NOMURA CONDITIONAL GUARANTY OF PAYMENT
--------------------------------------
($75,000,000 Loan - Nomura Properties)
FOR AND IN CONSIDERATION OF the sum of Ten and No/100 Dollars ($10.00)
and other good and valuable consideration paid or delivered to the
undersigned WELLSFORD COMMERCIAL PROPERTIES TRUST, a Maryland real estate
investment trust ("WCPT"), WHWEL REAL ESTATE LIMITED PARTNERSHIP ("WHWEL"),
WELLSFORD REAL PROPERTIES, INC., a Maryland corporation ("WRPI"), WHITEHALL
STREET REAL ESTATE LIMITED PARTNERSHIP V ("Whitehall V"), WHITEHALL STREET
REAL ESTATE LIMITED PARTNERSHIP VI ("Whitehall VI"), WHITEHALL STREET REAL
ESTATE LIMITED PARTNERSHIP VII ("Whitehall VII"), and WHITEHALL STREET REAL
ESTATE LIMITED PARTNERSHIP VIII ("Whitehall VIII", and together with
Whitehall V, Whitehall VI and Whitehall VII, collectively, "Whitehall"), each
a Delaware limited partnership (WCPT, WHWEL, WRPI and Whitehall are
hereinafter referred to collectively as "Guarantor"), the receipt and
sufficiency whereof is hereby acknowledged by Guarantor, and for the purpose
of seeking to induce BANKBOSTON, N.A., a national banking association
("BKB"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPMANY ("▇▇▇▇▇▇▇ ▇▇▇▇▇"; BKB and
▇▇▇▇▇▇▇ ▇▇▇▇▇ are hereinafter collectively referred to as "Lender", which
term shall also include each other Bank which may now or hereafter become
party to the "Credit Agreement" (as hereinafter defined) and shall also
include any such individual Bank acting as agent for all of the Banks), to
extend credit or otherwise provide financial accommodations to
WELLSFORD/WHITEHALL PROPERTIES II, L.L.C., a Delaware limited liability
company (hereinafter referred to as "Borrower"), which extension of credit
and provision of financial accommodations will be to the direct interest,
advantage and benefit of Guarantor, Guarantor does hereby, jointly and
severally, absolutely and irrevocably guarantee to Lender:
(a) subject to the provisions of Paragraphs 24 and 25, below, the full
and prompt payment when due, whether by acceleration or otherwise, either
before or after maturity thereof, of those certain Notes dated July __, 1998
made by Borrower to the order of the Banks in the aggregate principal face
amount of Seventy-Five Million and No/100 Dollars ($75,000,000.00)
(hereinafter referred to collectively as the "Bank Notes"), together with
interest as provided in the Bank Notes, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
(b) subject to the provisions of Paragraphs 24 and 25, below, the full
and prompt payment when due, whether by acceleration or otherwise, either
before or after maturity thereof, of each other note as may be issued under
that certain Mezzanine Loan Agreement dated July ___, 1998 among Borrower,
BKB, for itself and as agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and the other lenders now or
hereafter a party thereto (hereinafter referred to as the "Credit
Agreement"), together with interest as provided in each such note, together
with any replacements, supplements, renewals, modifications, consolidations,
restatements and extensions thereof (the Bank Notes and each of the notes
described in this subparagraph (b) is hereinafter referred to collectively as
the "Note"); and
(c) subject to the terms of Paragraphs 24 and 25 below, the full and
prompt payment of all other monetary obligations of Borrower to Lender under
the terms of the Credit Agreement, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
(d) subject to the terms of Paragraphs 24 and 25 below, the full and
prompt payment of any and all other monetary obligations of Borrower to
Lender under the Security Documents, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
(e) subject to the terms of Paragraphs 24 and 25 below, the full and
prompt payment of any and all other monetary obligations of Borrower to
Lender under any other agreements, documents or instruments now or hereafter
evidencing, securing or otherwise relating to the indebtedness evidenced by
the Note or the Credit Agreement (the Note, the Security Documents, the
Credit Agreement and said other agreements, documents and instruments, are
hereinafter collectively referred to as the "Loan Documents" and individually
referred to as a "Loan Document").
All terms used herein and not otherwise defined herein shall have the
meanings set forth in the Credit Agreement.
1. Agreement to Pay; Costs of Collection. Guarantor does hereby agree
that, subject to the terms of Paragraphs 24 and 25 below, below, if the Note
is not paid by Borrower in accordance with its terms (including all
applicable grace periods), or if any and all sums which are now or may
hereafter become due from Borrower to Lender under the Loan Documents are not
paid by Borrower in accordance with their terms (including all applicable
grace periods), Guarantor will immediately make such payments. Guarantor
further agrees to pay Lender on demand all reasonable costs and expenses
(including court costs and reasonable attorneys' fees and disbursements) paid
or incurred by Lender in endeavoring to enforce this Guaranty, and until paid
to Lender, such sums shall bear interest at the default rate set forth in the
Credit Agreement unless collection from Guarantor of interest at such rate
would be contrary to applicable law, in which event such sums shall bear
interest at the highest rate which may be collected from Guarantor under
applicable law.
