TERM LOAN AGREEMENT
between
WELLSFORD REAL PROPERTIES, INC.
and
WELLSFORD/WHITEHALL PROPERTIES, L.L.C.
August 28, 1997
TERM LOAN AGREEMENT dated as of August 28, 1997 between
WELLSFORD/WHITEHALL PROPERTIES, L.L.C., a Delaware limited liability company
(the "Borrower"), and WELLSFORD REAL PROPERTIES, INC. (the "Lender").
W I T N E S E T H:
WHEREAS, Borrower wishes to borrow a principal amount of up to
$86,293,190; and
WHEREAS, Lender is willing to provide Borrower with loans in the
aforesaid principal amount as follows: (i) an initial term loan of
$61,699,440, (ii) an additional term loan of $17,093,750 upon and subject to
the conditions set forth herein and (iii) an additional term loan of up to
$7,500,000 upon and subject to the conditions set forth herein.
NOW, THEREFORE, Borrower and Lender hereby agree as follows:
14 DEFINITIONS
As used in this Agreement:
"Advance Date" means the date each Term Loan is advanced by Lender.
"Agreement" means this Term Loan Agreement, as amended or
supplemented from time to time.
"Borrower" means Wellsford/Whitehall Properties, L.L.C.
"Business Day" means a day other than Saturday, Sunday or any other
day on which commercial banks in New York City are authorized or required by
law or executive order to close.
"Closing Date" means the date on which this Agreement has been duly
executed by Lender and Borrower, and all conditions precedent to the making
of Term Loan A have been met to the satisfaction of Lender and its counsel.
"Default" means any event specified in Section 8.01 hereof after
the expiration of any applicable cure period.
"Default Rate" means three (3%) percent in excess of the applicable
Interest Rate.
"Extension Period" means the period commencing on November 27, 1997
and terminating on February 25, 1998.
"Indebtedness" means all obligations, contingent and otherwise,
that in accordance with generally accepted accounting principles should be
classified upon the obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in any event and
whether or not so classified: (a) all debt and similar monetary obligations,
whether direct or indirect (including, without limitation, all obligations
evidenced by bonds, debentures, notes or similar debt instruments and
subordinated indebtedness); (b) all liabilities secured by any mortgage,
pledge, security interest, lien, charge or other encumbrance existing on
property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; and (c) all guarantees, interest
rate and currency swap obligations, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including contingent obligations that in accordance with generally accepted
accounting principles are required to be footnoted on Borrower's consolidated
balance sheets and any obligation to supply funds to or in any manner to
invest directly or indirectly in a Person, to purchase indebtedness, or to
assure the owner of indebtedness against loss through an agreement to
purchase goods, supplies or services for the purpose of enabling the debtor
to make payment of the indebtedness held by such owner or otherwise, and the
obligation to reimburse the issuer in respect of any letter of credit; (d)
any obligation as a lessee or an obligor under a capitalized lease; and (e)
Borrower's pro rata share of any of the above-described obligations of its
unconsolidated affiliates.
"Initial Maturity Date" means November 26, 1997.
"Interest Rate" means (i) Three Hundred (300) basis points (3.0%)
above the LIBO Rate, as adjusted from time to time, through the Initial
Maturity Date or (ii) Four Hundred (400) basis points (4.0%) above the LIBOR
Rate, as adjusted from time to time, after the Initial Maturity Date.
"Lender" means Wellsford Real Properties, Inc. and its successors
and assigns.
"LIBO Period" means a thirty (30) day period commencing on each
Advance Date and upon the expiration thereof each and every thirty (30) day
period thereafter.
"LIBO Rate" means, with respect to each LIBO Period, the rate per
annum equal to the rate at which BankBoston, N.A. is offered United States
Dollar deposits in an amount comparable to the Term Loan for which the
applicable LIBO Rate is being determined, such determination to be made on
the date which is two (2) Business Days prior to the applicable LIBO Period,
in whatever interbank eurodollar market selected by BankBoston, N.A. in its
sole discretion, acting in good faith.
