ASSIGNMENT OF MEMBER'S INTEREST
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THIS ASSIGNMENT OF MEMBER'S INTEREST (this "Assignment"), made as of the
16th day of July, 1998, by WELLSFORD/WHITEHALL PROPERTIES II, L.L.C., a
Delaware limited liability company ("Assignor"), to BANKBOSTON, N.A., a
national banking association ("BKB"), as Agent for itself and the other Banks
from time to time party to the Credit Agreement (as hereinafter defined)
(BKB, in its capacity as Agent, is hereinafter referred to as "Agent").
W I T N E S S E T H:
WHEREAS, Assignor is the sole member of Wellsford/Whitehall Holdings,
L.L.C., a limited liability company formed under the laws of the State of
Delaware (the "Property Owner"); and
WHEREAS, the Property Owner is presently governed by that certain
Certificate of Formation filed on August 18, 1997 with the Delaware Secretary
of State, as amended by amendment filed June 19, 1998 with the Delaware
Secretary of State, and that certain Amended and Restated Limited Liability
Company Operating Agreement for Wellsford/Whitehall Holdings, L.L.C., a
Delaware limited liability company, dated as of July 16, 1998 (collectively
the "Property Owner Organizational Agreements"); and
WHEREAS, Assignor, BKB, the other lenders a party thereto and Agent have
entered into that certain Mezzanine Loan Agreement dated of even date
herewith (as the same may be varied, extended, supplemented, consolidated,
amended, replaced, renewed or modified or restated, the "Credit Agreement"),
pursuant to which the Banks a party to the Credit Agreement have agreed to
provide a loan to the Assignor in the amount of up to $75,000,000.00 (the
"Loan"), which Loan is evidenced by those certain Notes made by Assignor to
the order of the Banks in the aggregate principal face amount of
$75,000,000.00 (such notes, together with such other Notes as may be issued
pursuant to the Credit Agreement, as the same may be varied, extended,
supplemented, consolidated, amended, replaced, renewed, modified or restated,
are hereinafter referred to collectively as the "Note"); and
WHEREAS, the Banks and Agent have required, as a condition to the making
of the Loan to Assignor, that Assignor execute this Assignment to secure the
obligations of Assignor under the Note, the Credit Agreement and certain
other agreements;
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00), and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
covenant and agree as follows:
1. Definitions. Capitalized terms used herein that are not otherwise
defined herein shall have the meaning set forth in the Credit Agreement.
2. Grant of Security Interest. As security for the payment and
performance by Assignor of each and all of Assignor's duties,
responsibilities and obligations under this Assignment, the Credit Agreement,
the Note and any and all agreements evidencing, securing or otherwise
relating to the obligations evidenced by the Note and the Credit Agreement
(this Assignment, the Credit Agreement, the Note and such other agreements,
together with any and all renewals, modifications, consolidations and
extensions thereof, are hereinafter referred to collectively as the "Loan
Documents"; and said duties, responsibilities and obligations of Assignor are
hereinafter referred to collectively as the "Obligations"), Assignor does
hereby transfer, assign, pledge, convey and grant to Agent, and does hereby
grant a security interest to Agent in, all of Assignor's right, title and
interest in and to the following:
(a) All right, title, interest, claims or rights of Assignor now
or hereafter in, to or against the Property Owner (including, without
limitation, Assignor's membership interest in the Property Owner, the
interest of Assignor in and to the Property Owner Organizational Agreements,
the capital of the Property Owner, and the property and assets of the
Property Owner and any rights pertaining thereto) which interest is evidenced
by Certificate No. 1 (the "Certificate"), together with any and all other
securities, cash, certificates or other property, option or right in respect
of, in addition to or substitution or exchange for the Certificate, or other
property at any time and from time to time receivable or otherwise
distributed in respect of or in exchange for all or any thereof; and
(b) Any and all profits, proceeds, accounts, income,
distributions, payments upon dissolution or liquidation of the Property Owner
or the sale, financing or refinancing of any of the property or assets of the
Property Owner, proceeds of a casualty or condemnation, return of capital,
repayment of loans, and payments of any kind or nature whatsoever, now or
hereafter distributable or payable by the Property Owner to Assignor, by
reason of Assignor's interest in the Property Owner or otherwise, or now or
hereafter distributable or payable to Assignor from any other source by
reason of Assignor being a member in the Property Owner, or on account of any
interest in or claim or rights against the Property Owner held by Assignor,
or by reason of services performed by Assignor for or on behalf of the
Property Owner or with respect to the assets of the Property Owner, and any
and all proceeds from any transfer, assignment or pledge of any interest of
Assignor in, or claim or right against, the Property Owner (regardless of
whether such transfer, assignment or pledge is permitted under the terms
hereof or the other Loan Documents), and all claims, choses in action, or
things in action or rights as a creditor now or hereafter arising against the
Property Owner; and
(c) All accounts, contract rights and general intangibles now or
hereafter arising from any of the foregoing; and
(d) All notes or other documents or instruments now or hereafter
evidencing or securing any of the foregoing; and
(e) All right of Assignor to collect and enforce payments
distributable or payable by the Property Owner to Assignor pursuant to the
terms of the Property Owner Organizational Agreements; and
(f) All documents, writings, leases, books, files, records,
computer tapes, programs, ledger books and ledger pages arising from or used
in connection with any of the foregoing; and
law All renewals, extensions, additions, substitutions or
replacements of any of the foregoing; and
(h) All powers, options, rights, privileges and immunities
pertaining to any of the foregoing; and
(i) All proceeds of any of the foregoing and all cash, security or
other property distributed on account of any of the foregoing.
All of the foregoing described in this paragraph 2 are hereinafter referred
to collectively as the "Collateral". The items described in (a), above, are
sometimes hereinafter referred to as the "Member Interests"; and the items
described in (b) - (i), above, are sometimes hereinafter referred to
collectively as the "Distributions."
3. Obligations Secured. This Assignment secures the payment and
performance by Assignor of the Obligations.
4. Collection of Distributions.
(a) It is acknowledged and agreed by the parties hereto that Agent
shall have sole and exclusive possession of the Distributions and that this
Assignment constitutes a present, absolute and current assignment of all the
Distributions and is effective upon the execution and delivery hereof.
