FIRST AMENDED AND RESTATED LOAN AGREEMENT
DATED AS OF JULY 16, 1998
among
WELLSFORD/WHITEHALL HOLDINGS, L.L.C., as Borrower
and
BANKBOSTON, N.A.,
GOLDMAN SACHS MORTGAGE COMPANY,
THE OTHER BANKS WHICH ARE PARTIES TO THIS AGREEMENT,
and
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT, as Banks
and
BANKBOSTON, N.A.,
AS ADMINISTRATIVE AGENT AND CO-ARRANGER
AND CO-SYNDICATION AGENT
and
GOLDMAN SACHS MORTGAGE COMPANY,
AS CO-ARRANGER AND CO-SYNDICATION AGENT
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS AND RULES OF INTERPRETATION. . . . . . . . . . . . .2
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . .2
Section 1.2. Rules of Interpretation.. . . . . . . . . . . . . . . . 23
Section 2. THE FACILITY.. . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.1. Commitment to Lend. . . . . . . . . . . . . . . . . . 24
Section 2.2. Facility Fee. . . . . . . . . . . . . . . . . . . . . 25
Section 2.3. Reduction of Commitment. . . . . . . . . . . . . . . 25
Section 2.4. Notes. . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.5. Interest on Loans.. . . . . . . . . . . . . . . . . . . 26
Section 2.6. Requests for Loans. . . . . . . . . . . . . . . . . . . 26
Section 2.7. Funds for Loans.. . . . . . . . . . . . . . . . . . . . 28
Section 2.8. Extension of Maturity Date. . . . . . . . . . . . . . . 28
Section 2.9. Termination of Advances. . . . . . . . . . . . . . . . 29
Section 3. REPAYMENT OF THE LOANS.. . . . . . . . . . . . . . . . . . . . 29
Section 3.1. Stated Maturity. . . . . . . . . . . . . . . . . . . . 29
Section 3.2. Mandatory Prepayments.. . . . . . . . . . . . . . . . . 30
Section 3.3. Optional Prepayments. . . . . . . . . . . . . . . . . 30
Section 3.4. Partial Prepayments. . . . . . . . . . . . . . . . . . 31
Section 3.5. Effect of Prepayments. . . . . . . . . . . . . . . . . 31
Section 4. CERTAIN GENERAL PROVISIONS.. . . . . . . . . . . . . . . . . . 31
Section 4.1. Conversion Options. . . . . . . . . . . . . . . . . . . 31
Section 4.2. Closing Fee. . . . . . . . . . . . . . . . . . . . . . 32
Section 4.3. Agent's Fee. . . . . . . . . . . . . . . . . . . . . . 32
Section 4.4. Funds for Payments. . . . . . . . . . . . . . . . . . . 32
Section 4.5. Computations. . . . . . . . . . . . . . . . . . . . . 32
Section 4.6. Inability to Determine Eurodollar Rate. . . . . . . . 33
Section 4.7. Illegality. . . . . . . . . . . . . . . . . . . . . . 33
Section 4.8. Additional Interest. . . . . . . . . . . . . . . . . . 33
Section 4.9. Additional Costs, Etc. . . . . . . . . . . . . . . . . 34
Section 4.10. Capital Adequacy. . . . . . . . . . . . . . . . . . . 35
Section 4.11. Indemnity of Borrower. . . . . . . . . . . . . . . . 35
Section 4.12. Interest on Overdue Amounts; Late Charge. . . . . . . 35
Section 4.13. Intentionally Omitted. . . . . . . . . . . . . . . . . 35
Section 4.14. Certificate. . . . . . . . . . . . . . . . . . . . . 36
Section 4.15. Limitation on Interest. . . . . . . . . . . . . . . . 36
Section 4.16. Certain Provisions Relating to Increased Costs. . . . 36
Section 5. COLLATERAL SECURITY. . . . . . . . . . . . . . . . . . . . . . 37
Section 5.1. Collateral. . . . . . . . . . . . . . . . . . . . . . 37
Section 5.2. Appraisals. . . . . . . . . . . . . . . . . . . . . . 37
Section 5.3. Release of Collateral. . . . . . . . . . . . . . . . . 38
Section 5.4. Additional Collateral.. . . . . . . . . . . . . . . . . 41
Section 5.5. Holdback. . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.6. Disbursement of Tenant Improvement Reserve. . . . . . 42
Section 6. REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . . . . . . 44
Section 6.1. Corporate Authority, Etc. . . . . . . . . . . . . . . . 44
Section 6.2. Governmental Approvals. . . . . . . . . . . . . . . . 45
Section 6.3. Title to Properties; Leases. . . . . . . . . . . . . . 46
Section 6.4. Financial Statements. . . . . . . . . . . . . . . . . 46
Section 6.5. No Material Adverse Changes. . . . . . . . . . . . . . 46
Section 6.6. Franchises, Patents, Copyrights, Etc. . . . . . . . . 47
Section 6.7. Litigation. . . . . . . . . . . . . . . . . . . . . . 47
Section 6.8. No Materially Adverse Contracts, Etc. . . . . . . . . 47
Section 6.9. Compliance with Other Instruments, Laws, Etc. . . . . 47
Section 6.10. Tax Status. . . . . . . . . . . . . . . . . . . . . . 48
Section 6.11. No Event of Default. . . . . . . . . . . . . . . . . 48
Section 6.12. Holding Company and Investment Company Acts. . . . . 48
Section 6.13. Absence of UCC Financing Statements, Etc. . . . . . . 48
Section 6.14. Setoff, Etc. . . . . . . . . . . . . . . . . . . . . 48
Section 6.15. Certain Transactions. . . . . . . . . . . . . . . . . 48
Section 6.16. Employee Benefit Plans. . . . . . . . . . . . . . . . 49
Section 6.17. ERISA Taxes. . . . . . . . . . . . . . . . . . . . . 49
Section 6.18. Plan Payments. . . . . . . . . . . . . . . . . . . . 49
Section 6.19. Regulations U and X. . . . . . . . . . . . . . . . . 49
Section 6.20. Environmental Compliance. . . . . . . . . . . . . . . 50
Section 6.21. Subsidiaries. . . . . . . . . . . . . . . . . . . . . 51
Section 6.22. Leases. . . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.23. Loan Documents. . . . . . . . . . . . . . . . . . . . 52
Section 6.24. Mortgaged Property and Mezzanine Property. . . . . . 52
(a) Off-Site Utilities. . . . . . . . . . . . . . . . . . . . 52
(b) Access, Etc. . . . . . . . . . . . . . . . . . . . . . . . 52
(c) Independent Building. . . . . . . . . . . . . . . . . . . 52
(d) Condition; No Asbestos. . . . . . . . . . . . . . . . . . 53
(e) Compliance with Law. . . . . . . . . . . . . . . . . . . . 53
(f) No Required Consents, Permits, Etc. . . . . . . . . . . . 53
(g) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 53
(h) Real Property Taxes; Special Assessments. . . . . . . . . 54
(i) Historic Status. . . . . . . . . . . . . . . . . . . . . . 54
(j) Eminent Domain; Casualty. . . . . . . . . . . . . . . . . 54
(k) Leases. . . . . . . . . . . . . . . . . . . . . . . . . . 54
(l) Management Agreements. . . . . . . . . . . . . . . . . . . 55
(m) Other Material Real Property Agreements; No Options. . . . 55
Section 6.25. Mezzanine Mortgage Loan Documents. . . . . . . . . . 55
Section 6.26. Brokers. . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.27. Fair Consideration. . . . . . . . . . . . . . . . . . 56
Section 6.28. Solvency. . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.29. No Bankruptcy Filing. . . . . . . . . . . . . . . . . 56
Section 6.30. No Fraudulent Intent. . . . . . . . . . . . . . . . . 56
Section 6.31. Other Debt. . . . . . . . . . . . . . . . . . . . . . 56
Section 6.32. Ownership. . . . . . . . . . . . . . . . . . . . . . 57
Section 6.33. Special Purpose Entity. . . . . . . . . . . . . . . . 58
Section 6.34. Management Agreements. . . . . . . . . . . . . . . . 58
Section 6.35. Obligations as Members. . . . . . . . . . . . . . . . 58
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER. . . . . . . . . . . . . 58
Section 7.1. Punctual Payment. . . . . . . . . . . . . . . . . . . 58
Section 7.2. Maintenance of Office. . . . . . . . . . . . . . . . . 58
Section 7.3. Records and Accounts. . . . . . . . . . . . . . . . . 59
Section 7.4. Financial Statements, Certificates and Information. . 59
Section 7.5. Notices.. . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.6. Existence; Maintenance of Properties. . . . . . . . . . 63
Section 7.7. Insurance. . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.8. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.9. Inspection of Properties and Books. . . . . . . . . . 70
Section 7.10. Compliance with Laws, Contracts, Licenses, and
Permits. . . . . . . . . . . . . . . . . . . . . . . 70
Section 7.11. Use of Proceeds. . . . . . . . . . . . . . . . . . . 71
Section 7.12. Further Assurances. . . . . . . . . . . . . . . . . . 71
Section 7.13. Management Agreements. . . . . . . . . . . . . . . . 71
Section 7.14. ERISA Compliance. . . . . . . . . . . . . . . . . . . 72
Section 7.15. Condemnation. . . . . . . . . . . . . . . . . . . . . 72
Section 7.16. Intentionally Omitted. . . . . . . . . . . . . . . . . 73
Section 7.17. Compliance. . . . . . . . . . . . . . . . . . . . . . 73
Section 7.18. Intentionally Omitted. . . . . . . . . . . . . . . . . 73
Section 7.19. Leasing. . . . . . . . . . . . . . . . . . . . . . . 73
Section 7.20. Special Purpose Entity. . . . . . . . . . . . . . . . 74
Section 7.21. Plan Assets, etc. . . . . . . . . . . . . . . . . . . 75
Section 7.22. Budgets. . . . . . . . . . . . . . . . . . . . . . . 75
Section 7.23. Preservation and Maintenance. . . . . . . . . . . . . 75
Section 7.24. Use of Mezzanine Property. . . . . . . . . . . . . . 76
Section 7.25. Property Owner to Remain a Single-Purpose Entity. . . 76
Section 7.26. Condominium. . . . . . . . . . . . . . . . . . . . . . 77
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.. . . . . . . . . . 78
Section 8.1. Restrictions on Indebtedness. . . . . . . . . . . . . 78
Section 8.2. Restrictions on Liens, Etc. . . . . . . . . . . . . . 79
Section 8.3. Restrictions on Investments . . . . . . . . . . . . . . 80
Section 8.4. Merger, Consolidation. . . . . . . . . . . . . . . . . 82
Section 8.5. Sale and Leaseback; Ground Lease. . . . . . . . . . . 82
Section 8.6. Compliance with Environmental Laws. . . . . . . . . . 82
Section 8.7. Distributions. . . . . . . . . . . . . . . . . . . . . 84
Section 8.8. Intentionally Omitted.. . . . . . . . . . . . . . . . . 84
Section 8.9. Development Activity. . . . . . . . . . . . . . . . . 84
Section 8.10. Intentionally Omitted. . . . . . . . . . . . . . . . . 85
Section 8.11. Transfers. . . . . . . . . . . . . . . . . . . . . . 85
Section 8.12. Additional Covenants with Respect to Indebtedness,
Operations, Fundamental Changes. . . . . . . . . . . 85
Section 8.13. Additional Restrictions Concerning the Mezzanine
Property.. . . . . . . . . . . . . . . . . . . . . . . 87
Section 8.14. Mezzanine Mortgage Loan Documents. . . . . . . . . . 88
Section 9. FINANCIAL COVENANTS OF BORROWER. . . . . . . . . . . . . . . . 88
Section 9.1. Debt Service Coverage Test Amount. . . . . . . . . . . 89
Section 9.2. Designated Collateral Value. . . . . . . . . . . . . . 89
Section 9.3. WWP Financial Covenants. . . . . . . . . . . . . . . . 89
Section 10. CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . 89
Section 10.1. Loan Documents. . . . . . . . . . . . . . . . . . . . 90
Section 10.2. Certified Copies of Organizational Documents. . . . . 90
Section 10.3. Bylaws; Resolutions. . . . . . . . . . . . . . . . . 90
Section 10.4. Incumbency Certificate; Authorized Signers. . . . . . 90
Section 10.5. Opinion of Counsel. . . . . . . . . . . . . . . . . . 90
Section 10.6. Payment of Fees. . . . . . . . . . . . . . . . . . . 90
Section 10.7. Appraisals. . . . . . . . . . . . . . . . . . . . . . 91
Section 10.8. Environmental Reports. . . . . . . . . . . . . . . . 91
Section 10.9. Insurance. . . . . . . . . . . . . . . . . . . . . . 91
Section 10.10. Performance; No Default. . . . . . . . . . . . . . . 91
Section 10.11. Representations and Warranties. . . . . . . . . . . 91
Section 10.12. Proceedings and Documents. . . . . . . . . . . . . . 91
Section 10.13. Eligible Real Estate Qualification Documents. . . . 91
Section 10.14. Compliance Certificate. . . . . . . . . . . . . . . 91
Section 10.15. Other Documents. . . . . . . . . . . . . . . . . . . 92
Section 10.16. No Condemnation/Taking. . . . . . . . . . . . . . . 92
Section 10.17. Governmental Policy. . . . . . . . . . . . . . . . . 92
Section 10.18. Other. . . . . . . . . . . . . . . . . . . . . . . . 92
Section 10.19. Satisfaction of Conditions as to Initial Collateral. 92
Section 11. CONDITIONS TO ALL BORROWINGS. . . . . . . . . . . . . . . . 92
Section 11.1. Prior Conditions Satisfied. . . . . . . . . . . . . . 92
Section 11.2. Representations True; No Default. . . . . . . . . . . 92
Section 11.3. No Legal Impediment. . . . . . . . . . . . . . . . . 93
Section 11.4. Governmental Regulation. . . . . . . . . . . . . . . 93
Section 11.5. Proceedings and Documents. . . . . . . . . . . . . . 93
Section 11.6. Borrowing Documents. . . . . . . . . . . . . . . . . 93
Section 11.7. Endorsement to Title Policy. . . . . . . . . . . . . 93
Section 11.8. Future Advances Tax Payment. . . . . . . . . . . . . 93
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC. . . . . . . . . . . . . 94
Section 12.1. Events of Default and Acceleration. . . . . . . . . . 94
Section 12.lA. Limitation of Cure Periods. . . . . . . . . . . . . 98
Section 12.2. Termination of Commitments. . . . . . . . . . . . . . 98
Section 12.3. Remedies. . . . . . . . . . . . . . . . . . . . . . . 98
Section 12.4. Distribution of Collateral Proceeds. . . . . . . . . 99
Section 12.5. Default under Mezzanine Mortgage Loan Documents. . . 99
Section 13. SETOFF. . . . . . . . . . . . . . . . . . . . . . . . . . . .101
Section 14. THE AGENT.. . . . . . . . . . . . . . . . . . . . . . . . . .101
Section 14.1. Authorization. . . . . . . . . . . . . . . . . . . .101
Section 14.2. Employees and Agents. . . . . . . . . . . . . . . . .101
Section 14.3. No Liability. . . . . . . . . . . . . . . . . . . . .101
Section 14.4. No Representations. . . . . . . . . . . . . . . . . .102
Section 14.5. Payments.. . . . . . . . . . . . . . . . . . . . . . .102
Section 14.6. Holders of Notes. . . . . . . . . . . . . . . . . . .103
Section 14.7. Indemnity. . . . . . . . . . . . . . . . . . . . . .103
Section 14.8. Agent as Bank. . . . . . . . . . . . . . . . . . . .103
Section 14.9. Resignation. . . . . . . . . . . . . . . . . . . . .103
Section 14.10. Duties in the Case of Enforcement. . . . . . . . . .104
Section 15. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . .104
Section 16. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . .105
Section 17. SURVIVAL OF COVENANTS, ETC. . . . . . . . . . . . . . . . .107
Section 18. ASSIGNMENT AND PARTICIPATION. . . . . . . . . . . . . . . . .107
Section 18.1. Conditions to Assignment by Banks. . . . . . . . . .107
Section 18.2. Register. . . . . . . . . . . . . . . . . . . . . . .108
Section 18.3. New Notes. . . . . . . . . . . . . . . . . . . . . .108
Section 18.4. Participations. . . . . . . . . . . . . . . . . . . .109
Section 18.5. Pledge by Bank. . . . . . . . . . . . . . . . . . . .109
Section 18.6. No Assignment by Borrower. . . . . . . . . . . . . .109
Section 18.7. Disclosure. . . . . . . . . . . . . . . . . . . . . .109
Section 18.8. Additional Restrictions on Assignments and
Participations. . . . . . . . . . . . . . . . . . . .109
Section 19. NOTICES.. . . . . . . . . . . . . . . . . . . . . . . . . . .110
Section 20. RELATIONSHIP. . . . . . . . . . . . . . . . . . . . . . . .111
Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. . . . .111
Section 22. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . .112
Section 23. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . .112
Section 24. ENTIRE AGREEMENT, ETC.. . . . . . . . . . . . . . . . . . . .112
Section 25. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . .112
Section 26. DEALINGS WITH THE BORROWER. . . . . . . . . . . . . . . . . .113
Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC. . . . . . . . . . . . . .113
Section 28. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . .113
Section 29. LIMITATION ON LIABILITY.. . . . . . . . . . . . . . . . . . .114
Section 30. NO UNWRITTEN AGREEMENTS.. . . . . . . . . . . . . . . . . . .114
Section 31. TIME OF THE ESSENCE.. . . . . . . . . . . . . . . . . . . . .114
Section 32. BANKRUPTCY. . . . . . . . . . . . . . . . . . . . . . . . . .114
SCHEDULES AND EXHIBITS:
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF REQUEST FOR LOAN
EXHIBIT C FORM OF COMPLIANCE CERTIFICATE
EXHIBIT D FORM OF REQUEST FOR EXTENSION OF LOAN
EXHIBIT E CERTIFICATE
SCHEDULE 1.1 BANKS AND COMMITMENTS
SCHEDULE 5.3 DESCRIPTION OF GREENBROOK CORPORATE CENTER AND POINT VIEW
VACANT LAND
SCHEDULE 6.3 TITLE TO PROPERTIES
SCHEDULE 6.4 ALL-IN ACQUISITION COST, DESIGNATED COLLATERAL VALUE AND
RELEASE PRICES
SCHEDULE 6.7 LITIGATION
SCHEDULE 6.17 ERISA PLANS
SCHEDULE 6.21 SUBSIDIARIES
SCHEDULE 6.24 AGREEMENTS
SCHEDULE 6.31-1 MEZZANINE MORTGAGE LOAN DOCUMENTS
SCHEDULE 6.31-2 ALLOCATION OF MORTGAGE LOAN
FIRST AMENDED AND RESTATED LOAN AGREEMENT
THIS FIRST AMENDED AND RESTATED LOAN AGREEMENT is made as of the 16th
day of July, 1998, by and among WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a
Delaware limited liability company, having its principal place of business at
610 Fifth Avenue, 7th Floor, New York, New York 10020 ("Borrower"),
BANKBOSTON, N.A., a national banking association, GOLDMAN SACHS MORTGAGE
COMPANY, a New York limited partnership, the other lending institutions which
are parties to this Agreement as "Banks", and the other lending institutions
which may become parties hereto pursuant to Section 18 (collectively, the
"Banks"), and BANKBOSTON, N.A., as Agent for the Banks and Co-Arranger and
Co-Syndication Agent (the "Agent"), and GOLDMAN SACHS MORTGAGE COMPANY, as
Co-Arranger and Co-Syndication Agent.
RECITALS.
WHEREAS, Borrower (formerly known as WEL/WH 1275 K Street, L.L.C.),
BankBoston, N.A., Goldman Sachs Mortgage Company and Agent have entered into
that certain Term Loan Agreement dated as of December 15, 1997 (the "Original
Loan Agreement"); and
WHEREAS, Wellsford/Whitehall Properties, L.L.C. ("Revolver Borrower"),
BankBoston, N.A., Goldman Sachs Mortgage Company and Agent have entered into
that certain Revolving Credit Agreement dated as of December 15, 1997 (the
"Original Revolving Credit Agreement"); and
WHEREAS, Revolver Borrower has merged into and with Borrower, with
Borrower being the surviving entity, and accordingly, the assets and
liabilities of Revolver Borrower have been assumed by the Borrower; and
WHEREAS, in connection with such merger, Borrower has requested that the
Banks consolidate, amend and restate the provisions of the Original Loan
Agreement and the Original Revolving Credit Agreement; and
WHEREAS, Agent, Borrower and the Banks desire to consolidate, amend and
restate the Original Loan Agreement and the Original Revolving Credit
Agreement in their entirety;
NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby consolidate, amend and
restate the Original Loan Agreement and the Original Revolving Credit
Agreement in their entirety and covenant and agree as follows:
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1. Definitions. The following terms shall have the meanings
set forth in this Section l or elsewhere in the provisions of this Agreement
referred to below:
Acknowledgments. The Acknowledgments executed by Property Owner,
Manager and Member, respectively, in favor of the Agent.
Advance Termination Date. March 31, 2000.
Agent. BankBoston, N.A., a national banking association, its successors
and assigns, acting as agent for the Banks.
Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent
may designate from time to time by notice to the Borrower and the Banks.
Agent's Special Counsel. Long Aldridge & Norman LLP or such other
counsel as may be approved by the Agent.
Agreement. This First Amended and Restated Loan Agreement, including
the Schedules and Exhibits hereto.
Agreement Regarding Fees. The Amended and Restated Agreement Regarding
Fees dated of even date herewith among Borrower, BKB and Goldman.
Appraisal. An MAI appraisal of the value of a parcel of Mortgaged
Property or Mezzanine Property, determined on an "as-is" fair market value
basis, performed by an independent appraiser selected by the Agent who is not
an employee of the Borrower, WWP, the Agent or a Bank, the form and substance
of such appraisal and the identity of the appraiser to be in accordance with
regulatory laws and policies (both regulatory and internal) applicable to the
Banks, including, without limitation, FIRREA, and otherwise acceptable to the
Majority Banks.
Appraised Value. The fair market value of a parcel of Mortgaged
Property or Mezzanine Property, determined by the most recent Appraisal of
such parcel or update obtained pursuant to Section 5.2 or Section 10.7,
subject, however, to such changes or adjustments to the value determined
thereby as may be required by the appraisal departments of the Majority Banks
in their good faith business judgment.
Approved Budget. The annual Budgets as approved by the Mezzanine
Mortgagee in accordance with the terms of the Mezzanine Mortgage Loan
Agreement.
Assignment of Interests. The Amended and Restated Assignment of
Member's Interest of even date herewith from Borrower to the Agent, as the
same may be modified or amended, pursuant to which there shall be assigned to
the Agent for the benefit of the Banks a security interest in the Equity
Interests, such assignment to be in form and substance satisfactory to the
Agent.
Assignment of Leases and Rents. Each of the absolute assignments of
leases and rents from the Borrower to the Agent pursuant to which there shall
be assigned to the Agent for the benefit of the Banks a security interest in
the interest of such party, as lessor with respect to all Leases of all or
any part of a Mortgaged Property, each such absolute assignment to be in form
and substance satisfactory to the Agent.
Balance Sheet Date. May 31, 1998.
Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or
any successor statute thereto.
Banks. BKB, Goldman, the other lending institutions which are a party
hereto and any other Person who becomes an assignee of any rights of a Bank
pursuant to Section 18 (but not including any Participant, as defined in
Section 18).
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts as its "base
rate", and (b) one-half of one percent (0.5%) above the Federal Funds
Effective Rate (rounded upwards, if necessary, to the next one-eighth of one
percent). Any change in the rate of interest payable hereunder resulting
from a change in the Base Rate shall become effective as of the opening of
business on the day on which such change in the Base Rate becomes effective.
Base Rate Loans. Those Loans bearing interest calculated by reference
to the Base Rate.
BKB. BankBoston, N.A., a national banking association.
Borrower. As defined in the preamble hereto.
Budget. The annual budget of the Property Owner with respect to the
Mezzanine Property, prepared by Property Owner in accordance with the terms
of the Mezzanine Mortgage Loan Agreement.
Building. All of the buildings, structures and improvements now or
hereafter located on any Mortgaged Property or Mezzanine Property.
Building Service Equipment. All apparatus, fixtures and articles of
personal property owned by the Borrower or the Property Owner, now or
hereafter attached to or used or procured for use in connection with the
operation or maintenance of any building, structure or other improvement
located on or included in the Mortgaged Property or Mezzanine Property,
including, but without limiting the generality of the foregoing, all engines,
furnaces, boilers, stokers, pumps, heaters, tanks, dynamos, motors,
generators, switchboards, electrical equipment, heating, plumbing, lifting
and ventilating apparatus, air-cooling and air-conditioning apparatus, gas
and electric fixtures, elevators, escalators, fittings, and machinery and all
other equipment of every kind and description, used or procured for use in
the operation of a Building (except apparatus, fixtures or articles of
personal property belonging to lessees or other occupants of such building or
to persons other than the Borrower or the Property Owner, unless the same be
abandoned by any such lessee or other occupant or person and shall become the
Borrower's or the Property Owner's property by reason of such abandonment),
together with any and all replacements thereof and additions thereto.
Business Day. Any day on which banking institutions in the city in
which the Agent's Head Office is located are open for the transaction of
banking business and, in the case of Eurodollar Rate Loans, which also is a
Eurodollar Business Day.
Capital Improvement Project. With respect to any Real Estate now or
hereafter owned by the Borrower which is utilized principally as commercial
office space, capital improvements consisting of rehabilitation,
refurbishment, replacement and improvements (including Tenant Improvement
Projects and Leasing Commissions) to the existing Buildings on such Real
Estate which may be properly capitalized under generally accepted accounting
principles.
Capital Improvement Reserve. For any period an amount equal to seventy-
five cents ($0.75) per annum multiplied by the weighted average of rentable
square footage of the Mortgaged Property and the Mezzanine Property during
such period.
Cash Collateral Agreement. The Amended and Restated Cash Collateral
Agreement dated of even date herewith among Agent, Borrower, Property Owner,
Member and Manager.
CERCLA. See Section 6.20.
Closing Date. The first date on which all of the conditions set forth
in Section 10 and Section 11 have been satisfied.
Co-Agent. Goldman.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower
which are or are intended to be subject to the security interests, liens and
mortgages created by the Security Documents, including, without limitation,
the Mortgaged Property and the Mezzanine Collateral.
Commitment. With respect to each Bank, the amount set forth on Schedule
1.1 hereto as the amount of such Bank's Commitment to make or maintain Loans
to the Borrower, as the same may be reduced from time to time in accordance
with the terms of this Agreement; provided that from and after the Advance
Termination Date, the Commitment of each Bank shall equal its Commitment
Percentage of the aggregate principal amount of the Loans from time to time
outstanding.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1.1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Compliance Certificate. See Section 7.4(d).
Conditional Guaranty. The Conditional Guaranty of Payment made by
Wellsford Commercial, WHWEL, Wellsford Real Properties, Whitehall Street Real
Estate Limited Partnership V, Whitehall Street Real Estate Limited
Partnership VI, Whitehall Street Real Estate Limited Partnership VII and
Whitehall Street Real Estate Limited Partnership VIII, in favor of the Agent
and the Banks, as the same may be modified or amended.
Condominium. Dedham Place Condominium.
Condominium Documents. Collectively, (a) that certain Master Deed of
Dedham Place Condominium (and all exhibits annexed thereto) made by Dedham
Place Associates Joint Venture, and recorded in the Norfolk County,
Commonwealth of Massachusetts Registry of Deeds on November 27, 1991 at Book
9118, page 376 et al., and (b) the Dedham Place Condominium Trust and Bylaws
dated November 20, 1991 and made by Dominic J. Saraceno, as trustee.
Consolidated or combined. With reference to any term defined herein,
that term as applied to the accounts of WWP and its Subsidiaries,
consolidated or combined in accordance with generally accepted accounting
principles.
Consolidated Total Assets. With respect to WWP and its Subsidiaries,
the sum of (a) an amount equal to (i) an amount equal to the difference of
(A) the Net Operating Income of the Stabilized Properties of WWP and its
Subsidiaries for the period covered by the four previous consecutive fiscal
quarters (treated as a single accounting period) minus (B) the Capital
Improvement Reserve for such Stabilized Properties for such period divided by
(ii) a nine and one-fourth percent (9.25%) capitalization rate, (b) the sum
of (i) the Appraised Value of the Non-Stabilized Properties that are
Mortgaged Properties and Mezzanine Properties plus (ii) the historic cost of
capital improvements to such Non-Stabilized Properties (including Tenant
Improvement Projects and Leasing Commissions) from the date of the most
recent Appraisal thereof pursuant to this Agreement, (c) the sum of (i) the
all-in acquisition cost (including reasonable closing costs) of the Non-
Stabilized Properties of WWP and its Subsidiaries that are not Mortgaged
Properties or Mezzanine Properties plus (ii) the historic cost of capital
improvements to such Non-Stabilized Properties (if this clause (c) is
applicable thereto) from the date of acquisition thereof (provided that the
Agent shall have the right to obtain at Borrower's expense an Appraisal with
respect to any of such Non-Stabilized Properties, and the Appraised Value
determined from such Appraisal shall be substituted for the amount in clause
(c)(i) for the applicable property for the purposes of such calculation), (d)
the historic cost of investments in Investment Partnerships; and (e) the
aggregate cash and Short-term Investments of such Person; provided that prior
to such time as WWP or a Subsidiary has owned and operated any Stabilized
Property for four full fiscal quarters, the Net Operating Income with respect
to such Stabilized Property shall be annualized in such manner as the Agent
shall approve, such approval not to be unreasonably withheld.
Notwithstanding anything herein to the contrary, Leasing Commissions shall
only be included for the purposes of clause (b)(ii) after and only for so
long as the tenant under the applicable Lease takes occupancy and is paying
rent in accordance with the terms of the Lease approved pursuant to Section
5.6. The assets of WWP and its Subsidiaries shall be adjusted to reflect
WWP's allocable share of such assets for the relevant period or as of the
date of determination.
Contribution Agreement. The Contribution Agreement dated as of February
12, 1998 among WWP, as Contributee, and Saracen Properties, Inc. and certain
other parties, as Contributor, as amended by Amendment No. 1 to Contribution
Agreement dated as of May 15, 1998.
Construction Inspector. A firm of professional engineers or architects
selected by the Agent and reasonably acceptable to the Borrower.
Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with Section 4.1.
Debt Service Coverage Test Amount. For any period of four consecutive
fiscal quarters then ended, the sum of principal and interest which would
have been payable during such period on a loan in the original principal
amount equal to the outstanding principal balance of the Loan and the
Mezzanine Mortgage Loan as of the date of such determination bearing interest
at a rate per annum equal to the sum of the then current annual yield on
seven (7) year obligations issued by the United States Treasury most recently
prior to the date of such determination plus one and sixty-five one-
hundredths percent (1.65%) and with the principal thereof being payable based
on a 25 year mortgage style amortization schedule (expressed as a mortgage
constant percentage). Such determination of the Debt Service Coverage Test
Amount by the Agent shall be conclusive and binding absent manifest error.
For the initial twelve (12) months following December 15, 1997, such debt
service shall be determined by annualizing the debt service from and after
December 15, 1997 in a manner as reasonably determined by Borrower and
reasonably acceptable to the Agent (provided that in the event that as of the
date of any determination such amounts shall not have been determined as so
provided, then such amount shall be annualized in a manner reasonably
acceptable to the Agent).
Default. See Section 12.1.
Deposit Account Agreement. The Deposit Account Agreement dated as of
December 31, 1996 among LaSalle National Bank, Property Owner and Mezzanine
Mortgagee.