2. Reinstatement of Refunded Payments. If, for any reason, any
payment to Lender of any of the obligations guaranteed hereunder is required
to be refunded by Lender to Borrower, or paid or turned over by Lender to any
other person, including, without limitation, by reason of the operation of
bankruptcy, reorganization, receivership or insolvency laws or similar laws
of general application relating to creditors' rights and remedies now or
hereafter enacted, Guarantor agrees to pay the amount so required to be
refunded, paid or turned over (hereinafter referred to as the "Turnover
Payment"), the obligations of Guarantor shall not be treated as having been
discharged by the original payment to Lender giving rise to the Turnover
Payment, and this Guaranty shall be treated as having remained in full force
and effect for any such Turnover Payment so made by Lender, as well as for
any amounts not theretofore paid to Lender on account of such obligations,
but only to the extent that Guarantor otherwise would have been liable for
the payment of the same hereunder.
3. Rights of Lender to Deal with Collateral, Borrower and Other
Persons. Guarantor hereby consents and agrees that Lender may at any time,
and from time to time, without thereby releasing Guarantor from any liability
hereunder and without notice to or further consent from Guarantor, either
with or without consideration: release or surrender any lien or other
security of any kind or nature whatsoever held by it or by any person, firm
or corporation on its behalf or for its account, securing any indebtedness or
liability hereby guaranteed; substitute for any collateral so held by it,
other collateral of like kind, or of any kind; modify the terms of the Note
or the Loan Documents; extend or renew the Note for any period; grant
releases, compromises and indulgences with respect to the Note or the Loan
Documents and to any persons or entities now or hereafter liable thereunder
or hereunder; release any other Guarantor, surety, endorser or accommodation
party of the Note, the Security Documents or any other Loan Documents; or
take or fail to take any action of any type whatsoever. No such action which
Lender shall take or fail to take in connection with the Note or the Loan
Documents, or any of them, or any security for the payment of the
indebtedness of Borrower to Lender or for the performance of any obligations
or undertakings of Borrower, nor any course of dealing with Borrower or any
other person, shall release Guarantor's obligations hereunder, affect this
Guaranty in any way or afford Guarantor any recourse against Lender. The
provisions of this Guaranty shall extend and be applicable to all
replacements, supplements, renewals, amendments, extensions, consolidations,
restatements and modifications of the Note and the Loan Documents, and any
and all references herein to the Note and the Loan Documents shall be deemed
to include any such replacements, supplements, renewals, extensions,
amendments, consolidations, restatements or modifications thereof.
4. No Contest with Lender; Subordination. So long as any obligation
hereby guaranteed remains unpaid or undischarged, Guarantor will not, by
paying any sum recoverable hereunder (whether or not demanded by ▇▇▇▇▇▇) or
by any means or on any other ground, claim any set-off or counterclaim
against Borrower in respect of any liability of Guarantor to Borrower or, in
proceedings under federal bankruptcy law or insolvency proceedings of any
nature, prove in competition with Lender in respect of any payment hereunder
or be entitled to have the benefit of any counterclaim or proof of claim or
dividend or payment by or on behalf of Borrower or the benefit of any other
security for any obligation hereby guaranteed which, now or hereafter, Lender
may hold or in which it may have any share. Guarantor hereby expressly
waives any right of contribution from or indemnity against ▇▇▇▇▇▇▇▇, whether
at law or in equity, arising from any payments made by Guarantor pursuant to
the terms of this Guaranty, and Guarantor acknowledges that Guarantor has no
right whatsoever to proceed against Borrower for reimbursement of any such
payments. In connection with the foregoing, Guarantor expressly waives any
and all rights of subrogation to Lender against Borrower, and Guarantor
hereby waives any rights to enforce any remedy which Lender may have against
Borrower and any rights to participate in any collateral for Borrower's
obligations under the Loan Documents. Guarantor hereby subordinates any and
all indebtedness of Borrower now or hereafter owed to Guarantor to all
indebtedness of Borrower to Lender, and agrees with Lender that (a) Guarantor
shall not demand or accept any payment from Borrower on account of such
indebtedness, (b) Guarantor shall not claim any offset or other reduction of
Guarantor's obligations hereunder because of any such indebtedness, and (c)
Guarantor shall not take any action to obtain any interest in any of the
security described in and encumbered by the Loan Documents because of any
such indebtedness; provided, however, that, if Lender so requests, such
indebtedness shall be collected, enforced and received by Guarantor as
trustee for Lender and be paid over to Lender on account of the indebtedness
of Borrower to Lender, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty except to
the extent the principal amount of such outstanding indebtedness shall have
been reduced by such payment.