Payments under or with respect to the Distributions shall be made as follows:
(1) Except as otherwise specifically provided in this
Paragraph 4, Assignor shall have no right to receive payments made under
or with respect to the Distributions (including without limitation any
Distributions from or relating to any sale, transfer, assignment,
conveyance, option or other disposition of, or any pledge, mortgage,
encumbrance, financing or refinancing of, or casualty to or condemnation
of, any of the Collateral, the Mortgaged Property or the Mezzanine
Property regardless of whether such event is permitted under the terms
of the Loan Documents), and all such payments shall be delivered
directly by the Property Owner to Agent for application by Agent in
satisfaction of the Obligations in such order as Agent in its sole and
absolute discretion shall determine.
(2) Except as otherwise specifically provided in this
Paragraph 4, if Assignor shall receive any payments made under or with
respect to the Distributions (including without limitation any
Distributions from or relating to any sale, transfer, assignment,
conveyance, option or other disposition of, or any pledge, mortgage,
encumbrance, financing or refinancing of, or casualty to or condemnation
of, any of the Collateral, the Mortgaged Property or the Mezzanine
Property regardless of whether such event is permitted under the terms
of the Loan Documents), Assignor shall hold all such payments in trust
for Agent, will not co-mingle such payments with other funds of
Assignor, and will immediately pay and deliver in kind, all such
payments directly to Agent (with such endorsements and assignments as
may be necessary to transfer title to Agent) for application by Agent in
satisfaction of the Obligations in such order as Agent in its sole and
absolute discretion shall determine.
(3) Assignor hereby agrees for the benefit of the Property
Owner that all payments actually received by Agent shall be deemed
payments to Assignor by the Property Owner. Agent shall apply any and
all such payments actually received by Agent in satisfaction of the
Obligations in such order as Agent in its sole and absolute discretion
shall determine. Agent shall return to Assignor that portion of any
payments actually received by Agent from the Property Owner which Agent
determines, in the exercise of its sole and absolute discretion but in
good faith is not needed to repay the Obligations.
awf In furtherance of the foregoing, Assignor does hereby
notify and direct the Property Owner and its members that all payments
under or with respect to the Distributions shall be made directly to
Agent at the address of Agent set forth in the Credit Agreement.
(b) Assignor shall cause the Property Owner, WASH, WASH Manager
and Wells Avenue Holdings promptly to distribute all net proceeds of the
sale, transfer, assignment, conveyance, option or other disposition of, or
any mortgage, hypothecation, encumbrance, financing or refinancing of, or
casualty to or condemnation of, any of its assets or properties, and any and
all other Distributions distributable or payable by the Property Owner, WASH,
WASH Manager or Wells Avenue Holdings or any member thereof under the terms
of the Property Owner Organizational Agreements, the WASH Organizational
Agreements, the WASH Manager Organizational Agreements or the Wells Avenue
Holdings Organizational Agreements, as applicable.
(c) Assignor hereby irrevocably designates and appoints Agent its
true and lawful attorney-in-fact, which appointment is coupled with an
interest, either in the name of Agent, or in the name of Assignor, at
Assignor's sole cost and expense, and regardless of whether Agent becomes a
member in the Property Owner or not, to take any or all of the following
actions:
(1) to ask, demand, sue for, attach, levy, settle,
compromise, collect, compound, recover, receive and give receipt and
acquittances for any and all Collateral and to take any and all actions
as Agent may deem necessary or desirable in order to realize upon the
Collateral, or any portion thereof, including, without limitation,
making any statements and doing and taking any actions on behalf of
Assignor which are otherwise required of Assignor under the terms of any
agreement as conditions precedent to the payment of the Distributions,
and the right and power to receive, endorse, assign and deliver, in the
name of Assignor, any checks, notes, drafts, instruments or other
evidences of payment received in payment of or on account of all or any
portion of the Collateral, and Assignor hereby waives presentment,
demand, protest and notice of demand, protest and non-payment of any
instrument so endorsed; and
(2) to institute one or more actions against the Property
Owner or any member thereof in connection with the collection of the
Distributions, to prosecute to judgment, settle or dismiss any such
actions, and to make any compromise or settlement deemed desirable, in
Agent's sole and absolute discretion, with respect to such
Distributions, to extend the time of payment, arrange for payment in
installments or otherwise modify the terms of the Property Owner
Organizational Agreements with respect to the Distributions or release
the Property Owner or any member thereof from their respective
obligations to pay any Distribution, without incurring responsibility
to, or affecting any liability of, Assignor under the Property Owner
Organizational Agreements;
it being specifically understood and agreed, however, that Agent shall not be
obligated in any manner whatsoever to give any notices of default (except as
may be specifically required herein or the other Loan Documents) or to
exercise any such power or authority or be in any way responsible for the
preservation, maintenance, collection of or realizing upon the Collateral, or
any portion thereof, or any of Assignor's rights therein. Notwithstanding
anything contained in this Paragraph 4 to the contrary, provided no Event of
Default has occurred and is continuing, Assignor shall have a license
(revocable upon the occurrence and during the continuance of an Event of
Default) to receive amounts attributable to (A) rents, issues and profits
paid under Leases not more than one (1) month in advance, (B) excess proceeds
from a sale of a Mortgaged Property or a Mezzanine Property that has been
released in accordance with Section 5.3 of the Credit Agreement, (c) proceeds
from a casualty permitted to be paid to Assignor pursuant to Section 7.7(b)
of the Credit Agreement, (D) excess amounts released from the reserves
maintained under Sections 7.2, 7.3, 7.4 and 7.5 of the Mezzanine Mortgage
Loan Agreement, and (E) rebates or refunds of property taxes paid with
respect to the Mortgaged Property or the Mezzanine Property. The foregoing
appointment is irrevocable and continuing and any such rights, powers and
privileges shall be exclusive in Agent, its successors and assigns until this
Assignment terminates as provided in Paragraph 13, below.