Designated Collateral Value. At the relevant time of reference thereto,
the sum of (a) the lesser of (i) sixty percent (60%) of the sum of (x) the
all-in acquisition cost (including reasonable closing costs) of a Mortgaged
Property plus (y) the historic cost of capital improvements (including any
Tenant Improvement Projects and Leasing Commissions) to such Mortgaged
Property after the date of such acceptance and (ii) sixty percent (60%) of
the sum of (x) the Appraised Value of a Mortgaged Property as determined in
connection with the acceptance of such Mortgaged Property as Collateral or as
most recently determined pursuant to Section 2.8 of this Agreement, subject
to the terms of Section 5.4, plus (y) the historic cost of Tenant Improvement
Projects and Leasing Commissions to such Mortgaged Property after the date of
such acceptance, plus (b) the current value of cash and Short-term
Investments, if any, at the time pledged to the Agent as Collateral pursuant
to a Pledge Agreement, plus (c) for so long as the Equity Interests are
pledged to the Agent as Collateral pursuant to the Assignment of Interests,
an amount equal to the sum of (i) the sum of sixty percent (60%) of the
Appraised Value of the Mezzanine Property as determined in connection with
the acceptance of the Equity Interests as Collateral or as most recently
determined pursuant to Section 2.8 of this Agreement, subject to the terms of
Section 5.4, minus (ii) the principal Indebtedness of the Property Owner as
of the date of acquisition of the Equity Interests (such amount being
$68,340,815.57), plus (d) the current value determined in a manner agreed to
by the Majority Banks of Collateral accepted by the Majority Banks under
clause (vi) of Section 5.1. Notwithstanding anything herein to the contrary,
Leasing Commissions shall only be included for the purposes of clauses
(a)(i)(y) and (a)(ii)(y) after and only for so long as the tenant under the
applicable Lease takes occupancy and is paying rent in accordance with the
terms of the Lease approved pursuant to Section 5.6 For the purposes of
clause (a) above, the lesser of the amount determined pursuant to clause
(a)(i) and (a)(ii) above shall be the Designated Collateral Value for each
such Mortgaged Property subject thereto, and the aggregate of the amounts
determined for each Mortgaged Property subject thereto shall be the
Designated Collateral Value for all such Mortgaged Properties; provided,
however, that with respect to the Mortgaged Properties listed in Schedule 6.4
hereto, the initial Designated Collateral Value for such properties is as set
forth on Schedule 6.4; provided further that in the event that the Maturity
Date is extended pursuant to Section 2.8, the Designated Collateral Value for
each of such Mortgaged Properties listed on Schedule 6.4 shall be the lesser
of the amount determined pursuant to clause (a)(i) and (a)(ii) above. The
initial Designated Collateral Value for the Mezzanine Property is set forth
on Schedule 6.4 hereto.
Distribution. The declaration or payment of any dividend or
distribution on or in respect of any shares of the Borrower, other than
dividends or distributions payable solely in equity securities of the
Borrower; the purchase, redemption, exchange or other retirement of any
shares of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its
shareholders as such; or any other distribution on or in respect of any
shares of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1.1 hereto; thereafter, such other office of such Bank,
if any, located within the United States that will be making or maintaining
Base Rate Loans.
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or combined in accordance with
Section 4.1.
Eligible Real Estate. Real Estate:
(a) which is owned in fee by the Borrower;
(b) which is located within the northeastern United States,
excluding those States which prescribe a "single-action" or similar rule
limiting the rights of creditors secured by real property, except to the
extent such exclusion is waived in writing by the Majority Banks with
respect to a specific parcel of Real Estate;
(c) which is utilized principally for commercial office purposes;
(d) which is approved by the Majority Banks after the date hereof
in their sole judgment;
(e) as to which all of the representations set forth in Section 6
of this Agreement concerning Mortgaged Property are true and correct;
and
(f) as to which the Agent has received all Eligible Real Estate
Qualification Documents, so long as all of such documents remain in full
force and effect.
Eligible Real Estate Qualification Documents. With respect to any
parcel of Real Estate proposed to be included in the Eligible Real Estate
each of the following:
(a) Security Documents. Such Security Documents relating to such
Real Estate as the Agent shall require, in form and substance
satisfactory to the Agent and duly executed and delivered by the
respective parties thereto.
(b) Enforceability Opinion. The favorable legal opinion of
counsel to the Borrower reasonably acceptable to the Agent qualified to
practice in the State in which such Real Estate is located, addressed to
the Banks and in form and substance satisfactory to the Agent as to the
enforceability of such Security Documents and such other matters as the
Agent shall reasonably request.
(c) Perfection of Liens. Evidence reasonably satisfactory to the
Agent that the Security Documents are effective to create in favor of
the Agent a legal, valid and enforceable first (except for Permitted
Liens entitled to priority under applicable law) lien and security
interest in such Real Estate and that all filings, recordings,
deliveries of instruments and other actions necessary or desirable to
protect and preserve such liens or security interests have been duly
effected.
(d) Survey and Taxes. The Survey of such Real Estate, together
with the Surveyor Certification and evidence of payment of all real
estate taxes, assessments and municipal charges on such Real Estate
which on the date of determination are required to have been paid under
Section 7.8.
(e) Title Insurance; Title Exception Documents. The Title Policy
covering such Real Estate, including all endorsements thereto, and
together with proof of payment of all fees and premiums for such policy,
and true and accurate copies of all documents listed as exceptions under
such policy.
(f) UCC Certification. A certification from the Title Insurance
Company or counsel satisfactory to the Agent that a search of the public
records designated by the Agent disclosed no conditional sales
contracts, security agreements, chattel mortgages, leases of personalty,
financing statements or title retention agreements which affect any
property, rights or interests of the Borrower that are or are intended
to be subject to the security interest, assignments, and mortgage liens
created by the Security Documents relating to such Real Estate except to
the extent that the same are discharged and removed prior to or
simultaneously with the inclusion of such Real Estate in the Collateral.
(g) Management Agreement. A true copy of the Management Agreement
relating to such Real Estate.
(h) Leases. True and correct copies of all Leases for such Real
Estate and any lease summaries prepared by Borrower with respect
thereto, together with the forms of Lease to be used by the Borrower in
connection with future leasing of such Mortgaged Property, such forms of
Lease to be in form and substance satisfactory to the Agent.
(i) Subordination Agreements. A Subordination, Attornment and
Non-Disturbance Agreement from each tenant of such Real Estate as
required by the Agent, dated not more than sixty (60) days prior to the
inclusion of such Real Estate in the Collateral and satisfactory in form
and substance to the Agent.
(j) Estoppel Certificates. Estoppel certificates from each tenant
of such parcel of Real Estate as required by Agent, such certificates to
be dated not more than sixty (60) days prior to the inclusion of such
Real Estate in the Collateral and to be satisfactory in form and
substance to the Agent.
(k) Certificates of Insurance. Each of (i) a current certificate
of insurance as to the insurance maintained on such Real Estate
(including flood insurance if necessary) from the insurer or an
independent insurance broker dated as of the date of determination,
identifying insurers, types of insurance, insurance limits, and policy
terms; (ii) certified copies of all policies evidencing such insurance
(or certificates therefor signed by the insurer or an agent authorized
to bind the insurer); and (iii) such further information and
certificates from the Borrower, its insurers and insurance brokers as
the Agent may reasonably request, all of which shall be in compliance
with the requirements of this Agreement.
(l) Hazardous Substance Assessments. A hazardous waste site
assessment report concerning Hazardous Substances and asbestos on such
Real Estate dated or updated not more than three months prior to the
inclusion of such Real Estate in the Collateral unless otherwise
approved by the Agent, from an Environmental Engineer, such report to
contain no qualifications except those that are acceptable to the
Majority Banks in their sole discretion and to otherwise be in form and
substance satisfactory to the Majority Banks.
(m) Certificate of Occupancy. A copy of the certificate(s) of
occupancy issued to the Borrower for such parcel of Real Estate
permitting the use and occupancy of the Building thereon (or evidence
that any previously issued certificate(s) of occupancy is not required
to be reissued to the Borrower), or a legal opinion reasonably
satisfactory to the Agent that no certificates of occupancy are
necessary to the use and occupancy thereof.
(n) Appraisal. An Appraisal of such Real Estate, in form and
substance satisfactory to the Majority Banks and dated not more than
three months prior to the inclusion of such Real Estate in the
Collateral.
(o) Zoning and Land Use Opinion of Counsel. A favorable opinion
concerning the Real Estate addressed to the Agent and dated the date of
the inclusion of such Real Estate in the Collateral, in form and
substance satisfactory to the Agent, from counsel approved by the Agent
admitted to practice in the State in which such parcel is located, as to
zoning and land use compliance, or such other evidence regarding zoning
and land use compliance as the Agent may approve in its reasonable
discretion.
(p) Construction Inspector Report. A report or written
confirmation from the Construction Inspector satisfactory in form and
content to the Majority Banks, dated or updated not more than three
months prior to the inclusion of such Real Estate in the Collateral,
addressing such matters as the Majority Banks may reasonably require,
including without limitation that the Construction Inspector has
reviewed the plans and specifications or other available materials for
all Buildings on the Real Estate, that the condition of the Buildings is
good, that all Buildings were constructed and completed in a good and
workmanlike manner, that the Buildings satisfy all applicable building,
zoning, handicapped access and Environmental Laws applicable thereto,
and whether or not the Real Estate and the Buildings thereon are a
conforming use under applicable zoning laws.
(q) Permit and Legal Compliance Assurances. Evidence satisfactory
to the Agent that all activities being conducted on such Real Estate
which require federal, state or local licenses or permits have been duly
licensed and that such licenses or permits are in full force and effect,
and that the Real Estate, the Buildings and the use and occupancy
thereof are in compliance in all material respects with all applicable
federal, state or local laws, ordinances or regulations.
(r) Operating Statements. Operating statements for such Real
Estate in the form of such statements delivered to the Banks under
Section 6.4(b) covering each of the four fiscal quarters ending
immediately prior to the addition of such Mortgaged Property to the
Collateral.
(s) Doing Business Opinion. An opinion, dated the date of the
inclusion of such Real Estate in the Collateral, of legal counsel to the
Borrower reasonably acceptable to the Agent qualified to practice in the
State in which such Real Estate is located to the effect that neither
the Agent nor any Bank shall be required to qualify to do business in
such State or any political subdivision thereof or to become liable to
pay any taxes in such State or any political subdivision thereof solely
on account of the receipt of the lien on such Real Estate securing the
Obligation, such opinion to be satisfactory to the Agent.
(t) Additional Documents. Such other documents, certificates,
reports or assurances as the Agent or the Majority Banks may reasonably
require in their discretion.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.
Environmental Engineer. A firm of independent professional engineers or
other scientists generally recognized as expert in the detection, analysis
and remediation of Hazardous Substances and related environmental matters and
reasonably acceptable to the Agent.
Environmental Laws. See Section 6.20(a).
Equity Interests. One hundred percent (100%) of the direct legal,
equitable and beneficial interests of the Borrower in and to Member.
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender
subject thereto would be required to maintain reserves under Regulation D of
the Board of Governors of the Federal Reserve System (or any successor or
similar regulations relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D or any
successor or similar regulation), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or
such other Eurodollar interbank market as may be selected by the Agent and
the Banks in their sole discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1.1 hereto; thereafter, such other office of
such Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate per annum equal to the quotient (rounded upwards to the
nearest 1/16 of one percent) of (a) the rate at which the Reference Bank's
Eurodollar Lending Office is offered Dollar deposits two Eurodollar Business
Days prior to the beginning of such Interest Period in whatever interbank
Eurodollar market may be selected by the Reference Bank in its sole
discretion, acting in good faith, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan to which such Interest
Period applies, divided by (b) a number equal to 1.00 minus the Eurocurrency
Reserve Rate.
Eurodollar Rate Loans. Loans bearing interest calculated by reference
to a Eurodollar Rate.
Event of Default. See Section 12.1.
Excess Property Income. As defined in the Cash Collateral Agreement.
Federal Funds Effective Rate. For any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
of the quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the
Agent.
generally accepted accounting principles. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to
time and (b) consistently applied with past financial statements of the
Borrower adopting the same principles; provided that a certified public
accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles)
as to financial statements in which such principles have been properly
applied.
Goldman. Goldman Sachs Mortgage Company.
Goldman Group. Collectively, the partners of WHWEL as of any date that
are affiliates of The Goldman Sachs Group L.P.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Guarantor. Collectively, the WWP Members and any other Person which is
now or may hereafter become a party to a Guaranty, and individually any one
of them.
Guaranty. Collectively, the Indemnity and Guaranty Agreement by the WWP
Members in favor of Agent and the Banks, the Conditional Guaranty, the WWP
Member Indemnity Agreement and each other guaranty which may hereafter be
delivered to the Agent and the Banks in connection with the Loan, each in
form and substance satisfactory to Agent in its sole discretion.
Hazardous Substances. See Section 6.20(b).
Holdback. See Section 5.5.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should
be made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect (including, without limitation, all obligations evidenced by bonds,
debentures, notes or similar debt instruments and subordinated indebtedness);
(b) all liabilities secured by any mortgage, pledge, security interest, lien,
charge or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been
assumed; and (c) all guarantees, interest rate and currency swap obligations,
endorsements and other contingent obligations whether direct or indirect in
respect of indebtedness of others, including contingent obligations that in
accordance with generally accepted accounting principles are required to be
footnoted on the Borrower's balance sheet and any obligation to supply funds
to or in any manner to invest directly or indirectly in a Person, to purchase
indebtedness, or to assure the owner of indebtedness against loss through an
agreement to purchase goods, supplies or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or
otherwise, and the obligation to reimburse the issuer in respect of any
letter of credit; and (d) any obligation as a lessee or an obligor under a
capitalized lease.
Indemnity Agreement. Collectively, the Indemnity Agreements Regarding
Hazardous Materials made by the Borrower and the WWP Members in favor of the
Agent and the Banks, pursuant to which such parties agree to indemnify the
Agent and the Banks with respect to Hazardous Substances and Environmental
Laws, such Indemnity Agreement to be in form and substance satisfactory to
the Agent.
Instruction Letter. That certain letter agreement dated May 15, 1998
among the Agent, the Property Owner, LaSalle National Bank and Amresco
Services, L.P., concerning the payment of Excess Property Income to Agent.
Interest Payment Date. (a) As to each Loan, the first day of each
January, April, July and October during the term of such Loan, and (b) also
as to each Eurodollar Rate Loan, the last day of the Interest Period relating
thereto.
Interest Period. With respect to each Eurodollar Rate Loan:
(a) initially, the period commencing on the Drawdown Date of such
Loan and ending one, two or three months thereafter; and
(b) thereafter, each period commencing on the day following the
last day of the next preceding Interest Period applicable to such Loan
and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request;
provided that all of the foregoing provisions relating to Interest Periods
are subject to the following:
(A) if any Interest Period with respect to a Eurodollar
Rate Loan would otherwise end on a day that is not a
Eurodollar Business Day, that Interest Period shall end and
the next Interest Period shall commence on the next preceding
or succeeding Eurodollar Business Day as determined
conclusively by the Reference Bank in accordance with the then
current bank practice in the applicable Eurodollar interbank
market;
(B) if the Borrower shall fail to give notice as
provided in Section 4.1, the Borrower shall be deemed to have
requested a conversion of the affected Eurodollar Rate Loan to
a Base Rate Loan on the last day of the then current Interest
Period with respect thereto; and
(C) no Interest Period relating to any Eurodollar Rate
Loan shall extend beyond the Maturity Date.
Investment Partnerships. Investments in joint ventures, general
partnerships, limited partnerships, limited liability companies or any other
business association formed for the purpose of acquiring fee interests in
income-producing commercial office properties, provided that Borrower shall
have sufficient Voting Interests or other rights to veto or block any major
actions to be taken by any other Person owning an interest in such Investment
Partnership. Any wholly-owned Subsidiary of the Borrower shall not be deemed
to be an Investment Partnership.
Investments. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person,
all loans, advances, or extensions of credit to, or contributions to the
capital of, any other Person, all purchases of the securities or business or
integral part of the business of any other Person and commitments and options
to make such purchases, all interests in real property, and all other
investments; provided, however, that the term "Investment" shall not include
(i) equipment, inventory and other tangible personal property acquired in the
ordinary course of business, or (ii) current trade and customer accounts
receivable for services rendered in the ordinary course of business and
payable in accordance with customary trade terms. In determining the
aggregate amount of Investments outstanding at any particular time: (a)
there shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is
paid; (b) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (c)
there shall not be deducted in respect of any Investment any amounts received
as earnings on such Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the foregoing clause (a)
may be deducted when paid; and (d) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.
Leases. Leases, licenses and agreements whether written or oral,
relating to the use or occupation of space in or on the Building or on the
Mortgaged Property or the Mezzanine Property.
Leasing Commissions. Reasonable and customary commissions paid to a
licensed real estate broker in connection with a Lease for all or any portion
of the Mortgaged Properties commonly known as Point View, 15 Broad, Mountain
Heights, Morris Technology Center and the Polaroid Buildings, approved
pursuant to Section 5.6, pursuant to commission agreements containing such
terms and provisions as are then prevailing between third party, unaffiliated
owners and brokers for comparable leases of space at properties similar to
such Mortgaged Property in the market area in which such Mortgaged Property
is located.
Liens. See Section 8.2.
Loan Documents. This Agreement, the Notes, the Security Documents, the
Guaranty, the Acknowledgments, and all other documents, instruments or
agreements executed or delivered by or on behalf of the Borrower, the
Guarantor, Property Owner, Manager, Member or the parties to the WWP Member
Indemnity Agreement evidencing or securing the Loans.
Loan Request. See Section 2.6.
Loans. The aggregate Loans to be made by the Banks hereunder.
Majority Banks. As of any date, the Bank or Banks whose aggregate
Commitment Percentage is equal to or greater than sixty-six and two-thirds
percent (66.67%).
Management Agreements. Agreements, whether written or oral, providing
for the management of the Mortgaged Property, the Mezzanine Property or any
of them.
Manager. WASH Manager L.L.C., a Delaware limited liability company.
Manager Organizational Agreements. That certain Certificate of Formation
for WASH Manager L.L.C., filed on April 7, 1998 with the Secretary of State
of the State of Delaware, and that certain Operating Agreement for WASH
Manager L.L.C., dated as of May 15, 1998.
Maturity Date. December 15, 2000, as the same may be extended as
provided in Section 2.8, or such earlier date on which the Loans shall become
due and payable pursuant to the terms hereof.
Member. Wells Avenue Holdings L.L.C., a Delaware limited liability
company.
Member Organizational Agreements. That certain Certificate of Formation
for Wells Avenue Holdings L.L.C. filed on April 2, 1998 with the Delaware
Secretary of State, and that certain Operating Agreement for Wells Avenue
Holdings L.L.C., a Delaware limited liability company, dated as of May 15,
1998
Mezzanine Collateral. All of the property, rights and interests of the
Borrower which are or are intended to be subject to the security interests,
security title and liens created by the Assignment of Interests and any
further collateral assignment for the benefit of the Agent relating to direct
or indirect interests in the Property Owner, including, without limitation,
UCC-1 financing statements executed and delivered in connection therewith.
Mezzanine Loan Documents. Collectively, this Agreement (to the extent
of provisions relating directly or indirectly to the Property Owner or
interests therein, the Mezzanine Collateral or the Mezzanine Property,
including without limitation Section 32), the Assignment of Interests, the
Cash Collateral Agreement, the Conditional Guaranty, any further assignments
or pledges to the Agent for the benefit of the Banks (including without
limitation UCC-1 Financing statements executed and delivered in connection
therewith), and all other documents, instruments, acknowledgments or
agreements executed or delivered to Agent or the Banks in connection with the
Mezzanine Collateral, the Mezzanine Property or the direct or indirect
interests in the Property Owner.
Mezzanine Management Agreement. As defined in Section 6.34.
Mezzanine Mortgagee. Initially, Nomura Asset Capital Corporation, and
its successors and assigns as the holder or holders of the Mezzanine Mortgage
Loan Documents, and any servicer or trustee acting on behalf of the holder or
holders of interests in the note secured thereby, as the case may be. As of
the date hereof, the servicer is Amresco Services, L.P.
Mezzanine Mortgage Loan. The first mortgage loan to the Property Owner,
in the original principal amount of $69,000,000.00.
Mezzanine Mortgage Loan Agreement. The Loan Agreement dated as of
December 31, 1996 between the Property Owner and the Mezzanine Mortgagee, as
amended by (i) that certain First Amendment to Loan Agreement dated as of
December 31, 1996 between the Property Owner and Nomura Asset Capital
Corporation and (ii) that certain Second Amendment to Loan Agreement and
Consent of Lender dated May 15, 1998 among Property Owner, Manager, Member
and LaSalle National Bank, as Trustee.
Mezzanine Mortgage Loan Documents. Collectively, the documents listed
on Schedule 6.30-1 attached hereto and made a part hereof.
Mezzanine Property. The real property owned by the Property Owner and
commonly known as 128 Tech Center, 7/57 Wells Avenue, 75/85/95 Wells Avenue,
201 University Avenue, Dedham Place and Norfolk Place (333 Elm Street).
Mortgaged Property. Collectively, the Eligible Real Estate which is
conveyed to and accepted by the Agent as security for the Obligations
pursuant to the Security Deeds.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
Negative Carry. See Section 5.5.
Net Income (or Deficit). With respect to any Person (or any asset of
any Person) for any fiscal period, the net income (or deficit) of such Person
(or attributable to such asset), after deduction of all expenses, taxes and
other proper charges, determined in accordance with generally accepted
accounting principles.
Net Operating Income. With respect to any Person for any period, an
amount equal to the sum of (a) the Net Income of such Person (attributable to
the Mortgaged Properties or the Mezzanine Properties for such period) plus
(b) depreciation, amortization and interest deducted in calculating such Net
Income plus (c) any extraordinary or non-recurring losses deducted in
calculating such Net Income plus/minus (d) Rent Adjustments with respect to
Leases for the Mortgaged Properties or the Mezzanine Properties minus (e) any
income included in calculating such Net Income from the Mortgaged Properties
or the Mezzanine Properties from tenants which are 60 or more days delinquent
in the payment of any rent minus (f) any extraordinary or non-recurring gains
included in calculating such Net Income. Net Operating Income shall be
determined in a manner consistent with the manner in which it has previously
been calculated and provided to the Banks.
Nomura Mortgages. Individually, a Mortgage, Assignment of Leases and
Rents and Security Agreement dated as of December 31, 1996 by the Property
Owner for the benefit of Mezzanine Mortgagee, which relates to a Mezzanine
Property, and collectively, all of them.
Non-Stabilized Property. Any Real Estate owned by the Borrower or the
Property Owner which is not a Stabilized Property.
Notes. See Section 2.4.
Notice. See Section 19.
Obligations. All indebtedness, obligations and liabilities of the
Borrower to any of the Banks and the Agent, individually or collectively,
under this Agreement or any of the other Loan Documents or in respect of any
of the Loans or the Notes, or other instruments at any time evidencing any of
the foregoing, whether existing on the date of this Agreement or arising or
incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.
Operating Agreement. That certain Amended and Restated Limited
Liability Company Operating Agreement of Wellsford/Whitehall Holdings,
L.L.C., dated as of July 16, 1998, being the operating agreement of the
Borrower.
Original Loan Agreement. As defined in the preamble hereto.
Original Revolving Credit Agreement. As defined in the preamble hereto.
Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar
responsibilities.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 8.2. When such term is used with respect to the
Mezzanine Property, "Permitted Liens" shall mean only those liens and
encumbrances as are shown in the Pro Forma Marked Owner's Title Insurance
Commitment #9851-00015 issued by Chicago Title Insurance Company in
connection with the acquisition by the Borrower of the direct and indirect
interests in the Property Owner.
Person. Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business, or other legal entity,
and any government or any governmental agency or political subdivision
thereof.
Plan Assets. Assets of any employee benefit plan subject to Part 4,
Subtitle A, Title I of ERISA.
Pledge Agreement. Each agreement from time to time in effect in form
and substance satisfactory to the Agent pursuant to which the Borrower or the
Guarantor may pledge cash, Short-term Investments or other property referred
to in clause (v) of Section 5.1 as part of the Collateral securing the
Obligations.
Potential Collateral. Any property of the Borrower which is not at the
time included in the Collateral and which consists of (i) Eligible Real
Estate which is a Stabilized Property, (ii) Real Estate which is a Non-
Stabilized Property which is capable of becoming Eligible Real Estate through
the approval of the Majority Banks and the completion and delivery of
Eligible Real Estate Qualification Documents, (iii) cash, (iv) Short-term
Investments and (v) other property referred to in clause (vi) of Section 5.1.
Property Owner. Wells Avenue Senior Holdings LLC, a Massachusetts
limited liability company.
Property Owner Organizational Agreements. That certain Certificate of
Organization of Wells Avenue Senior Holdings LLC filed on December 31, 1996
with the Secretary of State of the Commonwealth of Massachusetts and that
certain Operating Agreement of Wells Avenue Senior Holdings LLC, dated as of
December 31, 1996, as amended by Amendment No. 1 dated May 15, 1998.
Rating Agencies. Collectively, the "Rating Agencies" as defined in the
Mezzanine Mortgage Loan Documents.
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or the Property Owner.
REIT Status. With respect to Wellsford Commercial, its status as a real
estate investment trust as defined in Section 856(a) of the Code.
Record. The record, including computer records, maintained by the Agent
with respect to any Loan referred to in the Notes.
Reference Bank. BKB.
Register. See Section 18.2.
Release. See Section 6.20(c)(iii).
Rent Adjustments. For any Person, straight line adjustments to rent
payable under Leases, as determined in accordance with generally accepted
accounting principles.
Rent Roll. A report prepared by the Borrower or the Property Owner
showing for each tenant its occupancy status, lease expiration date, market
rent, lease rent and other information in such form as may have been approved
by the Agent, such approval not to be unreasonably withheld.
Reportable Event. Any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder.
Revolving Credit Termination Date. December 31, 1998.
SEC. The federal Securities and Exchange Commission.
Secured Mezzanine Loan Agreement. That certain Mezzanine Loan Agreement
dated of even date herewith by and among WWP, BKB, the other lending
institutions that are or become parties thereto and BKB in its capacity as
agent for itself and the other lending institutions that are or become
parties thereto, as the same may be amended, restated, consolidated,
supplemented, renewed, extended or replaced.
Secured Mezzanine Loan Agreement Lenders. The lenders from time to time
a party to the Secured Mezzanine Loan Agreement, which term shall include
without limitation any agent or nominee acting on behalf of such lenders.
Security Deeds. The Mortgages, Deeds to Secure Debt and Deeds of Trust
from the Borrower to the Agent for the benefit of the Banks (or to trustees
named therein acting on behalf of the Agent for the benefit of the Banks)
pursuant to which the Borrower has conveyed a Mortgaged Property as security
for the Obligations.
Security Documents. Collectively, the Security Deeds, the Assignments
of Rents and Leases, the Indemnity Agreement, the Guaranty, the Assignment of
Interests, any further collateral assignments to the Agent for the benefit of
the Banks, and each Pledge Agreement, including, without limitation, U.C.C.-1
financing statements executed and delivered in connection therewith.
Short-term Investments. Investments described in subsections (a)
through (g), inclusive, of Section 8.3. For all purposes of this Agreement
and the other Loan Documents, the value of Short-term Investments at any time
shall be the current market value thereof determined in a manner reasonably
satisfactory to the Agent.
Stabilized Property. Each parcel of Eligible Real Estate (a) which is
fully operational; (b) which is eighty percent (80%) leased and occupied
pursuant to bona-fide arm's length leases to third parties unaffiliated with
Borrower, any Guarantor or any of the Subsidiaries of the Borrower; (c) no
more than thirty-five percent (35%) of the Leases (based on the ratio of the
rentable square footage of such Real Estate that is occupied under such
Leases to the total rentable square footage of such Real Estate) for such
Real Estate are scheduled to expire (without regard to any extension options
not exercised) within two (2) years of the acceptance of such Real Estate as
a Mortgaged Property or the Equity Interests as Collateral with respect to
the Mezzanine Property (whether under this Agreement, the Original Loan
Agreement or the Original Revolving Credit Agreement); (d) less than all of
the Leases for such Real Estate are scheduled to expire (without regard to
any extension options not exercised) within five (5) years of the date of the
acceptance of such Real Estate as a Mortgaged Property or the Equity
Interests as Collateral with respect to the Mezzanine Property (whether under
this Agreement, the Original Loan Agreement or the Original Revolving Credit
Agreement); and (e) such Real Estate shall have a projected annual return to
Borrower of not less than 9% on acquisition cost based upon cash flows in
place as of the date of determination. The determination of whether a
property is a Stabilized Property for the purposes of determining the
Designated Collateral Value shall be made at such time as it is accepted as a
Mortgaged Property or Mezzanine Property as provided above, as applicable
provided that a property may be later determined to be a Stabilized Property
for the purposes of determining Consolidated Total Assets at such time as a
property satisfies the requirements for a Stabilized Property set forth in
the definition.
State. A state of the United States of America.
Subordination, Attornment and Non-Disturbance Agreement. An agreement
among the Agent, the Borrower and a tenant under a Lease pursuant to which
such tenant agrees to subordinate its rights under the Lease to the lien of
the Security Deed and agrees to recognize the Agent or its successor in
interest as landlord under the Lease in the event of a foreclosure under the
Security Deed, such agreement to be in form and substance satisfactory to the
Agent.
Subsidiary. Any corporation, association, partnership, limited
liability company, trust, or other business or other legal entity of which
the designated parent shall at any time own directly or indirectly through a
Subsidiary or Subsidiaries at least a majority (by number of votes or
controlling interests) of the outstanding Voting Interests.
Survey. An instrument survey of a Mortgaged Property or a Mezzanine
Property prepared by a registered land surveyor which shall show the location
of all buildings, structures, easements and utility lines on such property,
shall be sufficient to remove the standard survey exception from the Title
Policy, shall show that all buildings and structures are within the lot lines
of the Mortgaged Property or the Mezzanine Property and shall not show any
encroachments by others (or to the extent any encroachments are shown, such
encroachments shall be acceptable to the Agent in its sole discretion), shall
show rights of way, adjoining sites, establish building lines and street
lines, the distance to, and names of the nearest intersecting streets and
such other details as the Agent may reasonably require; shall show the zoning
district or districts in which the Mortgaged Property or the Mezzanine
Property is located and shall show whether or not the Mortgaged Property or
the Mezzanine Property is located in a flood hazard district as established
by the Federal Emergency Management Agency or any successor agency or is
located in any flood plain, flood hazard or wetland protection district
established under federal, state or local law and shall otherwise be in form
and substance reasonably satisfactory to the Agent.
Surveyor Certification. With respect to each parcel of Mortgaged
Property or Mezzanine Property, a certificate executed by the surveyor who
prepared the Survey with respect thereto, dated as of a recent date and
containing such information relating to such parcel as the Majority Banks or
the Title Insurance Company may reasonably require, such certificate to be
reasonably satisfactory to the Agent in form and substance.
Tenant Improvement Project. With respect to the Mortgaged Properties
commonly known as Point View, 15 Broad, Mountain Heights, Morris Technology
Center and the Polaroid Buildings, base building and/or tenant improvements
to the existing Buildings on such Mortgaged Property to be performed by the
Borrower in connection with any Lease approved pursuant to Section 5.6.
Tenant Improvement Reserve. The amount of $32,000,000.00, which amount
shall be reserved from the amounts available to be borrowed under this
Agreement and shall be disbursed as provided in Section 5.6.
Test Period. See Section 9.1.
Title Insurance Company. Commonwealth Land Title Insurance Company or
another title insurance company or companies reasonably approved by the
Agent.
Title Policy. With respect to each parcel of Mortgaged Property, an
ALTA standard form title insurance policy (or, if such form is not available,
an equivalent form of or legally promulgated form of mortgagee title
insurance policy reasonably acceptable to the Agent) issued by a Title
Insurance Company (with such reinsurance or co-insurance as the Agent may
require, any such reinsurance to be with direct access endorsements to the
extent available under applicable law) in such amount as the Agent may
require insuring the priority of the Security Deeds and that the Borrower
holds marketable fee simple title to such parcel, subject only to the
encumbrances permitted by the Security Deed and which shall not contain
standard exceptions for mechanics liens, persons in occupancy (other than
tenants as tenants only under Leases) or matters which would be shown by a
survey, shall not insure over any matter except to the extent that any such
affirmative insurance is acceptable to the Agent in its sole discretion, and
shall contain (a) a revolving credit endorsement and (b) such other
endorsements and affirmative insurance as the Agent reasonably may require
and is available in the State in which the Real Estate is located, including
but not limited to (i) a comprehensive endorsement, (ii) a variable rate of
interest endorsement, (iii) a usury endorsement, (iv) a doing business
endorsement, (v) in States where available, an ALTA form 3.1 zoning
endorsement, (vi) a "tie-in" endorsement, and (vii) a "first loss"
endorsement.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Type. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
Under Development. Any Real Estate shall be considered under
development until such time as (a) a certificate of occupancy has been
obtained, (b) seventy-five percent (75%) of the net leasable area is leased
and occupied, and (c) the gross revenue from the operation of such Real
Estate shall have been not less than the operating costs (including amounts
properly allocable to such period for expenses which are not payable on a
regular basis during such period, such as taxes and insurance) for three (3)
consecutive months.
Voting Interests. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled,
as such holders, (a) to vote for the election of a majority of the directors
(or persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control,
manage, or conduct the business of the corporation, partnership, association,
trust or other business entity involved.
Wellsford Commercial. Wellsford Commercial Properties Trust, a Maryland
real estate investment trust.
Wellsford Real Properties. Wellsford Real Properties, Inc., a Maryland
corporation.
WHWEL. WHWEL Real Estate Limited Partnership, a Delaware limited
partnership.
WWP. Wellsford/Whitehall Properties II, L.L.C., a Delaware limited
liability company.
WWP Member Indemnity Agreement. The Indemnity Agreement by Wellsford
Real Properties, Whitehall Street Real Estate Limited Partnership V,
Whitehall Street Real Estate Limited Partnership VI, Whitehall Street Real
Estate Limited Partnership VII and Whitehall Street Real Estate Limited
Partnership VIII in favor of the Agent and the Banks, as the same may be
modified or amended.
