quarters.
43. Section 7.1 of the Reimbursement Agreement shall be amended as
follows:
a. Subsection (c) shall be amended by deleting the references to
Sections 5.13 and 5.14, by replacing the words "45 days" with the words
"15 Business Days," and by deleting the words "provided that such cure
period shall apply only if not more than two such cure periods, or
portions thereof, have occurred in the prior 12 months."
b. Subsection (d) shall be amended by replacing the words "45 days"
with the words "15 Business Days."
c. Subsection (f) shall be amended by replacing the words "(except
the Loan Documents); or the occurrence and continuation of an event of
default under any of the Loan Document" with "or the occurrence and
continuation of any default under, or the failure to observe or perform
any term, covenant or agreement contained in any of the Spin Off
Agreements if such default or failure could have an adverse effect on the
Bank or on any Account Party's ability to satisfy its obligations under
this Reimbursement Agreement or any Related Document or on Guarantor's
ability to satisfy its obligations under the Guaranty, and the passage of
the applicable cure period, if any, set forth therein."
d. Subsection (h) shall be amended by replacing the words "(i) the
amount available to the Account Parties in connection with such litigation
under any insurance policies held by the Account Parties or their
Subsidiaries plus (ii) in the case of Wellsford REIT and its Subsidiaries"
with the words "$250,000" and by adding the words "or any judgment
creditor shall levy upon assets or properties of either Account Party or
any of their respective Subsidiaries" immediately before the semi-colon.
e. Subsection (m) shall be amended by replacing the word "60" with
the word "30" and by replacing the word "$1,000,000" with the word
"$250,000."
f. Subsection (t) shall be amended by deleting the "and"
immediately after the semi-colon.
g. Subsection (u) shall be deleted in its entirety and the
following subsection (u) shall be inserted in lieu thereof:
(a) "(u) default under the Guaranty by the Guarantor; and"
h. The following Subsection (v) shall be added immediately after
subsection (u):
(a) "(v) default by WRP in the payment of the principal of or
interest on any obligation or Indebtedness under the WRP Loan
Agreement; or the occurrence and continuation of a default under, or
the failure to observe or perform any material term, covenant or
agreement contained in, the WRP Loan Agreement, and the passage of
the applicable cure period, if any, set forth therein."
44. Section 8.1 of the Reimbursement Agreement shall be amended by
(i) deleting the words ", any Lender" in the first sentence thereof and
(ii) adding the words "the Guarantor," after the words "the Remarketing
Agent," in clause (d) thereof.
45. Section 9.3 shall be deleted in its entirety and the following
Section 9.3 shall be inserted in lieu thereof:
(a) "Section 9.3 Extension. On or after June 20, 1999 (and annually
thereafter through June 20, 2004), WRP may request that the then-existing
Expiration Date of the Letter of Credit be extended for a period of one-
year, provided however that in no event shall the date stated in paragraph
1(a) of the Letter of Credit be extended beyond May 30, 2005. Such
request shall be made in writing at least 120 days prior to then-existing
Expiration Date. Within sixty (60) days of receipt of a request for
extension, the Bank shall, at its sole option, either notify WRP, the Bond
Issuer and the Bond Trustee that it will consent to such extension or
notify WRP, the Bond Issuer and the Bond Trustee that the Letter of Credit
will not be so extended. Failure of the Bank to respond to any requested
extension shall constitute the Bank's denial of such request. If the Bank
consents to an extension request, such extension will become effective
only upon payment by the Account Parties of an extension fee in the amount
of $16,667. Failure to pay the extension fee within thirty (30) days
after the Bank has provided its consent to an extension shall nullify such
consent and the Expiration Date of the Letter of Credit will not be so
extended."