5. Waiver of Defenses. Guarantor hereby agrees that its obligations
hereunder shall not be affected or impaired by, and hereby waives and agrees
not to assert or take advantage of any defense based on:
(a) the incapacity or lack of authority of Borrower or any other
person or entity, the death or disability of Borrower or any Guarantor or any
other person or entity, or the failure of Lender to file or enforce a claim
against the estate (either in administration, bankruptcy or in any other
proceeding) of Borrower or any Guarantor or any other person or entity;
(b) the dissolution or termination of existence of Borrower or any
other Person;
(c) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Borrower or any
other Person;
(d) the voluntary or involuntary receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
assignment, composition, or readjustment of, or any similar proceeding
affecting Borrower, any Guarantor, Property Owner, WASH, WASH Manager, ▇▇▇▇▇
Avenue Holdings or any of Borrower's, any Guarantor's, Property Owner's,
WASH's, WASH Manager's or ▇▇▇▇▇ Avenue Holdings' properties or assets;
(e) the damage, destruction, condemnation, foreclosure or
surrender of all or any part of the Mezzanine Property or any Collateral;
(f) the failure of Lender to give notice of the existence,
creation or incurring of any new or additional indebtedness or obligation or
of any action or nonaction on the part of any other person whomsoever in
connection with any obligation hereby guaranteed;
(g) any failure or delay of Lender to commence an action against
Borrower or any other Person, to assert or enforce any remedies against
Borrower under the Note or the Loan Documents, or to realize upon any
security;
(h) any failure of any duty on the part of Lender to disclose to
Guarantor any facts it may now or hereafter know regarding Borrower, the
Property Owner, WASH or any other Person, or the Mezzanine Property or the
property encumbered by the Security Documents, whether such facts materially
increase the risk to Guarantor or not;
(i) failure to accept or give notice of acceptance of this
Guaranty by ▇▇▇▇▇▇;
(j) failure to make or give notice of presentment and demand for
payment of any of the indebtedness or performance of any of the obligations
hereby guaranteed;
(k) failure to make or give protest and notice of dishonor or of
default to Guarantor or to any other party with respect to the indebtedness
or performance of obligations hereby guaranteed;
(l) any and all other notices whatsoever to which Guarantor might
otherwise be entitled;
(m) any lack of diligence by ▇▇▇▇▇▇ in collection, protection or
realization upon any collateral securing the payment of the indebtedness or
performance of obligations hereby guaranteed;
(n) the invalidity or unenforceability of the Note or any of the
Loan Documents;
(o) the compromise, settlement, release or termination of any or
all of the obligations of Borrower under the Note or the Loan Documents;
(p) any transfer by Borrower or any other Person of all or any
part of the security encumbered by the Loan Documents;
(q) the failure of Lender to perfect any security or to extend or
renew the perfection of any security; or
(r) to the fullest extent permitted by law, any other legal,
equitable or surety defenses whatsoever to which Guarantor might otherwise be
entitled, it being the intention that the obligations of Guarantor hereunder
are absolute, unconditional (subject to the terms of Paragraphs 24 and 25,
below) and irrevocable.
6. Guaranty of Payment and Not of Performance or Collection. This is
a Guaranty of payment and not of performance or collection. Subject to the
terms of Paragraphs 24 and 25, below, the liability of Guarantor under this
Guaranty shall be primary, direct and immediate and not conditional or
contingent upon the pursuit of any remedies against Borrower or any other
person, nor against securities or liens available to Lender, its successors,
successors in title, endorsees or assigns. Guarantor hereby waives any right
to require that an action be brought against Borrower or any other person or
to require that resort be had to any security or to any balance of any
deposit account or credit on the books of Lender in favor of Borrower or any
other person.
7. Rights and Remedies of Lender. In the event of an Event of Default
under the Note or the Loan Documents, or any of them, Lender shall have the
right to enforce its rights, powers and remedies thereunder or hereunder or
under any other agreement, document or instrument now or hereafter
evidencing, securing or otherwise relating to the indebtedness evidenced by
the Note or secured by the Loan Documents, in any order, and all rights,
powers and remedies available to Lender in such event shall be nonexclusive
and cumulative of all other rights, powers and remedies provided thereunder
or hereunder or by law or in equity. Accordingly, Guarantor hereby
authorizes and empowers Lender upon the occurrence of any Event of Default
under the Note or the Loan Documents, at its sole discretion, and without
notice to Guarantor, to exercise any right or remedy which Lender may have,
including, but not limited to, judicial foreclosure, exercise of rights of
power of sale, acceptance of an assignment in lieu of foreclosure,
appointment of a receiver, exercise of remedies against personal property, or
enforcement of any assignment of leases, as to any security, whether real,
personal or intangible. At any public or private sale of any security or
collateral for any indebtedness or any part thereof guaranteed hereby,
whether by foreclosure or otherwise, Lender may, in its discretion, purchase
all or any part of such security or collateral so sold or offered for sale
for its own account and may apply against the amount bid therefor all or any
part of the balance due it pursuant to the terms of the Note or Security
Documents or any other Loan Document without prejudice to ▇▇▇▇▇▇'s remedies
hereunder against Guarantor for deficiencies. If the indebtedness guaranteed
hereby is partially paid by reason of the election of ▇▇▇▇▇▇ to pursue any of
the remedies available to Lender, or if such indebtedness is otherwise
partially paid, this Guaranty shall nevertheless remain in full force and
effect, and Guarantor shall remain liable for the entire balance of the
indebtedness guaranteed hereby (subject, however, to the provisions of
Paragraphs 24 and 25 below) even though any rights which Guarantor may have
against Borrower may be destroyed or diminished by the exercise of any such
remedy.