WWP Members. Wellsford Commercial and WHWEL.
Section 1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time
in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied
on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.
(h) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of New York, have the meanings
assigned to them therein.
(i) Reference to a particular "Section ", refers to that section
of this Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
Section 2. THE FACILITY.
Section 2.1. Commitment to Lend. Subject to the terms and conditions
set forth in this Agreement, each of the Banks severally agrees to lend to
the Borrower, and the Borrower may borrow from time to time between the
Closing Date and the Advance Termination Date upon notice by the Borrower to
the Agent given in accordance with Section 2.6, such sums as are requested by
the Borrower for the purposes set forth in Section 7.11 up to the lesser of
(a) a maximum aggregate principal amount outstanding (after giving effect to
all amounts requested) at any one time equal to such Bank's Commitment and
(b) such Bank's Commitment Percentage of the difference of (i) the aggregate
Designated Collateral Value minus (ii) an amount equal to the aggregate
Holdback; provided, that, in all events no Default or Event of Default shall
have occurred and be continuing; and provided, further, that the outstanding
principal amount of the Loans (after giving effect to all amounts requested)
shall not at any time exceed the Total Commitment. The Borrower may repay
and reborrow from time to time between the Closing Date and the Revolving
Credit Termination Date. Notwithstanding anything herein to the contrary, in
no event shall the amount of the Loans advanced for purposes permitted under
this Agreement, other than the purposes contemplated by Section 5.6, exceed
$268,000,000.00, and in no event shall the Borrower be permitted to request
Loans after the Revolving Credit Termination Date except for amounts
requested pursuant to Section 5.6. The Loans shall be made pro rata in
accordance with each Bank's Commitment Percentage. The Loan Request shall
constitute a representation and warranty by the Borrower that all of the
conditions set forth in Section 10 and Section 11, in the case of the initial
Loan, and Section 11, in the case of all other Loans, have been satisfied on
the date of such funding.
Section 2.2. Facility Fee. The Borrower agrees to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages a facility fee calculated at the rate of 0.1875% per annum on the
average daily amount by which the Total Commitment exceeds the outstanding
principal amount of Loans during each calendar quarter or portion thereof
commencing on the date hereof and ending on the Advance Termination Date;
provided, however, that from and after the Revolving Credit Termination Date
and ending on the Advance Termination Date, such fee shall be calculated at
the rate of 0.1875% per annum on the average daily amount by which the Tenant
Improvement Reserve exceeds the outstanding principal amount of Loans
disbursed pursuant to Section 5.6 from the Tenant Improvement Reserve. The
facility fee shall be payable quarterly in arrears on the first day of each
calendar quarter for the immediately preceding calendar quarter or portion
thereof, or on any earlier date on which the Commitments shall be reduced or
shall terminate as provided in Section 2.3, with a final payment on the
Advance Termination Date.
Section 2.3. Reduction of Commitment. The Borrower shall have the
right at any time and from time to time upon five Business Days' prior
written notice to the Agent to reduce by $1,000,000 or an integral multiple
of $1,000,000 in excess thereof or to terminate entirely the unborrowed
portion of the Commitments, whereupon the Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment Percentages
of the amount specified in such notice or, as the case may be, terminated,
any such reduction to be without penalty (unless such reduction requires
repayment of a Eurodollar Rate Loan). Promptly after receiving any notice
of the Borrower delivered pursuant to this Section 2.3, the Agent will notify
the Banks of the substance thereof. Upon the effective date of any such
reduction or termination, the Borrower shall pay to the Agent for the
respective accounts of the Banks the full amount of any facility fee under
Section 2.2 then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated. Notwithstanding the
foregoing, in no event shall the aggregate Commitments be reduced to less
than $200,000,000.00.
Section 2.4. Notes. The Loans shall be evidenced by a single
promissory note of the Borrower to each Bank in substantially the form of
Exhibit A hereto (collectively, the "Notes"), dated as of the Closing Date
and completed with appropriate insertions. Each such Note shall be payable
to the order of each Bank in the principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Loans made by such
Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes the Agent to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at the time of receipt of any
payment of principal thereof, an appropriate notation on the Agent's Record
reflecting the making of such Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Loans set forth on the Agent's
Record shall be prima facie evidence of the principal amount thereof owing
and unpaid to each Bank, but the failure to record, or any error in so
recording, any such amount on the Agent's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Note to make
payments of principal of or interest on any Note when due. By delivery of
the Notes, there shall not be deemed to have occurred, and there has not
otherwise occurred, any payment, satisfaction or novation of the Indebtedness
evidenced by the "Notes" described in the Original Revolving Credit Agreement
or the Indebtedness evidenced by the "Notes" described in the Original Loan
Agreement, which Indebtedness is instead allocated among the Banks as of the
date hereof and evidenced by the Notes and their respective Commitment
Percentages and the Banks shall as of the date hereof make such adjustments
to the outstanding Loans so that such outstanding Loans are consistent with
their respective Commitment Percentages.
Section 2.5. Interest on Loans.
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the date on which
such Base Rate Loan is converted to a Eurodollar Rate Loan at a rate per
annum equal to the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at a rate per annum equal to the sum of
the Eurodollar Rate determined for such Interest Period plus one and sixty-
five one-hundredths percent (1.65%).
(c) The Borrower promises to pay interest on each Loan in arrears
on each Interest Payment Date with respect thereto.
(d) Base Rate Loans and Eurodollar Rate Loans may be converted to
Loans of the other Type as provided in Section 4.1.
Section 2.6. Requests for Loans.
(a) Except with respect to the initial Loan funded at the
Closing Date, the Borrower shall give to the Agent written notice in the form
of Exhibit B hereto (or telephonic notice confirmed in writing in the form of
Exhibit B hereto) of each Loan requested hereunder (a "Loan Request") no less
than five (5) Business Days prior to the proposed Drawdown Date. The
Borrower shall not make a Loan Request more frequently than two (2) times
each month. Each such notice shall specify with respect to the requested
Loan the proposed principal amount, Drawdown Date, Interest Period (if
applicable) and Type. Each such notice shall also contain (i) a statement as
to the purpose for which such advance shall be used (which purpose shall be
in accordance with the terms of Section 5.6 or Section 7.11, as applicable),
(ii) in the case of any advance relating to any Capital Improvement Project
for a Mortgaged Property or a Mezzanine Property, a certification from the
Borrower that all materialmen, laborers, subcontractors and any other parties
who might or could claim statutory or common law liens and are furnishing or
have furnished material or labor to the Mortgaged Property or Mezzanine
Property, as applicable, have been paid (or will be paid from the proceeds of
the requested advance) all amounts due for such labor and materials, and if
requested by the Agent, delivery to the Agent of affidavits, lien waivers or
other evidence reasonably satisfactory to the Agent evidencing the same, and
(iii) a certification by the chief financial or chief accounting officer of
the Borrower that the Borrower and the Guarantor are and will be in
compliance with all of their respective covenants under the Loan Documents
after giving effect to the making of such Loan. With respect to any Loan
proposed to be funded after the initial Loan funded at the Closing Date, the
Borrower shall have complied with all requirements set forth in Section 5.4
and the Majority Banks shall have granted their consent to and accepted the
additional Collateral for such Loan in accordance with the terms and
conditions of Section 5.4.
(b) Promptly upon receipt of any such notice, the Agent shall
notify each of the Banks thereof. Except as provided in this Section 2.6,
each such Loan Request shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept the Loan requested from the Banks on
the proposed Drawdown Date, provided that, in addition to the Borrower's
other remedies against any Bank which fails to advance its proportionate
share of a requested Loan, such Loan Request may be revoked by the Borrower
by notice received by the Agent no later than the Drawdown Date if any Bank
fails to advance its proportionate share of the requested Loan in accordance
with the terms of this Agreement, provided further that the Borrower shall be
liable in accordance with the terms of this Agreement (including, without
limitation, amounts due pursuant to Section 4.8) to any Bank which is
prepared to advance its proportionate share of the requested Loan for any
costs, expenses or damages incurred by such Bank as a result of the
Borrower's election to revoke such Loan Request. Nothing herein shall
prevent the Borrower or the funding Banks from seeking recourse against any
Bank that fails to advance its proportionate share of a requested Loan (but
not any other Bank) as required by this Agreement for the actual and
consequential damages incurred by the Borrower (including, without
limitation, amounts required to be paid under this Agreement by the Borrower
to any Bank) and such funding Banks proximately caused by such Bank that has
failed to advance its proportionate share, provided that in no event shall
such Bank be liable for punitive or exemplary damages. The Borrower may
without cost or penalty revoke a Loan Request by delivering notice thereof to
each of the Banks no later than three (3) Business Days prior to the Drawdown
Date. Each Loan Request shall be (a) for a Base Rate Loan in a minimum
aggregate amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof, or (b) for a Eurodollar Rate Loan in a minimum aggregate amount of
$2,000,000 or an integral multiple of $100,000 in excess thereof; provided,
however, that there shall be no more than five (5) Eurodollar Rate Loans
outstanding at any one time. In the event that the proceeds from such Loan
are to be used for a purpose other than a Capital Improvement Project, then
the Borrower shall provide to the Agent as soon as practicable thereafter
such evidence as the Agent shall reasonably require to evidence that such
funds have been used for such purpose (which evidence may include, without
limitation, a closing statement).
Section 2.7. Funds for Loans.
(a) Not later than 2:00 p.m. (Boston time) on the proposed
Drawdown Date of any Loans, each of the Banks will make available to the
Agent, at the Agent's Head Office, in immediately available funds, the amount
of such Bank's Commitment Percentage of the amount of the requested Loans
which may be disbursed pursuant to Section 2.1. Upon receipt from each Bank
of such amount, and upon receipt of the documents required by Section 10 and
Section 11 and the satisfaction of the other conditions set forth therein, to
the extent applicable, the Agent will make available to the Borrower the
aggregate amount of such Loans made available to the Agent by the Banks by
crediting such amount to the account of the Borrower maintained at the
Agent's Head Office. The failure or refusal of any Bank to make available to
the Agent at the aforesaid time and place on any Drawdown Date the amount of
its Commitment Percentage of the requested Loans shall not relieve any other
Bank from its several obligation hereunder to make available to the Agent the
amount of such other Bank's Commitment Percentage of any requested Loans,
including any additional Loans that may be requested subject to the terms and
conditions hereof to provide funds to replace those not advanced by the Bank
so failing or refusing, provided that the Borrower may by notice received by
the Agent no later than the Drawdown Date refuse to accept any Loan which is
not fully funded in accordance with the Borrower's Loan Request subject to
the terms of Section 2.6. In the event of any such failure or refusal, the
Banks not so failing or refusing shall be entitled to a priority secured
position as against the Bank or Banks so failing or refusing for such Loans
as provided in Section 12.4.
(b) Unless Agent shall have been notified by any Bank prior to the
applicable Drawdown Date that such Bank will not make available to Agent such
Bank's pro rata share of a proposed Loan, Agent may in its discretion assume
that such Bank has made such Loan available to Agent in accordance with the
provisions of this Agreement and Agent may, if it chooses, in reliance upon
such assumption make such Loan available to Borrower, and such Bank shall be
liable to the Agent for the amount of such advance.
Section 2.8. Extension of Maturity Date.
(a) Provided that no Default or Event of Default shall have
occurred and be continuing, the Borrower shall have the option, to be
exercised by giving written notice to the Agent in the form of Exhibit D
hereto at least 90 days prior to the Maturity Date, subject to the terms and
conditions set forth in this Agreement, to extend the Maturity Date by one
(1) year. The request by the Borrower for extension of the Maturity Date
shall constitute a representation and warranty by the Borrower that all of
the conditions set forth in this Section shall have been satisfied on the
date of such request or shall be satisfied prior to the then existing
Maturity Date.
(b) The obligations of the Agent and the Banks to extend the
Maturity Date shall be subject to the satisfaction of the following
conditions precedent on or prior to the Maturity Date (without regard to any
extension):
(i) Payment of Extension Fee. The Borrower shall pay to the
Agent for the pro rata accounts of the Banks in accordance with their
respective Commitment Percentages an extension fee equal to fifteen-
hundredths of one percent (0.15%) of the Total Commitment, which fee
shall, when paid, be fully earned and non-refundable under any
circumstances.
(ii) No Default. On the date the Extension Request is given
and on the Maturity Date (as determined without regard to such
extension) there shall exist no Default or Event of Default.
(iii) Representations and Warranties. The representations
and warranties made by the Borrower, any of its Subsidiaries, the
Guarantor, the Manager, the Member or the Property Owner in the Loan
Documents or otherwise made by or on behalf of such Persons in
connection therewith or after the date thereof shall have been true and
correct in all material respects when made and (other than
representations as to the Guarantor) shall also be true and correct in
all material respects on the Maturity Date (as determined without regard
to such extension) other than for changes in the ordinary course of
business permitted by this Agreement that have not had any materially
adverse affect on the business of any of such Persons.
(iv) Appraisals. The Agent shall have received at Borrower's
expense Appraisals or updates of prior Appraisals to determine the
current Appraised Value and Designated Collateral Value of the Mortgaged
Property and the Mezzanine Property, which Appraisals shall be ordered,
reviewed and approved as provided in Section 5.2(a). The aggregate
outstanding principal amount of the Loans shall be reduced to an amount
such that the aggregate outstanding principal amount of the Loans does
not exceed the Designated Collateral Value (as most recently determined
based upon the Appraisals obtained pursuant to this Section 2.8).
Section 2.9. Termination of Advances. Notwithstanding anything in this
Agreement to the contrary, the Borrower shall have no right to obtain from
the Banks, and the Banks shall have no obligation to lend to Borrower, any
additional sums under this Agreement after the Advance Termination Date.
Section 3. REPAYMENT OF THE LOANS.
Section 3.1. Stated Maturity. The Borrower promises to pay on the
Maturity Date, and there shall become absolutely due and payable on the
Maturity Date, all of the Loans outstanding on such date, together with any
and all accrued and unpaid interest thereon.
Section 3.2. Mandatory Prepayments.
(a) Except with the prior written approval of the Majority Banks,
which approval may be withheld in the sole and absolute discretion of the
Majority Banks, if at any time the outstanding principal amount of the
Mezzanine Mortgage Loan is prepaid in full, whether voluntarily,
involuntarily or as the result of an acceleration of the maturity date
thereof, all of the outstanding Obligations together with any and all accrued
but unpaid interest thereon and prepayment fees shall become absolutely due
and payable. For the purposes hereof, and without limiting the generality of
the foregoing, the Mezzanine Mortgage Loan shall be deemed to have been
prepaid in the event that (i) a Nomura Mortgage or the Nomura Mortgages are
assigned by the holder thereof to a new holder for the purpose of
facilitating a refinance of the indebtedness secured thereby or (ii) the
Property Owner defeases the Mezzanine Mortgage Loan as permitted by Section
2.3.3 of the Mezzanine Mortgage Loan Agreement.
(b) If at any time there shall occur, whether voluntarily,
involuntarily or by operation of law, a sale, transfer, assignment,
conveyance, option or other disposition of, or any mortgage, hypothecation,
encumbrance, financing or refinancing of (i) any assets or properties of the
Property Owner, except for the Mezzanine Mortgage Loan and releases of the
Mezzanine Property in accordance with the terms of this Agreement, and except
as provided in Section 7.23(a) with respect to the replacement of fixtures,
equipment, machinery and other personal property by the Property Owner in
connection with the operation of the Mezzanine Property in the ordinary
course of business, (ii) any of the Mezzanine Collateral, (iii) any other
assets or properties of the Manager or the Member, (iv) any direct or
indirect interest of either Borrower, the Manager or the Member in the
Property Owner, (v) any direct or indirect interest of the Member in the
Manager, or (vi) any direct or indirect interest of Borrower in the Member,
all of the Obligations outstanding on such date, together with any and all
accrued but unpaid interest thereon and prepayment fees, shall become
absolutely due and payable. A pledge or transfer by WWP of its interest in
the Borrower to the Secured Mezzanine Loan Agreement Lenders shall not cause
a mandatory prepayment under this Section 3.2(b).
Section 3.3. Optional Prepayments. The Borrower shall not have the
right at any time prior to December 15, 1998 to prepay the Loans, as a whole
or in part. At any time after December 15, 1998, the Borrower shall have the
right, at the Borrower's election, to prepay the outstanding amount of the
Loans, as a whole or in part, at any time without penalty or premium;
provided, that the full or partial prepayment of the outstanding amount of
any Eurodollar Rate Loans pursuant to this Section 3.3 may be made only on
the last day of the Interest Period relating thereto except as otherwise
required pursuant to Section 4.7 unless payment is first made of any amounts
payable pursuant to Section 4.8. The Borrower shall give the Agent, no later
than 10:00 a.m., Boston time, at least three (3) Business Days prior written
notice of any prepayment pursuant to this Section 3.3 of any Base Rate Loans
and at least four Eurodollar Business Days notice of any proposed repayment
pursuant to this Section 3.3 of Eurodollar Rate Loans, in each case
specifying the proposed date of payment of Loans and the principal amount to
be paid.
Section 3.4. Partial Prepayments. Each partial prepayment of the Loans
under Section 3.3 shall be in an integral multiple of $100,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to
the date of payment and, after payment of such interest, shall be applied, in
the absence of instruction by the Borrower, first to the principal of Base
Rate Loans and then to the principal of Eurodollar Rate Loans.
Section 3.5. Effect of Prepayments. Amounts of the Loans prepaid under
Section 3.3 prior to the Revolving Credit Termination Date may be reborrowed
as provided in Section 2. Notwithstanding anything herein to the contrary,
amounts of the Loans prepaid after the Revolving Credit Termination Date may
not be reborrowed.
Section 4. CERTAIN GENERAL PROVISIONS.
Section 4.1. Conversion Options.
(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type and such Loan shall thereafter
bear interest as a Base Rate Loan or a Eurodollar Rate Loan, as applicable;
provided that (i) with respect to any such conversion of a Eurodollar Rate
Loan to a Base Rate Loan, the Borrower shall give the Agent at least three
Business Days' prior written notice of such election, and such conversion
shall only be made on the last day of the Interest Period with respect to
such Eurodollar Rate Loan; (ii) with respect to any such conversion of a Base
Rate Loan to a Eurodollar Rate Loan, the Borrower shall give the Agent at
least four Eurodollar Business Days' prior written notice of such election
and the Interest Period requested for such Loan, the principal amount of the
Loan so converted shall be in a minimum aggregate amount of $2,000,000 or an
integral multiple of $100,000 in excess thereof and, after giving effect to
the making of such Loan, there shall be no more than five (5) Eurodollar Rate
Loans outstanding at any one time; and (iii) no Loan may be converted into a
Eurodollar Rate Loan when any Default or Event of Default has occurred and is
continuing. All or any part of the outstanding Loans of any Type may be
converted as provided herein, provided that no partial conversion shall
result in a Base Rate Loan in an aggregate principal amount of less than
$1,000,000 or a Eurodollar Rate Loan in an aggregate principal amount of less
than $2,000,000 and that the aggregate principal amount of each Loan shall be
in an integral multiple of $100,000. On the date on which such conversion is
being made, each Bank shall take such action as is necessary to transfer its
Commitment Percentage of such Loans to its Domestic Lending Office or its
Eurodollar Lending Office, as the case may be. Each Conversion Request
relating to the conversion of a Base Rate Loan to a Eurodollar Rate Loan
shall be irrevocable by the Borrower.
(b) Any Loan may be continued as such Type upon the expiration of
an Interest Period with respect thereto by compliance by the Borrower with
the terms of Section 4.1; provided that no Eurodollar Rate Loan may be
continued as such when any Default of the type described in subsections (a),
(b), (c) or (d) of Section 12.1 or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the Interest Period relating thereto ending during the
continuance of any Default or Event of Default.
(c) In the event that the Borrower does not notify the Agent of
its election hereunder with respect to any Loan, such Loan shall be
automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.
Section 4.2. Closing Fee. The Borrower has paid to BKB and Goldman a
closing fee as specified in the Agreement Regarding Fees. BKB and Goldman
shall pay on the Closing Date to the other Banks a closing fee in accordance
with their separate agreement.
Section 4.3. Agent's Fee. The Borrower shall pay to the Agent, for the
Agent's own account, an Agent's fee as specified in the Agreement Regarding
Fees.
Section 4.4. Funds for Payments.
(a) All payments of principal, interest, facility fees, Agent's
fees, closing fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made to the Agent, for the respective accounts
of the Banks and the Agent, as the case may be, at the Agent's Head Office,
not later than 12:00 noon (Boston time) on the day when due, in each case in
immediately available funds. The Agent is hereby authorized to charge the
account of the Borrower with BKB, on the dates when the amount thereof shall
become due and payable, with the amounts of the principal of and interest on
the Loans and all fees, charges, expenses and other amounts owing to the
Agent and/or the Banks under the Loan Documents.
(b) All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of
the other Loan Documents, the Borrower will pay to the Agent, for the account
of the Banks or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the Agent would have
received on such due date had no such obligation been imposed upon the
Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under such other
Loan Document.
Section 4.5. Computations. All computations of interest on the Loans
and of other fees to the extent applicable shall be based on a 360-day year
and paid for the actual number of days elapsed. Except as otherwise provided
in the definition of the term "Interest Period" with respect to Eurodollar
Rate Loans, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension. The outstanding amount of the
Loans as reflected on the records of the Agent from time to time shall be
considered prima facie evidence of such amount.
Section 4.6. Inability to Determine Eurodollar Rate. In the event
that, prior to the commencement of any Interest Period relating to any
Eurodollar Rate Loan, the Agent shall determine that adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate for such Interest
Period, the Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower and the Banks) to the
Borrower and the Banks. In such event (a) any Loan Request with respect to
Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans and (b) each Eurodollar Rate Loan will
automatically, on the last day of the then current Interest Period thereof,
become a Base Rate Loan, and the obligations of the Banks to make Eurodollar
Rate Loans shall be suspended until the Agent determines that the
circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.
Section 4.7. Illegality. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful, or any central
bank or other governmental authority having jurisdiction over a Bank or its
Eurodollar Lending Office shall assert that it is unlawful, for any Bank to
make or maintain Eurodollar Rate Loans, such Bank shall forthwith give notice
of such circumstances to the Agent and the Borrower and thereupon (a) the
commitment of the Banks to make Eurodollar Rate Loans or convert Loans of
another type to Eurodollar Rate Loans shall forthwith be suspended and (b)
the Eurodollar Rate Loans then outstanding shall be converted automatically
to Base Rate Loans on the last day of each Interest Period applicable to such
Eurodollar Rate Loans or within such earlier period as may be required by
law.
Section 4.8. Additional Interest. If any Eurodollar Rate Loan or any
portion thereof is repaid or is converted to a Base Rate Loan for any reason
on a date which is prior to the last day of the Interest Period applicable to
such Eurodollar Rate Loan, the Borrower will pay to the Agent upon demand for
the account of the Banks in accordance with their respective Commitment
Percentages, in addition to any amounts of interest otherwise payable
hereunder, any amounts required to compensate the Banks for any losses, costs
or expenses which may reasonably be incurred as a result of such payment or
conversion, including, without limitation, an amount equal to daily interest
for the unexpired portion of such Interest Period on the Eurodollar Rate Loan
or portion thereof so repaid or converted at a per annum rate equal to the
excess, if any, of (a) the interest rate calculated on the basis of the
Eurodollar Rate applicable to such Eurodollar Rate Loan minus (b) the yield
obtainable by the Agent upon the purchase of debt securities customarily
issued by the Treasury of the United States of America which have a maturity
date most closely approximating the last day of such Interest Period (it
being understood that the purchase of such securities shall not be required
in order for such amounts to be payable and that a Bank shall not be
obligated or required to have actually obtained funds at the Eurodollar
Rate).
Section 4.9. Additional Costs, Etc. Notwithstanding anything herein to
the contrary, if any future applicable law or any amendment or modification
of present applicable law which expression, as used herein, includes
statutes, rules and regulations thereunder and legally binding
interpretations thereof by any competent court or by any governmental or
other regulatory body or official with appropriate jurisdiction charged with
the administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank or the Agent by any central bank or other
fiscal, monetary or other authority (whether or not having the force of law),
shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment or the Loans
(other than taxes based upon or measured by the income or profits of such
Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank under this
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by,
or deposits in or for the account of, or loans by, or commitments of an
office of any Bank beyond those in effect as of the date hereof, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Bank's Commitment, or any class of loans or commitments of which
any of the Loans or such Bank's Commitment forms a part; and the result of
any of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such
Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such
Bank's Commitment or any of the Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is calculated
by reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, within fifteen (15) days of
demand made by such Bank or (as the case may be) the Agent at any time and
from time to time and as often as the occasion therefor may arise, pay to
such Bank or the Agent such additional amounts as such Bank or the Agent
shall determine in good faith to be sufficient to compensate such Bank or the
Agent for such additional cost, reduction, payment or foregone interest or
other sum. Each Bank and the Agent in determining such amounts may use any
reasonable averaging and attribution methods, generally applied by such Bank
or the Agent.
Section 4.10. Capital Adequacy. If after the date hereof any Bank
determines that (a) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements of general application for banks or
bank holding companies or any change in the interpretation or application
thereof by any governmental authority charged with the administration
thereof, or (b) compliance by such Bank or its parent bank holding company
with any future guideline, request or directive of any such entity regarding
capital adequacy or any amendment or change in interpretation of any existing
guideline, request or directive (whether or not having the force of law), has
the effect of reducing the return on such Bank's or such holding company's
capital as a consequence of such Bank's commitment to make Loans hereunder to
a level below that which such Bank or holding company could have achieved but
for such adoption, change or compliance (taking into consideration such
Bank's or such holding company's then existing policies with respect to
capital adequacy and assuming the full utilization of such entity's capital)
by any amount deemed by such Bank to be material, then such Bank may notify
the Borrower thereof. The Borrower agrees to pay to such Bank the amount of
such reduction in the return on capital as and when such reduction is
determined, upon presentation by such Bank of a statement of the amount
setting for the Bank's calculation thereof. In determining such amount, such
Bank may use any reasonable averaging and attribution methods, generally
applied by such Bank or the Agent.
Section 4.11. Indemnity of Borrower. The Borrower agrees to indemnify
each Bank and to hold each Bank harmless from and against any loss, cost or
expense that such Bank may sustain or incur as a consequence of (a) default
by the Borrower in payment of the principal amount of or any interest on any
Eurodollar Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, or (b)
default by the Borrower in making a borrowing or conversion after the
Borrower has given (or is deemed to have given) a Loan Request or a
Conversion Request; provided, however, that the Borrower shall not be
required to so indemnify any Bank pursuant to clause (b) above which fails or
refuses to fund its proportionate share of a Loan in accordance with the
terms of this Agreement.
Section 4.12. Interest on Overdue Amounts; Late Charge. Overdue
principal and (to the extent permitted by applicable law) interest on the
Loans and all other overdue amounts payable hereunder or under any of the
other Loan Documents shall bear interest payable on demand at a rate per
annum equal to four percent (4.0%) above the Base Rate from the date due
until such amount shall be paid in full (after as well as before judgment).
In addition, the Borrower shall pay a late charge equal to three percent
(3.0%) of any amount of interest and/or principal payable on the Loans or any
other amounts payable hereunder or under the Loan Documents, which is not
paid within ten days of the date when due.
Section 4.13. Intentionally Omitted.
Section 4.14. Certificate. A certificate setting forth any amounts
payable pursuant to Section 4.8, Section 4.9, Section 4.10, Section 4.11 or
Section 4.12 and a brief explanation of such amounts which are due, submitted
by any Bank or the Agent to the Borrower, shall be conclusive in the absence
of manifest error.
Section 4.15. Limitation on Interest. Notwithstanding anything in this
Agreement to the contrary, all agreements between the Borrower and the Banks
and the Agent, whether now existing or hereafter arising and whether written
or oral, are hereby limited so that in no contingency, whether by reason of
acceleration of the maturity of any of the Obligations or otherwise, shall
the interest contracted for, charged or received by the Banks exceed the
maximum amount permissible under applicable law. If, from any circumstance
whatsoever, interest would otherwise be payable to the Banks in excess of the
maximum lawful amount, the interest payable to the Banks shall be reduced to
the maximum amount permitted under applicable law; and if from any
circumstance the Banks shall ever receive anything of value deemed interest
by applicable law in excess of the maximum lawful amount, an amount equal to
any excessive interest shall be applied to the reduction of the principal
balance of the Obligations and to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal of the
Obligations, such excess shall be refunded to the Borrower. All interest
paid or agreed to be paid to the Banks shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full period until payment in full of the principal of the Obligations
(including the period of any renewal or extension thereof) so that the
interest thereon for such full period shall not exceed the maximum amount
permitted by applicable law. This section shall control all agreements
between the Borrower and the Banks and the Agent.
Section 4.16. Certain Provisions Relating to Increased Costs. If any
Bank requests compensation for any losses or costs to be reimbursed pursuant
to any one or more of the provisions of Section 4.9 or Section 4.10, then,
upon request of Borrower, such Bank shall use reasonable efforts in a manner
consistent with such institution's practice in connection with loans like the
Loan to eliminate, mitigate or reduce amounts that would otherwise be payable
by Borrower under the foregoing provisions, provided that such action would
not be otherwise prejudicial to such Bank, including, without limitation, by
designating another of such Bank's offices, branches or affiliates; the
Borrower agreeing to pay all reasonably incurred costs and expenses incurred
by such Bank in connection with any such action. Notwithstanding anything to
the contrary contained herein, if no Default or Event of Default shall have
occurred and be continuing, and if any Bank has requested payment or
compensation for any losses or costs to be reimbursed pursuant to any one or
more of the provisions of Section 4.9 or Section 4.10 (each, an "Affected
Bank"), then, within thirty (30) days after such request for payment or
compensation, Borrower shall have the one-time right as to such Affected
Bank, to be exercised by delivery of written notice delivered to the Agent
and the Affected Bank within thirty (30) days of receipt of such notice, to
elect to cause the Affected Bank to transfer its Commitment. The Agent shall
promptly notify the remaining Banks that each of such Banks shall have the
right, but not the obligation, to acquire a portion of the Commitment, pro
rata based upon their relevant Commitment Percentages, of the Commitment of
the Affected Bank (or if any of such Banks does not elect to purchase its pro
rata share, then to such remaining Banks in such proportion as approved by
the Agent). In the event that the Banks do not elect to acquire all of the
Affected Bank's Commitment, then the Agent shall endeavor to obtain a new
Bank to acquire such remaining Commitment. Upon any such purchase of the
Commitment of the Affected Bank, the Affected Bank's interest in the
Obligations and its rights hereunder and under the Loan Documents shall
terminate at the date of purchase, and the Affected Bank shall promptly
execute all documents reasonably requested to surrender and transfer such
interest. The purchase price for the Affected Bank's Commitment shall equal
any and all amounts outstanding and owed by Borrower to the Affected Bank,
including principal and all accrued and unpaid interest or fees.
Section 5. COLLATERAL SECURITY.
Section 5.1. Collateral. The Obligations shall be secured by (i) a
perfected first priority lien or security title to be held by the Agent for
the benefit of the Banks in the Mortgaged Property pursuant to the terms of
the Security Deeds, (ii) a perfected first priority security interest to be
held by the Agent for the benefit of the Banks in the Leases for the
Mortgaged Property pursuant to the Assignments of Rents and Leases, (iii) the
Indemnity Agreement, (iv) a perfected first priority security interest to be
held by the Agent for the benefit of the Banks in the Equity Interests
pursuant to the terms of the Assignment of Interests, (v) a perfected first
priority lien to be held by the Agent for the benefit of the Banks in cash
and Short-term Investments of the Borrower from time to time pledged to the
Agent pursuant to one or more Pledge Agreements, (vi) a perfected first
priority security interest to be held by the Agent for the benefit of the
Banks in the collateral described in the Cash Collateral Agreement, and (vii)
such additional collateral, if any , as the Agent may from time to time
accept as security for the Obligations with the consent of the Majority
Banks, which consent may be given or withheld in the sole discretion of the
Majority Banks. The Obligations shall also be guaranteed pursuant to the
Guaranty.
Section 5.2. Appraisals.
(a) The Agent on behalf of the Banks shall require Appraisals of
each of the Mortgaged Property and the Mezzanine Property in the event that
the Borrower exercises its extension option pursuant to Section 2.8, which
will be ordered by the Agent and reviewed and approved by the appraisal
departments of the Majority Banks, in order to determine the current
Appraised Value of the Mortgaged Property and the Mezzanine Property, and the
Borrower shall pay to the Agent on demand all reasonable costs of all such
Appraisals; provided, however, that so long as no Default or Event of Default
shall have occurred and be continuing and regulatory requirements of any Bank
generally applicable to real estate loans of the category made under this
Agreement as reasonably interpreted by such Bank shall not require more
frequent Appraisals, and except as required with respect to the addition of
Eligible Real Estate as a Mortgaged Property under Section 5.4, the Borrower
shall not be required to pay for an Appraisal of a particular Mortgaged
Property or Mezzanine Property except in connection with such extension
request.