5. Warranties and Covenants. Assignor does hereby warrant and
represent to, and covenant and agree with, Agent and the Banks as follows:
(a) Performance. All duties, obligations and responsibilities
required to be performed by Assignor, WASH, WASH Manager and Wells Avenue
Holdings as of the date hereof under the Property Owner Organizational
Agreements, the WASH Organizational Agreements, the WASH Manager
Organizational Agreements and the Wells Avenue Holdings Organizational
Agreements, as applicable, have been performed, and no default or condition
which with the passage of time or the giving of notice, or both, would
constitute a default exists under the Property Owner Organizational
Agreements, the WASH Organizational Agreements, the WASH Manager
Organizational Agreements and the Wells Avenue Holdings Organizational
Agreements, as applicable.
(b) Organizational Agreements. A true, correct and complete copy
of the Property Owner Organizational Agreements, the WASH Organizational
Agreements, the WASH Manager Organizational Agreements and the Wells Avenue
Holdings Organizational Agreements together with all amendments thereto, are
attached hereto as Exhibit "A-1", "A-2", "A-3" and "A-4". The Property Owner
Organizational Agreements, the WASH Organizational Agreements, the WASH
Manager Organizational Agreements and the Wells Avenue Holdings
Organizational Agreements have been duly authorized, executed and delivered
by the parties thereto and are in full force and effect. Except for the Loan
Documents, the Mortgage Loan Documents and the Mezzanine Mortgage Loan
Documents, neither the Property Owner nor Assignor is a party to or is bound
by any indenture, contract or other agreement which purports to prohibit,
restrict, limit, or control the transfer or pledge of the Collateral, the
exercise of voting rights with respect to the Property Owner or the
management of the Property Owner.
(c) Title. Assignor is and shall remain the sole, lawful,
beneficial and record owner of the Member Interests and the Distributions,
free and clear of all liens, restrictions, claims, pledges, encumbrances,
charges, claims or rights of third parties and rights of set-off or
recoupment whatsoever (other than those in favor of Agent hereunder), and
Assignor has the full and complete right, power and authority to create a
security interest in the Collateral in favor of Agent, in accordance with the
terms and provisions of this Assignment. The Certificate has been duly
authorized and validly issued, and is fully paid and non-assessable.
Assignor is not and will not become a party to or otherwise be bound by any
agreement, other than the Loan Documents, the Mortgage Loan Documents and the
Mezzanine Mortgage Loan Documents, which restricts in any manner the rights
of any present or future holder of the Certificate with respect thereto.
(d) Members. Assignor is the sole member of the Property Owner,
and no other Person owns any legal, equitable or beneficial interest in the
Property Owner or, except for the voting rights of the independent manager as
set forth in the Property Owner Organizational Agreements, has any right to
vote or exercise control over the Property Owner or its management. The
Member Interests are not represented or otherwise evidenced by any
certificate or other document other than the Certificate.
(e) Priority. Upon the delivery of the Certificate to Agent, this
Assignment creates a valid and binding first priority security interest in
the Collateral securing the payment and performance of the Obligations and
the performance by Assignor of the Obligations, and upon the filing of UCC
Financing Statements with the Secretary of State of New York, the Office of
the Register of the City of New York and the Massachusetts Secretary of
State, all filings and other actions necessary to perfect and protect such
security interests shall have been duly made and taken. Neither Assignor nor
the Property Owner has performed or will perform any acts which might prevent
Agent from enforcing any of the terms and conditions of this Agreement or
which would limit Agent in any such enforcement.
(f) Notes. All original notes and other documents or instruments
(if any) evidencing, constituting, guaranteeing or securing any of the
Distributions or any right to receive the Distributions have been endorsed to
and delivered to Agent.
(g) Principal Place of Business. For the purposes of Article 9-
401 of the New York Uniform Commercial Code, the principal place of business
of Assignor is located in New York County, New York. In the event that
Assignor has more than one place of business in the State of New York, its
chief executive office is located in New York County, New York. In order to
perfect the pledge and security interests granted herein against Assignor,
U.C.C. Financing Statements must be filed with the Secretary of State of New
York, the Office of the Register of the City of New York, New York County and
the Massachusetts Secretary of State.
(h) Securities Laws. The transactions contemplated by this
Assignment do not violate and do not require that any filing, registration or
other act be taken with respect to any and all laws pertaining to the
registration or transfer of securities, including without limitation the
Securities Act of 1933, the Securities and Exchange Act of 1934, and any and
all rules and regulations promulgated thereunder or any similar federal,
state or local law, rule, regulation or orders (collectively the "Applicable
Law") hereafter enacted or analogous in effect, as the same are amended and
in effect from time to time (such Act and any similar laws as from time to
time being in effect being referred to as the "Federal Securities Laws").
Assignor shall at all times comply with Applicable Law and the Federal
Securities Laws as the same pertain to all or any portion of the Collateral
or any of the transactions contemplated by this Assignment (provided that the
foregoing shall not apply to assignments by the Banks of interests in the
Loan pursuant to the Credit Agreement).
(i) No Transfer Tax. No transfer tax, deed tax, conveyance tax or
similar tax may be payable as a result of a transfer of the Collateral
(whether by foreclosure, conveyance in lieu of foreclosure or otherwise) by
Assignor to Agent.
6. General Covenants. Assignor covenants and agrees that, so long as
this Assignment is continuing:
(a) No Further Encumbrance. Except as expressly permitted by
Section 5.3 of the Credit Agreement, Assignor shall not, without the prior
written consent of Agent, which consent may be withheld by Agent in its sole
and absolute discretion, directly, indirectly or by operation of law, sell,
transfer, assign, dispose of, pledge, convey, option, mortgage, hypothecate
or encumber any of the Collateral, nor shall there occur, directly,
indirectly or by operation of law, without the prior written consent of Agent
in each instance, which consent may be withheld by Agent in its sole and
absolute discretion, any sale, assignment, transfer, conveyance, disposition,
option, mortgage, hypothecation, pledge or other encumbrance of (i) any
direct or indirect interests, rights or claims of Property Owner in and to
Wells Avenue Holdings, (ii) any direct or indirect interests, rights or
claims of Wells Avenue Holdings in and to WASH Manager or (iii) any direct or
indirect interests, rights or claims of Wells Avenue Holdings and WASH
Manager in and to WASH. The foregoing shall not be deemed to restrict the
transfer of interests in Assignor itself, which transfers shall be governed
by the terms of the Credit Agreement.
(b) Defense of Collateral. Assignor shall at all times defend the
Collateral against all claims and demands of all persons at any time claiming
any interest in the Collateral adverse to Agent's interest in the Collateral
as granted hereunder.