8. Application of Payments. Guarantor hereby authorizes ▇▇▇▇▇▇,
without notice to Guarantor, to apply all payments and credits received from
Borrower or from Guarantor or realized from any security in such manner and
in such priority as set forth in the Credit Agreement.
9. Business Failure, Bankruptcy or Insolvency. In the event of the
business failure of a Guarantor or if there shall be pending any bankruptcy
or insolvency case or proceeding with respect to a Guarantor under federal
bankruptcy law or any other applicable law or in connection with the
insolvency of a Guarantor, or if a liquidator, receiver, or trustee shall
have been appointed for a Guarantor or a Guarantor's properties or assets,
Lender may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of Lender allowed in any
proceedings relative to such Guarantor, or any of such Guarantor's properties
or assets, and, irrespective of whether the indebtedness or other obligations
of Borrower guaranteed hereby or the obligations of such Guarantor hereunder
shall then be due and payable, by declaration or otherwise, Lender shall be
entitled and empowered to file and prove a claim for the whole amount of any
sum or sums owing by such Guarantor with respect to the indebtedness or other
obligations of Borrower guaranteed hereby, and to collect and receive any
moneys or other property payable or deliverable on any such claim. Guarantor
covenants and agrees that upon the commencement of a voluntary or involuntary
bankruptcy proceeding by or against Borrower, Guarantor shall not seek a
supplemental stay or otherwise pursuant to Section 105 of the Bankruptcy Code
or any other provision of the Bankruptcy Code, or any other debtor relief law
(whether statutory, common law, case law, or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable, to
stay, interdict, condition, reduce or inhibit the ability of Lender to
enforce any rights of Lender against Guarantor by virtue of this Guaranty or
otherwise.
10. Financial Statements and Other Information. Each Guarantor hereby
independently represents and warrants to Lender that all financial statements
heretofore delivered by it to Lender are true and correct in all material
respects, have been prepared in accordance with generally accepted accounting
principles consistently applied, and fairly present its financial condition
as of the date thereof; that no material adverse change has occurred in its
assets or financial condition as reflected therein since the date thereof;
and that it has no liabilities or known contingent liabilities involving
material amounts which are not reflected in such financial statements or
referred to in the notes thereto other than its obligations under this
Guaranty. Each Guarantor independently agrees that until all indebtedness
guaranteed hereby has been completely repaid and all obligations and
undertakings of Borrower and Guarantor under, by reason of, or pursuant to
the Note and the Loan Documents have been completely performed and no Lender
has any further obligation to make Loans to Borrower (or until the Assignment
of Interests has been terminated as provided therein, provided that no
"Triggering Event" (as hereinafter defined" has occurred), it will promptly
deliver to Lender upon written (but not more often than quarterly) demand its
then most recent financial statements readily available (provided that such
financial statements shall be prepared and updated not less frequently than
annually) detailing its assets and liabilities certified by it, in form and
substance reasonably acceptable to Lender.
The financial statements and other reports and information delivered by
Guarantor to Lender hereunder will be treated as confidential by each Lender,
and each assignee and participant hereunder and each potential assignee or
participant hereunder, and such parties for themselves agree not to disclose
such information to any Person, provided that such information may be
disclosed to any of the following in connection with their participation in
the transactions contemplated by the Loan Documents: directors, officers,
employees, representatives, legal counsel, accountants and prospective
investors of any of such Persons, it being understood that such Persons shall
be informed of the confidential nature of such information and shall agree to
treat such information confidentially. Notwithstanding the foregoing, such
Persons shall be permitted to disclose such information (a) to the extent
required by law, (b) to the extent such confidential information becomes
publicly available other than as a result of the breach of this Guaranty, (c)
to the extent such information becomes available to any of such Persons on a
non-confidential basis, or (d) to the extent necessary to enforce the Loan
Documents (provided that Lender shall use reasonable efforts to cause such
financial statements, reports and information to remain confidential).
11. Covenants of Guarantor. Each Guarantor independently hereby
covenants and agrees with Lender that until all indebtedness guaranteed
hereby has been completely repaid and all obligations and undertakings of
Borrower and Guarantor under, by reason of, or pursuant to the Note and the
Loan Documents have been completely performed, and the Lenders have no
further obligations to make Loans to Borrower (or until the Assignment of
Interests has been terminated as provided therein, provided that no
"Triggering Event" (as hereinafter defined) has occurred):
(a) it will cause to be done all things necessary to preserve and
keep in full force and effect its legal existence, rights and franchises, to
effect and maintain all required foreign qualifications, licensing,
domestication or authorization, and to comply in all material respects with
all applicable laws and regulations with respect to the foregoing;
(b) it will keep complete, proper and accurate records and books
of account in which full, true and correct entries will be made in accordance
with generally accepted accounting principles consistent with the preparation
of the financial statements heretofore delivered to Lender and will maintain
adequate accounts and reserves for all taxes (including income taxes), all
depreciation and amortization of its properties, all other contingencies, and
all other proper reserves in the same manner, and to the same extent, that it
has, to the extent applicable, kept and maintained it records and books and
maintained accounts and reserves for the foregoing; and
(c) it will not make or permit to be made, by voluntary or
involuntary means, any transfer or encumbrance of its direct or indirect
interest in Borrower, or any dilution of its direct or indirect interest in
Borrower, which would violate the provisions of Section 8.11 of the Credit
Agreement.