(b) Notwithstanding the provisions of Section 5.2(a), the Agent
may obtain Appraisals or perform internal studies updating and revising prior
Appraisals with respect to the Mortgaged Property and the Mezzanine Property
or such portion thereof as the Majority Banks shall determine, for the
purpose of determining the current Appraised Value of the Mortgaged Property
and the Mezzanine Property at any time following a partial condemnation of or
uninsured casualty to a Mortgaged Property or a Mezzanine Property (provided
that such Appraisal shall be limited to the affected property). The expense
of such Appraisals and updates performed pursuant to this Section 5.2(b)
shall be borne by the Borrower.
Section 5.3. Release of Collateral.
(a) Provided no Default or Event of Default shall have occurred
hereunder and be continuing (or would exist immediately after giving effect
to the transactions contemplated by this Section 5.3), the Agent shall
release a Mortgaged Property or other Collateral from the lien of the
Security Documents encumbering the same upon the request of the Borrower and
upon the following terms and conditions (provided that a release of a
Mezzanine Property shall be governed by the provisions of Section 5.3(b)):
(i) The Borrower shall deliver to the Agent written notice of
its desire to obtain each such release no later than fifteen (15) days
prior to the date on which each such release is to be effected together
with evidence satisfactory to the Agent that such release is to
facilitate a sale of such Mortgaged Property or other Collateral to an
unrelated third party in a bona-fide arms-length transaction for a cash
sales price; and
(ii) The Borrower shall submit to the Agent with such request
a Compliance Certificate prepared using the financial statements of the
Borrower most recently provided or required to be provided to the Agent
under Section 6.4 or Section 7.4 adjusted in the best good faith
estimate of the Borrower to give effect to the proposed release and
demonstrating that no Default or Event of Default with respect to the
covenants referred to therein shall exist after giving effect to such
release; and
(iii) The Borrower shall pay all reasonable costs and
expenses of the Agent in connection with such release, including without
limitation, reasonable attorney's fees and disbursements; and
(iv) The Borrower shall pay to the Agent for the account of
the Banks, which payment shall be applied to reduce the outstanding
principal balance of the Loans, a release price equal to one hundred
twenty percent (120%) of the Designated Collateral Value of such
Collateral. In the event of a release pursuant hereto, the amount
available to be borrowed against the Collateral remaining after such
release shall be reduced by an amount equal to twenty percent (20%) of
the Designated Collateral Value of the Collateral so released without
reducing the Designated Collateral Value of the remaining Mortgaged
Properties or other Collateral for purposes of calculating release
prices. Notwithstanding the foregoing, (A) the vacant land described on
Schedule 5.3(a) hereto
comprising part of the Mortgaged Property commonly known as Point View
and (B) the farm house improvements at the Mortgaged Property commonly
known as 180/188 Mt. Airy Road subject to the purchase option contained
in Paragraph 33 of that certain Agreement between Fidelity Union Bank,
as ancillary trustee for Mellon Bank, N.A., as trustee for Westinghouse
Master Trust Fund, as landlord, and Mt. Airy Associates/ Management, as
tenant, dated November 8, 1982, shall be released upon the payment to
the Agent for the account of the Banks an amount (without premium) equal
to eighty percent (80%) of the gross sales proceeds less reasonable and
customary closing costs from such sale, the Mortgaged Property commonly
known as 74 Turner Street shall be released upon the payment to the
Agent for the account of the Banks an amount (without premium) equal to
twenty-four percent (24%) of the gross sales proceeds less reasonable
and customary closing costs from such sale (the "74 Turner Release
Price"), and the vacant land described on Schedule 5.3(b) hereto
comprising part of the Mortgaged Property commonly known as Greenbrook
Corporate Center shall be released upon the payment to the Agent for the
account of the Banks an amount (without premium) equal to the amount
allocated to such vacant land in the Appraisal of such Mortgaged
Property (as most recently determined pursuant to this Agreement) upon
the sale of such land to an unrelated third party, provided that the
Borrower shall submit to the Agent with the request for the release of
the Point View and Greenbrook Corporate Center land, 74 Turner Street or
such improvements at Mt. Airy (A) a survey satisfactory to Agent showing
such land that Borrower desires to release from the Security Documents
and such other evidence as Agent may reasonably require to show the
availability of unrestricted (whether by private agreement or
governmental provision) direct access to public roads and utilities from
all unreleased portions of such Mortgaged Property, (B) a certification
from Borrower that the conveyance by Borrower of such land which is
requested to be released will not violate the terms of any lease,
agreement, ordinance or restriction by which such Mortgaged Property is
subject (and, with respect to the release of 74 Turner Street, any
lease, agreement, ordinance or restriction by which the Mezzanine
Property commonly known as 128 Technology Center is subject) and, with
respect to the release of 74 Turner Street, a certification from an
appropriate licensed professional that the Mezzanine Property commonly
known as 128 Technology Center satisfies all zoning requirements
applicable thereto, including without limitation, parking requirements
without utilization of 74 Turner Street, and (C) evidence of the proper
subdivision of the property to be released. Such payments shall be
applied to reduce the outstanding principal balance of the Loans;
provided, that the Borrower shall not be required to make a payment
which would reduce the principal balance below zero. Upon the release
of 74 Turner Street, the Designated Collateral Value for the Mezzanine
Property commonly known as 128 Technology Center shall be reduced by the
amount of the 74 Turner Release Price.
(b) Provided no Default or Event of Default shall have occurred
hereunder or the other Loan Documents and be continuing (or would exist
immediately after giving effect to the transactions contemplated by this
Section 5.3), the Property Owner may from time to time release a Mezzanine
Property from the lien of the Nomura Mortgage encumbering the same, and
thereafter (or concurrently) sell, transfer or otherwise convey such
Mezzanine Property to a third party, without thereby requiring the prepayment
of the outstanding Obligations as provided in Section 3.2 upon the request of
the Borrower and upon the following terms and conditions:
(i) The Borrower shall deliver to the Agent written notice of
Property Owner's desire to obtain each such release no later than
fifteen (15) days prior to the date on which each such release is to be
effected together with evidence satisfactory to the Agent that such
release is to facilitate a sale of such Mezzanine Property to an
unrelated third party in a bona-fide arms-length transaction for a cash
sales price or a bona-fide refinance and that such release is in
compliance with the requirements of the Mezzanine Mortgage Loan
Documents (or has otherwise been consented to by the Mezzanine
Mortgagee); and
(ii) The Borrower shall submit to the Agent with such request
a Compliance Certificate prepared using the financial statements of the
Borrower most recently provided or required to be provided to the Agent
under Section 6.4 or Section 7.4 adjusted in the best good faith
estimate of the Borrower to give effect to the proposed release and
demonstrating that no Default or Event of Default with respect to the
covenants referred to therein shall exist after giving effect to such
release; and
(iii) The Borrower shall pay all reasonable costs and
expenses of the Agent in connection with such release, including without
limitation, reasonable attorney's fees and disbursements; and
(iv) The Borrower shall pay to the Agent for the account of
the Banks, which payment shall be applied to reduce the outstanding
principal balance of the Loans, a release price for such property as set
forth on Schedule 6.4. In the event of a release pursuant hereto, the
amount available to be borrowed against the collateral remaining for the
Loans after such release shall be reduced by an amount equal to twenty
percent (20%) of the Designated Collateral Value of the Collateral so
released without reducing the Designated Collateral Value of such
remaining collateral for the purposes of calculating release prices or
the release prices set forth on Schedule 6.4; provided that upon a
release of the Mezzanine Property commonly known as 201 University, the
amount available to be borrowed against the balance of the Mezzanine
Collateral remaining for the Loan shall be reduced by the sum of
$48,465.00, provided further that such reduction shall not reduce the
release prices set forth on Schedule 6.4. Such payments shall be
applied to reduce the outstanding principal balance of the Loans;
provided, that the Borrower shall not be required to make a payment
which would reduce the principal balance below zero; and
(b) No release of a Mortgaged Property from the lien of the
Security Documents encumbering the same or the release of any other
Collateral or Mezzanine Property shall be granted by Lender prior to December
15, 1998, unless the release payment applicable thereto pursuant to Section
5.3(a) or Section 5.3(b) hereinabove shall be deposited into an account of
the Agent or other cash collateral vehicle acceptable to Agent in its sole
discretion, which shall be pledged to the Agent, pursuant to documentation
acceptable to Agent in its sole discretion, for the account of the Banks as
security for the Obligations and which shall not be applied against or reduce
the Outstanding Loans, unless the Agent shall otherwise so elect in its sole
discretion.
Section 5.4. Additional Collateral.
(a) The Borrower shall have the right subject to the terms hereof
to add to the Collateral any other Real Estate that is owned by the Borrower
and which is not security for any other Indebtedness. Such addition shall be
completed by the execution and delivery to the Agent of each of the Eligible
Real Estate Qualification Documents. Notwithstanding the foregoing, the
addition of such Collateral shall not increase the Designated Collateral
Value or the amounts available to be borrowed by the Borrower unless each of
the following conditions shall be satisfied:
(i) if such proposed collateral is Real Estate, such Real
Estate shall be Eligible Real Estate;
(ii) no Default or Event of Default shall have occurred or
exist or would occur or exist if such asset were included within the
Collateral and the requested Loan fully funded, including, without
limitation, under Section 9.1;
(iii) the Borrower shall have executed and delivered to
the Agent all Eligible Real Estate Qualification Documents or other
instruments, documents, or agreements, including Uniform Commercial Code
financing statements, as the Agent shall deem necessary or desirable to
perfect a first priority security interest in, or lien on, such
Collateral, all of which instruments, documents or agreements shall be
in form and substance satisfactory to the Agent in its sole discretion;
and
(iv) the Agent, on behalf of the Banks, shall have received
any other appraisals, surveys, rent rolls, environmental reports, title
insurance reports, certificates, opinions or other information or
documentation with respect to the Collateral as the Agent, in its sole
discretion, shall deem necessary or desirable.
The Borrower acknowledges that the decision of the Majority Banks to
grant or withhold their consent to the acceptance of additional Collateral
under this Section 5.4 shall be based entirely on such factors as the
Majority Banks deem relevant in their sole discretion, including, without
limitation, those enumerated in clauses (i) through (iv) hereinabove, and
such consent may be granted or withheld solely at the discretion of the
Majority Banks; provided, however, that if the such Real Estate is a
Stabilized Property, acceptance of such Real Estate shall be subject only to
the satisfaction of the terms of Section 5.4(a)(ii), (iii) and (iv).
(b) In connection with each such addition, the Borrower shall pay
to the Agent the reasonable out-of-pocket costs and expenses (including
reasonable attorney's fees and expenses) of the Agent in connection with the
addition of such Collateral.
(c) In no event shall the acquisition cost of any Mortgaged
Property or the Equity Interests exceed $40,000,000.00.
Section 5.5. Holdback. The Banks have required that Borrower reserve
from the amounts available to be borrowed under this Agreement an amount
necessary to cover (a) eighty percent (80%) of the corporate general and
administrative costs of the Borrower, and (b) eighty percent (80%) of the
operating expenses for each Non-Stabilized Property for which net operating
income from such property is insufficient to cover (such amount pursuant to
clause (b) is hereinafter referred to as the "Negative Carry") as reasonably
determined by the Borrower subject to the approval of the Agent in an amount
to cover all such costs for a period of eighteen (18) months; provided that
in the event that as of any date of determination such amount shall not have
been determined as so provided, then such amount shall be as reasonably
determined by Agent (such amount is hereafter referred to as the "Holdback").
Amounts reserved under the Holdback shall not bear interest until disbursed.
The Borrower may request a disbursement of amounts reserved pursuant to the
Holdback to pay such costs as such costs are incurred, but at no time shall
the amount of the Holdback be less than an amount sufficient to cover such
cost and expenses for a period of six (6) months, and the Borrower shall take
such actions as are necessary (including the prepayment of the Loan to
reinstate the Holdback to such minimum level if it should ever fall below
such level). The Holdback described in Section 5.5(a) shall be allocated pro
rata among all Non-Stabilized Properties that also have a Holdback described
in Section 5.5(b). At such time as a Non-Stabilized Property shall become a
Stabilized Property, the Holdback for such Non-Stabilized Property shall be
eliminated, provided that any Holdback for corporate general and
administrative costs shall be re-allocated among the remaining Non-Stabilized
Properties that also have a Holdback described in Section 5.5(b) pro rata
based upon their respective Designated Collateral Values. As of the date of
this Agreement, the Holdback is $3,957,601.60. The Holdback shall be
determined by the Agent for each additional Mortgaged Property that is
included as Collateral which is a Non-Stabilized Property at the time such
Mortgaged Property is added to the Collateral. At such time as the Borrower
shall deliver to the Agent evidence satisfactory to the Agent that the
"Holdback" under the Secured Mezzanine Loan Agreement is no longer required
pursuant to the terms of the last sentence of Section 5.5 thereof, the
Holdback shall no longer be required under this Agreement.
Section 5.6. Disbursement of Tenant Improvement Reserve. Amounts from
the Tenant Improvement Reserve shall be available to be disbursed hereunder
for Tenant Improvement Projects and Leasing Commissions. With respect to
Loan Requests for Loans to fund Tenant Improvement Projects or Leasing
Commissions, Loans shall be made on the following basis:
(a) prior to any disbursements from the Tenant Improvement
Reserve, the Borrower shall submit to the Agent for approval by the Majority
Banks the proposed Lease to which the Tenant Improvement Project and/or
Leasing Commission relate and a separate budget for such proposed Tenant
Improvement Project and Leasing Commission (a "Building Capital Project
Budget") setting forth the total cost required to construct the Tenant
Improvement Project to be constructed by the Borrower pursuant to such Lease
(such cost is hereinafter referred to as the "Total Cost") and the Leasing
Commissions with respect to such Lease;
(b) upon written approval by the Majority Banks in their sole and
absolute discretion of a Lease and the corresponding Building Capital Project
Budget, the Borrower may thereafter submit Loan Requests for Tenant
Improvement Projects with respect to the applicable Mortgaged Property which
Loan Requests shall separately identify the Mortgaged Property and the Tenant
Improvement Project for which funds are requested and shall identify that
portion of the Total Cost that has been drawn and the amount of the Total
Cost remaining to be drawn (separately identifying amounts drawn under this
Agreement and amounts drawn by WWP under the Secured Mezzanine Loan
Agreement) and a certification that the amount of the Total Cost remaining to
be drawn (including amounts available to be drawn pursuant to the Secured
Mezzanine Loan Agreement with respect thereto) together with equity funds to
be provided by Borrower will be sufficient to cause the Tenant Improvement
Project to be completed in full; provided that prior to the initial
disbursement with respect to a Tenant Improvement Project, the Borrower shall
provide to the Agent evidence satisfactory to the Agent that Borrower has
paid from equity twenty-five percent (25%) of the amounts identified in the
Building Capital Project Budget for such Tenant Improvement Project;
(c) upon compliance with all terms and conditions set forth in
this Agreement with respect to advances of the Loans including, without
limitation, the terms and conditions in Section 2.6 and this Section 5.6,
Loan Requests for Tenant Improvement Projects for work in place will be
funded in accordance with the applicable Building Capital Project Budget;
provided, however, if the Agent in its sole and absolute discretion
determines at any time that the cost of completing a Tenant Improvement
Project is in excess of the amount remaining with respect thereto in the
Building Capital Project Budget and equity funds provided by Borrower, no
additional advances with respect to such Tenant Improvement Project shall be
made unless the Borrower shall provide such funds as the Agent in its sole
and absolute discretion determines are necessary to fully complete such
Tenant Improvement Project in accordance with the terms of this Section 5.6;
(d) amounts disbursed for any approved Tenant Improvement Project
shall be an amount not to exceed, under any circumstances, the costs and
expenses actually incurred by the Borrower with respect thereto
notwithstanding the approval by the Agent of the Total Cost thereof or the
amounts set forth in any Building Capital Project Budget with respect
thereto;
(e) the Borrower shall construct each Tenant Improvement Project
in a good and workmanlike manner and in compliance with all applicable laws
and complete the approved Tenant Improvement Project within the time periods
and as required by, and in accordance with, the Lease with respect thereto;
(f) amounts disbursed for Leasing Commissions shall be an amount
not to exceed, under any circumstances, the commission actually incurred by
Borrower which is reasonable and customary for a licensed real estate broker
in the market area in which the Mortgaged Property is located;
(g) with respect to a Loan Request to pay any portion of the
Leasing Commissions, Borrower shall provide evidence as reasonably requested
by the Agent that such Leasing Commissions are then due and payable or have
been properly paid; provided that prior to the initial disbursement with
respect to a Leasing Commission, the Borrower shall provide to the Agent
evidence satisfactory to the Agent that Borrower has paid from equity twenty-
five percent (25%) of the amounts identified in the Building Capital Project
Budget for such Leasing Commission; and
(h) with respect to each Loan Request for Tenant Improvement
Projects or Leasing Commissions, the Borrower shall provide the Agent with
such additional documents, certificates, lien waivers and affidavits as the
Agent may reasonably request.
Section 6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as
follows.
Section 6.1. Corporate Authority, Etc.
(a) Incorporation; Good Standing. The Borrower is a limited
liability company duly organized pursuant to its organizational documents and
amendments thereto filed with the Secretary of State of Delaware and is
validly existing and in good standing under the laws of the State of
Delaware. WWP is a limited liability company duly organized pursuant to its
organizational documents and amendments thereto filed with the Secretary of
State of Delaware and is validly existing and in good standing under the laws
of the State of Delaware. Wellsford Commercial is a Maryland real estate
investment trust duly organized pursuant to its organizational documents and
amendments thereto filed with the Secretary of State of Maryland and is
validly existing and in good standing under the laws of the State of
Maryland. WHWEL is a limited partnership duly organized pursuant to its
organizational documents and amendments thereto filed with the Secretary of
State of Delaware and is validly existing and in good standing under the laws
of the State of Delaware. The Member is a limited liability company duly
organized pursuant to its organizational documents and amendments thereto
filed with the Secretary of State of Delaware and is validly existing and in
good standing under the laws of the State of Delaware. Manager is a limited
liability company duly organized pursuant to its organizational documents and
amendments thereto filed with the Secretary of State of Delaware and is
validly existing and in good standing under the laws of the State of
Delaware. Property Owner is a limited liability company duly organized
pursuant to its organizational documents and amendments thereto filed with
the Secretary of Commonwealth of Massachusetts and is validly existing and in
good standing under the laws of the Commonwealth of Massachusetts. Each of
the Borrower, the Member, the Property Owner and the Manager (i) has all
requisite power to own its property and conduct its business as now conducted
and as presently contemplated, and (ii) is in good standing as a foreign
entity and is duly authorized to do business in the jurisdictions where the
Mortgaged Property or other Collateral held by it, or, as to Manager, Member
and Property Owner, the Mezzanine Property and other Mezzanine Collateral
held by it, is located and in each other jurisdiction where a failure to be
so qualified in such other jurisdiction could have a materially adverse
effect on the business, assets or financial condition of such Person.
(b) Subsidiaries. Without limiting the foregoing, each of the
Subsidiaries of the Borrower and the Guarantor (i) is a corporation, limited
partnership, limited liability company or trust duly organized under the laws
of its State of organization and is validly existing and in good standing
under the laws thereof, (ii) has all requisite power to own its property and
conduct its business as now conducted and as presently contemplated and (iii)
is in good standing and is duly authorized to do business in each
jurisdiction where Mortgaged Property, Mezzanine Property or other Collateral
held by it is located and in each other jurisdiction where a failure to be so
qualified could have a materially adverse effect on the business, assets or
financial condition of the Borrower or such Subsidiary or any Guarantor.
Neither the Property Owner, Manager nor Member has any Subsidiaries, other
than those which own their respective interests in Property Owner.
(c) Authorization. The execution, delivery and performance of
this Agreement and the other Loan Documents to which any of the Borrower, the
Member, the Manager, the Property Owner or the Guarantor are or are to become
a party and the transactions contemplated hereby and thereby (i) are within
the authority of the such Person, (ii) have been duly authorized by all
necessary proceedings on the part of such Person, (iii) do not and will not
conflict with or result in any breach or contravention of any provision of
law, statute, rule or regulation to which such Person is subject or any
judgment, order, writ, injunction, license or permit applicable to such
Person, (iv) do not and will not conflict with or constitute a default
(whether with the passage of time or the giving of notice, or both) under any
provision of the articles of incorporation , bylaws, or other charter
documents of, or any agreement or other instrument binding upon, such Person,
or any of its properties, and (v) do not and will not result in or require
the imposition of any lien or other encumbrance on any of the properties,
assets or rights of any such Person (other than those in favor of the Agent
pursuant to the terms of the Loan Documents).
(d) Enforceability. The execution and delivery of this Agreement
and the other Loan Documents to which any of the Borrower, the Member, the
Manager, the Property Owner or the Guarantor are or are to become a party are
valid and legally binding obligations of such Person enforceable in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally
the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor
may be brought.
Section 6.2. Governmental Approvals. The execution, delivery and
performance by the Borrower, the Member, the Manager, the Property Owner and
the Guarantor of this Agreement and the other Loan Documents, as applicable,
and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained and the filing of the Security Documents in
the appropriate records office with respect thereto.
Section 6.3. Title to Properties; Leases. Except as indicated on
Schedule 6.3 hereto, the Borrower owns all of the assets reflected in the
balance sheet of the Borrower as of the Balance Sheet Date or acquired since
that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
The Property Owner owns all of the assets reflected in the balance sheet of
the Property Owner dated as of the Balance Sheet Date, subject to no rights
of others, including any rights of first refusal, right of first offer or
other right to acquire, mortgages, leases, conditional sales agreements,
title retention agreements, liens or other encumbrances, except the Mezzanine
Mortgage Loan, the Permitted Liens, the rights of tenants as tenants only
under the Leases reflected in the Rent Rolls for the Mezzanine Property and
the right of first offer with respect to a sale of 201 University Avenue,
Westwood Massachusetts.
Section 6.4. Financial Statements. The Borrower has furnished to each
of the Banks: (a) an unaudited balance sheet and an unaudited statement of
income and cash flows of Borrower as of the Balance Sheet Date certified by
the Borrower's chief financial or chief accounting officer to have been
prepared in accordance with generally accepted accounting principles and to
fairly present the financial condition of the Borrower as at the close of
business on the dates thereof (subject to year-end adjustments); (b) an
unaudited consolidated statement of operating income for the Mortgaged
Property satisfactory in form to the Agent and certified by the Borrower's
chief financial or accounting officer as fairly presenting the operating
income for such parcels for such periods; and (c) the balance sheet of the
Property Owner dated as of the Balance Sheet Date and an unaudited
consolidated statement of operating income for the Mezzanine Property
satisfactory in form to the Agent and certified by the Borrower's chief
financial or accounting officer as fairly presenting the operating income for
such parcels for such periods. Such balance sheet and statements of income,
stockholder's equity and cash flows have been prepared in accordance with
generally accepted accounting principles and fairly present the financial
condition of the Borrower and the Property Owner as of such dates and the
results of the operations of the Borrower, the Mortgaged Property, the
Property Owner and the Mezzanine Property for such periods. There are no
liabilities, contingent or otherwise, of the Borrower or the Property Owner
involving material amounts not disclosed in said financial statements and the
related notes thereto as of their respective dates. The all-in acquisition
costs of the Mortgaged Properties and the Mezzanine Property, the Designated
Collateral Value as of the date hereof allocable thereto and the
classification of such property as a Stabilized Property or Non-Stabilized
Property are as set forth on Schedule 6.4 hereto.
Section 6.5. No Material Adverse Changes. Since the Balance Sheet
Date, there has occurred no materially adverse change in the financial
condition or business of the Borrower, as shown on or reflected in the
balance sheet of the Borrower, as of the Balance Sheet Date, or its
consolidated statement of income or cash flows for the fiscal year then
ended, other than changes in the ordinary course of business that have not
had any materially adverse effect either individually or in the aggregate on
the business or financial condition of the Borrower. There has occurred no
materially adverse change in the financial condition or business of the
Property Owner as shown on or reflected in the balance sheet of the Property
Owner as of the Balance Sheet Date, or its statement of income or cash flows
for the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually
or in the aggregate on the business or financial condition of the Property
Owner.
Section 6.6. Franchises, Patents, Copyrights, Etc. The Borrower, the
Member, the Property Owner, the Manager and the Guarantor possess all
franchises, patents, copyrights, trademarks, trade names, service marks,
licenses and permits, and rights in respect of the foregoing, adequate for
the conduct of their business substantially as now conducted without known
conflict with any rights of others.
Section 6.7. Litigation. Except as stated on Schedule 6.7 there are no
actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower, the Member, the Property Owner, the Manager,
the Guarantor, the Mortgaged Property, the Mezzanine Collateral or the
Mezzanine Property before any court, tribunal or administrative agency or
board that, if adversely determined, might, either in any case or in the
aggregate, materially adversely affect the properties, assets, financial
condition or business of such Person or materially impair the right of such
Person to carry on business substantially as now conducted by it, or result
in any liability not adequately covered by insurance, or for which adequate
reserves are not maintained on the balance sheet of such Person, or which
question the validity of this Agreement or any of the other Loan Documents or
any of the Mezzanine Mortgage Loan Documents, any action taken or to be taken
pursuant hereto or thereto or any lien or security interest created or
intended to be created pursuant hereto or thereto, or which will adversely
affect the ability of such Person to pay and perform the Obligations in the
manner contemplated by this Agreement and the other Loan Documents. There
are no judgments outstanding against or affecting the Borrower, the Guarantor
or the Mortgaged Property in excess of $250,000.00, or against or affecting
the Member, the Manager, the Property Owner, the Mezzanine Collateral or the
Mezzanine Property.
Section it u No Materially Adverse Contracts, Etc. None of the
Borrower, the Member, the Property Owner, the Manager or the Guarantor is
subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or
financial condition of any such Person. None of the Borrower, the Member,
the Property Owner, the Manager or the Guarantor is a party to any contract
or agreement that has or is expected, in the judgment of the officers of such
Person, to have any materially adverse effect on the business of any such
Person.
Section 6.9. Compliance with Other Instruments, Laws, Etc. None of the
Borrower, the Member, the Property Owner, the Manager or the Guarantor is in
violation of any provision of its charter or other organizational documents,
by-laws, or any agreement or instrument to which it may be subject or by
which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases
in a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or
business of such Person.
Section 6.10. Tax Status. Each of the Borrower, the Member, the
Property Owner, the Manager and the Guarantor (a) has made or filed all
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (b) has paid all taxes
and other governmental assessments and charges shown or determined to be due
on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (c) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by
the taxing authority of any jurisdiction, and the officers or members of each
of the Borrower, the Member, the Property Owner, the Manager and the
Guarantor know of no basis for any such claim.
Section 6.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.
Section 6.12. Holding Company and Investment Company Acts. None of the
Borrower, the Member, the Property Owner, the Manager or the Guarantor is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is it an "investment company", or an
"affiliated company" or a "principal underwriter" of an "investment company",
as such terms are defined in the Investment Company Act of 1940.
Section 6.13. Absence of UCC Financing Statements, Etc. Except with
respect to Permitted Liens, the Mezzanine Mortgage Loan Documents and the
Loan Documents, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, that purports to cover,
affect or give notice of any present or possible future lien on, or security
interest or security title in, any property of the Borrower, the Member, the
Property Owner or the Manager or rights thereunder.
Section 6.14. Setoff, Etc. The Collateral and the rights of the Agent
and the Banks with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Borrower is the owner of the
Collateral free from any lien, security interest, encumbrance or other claim
or demand, except Permitted Liens.
Section 6.15. Certain Transactions. Except as disclosed in writing to
the Agent, and except with respect to that certain Property Management
Agreement between Property Owner and Northeast Real Estate Services LLC,
dated May 15, 1998, none of the members, officers, trustees, directors, or
employees of the Borrower, the Member, the Property Owner, the Manager or the
Guarantor is a party to any transaction with each other (other than for
services as employees, officers and directors and transactions solely between
Guarantors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, trustee, director or such employee or, to the knowledge of such
Person, any corporation, partnership, trust or other entity in which any
member, officer, trustee, director, or any such employee has a substantial
interest or is a member, officer, director, trustee or partner.
Section 6.16. Employee Benefit Plans. The Borrower, the Member, the
Property Owner, the Manager and each ERISA Affiliate are in compliance in all
material respects with ERISA. There has been no Reportable Event with
respect to any Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan. There has been no institution of proceedings or any other
action by PBGC, the Borrower, the Member, the Property Owner, the Manager or
any ERISA Affiliate to terminate or withdraw or partially withdraw from any
such Plan under any circumstances which could lead to material liabilities to
PBGC or, with respect to a Multiemployer Plan, the "Reorganization" or
"Insolvency" (as each such term is defined in ERISA) of any such Plan. To
the best of the Borrower's knowledge, no "prohibited transaction" (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred
with respect to any such Plan, and neither the consummation of the
transactions provided for in this Agreement and compliance by the Borrower,
the Member, the Property Owner, the Manager and the Guarantor with the
provisions hereof and the other Loan Documents, nor the consummation of the
transactions provided for in the Mezzanine Mortgage Loan Documents and
compliance by the Property Owner with the provisions thereof, will involve
any prohibited transaction.
Section 6.17. ERISA Taxes. None of the Borrower, the Member, the
Property Owner, the Manager nor any ERISA Affiliate thereof is currently and
the Borrower has no reason to believe that any such Person or any ERISA
Affiliate will become subject to any liability (other than routine expenses
or contributions relating to the Plans set forth on Schedule 6.17, if timely
paid), tax or penalty whatsoever to any person whomsoever, which liability,
tax or penalty is directly or indirectly related to any Plans set forth on
Schedule 6.17 including, but not limited to, any penalty or liability arising
under Title I or Title IV of ERISA, any tax or penalty resulting from a loss
of deduction under Sections 404 and 419 of the Code, or any tax or penalty
under Chapter 43 of the Code, except such liabilities, taxes or penalties
(when taken as a whole) as will not have a material adverse effect on such
Person or upon its financial condition, assets, business, operations,
liabilities or prospects.
Section 6.18. Plan Payments. The Borrower, the Member, the Property
Owner, the Manager and each ERISA Affiliate has made full and timely payment
of all amounts (i) required to be contributed under the terms of each Plan
set forth on Schedule 6.17 and applicable law and (ii) required to be paid as
expenses of each Plan set forth on Schedule 6.17. No Plan set forth on
Schedule 6.17 would have an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA) if such Plan were terminated as of
the date on which this representation and warranty is made.
Section 6.19. Regulations U and X. No portion of any Loan is to be
used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Section 6.20. Environmental Compliance. The Borrower or an affiliate
or agent thereof has conducted or caused to be conducted Phase I
environmental site assessments with respect to the past usage and condition
of the Mortgaged Property and the Mezzanine Property and the operations
conducted thereon, and is familiar with the present condition and usage of
the Mortgaged Property and the Mezzanine Property and the operations
conducted thereon and, based upon such reports and knowledge, makes the
following representations and warranties.
(a) With respect to the Mortgaged Property and the Mezzanine
Property, none of the Borrower, the Member, the Property Owner, the Manager
or the Guarantor or any operator of the Mortgaged Property or the Mezzanine
Property, or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation, ordinance,
order or decree relating to the environment (hereinafter "Environmental
Laws"), which violation involves the Mortgaged Property or the Mezzanine
Property, and would have a material adverse effect on the environment or the
business, assets or financial condition of any such Person.
(b) None of the Borrower, the Member, the Property Owner, the
Manager or the Guarantor has received any notice from any third party
including, without limitation, any federal, state or local governmental
authority, (i) that it has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under CERCLA
with respect to a site listed on the National Priorities List, 40 C.F.R. Part
300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42 U.S.C.
Section 9601(5), any hazardous substances as defined by 42 U.S.C. Section
9601(14), any pollutant or contaminant as defined by 42 U.S.C. Section
9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of have been
found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that such Person, conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law; or (iii) that it is or shall be a named party to any claim, action,
cause of action, complaint, or legal or administrative proceeding (in each
case, contingent or otherwise) arising out of any third party's incurrence of
costs, expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Substances.