"Lien" means (a) a mortgage, lien, pledge, charge, security
interest, encumbrance or preference, priority or other security or
preferential arrangement of any kind or nature in respect of any asset, or
(b) the interest of a vendor under any conditional sale agreement, financing
lease or other title retention agreement relating to an asset.
"Loan Documents" mean, collectively, this Agreement, the Term
Notes, any guarantees and mortgages entered into by the Sub Guarantors and
any and all documents executed and delivered in connection therewith.
"Maturity Date" means the later of (i) the Initial Maturity Date or
(ii) the expiration of the Extension Period, if any.
"Operating Agreement" means the Limited Liability Company Operating
Agreement of Borrower dated as of August 28, 1997.
"Person" means an individual, a corporation, a limited liability
company, an association, a joint stock company, a business trust, a
partnership, a joint venture, an unincorporated organization, or a government
or any agency or political subdivision thereof.
"Properties" mean any of the following real properties known as
Point View - Main Campus, 1700 Valley Road, 1800 Valley Road, the Chatham
Building, Greenbrook, 1275 K Street, 600 Atrium, 700 Atrium and 15 Broad
Street.
"Sub Guarantors" means any of the following Subsidiaries, WEL/WH
Chatham, L.L.C., WEL/WH Point View/1800 Valley, L.L.C., WEL/WH 1700 Valley,
L.L.C., WEL/WH Greenbrook, L.L.C., WEL/WH 600 ATR, L.L.C., WEL/WH 700 ATR,
L.L.C., WEL/WH 1275 K Street, L.L.C. and WEL/WH 15 Broad Street, L.L.C.
"Subsidiaries" shall have the meaning set forth in the Operating
Agreement.
"Taxes" means any and all present and future taxes, levies,
imposts, duties, fees, deductions, withholdings or charges of a similar
nature imposed or assessed by any federal, state, county or any political
subdivision or taxing authority thereof, together with any interest thereon
and any penalties with respect thereto.
"Term Loan A" means the term loan made to Borrower under this
Agreement in the principal amount of $61,699,440.
"Term Loan B" means the term loan which may be made to Borrower
under this Agreement in the principal amount of $17,093,750.
"Term Loan C" means the term loan which may be made to Borrower
under this Agreement in the principal amount of up to $7,500,000.
"Term Loan B Notice" means a written notice, given to Lender by
Borrower requesting funding of Term Loan B.
"Term Loan C Notice" means a written notice, given to Lender by
Borrower requested funding of Term Loan C.
"Term Loan" mean, individually, Term Loan A, Term Loan B or Term
Loan C.
"Term Loans" mean, collectively, Term Loan A, Term Loan B and Term
Loan C.
"Term Notes" means each of the promissory notes issued by Borrower
to Lender in the form annexed hereto as Exhibits A-1, A-2 and A-3,
respectively.
1. THE TERM LOANS
2.01. Term Loan Commitment. Subject to the conditions set forth
in Section 5.01 and upon the terms of this Agreement, Lender shall make Term
Loan A to Borrower on the Closing Date, subject to the satisfaction of the
conditions set forth in Section 5.02 herein and upon the terms of this
Agreement, Lender shall make Term Loan B to Borrower on the third Business
Day following receipt of the Term Loan B Notice and subject to the
satisfaction of the conditions set forth in Section 5.03 herein and upon the
terms of this Agreement, Lender shall make Term Loan C to Borrower on the
third Business Day following receipt of the Term Loan C Notice.
2.02. Payment of Interest. Interest shall accrue and Borrower
shall pay interest on the aggregate outstanding principal amount of each Term
Loan, from time to time outstanding, at a rate per annum equal to the
Interest Rate in effect from time to time. Accrued interest on the Term
Loans shall be paid in arrears on the 1st day of each calendar month
commencing on the first day of the month following each Advance Date and on
the Maturity Date, except that with respect to Term Loan A the first interest
payment shall be due on October 1, 1997.
