LOAN PARTICIPATION AGREEMENT
LOAN PARTICIPATION AGREEMENT (this "Agreement") dated as of August _,
1997 between MORGAN GUARANTY TRUST COMPANY OF NEW YORK (the "Bank") and
WELLSFORD REAL PROPERTIES, INC. (the "Participant").
Reference is made to the Revolving Credit Agreement dated as of August
_, 1997 (the "Credit Agreement") between the various entities named therein
as "Borrower" (said entities, together with any other entity who becomes
liable under the terms of the Credit Agreement, are hereinafter collectively
referred to as the "Borrower") and the Bank, a copy of which has been
furnished to the Participant. Capitalized terms used herein without
definition shall have the respective meanings ascribed thereto in the Credit
Agreement. Pursuant to the terms of the Credit Agreement, the Bank is
committed, subject to the terms and conditions thereof, to make a loan
(collectively, the "Loan") in advances to the Borrower from time to time in
an aggregate principal amount not to exceed $70,000,000 at any one time
outstanding and with the aggregate principal amount of all Advances made
under the Credit Agreement not to exceed $80,000,000 (the "Commitment").
On the following terms and conditions, the Bank hereby agrees to sell
and the Participant hereby agrees to purchase an undivided junior interest
(the "Junior Participation") in the Loan and each of the Advances. The
maximum aggregate outstanding principal amount of the Junior Participation is
$35,000,000, and the relationship which the aggregate outstanding principal
amount of (a) as to the Participant, the Junior Participation, and (b) as to
the Bank, the sum of (i) the Senior Participation (as hereinafter defined)
plus (ii) any Default Senior Interest (as hereinafter defined) plus (iii) any
Bank Junior Participation (as hereinafter defined), as the case may be, bears
to the aggregate outstanding principal amount of the Loan made or to be made
by the Bank (determined at any given time after giving effect to any
assignment by the Bank of any of its right, title and interest under the
Credit Agreement but without giving effect to the sale of this or any other
participation therein) is hereinafter called the "Participation Percentage".
The Junior Participation will be payable in accordance with Section 2 below
and shall bear interest at an annual rate equal to 1.50% in excess of the
interest rate payable under the Note as in effect from time to time (the
"Junior Participation Rate"). The Bank will retain a senior interest in the
Loans (the "Senior Participation") payable in accordance with Section 2
below, which Senior Participation shall bear interest at an annual rate equal
to the interest rate payable under the Note as in effect from time to time
less 1.50% (the "Senior Participation Rate"). For purposes of this
Agreement, the term "Note" shall mean the promissory note executed by
Borrower in favor of the Bank in the maximum principal amount of $70,000,000
together with any modification thereof made in accordance with Section 4(f)
below.
1. ADVANCES; SERVICING ADVANCES
(a) Upon the Bank's receipt of a Preliminary Borrowing Request from the
Borrower and all required documentation in support thereof, the Bank shall,
provided it has approved such Preliminary Borrowing Request, promptly furnish
to the Participant a copy thereof as well as all documents and information
furnished by or on behalf of the Borrower in connection therewith. The
Participant shall have five (5) Business Days to review the Preliminary
Borrowing Request.
In the event that upon receiving a Preliminary Borrowing Request the
Participant delivers a certification to the Bank (a "Dispute Notice"), which
Dispute Notice must be received by the Bank within five (5) Business Days
following Participant's receipt of the Preliminary Borrowing Request,
certifying that the Participant has determined in good faith that the
Collateral Value calculated by the Bank after giving effect to the new
Advance is too high, the Participant shall not be obligated to fund its share
of the new Advance. In the event the Participant does not deliver to the
Bank a written revocation of the Dispute Notice within one Business Day after
delivering the Dispute Notice, the Participant shall be deemed to have
elected not to fund its share of such new Advance and shall also be deemed to
have automatically waived its right to fund any future Advance made pursuant
to the Credit Agreement. In the event that the Participant fails to deliver
a Dispute Notice by the end of such fifth Business Day, the Participant shall
be deemed to have waived its rights under this paragraph (a) and shall be
obligated to fund its share of the new Advance in accordance with paragraph
(c) of this Section 1. Any Dispute Notice shall include reasonable back-up
for such determination.