(c) With respect to the Mortgaged Property and the Mezzanine
Property, except as specifically set forth in the environmental site
assessment reports for the initial Mortgaged Property and the Mezzanine
Property, each of which has been provided to the Agent on or before the date
hereof or, in the case of Mortgaged Property acquired after the date hereof,
the environmental site assessment reports with respect thereto provided to
the Agent under Section 5.4:
(i) no portion of the Mortgaged Property or the Mezzanine Property
has been used for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws, and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Mortgaged Property or the
Mezzanine Property; (ii) in the course of any activities conducted by the
Borrower, the Member, the Property Owner, the Manager, the Guarantor or the
operators of its properties, no Hazardous Substances have been generated or
are being used on the Mortgaged Property or the Mezzanine Property except in
the ordinary course of business and in accordance with applicable
Environmental Laws; (iii) there has been no past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping (a "Release") or threatened Release
of Hazardous Substances on, upon, into or from the Mortgaged Property or the
Mezzanine Property, or, to the best of the Borrower's knowledge, on, upon,
into or from the other properties of Borrower, the Property Owner, the
Manager or the Guarantor, which Release would have a material adverse effect
on the value of any of the Mortgaged Property or the Mezzanine Property or
adjacent properties or the environment; (iv) to the best of the Borrower's
knowledge, there have been no Releases on, upon, from or into any real
property in the vicinity of any of the Mortgaged Property or the Mezzanine
Property which, through soil or groundwater contamination, may have come to
be located on, and which would have a material adverse effect on the value
of, the Mortgaged Property or the Mezzanine Property; and (v) to the best of
Borrower's knowledge and belief, any Hazardous Substances that have been
generated on any of the Mortgaged Property or the Mezzanine Property have
been transported off-site only by carriers having an identification number
issued by the EPA or approved by a state or local environmental regulatory
authority having jurisdiction regarding the transportation of such substance
and, to the best knowledge of the Borrower without independent investigation,
treated or disposed of only by treatment or disposal facilities maintaining
valid permits as required under all applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrower's
knowledge, operating in compliance with such permits and applicable
Environmental Laws.
(d) None of the Borrower, the Member, the Property Owner, the
Manager, the Guarantor, the Mortgaged Property nor the Mezzanine Property is
required by any applicable Environmental Law to perform Hazardous Substances
site assessments, or remove or remediate Hazardous Substances, or give notice
to any governmental agency or to record or deliver to other Persons an
environmental disclosure document or statement by virtue of the transactions
set forth herein and contemplated hereby, or as a condition to the recording
of the Security Deed or to the effectiveness of any other transactions
contemplated hereby.
Section 6.21. Subsidiaries. Schedule 6.21 sets forth all of the
Subsidiaries of the Borrower. The form and jurisdiction of organization of
each of the Subsidiaries, and the Borrower's ownership interest therein, is
set forth in said Schedule 6.21.
Section 6.22. Leases. The Borrower has delivered to the Agent true
copies of the Leases and any amendments thereto relating to the Mortgaged
Property and the Mezzanine Property.
Section 6.23. Loan Documents. All of the representations and
warranties made by or on behalf of the Borrower, the Member, the Property
Owner, the Manager or the Guarantor in the Loan Documents to which it is a
party or any document or instrument delivered to the Agent or the Banks
pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects, and no such Person has failed to disclose
such information as is necessary to make such representations and warranties
not misleading.
Section 6.24. Mortgaged Property and Mezzanine Property. The Borrower
makes the following representations and warranties concerning each Mortgaged
Property and Mezzanine Property:
(a) Off-Site Utilities. All water, sewer, electric, gas,
telephone and other utilities necessary for the use and operation of the
Mortgaged Property and the Mezzanine Property are installed to the property
lines of the Mortgaged Property and the Mezzanine Property through dedicated
public rights-of-way or through perpetual private easements approved by the
Agent with respect to which, in the case of the Mortgaged Property, the
applicable Security Deed creates a valid and enforceable first lien and,
except in the case of drainage facilities, are connected to the Building
located thereon with valid permits and are adequate to service the Building
in compliance with applicable law.
(b) Access, Etc. The streets abutting the Mortgaged Property and
the Mezzanine Property are dedicated and accepted public roads, to which the
Mortgaged Property and the Mezzanine Property have direct access by trucks
and other motor vehicles and by foot, or are perpetual private ways (with
direct access by trucks and other motor vehicles and by foot to public roads)
to which the Mortgaged Property and the Mezzanine Property have direct access
approved by the Agent and with respect to which, in the case of the Mortgaged
Property, the applicable Security Deed creates a valid and enforceable first
lien. All private ways providing access to the Mortgaged Property and the
Mezzanine Property are zoned in a manner which will permit access to the
Building over such ways by trucks and other commercial and industrial
vehicles.
or Independent Building. Each Building is fully independent in
all respects including, without limitation, in respect of structural
integrity, heating, ventilating and air conditioning, plumbing, mechanical
and other operating and mechanical systems, and electrical, sanitation and
water systems, all of which are connected directly to off-site utilities
located in public streets or ways or through insured perpetual private
easements approved by the Agent. Each Building is located on a lot which is
separately assessed for purposes of real estate tax assessment and payment.
Each Building, all Building Service Equipment and all paved or landscaped
areas related to or used in connection with each Building are, except as
specifically disclosed on a Survey delivered to the Agent prior to the date
hereof and except as disclosed in the Condominium Documents with respect to
the Condominium only, located wholly within the perimeter lines of the lot or
lots on which the Mortgaged Property or Mezzanine Property is located.
Property Owner has not made any additions, alterations or improvements to the
Mezzanine Property, nor have any other changes occurred with respect to the
Mezzanine Property, from the last revision date of the survey of the
Mezzanine Property delivered by Borrower to the Agent that in accordance with
good surveying practices should be disclosed on an as-built survey of the
Mezzanine Property.
(d) Condition; No Asbestos. Except as may otherwise be
specifically disclosed in any written engineering report furnished or caused
to be furnished by the Borrower to the Agent prior to the date hereof, each
Building is structurally sound, in good repair and free of material defects
in materials and workmanship. All major building systems located within each
Building, including without limitation heating, ventilating and air
conditioning, electrical, sprinkler, plumbing or other mechanical systems,
are in good working order and condition. No asbestos is located in or on any
Building, except for nonfriable asbestos or contained friable asbestos which
is being monitored and/or remediated in accordance with the recommendations
of an Environmental Engineer.
(e) Compliance with Law. Except as may otherwise be specifically
disclosed on the face of any certificate of occupancy delivered to the Agent
prior to the date hereof, each Building as presently constructed, used,
occupied and operated does not violate any applicable federal or state law or
governmental regulation, or any local ordinance, order or regulation,
including but not limited to laws, regulations, or ordinances relating to
zoning, building use and occupancy, subdivision control, fire protection,
health, sanitation, safety, handicapped access, historic preservation and
protection, tidelands, wetlands, flood control and Environmental Laws. Each
Building complies with applicable zoning laws and regulations and is not a
so-called non-conforming use. The zoning laws permit use of each Building
for its current use. There is such number of parking spaces on the lot or
lots on which each Building is located as is adequate under the zoning laws
and regulations to permit use of each Building for its current use.
(f) No Required Consents, Permits, Etc. None of the Borrower, the
Member, the Property Owner, the Manager or the Guarantor has received notice
of, or has knowledge of, any approvals, consents, licenses, permits, utility
installations and connections (including, without limitation, drainage
facilities), curb cuts and street openings, required by applicable laws,
rules, ordinances or regulations or any agreement affecting the Mortgaged
Property or the Mezzanine Property for the maintenance, operation, servicing
and use of the Mortgaged Property or the Mezzanine Property or the Building
for its current use which have not been granted, effected, or performed and
completed (as the case may be), or any fees or charges therefor which have
not been fully paid, or which are no longer in full force and effect. No
such approvals, consents, permits or licenses (including, without limitation,
any railway siding agreements) will terminate, or become void or voidable or
terminable on any foreclosure sale of the Mortgaged Property pursuant to the
Security Deed. To the best knowledge of the Borrower, there are no
outstanding notices, suits, orders, decrees or judgments relating to zoning,
building use and occupancy, fire, health, sanitation or other violations
affecting, against, or with respect to, the Mortgaged Property or the
Mezzanine Property or any part thereof.
(g) Insurance. None of the Borrower, the Member, the Property
Owner, the Manager or the Guarantor has received any notice from any insurer
or its agent requiring performance of any work with respect to the Mortgaged
Property or the Mezzanine Property or canceling or threatening to cancel any
policy of insurance, and the Mortgaged Property and the Mezzanine Property
comply with the requirements of all carriers of insurance on the Mortgaged
Property and the Mezzanine Property.
(h) Real Property Taxes; Special Assessments. There are no unpaid
or outstanding real estate or other taxes or assessments on or against the
Mortgaged Property or the Mezzanine Property or any part thereof which are
payable by the Borrower or the Property Owner or any prior owner of the
Mortgaged Property or the Mezzanine Property (except only real estate taxes
or other taxes or assessments, that are not yet due and payable). The
Borrower has delivered or caused to be delivered to the Agent, or has
requested from the appropriate authorities and will deliver to the Agent
promptly upon receipt, true and correct copies of real estate tax bills for
the Mortgaged Property and the Mezzanine Property for the past three fiscal
tax years. No abatement proceedings are pending with reference to any real
estate taxes assessed against the Mortgaged Property or the Mezzanine
Property. There are no betterment assessments or other special assessments
presently pending with respect to any portion of the Mortgaged Property or
the Mezzanine Property, and none of the Borrower, the Member, the Property
Owner, the Manager or the Guarantor has received any notice of any such
special assessment being contemplated.
(i) Historic Status. No Building is a historic structure or
landmark and no Building, Mortgaged Property or Mezzanine Property is located
within any historic district pursuant to any federal, state or local law or
governmental regulation.
(j) Eminent Domain; Casualty. There are no pending eminent domain
proceedings against the Mortgaged Property or Mezzanine Property or any part
thereof, and, to the knowledge of the Borrower, no such proceedings are
presently threatened or contemplated by any taking authority. No Mortgaged
Property, Mezzanine Property or Building nor any part thereof is now damaged
or injured as a result of any fire, explosion, accident, flood or other
casualty.
(k) Leases. An accurate and complete Rent Roll and summary
thereof in a form reasonably satisfactory to the Agent as of the date of
inclusion of each Mortgaged Property or Mezzanine Property (or such other
recent date as may be acceptable to the Agent) with respect to all Leases of
any portion of the Mortgaged Property and the Mezzanine Property has been
provided to the Agent. The Leases reflected on such Rent Roll constitute as
of the date thereof the sole agreements and understandings relating to
leasing or licensing of space at such Mortgaged Property or Mezzanine
Property and in the Building relating thereto. There are no occupancies,
rights, privileges or licenses in or to any Mortgaged Property or Mezzanine
Property or portion thereof other than pursuant to the Leases reflected in
Rent Rolls previously furnished to the Agent for such Mortgaged Property or
Mezzanine Property. Except as set forth in each Rent Roll, the Leases
reflected therein are in full force and effect in accordance with their
respective terms, without any payment default or any other material default
thereunder, nor are there any defenses, counterclaims, offsets, concessions
or rebates available to any tenant thereunder, and none of the Borrower, the
Member, the Property Owner, the Manager or the Guarantor has given or made
any notice of any payment or other material default, or any claim, which
remains uncured or unsatisfied, with respect to any of the Leases. The Rent
Rolls furnished to the Banks accurately and completely set forth all rents
payable by and security, if any, deposited by tenants, no tenant having paid
more than one month's rent in advance. The Borrower has reviewed the
estoppel certificates delivered by the tenants of the Mortgaged Property and
the Mezzanine Property to the Agent and such estoppel certificates as of the
date thereof are true and correct in all material respects. Except as
otherwise set forth in Schedule A-5 to the Contribution Agreement, all tenant
improvements or work to be done, furnished or paid for by the Borrower, the
Member, the Property Owner, the Manager or the Guarantor or credited or
allowed to a tenant, for, or in connection with, the Building pursuant to any
Lease has been completed and paid for or provided for in a manner
satisfactory to the Agent. No material leasing, brokerage or like
commissions, fees or payments are due from the Borrower, the Member, the
Property Owner, the Manager or the Guarantor in respect of the Leases.
(l) Management Agreements. Borrower has delivered to Agent true,
correct and complete copies of the Management Agreements for the Mortgaged
Property and the Mezzanine Property. To the best knowledge of the Borrower,
there are no material claims or any bases for material claims in respect of
the Mortgaged Property or the Mezzanine Property or its operation by any
party to any Management Agreement.
(m) Other Material Real Property Agreements; No Options. There
are no material agreements pertaining to the Mortgaged Property, the
Mezzanine Property or any Building thereon or the operation or maintenance of
any thereof other than as described in this Agreement (including the
Schedules hereto) or otherwise disclosed in writing to the Agent by the
Borrower; and no person or entity has any right or option to acquire the
Mortgaged Property, the Mezzanine Property or any Building thereon or any
portion thereof or interest therein (other than the right of first offer of
Computer Associates set forth in its lease with respect to 201 University
Avenue, the option to purchase the farmhouse improvements at the Mortgaged
Property commonly known as 180/188 Mt. Airy Road as described in Section
5.3(a)(iv), and the option of JVC Americas Corp. to acquire approximately 2.5
acres of the Mortgaged Property commonly known as 1800 Valley). All service
agreements with respect to the Mortgaged Property and the Mezzanine Property
are terminable upon thirty (30) days notice with no penalty or premium or as
otherwise disclosed in writing to the Agent.
Section 6.25. Mezzanine Mortgage Loan Documents. The Borrower hereby
restates and reaffirms each of the representations and warranties made by the
Property Owner set forth in the Mezzanine Mortgage Loan Documents (including
without limitation those set forth in Section 4.1 of the Mezzanine Mortgage
Loan Agreement and Paragraph 2 of the Nomura Mortgages) as if the same were
more fully set forth herein and were made to the Agent and the Banks herein
as of the date hereof; provided, however, that (i) any references in the
Mezzanine Mortgage Loan Documents to "Permitted Encumbrances" shall for the
purposes hereof be a reference to Permitted Liens and (ii) the "Rent Rolls"
referred to in subsection 4.1(aa) of the Mezzanine Mortgage Loan Agreement
shall for the purposes hereof be deemed to mean the latest Rent Rolls for the
Mezzanine Properties heretofore delivered by Borrower to Agent.
Section 6.26. Brokers. None of the Borrower, the Property Owner, the
Manager, the Member or the Guarantor has engaged or otherwise dealt with any
broker, finder or similar entity in connection with this Agreement or the
Loans contemplated hereunder.
Section 6.27. Fair Consideration. The Borrower (and, as applicable,
the Guarantor), by receiving the benefits under this Agreement and the other
Loan Documents is receiving "reasonably equivalent value" within the meaning
of Section 548 of the Bankruptcy Code, Title 11, U.S.C.A. and "fair
consideration" within the meaning of Consolidated Laws of New York Annotated,
Chapter 12, Article 10, Section 272 in exchange for the delivery of the
Security Documents to Agent, and but for the willingness of the Guarantor to
enter into the Guaranty, Borrower would be unable to obtain the financing
contemplated hereunder which financing will enable Borrower (including the
Guarantor) to have available financing to conduct and expand its business.
The transaction evidenced by this Agreement and the other Loan Documents is
in the best interests of the Borrower and the Guarantor and the creditors of
such Persons.
Section 6.28. Solvency. As of the Closing Date and after giving effect
to the transactions contemplated by this Agreement and the other Loan
Documents, including all of the Loans made or to be made hereunder, none of
the Borrower, the Member, the Property Owner, the Manager or the Guarantor
is insolvent on a balance sheet basis, the sum of such Person's assets
exceeds the sum of such Person's liabilities, each such Person is able to pay
its debts as they become due, and each such Person has sufficient capital to
carry on its business.
Section 6.29. No Bankruptcy Filing. None of the Borrower, the Member,
the Property Owner, the Manager or the Guarantor is contemplating either the
filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of its assets or property, and Borrower
has no knowledge of any Person contemplating the filing of any such petition
against it or any of such other Persons.
Section 6.30. No Fraudulent Intent. Neither the execution and delivery
of this Agreement or any of the other Loan Documents nor the performance of
any actions required hereunder or thereunder is being undertaken by the
Borrower, the Member, the Property Owner, the Manager or the Guarantor with
or as a result of any actual intent by any of such Persons to hinder, delay
or defraud any entity to which any of such Persons is now or will hereafter
become indebted.
Section 6.31. Other Debt. None of the Borrower, the Member, the
Property Owner, the Manager, the Guarantor or any of their respective
Subsidiaries is in default in the payment of any other Indebtedness or under
any agreement, mortgage, deed of trust, security agreement, financing
agreement, indenture or lease to which any of them is a party. The Borrower
is not a party to or bound by any agreement, instrument or indenture that may
require the subordination in right or time of payment of any of the
Obligations to any other indebtedness or obligation of the Borrower. Without
limiting the foregoing, no "Default" or "Event of Default" under the
Mezzanine Mortgage Loan Documents has occurred. The Borrower has provided to
the Agent copies of all agreements, mortgages, deeds of trust, financing
agreements or other material agreements binding upon Borrower, the Guarantor,
the Property Owner, the Member or the Manager or their respective properties
and entered into by such Person as of the date of this Agreement with respect
to any Indebtedness of such Person. Attached hereto as Schedule 6.31-1 is a
true, accurate and complete list of all of the Mezzanine Mortgage Loan
Documents. Without limiting the foregoing, Borrower has delivered to the
Agent true, correct and complete copies of the Mezzanine Mortgage Loan
Documents, and none of the Mezzanine Mortgage Loan Documents has been
modified or amended in any respect except as set forth in Schedule 6.31-1
hereto. As of the date hereof, the outstanding principal balance secured by
the Nomura Mortgages is [$68,340,815.57] and interest has been paid through
[May 10, 1998.] The initial allocation of the Mezzanine Mortgage Loan among
the Mezzanine Properties is set forth on Schedule 6.31-2 hereto. As of the
date hereof, the amount on deposit in the "Tax and Insurance Escrow Fund" (as
defined in the Mezzanine Mortgage Loan Documents) is approximately
[$278,184.89,] the amount on deposit in the "Capital Reserve Fund" (as
defined in the Mezzanine Mortgage Loan Documents) is approximately
[$181,243.70,] and the amount on deposit in the "Rollover Reserve Fund" (as
defined in the Mezzanine Mortgage Loan Documents) is approximately
[$608,232.64.]
Section 6.32. Ownership. WWP is the sole member of the Borrower,
subject to the pledge by WWP of its interest in the Borrower to the Secured
Mezzanine Loan Agreement Lenders. Wellsford Commercial and WHWEL own 94.64%
of the membership units in WWP. Wellsford Real Properties owns not less than
99% of the legal, equitable and beneficial interests in Wellsford Commercial.
Whitehall Street Real Estate Limited Partnership V, Whitehall Street Real
Estate Limited Partnership VI, Whitehall Street Real Estate Limited
Partnership VII and Whitehall Street Real Estate Limited Partnership VIII are
partners of WHWEL, a member of WWP. Member and Manager are and shall remain
the sole members of the Property Owner 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, and no other
Person owns or shall own any legal, equitable or beneficial interests in the
Property Owner, or have any right to vote or exercise control over the
Property Owner or its management (except for the rights of the "independent
manager" of the Property Owner, as set forth in the Property Owner
Organizational Agreements). Member is and shall remain the sole member of
Manager, 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, and no other Person owns or shall own any
legal, equitable or beneficial interests in Manager, or have any right to
vote or exercise control over the Manager or its management (except for the
rights of the "independent manager" of the Manager, as set forth in the
Manager Organizational Agreements). Borrower is and shall remain the sole
member of the Member 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, and no other Person owns or shall own
any legal, equitable or beneficial interest in the Member, or have any right
to vote or exercise control over the Member or its management (except for the
rights of the "independent manager" of the Member as set forth in the Member
Organizational Agreements). Property Owner owns no assets other than the
Mezzanine Property, and no other Person owns any legal, equitable or
beneficial interests in the Mezzanine Property, other than the interest as
tenants only of the tenants listed on the Rent Roll delivered to the Agent
pursuant to Section 6.24(k). Manager and the Member own no assets other than
their respective interests in the Property Owner, and as to the Member, its
interests in the Manager.
Section 6.33. Special Purpose Entity. The Borrower is in full and
complete compliance with the Operating Agreement.
Section 6.34. Management Agreements. The Mezzanine Property is managed
by Northeast Real Estate Services LLC pursuant to a Management Agreement
between the Property Owner and Northeast Real Estate Services LLC dated May
15, 1998 (the "Mezzanine Management Agreement"). The Borrower has delivered
to the Agent a true, correct and complete copy of such Mezzanine Management
Agreement. There are no claims or any basis for any claim in respect of the
Mezzanine Property or its operation by any party to the Mezzanine Management
Agreement.
Section 6.35. Obligations as Members.
(a) All duties, obligations and responsibilities required to be
performed by the Manager and the Member as of the date hereof under the
Property Owner Organizational Agreements and by the Member as of the date
hereof under the Manager Organizational Agreements, 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 or the Manager Organizational Agreements.
(b) Except for the Loan Documents, the Mezzanine Mortgage Loan
Documents and, with respect to clause (iii) only, the Property Owner
Organizational Agreements, the Manager Organizational Agreements and the
Member Organizational Agreements, neither the Property Owner, the Manager nor
the Member is a party to or is bound by any indenture, contract or other
agreement which purports to prohibit, restrict, limit, or control (i) the
transfer or pledge of direct or indirect interests in the Property Owner, the
Manager or the Member, (ii) the exercise of voting rights with respect to
the such Persons or (iii) the management of such Persons.
Section i AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
Section 7.1. Punctual Payment. The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Loans and all
interest and fees provided for in this Agreement, all in accordance with the
terms of this Agreement and the Notes as well as all other sums owing
pursuant to the Loan Documents.
Section 7.2. Maintenance of Office. The Borrower will maintain its
chief executive office at 610 Fifth Avenue, 7th Floor, New York County, New
York, New York, or at such other place in the United States of America as the
Borrower shall designate upon prior written notice to the Agent and the
Banks, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.
Section 7.3. Records and Accounts. The Borrower will keep and will
cause the Property Owner to (a) keep true and accurate records and books of
account in which full, true and correct entries will be made in accordance
with generally accepted accounting principles and (b) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation
and amortization of its properties, contingencies and other reserves. The
Borrower will not make and will not allow the Property Owner to make, without
the prior written consent of the Majority Banks, (x) any material changes to
the accounting procedures used by such Person in preparing the financial
statements and other information described in Section 6.4 or (y) a change in
its fiscal year.
Section 7.4. Financial Statements, Certificates and Information. The
Borrower will deliver or cause to be delivered to the Agent with sufficient
copies for each of the Banks:
(a) as soon as practicable, but in any event not later than 90
days after the end of each fiscal year of the Borrower, the audited balance
sheet of the Borrower at the end of such year, and the related audited
statements of income, changes in shareholders' equity and cash flows for such
year, each setting forth in comparative form the figures for the previous
fiscal year (other than the fiscal year ending prior to the Closing Date for
which such statements of Borrower were not separately prepared) and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and accompanied by an auditor's report
prepared without qualification by Ernst & Young LLP or by another "Big Six"
accounting firm, together with the unaudited annual operating statement of
each Mortgaged Property and the Mezzanine Property (which statement shall
also be reconciled to the budget for the Mortgaged Property and the Mezzanine
Property), together with a certification by Borrower's chief financial or
chief accounting officer that the information contained in such statement
fairly presents the operations of the Mortgaged Property and the Mezzanine
Property for such period, and any other information the Banks may reasonably
need to complete a financial analysis of the Borrower;
(b) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (including the
fourth quarter), copies of the unaudited balance sheet of the Borrower as of
the end of such quarter, and the related unaudited consolidated statements of
income, changes in shareholders' equity and cash flows for the portion of the
Borrower's fiscal year then elapsed, and the unaudited operating statement
for the Mortgaged Property and the Mezzanine Property for such quarter and
year-to-date (which statement shall also be reconciled to the budget for the
Mortgaged Property and the Mezzanine Property), all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Borrower that the information contained in such financial
statements fairly presents the financial position of the Borrower and the
operations of the Mortgaged Property and the Mezzanine Property on the date
thereof (subject to year-end adjustments);
(c) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (including the
fourth fiscal quarter in each year), copies of a statement of Net Operating
Income for such fiscal quarter and year-to-date for each of the Mortgaged
Properties and the Mezzanine Properties, prepared in a manner reasonable
satisfactory to the Agent, together with a certification by the Borrower's
chief financial or chief accounting officer that the information contained in
such statement fairly presents the Net Operating Income of the Mortgaged
Property and the Mezzanine Property for such period;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement (a "Compliance
Certificate") certified by the principal financial or accounting officer of
the Borrower in the form of Exhibit C hereto setting forth in reasonable
detail computations evidencing compliance with the covenants contained in
Section 9, and (if applicable) reconciliations to reflect changes in
generally accepted accounting principles since the Balance Sheet Date;
(e) concurrently with the delivery of the financial statements
described in subsections (b) and (c) above, a certificate signed by the
President or Chief Financial Officer of the Borrower to the effect that,
having read this Agreement, and based upon an examination which they deem
sufficient to enable them to make an informed statement, there does not exist
any Default or Event of Default, or if such Default or Event of Default has
occurred, specifying the facts with respect thereto;
(f) contemporaneously with the filing, mailing or releasing
thereof, copies of all press releases and all material of a financial nature
filed with the SEC, if applicable, or sent to all of the members of the
Borrower;
(g) as soon as practicable but in any event not later than 45 days
after the end of each fiscal quarter of the Borrower (including the fourth
fiscal quarter in each year), updated Rent Rolls with respect to the
Mortgaged Property and the Mezzanine Property and a summary of each Rent Roll
in form reasonably satisfactory to the Agent;
(h) as soon as practicable, but in any event not later than 30
days prior to the beginning of each calendar year, the annual operating
budget for each Mortgaged Property, in form and substance satisfactory to the
Majority Banks;
(i) promptly after they are filed with the Internal Revenue
Service, copies of all annual federal income tax returns and amendments
thereto of the Borrower and the Guarantor;
(j) not later than 45 days after the end of each fiscal quarter of
the Borrower (including the fourth fiscal quarter in each year), the market
comparable study conducted by the Borrower's internal staff or its property
managers, and at other times copies of such market studies relating to the
Mortgaged Property and the Mezzanine Property as are from time to time
prepared by or on behalf of the Borrower;
(k) to the extent not otherwise provided to Agent hereunder, a
copy of each statement, report, Rent Roll, tax return or other matter
required to be delivered to the Mezzanine Mortgagee pursuant to the Mezzanine
Mortgage Loan Documents as and when the same is required to be delivered to
the Mezzanine Mortgagee pursuant to the terms thereof;
(l) not later than 45 days after the end of each fiscal quarter
(including the fourth quarter), a certification by the principal financial or
accounting officer of the Borrower to the effect that to such Person's
knowledge no "Default" or "Event of Default" exists under the Mezzanine
Mortgage Loan Documents, or if such Person shall obtain knowledge of any then
existing "Default" or "Event of Default" under the Mezzanine Mortgage Loan
Documents, they shall disclose in such statement such "Defaults" or "Events
of Default";
(m) not later than 45 days after the end of each fiscal quarter
(including the fourth quarter), a copy of each Lease entered into by or on
behalf of the Borrower or Property Owner, respectively, during such quarter;
(n) promptly upon issuance of the same by any of the Property
Owner, the Borrower, the Member or the Manager, duplicate copies of any and
all notices of any proposed sale or other disposition, or financing or
refinancing, of any interest of or in the Property Owner or of the Mezzanine
Property or of the Mezzanine Collateral, together with all material documents
related thereto and a description of the material terms thereof;
(o) duplicate copies of any and all notices of default by or under
the Property Owner Organizational Agreements, the Member Organizational
Agreements or the Manager Organizational Agreements or of any failure by any
Persons to perform any obligation under such agreements;
(p) duplicate copies of any and all notices sent by the Property
Owner to any Rating Agency, or sent by a Rating Agency to the Property Owner;
(q) not later than 45 days after the end of each calendar year,
evidence that the Property Owner, the Member and the Manager have taken all
actions required by the respective states in which they are organized and
Massachusetts law to remain in good standing;
(r) duplicate copies of any and all appraisals or updates thereof
that are required to be delivered by the Property Owner to the Mezzanine
Mortgagee pursuant to any of the Mezzanine Mortgage Loan Documents as and
when the same are required to be delivered to the Mezzanine Mortgagee; and
(s) from time to time such other financial data and information in
the possession of or reasonably obtainable by the Borrower or the Property
Owner relating to the Borrower, the Property Owner, the Manager, the Member,
the Mortgaged Property, the Mezzanine Property or the Mezzanine Collateral
(including without limitation auditors' management letters, property
inspection and environmental reports and information as to zoning and other
legal and regulatory changes affecting the Borrower) as the Agent may
reasonably request.
Section 7.5. Notices.
(a) Defaults. The Borrower will promptly notify the Agent in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this
Agreement or under any note, evidence of indebtedness, indenture or other
obligation (including, without limitation, the Mezzanine Mortgage Loan
Documents) to which or with respect to which any of the Borrower, the Member,
the Property Owner, the Manager or the Guarantor is a party or obligor,
whether as principal or surety, and such default would permit the holder of
such note or obligation or other evidence of indebtedness to accelerate the
maturity thereof, which acceleration would have a material adverse effect on
any such Person, the Borrower shall forthwith give written notice thereof to
the Agent and each of the Banks, describing the notice or action and the
nature of the claimed default.
(b) Environmental Events. The Borrower will promptly give notice
to the Agent (i) upon the Borrower or the Guarantor obtaining knowledge of
any potential or known Release, or threat of Release, of any Hazardous
Substances at or from the Mortgaged Property or the Mezzanine Property; (ii)
of any violation of any Environmental Law that the Borrower, the Guarantor or
the Property Owner reports in writing or is reportable by such Person in
writing (or for which any written report supplemental to any oral report is
made) to any federal, state or local environmental agency and (iii) upon
becoming aware thereof, of any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or board, that
in either case involves the Mortgaged Property or the Mezzanine Property or
has the potential to materially affect the assets, liabilities, financial
conditions or operations of such Person or the Agent's liens or security
title on the Collateral pursuant to the Security Documents.
(c) Notification of Claims Against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Agent in writing of any
setoff, claims (including, with respect to the Mortgaged Property and
Mezzanine Property, environmental claims), withholdings or other defenses to
which any of the Collateral or the Mezzanine Property or the rights of the
Borrower, the Member, the Property Owner, the Manager, the Guarantor or the
Agent or the Banks with respect to the Mezzanine Property or the Mortgaged
Property or any of the Collateral or Mezzanine Collateral are subject. In
addition, the Borrower will, immediately upon becoming aware thereof, notify
the Agent in writing of the occurrence of any material default under any
Lease, the intention of any tenant under a Lease to withhold any fixed or
base rent or the actual withholding thereof, or any bankruptcy, insolvency or
cessation of operations by any tenant under a Lease.
(d) Notice of Litigation and Judgments. The Borrower will give
notice to the Agent in writing within 15 days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting any of the Borrower, the Property Owner, the Member,
the Manager or the Guarantor or to which any of such Persons is or is to
become a party involving an uninsured claim against any of such Persons that
could reasonably be expected to have a materially adverse effect on any of
such Persons and stating the nature and status of such litigation or
proceedings. The Borrower will give notice to the Agent, in writing, in form
and detail satisfactory to the Agent and each of the Banks, within ten days
of any judgment not covered by insurance, whether final or otherwise, against
any of the Borrower, the Property Owner, the Manager, the Member or the
Guarantor in an amount in excess of $250,000.
(e) Notification of Banks. Promptly after receiving any notice
under this Section 7.5, the Agent will forward a copy thereof to each of the
Banks, together with copies of any certificates or other written information
that accompanied such notice.
Section 7.6. Existence; Maintenance of Properties.
(a) The Borrower will do or cause to be done all things necessary
to preserve and keep in full force and effect its existence as a Delaware
limited liability company and shall not amend or modify the Operating
Agreement in any manner without the prior written consent of the Agent. The
Borrower will do or cause to be done all things necessary to preserve and
keep in full force all of its rights and franchises. The Borrower will
continue to engage primarily in the business now conducted by it. The
Borrower will cause each of the Property Owner, the Member and the Manager to
do or cause to be done all things necessary to preserve and keep in full
force and effect and in good standing their legal existence as a corporation,
limited partnership, trust or limited liability company, as applicable.
Without limiting the foregoing, the Property Owner, the Member and the
Manager shall take all actions as are necessary to maintain all protection
afforded to limited liability companies in their states of organization and
Massachusetts. The Borrower will do or cause to be done all things necessary
to preserve and keep in full force and affect all of the rights and
franchises of the Property Owner, the Manager and the Member. The Borrower
will cause each of the Property Owner, the Member and the Manager to continue
to engage primarily in the respective businesses now conducted by each of
them and in related businesses.
(b) The Borrower (i) will cause all of its properties used or
useful in the conduct of its business and the Mezzanine Property to be
maintained and kept in good condition, repair and working order (ordinary
wear and tear excepted) and supplied with all necessary equipment, and (ii)
will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof in all cases in which the failure so to
do would have a material adverse effect on the condition of the applicable
Mortgaged Property or other Collateral or Mezzanine Property or on the
financial condition, assets or operations of the Borrower, the Property
Owner, the Member, the Manager or the Guarantor.