12. [Intentionally Omitted].
13. Changes in Writing; No Revocation. This Guaranty may not be
changed orally, and no obligation of Guarantor can be released or waived by
▇▇▇▇▇▇ except by a writing signed by a duly authorized officer of Lender.
This Guaranty shall be irrevocable by Guarantor until all indebtedness
guaranteed hereby has been completely repaid and the Lenders have no further
obligation to advance Loans to Borrower. Notwithstanding anything contained
in this Guaranty or any of the Loan Documents to the contrary, this Guaranty
shall terminate and be of no further force or effect upon the earlier to
occur of (i) payment to Lender by Guarantor of the "Allocable Loan Amount"
(as hereinafter defined) and (ii) any termination of the Assignment of
Interests either pursuant to the terms thereof or by mutual agreement of
Borrower and Lender provided that no "Triggering Event" (as hereinafter
defined) has occurred.
14. Notices. All notices, demands or requests provided for or
permitted to be given pursuant to this Guaranty (hereinafter in this
paragraph referred to as "Notice") must be in writing and shall be deemed to
have been properly given or served by personal delivery or by sending same by
overnight courier or by depositing the same in the United States Mail,
postpaid and registered or certified, return receipt requested, at the
addresses set forth below. Each Notice shall be effective upon being
delivered personally or upon being sent by overnight courier or upon being
deposited in the United States Mail as aforesaid. The time period in which a
response to any such Notice must be given or any action taken with respect
thereto, however, shall commence to run from the date of receipt if
personally delivered or sent by overnight courier or, if so deposited in the
United States Mail, the earlier of three (3) business days following such
deposit and the date of receipt as disclosed on the return receipt.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no Notice was given shall be deemed to be receipt of
the Notice sent. By giving at least fifteen (15) days prior Notice thereof,
Guarantor or Lender shall have the right from time to time and at any time
during the term of this Guaranty to change their respective addresses and
each shall have the right to specify as its address any other address within
the United States of America. For the purposes of this Guaranty:
The Address of Lender is:
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Division
with a copy to:
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
Suite 500
Atlanta, Georgia 30346
Attn: ▇▇▇ ▇▇▇▇▇
and a copy to each other Lender which may now or hereafter become a
party to the Credit Agreement at such address as may be designated by
such Lender.
The Address of Guarantor is:
Wellsford Commercial Properties Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
and
Wellsford Real Properties, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
and
WHWEL Real Estate Limited Partnership
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
and
Whitehall Street Real Estate Limited Partnership V
Whitehall Street Real Estate Limited Partnership VI
Whitehall Street Real Estate Limited Partnership VII
Whitehall Street Real Estate Limited Partnership ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
15. Governing Law. Guarantor acknowledges and agrees that this
Guaranty and the obligations of Guarantor hereunder shall be governed by and
interpreted and determined in accordance with the internal laws of the State
of New York (excluding the laws applicable to conflicts or choice of law).
16. CONSENT TO JURISDICTION; WAIVERS. GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF NEW YORK
OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY, AND (B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY
STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, AND (II) TO OBJECT TO
JURISDICTION WITHIN THE STATE OF NEW YORK OR VENUE IN ANY PARTICULAR FORUM
WITHIN THE STATE OF NEW YORK. NOTHING CONTAINED HEREIN, HOWEVER, SHALL
PREVENT ▇▇▇▇▇▇ FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY
RIGHTS AGAINST ANY SECURITY AND AGAINST GUARANTOR PERSONALLY, AND AGAINST ANY
PROPERTY OF GUARANTOR, WITHIN ANY OTHER STATE. INITIATING SUCH SUIT, ACTION
OR PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE
A WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND LENDER
HEREUNDER OR OF THE SUBMISSION HEREIN MADE BY GUARANTOR TO PERSONAL
JURISDICTION WITHIN THE STATE OF NEW YORK.
17. Successors and Assigns. The provisions of this Guaranty shall be
binding upon Guarantor and its heirs, successors, successors in title, legal
representatives, executors, estate and assigns, and shall inure to the
benefit of ▇▇▇▇▇▇, its successors, successors in title, legal representatives
and assigns.
18. Assignment by ▇▇▇▇▇▇. Subject to the terms of Section 18.8 of the
Credit Agreement, this Guaranty is assignable by Lender in whole or in part
in conjunction with any assignment of the Note or portions thereof, and any
such assignment hereof or any transfer or assignment of the Note or portions
thereof by Lender shall operate to vest in any such assignee the rights and
powers, in whole or in part, as appropriate, herein conferred upon and
granted to Lender.