RDO Section 10.7 shall be deleted in its entirety and the following
Section 10.7 shall be inserted in lieu thereof:
(a) "Section 10.7 Consent to Jurisdiction and Venue, Etc. Each of the
Bond Issuer and WRP irrevocably (a) agrees that any suit, action or other
legal proceeding arising out of or relating to this Reimbursement
Agreement or any of the other Related Documents may be brought in a court
of record in the State of New York or in the Courts of the United States
located in such state, (b) consents to the jurisdiction of each such court
in any such suit, action or proceeding and (c) waives any objection which
it may have to the laying of venue of any such suit, action or proceedings
in any of such courts and any claim that any such suit, action or
proceeding has been bought in an inconvenient forum. Each of the Bond
Issuer and WRP agrees that a final judgment in any such suit, 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. All
mailings under this Section 10.7 shall be by certified mail, return
receipt requested.
(b) Nothing in this Section 10.7 shall affect the right of the Bank
to serve legal process in any other manner permitted by law or affect that
right of the Bank to bring any suit, action or proceeding against either
the Bond Issuer or WRP or their respective property or any property
encumbered by the Assignment and Lien in the courts of any other
jurisdiction."
47. Section 10.13 shall be deleted in its entirety and the following
Section 10.13 shall be inserted in lieu thereof:
(a) "Section 10.13 WAIVER OF JURY TRIAL. WRP AND THE BOND ISSUER
EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO
TRIAL BY JURY FOR ANY TRIAL RESULTING EITHER DIRECTLY OR INDIRECTLY OUT
OF, UNDER OR IN CONNECTION WITH THIS REIMBURSEMENT AGREEMENT OR ANY OF THE
OTHER RELATED DOCUMENTS. WRP AND THE BOND ISSUER EACH FURTHER AGREES
THAT, IN THE EVENT OF LITIGATION, IT WILL NOT PERSONALLY OR THROUGH ITS
AGENTS OR ATTORNEYS SEEK TO REPUDIATE THE VALIDITY OF THIS SECTION 10.13,
AND IT ACKNOWLEDGES THAT IT FREELY AND VOLUNTARILY ENTERED INTO THIS
AGREEMENT TO WAIVE TRIAL BY JURY IN ORDER TO INDUCE THE BANK TO ISSUE THE
LETTER OF CREDIT, AND TO ENTER INTO THE FIRST AMENDMENT."
48. The following Section 10.15 is hereby added to the Reimbursement
Agreement:
(a) "Section 10.15. Subrogation and Subordination. Notwithstanding
anything to the contrary set forth in this Reimbursement Agreement, the
Related Documents, the Wellsford Reimbursement Agreement or the Spin Off
Agreements:
(b) (1) Subrogation. Except as set forth in Subsection 10.15(2)
below with respect to the Wellsford Reimbursement Agreement, until all
obligations to the Bank under this Reimbursement Agreement and the Related
Documents shall have been paid in full and the Letter of Credit shall have
expired or been canceled, each Account Party shall withhold exercise of
(a) any claim, right or remedy, direct or indirect, that such Account
Party now has or may hereafter have against the other Account Party or any
of its assets in connection with this Reimbursement Agreement or the
Related Documents or the performance by any Account Party of its
obligations thereunder, in each case, whether such claim, right or remedy
arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (i) any right of subrogation,
reimbursement or indemnification that any Account Party now has or may
hereafter have against the other Account Party, (ii) any right to enforce,
or to participate in, any claim, right or remedy that the Bank now or may
hereafter have against any Account Party, and (iii) any benefit of, and
any right to participate in, any collateral or security now or hereafter
held by the Bond Trustee or the Bank, and (b) any right of contribution
any Account Party may have against any other Person regarding any of the
obligations under this Reimbursement Agreement and the Related Documents.
Each Account Party agrees that, to the extent the agreement to withhold
the exercise of its rights of subrogation, reimbursement, indemnification
and contribution as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of
contribution such Account Party may have against the other Account Party
or any such other Person shall be junior to and subordinate to any rights
the Bank or the Bond Trustee may have in any such collateral or security,
and to any right the Bank may have against such other Account Party or
such other Person. The Bank may use, sell or dispose of any item of
collateral or security as it sees fit without regard to any subrogation
rights any Account Party may have, and upon any such disposition or sale
any rights of subrogation any Account Party may have shall terminate. If
any amounts shall be paid to any Account Party on account of such
subrogation, reimbursement or indemnification rights at any time when all
obligations to the Bank then due and owing under this Reimbursement
Agreement and the Related Documents shall not have been paid in full, such
amount shall be held in trust for the Bank and shall forthwith be paid
over to the Bank to be credited and applied against the obligations to the
Bank under this Reimbursement Agreement and the Related Documents whether
matured or unmatured, in accordance with the terms hereof and thereof.