Section 7.7. Insurance.
(a) The Borrower will, at its expense, procure and maintain, or
cause to be procured and maintained, for the benefit of the Borrower and the
Agent, insurance policies issued by such insurance companies, in such
amounts, in such form and substance, and with such coverages, endorsements,
deductibles and expiration dates as are acceptable to the Agent, providing
the following types of insurance covering the Mortgaged Property:
(i) "All Risks" property insurance (including broad form
flood, broad form earthquake and comprehensive boiler and machinery
coverages) on each Building and the contents therein of the Borrower in
an amount not less than one hundred percent (100%) of the full
replacement cost of each Building and the contents therein of the
Borrower, with deductibles not to exceed $50,000 for any one occurrence,
with a replacement cost coverage endorsement, and, if requested by the
Agent, a contingent liability from operation of building laws
endorsement in such amounts as the Agent may require. Full replacement
cost as used herein means the cost of replacing the Building (exclusive
of the cost of excavations, foundations and footings below the lowest
basement floor) and the contents therein of the Borrower without
deduction for physical depreciation thereof;
(ii) During the course of construction or repair of any
Building having a cost in excess of $1,000,000, the insurance required
by clause (i) above shall be written on a builders risk, completed
value, non-reporting form, meeting all of the terms required by clause
(i) above, covering the total value of work performed, materials,
equipment, machinery and supplies furnished, existing structures, and
temporary structures being erected on or near the Real Estate, including
coverage against collapse and damage during transit or while being
stored off-site, and containing a soft costs (including loss of rents)
coverage endorsement and a permission to occupy endorsement;
(iii) Flood insurance if at any time any Building is
located in any federally designated "special hazard area" (including any
area having special flood, mudslide and/or flood-related erosion
hazards, and shown on a Flood Hazard Boundary Map or a Flood Insurance
Rate Map published by the Federal Emergency Management Agency as Zone A,
AO, Al-30, AE, A99, AH, VO, Vl-30, VE, V, M or E) and the broad form
flood coverage required by clause (i) above is not available, in an
amount equal to the full replacement cost or the maximum amount then
available under the National Flood Insurance Program;
(iv) Rent loss insurance in an amount sufficient to recover at
least the total estimated gross receipts from all sources of income,
including without limitation, rental income, for the Real Estate for a
twelve month period;
(v) Commercial general liability insurance against claims for
personal injury (to include, without limitation, bodily injury and
personal and advertising injury) and property damage liability, all on
an occurrence basis, if commercially available, with such coverages as
the Agent may reasonably request (including, without limitation,
contractual liability coverage, completed operations coverage for a
period of two years following completion of construction of any
improvements on the Real Estate, and coverages equivalent to an ISO
broad form endorsement), with a general aggregate limit of not less than
$1,000,000, a completed operations aggregate limit of not less than
$1,000,000, and a combined single "per occurrence" limit of not less
than $1,000,000 for bodily injury, property damage and medical payments;
(vi) During the course of construction or repair of any
improvements on the Real Estate in excess of $1,000,000, owner's
contingent or protective liability insurance covering claims not covered
by or under the terms or provisions of the insurance required by clause
(v) above;
(vii) Employers liability insurance (with respect to the
Borrower's employees only);
(viii) Umbrella liability insurance with limits of not less
than $50,000,000 to be in excess of the limits of the insurance required
by clauses (v), (vi) and (vii) above, with coverage at least as broad as
the primary coverages of the insurance required by clauses (v), (vi) and
(vii) above, with any excess liability insurance to be at least as broad
as the coverages of the lead umbrella policy. All such policies shall
be endorsed to provide defense coverage obligations;
(ix) Workers' compensation insurance for all employees of the
Borrower engaged on or with respect to the Real Estate; and
(x) Such other insurance in such form and in such amounts as
may from time to time be required by the Majority Banks against other
insurable hazards and casualties which at the time are commonly insured
against in the case of properties of similar character and location to
the Real Estate.
The Borrower shall pay or cause to be paid all premiums on insurance
policies. The insurance policies with respect to all Mortgaged Properties
provided for in clauses (v), (vi) and (viii) above with respect to all
Mortgaged Property shall name the Agent and each Bank as an additional
insured. The insurance policies provided for in clauses (i), (ii), (iii) and
(iv) above shall name the Agent as mortgagee and loss payee, shall be first
payable in case of loss to the Agent, and shall contain mortgage clauses and
lender's loss payable endorsements in form and substance acceptable to the
Agent. The Borrower shall deliver duplicate originals or certified copies of
all such policies to the Agent, and the Borrower shall promptly furnish to
the Agent all renewal notices and evidence that all premiums or portions
thereof then due and payable have been paid. At least 15 days prior to the
expiration date of the policies, the Borrower shall deliver to the Banks
evidence of continued coverage, including a certificate of insurance, as may
be satisfactory to the Agent.
(b) All policies of insurance required by this Agreement shall
contain clauses or endorsements to the effect that (i) no act or omission of
either the Borrower or anyone acting for the Borrower shall affect the
validity or enforceability of such insurance insofar as the Agent is
concerned, (ii) the insurer waives any right of setoff, counterclaim,
subrogation, or any deduction in respect of any liability of the Borrower and
the Agent, (iii) such insurance is primary and without right of contribution
from any other insurance which may be available, (iv) such policies shall not
be modified, canceled or terminated prior to the scheduled expiration date
thereof without the insurer thereunder giving at least 15 days prior written
notice to the Agent by certified or registered mail, and (v) that the Agent
or the Banks shall not be liable for any premiums thereon or subject to any
assessments thereunder, and shall in all events be in amounts sufficient to
avoid any coinsurance liability.
(c) The insurance required by this Agreement may be effected
through a blanket policy or policies covering additional locations and
property of the Borrower and other Persons not included in the Mortgaged
Property, provided that such blanket policy or policies comply with all of
the terms and provisions of this Section 7.7 and contain endorsements or
clauses reasonably satisfactory to the Agent.
(d) All policies of insurance required by this Agreement shall be
issued by companies licensed to do business in the State where the policy is
issued and also in the states where the Real Estate is located and having a
rating in Best's Key Rating Guide of at least "A" and a financial size
category of at least "VIII".
(e) The Borrower shall not carry separate insurance, concurrent in
kind or form or contributing in the event of loss, with any insurance
required under this Agreement unless such insurance complies with the terms
and provisions of this Section 7.7.
(f) In the event of any loss or damage to the Mortgaged Property,
the Borrower shall give immediate written notice to the insurance carrier and
the Agent, and the Agent shall furnish a copy of such notice promptly to each
of the Banks. The Borrower may make proof of loss and adjust and compromise
any claim under insurance policies which is of an amount not more than
$1,000,000.00 so long as no Event of Default has occurred and is continuing
and so long as such claim is pursued diligently and in good faith. The
Borrower hereby irrevocably authorizes and empowers the Agent, at the Agent's
option in the Agent's sole discretion or at the request of the Majority Banks
in their sole discretion, as attorney in fact for the Borrower, to make proof
of any loss except as provided in the preceding sentence, to adjust and
compromise any claim under insurance policies, to appear in and prosecute any
action arising from such insurance policies, to collect and receive insurance
proceeds, and to deduct therefrom the Agent's expenses incurred in the
collection of such proceeds. If the Mortgaged Property is acquired by the
Agent or any nominee through foreclosure, deed in lieu of foreclosure or
otherwise is acquired from the owner thereof, all right, title and interest
of the owner of such Mortgaged Property in and to any insurance policies and
unearned premiums thereon and in and to the proceeds thereof resulting from
loss or damage to the Mortgaged Property prior to such sale or acquisition
shall pass to the Agent or any other successor in interest to the owner or
purchaser or grantee of the Mortgaged Property.
(g) Subject to the terms of the following sentence, the Borrower
authorizes the Agent, at the Agent's option or at the request of the Majority
Banks' in their sole discretion, to (i) apply the balance of such proceeds to
the payment of the Obligations whether or not then due, or (ii) if the Agent
or the Majority Banks shall require the reconstruction or repair of the
Mortgaged Property, to hold the balance of such proceeds to be used to pay
all taxes, charges, sewer use fees, water rates and assessments which may be
imposed upon the Mortgaged Property and the Obligations as they become due
during the course of reconstruction or repair of the Mortgaged Property and
to reimburse the Borrower, in accordance with such terms and conditions as
Agent may prescribe, for the cost of such reconstruction or repair of the
Mortgaged Property, and on completion of such reconstruction or repair to pay
any excess funds to the Borrower so long as no Default or Event of Default
has occurred and is continuing, or if a Default or Event of Default has
occurred and is continuing, to apply any of the excess to the payment of the
Obligations. Notwithstanding the foregoing, the Agent shall make such net
proceeds available to the Borrower to reconstruct and repair the Mortgaged
Property, in accordance with such terms and conditions as the Agent may
prescribe for the disbursement of such proceeds to assure completion of such
reconstruction or repair provided that (A) no Default or Event of Default
shall have occurred and be continuing, (B) the Borrower shall have provided
to Agent additional cash security in an amount equal to the amount reasonably
estimated by the Agent to be the amount in excess of such proceeds which will
be required to complete such repair or restoration, and (C) the Agent shall
determine that such repair or reconstruction can be completed prior to the
Maturity Date, (D) the cost of such reconstruction or repair is not estimated
by the Agent to exceed fifty percent (50%) of the Appraised Value of such
Mortgaged Property, (E) the Agent shall have approved the plans and
specifications for such repair or restoration and determined that the
repaired or restored Mortgaged Property will provide the Banks with adequate
security for the Obligations, and (F) the Borrower shall have delivered to
the Agent written agreements binding upon all tenants or other parties having
present or future rights to possession of any portion of the Mortgaged
Property or having any right to require repair, restoration or completion of
the Mortgaged Property or any portion thereof, agreeing upon a date for
delivery of possession of the Mortgaged Property or their respective portions
thereof, or for such required repair, restoration or completion, to permit
time which is sufficient in the judgment of the Agent for such repair or
restoration and approving the plans and specifications for such repair or
restoration, or other evidence satisfactory to the Agent that none of such
tenants or other parties may terminate their Leases as a result of such
casualty or have a right to approve the plans and specifications for such
repair or restoration.
(h) The Borrower, at its expense, will procure and maintain or
cause to be procured and maintained, insurance covering the Borrower and the
Mortgaged Property in such amounts and against such risks and casualties as
are customary for properties of similar character and location, due regard
being given to the type of improvements thereon, their construction,
location, use and occupancy.
(i) The Borrower shall provide or cause to be provided to the
Agent for the benefit of the Banks Title Policies for all of the Mortgaged
Property which shall at all times be in an aggregate amount of not less than
the initial Designated Collateral Value attributable to such Mortgaged
Property (provided that a Title Policy for an individual Mortgaged Property
need not equal the aggregate Designated Collateral Value). Each Title Policy
shall also contain, to the extent available, a tie-in endorsement aggregating
the insurance coverage provided under all of the policies with tie-in
endorsements.
(j) The Borrower will cause the Property Owner, at its expense, to
procure and maintain the insurance policies required by the Mezzanine
Mortgage Loan Documents. Each commercial general liability or umbrella
liability policy with respect to the Mezzanine Property shall name the Agent
and the Banks as an additional insured and shall contain a cross
liability/severability endorsement. The Borrower shall deliver duplicate
originals or certified copies of all such policies to the Agent, and the
Borrower shall promptly furnish to the Agent all renewal notices and evidence
that all premiums or portions thereof then due and payable have been paid.
At least 15 days prior to the expiration date of all such policies, the
Borrower shall deliver to the Agent evidence of continued coverage, including
a certificate of insurance, as may be reasonably satisfactory to the Agent.
Agent acknowledges and agrees that such insurance may be provided by the
Borrower covering the Mezzanine Property as well as other properties directly
or indirectly owned by the Borrower, provided that such insurance satisfies
the requirements of the Mezzanine Mortgage Loan Documents and the Loan
Documents.
(k) In the event of any loss or damage to the Mezzanine Property,
the Borrower shall give prompt written notice to the insurance carrier and
the Agent. The Agent acknowledges that the Property Owner's rights to any
insurance proceeds are subject to the terms of the Mezzanine Mortgage Loan
Documents. The Borrower may not and shall not permit the Property Owner to
settle, adjust or compromise any claim under such insurance policies without
the prior written consent of the Agent; provided, further, that the Property
Owner may make proof of loss and adjust and compromise any claim under
casualty insurance policies which is of an amount less than $1,000,000.00 so
long as no Default or Event of Default has occurred. Any proceeds of such
claim which are not used to reconstruct or repair the Mezzanine Property, or
applied to the balance of the loan evidenced by the Mezzanine Mortgage Loan
Documents, shall be deposited into the accounts established pursuant to the
Mezzanine Mortgage Loan Documents to the extent required thereby, or if such
deposit is not required thereunder, then such proceeds shall be paid to (i)
Borrower (and not to Agent) so long as the Mezzanine Property has been fully
repaired and restored and no Default or Event of Default has occurred and is
continuing, or (ii) if a Default of Event of Default has occurred and is
continuing, or if the Mezzanine Property has not been so fully repaired or
restored, then such excess insurance proceeds shall be paid to Agent and
applied to the payment of the Obligations whether or not then due.
Notwithstanding anything contained in the Loan Documents to the contrary,
Agent hereby agrees that the Property Owner may use all insurance proceeds to
restore and repair the Mezzanine Property, provided that such use is
permitted or required under the terms of the Mezzanine Mortgage Loan
Documents.
(l) In the event that the Property Owner is permitted pursuant to
the terms of the Mezzanine Mortgage Loan Documents to reconstruct, restore or
repair the Mezzanine Property following a casualty to any portion of the
Mezzanine Property, the Borrower shall cause the Property Owner to promptly
and diligently repair and restore the Mezzanine Property in the manner and
within the time periods required by the Mezzanine Mortgage Loan Documents,
the Leases and any other agreements affecting the Mezzanine Property. In the
event that Property Owner is permitted pursuant to the terms of the Mezzanine
Mortgage Loan Documents to elect not to reconstruct, restore or repair the
Mezzanine Property following a casualty to any portion of the Mezzanine
Property, the Borrower shall not permit the Property Owner to elect not to
reconstruct, restore or repair the Mezzanine Property without the prior
written consent of the Agent.
Section 7.8. Taxes.
(a) The Borrower will duly pay and discharge, or cause to be paid
and discharged, before the same shall become overdue, all taxes, assessments
and other governmental and private charges imposed upon the Borrower, the
Member, the Manager, the Property Owner and upon the Mortgaged Property and
any other Collateral, such Person's sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property, and shall in any event cause the prompt,
full and unconditional discharge of all liens imposed on or against the
Collateral or the Mezzanine Collateral or any portion thereof within thirty
(30) days after receiving written notice (whether from the Mezzanine
Mortgagee, the Agent, the lienholder or any other Person) of the filing
thereof; provided that so long as no Event of Default has occurred, any such
tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings which shall suspend the collection thereof with respect to such
property, neither such property nor any portion thereof or interest therein
would be in any danger of sale, forfeiture or loss by reason of such
proceeding and the Borrower or such Person shall have set aside adequate
reserves with respect thereto as the Agent may reasonably require; and
provided, further, that forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor, the Borrower
either (i) will provide a bond issued by a surety reasonably acceptable to
the Majority Banks and sufficient to stay all such proceedings or (ii) if no
such bond is provided, will pay each such tax, assessment, charge, levy or
claim.
(b) The Borrower shall cause the Property Owner to pay all "Taxes"
and "Other Charges" (as defined in the Mezzanine Mortgage Loan Agreement), to
pay all claims for labor, material or supplies that if unpaid or unbonded
might by law become a lien or charge upon any of its property (including the
Mezzanine Property), and to keep the Mezzanine Property free from all Liens
(other than the lien of the Nomura Mortgages and the Permitted Liens), and
shall in any event cause the prompt, full and unconditional discharge of all
Liens imposed upon the Mezzanine Property or any portion thereof within
thirty (30) days after receiving written notice (whether from the Mezzanine
Mortgagee, the Agent, the lienholder or any other Person) of the filing
thereof or such earlier time as may be required by the Mezzanine Mortgage
Loan Documents; subject in each case to the Property Owner's right to contest
the same as permitted in but subject to the conditions set forth in the
Nomura Mortgages so long as no Event of Default has occurred. In the event
that the Property Owner elects to commence any contest or similar proceeding
with respect to any such Taxes, Other Charges, Liens or other claims
described herein, the Borrower shall provide prompt written notice thereof to
the Agent together with such evidence as the Agent may reasonably require
showing the Property Owner's satisfaction of the requirements set forth in
Section 5.1(b) of the Mezzanine Mortgage Loan Agreement. Notwithstanding the
foregoing, the Borrower shall cause the Property Owner promptly to pay any
contested Taxes, Other Charges, Lien or claim and the payment thereof shall
not be deferred, if the Mezzanine Mortgagee or the Property Owner may be
subject to civil or criminal damages as a result thereof. If such action or
proceeding is terminated or discontinued adversely to the Property Owner,
then the Borrower shall deliver to the Agent reasonable evidence of payment
of such contested Taxes, Other Charges or Lien.
Section 7.9. Inspection of Properties and Books. The Borrower shall
permit the Banks, through the Agent or any representative designated by the
Agent, at the Borrower's expense to visit and inspect any of the properties
of the Borrower and the Mezzanine Property, to examine the books of account
of the Borrower and the Property Owner (and to make copies thereof and
extracts therefrom) and to discuss the affairs, finances and accounts of the
Borrower and the Property Owner with, and to be advised as to the same by,
its officers, all at such reasonable times and intervals as the Agent or any
Bank may reasonably request. The Banks shall use good faith efforts to
coordinate such visits and inspections so as to minimize the interference
with and disruption to the Borrower's and the Property Owner's normal
business operations.
Section 7.10. Compliance with Laws, Contracts, Licenses, and Permits.
The Borrower will comply and will cause the Property Owner, the Member and
the Manager to comply in all respects with (i) all applicable laws and
regulations now or hereafter in effect wherever its business is conducted,
including all Environmental Laws, (ii) the provisions of its or their
certificate of formation, operating agreement, corporate charter, and other
charter documents and bylaws, (iii) all agreements and instruments to which
it is a party or by which it or any of its properties may be bound, (iv) all
applicable decrees, orders, and judgments, and (v) all licenses and permits
required by applicable laws and regulations for the conduct of its business
or the ownership, use or operation of its properties. The Borrower covenants
and agrees to give Agent prompt notice of any non-compliance with such laws,
ordinances, regulations or requirements and of any notice of non-compliance
therewith which the Borrower, the Property Owner, the Member or the Manager
receives or any threatened or pending proceedings in respect thereto or with
respect to the Mezzanine Property (including, without limitation, changes in
zoning) of which the Property Owner, the Borrower, the Member or the Manager
receives notice. If at any time while any Loan or Note is outstanding or the
Banks have any obligation to make Loans hereunder, any authorization,
consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower, the Property Owner, the Member or the Manager may fulfill
any of its obligations hereunder, the Borrower will immediately take or cause
to be taken all steps necessary to obtain such authorization, consent,
approval, permit or license and furnish the Agent and the Banks with evidence
thereof. Notwithstanding the foregoing, the Property Owner shall have the
right to contest the applicability of any legal requirement subject to the
approval of the Mezzanine Mortgagee, so long as Property Owner is in good
faith, and by proper legal proceedings, diligently contesting the application
thereof, provided no Event of Default shall exist and be continuing
hereunder, and the Borrower provides evidence to the Agent that the Property
Owner is otherwise fully complying with each of the conditions set forth in
the Mezzanine Mortgage Loan Documents or prescribed by the Mezzanine
Mortgagee applicable to such contest. The Borrower shall promptly notify the
Agent of the commencement of any contest or similar proceeding hereunder.
Notwithstanding the foregoing, the Borrower shall cause the Property Owner
promptly to comply with any contested legal requirement, and compliance
therewith shall not be deferred, if the Property Owner or the Mezzanine
Mortgagee may be subject to civil or criminal charges or damages as a result
thereof or such noncompliance might place the Mezzanine Property or any part
thereof in danger of being forfeited, lost or closed. If such action or
proceeding is terminated or discontinued adversely to the Property Owner,
then, the Borrower shall, upon written demand, deliver to the Agent
reasonable evidence of compliance by the Property Owner with such contested
legal requirement.
Section 7.11. Use of Proceeds. The Borrower will use the proceeds of
the Loans solely to provide short-term financing (a) for the acquisition of
fee interests by Borrower in Real Estate which is located in the northeastern
corridor of the United States and utilized principally as commercial office
space, (b) for Capital Improvement Projects to Real Estate owned by the
Borrower, (c) for the repayment of Indebtedness incurred or assumed by the
Borrower in connection with the acquisitions and investments described in
Section 7.11(a), (d) for the acquisition of the Equity Interests, (e) for
reasonable transaction costs related to the transactions referred to in the
preceding clause (a) and (d), (f) for Capital Improvement Projects and
Leasing Commissions, (g) up to $10,000,000 for general working capital
purposes, and (h) for such other purposes as the Majority Banks may approve.
Notwithstanding the foregoing, in no event shall the proceeds of the Loan be
used to acquire any asset that as a part of such transaction or in a related
transaction will be or is to become subject to a lien against such asset
other than a lien in favor of the Agent and the Banks under the Loan
Documents.
Section 7.12. Further Assurances. The Borrower will cooperate with,
and will cause the Manager, the Member and the Guarantor to cooperate with,
the Agent and the Banks and execute such further instruments and documents as
the Banks or the Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Agreement and the other
Loan Documents.
Section 7.13. Management Agreements. The Borrower will provide prompt
written notice to the Agent of any termination or material modification or
amendment of any Management Agreement, provided that, without the prior
consent of the Majority Banks, none of the Management Agreements for the
Mortgaged Property shall be modified or amended to increase the fees payable
thereunder and provided further that, without the prior consent of the
Majority Banks, which consent shall not be unreasonably withheld or delayed,
the Borrower shall not permit the Property Owner to terminate, modify or
amend any Management Agreement for the Mezzanine Property. The Borrower will
not enter into and will not permit the Property Owner to enter into any
Management Agreement or otherwise manage any of the Mortgaged Property or the
Mezzanine Property except with property and leasing managers having
sufficient expertise and resources to manage such properties as Class A
office buildings or if such buildings are Non-Stabilized Properties, as Class
B office buildings and with respect to the Mezzanine Property are approved by
the Agent, and on leasing terms and conditions no less favorable to the
Borrower or the Property Owner than are contained in the Management
Agreements delivered to the Agent prior to the date hereof or are otherwise
on then commercially reasonable terms. Any Management Agreement for the
Mezzanine Property shall be in form and substance reasonably satisfactory to
the Agent. The Agent hereby approves the Mezzanine Management Agreement.
Notwithstanding the foregoing, any manager of the Mezzanine Property shall
satisfy any conditions or requirements contained in the Mezzanine Mortgage
Loan Documents applicable to such entity acting as the manager of the
Mezzanine Property, and in no event shall there be a change to the manager of
the Mezzanine Property or any Management Agreement for the Mezzanine Property
if the same would constitute a "Default" or "Event of Default" under the
Mezzanine Mortgage Loan Documents.
Section 7.14. ERISA Compliance. The Borrower will not permit the
present value of all employee benefits vested in all Employee Benefit Plans,
Multiemployer Plans and Guaranteed Pension Plans maintained by the Borrower
and any ERISA Affiliate thereof to exceed the present value of the assets
allocable to such vested benefits by an amount greater than $500,000.00 in
the aggregate. Neither the Borrower nor any ERISA Affiliate thereof will at
any time permit any such Plan maintained by it to engage in any "prohibited
transaction" as such term is defined in Section 4975 of the Code or Section
406 of ERISA, incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived, or terminate any such
Plan in any manner which could result in the imposition of a lien on the
property of the Borrower or the Guarantor pursuant to Section 4068 of ERISA.
Section 7.15. Condemnation. In the event that all or any portion of
the Mezzanine Property shall be damaged or taken through condemnation (which
term shall include any damage or taking by any governmental authority, quasi-
governmental authority, any party having the power of condemnation, or any
transfer by private sale in lieu thereof), or any such condemnation shall be
threatened, the Borrower shall give prompt written notice to the Agent. The
Agent and the Banks acknowledge that the Property Owner's rights to any
condemnation award is subject to the terms of the Mezzanine Mortgage Loan
Documents. The Borrower may not and shall not permit the Property Owner to
settle or compromise any claim, action or proceeding relating to such damage
or condemnation without the prior written consent of the Agent. Any
proceeds, award or damages from such damage or condemnation which are not
used to reconstruct or repair the Mezzanine Property, or applied to the
balance of the loan evidenced by the Mezzanine Mortgage Loan Documents, shall
be paid to the Agent and applied to the payment of the Obligations whether or
not then due. Notwithstanding anything contained in the Loan Documents to
the contrary, Agent hereby agrees that the Property Owner may use all
condemnation proceeds, awards and damages to restore and repair the Mezzanine
Property, provided that such use is permitted or required under the terms of
the Mezzanine Mortgage Loan Documents. In the event that the Property Owner
is permitted pursuant to the terms of the Mezzanine Mortgage Loan Documents
to reconstruct, restore or repair the Mezzanine Property following a
condemnation of any portion of the Mezzanine Property, the Borrower shall
cause the Property Owner to promptly and diligently repair and restore the
Mezzanine Property in the manner and within the time periods required by the
Mezzanine Mortgage Loan Documents, the Leases and any other agreements
affecting the Mezzanine Property. In the event that the Property Owner is
permitted pursuant to the terms of the Mezzanine Mortgage Loan Documents to
elect not to reconstruct, restore or repair the Mezzanine Property following
a condemnation of any portion of the Mezzanine Property, the Borrower shall
not permit the Property Owner to elect not to reconstruct, restore or repair
the Mezzanine Property without the prior written consent of the Agent.
Section 7.16. Intentionally Omitted.
Section 7.17. Compliance. The Borrower shall operate its business in
compliance with the terms and conditions of this Agreement and the other Loan
Documents. Wellsford Commercial shall at all times comply with all
requirements of applicable laws necessary to maintain REIT Status.
Section wful Intentionally Omitted.
Section 7.19. Leasing. The Borrower will take or cause to be taken all
reasonable steps within the power of the Borrower to market and lease the
leasable area of the Mortgaged Property and the Borrower will cause the
Property Owner to take or cause to be taken all reasonable steps within the
power of the Property Owner to market and lease the leasable area of each
Mezzanine Property, all in accordance with sound and customary leasing and
management practices for similar properties. The Borrower will not, and will
not allow the Property Owner to, lease all or any portion of the Mortgaged
Property or the Mezzanine Property or amend, supplement or otherwise modify,
terminate or cancel, or accept the surrender of, or consent to the assignment
or subletting of, or grant any concessions to or waive the performance of any
obligations of any tenant, lessee or licensee under, any now existing or
future Lease without the prior written consent of the Agent; provided,
however, with respect to any Lease which covers less than 25,000 square feet
or provides less than three percent (3%) of the Net Operating Income of the
Mortgaged Property and the Mezzanine Property, whichever is less, the
Borrower or the Property Owner may amend, supplement or otherwise modify,
terminate or cancel, or accept the surrender of, or consent to the assignment
or subletting of, or grant concessions to or waive the performance of any
obligations of any tenant, lessee or licensee under any such Lease in the
ordinary course of business consistent with sound leasing and management
practices for similar properties provided that such action with respect to a
Lease for a Mezzanine Property shall not cause (with the passage of time or
otherwise) a default under the Mezzanine Mortgage Loan Documents. The
Borrower shall furnish or cause the Property Owner to furnish the Agent with
executed copies of all Leases hereafter made, and all Leases now or hereafter
entered into will be in form and substance subject to the approval of the
Agent. Upon the Agent's request, the Borrower shall make a separate and
distinct assignment to the Agent as additional security, of all Leases for
the Mortgaged Property hereafter made. Notwithstanding the foregoing,
following the Agent's approval of the "Leasing Parameters" (as hereinafter
defined) for the Mortgaged Property and the Mezzanine Property, then the
Borrower or the Property Owner, as applicable, may, without the prior
approval of the Agent, enter into any Lease provided that the Lease covers
less than 25,000 square feet or provides less than three percent (3%) of the
Net Operating Income of the Mortgaged Property and the Mezzanine Property, is
a bona fide arm's length lease entered into in the ordinary course of
business with a party unaffiliated with the Borrower, the Property Owner, the
Member, the Manager or the Guarantor, falls within the Leasing Parameters and
is on the standard lease form (without material modification or addition).
In connection with any Lease to be approved by the Agent as provided herein,
the Borrower shall submit to the Agent for its approval the identity of the
tenant and a summary of the major terms of the Lease (which terms shall
include without limitation those matters included within the Leasing
Parameters) (collectively the "Major Terms"), and Agent's approval shall be
limited to the approval of the Major Terms, and provided further that any
such terms submitted to the Agent for approval shall be deemed approved by
the Agent unless the Agent expressly disapproves the same by written notice
delivered to the Borrower (which shall state the reasons for disapproval)
within five (5) Business Days after the date of the delivery of such Lease to
the Agent for approval and all other information reasonably requested by the
Agent in order to make such determination. Following the approval by the
Agent of the Major Terms, the Borrower or the Property Owner shall be
permitted to enter into a lease to such tenant which falls within the Major
Terms. As used herein, "Leasing Parameters" means leasing parameters for the
Mortgaged Property and the Mezzanine Property approved by the Agent. Leasing
Parameters shall include, without limitation, the minimum and maximum term,
the minimum rent, tax and operating stops, tenant standard improvements,
tenant allowances and other tenant inducements and leasing commissions, and
shall be approved by the Agent prior to the commencement of each calendar
year during the term of the Notes. The Borrower will require, and each Lease
will require, each tenant of a Mortgaged Property to enter into a
Nondisturbance, Attornment and Subordination Agreement and to provide an
estoppel certificate satisfactory to the Agent upon the request of the Agent.
The Agent shall have the right, and the Borrower hereby authorizes the Agent,
to communicate directly with any tenant under a Lease to verify any
information delivered to the Agent by the Borrower concerning such tenant or
such tenant's Lease. The Borrower shall not collect and shall not permit the
Property Owner to collect any rents, issues, profits, revenues, income or
other benefits payable under any of the Leases for the Mezzanine Property
more than one (1) month in advance (provided that the foregoing shall not
prohibit the collection of security deposits). The Borrower shall not,
directly or indirectly, cause or permit to exist, or allow the Property Owner
to cause or permit to exist, any condition which would result in the
termination or cancellation of, or which would relieve the performance of any
obligations of any tenant under, any Lease for all or any portion of a
Mezzanine Property.
Section 7.20. Special Purpose Entity. The Borrower shall conduct its
business in full compliance with and shall not violate the terms and
conditions of the Operating Agreement.
Section 7.21. Plan Assets, etc. The Borrower will do, or cause to be
done, all things necessary to ensure that the Borrower, the Property Owner,
the Member and the Manager will not be deemed to hold Plan Assets at any
time. Each owner of an equity interest in Borrower has certified to Borrower
and the Banks, and Borrower shall require each proposed transferee of any
equity interest in Borrower, as a condition precedent to such transfer, to
certify to Borrower and the Banks, that the source of funds used or to be
used by it to acquire its interest in Borrower are not assets of any plan
subject to Title I of ERISA or Section 4975 of the Code and are not deemed to
be assets of any such plan under the U.S. Department of Labor's plan asset
regulations. Borrower has provided the Agent with a copy of each such
certification from each owner of an equity interest in Borrower and will
promptly provide the Agent with a copy of each such certification from each
proposed transferee.
Section 7.22. Budgets. The Borrower shall cause the Property Owner to
provide to Agent a copy of each Budget that is submitted by the Property
Owner to the Mezzanine Mortgagee for approval by the Mezzanine Mortgagee
pursuant to the Mezzanine Mortgage Loan Documents, or any revision or
amendment thereof, as the same are submitted by the Property Owner to the
Mezzanine Mortgagee pursuant to the Mezzanine Mortgage Loan Documents.
Section 7.23. Preservation and Maintenance.