2.03. Default Interest. Notwithstanding anything to the contrary
in Section 2.02 hereof, if Borrower shall fail to make any payment, within
five (5) days after its due date, (whether at maturity, on acceleration or
otherwise), of any interest or principal amount owing under this Agreement or
the Term Notes, then Borrower shall pay interest on demand at a rate per
annum equal to the Default Rate from time to time in effect to the fullest
extent permitted by law on the amount of principal and interest overdue from
the date of default until payment in full of the principal and interest
amount overdue plus interest thereon.
2.04. Repayment of Principal. Borrower shall repay the principal
amount of the Term Loans on, or at Borrower's option as provided in Section
2.06 before, the Maturity Date.
2.05. The Term Notes. On the Closing Date, Borrower shall duly
issue and deliver to Lender, a single promissory note in the form of Exhibit
A-1 hereto.
2.06. Prepayment. (a) Voluntary Prepayment. Borrower may, upon
not less than three (3) Business Days irrevocable prior written notice to
Lender, prepay the Term Loans in whole or in part without premium or penalty.
Amounts repaid with respect to the Term Loans may not be reborrowed by
Borrower pursuant to the Agreement.
(b) Interest. Any prepayment of principal of the Term Loans
shall be paid together with unpaid accrued interest thereon to and including
the prepayment date.
2.07. Extension of Initial Maturity Date. (a) The principal
amount of the Term Loans plus any accrued and unpaid interest thereon shall
be due and payable to Lender on the Initial Maturity Date.
(b) Notwithstanding the provisions of Section 2.07(a),
Borrower may elect to extend the Initial Maturity Date, subject to the terms
and conditions of this Section 2.07 and Section 4.01 herein, upon written
notice received by Lender on or before November 5, 1997. If the conditions
set forth in Section 2.07(c) and Section 4.01 herein are not satisfied on or
prior to the Initial Maturity Date, the principal amount of the Term Loans
and any accrued and unpaid interest thereon shall be due and payable on the
Initial Maturity Date.
(c) The obligation of Lender to extend the Initial Maturity
Date is subject to the fulfillment of the following conditions by Borrower:
(i) no Default shall have occurred hereunder or under any Loan Document,
either before or after giving effect to such extension and (ii) Lender shall
have received the documents referred to in Section 4.01 prior to the Initial
Maturity Date.
2. TERMS APPLICABLE TO TERM LOANS
3.01. Payments and Computations. (a) Borrower shall make each
payment due hereunder and under the Term Notes not later than 1:00 P.M., on
the date when due, in same day funds as provided in the Term Notes or as
directed by Lender.
(b) All computations of interest hereunder shall be made by
Lender on the basis of a year of 360 days, in each case for the actual number
of days elapsed (including the first day but excluding the last day)
occurring in the period for which such interest is payable. Each
determination by Lender of an interest rate hereunder shall be conclusive and
binding for all purposes, absent error.
(c) Whenever any payment hereunder or under the Term Notes,
as the case may be, shall be due on a day other than a Business Day such
payment shall be made on the next succeeding Business Day and such extension
of time shall in such case be included in the computation of payment of
interest.
3.02. Taxes; Reserves; Additional Costs. All payments made by
Borrower hereunder shall be made free and clear of, and without reduction for
or on account of future income, stamp or other Taxes, levies, imposts,
duties, charges, fees, deductions, reserves or withholdings hereafter
imposed, levied, collected, withheld or assessed by any governmental and/or
taxing authority, excluding income, gross receipts, capital stock and
franchise taxes imposed on Lender by the United States of America or any
political subdivision or taxing authority thereof or therein. If any Taxes
are required to be withheld from any amounts payable to Lender hereunder, the
amounts so payable shall be increased to the extent necessary to yield to
Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rate or in the amounts specified hereunder.
Borrower hereby indemnifies Lender for any incremental taxes, interest or
penalties that may become payable by Lender which may result from any failure
by Borrower to pay any such Tax when due to the appropriate taxing authority.