(c) (2) Subordination. Any Indebtedness of an Account Party now or
hereafter held by any other Account Party, including without limitation
all obligations under the Wellsford Reimbursement Agreement, is hereby
subordinated in right of payment to the prior payment in full of all
obligations of such Person to the Bank now or hereafter existing under
this Reimbursement Agreement and the other Related Documents (all such
obligations by any Account Party to the other Account Party being the
"Subordinated Obligations"). Each Account Party agrees not to ask,
demand, ▇▇▇ for, take or receive from the other Account Party, directly or
indirectly, in cash or other property or by set-off or in any other manner
(including without limitation from or by way of collateral), payment of
all or any of the Subordinated Obligations of such other Account Party
unless and until all obligations then due and owing under this
Reimbursement Agreement and the other Related Documents shall have been
paid and satisfied in full. Any payment on any Subordinated Obligation
collected or received by any Account Party after an Event of Default has
occurred and is continuing shall be held in trust for the Bank and shall
forthwith be paid over to the Bank to be credited and applied against the
obligations to the Bank under this Reimbursement Agreement and the Related
Documents, but without affecting, impairing or limiting in any manner the
liability of any Account Party under any other provision of this
Reimbursement Agreement and the other Related Documents."
49. Exhibit D to the Reimbursement Agreement is replaced with
Attachment A (Compliance Certificate of WRP) attached hereto.
50. In connection with this First Amendment and the transactions
contemplated hereby, Account Parties agree to pay the Bank, pursuant to Section
2.5 of the Reimbursement Agreement, the sum of $50,000 as an amendment fee,
plus the Bank's actual costs and expenses (including, without limitation,
attorneys fees) associated with this First Amendment and the Related Documents.
All such amounts shall be payable on the Effective Date.
51. This First Amendment shall be effective upon the date (the
"Effective Date") that each of the following conditions is, except as
specifically provided below, (x) satisfied or (y) waived by the Bank:
a. The Account Parties shall deliver or cause to be delivered to
the Bank a fully executed copy of this First Amendment, the Assignment
Agreement, the Guaranty, the Note Amendments, and the Bond Pledge
Amendment;
b. The Account Parties shall deliver or cause to be delivered to
the Bank a fully executed copy of the Indenture Supplement, the Assessment
Agreement Amendment, the Assessment and Lien Amendment, the Deed of Trust
Amendment and all documents amending, modifying or supplementing the
Wellsford Reimbursement Agreement entered into prior to, concurrently
with, or immediately after the Spin Off and the Merger;
c. The Account Parties shall deliver or cause to be delivered to
the Bank the following for each of WRP, the Guarantor and the Bond Issuer,
unless otherwise noted, dated the Effective Date:
(1) Certified copies of the Articles of Incorporation or
Limited Partnership Agreement, as the case may be, of each of WRP,
the Guarantor and the Bond Issuer, together with a good standing
certificate from the Secretary of State (or comparable official) of
their respective jurisdictions of incorporation or organization, each
dated a recent date prior to the Effective Date;
(2) Good standing certificates regarding each of WRP, the
Guarantor and the Bond Issuer from the Secretary of State of
Colorado;
(3) Copies of the Bylaws, if applicable, for each of WRP, the
Guarantor and the Bond Issuer certified as of the Effective Date by
their respective corporate secretary or an assistance secretary;
(4) Resolutions of the Boards of Directors of each of WRP, the
Guarantor and the Bond Issuer or a written consent of its general
partner or partners, as applicable, approving and authorizing the
execution, delivery and performance of this First Amendment and the
other Related Documents to be entered into concurrently with the
First Amendment to which it is a party and the other matters
contemplated hereby and copies of all other documents evidencing any
other necessary organizational action, certified as of the Effective
Date by their respective secretary or assistant secretary as being in
full force and effect without modification or amendment;
(5) Signature and incumbency certificates of the officers of
each of WRP, the Guarantor and the Bond Issuer executing this First
Amendment and the other Related Documents to be entered into
concurrently with the First Amendment to which it is a party;