(a) The Borrower (i) shall not permit or commit waste, impairment,
or deterioration of the Mezzanine Property or permit the Property Owner to
abandon the Mezzanine Property, (ii) shall cause the Property Owner to
restore or repair promptly and in a good and workmanlike manner all or any
part of the Mezzanine Property in the event of any damage, injury or loss
thereto, to the equivalent of its condition prior to such damage, injury or
loss, or such other condition as the Agent may approve in writing, (iii)
shall cause the Property Owner to keep the Mezzanine Property, including the
Building and any fixtures, equipment, machinery and personal property, in
good order, repair and tenantable condition (subject to ordinary wear and
tear) and shall replace fixtures, equipment, machinery and personal property
on the Mezzanine Property when necessary to keep such items in good order,
repair, and tenantable condition, and (iv) shall cause Property Owner to keep
all trademarks, tradenames, servicemarks and licenses and permits necessary
for the use and occupancy of the Mezzanine Property in good standing and in
full force and effect. Subject to the provisions of Section 7.23(b) below,
neither the Borrower, the Property Owner nor any tenant or other Person shall
remove, demolish or alter any Building now existing or hereafter erected on
the Mezzanine Property or any other fixtures, equipment, machinery or
personal property in or on the Mezzanine Property except when incident to the
replacement of fixtures, equipment, machinery or other personal property with
items of like kind and value. The Borrower shall cause the Property Owner to
comply with the asbestos operations and maintenance program in effect as of
the date hereof (if any) or adopted hereafter with respect to any new
Mortgaged Property, and shall not permit the Property Owner to discontinue or
materially modify such program without the Agent's prior written consent. In
the event that the Property Owner shall remove any asbestos or asbestos-
containing materials after the date hereof, such removal shall be performed
in accordance with all applicable laws and, upon the request of the Agent,
the Borrower shall provide evidence of such compliance to the Agent.
(b) Provided that no Event of Default shall have occurred and be
continuing hereunder, the Borrower may permit the Property Owner to undertake
any alteration, improvement, demolition or removal of the Mezzanine Property
or any portion thereof (an "Alteration") so long as such Alteration (i) is
performed strictly in compliance with the terms and conditions of the Nomura
Mortgages and the other Mezzanine Mortgage Loan Documents, (ii) is permitted
by the Leases for such Mezzanine Property, (iii) shall not materially
adversely affect the value of the applicable Mezzanine Property or materially
reduce the income from the level available immediately prior to commencement
of such Alteration, and (iv) shall not have a material adverse effect on the
ability of the Property Owner to perform its obligations under the Mezzanine
Mortgage Loan Documents and the Leases for the Mezzanine Property or of the
Borrower to perform its obligations under the Loan Documents. Any other
Alteration shall require the prior written consent of the Agent, such consent
not to be unreasonably withheld or delayed. All work performed in connection
with any Alteration shall be performed in accordance with all applicable
laws. The Borrower shall cause the Property Owner to provide to the Agent
such evidence as the Agent may reasonably require to evidence the Property
Owner's compliance with the terms of the Mezzanine Mortgage Loan Documents
and this Agreement in connection with any Alteration.
Section 7.24. Use of Mezzanine Property. Unless required by applicable
law or unless the Agent has otherwise agreed in writing, the Borrower shall
not allow or permit the Property Owner to allow changes in the nature of the
occupancy or use for which the Mezzanine Property was intended at the time
this Agreement was executed. The Borrower shall not initiate, permit to
occur or acquiesce in or permit the Property Owner to initiate, permit to
occur or acquiesce in a change in the zoning classification of the Mezzanine
Property or subject the Mezzanine Property to restrictive, negative or other
covenants without the Agent's written consent, which consent shall not be
unreasonably withheld or delayed. The Borrower shall cause the Property
Owner to comply with, observe and perform in all material respects all zoning
and other laws affecting the Mezzanine Property, all agreements and other
covenants affecting the Mezzanine Property (including without limitation the
Mezzanine Mortgage Loan Documents), and all licenses and permits affecting
the Mezzanine Property. The Borrower shall cause the Property Owner to take
all actions as are necessary to cause the prompt distribution to Agent of all
Excess Property Income to Agent as provided in the Cash Collateral Agreement.
Section 7.25. Property Owner to Remain a Single-Purpose Entity. The
Borrower shall cause the Property Owner to comply with the provisions of
Section 4.1(dd) of the Mezzanine Mortgage Loan Agreement, shall cause the
Property Owner to do all things necessary to observe limited liability
company formalities and to preserve its existence, and will not permit the
Property Owner to amend, modify or otherwise change its articles of
organization, operating agreement or other organizational documents.
Section 7.26. Condominium.
(a) The Borrower represents, warrants and covenants that the
Condominium Documents and all of the easements and other rights granted
thereby are now valid and subsisting.
(b) The Borrower will cause the Property Owner to fully and
faithfully pay when due and payable the assessments, common charges and other
charges mentioned in and made payable by the Property Owner under the
Condominium Documents, and shall cause the Property Owner to fully and
faithfully perform all obligations on the part of the Property Owner to be
performed under the Condominium Documents in the time and manner therein
prescribed.
(c) The Borrower shall cause the Property Owner to do all things
necessary to preserve and keep unimpaired its rights, powers and privileges
under the Condominium Documents and to prevent the termination or expiration
of the Condominium Documents, or the withdrawal of the Condominium from a
condominium form of ownership, to the end that the Property Owner may enjoy
all of the rights granted to it as a party to the Condominium Documents.
(d) The Borrower will promptly notify Agent of any failure by the
Property Owner to comply with the Condominium Documents.
(e) The Borrower will (i) promptly notify Agent of the receipt by
the Borrower, the Manager, the Member or the Property Owner of any notice
asserting or claiming a default by the Property Owner under, or lack of
compliance by the Property Owner with, the Condominium Documents, (ii)
promptly notify Agent of the receipt by the Borrower, the Manager, the Member
or the Property Owner of any notice or request of a termination or purported
termination of the Condominium Documents or of the Condominium or of or for
the commencement or taking of or intent to commence to take any action to
terminate the Condominium or the Condominium Documents or to withdraw the
Condominium from the condominium ownership pursuant to applicable law or to
seek any action for partition of the Condominium, (iii) promptly notify Agent
of the receipt by the Borrower, the Manager, the Member or the Property Owner
of any notice or request of a modification or change or proposed modification
or change of or to the Condominium Documents, and (iv) promptly cause a copy
of each such notice or request received by the Property Owner, the Manager,
the Member or the Borrower to be delivered to Agent. The Borrower will
promptly notify Agent of the institution of a proceeding to partition the
Condominium or withdraw same from condominium ownership pursuant to
applicable law, and of the institution of any such partition or withdrawal
proceeding. The Borrower will promptly deliver to Agent a copy of each
notice, pleading, brief and preliminary, interim and final determination or
decision and other papers received by it in each such partition or withdrawal
proceeding.
(f) The Borrower will not, without the prior consent of Agent,
allow or suffer the Property Owner to wholly or partially terminate, modify,
subordinate or surrender or suffer or permit in whole or in part any
termination, modification, surrender or expiration of any of the Condominium
Documents, or withdraw or cause to permit the withdrawal of the Condominium
by operation of law or otherwise from condominium ownership pursuant to
applicable law, or allow or suffer the Property Owner to commence or
prosecute any action or proceeding to partition the Condominium or cause or
permit the Condominium to be partitioned pursuant to applicable law or
otherwise.
(g) The Borrower will, within 30 days after receipt of a written
demand from Agent, obtain from the board, association or other Person charged
with administering the Condominium Documents and deliver to Agent a duly
signed and acknowledged certificate certifying that the Condominium Documents
are unmodified and in full force and effect (or, if the same have been
modified in compliance with the Mezzanine Mortgage Loan Documents and this
Agreement, that the Condominium Documents are in full force and effect as so
modified and that there have been no other modifications), stating the dates
to which the assessments, common charges and other charges payable under the
Condominium Documents have been paid and stating whether to the certifying
party's knowledge the Property Owner is in compliance with the Condominium
Documents or, if not, specifying each default or failure of compliance of
which the certifying party has knowledge. The Borrower will, promptly upon
receipt thereof by the Borrower, the Manager, the Member or the Property
Owner, furnish Agent with a copy of all notices and statements, however
characterized, issued by the board, association or other Person charged with
administering the Condominium Documents relating to the Condominium.
(h) The Borrower will not permit or suffer the Property Owner to
exercise any of the Property Owner's rights under the Condominium Documents,
or, to the extent not prohibited by applicable laws, vote at any meeting of
the board, association or other Person charged with administering the
Condominium Documents, in any way that is inconsistent with its duties or
obligations under the Mezzanine Mortgage Loan Documents or this Agreement.
Notwithstanding the foregoing, after the occurrence of an Event of Default
hereunder and for so long as such Event of Default is continuing, the
Borrower will notify Agent of all meetings of the board, association or other
Person charged with administering the Condominium Documents, at least five
(5) Business Days prior thereto, and, to the extent not prohibited by
applicable law, the Borrower will cause the Property Owner to exercise all of
its rights under the Condominium Documents, and vote at all meetings of the
board, association or other Person charged with administering the Condominium
Documents, in accordance with any instructions delivered by Agent to the
Borrower.
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any of the Banks has any obligation to make any Loans:
Section 8.1. Restrictions on Indebtedness. The Borrower will not
create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks arising under any of the Loan
Documents;
(b) current liabilities of the Borrower incurred in the ordinary
course of business and relating to the Mortgaged Property but not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit except
for credit on an open account basis customarily extended and in fact extended
in connection with normal purchases of goods and services relating to the
Mortgaged Property;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies relating to
the Mortgaged Property to the extent that payment therefor shall not at the
time be required to be made in accordance with the provisions of Section 7.8;
(d) Indebtedness in respect of judgments or awards relating to the
operation and maintenance of the Mortgaged Property in accordance with this
Agreement that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in respect
of which the Borrower shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a stay of execution
shall have been obtained pending such appeal or review; or
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business relating to the Mortgaged Property.
Notwithstanding anything in this Section 8.1 to the contrary, the
Subsidiaries of the Borrower (other than Member, Manager and Property Owner)
shall be permitted to create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to Indebtedness provided that
Borrower shall not be liable, contingently or otherwise, therefor; provided,
however, that neither Property Owner, Manager or Member shall be permitted to
create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness other than Indebtedness of
Property Owner, Manager and Member expressly permitted pursuant to Section
8.12(e) or Section 8.13(b), as applicable.
Section 8.2. Restrictions on Liens, Etc. Without limiting the terms of
Section 8.1, the Borrower will not (a) create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage, pledge,
negative pledge, charge, restriction or other security interest of any kind
upon any of its property or assets of any character whether now owned or
hereafter acquired, or upon the income or profits therefrom; (b) transfer any
of its property or assets or the income or profits therefrom for the purpose
of subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to payment of its general creditors; (c)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more
than 30 days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; (e) sell, assign, pledge or otherwise transfer any accounts,
contract rights, general intangibles, chattel paper or instruments, with or
without recourse; (f) incur or maintain any obligation to any holder of
Indebtedness of the Borrower which prohibits the creation or maintenance of
any lien securing the Obligations (collectively "Liens"); or (g) permit
either the Member or the Manager to create or incur or suffer to be created
or incurred or to exist any Lien upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or
profits therefrom; provided that the Borrower may create or incur or suffer
to be created or incurred or to exist:
(i) Leases permitted under this Agreement;
(ii) liens on properties to secure taxes, assessments and
other governmental charges or claims for labor, material or supplies
relating to the Mortgaged Property in respect of obligations not
overdue;
(iii) deposits or pledges made in connection with, or to
secure payment of, worker's compensation, unemployment insurance, old
age pensions or other social security obligations;
(iv) liens in favor of the Agent and the Banks under the Loan
Documents; and
(v) liens and encumbrances on a Mortgaged Property, if any,
expressly permitted under the terms of the Security Deed relating
thereto.
Notwithstanding anything in this Section 8.2 to the contrary, Subsidiaries of
the Borrower (other than Member, Manager and Property Owner) shall be
permitted to create or incur or suffer to be created or incur any Lien other
than Liens with respect to the Mortgaged Property, the Mezzanine Property or
any other Collateral; provided, however, that Property Owner shall be
permitted to create or incur or suffer to be created or incur only those
Liens permitted pursuant to Section 8.13(a).
Section 8.3. Restrictions on Investments. The Borrower will not, and
will not permit Manager, Member or Property Owner to, make or permit to exist
or to remain outstanding any Investment except Investments by Borrower and as
expressly permitted below, Manager, Member, and Property Owner in:
(a) Investments by Borrower in marketable direct or guaranteed
obligations of the United States of America that mature within one (1) year
from the date of purchase by the Borrower or its Subsidiary;
(b) Investments by Borrower in marketable direct obligations of
any of the following: Federal Home Loan Mortgage Corporation, Student Loan
Marketing Association, Federal Home Loan Banks, Federal National Mortgage
Association, Government National Mortgage Association, Bank for Cooperatives,
Federal Intermediate Credit Banks, Federal Financing Banks, Export-Import
Bank of the United States, Federal Land Banks, or any other agency or
instrumentality of the United States of America;
(c) Investments by Borrower in demand deposits, certificates of
deposit, bankers acceptances and time deposits of United States banks having
total assets in excess of $100,000,000; provided, however, that the aggregate
amount at any time so invested with any single bank having total assets of
less than $1,000,000,000 will not exceed $200,000;
(d) Investments by Borrower in securities commonly known as
"commercial paper" issued by a corporation organized and existing under the
laws of the United States of America or any State which at the time of
purchase are rated by Moody's Investors Service, Inc. or by Standard & Poor's
Corporation at not less than "P 1" if then rated by Moody's Investors
Service, Inc., and not less than "A 1", if then rated by Standard & Poor's
Corporation;
(e) Investments by Borrower in mortgage-backed securities
guaranteed by the Government National Mortgage Association, the Federal
National Mortgage Association or the Federal Home Loan Mortgage Corporation
and other mortgage-backed bonds which at the time of purchase are rated by
Moody's Investors Service, Inc. or by Standard & Poor's Corporation at not
less than "Aa" if then rated by Moody's Investors Service, Inc. and not less
than "AA" if then rated by Standard & Poor's Corporation;
(f) Investments by Borrower in repurchase agreements having a term
not greater than 90 days and fully secured by securities described in the
foregoing subsection (a), (b) or (e) with banks described in the foregoing
subsection (c) or with financial institutions or other corporations having
total assets in excess of $500,000,000;
(g) Investments by Borrower in shares of so-called "money market
funds" registered with the SEC under the Investment Company Act of 1940 which
maintain a level per-share value, invest principally in investments described
in the foregoing subsections (a) through (f) and have total assets in excess
of $50,000,000;
(h) Investments by Borrower in Mortgaged Property, including
earnest money deposits relating thereto and transaction costs;
(i) Investments by Borrower in wholly-owned Subsidiaries of
Borrower and Investments by wholly-owned Subsidiaries of Borrower (other than
Member, Manager and Property Owner) in fee and leasehold interests in
properties located in the northeastern United States which are used
principally for commercial office purposes or in land or non-income producing
land assets, and which leasehold interests are under ground leases having not
less than fifty (50) years of the leasehold term remaining at the time of
acquisition thereof;
(j) Investments by Borrower and its Subsidiaries (other than
Member, Manager or Property Owner) in Investment Partnerships which own
Investments of the type described in Section 8.3(i);
(k) Investments by Borrower in Member provided it is wholly-owned
by the Borrower, and by Member in Manager, and by Member and Manager in
Property Owner; and
(l) Investments by Property Owner in the Mezzanine Property.
Section 8.4. Merger, Consolidation. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to any merger,
consolidation or other business combination, or agree to effect any asset
acquisition, stock acquisition or other acquisition without the prior written
consent of the Majority Banks except (i) the merger or consolidation of one
or more of the Subsidiaries of the Borrower with and into the Borrower
provided that no Default or Event of Default exists or will occur as a result
thereof and (ii) the merger or consolidation of two or more Subsidiaries of
the Borrower.
Section 8.5. Sale and Leaseback; Ground Lease. The Borrower will not,
and will not permit the Property Owner to, enter into any arrangement,
directly or indirectly, whereby the Borrower or the Property Owner shall sell
or transfer any Real Estate owned by it or the Mezzanine Property, as
applicable, in order that then or thereafter the Borrower or the Property
Owner or any affiliate thereof shall lease back the Mezzanine Property. The
Borrower will not permit the Property Owner to enter into a ground lease or
similar lease for the Mezzanine Property.
Section 8.6. Compliance with Environmental Laws. The Borrower will not
do and will not permit the Property Owner or any tenant of the Mortgaged
Property or the Mezzanine Property to do any of the following: (a) use any of
the Mortgaged Property or Mezzanine Property or any portion thereof as a
facility for the handling, processing, storage or disposal of Hazardous
Substances, except for small quantities of Hazardous Substances used in the
ordinary course of business and in compliance with all applicable
Environmental Laws and the presence of asbestos or asbestos-containing
materials located in the Building which are to be maintained, contained and
removed in accordance with the terms of the Mezzanine Mortgage Loan Documents
and the Loan Documents, as applicable, (b) cause or permit to be located on
any of the Mortgaged Property or Mezzanine Property any underground tank or
other underground storage receptacle for Hazardous Substances except in full
compliance with Environmental Laws, (c) generate any Hazardous Substances on
any of the Mortgaged Property or Mezzanine Property except in full compliance
with Environmental Laws, (d) conduct any activity at any of the Mortgaged
Property or Mezzanine Property or use any Mortgaged Property or Mezzanine
Property in any manner so as to cause a Release of Hazardous Substances on,
upon or into the Mortgaged Property or Mezzanine Property or any surrounding
properties or any threatened Release of Hazardous Substances which might give
rise to liability under CERCLA or any other Environmental Law, or (e)
directly or indirectly transport or arrange for the transport of any
Hazardous Substances (except in compliance with all Environmental Laws).
The Borrower shall:
(i) in the event of any change in Environmental Laws governing the
assessment, release or removal of Hazardous Substances, which change would
lead a prudent lender to require additional testing to avail itself of any
statutory insurance or limited liability, take all action (including, without
limitation, the conducting of engineering tests at the sole expense of the
Borrower) to confirm that no Hazardous Substances have been Released or
disposed of on the Mortgaged Property or Mezzanine Property in violation of
any Environmental Laws; and
(ii) if any Release or disposal of Hazardous Substances shall occur
or shall have occurred on the Mortgaged Property or Mezzanine Property
(including without limitation any such Release or disposal occurring prior to
the acquisition of such Mortgaged Property or Mezzanine Property by the
Borrower or Property Owner, respectively), cause the prompt containment and
removal of such Hazardous Substances and remediation of the Mortgaged
Property or Mezzanine Property in full compliance with all applicable laws
and regulations and to the satisfaction of the Majority Banks; provided, that
the Borrower shall be deemed to be in compliance with Environmental Laws for
the purpose of this clause (ii) so long as it or a responsible third party
with sufficient financial resources is taking reasonable action to remediate
or manage any event of noncompliance to the satisfaction of the Majority
Banks and no action shall have been commenced by any enforcement agency. The
Majority Banks may engage their own Environmental Engineer to review the
environmental assessments and the Borrower's compliance with the covenants
contained herein.
At any time after an Event of Default shall have occurred hereunder, or,
whether or not an Event of Default shall have occurred, at any time that the
Agent or the Majority Banks shall have reasonable grounds to believe that a
Release or threatened Release of Hazardous Substances may have occurred
relating to any Mortgaged Property or Mezzanine Property, or that any of the
Mortgaged Property or Mezzanine Property is not in compliance with the
Environmental Laws, the Agent may at its election and will at the request of
the Majority Banks obtain such environmental assessments of such Mortgaged
Property or Mezzanine Property prepared by an Environmental Engineer as may
be necessary or advisable for the purpose of evaluating or confirming (i)
whether any Hazardous Substances are present in the soil or water at or
adjacent to such Mortgaged Property or Mezzanine Property and (ii) whether
the use and operation of such Mortgaged Property or Mezzanine Property comply
with all Environmental Laws. Environmental assessments may include detailed
visual inspections of such Mortgaged Property or Mezzanine Property
including, without limitation, any and all storage areas, storage tanks,
drains, dry wells and leaching areas, and the taking of soil samples, as well
as such other investigations or analyses as are necessary or appropriate for
a complete determination of the compliance of such Mortgaged Property or
Mezzanine Property and the use and operation thereof with all applicable
Environmental Laws. All such environmental assessments shall be at the sole
cost and expense of the Borrower.
Section 8.7. Distributions.
(a) The Borrower shall make no Distributions in the event that an
Event of Default consisting of a failure to pay principal, interest or fees
hereunder shall have occurred and be continuing, or any other Event of
Default shall have occurred and be continuing and the maturity of the
Obligations has been accelerated.
(b) In the event that an Event of Default shall have occurred and
be continuing, the Borrower shall not permit the Property Owner, the Member
or the Manager to make any Distributions whatsoever, directly or indirectly,
from amounts attributable to the Mezzanine Property, the Mezzanine Collateral
or its direct or indirect interest in the Property Owner, directly or
indirectly, other than such Distributions that are paid to the Agent pursuant
to the terms of this Agreement or the other Loan Documents.
Section 8.8. Intentionally Omitted.
Section 8.9. Development Activity. Neither the Borrower nor any
Subsidiary of the Borrower shall, without the prior written consent of the
Majority Banks, engage, directly or indirectly, in the "ground-up"
development of properties to be used principally for commercial office
purposes or otherwise, except that the Borrower, subject to the terms of this
Section 8.9, and Subsidiaries of the Borrower (other than Property Owner,
Manager and Member) may engage in the "ground up" development of Real Estate
to be used principally for commercial office purposes provided that the
aggregate costs of acquisition and development of all such properties Under
Development (assuming the full cost of developing such property) at any time
shall not exceed the greater of (i) ten percent (10%) of WWP's Consolidated
Total Assets or (ii) $25,000,000.00. Notwithstanding anything herein to the
contrary, except for the Mortgaged Property commonly known as 140 Kendrick
Street which may be developed by the Borrower, no "ground up" development
shall be performed by the Borrower, Property Owner, Manager or Member. For
purposes of this Section 8.9, the term "development" shall include the new
construction of an office building or office park, but shall not include
Capital Improvement Projects to existing Real Estate which is already used
principally for commercial office purposes. Without limiting the foregoing,
the Borrower acknowledges that for the purposes of this Agreement, (a) any
interest by the Borrower or any Subsidiary in a property which is proposed to
be developed, or any interest therein pursuant to which the borrower or any
Subsidiary has the right to approve site plans or other plans and
specifications or pursuant to which such parties' obligations are conditioned
upon the achievement of certain leasing levels, (b) any agreement by the
Borrower or any Subsidiary which obligates such party to contribute or
otherwise advance funds in connection with or upon completion of the
development of a property, or (c) any acquisition of a property which is
proposed to be developed or which is under development and lease-up at the
time such agreement is entered into, shall be considered a "development" for
the purposes of this Section 8.9. The Borrower acknowledges that the
decision of the Majority Banks to grant or withhold such consent shall be
based on such factors as the Majority Banks deem relevant in their sole
discretion, including without limitation, evidence of sufficient funds both
from borrowings and equity to complete such development and evidence that
such Subsidiary has the resources and expertise necessary to complete such
project. Nothing herein shall prohibit the Borrower or any Subsidiary of the
Borrower from entering into an agreement to acquire Real Estate which has
been developed and initially leased by another Person to the extent not
otherwise prohibited by this Agreement.
Section 8.10. Intentionally Omitted.
Section 8.11. Transfers. The Borrower shall not permit any sale,
transfer, disposition, pledge, mortgage, hypothecation or encumbering of (a)
any direct interest in Borrower other than a sale, transfer, disposition,
pledge, mortgage, hypothecation or encumbrance to or in favor of the Secured
Mezzanine Loan Agreement Lenders or (b) any direct or indirect interest (i)
of Wellsford Commercial in Borrower, (ii) of Wellsford Real Properties in
Wellsford Commercial, (iii) of WHWEL in Borrower, or (iv) of any Person or
Persons directly or indirectly holding the ownership interests in WHWEL,
provided that sales, transfers or other dispositions (but not pledges,
mortgages, hypothecations or encumbrances) of interests in WHWEL shall be
permitted if after giving effect thereto the Goldman Group, directly or
indirectly, owns and controls at least seventy percent (70%) of the ownership
interests in WHWEL. Notwithstanding anything herein to the contrary, (x)
WHWEL shall be permitted at any time and from time to time to convert all or
any of its interest in the Borrower into an interest in Wellsford Commercial
and/or Wellsford Real Properties, and (y) WHWEL and Wellsford Commercial may
transfer or pledge their interests in Borrower to one another as may be
permitted in the operating agreement of the Borrower.
Section 8.12. Additional Covenants with Respect to Indebtedness,
Operations, Fundamental Changes. The Borrower represents, warrants and
covenants as of the date hereof and until such time as the Obligations are
paid in full and the Banks have no further obligations to make any Loans,
that each of the Borrower, the Member and the Manager:
(a) does not own and will not own any encumbered asset other than
the Borrower's ownership of the Collateral;
(b) is not engaged and will not engage in any business other than
the Borrower's acquisition, ownership, operation and sale of the Collateral
and the Member's and the Manager's ownership and operation of its direct or
indirect interest in the Property Owner;
(c) as to the Member and the Manager only, does not and will not
have any Subsidiaries (whether the same would constitute an entity that could
be consolidated on any of such Person's financial statements or a minority
interest) other than, as to the Member and the Manager, the Property Owner
and, as to the Member only, the Manager;
(d) will not enter into any contract or agreement with any
partner, member, shareholder, principal or affiliate of the Borrower, the
Property Owner, the Member, the Manager or the Guarantor, or any affiliate of
any such partner, member, shareholder, principal or affiliate, except upon
terms and conditions that are intrinsically fair and substantially similar to
those that would be available on an arms-length basis with third parties
other than an affiliate;
(e) as to the Member and the Manager only, has not incurred and
will not incur any Indebtedness, other than current liabilities incurred in
the ordinary course of business in connection with normal purchases of goods
and services but not incurred through the borrowing of money; no other debt
or other obligations of any of such Persons may be secured (senior,
subordinate or pari passu) by any right or asset of such Person;
(f) has not made and will not make any loans or advances to any
third party (including the Property Owner, the Borrower, the Member, the
Manager, the Guarantor, any affiliate of such Persons or any member, partner
or shareholder of such Persons);
(g) is and will remain solvent and pay its debts and liabilities
(including, without limitation, employment and overhead expenses) from its
own assets as the same shall become due;
(h) has done or caused to be done and will do all things necessary
to observe limited liability company, corporate and partnership formalities
(as applicable) and to preserve its existence, and will not, nor will any
partner, member or shareholder thereof, amend, modify or otherwise change its
partnership agreement, operating agreement, articles of incorporation, by-
laws or other organizational documents in a manner which adversely affects
such Person's or such partner's, member's or shareholder's existence as a
single purpose entity;
(i) will conduct and operate its business as presently conducted
and operated;
(j) will maintain books and records and bank accounts (if any)
separate from those of its affiliates, including its partners, members and
shareholders;
(k) will be, and at all times will hold itself out to the public
as, a legal entity separate and distinct from any other entity (including any
affiliate thereof, including any partner, member, shareholder or any
affiliate of any partner, member or shareholder of the Borrower, the Member
or the Manager) and shall maintain and use separate stationery, invoices and
checks;
(l) will file its own separate tax returns or if such returns are
filed jointly, such Persons shall be reflected as separate entities thereon;
(m) will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light
of its contemplated business operations;
(n) will not, nor shall any partner, member, shareholder or
affiliate, seek the dissolution or winding up, in whole or in part, of the
Borrower, the Property Owner, the Member or the Manager;
(o) will not enter into, and will not permit Property Owner to
enter into, any transaction of merger, consolidation or other business
combination, or acquire by purchase or otherwise all or substantially all of
the business or assets of, or any stock or beneficial ownership of, any
entity;
(p) will not commingle the funds and other assets of the Borrower,
the Property Owner, the Member or the Manager, as applicable, with those of
any partner, member, shareholder, any affiliate or any other Person;
(q) has and will maintain its assets in such a manner that it is
not costly or difficult to segregate, ascertain or identify its individual
assets from those of any affiliate or any other Person;
(r) does not and will not hold itself out to be responsible for
the debts or obligations of any other Person;
(s) shall comply with the provisions of its partnership agreement,
operating agreement, articles of incorporation or bylaws or other
organizational documents, as applicable; and
(t) with respect to the Manager and the Member, shall be organized
and conduct its business so that, and otherwise cause, the assumptions of
fact made with respect to the Borrower, the Member, the Manager and the
Property Owner in that certain opinion letter dated May 15, 1998 delivered by
Robinson Silverman Pearce Aronsohn & Berman LLP with respect to non-
consolidation issues to be true and correct, in all material respects at all
times.
Section impos Additional Restrictions Concerning the Mezzanine
Property.
(a) Except as expressly provided in Section 5.3 or Section 7.19,
the Borrower will not, without the prior written consent of the Agent in each
instance, permit the Property Owner, directly or indirectly to: (i) sell,
convey, assign, transfer, contribute, option, mortgage, pledge, encumber,
charge, hypothecate or dispose of the Mezzanine Property, or any part thereof
or interest therein; or any income or profits therefrom, or any other
accounts, contract rights, general intangibles, instruments, chattel paper or
other assets or claims, whether now owned or hereafter acquired; or (ii)
create or suffer to be created or to exist any lien, encumbrance, security
interest, mortgage, pledge, restriction, attachment or other charge of any
kind upon, or any levy, seizure, attachment or foreclosure of, the Mezzanine
Property, or any part thereof or interest therein, or any income or profit
therefrom, or any other accounts, contract rights, general intangibles,
instruments, chattel paper or other assets or claims, whether now owned or
hereafter acquired, except for Permitted Liens. For the purposes of this
paragraph, the sale, conveyance, transfer, disposition, alienation,
hypothecation or encumbering of all or any portion of any interest in the
Property Owner, the Member or the Manager, or the creation or addition of a
new member or other owner of any interest in the Property Owner, the Member
or the Manager shall be deemed to be a transfer of an interest in the
Property Owner, the Member or the Manager. A pledge or transfer by WWP of
its interest in the Borrower pursuant to Section 8.11(a) shall not violate
the provisions of Section 8.13(a).
(b) The Borrower will not permit the Property Owner to create,
incur, assume, guarantee or be or remain liable, contingently or otherwise,
with respect to any Indebtedness other than:
(i) Indebtedness arising under the Mezzanine Mortgage Loan
Documents (it being acknowledged and agreed that any refinancing of such
Indebtedness in connection with an assignment and restatement of the
Mezzanine Mortgage Loan Documents shall not constitute permitted
Indebtedness);
(ii) current liabilities of the Property Owner permitted
pursuant to the Approved Budget incurred in the ordinary course of
business but not incurred through (A) the borrowing of money, or (B) the
obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal
purchases of goods and services; and
(iii) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 7.8.
Section 8.14. Mezzanine Mortgage Loan Documents. The Borrower agrees
to cause the Property Owner to deliver immediately to the Agent copies of any
notices, certificates, requests, demands or other instruments (including
without limitation any notice of default, acceleration or the exercise or
threat of exercise of any remedies under the Mezzanine Mortgage Loan
Documents) furnished or delivered to or by the Property Owner under or in any
way relating to the Mezzanine Mortgage Loan Documents. The Borrower shall
not permit the Property Owner to seek nor to obtain additional advances from
the holder or holders of the Mezzanine Mortgage Loan Documents (provided that
the foregoing shall not be deemed violated in the event that the holder or
holders of the Mezzanine Mortgage Loan Documents shall make a protective
advance or advances for the payment of taxes, insurance premiums or to
protect the Mezzanine Property pursuant to the terms of the Nomura Mortgages,
provided that such advance may otherwise constitute a Default or Event of
Default hereunder to the extent that such protected advance is made by the
Mezzanine Mortgagee as a result of a "Default" or "Event of Default" under
the Mezzanine Mortgage Loan Documents), or to modify, amend, terminate,
extend or seek a consent or waiver under the Mezzanine Mortgage Loan
Documents in any respect without the prior written approval of the Agent.
Section 9. FINANCIAL COVENANTS OF BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans it will comply
with the following:
Section 9.1. Debt Service Coverage Test Amount. The Borrower will not,
at the end of any fiscal quarter permit (a) the difference of (i) the Net
Operating Income of the Mortgaged Properties and the Mezzanine Properties for
any test period of four consecutive fiscal quarters then ended (treated as a
single accounting period) (the "Test Period") minus (ii) the Capital
Improvement Reserve for such Test Period to be less than (b) the multiple of
the Debt Service Coverage Test Amount for the Test Period set forth below:
Fiscal Quarter Ending Multiple of Debt Service
On or Before: Coverage Test Amount
--------------------- --------------------
December 31, 1998 1.35
Thereafter 1.45
In the event that the Borrower shall not have owned any of such Mortgaged
Properties or the Mezzanine Properties for four (4) consecutive fiscal
quarters, then the Net Operating Income of the Borrower for such Mortgaged
Properties and the Mezzanine Properties shall be annualized based upon
historical information with respect to such Mortgaged Properties and the
Mezzanine Properties in a manner reasonably satisfactory to the Agent.
Section 9.2. Designated Collateral Value. The Borrower will not permit
the outstanding principal balance of the Loans as of the date of
determination to be greater than the Designated Collateral Value as of the
date of determination.