(b) In the event the Participant timely delivers a Dispute Notice, the
Bank shall fund one hundred percent (100%) of the Advance and shall be deemed
to be the owner of a fifty percent (50%) Senior Participation in such Advance
and a new junior participation (a "Bank Junior Participation") evidencing the
remaining fifty percent (50%) interest in such Advance, which Bank Junior
Participation shall be pari passu with the Junior Participation held by the
Participant and shall bear interest at the Junior Participation Rate in
accordance with Section 2 below, provided, however, that all payments
received by the Bank on account of such Advance shall nonetheless be
aggregated with payments received by the Bank on account of the balance of
the Loan for purposes of distributions under Section 2.
(c) Provided that the Preliminary Borrowing Request has been approved
by the Bank, and unless a Dispute Notice has been timely delivered in
accordance with paragraph (a) above and not revoked, upon the Bank's receipt
of a Borrowing Request, a copy of which the Bank shall promptly furnish to
the Participant, the Participant will before 10:00 a.m. (New York City time)
on the date of the requested borrowing set forth in the Borrowing Request,
make available to the Bank at its office at 60 Wall Street, New York, New
York 10260, funds immediately available in the amount of fifty percent (50%)
of the new Advance. The Note evidencing, and all other documents relating
to, the Loan will be retained by the Bank but copies thereof will be
furnished to the Participant. To evidence the Junior Participation the Bank
has provided the Participant with a loan participation certificate (the
"Junior Certificate") in the form annexed hereto and hereby authorizes the
Participant to endorse on the Junior Certificate the dates and the amount of
each advance in respect of the Junior Participation and the amount of each
payment of principal which the Bank advises the Participant has been credited
to its account.
(d) In the event that the Participant fails to advance the funds
requested in connection with any Advance when required, the Bank shall, to
the extent required to comply with its obligations under the Credit
Agreement, fund 100% of such Advance or obtain an alternative source of
funding for such portion of the Advance. If the Bank funds 100% of such
Advance, the Participant covenants and agrees that it shall, subject to the
terms of the penultimate sentence of this paragraph (d), reimburse the Bank
in the amount of 50% of such Advance together with interest on such amount
calculated at the interest rate of two percent in excess of the Junior
Participation Rate payable from the day such Advance was made by the Bank
through and including the day the Participant reimburses the Bank for funding
the Participant's share of such Advance, which repayment obligation as to
both principal and interest shall be subject to a credit in the amount of any
principal or interest, respectively, received from time to time by the Bank
or the provider of any alternative financing as the holder of the applicable
Default Senior Interest (as defined below). Such reimbursement shall be made
by wire transfer to the account indicated by the Bank. In the event that the
Participant fails to reimburse the Bank as provided in this paragraph within
three (3) Business Days after the Bank funds on behalf of the Participant, or
in the event that an alternative source of funding is obtained by the Bank,
then the Bank or such alternative source of funding shall be deemed the owner
of a new senior participation interest (a "Default Senior Interest")
evidencing a senior participation as to the portion of such Advance that was
payable by the Participant, payable at the same senior priority as the Senior
Participation in the balance of the Loan in accordance with Section 2 below,
provided, further, that any Default Senior Interest shall bear interest at
the Junior Participation Rate for so long as it remains outstanding. At any
time following the issuance of a Default Senior Interest, the Participant,
prior to reimbursing the holder of the Default Senior Interest, shall provide
ten (10) days prior written notice of its intention to effect such
reimbursement. The holder of the Default Senior Interest shall notify the
Participant within five (5) Business Days of its receipt of such notice of
its election to either (i) accept reimbursement from the Participant in which
case upon receipt of such full reimbursement of principal and interest the
Default Senior Interest shall be assigned to the Participant and
automatically immediately converted to a Junior Participation or (ii) reject
the reimbursement and retain the Default Senior Interest in which case the
reimbursement obligation of the Participant under this paragraph (d) shall
automatically terminate with respect to the subject Advance. Nothing herein
shall be deemed a waiver of any other rights or remedies of the Bank provided
hereunder, at law or in equity in connection with any refusal by the
Participant to fund its share of any Advance.