(c) Modification of Organizational Agreements. So long as this
Assignment remains in effect, Assignor shall not modify, amend, cancel,
release, surrender, terminate or permit the modification, amendment,
cancellation, release, surrender or termination of, the Property Owner
Organizational Agreements, the WASH Organizational Agreements, the WASH
Manager Organizational Agreements or the Wells Avenue Holdings Organizational
Agreements, or dissolve, liquidate, redeem, cancel, wind-up or permit the
dissolution, liquidation, redemption, cancellation, winding-up or expiration
of the Property Owner, WASH, WASH Manager or Wells Avenue Holdings or the
Property Owner Organizational Agreements, the WASH Organizational Agreements,
the WASH Manager Organizational Agreements or the Wells Avenue Holdings
Organizational Agreements, or seek or permit the partition of any of the
assets of the Property Owner, WASH, WASH Manager or Wells Avenue Holdings,
without in each instance the prior written consent of Agent, which consent
may be withheld by Agent in its sole and absolute discretion; provided,
however, that Agent shall not unreasonably withhold its consent to any
modification or amendment of the Property Owner Organizational Agreements,
the WASH Organizational Agreements, the WASH Manager Organizational
Agreements or the Wells Avenue Holdings Organizational Agreements which does
not affect or have an impact on the management of the Property Owner, WASH,
WASH Manager or Wells Avenue Holdings, as applicable, any voting rights, the
rights to receive distributions, any provisions of the Property Owner
Organizational Agreements, the WASH Organizational Agreements, the WASH
Manager Organizational Agreements or the Wells Avenue Holdings Organizational
Agreements, as applicable, concerning actions that the Property Owner, WASH,
WASH Manager or Wells Avenue Holdings, as applicable, is either authorized to
do or that are ultra vires, or otherwise materially affect the Property
Owner, WASH, WASH Manager or Wells Avenue Holdings, as applicable, the
Collateral or the rights and benefits afforded to Agent and the Banks
pursuant to this Assignment and the other Loan Documents (such modifications
or amendments described in the foregoing proviso are hereinafter referred to
as the "Minor Amendments").
(d) Performance of Duties.
(1) Assignor shall perform all of its duties,
responsibilities and obligations under the Property Owner Organizational
Agreements and with respect to the Collateral, and shall diligently and
in good faith protect the value of the Collateral. Assignor shall cause
Property Owner to perform all of its duties, responsibilities and
obligations under the Wells Avenue Holdings Organizational Agreements,
and shall cause Wells Avenue Holdings and WASH Manager to perform all of
their respective duties, responsibilities and obligations under the WASH
Manager Organizational Agreements and the WASH Organizational
Agreements, respectively.
(2) Assignor shall not, without the prior written consent of
Agent, which consent may be withheld by Agent in its sole and absolute
discretion, take or permit to be taken any action which could result in
the sale, reduction, cancellation, dilution, diminution, conversion or
withdrawal of any interest of Assignor in the Property Owner, of the
Property Owner in Wells Avenue Holdings, of Wells Avenue Holdings in
WASH Manager, or of Wells Avenue Holdings or WASH Manager in WASH, or
omit to take any action necessary to prevent any such sale, reduction,
cancellation, dilution, diminution, conversion or withdrawal, or
otherwise take any action or omit to take any action that would, in the
exercise of Agent's judgment, jeopardize or diminish the security
interests or rights and benefits afforded to Agent by the Collateral.
Without limiting the foregoing, Assignor shall not consent to or permit
to occur the admission of any new member in the Property Owner, Wells
Avenue Holdings, WASH Manager or WASH, the creation of any new class of
interest in the Property Owner, Wells Avenue Holdings, WASH Manager or
WASH, or the issuance, directly or indirectly, of any other equity or
beneficial interest in the Property Owner, Wells Avenue Holdings, WASH
Manager or WASH.
(e) Payment of Taxes. Assignor shall pay all taxes and other
charges against the Collateral, shall not use the Collateral illegally, and
shall not suffer to exist any loss, theft, damage or destruction of the
Collateral and shall suffer to exist no levy, seizure or attachment of the
Collateral.
(f) Enforcement of Organizational Agreements. Assignor, at the
request of Agent, shall take such actions as Agent may reasonably require to
enforce the terms of the Property Owner Organizational Agreements, the WASH
Organizational Agreements, the WASH Manager Organizational Agreements and
the Wells Avenue Holdings Organizational Agreements, respectively, or any
other contract, agreement or instrument included in, giving rise to,
creating, establishing, evidencing or relating to the Collateral or to
collect or enforce any claim for payment or other right or privilege assigned
to Agent hereunder.
(g) Further Assurances. Assignor authorizes Agent, at the expense
of Assignor, to execute and file any financing statement or statements deemed
necessary by Agent to perfect its security interest in any of the Collateral.
Any such financing statement may be signed by Agent alone. Assignor will
sign and deliver any financing statements and other documents, and perform
such other acts as Agent may deem necessary or desirable from time to time to
establish and maintain in favor of Agent, valid and perfected security
interests in the Collateral, free of all other liens, encumbrances, security
interests and claims other than as permitted by the terms of this Assignment.
Assignor shall do anything else Agent may reasonably require from time to
time to establish a valid security interest in and to further protect and
perfect its security interest in the Collateral.
(h) Location of Collateral. Except for those items of the
Collateral that are delivered to Agent as provided herein, the Collateral,
and all records of Assignor relative to the Collateral, are and will be kept
at the office of Assignor located in New York County, New York. Assignor
shall give Agent not fewer than thirty (30) days prior written notice of any
proposed change in the name of Assignor or the Member and any proposed change
in the location of the Collateral or of such records, and Assignor will not,
without the prior written consent of Agent, move the Collateral or such
records to a location outside of New York County, New York or keep duplicate
records with respect to the Collateral at any address outside such county.