3.03. Fees and Costs. In order to induce Lender to enter into
this Agreement and make the Term Loans to Borrower, Borrower shall pay on the
Closing Date and on each subsequent Advance Date, all fees and costs
associated with documenting and closing the Term Loans, including all
reasonable out-of-pocket costs and expenses, including the fees and
disbursements of counsel to Lender, incurred by Lender in connection with the
preparation, execution and delivery of this Agreement, the Term Notes and any
other Loan Documents.
3. SECURITY
4.01. Security During Any Extension Period. As security for the
prompt payment of the amounts due hereunder, and under each of the Term Notes
and the fulfillment of all other obligations of Borrower hereunder and under
the Term Notes, during any Extension Period, Borrower shall cause each Sub
Guarantor to deliver to the Lender and Lender shall receive, prior to the
commencement of the Extension Period:
(a) One or more mortgages, in form and substance
substantially similar to the mortgage attached hereto as Exhibit B, and in
form for recording in the appropriate filing office in the jurisdiction in
which the Properties are located, creating cross-defaulted first priority
liens on the Properties, together with the payment of any and all mortgage
recording taxes in connection therewith, provided that the mortgage relating
to the property known as 1275 K Street shall only be recorded if there has
been a Default pursuant to Section 8.01 hereof during the Extension Period;
(b) Uniform Commercial Code Financing Statements Form UCC-1,
in form for recording in the appropriate filing offices in the jurisdiction
in which the Properties are located, creating a first priority lien in all
personal property located at the Properties;
(c) A joint and several guaranty of the amounts due
hereunder, and under each of the Term Notes and the fulfillment of all other
obligations of Borrower hereunder from the Sub Guarantors in such form
reasonably acceptable to Lender.
(d) Such other documents as may be required by Lender in its
sole discretion.
4. CONDITIONS PRECEDENT
5.01. Conditions Precedent to Term Loan A. The obligation of
Lender to disburse Term Loan A is subject to the fulfillment of the following
conditions by Borrower:
(a) The representations and warranties herein contained and
contained in the Loan Documents shall be true and correct in all respects on
and as of the Closing Date.
(b) Lender shall have received such consents or
acknowledgments, with respect to such of the transactions hereunder, from
such Persons as Lender or its counsel may reasonably determine to be
necessary or appropriate.
(c) Lender shall have received (i) copies of the certificate
of formation and all amendments thereto of Borrower, certified as of a recent
date by the Secretary of State of its jurisdiction of formation; and (ii) the
certificate of said Secretary of State as to the valid existence, good
standing (or equivalent) and other charter documents on file of Borrower, as
of a recent date.
(d) Borrower shall pay all of the fees and costs due pursuant
to Section 3.04 and as elsewhere provided for herein and Lender's actual
costs and expenses pursuant to Section 9.02 hereof.
Lender's disbursement of Term Loan A shall constitute its acknowledgment that
such conditions precedent relating to Term Loan A have been satisfied.
5.02. Conditions Precedent to Term Loan B. The obligation of
Lender to disburse Term Loan B shall be subject to the fulfillment of the
following conditions precedent:
(a) Lender shall have received a properly executed Term Loan
B Notice at least five (5) days prior to the Advance Date of such Term Loan,
but in any event prior to the Maturity Date.
(b) No Default hereunder or under any Loan Document shall
have occurred and be continuing, either before or after giving effect to such
Term Loan B; and Borrower shall have complied and shall then be in compliance
in all respects with all of the terms, covenants and conditions of this
Agreement, Term Note A and any Loan Document which is binding on it.
(c) Lender shall have received such consents or
acknowledgments, with respect to such of the transactions hereunder, from
such Persons as Lender or its counsel may reasonably determine to be
necessary or appropriate.
(d) Lender shall have received evidence satisfactory to it,
that Borrower, simultaneously with its receipt of the proceeds of the Advance
in connection with the Term B Loan, will purchase the property known as 700
Atrium, pursuant to the 700 Atrium Purchaser Contract (as such term is
defined in the Operating Agreement).
Lender's disbursement of Term Loan B shall constitute its acknowledgment that
such conditions precedent relating to Term Loan B have been satisfied.