(e) The Bank reserves the right, but is not obligated, to make advances
of all amounts necessary for the payment of hazard insurance premiums, water
rates, real estate taxes, assessments or other public charges, or other items
necessary for the protection of the security of any mortgage or deed of trust
securing the Loan or the preservation of any mortgaged property to the extent
funds held in mortgage escrows are insufficient to pay for such items. In
the event that the Bank determines that such an advance (a "Servicing
Advance") is necessary or appropriate in connection with the Loan or any
property which has been converted to real estate owned status following the
exercise of any remedies, the Bank shall, in the absence of an emergency, use
reasonable efforts to consult with the Participant prior to making a
Servicing Advance. While the Bank shall use reasonable efforts to consult
with the Participant, other than in the case of an emergency, the
determination of the Bank shall be conclusive in the event that the parties
disagree. In the event, however, that the Participant is servicing the Loan
in accordance with Section 4(d) and 4(e) below, the Participant shall have
the right, after consulting with the Bank, to make a Servicing Advance with
respect to the Loan in the event that the Participant reasonably determines
that such an advance is necessary to protect the security of the collateral
or preserve the then existing condition of the mortgaged property. Servicing
Advances shall bear interest from the date advanced until repaid at the same
rate of interest payable by the Borrower under the Loan Documents (the
"Servicing Advance Rate") with respect to such advances and will be
reimbursed to the Bank and/or the Participant, as the case may be, together
with interest thereon, in accordance with Section 2 below.
(f) In the event that the Participant fails to fund the amount
requested in connection with the funding of any Advance within the applicable
time period, the Participant shall reimburse the Bank for all reasonable and
necessary out-of-pocket costs and expenses actually incurred by the Bank,
directly or indirectly, as a result of the Participant's failure to fund
within the applicable time period, which reimbursement shall be made within
10 days after receipt by the Participant of copies of invoices and/or
statements from the Bank itemizing such costs and expenses.
2. DISTRIBUTIONS
(a) With respect to prepayments of principal actually received by the
Bank in respect of the Loan such prepayments shall be promptly applied:
(i) First, to the Bank and the Participant, on a pari passu basis
in relation to the respective amounts of unreimbursed Servicing
Advances and Asset Audit Expenses owing to the Bank and the
Participant, to reimburse the Bank and the Participant for any
unreimbursed Servicing Advances together with interest thereon at
the Servicing Advance Rate and to reimburse the Bank and the
Participant for any unreimbursed Asset Audit Expenses; and
(ii) Second, to the Bank and the Participant, on a pari passu
basis, based upon their respective Participation Percentages.
(b) With respect to all other payments of principal actually received
by the Bank in respect of the Loan, such payments shall be promptly applied:
(i) First, to the Bank and the Participant on a pari passu basis
in relation to the respective amounts of unreimbursed Servicing
Advances and Asset Audit Expenses owing to the Bank and the
Participant, to reimburse the Bank and the Participant for any
unreimbursed Servicing Advances together with interest thereon at
the Servicing Advance Rate and to reimburse the Bank and the
Participant for any unreimbursed Asset Audit Expenses;
(ii) Second, to the Bank to repay all principal amounts due and
owing to the Bank as the holder of the Senior Participation and any
Default Senior Interest in the Loan; and
(iii) Third, only to the extent of any remaining funds
representing such principal payments, to the Bank and the
Participant on a pari passu basis, to the extent of the Junior
Participation held by the Participant and any Bank Junior
Participation held by the Bank.