19. Severability. If any term or provision of this Guaranty shall be
determined to be illegal or unenforceable, all other terms and provisions
hereof shall nevertheless remain effective and shall be enforced to the
fullest extent permitted by law.
20. Disclosure. Guarantor agrees that in addition to disclosures made
in accordance with standard banking practices, any Lender may disclose
information obtained by such Lender pursuant to this Guaranty to assignees or
participants and potential assignees or participants hereunder, subject to
the terms of Paragraph 10 above.
21. No Unwritten Agreements. THIS GUARANTY REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
22. Time of the Essence. Time is of the essence with respect to each
and every covenant, agreement and obligation of Guarantor under this
Guaranty.
23. [Intentionally Omitted.]
24. Triggering Event.
(a) LENDER ACKNOWLEDGES AND AGREES THAT, NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS GUARANTY, THE PAYMENT BY GUARANTOR OF ITS
OBLIGATIONS UNDER THIS GUARANTY SHALL BE DUE ONLY IN THE EVENT THAT, AND
GUARANTOR SHALL HAVE NO LIABILITY HEREUNDER UNLESS AND UNTIL, ONE OR MORE
"TRIGGERING EVENTS" (AS THAT TERM IS HEREINAFTER DEFINED) SHALL OCCUR AND,
WITH RESPECT TO THE ITEMS DESCRIBED IN CLAUSES (iv) THROUGH (ix) BELOW, ANY
OF THE EVENTS DESCRIBED THEREIN IS NOT CURED WITHIN FIVE (5) DAYS AFTER
RECEIPT BY GUARANTOR OF WRITTEN NOTICE FROM AGENT OF THE OCCURRENCE OF ANY
SUCH EVENT (PROVIDED, HOWEVER, THAT SUCH CURE BY GUARANTOR SHALL NOT BE
DEEMED A CURE OF ANY EVENT OF DEFAULT).
(b) For the purposes of this Guaranty, the term "Triggering Event"
shall mean the occurrence of any one or more of the following events:
(i) Any of the Guarantor, the Borrower, WASH, WASH Manager,
▇▇▇▇▇ Avenue Holdings or the Property Owner shall file any
voluntary petition under any Chapter of the Bankruptcy Code, or
shall in any manner seek any relief, protection, reorganization,
liquidation, dissolution or similar relief for debtors under any
local, state, federal or other insolvency laws or other laws
providing for the relief of debtors, or in equity, or directly or
indirectly cause any of the other of such Persons to file any such
petition or to seek any such relief; or
(ii) Any of the Guarantor, the Borrower, WASH, WASH Manager,
▇▇▇▇▇ Avenue Holdings or the Property Owner (A) shall file, or,
directly or indirectly, cause to be filed, any involuntary petition
under any Chapter of the Bankruptcy Code against any of such
Persons, whether or not any of such Persons joins in such petition,
or (B) shall, directly or indirectly, cause any of such Persons to
become the subject of any dissolution, liquidation or insolvency
proceeding or any other proceeding pursuant to any local, state,
federal or other insolvency laws or other laws providing for the
relief of debtors, or in equity;
(iii) Any of the Guarantor, the Borrower, WASH, WASH
Manager, ▇▇▇▇▇ Avenue Holdings or the Property Owner shall,
directly or indirectly, cause the Mezzanine Property or the
Mezzanine Collateral, or any portion thereof or interest therein,
or any interest of such Persons in the Mezzanine Property or the
Mezzanine Collateral, to become the property of any bankruptcy,
dissolution, liquidation or insolvency proceeding; or
(iv) Guarantor, Borrower, WASH, WASH Manager, ▇▇▇▇▇ Avenue
Holdings, the Property Owner, or any of them, shall take any action
of any kind or nature whatsoever, either directly or indirectly, to
oppose, impede, obstruct, hinder, frustrate, enjoin or otherwise
interfere with the exercise by Lender of any of Lender's rights and
remedies under the Loan Documents, or at law or in equity, other
than a "Permitted Defense" (as hereinafter defined) or shall,
either directly or indirectly, cause any other person to take any
action which, if taken by Guarantor, the Borrower, WASH, WASH
Manager, ▇▇▇▇▇ Avenue Holdings or the Property Owner, would
constitute a Triggering Event. For the purposes hereof, a
"Permitted Defense" shall mean (A) the defense of payment in full
of the obligations guaranteed hereby, (B) a defense made in good
faith that a Triggering Event has not occurred, or (C) a defense
that an Event of Default has not occurred or as to the improper
exercise of the remedies of the Lenders under the Loan Documents,
provided that (1) the primary purpose of raising such defense is
not to delay, inhibit or interfere with the exercise by Lender of
its rights and remedies under the Loan Documents, (2) Agent's
rights under the Assignment of Interests to exercise all voting and
other membership, management, approval or other rights with respect
to the Property Owner shall not be opposed, impeded, obstructed,
hindered, frustrated, enjoined or otherwise interfered with, and
(3) all "Distributions" (as defined in the Assignment of Interests)
are paid to Agent for application in accordance with the terms of
the Credit Agreement; or
(v) Except as expressly permitted in Section 5.3 of the
Credit Agreement, there shall occur, whether voluntarily,
involuntary or by operation of law, a sale, transfer, assignment,
conveyance, option or other disposition of, or any mortgage,