d. The Account Parties shall deliver or cause to be delivered to
the Bank originally executed copies of favorable opinions of (i) Ballard,
Spahr, ▇▇▇▇▇▇▇ & Ingersoll, Bond Counsel, (ii) ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇, Colorado counsel to the Bond Issuer, (iii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, New York counsel to the Bond Issuer, (iv)
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, Maryland counsel to WRP, (v) ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, New York counsel to WRP, (vi) ▇▇▇▇▇▇▇
& ▇▇▇▇▇, counsel to the Guarantor, (vii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, New York special counsel to the Guarantor, (viii)
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, Maryland counsel to Wellsford REIT, and
(ix) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, New York counsel to
Wellsford REIT, each in form and substance satisfactory to the Bank and
its counsel, dated as of the Effective Date;
e. The Account Parties shall deliver or cause to be delivered to
the Bank certified copies of all approvals or authorizations by, or
consents of, or notices to or registrations with, any governmental body or
agency required for the Bond Issuer, WRP or the Guarantor, as the case may
be, to enter into this First Amendment and the other Related Documents to
be entered into concurrently with the First Amendment to which each of
them is a party or to have WRP assume Wellsford REIT's position with
respect to the Development or the Bonds, and copies of all such approvals,
authorizations, consents, notices or registrations required to be obtained
or made prior to the Effective Date in connection with the transactions
contemplated by the Related Documents;
f. WRP shall deliver or cause to be delivered (i) a completed,
executed Compliance Certificate in the form of Attachment A hereto dated
as of the Effective Date demonstrating compliance with each of the
covenants calculated therein after consummation of the Merger and (ii) a
completed, executed Compliance Certificate for the Guarantor in the form
of Attachment B hereto dated as of the Effective Date demonstrating
compliance with each of the covenants calculated therein as of the most
recent fiscal quarter end of the Guarantor and after the consummation of
the Spin Off and the Merger;
g. WRP shall deliver or cause to be delivered (i) a Solvency
Certificate of WRP in the form of Attachment C hereto dated as of the
Effective Date demonstrating WRP's solvency after the consummation of the
Spin Off, the Merger and the related transactions described in the Proxy
Statement, including without limitation, the transactions contemplated by
this First Amendment and the Related Documents, and (ii) a Solvency
Certificate of the Guarantor in the form of Exhibit D hereto dated as of
the Effective Date demonstrating the Guarantor's solvency after the
consummation of the Spin Off, the Merger and the related transactions
described in the Proxy Statement, including without limitation, the
transactions contemplated by this First Amendment, the Guaranty and the
Related Documents,
h. Each Account Party and the Guarantor shall deliver a certificate
executed by one of its officers and dated as of the Effective Date stating
that: (i) its representations and warranties, contained in Article 4 of
the Reimbursement Agreement, as amended by this First Amendment, and the
Related Documents or Article III of the Guaranty, as applicable, are true
and correct on and as of the Effective Date as though made on and as of
such date; (ii) it is in compliance with all of the covenants set forth in
Articles 5 and 6 of the Reimbursement Agreement as amended by this First
Amendment or Article IV and V of the Guaranty, as applicable, (iii) no
petition by or against it has at any time been filed under the United
States Bankruptcy Code or under any similar act; (iv) no Event of Default
or Default has occurred and is continuing, or would result from the
execution, delivery or performance of this First Amendment, the Guaranty,
or the Related Documents; and (v) such other matters as the Bank or its
counsel may request;
i. WRP shall pay or caused to be paid all of the amounts
(including attorney's fees and expenses) payable at the Effective
Date pursuant to Section 2.5 of the Reimbursement Agreement and
paragraph 40 hereof;
j. WRP shall deliver or cause to be delivered for each of WRP and
the Guarantor its most recent annual audited financial statements and its
unaudited financial statements as of March 31, 1997. All of such
statements shall be accompanied with a certificate from an officer of WRP
or the Guarantor, as applicable, stating that no material adverse change