5.03. Conditions Precedent to Term Loan C. The obligation of
Lender to disburse Term Loan C shall be subject to the fulfillment of the
following conditions precedent:
(a) Lender shall have received a properly executed Term Loan
C Notice at least five (5) days prior to the Advance Date of such Term Loan,
but in any event prior to the Maturity Date.
(b) No Default hereunder or under any Loan Document shall
have occurred and be continuing, either before or after giving effect to such
Term Loan C; and Borrower shall have complied and shall then be in compliance
in all respects with all of the terms, covenants and conditions of this
Agreement, Term Note A, Term Note B and any Loan Document which is binding on
it.
(c) Lender shall have received such consents or
acknowledgments, with respect to such of the transactions hereunder, from
such Persons as Lender or its counsel may reasonably determine to be
necessary or appropriate.
(d) Lender shall have received evidence satisfactory to it,
that Borrower will cause the properties known as 600 Atrium and 15 Broad
Street to be contributed to it pursuant to the Operating Agreement.
Lender's disbursement of Term Loan C shall constitute its acknowledgment that
such conditions precedent relating to Term Loan C have been satisfied.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
6.01. Organization of Borrower. Borrower and the Sub Guarantors
are limited liability companies duly formed, validly existing and in good
standing under the laws of the State of Delaware and have all powers and all
governmental licenses, authorizations, consents and approvals required to
carry on its business as they are now being conducted. Borrower and the Sub
Guarantors are duly qualified to do business and are in good standing in all
jurisdictions in which the ownership of its property or the conduct of its
business makes such qualification necessary.
6.02. Authorization. The execution, delivery and performance of
this Agreement, the Term Notes and the other Loan Documents by Borrower are
within the power and authority of Borrower and have been authorized by all
necessary action, and require no action by or in respect of, or filing with,
any governmental body, agency or official.
6.03. Guarantees and Mortgages. The execution, delivery and
performance of the guarantees and mortgages by the Sub Guarantors are within
the power and authority of Sub Guarantors and have been authorized by all
necessary action, and require no action by or in respect of, or filing with,
any governmental body, agency or official.
6.04. Validity. The Loan Documents have been duly executed and
delivered by Borrower and constitute the legal, valid and binding obligations
of Borrower enforceable against Borrower in accordance with their respective
terms, except as the enforceability hereof and thereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and by general principles of equity.
6.05. Consents. All consents, authorizations, approvals of or
filings or registrations with any commission, board, agency, court or other
governmental authority necessary in connection with the valid execution,
delivery and performance of the Loan Documents by Borrower have been obtained
or effected and are in full force and effect.
6.06. No Conflict. The execution and delivery by Borrower of the
Loan Documents do not, and the performance by Borrower of the Loan Documents
to which they are, respectively, a party, will not, (a) violate any provision
of the Operating Agreement or any law, rule, regulation, order, writ,
judgment, decree, determination or award applicable to Borrower, (b) result
in a breach of or constitute a default under any indenture, lease, loan or
other agreement or any instrument to which Borrower is a party or by which
they or their properties may be bound or affected, or (c) result in, or
require the creation or imposition of, any Lien upon or with respect to any
of the properties now owned or hereafter acquired by Borrower, other than the
Liens granted to Lender pursuant hereto.
6.07. No Default. Borrower is not in violation of any law, rule,
regulation, order, writ, judgment, decree, determination or award applicable
to it or any indenture, lease, loan or other agreement to which it is a party
or by which it or its properties may be bound or affected, the violation of
which would have a material adverse effect upon the ability of Borrower to
perform any of its respective obligations under the Loan Documents.
6. COVENANTS
Until the Term Notes have been paid in full in accordance with
their terms and until the performance of all obligations of Borrower
hereunder and under the other Loan Documents to which it is a party, Borrower
covenants that:
7.01. Negative Covenants. Except for the Assumed Financing (as
such term is defined in the Operating Agreement) and as otherwise consented
to by Wellsford Commercial Properties Trust pursuant to the Operating
Agreement, Borrower shall not, and will not permit any of its Subsidiaries
to:
(a) Incur any Indebtedness; or
(b) (i) create or incur or suffer to be created or incurred
or to exist any Lien, mortgage, negative pledge, restriction or other
security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or
profits therefrom; or (ii) transfer any of its property or assets or the
income or profits therefrom.