(c) With respect to payments of interest actually received by the Bank
in respect of the Loan, such payments will be promptly applied:
(i) First, to the Bank and the Participant on a pari passu basis,
to repay any accrued and unpaid interest on any Servicing Advances
by such party at the Servicing Advance Rate;
(ii) Second, to the Bank to repay all accrued and unpaid interest
on the Senior Participation at the Senior Participation Rate and
any Default Senior Interest at the Junior Participation Rate; and
(ii) Third, to the Bank and the Participant on a pari passu basis,
to repay all accrued and unpaid interest on any Bank Junior
Participation held by the Bank and the Junior Participation held by
the Participant, at the Junior Participation Rate.
(d) Notwithstanding anything herein to the contrary, the fees payable
under Section 3.01 of the Credit Agreement shall be solely for the account of
the Bank and shall be retained by the Bank for its own account. In addition,
any late fees and, notwithstanding anything to the contrary set forth in
Section 2(c) above, any incremental increases in the interest rate under the
Loan paid by the Borrower on account of a default rate of interest being in
effect (but only to the extent of the incremental increase in the interest
rate as opposed to the base rate of interest which shall remain payable in
accordance with Section 2(c) above) shall be divided between the Bank and the
Participant in accordance with their respective Participation Percentage at
the time of payment.
(e) In addition to the payments of debt service on the Loan to be
distributed as set forth above, payments received by the Bank under any
guaranty or indemnification provision under any Loan Document shall (i) be
distributed in accordance with paragraphs (a) through (c) above of this
Section 2 to the extent such payments relate to principal or interest on the
Loan and (ii) in the event such payment relates to obligations of the
Borrower other than the payment of the Loan, such payment shall be
distributed to the Bank and the Participant based upon the actual losses
suffered by each such party in connection with the event giving rise to such
payment.
3. RETURN OF FUNDS
If the Bank should for any reason make any payment to the Participant in
anticipation of the receipt of funds from the Borrower or any guarantor and
such funds are not received by the Bank from the Borrower or any guarantor on
the date payment is due, then the Participant shall, on demand of the Bank,
forthwith return to the Bank any such amounts transferred to the Participant
by the Bank in respect of the Junior Participation plus interest thereon from
the day such amounts were transferred by the Bank to the Participant to, but
not including, the day such amounts are returned by the Participant at a rate
per annum equal to the effective Federal Funds Rate. If the Bank is required
at any time to return to the Borrower or any guarantor or to a trustee,
receiver, liquidator, custodian or other similar official any portion of the
payments made by the Borrower or any guarantor to the Bank, then the
Participant shall, on demand of the Bank, forthwith return to the Bank any
such payments transferred to the Participant by the Bank in respect of the
Junior Participation, but without interest on such payments (unless the Bank
is required to pay interest on such amounts to the person recovering such
payments).
4. SERVICING
(a) The Bank will exercise the same care in making and in handling the
Loan as the Bank exercises with respect to loans in which no participations
are granted. All moneys received by the Bank under the Loan shall be held by
the Bank as trustee for the Participant to be disbursed in accordance with
Section 2 above. Except as expressly provided herein, the Bank does not
assume any other duties or responsibility.
(b) The Bank may make such inspections of the mortgaged properties from
time to time in accordance with its customary practices. The Bank shall
notify the Participant at least three Business Days prior to any such
inspection such that representatives of the Participant can, at their own
expense, accompany the Bank on any such inspection. Any written report
prepared by or on behalf of the Bank in connection with an inspection shall
be promptly furnished to the Participant. In no event shall the Bank be
obligated to take any action to effect repairs and correct any deficient
structural, environmental or physical conditions on any of the mortgaged
properties.
(c) The Bank shall promptly furnish to the Participant copies of all
quarterly and
annual financial statements received from the Borrower. At any time that the
Bank recalculates the Collateral Value, the Bank shall promptly furnish to
the Participant the results of its determination. In the event that the
Participant requests that the Bank recalculate the Collateral Value, the Bank
shall perform such recalculation, provided, however, that the Bank shall not
be obligated to recalculate the Collateral Value more than once every two
months. In addition, upon the request of the Participant, the Bank shall
also furnish to the Participant, at the Participant's cost, such other
information within the Bank's possession relating to the Loan, any Advance or
a mortgaged property as the Participant may from time to time reasonably
request.