hypothecation, encumbrance, financing or refinancing of (A) any
assets or properties of WASH, except for (1) the Mezzanine Mortgage
Loan, (2) releases of the Mezzanine Property in accordance with the
terms of the Credit Agreement, and except as provided in Section
7.21(a) with respect to the replacement of fixtures, equipment,
machinery and other personal property by WASH in connection with
the operation of the Mezzanine Property in the ordinary course of
business, (3) a condemnation of all or any portion of the Mezzanine
Property, or (4) a foreclosure of the Mezzanine Property by the
Mezzanine Mortgagee, (B) any of the Mezzanine Collateral or any of
the Borrower's, the Property Owner's, ▇▇▇▇▇ Avenue Holdings' or
WASH Manager's direct or indirect interests, rights or claims in
and to WASH (including without limitation any rights to receive
distributions from WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings),
(C) any other assets or properties of WASH Manager or ▇▇▇▇▇ Avenue
Holdings, (D) any direct or indirect interests, rights or claims of
either Borrower, the Property Owner, WASH Manager or ▇▇▇▇▇ Avenue
Holdings in WASH, (E) any direct or indirect interests, rights or
claims of Borrower in ▇▇▇▇▇ Avenue Holdings, or (F) any direct or
indirect interests, rights or claims of ▇▇▇▇▇ Avenue Holdings in
WASH Manager; or
(vi) WASH shall seek or obtain additional advances from the
holder or holders of the Mezzanine Mortgage Loan Documents
(provided that the foregoing shall not be deemed violated in the
event that the holder or holders of the Mezzanine Mortgage Loan
Documents shall make a protective advance or advances for the
payment of taxes, insurance premiums or to protect the Mezzanine
Property pursuant to the terms of the Nomura Mortgages), or WASH
shall modify, amend, terminate, extend or seek a consent or waiver
under the Mezzanine Mortgage Loan Documents in any respect without
the prior written approval of the Lender (other than an amendment
or waiver that would reduce the obligations of WASH to pay
principal, interest, loan fees, default interest, late charges,
prepayment fees or similar payments thereunder or a waiver of an
"Event of Default" under the Mezzanine Mortgage Loan Documents or
other occasional waiver of compliance with a term of any of the
Mezzanine Mortgage Loan Documents which waiver in each case is not
a waiver of future compliance with such term or tantamount to an
amendment of the Mezzanine Mortgage Loan Documents, and which
waiver does not have a material adverse effect on any of the
Borrower, Lender, Property Owner, WASH, WASH Manager, ▇▇▇▇▇ Avenue
Holdings, the Collateral, the Mezzanine Collateral or the Mezzanine
Property); or
(vii) Any of Borrower, ▇▇▇▇▇ Avenue Holdings, WASH, WASH
Manager or Property Owner shall modify, amend, cancel, release,
surrender, terminate or permit the modification, amendment,
cancellation, release, surrender or termination of the ▇▇▇▇▇ Avenue
Holdings Organizational Agreements, the WASH Manager Organizational
Agreements or the WASH Organizational Agreements other than "Minor
Amendments" (as such term is defined in the Assignment of
Interests), or dissolve, liquidate, redeem, cancel, wind-up or
permit the dissolution, liquidation, redemption, cancellation,
winding-up or expiration of WASH, WASH Manager or ▇▇▇▇▇ Avenue
Holdings or the ▇▇▇▇▇ Avenue Holdings Organizational Agreements,
the WASH Manager Organizational Agreements or the WASH
Organizational Agreements, or seek or permit the partition of any
of the assets of any of such Persons; or
(viii) Any of Borrower, the Property Owner, WASH Manager or
▇▇▇▇▇ Avenue Holdings shall take any action which results in the
sale, reduction, cancellation, dilution, diminution, conversion or
withdrawal of any direct or indirect interest of such Person in
WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings, as applicable, or omit
to take any action necessary to prevent any such sale,
cancellation, reduction, dilution, diminution, conversion or
withdrawal, or, without limiting the foregoing, consent to or
permit to occur the admission of any new member of WASH, WASH
Manager or ▇▇▇▇▇ Avenue Holdings, the creation of any new class of
interest in WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings, or the
issuance, directly or indirectly, any other equity or beneficial
interest in WASH, WASH Manager or ▇▇▇▇▇ Avenue Holdings; or
(ix) The Borrower shall breach any of its covenants or
agreements contained in Paragraphs 6(i) or 6(j) of the Assignment
of Interests, to the full extent of any losses, damages and
expenses of Lender on account thereof.
(c) No consent or approval which may be given by the Lender
pursuant to Section 32(g) of the Credit Agreement shall be deemed to release,
diminish or otherwise impair the obligations of Guarantor under this Guaranty
or to otherwise affect the determination of whether a Triggering Event has
occurred.
(d) For the purposes of this Guaranty, in order to determine any
loss, damage or expense of Lender, Lender shall not be required to have sold
or otherwise disposed of any of the Mezzanine Collateral or any other
Collateral.