Notwithstanding the foregoing, Agent acknowledges and agrees that the
property records for the Mezzanine Property (including leases, service
contracts and the like) will be kept at the office of the managing agent in
Newton, Massachusetts. Nothing contained in this subparagraph shall be
construed so as to prevent Assignor from keeping material abstracted from the
books and records described herein at any of its offices as necessity or
convenience dictates. Assignor shall permit the Agent or any representative
designated by the Agent, at the Agent's expense and upon reasonable advance
notice (which may be oral), to examine the books and accounts of the Assignor
(and to make copies thereof and extracts therefrom) and to discuss the
affairs, finances and accounts of the Assignor with, and to be advised as to
the same by, its members and officers, all at such reasonable times and
intervals as the Agent may reasonably request. The Agent shall use good
faith efforts to coordinate such visits and inspections so as to minimize the
interference with and disruption to Assignor's normal business operations.
(i) Evidence of Indebtedness. Without limiting any other terms of
the Loan Documents prohibiting or restricting the ability of the Property
Owner to incur Indebtedness, if any amounts are due from the Property Owner
to Assignor and the obligations to repay such amount is to be evidenced by a
separate document or instrument, then as evidence of such obligations,
Assignor shall cause the Property Owner to issue Assignor, as the evidence of
any obligations of the Property Owner to pay Distributions to Assignor in the
future, a promissory note bearing the legend attached hereto as Exhibit "B"
and which note shall provide that all payments due under such promissory note
are to be paid directly to Agent as required by and applied as provided in
the Loan Documents until the Obligations are paid in full or this Assignment
is otherwise terminated as provided herein. No other evidence of such
obligations shall be executed by the Property Owner to Assignor.
(j) Delivery of Notes. Assignor shall promptly deliver to Agent
any note or other document or instrument entered into after the date hereof
which evidences, constitutes, guarantees or secures any of the Distributions
or any right to receive a Distribution, which notes or other documents and
instruments shall be accompanied by such endorsements or assignments as Agent
may require to transfer title to Agent.
(k) Assignor Remains Liable. Anything herein to the contrary
notwithstanding, (1) Assignor shall remain liable under the Property Owner
Organizational Agreements and all other contracts, agreements and instruments
included in, giving rise to, creating, establishing, evidencing or relating
to the Collateral to the extent set forth therein to perform all of its
duties and obligations (including, without limitation, the making of any
contributions to the capital of the Property Owner or the payment of any
other sum to or on behalf of the Property Owner) to the same extent as if
this Assignment had not been executed, (2) the exercise by Agent of any of
its rights hereunder shall not release Assignor from any of its duties or
obligations under the Property Owner Organizational Agreements or any such
contracts, agreements and instruments, and (3) Agent shall not have any
obligation or liability under the Property Owner Organizational Agreements,
the WASH Organizational Agreements, the WASH Manager Organizational
Agreements or the Wells Avenue Holdings Organizational Agreements or any such
contract, agreement or instrument by reason of this Assignment, nor shall
Agent be obligated to perform any of the obligations or duties of Assignor
thereunder or to take any action to collect or enforce any claim for payment
or other right or privilege assigned to Agent hereunder.
(l) Substitutions or Exchanges. If Assignor shall at any time be
entitled to receive or shall receive any cash, certificate or other property,
option or right, upon, in respect of, as an addition to, or in substitution
or exchange for any of the Collateral, whether for value paid by Assignor or
otherwise, Assignor agrees that the same shall be deemed to be Collateral and
shall be delivered directly to Agent in each case, accompanied by proper
instruments of assignment duly executed by Assignor in such a form as may be
required by Agent, to be held by Agent subject to the terms hereof, as
further security for the Obligations (except as otherwise provided herein
with respect to the application of the foregoing to the Obligations). If
Assignor receives any of the foregoing directly, Assignor agrees to hold such
cash or other property in trust for the benefit of Agent, and to surrender
such cash or other property to Agent immediately.
(m) Additional Interests in Member. In the event that Assignor
purchases or otherwise acquires or obtains any additional interest in the
Property Owner or any rights or options to acquire such interest, all such
interest, rights and options shall automatically be deemed to be a part of
the Collateral. All certificates, if any, representing such member interest
shall be promptly delivered to Agent, together with assignments related
thereto, or other instruments appropriate to transfer a certificate
representing any Property Owner interest, duly executed in blank.
7. Events of Default. An Event of Default shall exist hereunder upon
the occurrence of any of the following:
(a) Any warranty, representation or statement made by or on behalf
of Assignor in this Assignment proves untrue or misleading in any material
respect upon the date when made or deemed to have been made or repeated; or
(b) Assignor shall fail to duly and fully comply with any
covenant, condition or agreement in Paragraphs 6(a), 6(c), 6(d)(2), 6(i),
6(j) or 6(l) of this Assignment; or
(c) any of the Assignor, Property Owner, WASH Manager or Wells
Avenue Holdings shall fail to, or the Assignor shall fail to cause WASH to,
duly and fully comply with any other covenant, condition or agreement of this
Assignment (other than those specified in this Paragraph 7 or any default
excluded from any provision of cure of defaults contained in any other of the
Loan Documents) and the same is not cured within thirty (30) days following
receipt of written notice of such default; or
(d) The occurrence of an Event of Default under any of the other
Loan Documents.
8. Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, Agent may take any action deemed by Agent to be necessary or
appropriate to the enforcement of the rights and remedies of Agent under this
Assignment and the Loan Documents, including, without limitation, the
exercise of its rights and remedies with respect to any or all of the Member
Interests. The remedies of Agent shall include, without limitation, all
rights and remedies specified in the Loan Documents and this Assignment, all
remedies of Agent under applicable general or statutory law, and the remedies
of a secured party under the Uniform Commercial Code as enacted in the State
of New York, regardless of whether the Uniform Commercial Code has been
enacted or enacted in that form in any other jurisdiction in which such right
or remedy is asserted. Any notice required by law, including, but not
limited to, notice of the intended disposition of all or any portion of the
Collateral, shall be reasonably and properly given in the manner prescribed
for the giving of notice herein, and, in the case of any notice of
disposition, if given at least ten (10) calendar days prior to such
disposition. Agent may require Assignor to assemble the Collateral and make
it available to Agent at any place to be designated by Agent which is
reasonably convenient to both parties. It is expressly understood and agreed
that Agent shall be entitled to dispose of the Collateral at any public or
private sale, without recourse to judicial proceedings and without either
demand, appraisement, advertisement or notice of any kind, all of which are
expressly waived, and that Agent shall be entitled to bid and purchase at any
such sale. In the event that Agent is the successful bidder at any public or
private sale of any note or other document or instrument evidencing
Assignor's right to receive a Distribution, Agent shall be entitled to credit
the amount bid by Agent against the obligations evidenced by such note,
document or instrument rather than the obligations evidenced by the Note. To
the extent the Collateral consist of marketable securities, Agent shall not
be obligated to sell such securities for the highest price obtainable, but
shall sell them at the market price available on the date of sale. Agent
shall not be obligated to make any sale of the Collateral if it shall
determine not to do so regardless of the fact that notice of sale of the
Collateral may have been given. Agent may, without notice or publication,
adjourn any public sale from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned. Each such purchaser
at any such sale shall hold the Collateral sold absolutely free from claim or
right on the part of Assignor. In the event that any consent, approval or
authorization of any governmental agency or commission will be necessary to
effectuate any such sale or sales, Assignor shall execute all such
applications or other instruments as Agent may deem reasonably necessary to
obtain such consent, approval or authorization. Agent may notify any account
debtor or obligor with respect to the Collateral to make payment directly to
Agent, and may demand, collect, receipt for, settle, compromise, adjust, sue
for, foreclose or realize upon the Collateral as Agent may determine whether
or not the Obligations or the Collateral are due, and for the purpose of
realizing Agent's rights therein, Agent may receive, open and dispose of mail
addressed to Assignor and endorse notes, checks, drafts, money orders,
documents of title or other evidences of payment, shipment or storage of any
form of Collateral on behalf and in the name of Assignor, as its
attorney-in-fact. In addition, Assignor hereby irrevocably designates and
appoints Agent its true and lawful attorney-in-fact either in the name of
Agent or Assignor to (i) sign Assignor's name on any Collateral, drafts
against account debtors, assignments, any proof of claim in any bankruptcy or
other insolvency proceeding involving any account debtor, any notice of lien,
claim of lien or assignment or satisfaction of lien, or on any financing
statement or continuation statement under the Uniform Commercial Code; (ii)
send verifications of accounts receivable to any account debtor; and (iii) in
connection with a transfer of the Collateral as described above, sign in
Assignor's name any documents necessary to transfer title to the Collateral
to Agent or any third party. All acts of said power of attorney are hereby
ratified and approved and Agent shall not be liable for any mistake of law or
fact made in connection therewith. This power of attorney is coupled with an
interest and shall be irrevocable so long as any amounts remain unpaid on any
of the Obligations. All remedies of Agent shall be cumulative to the full
extent provided by law, all without liability except to account for property
actually received, but the Agent shall have no duty to exercise such rights
and shall not be responsible for any failure to do so or delay in so doing.
Pursuit by Agent of certain judicial or other remedies shall not abate nor
bar other remedies with respect to the Obligations or to other portions of
the Collateral. Agent may exercise its rights to the Collateral without
resorting or regard to other collateral or sources of security or
reimbursement for the Obligations. In the event that any transfer tax, deed
tax, conveyance tax or similar tax is payable in connection with the
foreclosure, conveyance in lieu of foreclosure or otherwise of the Member
Interests, the Borrower shall pay such amount to agent upon demand and if
Borrower fails to pay such amount on demand, Agent may advance such amount on
behalf of Borrower and the amount thereof shall become a part of the
Obligations and bear interest at the rate for overdue amounts under the
Credit Agreement until paid.
(b) If Assignor fails to perform any agreement or covenant
contained in this Assignment beyond any applicable period for notice and
cure, Agent may itself perform, or cause to be performed, any agreement or
covenant of Assignor contained in this Assignment which Assignor shall fail
to perform, and the cost of such performance, together with any reasonable
expenses, including reasonable attorneys' fees actually incurred (including
attorneys' fees incurred in any appeal) by Agent in connection therewith,
shall be payable by Assignor upon demand and shall constitute a part of the
Obligations and shall bear interest at the rate for overdue amounts as set
forth in the Credit Agreement.
(c) Whether or not an Event of Default has occurred and whether or
not Agent is the absolute owner of the Collateral, Agent may take such action
as Agent may deem necessary to protect the Collateral or its security
interest therein, Agent being hereby authorized to pay, purchase, contest and
compromise any encumbrance, charge or lien which in the judgment of Agent
appears to be prior or superior to its security interest, and in exercising
any such powers and authority to pay necessary expenses, employ counsel and
pay reasonable attorney's fees. Any such advances made or expenses incurred
by Agent shall be deemed advanced under the Loan Documents, shall increase
the indebtedness evidenced and secured thereby, shall be payable upon demand
and shall bear interest at the rate for overdue payments set forth in the
Credit Agreement.
(d) Any certificates or securities held by Agent as Collateral
hereunder may, at any time, and at the option of Agent, be registered in the
name of Agent or its nominee, endorsed or assigned in blank or in the name of
any nominee and Agent may deliver any or all of the Collateral to the issuer
or issuers thereof for the purpose of making denominational exchanges or
registrations or transfer or for such other purposes in furtherance of this
Agreement as Agent may deem desirable. Until the occurrence of an Event of
Default, Assignor shall retain the right to vote any of the Collateral or
exercise limited liability company membership rights, in a manner not
inconsistent with the terms of this Agreement and the other Loan Documents,
and Agent hereby grants to Assignor its proxy to enable Assignor to so vote
any of the Collateral or exercise such limited liability company member
rights (except that Assignor shall not have any right to exercise any such
power or right if the exercise thereof would violate or result in a violation
of any of the terms of this Agreement or any of the other Loan Documents).
At any time after the occurrence and during the continuance of any Event of
Default, Agent or its nominee shall, without notice or demand, automatically
have the sole and exclusive right to give all consents, waivers and
ratifications in respect of the Collateral and exercise all voting and other
membership, management, approval or other rights at any meeting of the
members of the Property Owner (and the right to call such meetings) or
otherwise (and to give written consents in lieu of voting thereon), and
exercise any and all rights of conversion, exchange, subscription or any of
the rights, privileges or options pertaining to the Collateral and otherwise
act with respect thereto and thereunder as if it were the absolute owner
thereof (all of such rights of the Assignor ceasing to exist and terminating
upon the occurrence of an Event of Default) including, without limitation,
the right to exchange, at its discretion, any and all of the Collateral upon
the merger, consolidation, reorganization, recapitalization or the
readjustment of the issuer thereof, all without liability except to account
for property actually received and in such manner as Agent shall determine in
its sole and absolute discretion, but Agent shall have no duty to exercise
any of the aforesaid rights, privileges or options and shall not be
responsible for the failure to do so or delay in so doing. The exercise by
Agent of any of its rights and remedies under this paragraph shall not be
deemed a disposition of collateral under Article 9 of the UCC nor an
acceptance by Agent of any of the Collateral in satisfaction of the
Obligations.