(d) To the extent there occurs an Event of Default under any Mortgage
or the Note, the Participant shall assume the servicing of the Loan and shall
complete an asset audit containing a discussion of the economics of the Loan
and the related mortgaged property and a recommended course of action for the
Loan within 10 days of receiving notice from the Bank that such a default has
occurred unless such default is cured prior thereto. The results of any
asset audit shall be put into a concise memorandum format by the Participant
and forwarded, together with a copy of all documents prepared by or on behalf
of the Participant in connection with such asset audit, to the Bank. The cost
of such asset audit (the "Asset Audit Expense") will be borne by Participant,
subject to reimbursement in accordance with Section 2 above. To the extent
that Participant is not fully reimbursed for an Asset Audit Expense within
thirty (30) days following the incurrence of such expense pursuant to
distributions under Section 2, then the Bank shall promptly reimburse the
Participant for fifty percent (50%) of the applicable Asset Audit Expense,
subject to reimbursement in accordance with Section 2.
(e) In the event that the Bank agrees with the recommendations of the
Participant set forth in the asset audit, or in the event that the Bank does
not object to such recommendations within ten (10) days following receipt of
the asset audit, the Participant shall, in the name of the Bank, implement
the course of action set forth in the approved (or deemed approved) asset
audit. Prior to commencing the pursuit of such remedies, however, the
Participant shall instruct outside counsel acceptable to the Bank to review
the documents evidencing and securing the Loan for enforceability, the effect
of any laws affecting remedies (including, without limitation, election of
remedies doctrines, anti-deficiency rules and single action rules) and any
technical defaults, and, subject to outside counsel's recommendations and
findings regarding state laws affecting remedies, commence enforcing such
agreed upon remedies. In the event the Bank disagrees with the
recommendations of the Participant set forth in the asset audit and if the
Bank and the Participant are unable to reach an agreement as to the course of
action to be taken within thirty (30) days following delivery of the original
asset audit, the Participant shall have the right to accelerate the Loan and
commence foreclosure proceedings under any Mortgage or Mortgages, provided,
however, that no foreclosure or similar proceeding shall be completed and no
deed-in-lieu of foreclosure shall be accepted unless the Participant has
previously obtained an updated phase I environmental study (and phase II if
necessary) with respect to the property or properties subject to such
foreclosure action which is reasonably acceptable to the Bank. In connection
with any foreclosure proceeding or any other action taken by the Participant
pursuant to the first sentence of this paragraph (e), the Bank shall
cooperate with the Participant so as to enable the Participant to accelerate
the Loan and legally commence foreclosure proceedings or take such other
agreed upon actions, whether through the execution and delivery of a limited
power of attorney or otherwise. Notwithstanding anything herein to the
contrary, in the event that the Participant has defaulted in any of its
obligations under this Agreement beyond any applicable grace period,
including, without limitation, failing to deliver an asset audit in
accordance with this Section, all decisions as to the election and pursuit of
remedies shall belong to the Bank. In no event shall any other remedies be
pursued without the written consent of the Bank, which consent shall not be
unreasonably withheld or delayed.
(f) Except as otherwise provided in this Agreement, the Bank reserves
the sole right and responsibility to enforce the obligations of the Borrower
and any other entity obligated in respect of the Loan, and may, in its sole
discretion, and shall have the sole and exclusive right to (i) agree to any
modification of any of the terms of the Loan or the Note or any other
agreement or instrument evidencing, securing or otherwise relating to the
Loan, (ii) waive any of such terms or give or withhold consents or approvals
to any action or failure to act by the Borrower or any such other agreement
or instrument and (iii) exercise or refrain from exercising, or waive, any
rights or powers the Bank may have in respect thereof, provided that (x)
prior to agreeing to any such amendment or waiver (except as otherwise set
forth in clause (y) below), the Bank shall consult with the Participant,
provided that in the event that the Bank and the Participant disagree, the
decision of the Bank shall be final and conclusive and (y) no amendment or
waiver shall increase the Junior Participation or subject the Participant to
any additional obligation, reduce the principal of the Junior Participation
or the rate of interest on the Note, increase the amount of the Commitment,
modify the eighty (80%) percent loan to value requirement set forth in the
Credit Agreement, postpone the date fixed for payment of principal of or
interest on the Junior Participation or the Note or otherwise modify or grant
a waiver with respect to the Loan or any document relating thereto in a
manner which would materially adversely affect the Participant's rights
thereunder or hereunder without the prior written consent of the Participant.