7. DEFAULTS
8.01. Events of Default. If any of the following events shall
occur and be continuing:
(a) Borrower or any Sub Guarantor shall fail to pay any
amounts of principal or interest due hereunder, under any of the Term Notes
or any Loan Document when due, whether at maturity, by acceleration or
otherwise; or
(b) Any representation or warranty made by Borrower or any
Sub Guarantor in this Agreement, or in any other Loan Document or any
certificate or notice delivered or made in connection herewith and therewith
shall prove to be false or misleading in any material respect when made; or
(c) Borrower or any Sub Guarantor shall fail to perform or
observe any other obligations, covenants or terms contained in this
Agreement, or any of the other Loan Documents (other than as described in (a)
or (b) above) to which it is a party, and such default shall continue for 5
days after written notice thereof from Lender to Borrower or the Sub
Guarantors, as the case may be; or
(d) An involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
against Borrower or any Sub Guarantor, or a court shall enter a decree or
order appointing a receiver, liquidator, assignee, custodian, trustee,
sequester (or similar official) of or for any substantial part of their
respective properties, or ordering the winding-up or liquidation of their
affairs, and such case shall not be dismissed in 60 days, or such decree or
order shall remain unstayed and in effect for a period of 30 consecutive
days; or
(e) Borrower or any Sub Guarantor shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of or for all or any substantial
part of their respective property, or shall make any general assignment for
the benefit of creditors, or shall fail generally to pay their respective
debts as they become due, or shall take any action in furtherance of any of
the foregoing; or
(f) If at any time during the term of this Agreement, WHWEL
Real Estate Limited Partnership exercises its "Conversion Right" (as such
term is defined in the Operating Agreement) to require Wellsford Commercial
Properties Trust, a Maryland real estate investment trust, to convert any of
its Membership Units (as such term is defined in the Operating Agreement)
into shares of beneficial interest of Wellsford Commercial Properties Trust;
then in the case of any of the events specified in paragraphs (d) and (e),
the Term Loans shall be immediately terminated and all amounts payable by
Borrower or any Sub Guarantor, if applicable, to Lender under this Agreement
and the Term Notes, as the case may be, shall be immediately due and payable
without any action on the part of Lender, Borrower, Sub Guarantor, or any
other Person, and, in the case of any of the other events specified above,
Lender may, by notice to Borrower (i) declare the Term Loans to be forthwith
cancelled and terminated, whereupon the same shall be so cancelled and
terminated and/or (ii) declare the principal, interest and all other amounts
payable by Borrower to Lender under this Agreement and the Term Notes to be
immediately due and payable, whereupon the same shall become forthwith due
and payable.
8. GENERAL PROVISIONS
9.01. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of Borrower, Lender and their respective
successors and assigns, provided that Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written consent to
Lender. Lender may not at any time assign any of its rights hereunder.
9.02. Costs and Expenses. Borrower agrees to pay all reasonable
costs and expenses, including the fees and disbursements of Lender's counsel,
incurred in connection with the enforcement of this Agreement, the Term Notes
or any other Loan Documents.
9.03. Amendment; Waiver. No amendment, modification or waiver of
any provision of this Agreement, and no consent to any departure by Borrower
therefrom, shall in any event be effective unless the same be in writing and
signed by Lender. Any waiver of any provision of this Agreement, and any
consent to any departure by Borrower therefrom, shall be effective only in
the specific instance and for the specific purpose for which given. Neither
failure nor delay on the part of either party to exercise any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any right, power or remedy.
No notice to or demand on Borrower in any case shall entitle Borrower to any
other or further notice or demand in similar or other circumstances. The
rights herein provided are cumulative and not exclusive of any rights
provided by law.