(e) Upon the occurrence and during the continuance of any Event of
Default, the Agent may direct the Assignor in writing to, and the Assignor
shall cause WASH to, replace the existing property manager and leasing agent
for the Mezzanine Property with a property manager and leasing agent approved
by the Agent, subject to any conditions in the Mortgage Loan Documents and
the Mezzanine Mortgage Loan Documents to the qualifications and approval of
such manager and leasing agent and the form and terms of any new property
management and/or leasing agreement. The Assignor hereby irrevocably
constitutes and appoints the Agent its true and lawful attorney-in-fact, with
full power of substitution, to execute, acknowledge and deliver any
instruments and to do and perform any acts which are referred to in this
Paragraph 8(e), in the name and on behalf of the Assignor. The power vested
in such attorney-in-fact is, and shall be deemed to be, coupled with an
interest and irrevocable.
(f) Upon the written demand of the Agent following the occurrence
of and during the continuance of an Event of Default, the Assignor shall
deliver or cause to be delivered to the Agent or the Agent's designee all
books, records, contracts, Leases, files and other correspondence relating to
the Mortgaged Property and the Mezzanine Property. In addition, upon the
occurrence and during the continuance of an Event of Default, the Assignor
shall upon the written demand of the Agent cause all tenant security deposits
(whether in the form of cash, letter of credit or otherwise) and other
refundable deposits paid to or held by or on behalf of the Property Owner or
WASH in connection with the Leases to be delivered to the Agent, subject to
the rights of the Mortgagee under the Mortgage Loan Documents and the
Mezzanine Mortgagee under the Mezzanine Mortgage Loan Documents, as
applicable.
(g) Notwithstanding anything in this Assignment or any other Loan
Document to the contrary, any reference in this Assignment or any other Loan
Document to "the continuance of a default" or "the continuance of an Event of
Default" or any similar phrase shall not create or be deemed to create any
right on the part of Assignor or any other party to cure any default
following the expiration of any applicable grace or notice and cure period.
9. Duties of Agent. The powers conferred on Agent hereunder are
solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Agent's duty with reference to the
Collateral shall be solely to use slight care in the custody and preservation
of the Collateral, which shall not include any steps necessary to preserve
rights against prior parties. Agent shall have no responsibility or
liability for the collection of any Collateral or by reason of any
invalidity, lack of value or uncollectability of any of the payments received
by it.
10. Indemnification.
(a) It is specifically understood and agreed that this Assignment
shall not operate to place any responsibility or obligation whatsoever upon
Agent, or cause Agent to be, or to be deemed to be, a member in the Property
Owner and that in accepting this Assignment, Agent neither assumes nor agrees
to perform at any time whatsoever any obligation or duty of Assignor relating
to the Collateral or under the Property Owner Organizational Agreements or
any other mortgage, indenture, contract, agreement or instrument to which the
Property Owner is a party or to which it is subject, all of which obligations
and duties shall be and remain with and upon Assignor; provided, however,
that Assignor shall not be liable for the performance of any liabilities or
duties under the Organizational Agreements of Property Owner, Wells Avenue
Holdings, WASH Manager or WASH which may result from written amendments
thereof made by Agent after the occurrence of an Event of Default.
(b) Assignor upon receipt of written demand shall pay to Agent the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and disbursements of counsel actually incurred (including
those incurred in any appeal), and of any experts and agents, which Agent may
incur in connection with (i) the administration of this Assignment, (ii) the
sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of Agent hereunder, or
(iv) the failure by Assignor to perform or observe any of the provisions
hereof beyond any applicable period for notice and cure.
11. Security Interest Absolute. All rights of Agent, and the security
interests hereunder, and all of the obligations secured hereby, shall be
absolute and unconditional, irrespective of:
(a) Any lack of validity or enforceability of the Loan Documents
or any other agreement or instrument relating thereto;
(b) Any change in the time (including the extension of the
maturity date of the Note), manner or place of payment of, or in any other
term of, all or any of the Obligations or any other amendment or waiver of or
any consent to any departure from the Loan Documents;
(c) Any exchange, release or nonperfection of any other collateral
for the Obligations, or any release or amendment or waiver of or consent to
departure from any of the Loan Documents with respect to all or any part of
the Obligations; or
(d) Any other circumstance (other than payment of the Obligations
in full) that might otherwise constitute a defense available to, or a
discharge of, Assignor or any third party for the Obligations or any part
thereof.
12. Amendments and Waivers. No amendment or waiver of any provision of
this Assignment nor consent to any departure therefrom shall in any event be
effective unless the same shall be in writing and signed by Agent, and then
such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. No delay or omission of Agent to
exercise any right, power or remedy accruing upon any Event of Default shall
exhaust or impair any such right, power or remedy or shall be construed to be
a waiver of any such Event of Default, or acquiescence therein; and every
right, power and remedy given by this Assignment to Agent may be exercised
from time to time and as often as may be deemed expedient by Agent. Failure
on the part of Agent to complain of any act or failure to act which
constitutes an Event of Default, irrespective of how long such failure
continues, shall not constitute a waiver by Agent of Agent's rights hereunder
or impair any rights, powers or remedies consequent on any Event of Default.
Assignor hereby waives to the extent permitted by law all rights which
Assignor has or may have under and by virtue of the Uniform Commercial Code
as enacted in the State of New York, and any federal, state, county or
municipal statute, regulation, ordinance, Constitution or charter, now or
hereafter existing, similar in effect thereto providing any right of Assignor
to notice and to a judicial hearing prior to seizure by Agent of any of the
Collateral. Assignor hereby waives and renounces for itself, its heirs,
successors and assigns, presentment, demand, protest, advertisement or notice
of any kind (except for any notice required by law or the Loan Documents) and
all rights to the benefits of any statute of limitations and any moratorium,
reinstatement, marshaling, forbearance, valuation, stay, extension,
homestead, redemption and appraisement now provided or which may hereafter be
provided by the Constitution and laws of the United States and of any state
thereof, both as to itself and in and to all of its property, real and
personal, against the enforcement of this Assignment and the collection of
any of the Obligations.