(g) In the event that the Participant is servicing the Loan as
contemplated by paragraphs (d) and (e) above of this Section 4, the
Participant will exercise the same care in servicing the Loan as the
Participant exercises with respect to loans held by the Participant for its
own account. All moneys received by the Participant under or in respect of
the Loan shall be held by the Participant as trustee for the Bank and shall
be immediately remitted to the Bank to be disbursed in accordance with
Section 2 above. Except as expressly provided herein, the Participant does
not assume any other duties or responsibilities.
(h) The Bank shall maintain customary books and records in respect of
the Loan in accordance with its standard practices. Such books and records
shall be made available for copying and inspection by the Participant at the
Participant's cost and expenses during normal business hours upon not less
than three Business Days' prior written notice. The Bank and the Participant
shall notify each other as to any material default under the Loan which comes
to such party's attention or any other matter which in the Bank's or the
Participant's respective judgment might adversely affect the parties'
respective interests hereunder or any documents relating thereto.
5. LIMITATIONS ON LIABILITY
The Bank shall not, in the absence of gross negligence or willful
misconduct, be under any liability to the Participant with respect to
anything which it may do or refrain from doing which may seem to the Bank to
be necessary or desirable in connection with its obligations hereunder.
Without in any way limiting the foregoing, the Bank may rely upon the advice
of counsel concerning legal matters and upon any written communication or
telephone conversation which it believes to be genuine and correct or to have
been signed, sent or made by the proper person and shall not be required to
make an inquiry concerning the performance by the Borrower of its obligations
under the Credit Agreement or in respect of the Loan. Except for the Bank's
obligation to cooperate with the Participant under Section 4(e) above in
order to enable the Participant to accelerate the Loan and commence
foreclosure proceedings, the Bank shall have no obligation to make any claim
on, or assert any lien upon, or assert any setoff against, any property held
by it, and if it elects to do so with respect to any property other than
collateral for the Loan, the Bank may in its discretion apply the same
against indebtedness of the Borrower other than its indebtedness in respect
of the Loan. The Bank may accept deposits from, make loans or otherwise
extend credit to, and generally engage in any kind of Bank or trust business
with, the Borrower or any other entity obligated in respect of the Loan.
6. INDEMNIFICATION OF THE BANK
The Participant agrees to indemnify the Bank for its Participation
Percentage of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature against it in any way relating to or arising out of the Loan,
the Note or the transactions contemplated thereby or the enforcement of any
of the terms thereof, provided that the Participant shall not be liable for
any of the foregoing to the extent they arise from the Bank's gross
negligence or willful misconduct. This indemnity shall survive termination
of this Agreement.
7. DISCLAIMERS BY THE BANK
The Bank makes no representation or warranty in connection with, and
shall have no responsibility with respect to, the solvency, financial
condition, or statements of the Borrower, or the validity and enforceability
of the obligations of the Borrower in respect of the Loan or Note. The
Participant acknowledges that it has, independently and without reliance on
the Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to purchase the Junior
Participation and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of the
Borrower.
8. ASSIGNMENT AND TRANSFERS
This Agreement may not be assigned by one party without the prior
written consent of the other party, nor may the Participant transfer the
Junior Participation in whole or in part to any other person without the
prior written consent of the Bank, which consent in the case of a transfer by
the Participant of all or any portion of the Junior Participation shall not
be unreasonably withheld or delayed. The Bank may sell other participation
in the Loan and/or assign any of its right, title or interest therein,
provided that the aggregate principal amount of all such participations does
not exceed the aggregate principal amount of such loans made or to be made by
the Bank, after giving effect to any such assignment. In addition, the Bank
shall have the right at any time to delegate any of its servicing
responsibilities hereunder without obtaining the consent of the Participant,
provided, however, that as between the Bank and the Participant, the Bank
shall be remain primarily liable for such delegated activities subject to the
limitations set forth in this Agreement.
9. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
10. NOTICES
Any communications provided for or permitted hereunder shall be in
writing and, unless otherwise expressly provided herein, shall be sent as
follows to:
(i) in the case of the Bank:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attention: Larry Blume
Fax No.: (212) 648-5138
with a copy to:
Swidler & Berlin, Chartered
3000 K Street, N.W.
Washington, D.C. 20007
Attention: Kenneth G. Lore, Esq
Fax No. 202-424-7645
(ii) in the case of the Participant:
Wellsford Real Properties, Inc.
610 Fifth Avenue
New York, New York 10020
Attention: Gregory F. Hughes
Fax: (212) 333-2323
with a copy to:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10014
Attn: Alan S. Pearce, Esq.
Fax: (212) 541-1411
or as to each such person such other address as may hereafter be furnished by
such person to the parties hereto in writing. Any communication required or
permitted to be delivered to any of the foregoing shall be deemed to have
been duly given when sent by electronic means to the facsimile number listed
above, with a copy mailed first class, postage prepaid, to the address of the
party.
11. SEVERAL NATURE
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement.
12. SUCCESSORS AND ASSIGNS
The provisions of this Agreement shall be binding upon and, subject to
the limitations set forth in Section 8 above, inure to the benefit of the
respective successors and assigns of the parties hereto. No other person,
including, without limitation, the Borrower, shall be entitled to any benefit
or equitable right, remedy or claim under this Agreement.
13. HEADINGS; CONSTRUCTION OF AGREEMENT
The headings of various sections of this Agreement are for convenience
of reference only and are not to be construed as defining or limiting, in any
way, the scope or intent of the provisions hereof. The Participant
acknowledges that it was represented by competent counsel in connection with
the negotiation and drafting of this Agreement and that this Agreement shall
not be subject to the principle of construing the meaning against the Person
who drafted same.
14. NO PARTNERSHIP
Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between the Bank and the
Participant.
15. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, and all of which shall
together constitute one and the same agreement.
[signatures follow on next page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ L. Blume
____________________________________
Name: L. Blume
Title: Vice President
By: /s/ Benjamin J. Costello
____________________________________
Name: Benjamin J. Costello
Title: Vice President
WELLSFORD REAL PROPERTIES, INC.
By: /s/ Gregory F. Hughes
___________________________________
Name: Gregory F. Hughes
Title: CFO
LOAN PARTICIPATION CERTIFICATE
Morgan Guaranty Trust Company of New York (the "Bank") hereby certifies
that it has sold to Wellsford Real Properties, Inc. (the "Participant") a
participation (the "Junior Participation") and has received from the
Participant funds in the aggregate amount endorsed on the grid attached
hereto shown at any time as outstanding and unpaid in respect of the Junior
Participation, both pursuant to the Loan Participation Agreement dated as of
August__, 1997 between the Bank and the Participant (the "Participation
Agreement") relating to a Loan under the Credit Agreement dated as of
August__, 1997 between the various borrowing entities named therein (the
"Borrower"), and Morgan Guaranty Trust Company of New York, the Bank (the
"Credit Agreement"). The Junior Participation shall bear interest at an
annual rate equal to 1.50% in excess of the interest rate payable under the
Note as in effect from time to time.
This Loan Participation Certificate is issued pursuant to, and the
Junior Participation evidenced hereby is subject to, the terms of the
Participation Agreement and the Credit Agreement. Terms used but not defined
herein shall have the meanings set forth in the Credit Agreement.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ L. Blume
____________________________________
Name: L. Blume
Title: Vice President
By: /s/ Benjamin J. Costello
Name: Benjamin J. Costello
Title: Vice President
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Outstanding
Date of Amount of Principal Principal Notation
Advance Participation Repaid Balance Made By