in the consolidated assets, liabilities, operations or financial condition
of WRP or the Guarantor, as applicable, has occurred since the date of the
most recent financial statements;
k. The Account Parties shall deliver or cause to be delivered to
the Bank evidence that any amendments to the Related Documents necessary
or desirable to perfect the security interests granted in the
Reimbursement Agreement, as amended, and the Related Agreements have been
executed and delivered and, if necessary, recorded or filed in the
appropriate county recorder's office; that any other appropriate financing
statements, including any amendments to the UCC-1 financing statement
previously filed, have been filed in the appropriate filing office(s); and
that commitments for endorsements to the Loan Policies regarding the Deed
of Trust and the Assessment and Lien have been issued by a title company
acceptable to the Bank in form and substance acceptable to the Bank;
l. Wellsford REIT shall deliver or cause to be delivered to the
Bank fully executed or conformed copies of any agreements or documents
relating to the Spin Off or the Merger, including without limitation the
Spin Off Agreements, that the Bank or its counsel may request, accompanied
by certificates of officers of the parties to such agreements or
documents, in form and substance satisfactory to the Bank and dated as of
the Effective Date, certifying that the Spin Off has been consummated
prior to the effectiveness of this First Amendment in accordance with the
Spin Off Documents and the Merger will be consummated on the Effective
Date immediately following the effectiveness of the First Amendment in
accordance with the Agreement and Plan of Merger dated as of January 16,
1997 and the documents contemplated thereby.
m. The Account Parties shall deliver such other documents,
instruments, approvals and, if requested by the Bank, certified duplicates
of executed copies thereof, and opinions as the Bank may reasonably
request;
n. The Bank shall give notice, as provided in Paragraph 1(a) of the
Letter of Credit, extending the Letter of Credit to June 20, 2000, and the
Bank shall give notice in accordance with Section 2.10 of the
Reimbursement Agreement providing new wire transfer instructions for
payment to the Bank.
52. Nothing in this Agreement shall be construed to modify the
obligations of the Bank to the Bond Trustee arising under or in connection with
the Letter of Credit.
53. On and after the Effective Date, each reference in the
Reimbursement Agreement and the Related Documents to the Reimbursement
Agreement or any schedule or exhibit thereto shall mean the Amended
Reimbursement Agreement or such schedule or exhibit thereto as amended by this
First Amendment. Except as specifically amended or modified hereby, the
Reimbursement Agreement shall remain in full force and effect and is hereby
ratified and confirmed. The execution, delivery and effectiveness of this
First Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of the Bank nor constitute a waiver of any
provision of the Amended Reimbursement Agreement.
54. This First Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of laws.
55. This First Amendment may be executed in any number of
counterparts, any set of which signed by the parties hereto shall be deemed to
be and shall constitute a completed executed original for all purposes. The
parties agree that this First Amendment, agreements ancillary to this First
Amendment, and Related Documents to be entered into in connection with this
First Amendment will be considered executed and delivered by a party upon
delivery of such party's signature to the other parties by facsimile
transmission. Such facsimile signature shall be treated in all respects as
having the same effect as an original signature.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have executed this First
Amendment to Letter of Credit Reimbursement Agreement as of the day and year
first above written.
PALOMINO PARK PUBLIC IMPROVEMENTS
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Title:
--------------------------
WELLSFORD RESIDENTIAL PROPERTY
TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Title:
--------------------------
WELLSFORD REAL PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Title:
--------------------------
DRESDNER BANK AG, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
--------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Assistant Vice President
--------------------------
List of Attachment
Attachment A - Form of Compliance Certificate for WRP.
Attachment B - Form of Compliance Certificate for the Guarantor.
Attachment C - Form of Solvency Certificate for WRP.
Attachment D - Form of Solvency Certificate for the Guarantor.