13. Continuing Security Interest; Transfer of Note; Release of
Collateral. This Assignment shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the
indefeasible payment in full of the Obligations and the termination of the
obligation of the Banks to make Loans to Assignor, (b) be binding upon
Assignor and its permitted successors and assigns, and (c) inure, together
with the rights and remedies of Agent hereunder, to the benefit of Agent and
the Banks and their respective successors, transferees and assigns. Upon the
indefeasible payment in full of the Obligations and the termination of the
obligation of the Banks to make Loans to Assignor, the security interest
granted hereby shall terminate and all rights to the Collateral shall revert
to Assignor. Upon any such termination, Agent will at Assignor's expense
execute and deliver to Assignor such documents as Assignor shall reasonably
request to evidence such termination.
14. Modifications, Etc. Assignor hereby consents and agrees that Agent
and the Banks may at any time and from time to time, without notice to or
further consent from Assignor, either with or without consideration,
surrender any property 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 the Obligations; substitute for any Collateral so held by
it, other collateral of like kind; agree to modification of the terms of the
Loan Documents; extend or renew the Loan Documents for any period; grant
releases, compromises and indulgences with respect to the Loan Documents for
any period; grant releases, compromises and indulgences with respect to the
Loan Documents to any persons or entities now or hereafter liable thereunder
or hereunder; release any guarantor, endorser or any other Person liable with
respect to the Obligations; or take or fail to take any action of any type
whatsoever; and no such action which Agent shall take or fail to take in
connection with the Loan Documents, or any of them, or any security for the
payment of the Obligations or for the performance of any obligations or
undertakings of Assignor, nor any course of dealing with Assignor or any
other person, shall release Assignor's obligations hereunder, affect this
Assignment in any way or afford Assignor any recourse against Agent.
15. Securities Act. In view of the position of Assignor in relation to
the Collateral, or because of other current or future circumstances, a
question may arise under Applicable Law or the Federal Securities Laws with
respect to any disposition of the Collateral permitted hereunder. Assignor
understands that compliance with the Federal Securities Laws might very
strictly limit the course of conduct of Agent if Agent were to attempt to
dispose of all or any part of the Collateral in accordance with the terms
hereof, and might also limit the extent to which or the manner in which any
subsequent transferee of any Collateral could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting the
Agent in any attempt to dispose of all or part of the Collateral in
accordance with the terms hereof under applicable Blue Sky or other state
securities laws or similar Applicable Law analogous in purpose or effect.
Assignor recognizes that in light of the foregoing restrictions and
limitations Agent may, with respect to any sale of the Collateral, limit the
purchasers to those who will agree, among other things, to acquire such
Collateral for their own account, for investment, and not with a view to the
distribution or resale thereof. Assignor acknowledges and agrees that in
light of the foregoing restrictions and limitations, the Agent in its sole
and absolute discretion may, in accordance with Applicable Law, (a) proceed
to make such a sale whether or not a registration statement for the purpose
of registering such Collateral or part thereof shall have been filed under
the Federal Securities Laws and (b) approach and negotiate with a single
potential purchaser to effect such sale. Assignor acknowledges and agrees
that any such sale might result in prices and other terms less favorable to
the seller if such sale were a public sale without such restrictions. In the
event of any such sale, Agent shall incur no responsibility or liability for
selling all or any part of the Collateral in accordance with the terms hereof
at a price that Agent, in its sole and absolute discretion, may in good faith
deem reasonable under the circumstances, notwithstanding the possibility that
a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached. The provisions of this paragraph will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Agent sells.
16. Governing Law; Terms. THIS ASSIGNMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK.
17. Notices. Each notice, demand, election or request provided for or
permitted to be given pursuant to this Assignment shall be deemed to have
been properly given or served if given in the manner provided in the Credit
Agreement.
18. No Unwritten Agreements. THE WRITTEN LOAN DOCUMENTS REPRESENT 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.
19. Miscellaneous. Time is of the essence of this Assignment. Title
or captions of paragraphs hereof are for convenience only and neither limit
nor amplify the provisions hereof. References to a particular paragraph
refer to that paragraph of this Assignment unless otherwise indicated. If,
for any circumstances whatsoever, fulfillment of any provision of this
Assignment shall involve transcending the limit of validity presently
prescribed by applicable law, the obligation to be fulfilled shall be reduced
to the limit of such validity; and if any clause or provision herein operates
or would prospectively operate to invalidate this Assignment, in whole or in
part, then such clause or provision only shall be held for naught, as though
not herein contained, and the remainder of this Assignment shall remain
operative and in full force and effect.
IN WITNESS WHEREOF, Assignor and Agent have executed this Assignment on
the date first above written.
AGENT:
BANKBOSTON, N.A., as Agent
By: /s/ Mark E. Basham
---------------------------------
Mark E. Basham, Managing Director
ASSIGNOR:
WELLSFORD/WHITEHALL PROPERTIES II, L.L.C., a
Delaware limited liability company
By: Wellsford Commercial Properties Trust, a
Maryland real estate investment trust,
its manager
By: /s/ Gregory F. Hughes
--------------------------------
Name: Gregory F. Hughes
Title: CFO & Treasurer
EXHIBIT "A"
ORGANIZATIONAL AGREEMENTS
EXHIBIT "B"
PROMISSORY NOTE LEGEND
"THIS NOTE HAS BEEN PLEDGED BY WELLSFORD/WHITEHALL PROPERTIES II, L.L.C.
("ASSIGNOR") TO BANKBOSTON, N.A., AS AGENT ("AGENT") PURSUANT TO AN
ASSIGNMENT OF MEMBER'S INTEREST DATED AS OF JULY 16, 1998 (THE "ASSIGNMENT").
ALL AMOUNTS PAYABLE TO ASSIGNOR PURSUANT TO THIS NOTE SHALL BE PAID DIRECTLY
TO AGENT AS REQUIRED BY THE ASSIGNMENT."