9.04. Notices. Except as otherwise provided herein, all notices,
demands and other communications to either party hereto under this Agreement
shall be in writing and shall be delivered or sent to such party at the
following addresses:
To Borrower:
Wellsford/Whitehall Properties, L.L.C.
c/o Wellsford Commercial Properties Trust
610 Fifth Avenue
New York, New York 10020
Attention: President
with a copy to:
WHWEL Real Estate Limited Partnership
85 Broad Street, 19th Floor
New York, New York 10004
Attention: Chief Financial Officer
To Lender:
Wellsford Real Properties, Inc.
610 Fifth Avenue
New York, New York 10020
Attention: President
or to such other address as it may by written notice to the other party
hereto have designated for such purpose. Any such notice, demand or other
communications shall be deemed given when sent.
9.05. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same instrument.
9.06. Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect the construction hereof.
9.07. Invalidity. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated
thereby and shall be given effect so far as possible.
9.08. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
9.09. Waiver of Jury Trial; Service of Process. BORROWER HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY
TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS. Borrower further agrees that
any process required to be served on it for purposes of any such proceeding
may be served on it, with the same effect as personal service on it within
the State of New York, by registered mail, return receipt requested,
addressed to it at its address for purposes of notices as provided in Section
9.04 hereof, provided that such process shall not be deemed served until
actual receipt by Borrower.
9.10. Indemnification. (a) Borrower agrees to pay, and protect,
indemnify and save harmless Lender and, in their capacity as such, its
officers, directors, shareholders, controlling persons, employees, agents and
servants from and against, all liabilities, losses, claims, damages,
penalties, causes of action, suits, judgments, costs, expenses or disburse-
ments (including, without limitation, reasonable attorneys' fees and
expenses) of any kind whatsoever which may at any time be imposed on,
incurred by or asserted against Lender in any way relating to or arising out
of the Loan Documents or the transactions by and between Lender and Borrower,
as contemplated thereby, provided that, Borrower will not be liable to Lender
for such liabilities, losses, claims, damages, penalties, causes of action,
suits, judgments, costs, expenses or disbursements (including, without
limitation, attorneys' fees) or judgments arising from Lender's gross
negligence, wilful misconduct or failure to comply with applicable regulatory
requirements imposed on it with respect to the Term Loans, if any.
(b) Lender agrees that with respect to any action, suit or
proceeding against it, or any of its officers, directors, shareholders,
controlling persons, employees, agents and servants, in respect of which
indemnity may be sought hereunder, it will give written notice of the
commencement of such action to Borrower promptly after it or any of its
officers, directors, shareholders, controlling persons, employees, agents and
servants is made a party to such action or it otherwise has knowledge
thereof. Upon receipt of any such notice by Borrower, Borrower shall be
entitled to assume the defense of such action, including the employment of
counsel reasonably acceptable to Lender and the payment of all expenses in
connection with such defense, and shall have the right to negotiate and
consent to settlement. Failure of Lender to provide notice pursuant to this
Section 9.10(b) shall not negate any indemnification obligations of Borrower.
(c) Any indemnified party shall have the right to employ
separate counsel in any such action against it and to participate in the
defense thereof and the fees and expenses of such counsel shall be at the
expense of such party if an adequate defense is not being provided by the
indemnifying party in the reasonable judgment of the indemnified party.
Notwithstanding the foregoing, Borrower shall not have the right to defend
the indemnified party in any action or proceeding if such indemnified party
has been advised by its own counsel that there are legal defenses available
to such indemnified party which are different from, additional to or conflict
with the defenses available to Borrower. Borrower shall not be liable for
any settlement of any such action effected without its consent, which consent
shall not be unreasonably withheld.
(d) The provisions of this Section 9.10 shall survive the
repayment in full of the Term Notes and the satisfaction of all obligations
of Borrower under the Loan Documents.
IN WITNESS WHEREOF, Borrower and Lender have executed this
Agreement as of the date above written.
WELLSFORD/WHITEHALL PROPERTIES,
L.L.C.
By: Wellsford Commercial Properties Trust
By: /s/ Edward Lowenthal
__________________________________
Name: Edward Lowenthal
Title: President
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Edward Lowenthal
_____________________________________
Name: Edward Lowenthal
Title: President