25. Limitation of Recovery. Without modifying or limiting any
provision of this Guaranty or any agreement contained herein, except as
Guarantor's liability is otherwise limited as specifically provided in
Paragraph 24, above, it is hereby agreed that the amount recoverable from
Guarantor under this Guaranty (but not the scope or extent of the liabilities
and obligations guaranteed under this Guaranty) shall be limited to (a) the
principal balance of the Notes not to exceed an amount equal to
$18,569,816.00 (such sum of $18,569,816.00 being hereinafter referred to as
the "Allocable Principal Amount"), (b) interest accrued on the principal
portion of the Notes described in Paragraph 25(a), (c) any payments or
advances of funds made by Lender pursuant to any one or more of the Loan
Documents relating directly or indirectly to the Mezzanine Property, the
Mezzanine Collateral or the Mezzanine Mortgage Loan, and (d) all expenses
(including, but not limited to, reasonable attorneys' fees) paid or incurred
by Lender in endeavoring to enforce this Guaranty (such amounts set forth in
clauses (a) through (d) inclusive above are hereinafter referred to
collectively as the "Allocable Loan Amount"). In the event of any
foreclosure sale of the Collateral, the amount recoverable against the
Guarantors with respect to any of the Triggering Events, which pursuant to
the terms of any subparagraph of Paragraph 24(b) the liability of Guarantors
is not specifically limited to the terms thereof, shall be reduced by an
amount equal to the amount paid at such foreclosure sale, for the Collateral
or portion thereof so sold at the time of such foreclosure sale (Guarantor
remaining liable at such foreclosure sale for the deficiency up to the extent
of any remaining liability of Guarantor hereunder).
26. Reduction of the Allocable Principal Amount.
(a) Notwithstanding anything contained in this Guaranty to the
contrary, if and to the extent that one or more of the Mezzanine Properties
are released from the lien of the Nomura Mortgage and such Mezzanine Property
is released in accordance with the terms of Section 5.3 of the Credit
Agreement (including without limitation the payment to Lender of the
requisite release price allocable to such portion of the Collateral pursuant
to the provisions of Section 5.3 of the Credit Agreement), then the Allocable
Principal Amount shall be automatically reduced by an amount equal to one
hundred percent (100%) of the Designated Collateral Value allocable to such
portion of the Collateral.
(b) If and to the extent that any "Distributions" (as defined in
the Assignment of Interests) or other sums generated by any one or more of
the Mezzanine Properties (including, without limitation, any condemnation
awards and/or casualty insurance proceeds) are received by Agent under the
Loan Documents after the occurrence and during the continuance of an Event of
Default, and are applied by Lender in reduction of the outstanding principal
balance of the Notes, then the Allocable Principal Amount shall be
automatically reduced by a like amount.
27. Joint and Several Liability. Notwithstanding anything to the
contrary herein, the representations, warranties, covenants and agreements
made by each of the Persons comprising Guarantor herein, and the liability of
each of the Persons comprising Guarantor hereunder, is joint and several
subject to the terms of this Paragraph 27; provided, however, that the
maximum liability of WRPI and WCPT (collectively, the "Wellsford Entities")
on a joint and several basis shall be fifty percent (50%) of the Allocable
Loan Amount, and the maximum liability of Whitehall and WHWEL on a joint and
several basis shall be fifty percent (50%) of the Allocable Loan Amount; and
provided further that, in the event that a Triggering Event shall occur
solely as a result of any of the events described in Paragraph 24(b)(i), (ii)
or (iii) as to only one or more of the Wellsford Entities, on the one hand,
or only one or more of the Whitehall Entities, on the other hand, then the
Whitehall Entities shall have no liability hereunder as a result of any such
action on the part of any Wellsford Entity, and none of the Wellsford
Entities shall have any liability hereunder as a result of any such action on
the part of any of the Whitehall Entities.
28. Statement of Discharge. Upon the payment in full of the
indebtedness guaranteed hereby and upon the termination of Lender's
obligations to advance Loans to Borrower, the Lender shall, upon the written
request of any of Whitehall, WRPI or the Borrower, deliver a statement to the
Guarantor that the Guarantor's obligations under this Guaranty have been
discharged and satisfied and that this Guaranty is terminated (subject to
reinstatement as provided herein).
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇▇ has executed this Guaranty under seal as
of the 16th day of July, 1998.
WELLSFORD COMMERCIAL PROPERTIES TRUST, a
Maryland real estate investment trust
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO & Treasurer
[SEAL]
WELLSFORD REAL PROPERTIES, INC., a Maryland
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CFO & Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
WHWEL REAL ESTATE LIMITED PARTNERSHIP
By: WHATR Gen-Par, Inc., General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Secretary
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP V
By: WH Advisors, L.P. V
By: WH Advisors, Inc. V
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP VI
By: WH Advisors, L.P. VI
By: WH Advisors, Inc. VI
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP VII
By: WH Advisors, L.P. VII
By: WH Advisors, Inc. VII
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP VIII
By: WH Advisors, L.P. VIII
By: WH Advisors, Inc. VIII
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President