Section 9.3. WWP Financial Covenants. If and only in the event that
the loans contemplated by the Secured Mezzanine Loan Agreement shall be paid
in full and the Secured Mezzanine Loan Agreement shall be terminated, then
Borrower shall cause WWP to at all times thereafter observe, perform and
comply with each and every covenant set forth in Sections 9.1 through 9.5 of
the Secured Mezzanine Loan Agreement as set forth in the Secured Mezzanine
Loan Agreement as of the date hereof (or as the same may be amended with the
approval of the Majority Banks), as if such covenants and any defined terms
referred to therein were fully set forth in this Agreement and a part hereof,
subject, however, to any applicable period of grace or notice and cure with
respect to a failure to comply with such covenants as set forth in the
Secured Mezzanine Loan Agreement. Notwithstanding the foregoing, the
provisions of this Section 9.3 shall not apply in the event that the Secured
Mezzanine Loan Agreement Lenders shall acquire title to the interest of WWP
in the Borrower.
Section 10. CLOSING CONDITIONS.
The obligations of the Agent and the Banks to make the initial Loans
shall be subject to the satisfaction of the following conditions precedent on
or prior to July 16, 1998.
Section 10.1. Loan Documents. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto, shall be
in full force and effect and shall be in form and substance satisfactory to
the Majority Banks. The Agent shall have received a fully executed copy of
each such document, except that each Bank shall have received a fully
executed counterpart of its Note. The Agent is authorized by the Banks to
execute on behalf of the Banks and Agent, as applicable, any amendments to
agreements securing or relating to the Original Revolving Credit Agreement
and the Original Loan Agreement as Agent deems appropriate.
Section 10.2. Certified Copies of Organizational Documents. The Agent
shall have received from the Borrower a copy, certified as of a recent date
by the appropriate officer of the State in which the Borrower and the
Guarantor are organized or in which the Mortgaged Property is located, and by
a duly authorized officer of such Person to be true and complete, of the
articles of incorporation or other organizational documents of the Borrower
and the Guarantor (or a certification satisfactory to the Agent that there
have been no changes to the foregoing from those previously provided to the
Agent) or their respective qualification to do business, as applicable, as in
effect on such date of certification.
Section 10.3. Bylaws; Resolutions. All action on the part of the
Borrower and the Guarantor necessary for the valid execution, delivery and
performance by the Borrower and the Guarantor of the Loan Documents to which
it is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Agent shall have been provided to the
Agent. The Agent shall have received from the Borrower and the Guarantor, as
applicable, true copies of its bylaws (or a certification satisfactory to the
Agent that there have been no changes to the foregoing from those previously
provided to the Agent) and the resolutions adopted by its board of directors
or other governing body authorizing the transactions described herein, each
certified by its secretary or other duly authorized officer as of a recent
date to be true and complete.
Section 1it u Incumbency Certificate; Authorized Signers. The Agent
shall have received from the Borrower and Guarantor an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized
officer of the Borrower and Guarantor and giving the name and bearing a
specimen signature of each individual who shall be authorized: (a) to sign,
in the name and on behalf of the Borrower and the Guarantor, each of the Loan
Documents to which the Borrower or the Guarantor is or is to become a party;
(b) in the case of the Borrower to make Loan and Conversion Requests; and (c)
to give notices and to take other action on behalf of the Borrower under the
Loan Documents.
Section 10.5. Opinion of Counsel. The Agent shall have received a
favorable opinion addressed to the Banks and the Agent and dated as of the
Closing Date, in form and substance satisfactory to the Banks and the Agent,
from Robinson, Silverman, Pearce, Aronsohn & Berman, and other counsel of the
Borrower and the Guarantor, as to such matters as the Agent shall reasonably
request.
Section 10.6. Payment of Fees. The Borrower shall have paid to the
Agent the commitment fee pursuant to Section 4.2.
Section 10.7. Appraisals. The Agent shall have received Appraisals of
the Mortgaged Property and the Mezzanine Property in form and substance
satisfactory to the Majority Banks prior to the Closing Date demonstrating
that the initial Collateral has a Designated Collateral Value that is in
compliance with the terms of this Agreement.
Section 10.8. Environmental Reports. The Agent shall have received
environmental site assessment reports for the Mortgaged Property and the
Mezzanine Property prepared by an Environmental Engineer, which indicate the
condition of the Mortgaged Property, the Mezzanine Property and such other
properties and any Buildings thereon and which set forth no qualifications
except those that are acceptable to the Majority Banks in their sole
discretion, and disclosing that each piece of Mortgaged Property, Mezzanine
Property and any Building thereon is free of oil, underground storage tanks,
asbestos or asbestos containing material, lead paint and other Hazardous
Substances (except to the extent acceptable to the Majority Banks in their
sole discretion), and which reports are otherwise in form and substance
satisfactory to the Majority Banks).
Section 10.9. Insurance. The Agent shall have received duplicate
originals or certified copies of all policies of insurance required by this
Agreement.
Section 10.10. Performance; No Default. The Borrower shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by it on or prior to the Closing Date, and on the
Closing Date there shall exist no Default or Event of Default.
Section 10.11. Representations and Warranties. The representations and
warranties made by the Borrower and the Guarantor in the Loan Documents or
otherwise made by or on behalf of any Borrower and Guarantor, or any
Subsidiary thereof, in connection therewith or after the date thereof shall
have been true and correct in all material respects when made and shall also
be true and correct in all material respects on the Closing Date.
Section 10.12. Proceedings and Documents. All proceedings in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be reasonably satisfactory to the Agent and the Agent's
Special Counsel in form and substance, and the Agent shall have received all
information and such counterpart originals or certified copies of such
documents and such other certificates, opinions or documents as the Agent and
the Agent's Special Counsel may reasonably require.
Section 10.13. Eligible Real Estate Qualification Documents. The
Eligible Real Estate Qualification Documents for each parcel of Mortgaged
Property and the Mezzanine Collateral included in the Collateral as of the
Closing Date shall have been delivered to the Agent.
Section 10.14. Compliance Certificate. A Compliance Certificate dated
as of the date of the Closing Date demonstrating compliance with each of the
covenants calculated therein as of the most recent fiscal quarter end for
which the Borrower has provided financial statements under Section 6.4
adjusted in the best good faith estimate of the Borrower dated as of the date
of the Closing Date shall have been delivered to the Agent.
Section 10.15. Other Documents. To the extent requested by the Agent,
executed copies of all material agreements of any nature whatsoever to which
the Borrower is a party affecting or relating to the use, operation,
development, construction or management of the Mortgaged Property or other
Collateral or the Mezzanine Property.
Section 10.16. No Condemnation/Taking. The Agent shall have received
written confirmation from the Borrower that no condemnation proceedings are
pending or to the Borrower's knowledge threatened against any Mortgaged
Property, Mezzanine Property or other Collateral or, if any such proceedings
are pending or threatened, identifying the same and the Real Estate affected
thereby and the Agent shall have determined that none of such proceedings is
or will be material to the Mortgaged Property, Mezzanine Property or other
Collateral affected thereby.
Section 10.17. Governmental Policy. Each Bank shall have determined
that there have been no material changes in governmental regulations or
policy affecting the Banks, the Borrower or the Guarantor.
Section 10.18. Other. The Agent shall have reviewed such other
documents, instruments, certificates, opinions, assurances, consents and
approvals as the Agent or the Agent's Special Counsel may reasonably have
requested.
Section 10.19. Satisfaction of Conditions as to Initial Collateral.
The parties hereto acknowledge that the requirements of Sections 10.7, 10.8
and 10.13 for the Mezzanine Properties and the Mortgaged Properties as of the
date hereof have been satisfied.
Section 11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
Section 11.1. Prior Conditions Satisfied. All conditions set forth in
Section 10 shall continue to be satisfied as of the date upon which any Loan
is to be made.
Section 11.2. Representations True; No Default. Each of the
representations and warranties contained in this Agreement, the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with this Agreement shall be true as of the date as of which they
were made and shall also be true at and as of the time of the making of such
Loan (except that representations and warranties as to the Guarantor shall
not be deemed to have been repeated), with the same effect as if made at and
as of that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Agreement and the other Loan Documents and
changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and except to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing. Agent
shall have received a certificate of the Borrower signed by an authorized
officer of the Borrower to such effect.
Section 11.3. No Legal Impediment. No change shall have occurred in
any law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Bank would make it illegal for such Bank to make
such Loan.
Section 11.4. Governmental Regulation. Each Bank shall have received
such statements in substance and form reasonably satisfactory to such Bank as
such Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of
the Federal Reserve System.
Section 11.5. Proceedings and Documents. All proceedings in connection
with the Loan shall be satisfactory in substance and in form to the Majority
Banks, and the Majority Banks shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Majority Banks may reasonably request.
Section 11.6. Borrowing Documents. In the case of any request for a
Loan, the Agent shall have received a copy of each of the request for a Loan
required by Section 2.6 in the form of Exhibit B hereto, fully completed.
Section 11.7. Endorsement to Title Policy. At such time as the Agent
shall determine in its discretion, to the extent available under applicable
law, a "date down" endorsement to each Title Policy indicating no change in
the state of title and containing no survey exceptions not approved by the
Agent, which endorsement shall, expressly or by virtue of a proper "revolving
credit" clause or endorsement in the Title Policy, increase the coverage of
the Title Policy to the aggregate amount of all Loans advanced and
outstanding on or before the effective date of such endorsement, other than
the Designated Collateral Value Amount for the Equity Interests, if
applicable (provided that the amount of coverage under an individual Title
Policy for an individual Mortgaged Property need not equal the aggregate
amount of all Loans), or if such endorsement is not available, such other
evidence and assurances as the Agent may reasonably require (which evidence
may include, without limitation, an affidavit from the Borrower stating that
there have been no changes in title from the date of the last effective date
of the Title Policy).
Section 11.8. Future Advances Tax Payment. As a condition precedent to
any Bank's obligations to make any Loans, the Borrower will pay or cause to
be paid to the Agent any mortgage, recording, intangible, documentary stamp
or other similar taxes and charges which the Agent reasonably determines to
be payable as a result of such Loan to any state or any county or
municipality thereof in which any of the Mortgaged Property is located and
deliver to the Agent such affidavits or other information which the Agent
reasonably determines to be necessary in connection with the payment of such
tax, in order to insure that the Security Deeds on Mortgaged Property located
in such state secure the Borrower's obligation with respect to the Loans then
being requested. The provisions of this Section 11.8 shall be without
limitation of the Borrower's obligations under other provisions of the Loan
Documents, including without limitation Section 15 hereof.
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 12.1. Events of Default and Acceleration. If any of the
following events ("Events of Default" or, if the giving of notice or the
lapse of time or both is required, then, prior to such notice or lapse of
time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans or
any other sums due hereunder or under any of the other Loan Documents, when
the same shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for payment;
(c) Intentionally Omitted.
(d) Intentionally Omitted.
(e) any of the Borrower, the Member, the Manager, the Guarantor or
any other party shall fail to, or the Borrower shall fail to cause the
Property Owner to, perform any other term, covenant or agreement contained
herein or in any of the other Loan Documents (other than those specified in
this Section 12.1);
(f) any representation or warranty of the Borrower, the Property
Owner, the Member, the Manager or any Guarantor in this Agreement or any
other Loan Document, or in any report, certificate, financial statement,
request for a Loan, or in any other document or instrument delivered pursuant
to or in connection with this Agreement, any advance of a Loan or any of the
other Loan Documents shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;
(g) without limiting any other terms of the Loan Documents
prohibiting or restricting the ability of such Persons to incur Indebtedness,
any of the Borrower, the Property Owner, the Member, the Manager or any
Guarantor shall fail to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received or other
Indebtedness (which as to the Property Owner only involves such obligations
or Indebtedness individually or in the aggregate in excess of $1,000,000.00)
or fail to observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound (including, without
limitation, the Mezzanine Mortgage Loan Documents), evidencing or securing
any such borrowed money or credit received or other Indebtedness for such
period of time as would permit (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof (which as to the Property Owner
only involves such obligations or Indebtedness individually or in the
aggregate in excess of $1,000,000.00); provided however that any failure of a
Guarantor to pay such amounts or observe or perform such terms, covenants or
agreements with respect to a "Loan Document" (as defined in the Secured
Mezzanine Loan Agreement) shall not constitute a Default under this Section
12.1(g);
(h) any of the Borrower, the Property Owner, the Member, the
Manager or the Guarantor (A) shall make an assignment for the benefit of
creditors, or admit in writing its general inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator or receiver of
any such Person of any substantial part of the assets of any thereof, (B)
shall commence any case or other proceeding relating to any such Person under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or (C) shall take any action to authorize or in
furtherance of any of the foregoing;
(i) a petition or application shall be filed for the appointment
of a trustee or other custodian, liquidator or receiver of any of the
Borrower, the Property Owner, the Member, the Manager or the Guarantor or any
substantial part of the assets of any thereof, or a case or other proceeding
shall be commenced against any such Person under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect,
and such Person shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition, application, case or proceeding shall
not have been dismissed within 60 days following the filing or commencement
thereof;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any of the Borrower, the
Property Owner, the Member, the Manager or the Guarantor bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of any such Person, in each
case of the foregoing in an involuntary case under federal bankruptcy laws as
now or hereafter constituted;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 60 days, whether or not consecutive, any uninsured
final judgment against any of the Borrower, the Property Owner, the Member,
the Manager or the Guarantor that, with other outstanding uninsured final
judgments, undischarged, against such Person exceeds in the aggregate
$5,000,000.00 with respect to the Borrower or a Guarantor or $1,000,000.00
with respect to the Property Owner, the Manager or the Member; provided that
in any event such judgment with respect to the Property Owner, the Manager or
the Member shall be sooner removed prior to the commencement of any
proceeding of foreclosure, levy or other sale pursuant thereto; and provided
further that any such judgment against a Guarantor arising from a failure to
perform under a "Loan Document" (as defined in the Secured Mezzanine Loan
Agreement) shall not constitute a Default under this Section 12.1(k);
(l) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the Banks,
or any action at law, suit in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of any of the Borrower, the Property Owner, the Member, the Manager or
the Guarantor or any of their respective holders of Voting Interests, or any
court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the terms
thereof in any material respect as determined by the Majority Banks;
(m) any dissolution, termination, partial or complete liquidation,
merger or consolidation of any of the Borrower, the Property Owner, the
Member, the Manager or the Guarantor, or any sale, transfer or other
disposition of the assets of any such Person, other than as permitted under
the terms of this Agreement or the other Loan Documents or otherwise
consented to in writing by the Majority Banks;
(n) any suit or proceeding shall be filed against any of the
Borrower, the Property Owner, the Member, the Manager or the Guarantor or any
of the Mortgaged Property, the Mezzanine Property or any other Collateral
which in the good faith business judgment of the Majority Banks after giving
consideration to the likelihood of success of such suit or proceeding and the
availability of insurance to cover any judgment with respect thereto and
based on the information available to them, if adversely determined, would
have a materially adverse affect on the ability of the Property Owner to
perform each and every one of its obligations under and by virtue of the
Mezzanine Mortgage Loan Documents or the Borrower or any Guarantor to perform
each and every one of their respective obligations under and by virtue of the
Loan Documents; provided that any such suit or proceeding against a Guarantor
relating to a claim under a "Loan Document" (as defined in the Secured
Mezzanine Loan Agreement) shall not constitute a Default under this Section
12.1(n);
(o) the Property Owner, the Member or the Manager shall be
indicted for a federal crime, a punishment for which could include the
forfeiture of any assets of such Person, or the Borrower shall be indicted
for a federal crime, a punishment for which could include the forfeiture of
any assets of such Person included in the Mortgaged Property or other
Collateral;
(p) Jeffrey H. Lynford shall cease to be the Chairman of the Board
of, or Edward Lowenthal shall cease to be the President of, Wellsford
Commercial, and a competent and experienced successor for such Person shall
not be approved by the Majority Banks within six (6) months of such event;
(q) Any violation of the covenant set forth in Section 8.11 shall
occur;
(r) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of any of the Borrower, the Property Owner,
the Member, the Manager or the Guarantor to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $1,000,000 and such event in
the circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan; or a trustee shall have been
appointed by the United States District Court to administer such Plan; or the
PBGC shall have instituted proceedings to terminate such Guaranteed Pension
Plan;
(s) any Guarantor denies that it has any liability or obligation
under the Guaranty or the Indemnity Agreement, or shall notify the Agent or
any of the Banks of such Guarantor's intention to attempt to cancel or
terminate the Guaranty or the Indemnity Agreement, or shall fail to observe
or comply with any term, covenant, condition or agreement under the Guaranty
or the Indemnity Agreement;
(t) the Borrower, the Member, the Manager or any other Person
acting on behalf of any of them shall cause, or the Borrower shall permit the
Property Owner to, cause less than all of the Excess Property Income to be
deposited with the Agent as and when provided in the Assignment of Interests
or the Cash Collateral Agreement and the same is not cured within five (5)
days following receipt of written notice of such default;
(u) any warranty or representation of the Property Owner, the
Manager, the Member or the Borrower in any acknowledgment delivered to the
Agent in connection with the Loan shall prove to have been false or
misleading in any material respect upon the date when made or deemed to have
been made or repeated, or the Property Owner, the Manager, the Member or the
Borrower shall fail to perform any term, covenant or agreement contained in
any such acknowledgment; or
(v) The occurrence of an Event of Default under any of the other
Loan Documents;
then, and in any such event, the Agent may, and upon the request of the
Majority Banks shall, by notice in writing to the Borrower declare all
amounts owing with respect to this Agreement, the Notes and the other Loan
Documents to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in
the event of any Event of Default specified in Section 12.1(h), Section
12.1(i) or Section 12.1(j), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from any of the
Banks or the Agent. Without limiting the terms of this Agreement, the
occurrence of a "Default" or "Event of Default" under the Secured Mezzanine
Loan Agreement shall not in and of itself constitute a Default or Event of
Default under this Agreement or the other Loan Documents.
Section 12.lA. Limitation of Cure Periods. Notwithstanding anything
contained in Section 12.1 to the contrary, (i) no Event of Default shall
exist hereunder upon the occurrence of any failure described in Section
12.1(b) in the event that the Borrower cures such default within five (5)
days following receipt of written notice of such default, provided, however,
that Borrower shall not be entitled to receive more than two (2) notices in
the aggregate pursuant to this clause (i) in any period of 365 days ending on
the date of any such occurrence of default, and provided further that no such
cure period shall apply to any payments due upon the maturity of the Notes,
and (ii) no Event of Default shall exist hereunder upon the occurrence of any
failure described in Section 12.1(e) in the event that the Borrower cures
such default with thirty (30) days following receipt of written notice of
such default, provided that the provisions of this clause (ii) shall not
pertain to defaults consisting of a failure to provide insurance as required
by Section 7.7, to any default consisting of a failure to comply with Section
7.4(e), Section 8.2(g), Section 8.7(b), Section 8.12 (as to the failure of
the Manager, the Member or the Property Owner to comply therewith), Section
8.13, Section 8.14 (as to the failure to deliver any notice of default,
acceleration or the exercise or threat of exercise of any remedies under the
Mezzanine Mortgage Loan Documents) or to any default excluded from any
provision of cure of defaults contained in any other of the Loan Documents;
provided, however, that the occurrence of such events under Sections 8.2(g),
8.7(b), 8.12, 8.13 and 8.14 shall be subject to the rights of Borrower
pursuant to Paragraph 8(h) of the Assignment of Interests.
Section 12.2. Termination of Commitments. If any one or more Events of
Default specified in Section 12.1(h), Section 12.1(i) or Section 12.1(j)
shall occur, then immediately and without any action on the part of the Agent
or any Bank any unused portion of the credit hereunder shall terminate and
the Banks shall be relieved of all obligations to make Loans to the Borrower.
If any other Event of Default shall have occurred and be continuing, the
Agent, upon the election of the Majority Banks, may by notice to the Borrower
terminate the obligation to make Loans to the Borrower. No termination under
this Section 12.2 shall relieve the Borrower of its obligations to the Banks
arising under this Agreement or the other Loan Documents.
Section 12.3. Remedies. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Loans pursuant to Section 12.1,
the Agent on behalf of the Banks, may, with the consent of the Majority Banks
but not otherwise, proceed to protect and enforce their rights and remedies
under this Agreement, the Notes or any of the other Loan Documents by suit in
equity, action at law or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Agreement
and the other Loan Documents or any instrument pursuant to which the
Obligations are evidenced, including to the full extent permitted by
applicable law the obtaining of the ex parte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right. No remedy
herein conferred upon the Agent or the holder of any Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision
of law.
Section 12.4. Distribution of Collateral Proceeds. In the event that,
following the occurrence or during the continuance of any Event of Default,
any monies are received in connection with the enforcement of any of the
Security Documents, or otherwise with respect to the realization upon any of
the Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent to protect or preserve the collateral or in connection
with the collection of such monies by the Agent, for the exercise, protection
or enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent under this Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference
as the Majority Banks shall determine; provided, however, that (i)
distributions in respect of such Obligations shall be made pari passu among
Obligations with respect to the Agent's fee payable pursuant to Section 4.3
and all other Obligations, (ii) in the event that any Bank shall have
wrongfully failed or refused to make an advance under Section 2.7 and such
failure or refusal shall be continuing, advances made by other Banks during
the pendency of such failure or refusal shall be entitled to be repaid as to
principal and accrued interest in priority to the other Obligations described
in this subsection (b), and (iii) Obligations owing to the Banks with respect
to each type of Obligation such as interest, principal, fees and expenses,
shall be made among the Banks pro rata; and provided, further, that the
Majority Banks may in their discretion make proper allowance to take into
account any Obligations not then due and payable; and
(c) Third, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
Section 12.5. Default under Mezzanine Mortgage Loan Documents.
Notwithstanding anything herein to the contrary, the Borrower hereby
expressly agrees that any "Event of Default" (as defined in the Mezzanine
Mortgage Loan Documents) (which shall be deemed to include maturity of the
debt secured by the Mezzanine Mortgage Loan Document or any other occurrence
which would give the holder of the Mezzanine Mortgage Loan Documents the
right to exercise remedies thereunder) shall constitute and be deemed to be
an Event of Default under this Agreement for which no right to cure shall be
available; provided, however, that in the event that (a) a court of competent
jurisdiction finally determines in an adjudication binding upon the Mezzanine
Mortgagee, and sufficient to prohibit or stay any exercise by the Mezzanine
Mortgagee of its remedies under the Mezzanine Mortgage Loan Documents, that
an "Event of Default" under the Mezzanine Mortgage Loan Documents was in fact
not an "Event of Default" thereunder, or (b) the Mezzanine Mortgagee
withdraws such notice of the existence of an "Event of Default" (subject to
the terms of this Section 12.5 below concerning the approval thereof by the
Majority Banks), and in either event the Agent has not foreclosed on the
"Member Interests" (as defined in the Assignment of Interests), such "Event
of Default" shall no longer constitute an Event of Default hereunder.
Without limiting the foregoing, an "Event of Default" under the Mezzanine
Mortgage Loan Documents shall conclusively be deemed to have occurred upon
the declaration, statement or notice from the Mezzanine Mortgagee as to the
existence or occurrence of an "Event of Default" under the Mezzanine Mortgage
Loan Documents. The Borrower shall cause the Property Owner to give the
Agent immediate notice of default and all other notices or communications
received by the Property Owner pursuant to the Mezzanine Mortgage Loan
Documents or in connection with the Mezzanine Mortgage Loan. Upon the
occurrence of any "Default" (as defined in the Mezzanine Mortgage Loan
Documents), the Borrower shall cause the Property Owner to deliver to the
Agent within five (5) days after the first to occur of (x) receipt by the
Property Owner of notice of such "Default" from the Mezzanine Mortgagee or
(y) the date the Property Owner obtains actual knowledge of the occurrence of
such "Default", a detailed description of the actions to be taken by the
Property Owner to cure such "Default" and the dates by which each such action
shall occur. Such schedule shall be subject to the approval of the Majority
Banks. The Borrower shall cause the Property Owner to take all such actions
as are necessary to cure such "Default" under the Mezzanine Mortgage Loan
Documents by the date approved by the Majority Banks, and shall deliver to
the Agent not less frequently than weekly thereafter written updates
concerning the status of the Property Owner's efforts to cure such "Default".
The Agent shall have the right, but not the obligation, to pay any sums or to
take any action which the Agent deems necessary or advisable to cure any
default or alleged default under the Mezzanine Mortgage Loan Documents
(whether or not the Property Owner is undertaking efforts to cure such
default or the same is an "Event of Default" under the Mezzanine Mortgage
Loan Documents or a Default or Event of Default hereunder), and such payment
or such action is hereby authorized by the Borrower, and any sum so paid and
any expense incurred by the Agent in taking any such action shall be
evidenced by this Agreement and secured by the Security Documents and shall
be immediately due and payable by Borrower to the Agent with interest at the
rate for overdue amounts set forth in Section 4.12 until paid. The Agent
shall be authorized to take such actions upon the assertion by the Mezzanine
Mortgagee of the existence of such "Default" or "Event of Default" without
any duty to inquire or determine whether such "Default" or "Event of Default"
exist. The consent or waiver by the Mezzanine Mortgagee of any "Event of
Default" under the Mezzanine Mortgage Loan Documents shall not annul the
occurrence of an Event of Default hereunder unless otherwise approved by the
Majority Banks; provided, however that if the Mezzanine Mortgagee shall
accept the cure of an "Event of Default" under the Mezzanine Mortgage Loan
Documents resulting from a failure to pay any amounts due to the Mezzanine
Mortgagee thereunder within five (5) days of the occurrence of such event,
such acceptance shall not require the consent of the Majority Banks to annul
the occurrence of an Event of Default hereunder. The Borrower shall cause
the Property Owner to permit Agent to enter upon the Mezzanine Property for
the purpose of curing any default or alleged default under the Mezzanine
Mortgage Loan Documents or hereunder. The Borrower hereby transfers and
assigns any excess proceeds arising from any foreclosure or sale under power
pursuant to the Nomura Mortgages or any instrument evidencing the
indebtedness secured thereby, and the Borrower hereby authorizes and directs
the holder or holders of the Nomura Mortgages to pay such excess proceeds
directly to the Agent up to the amount of the Obligations. The provisions of
this Section 12.5 shall be subject to the rights of Borrower pursuant to
Paragraph 8(h) of the Assignment of Interests.
Section 13. SETOFF.
Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits (general or specific, time
or demand, provisional or final, regardless of currency, maturity, or the
branch of where such deposits are held) or other sums credited by or due from
any of the Banks to the Borrower or any Guarantor and any securities or other
property of the Borrower or any Guarantor in the possession of such Bank may
be applied to or set off against the payment of Obligations and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of the Borrower or any
Guarantor to such Bank. Each of the Banks agrees with each other Bank that
if such Bank shall receive from the Borrower or any Guarantor, whether by
voluntary payment, exercise of the right of setoff, or otherwise, and shall
retain and apply to the payment of the Note or Notes held by such Bank any
amount in excess of its ratable portion of the payments received by all of
the Banks with respect to the Notes held by all of the Banks, such Bank will
make such disposition and arrangements with the other Banks with respect to
such excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Notes held by it its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is
thereafter recovered from such Bank, such disposition and arrangements shall
be rescinded and the amount restored to the extent of such recovery, but
without interest.
Section 14. THE AGENT.
Section 14.1. Authorization. The Agent is authorized to take such
action on behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent. The
obligations of Agent hereunder are primarily administrative in nature, and
nothing contained in this Agreement or any of the other Loan Documents shall
be construed to constitute the Agent as a trustee for any Bank or to create
any agency or fiduciary relationship. The Borrower and any other Person
shall be entitled to conclusively rely on a statement from the Agent that it
has the authority to act for and bind the Banks pursuant to this Agreement
and the other Loan Documents.
Section 14.2. Employees and Agents. The Agent may exercise its powers
and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Agreement and the other Loan
Documents. The Agent may utilize the services of such Persons as the Agent
may reasonably determine, and all reasonable fees and expenses of any such
Persons shall be paid by the Borrower.
Section 14.3. No Liability. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent, or employee thereof, shall be liable for
any waiver, consent or approval given or any action taken, or omitted to be
taken, in good faith by it or them hereunder or under any of the other Loan
Documents, or in connection herewith or therewith, or be responsible for the
consequences of any oversight or error of judgment whatsoever, except that
the Agent or such other Person, as the case may be, may be liable for losses
due to its willful misconduct or gross negligence.
Section 14.4. No Representations. The Agent shall not be responsible
for the execution or validity or enforceability of this Agreement, the Notes,
any of the other Loan Documents or any instrument at any time constituting,
or intended to constitute, collateral security for the Notes, or for the
value of any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for
any recitals or statements, warranties or representations made herein or in
any of the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower, the Guarantor, the Property
Owner, the Manager or the Member, or be bound to ascertain or inquire as to
the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any other of the Loan Documents. The Agent shall not
be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrower or the Guarantor or any holder of any of the
Notes shall have been duly authorized or is true, accurate and complete. The
Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with
respect to the creditworthiness or financial condition of the Borrower, the
Property Owner, the Manager, the Member or the Guarantor. Each Bank
acknowledges that it has, independently and without reliance upon the Agent
or any other Bank, and based upon such information and documents as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank, based upon such
information and documents as it deems appropriate at the time, continue to
make its own credit analysis and decisions in taking or not taking action
under this Agreement and the other Loan Documents.
Section 14.5. Payments.
(a) A payment by the Borrower or the Guarantor to the Agent
hereunder or under any of the other Loan Documents for the account of any
Bank shall constitute a payment to such Bank. The Agent agrees to distribute
to each Bank not later than one Business Day after the Agent's receipt of
good funds, determined in accordance with the Agent's customary practices,
such Bank's pro rata share of payments received by the Agent for the account
of the Banks except as otherwise expressly provided herein or in any of the
other Loan Documents.
(b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of
the other Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the
Agent is to be repaid, each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its pro rata share of any Loan or (ii) to comply with
the provisions of Section 13 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share
of such payments due and payable to all of the Banks, in each case as, when
and to the full extent required by the provisions of this Agreement, shall be
deemed delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank
until such time as such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from the Borrower and
the Guarantor, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans. The
Delinquent Bank hereby authorizes the Agent to distribute such payments to
the nondelinquent Banks in proportion to their respective pro rata shares of
all outstanding Loans. A Delinquent Bank shall be deemed to have satisfied
in full a delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans of the nondelinquent Banks or as a result
of other payments by the Delinquent Banks to the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans have returned to
those in effect immediately prior to such delinquency and without giving
effect to the nonpayment causing such delinquency.
Section 14.6. Holders of Notes. Subject to the terms of Article 18,
the Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished
in writing with a different name by such payee or by a subsequent holder,
assignee or transferee.
Section 14.7. Indemnity. The Banks ratably agree hereby to indemnify
and hold harmless the Agent from and against any and all claims, actions and
suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Agent has not been reimbursed by the
Borrower as required by Section 15), and liabilities of every nature and
character arising out of or related to this Agreement, the Notes, or any of
the other Loan Documents or the transactions contemplated or evidenced hereby
or thereby, or the Agent's actions taken hereunder or thereunder, except to
the extent that any of the same shall be directly caused by the Agent's
willful misconduct or gross negligence.
Section 14.8. Agent as Bank. In its individual capacity, BKB shall
have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as the holder of any
of the Notes as it would have were it not also the Agent.
Section 14.9. Resignation. The Agent may resign at any time by giving
60 days' prior written notice thereof to the Banks and the Borrower. Upon
any such resignation, the Majority Banks shall have the right to appoint as a
successor Agent any Bank or any bank whose senior debt obligations are rated
not less than "A3" or its equivalent by Moody's Investors Service, Inc. or
not less than "A" or its equivalent by Standard & Poor's corporation and
which has total assets in excess of $10 billion and, so long as the Loan is
secured by the Mezzanine Collateral, who is approved by the Rating Agencies
pursuant to the Mezzanine Mortgage Loan Agreement. Unless a Default or Event
of Default shall have occurred and be continuing, such successor Agent shall
be reasonably acceptable to the Borrower. If no successor Agent shall have
been so appointed by the Majority Banks and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a Bank or any bank whose debt obligations are
rated not less than "A" or its equivalent by Moody's Investors Service, Inc.
or not less than "A" or its equivalent by Standard & Poor's Corporation and
which has total assets in excess of $10 billion and, so long as the Loan is
secured by the Mezzanine Collateral, who is approved by the Rating Agencies
pursuant to the Mezzanine Mortgage Loan Agreement. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder as Agent. After any
retiring Agent's resignation, the provisions of this Agreement and the other
Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
Section 14.10. Duties in the Case of Enforcement. In case one or more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a)
so requested by the Majority Banks and (b) the Banks have provided to the
Agent such additional indemnities and assurances against expenses and
liabilities as the Agent may reasonably request, proceed to enforce the
provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in
respect of such Collateral. The Majority Banks may direct the Agent in
writing as to the method and the extent of any such sale or other
disposition, the Banks hereby agreeing to indemnify and hold the Agent
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
Section 15. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing
and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's gross or net
income, except that the Agent and the Banks shall be entitled to
indemnification for any and all amounts paid by them in respect of taxes
based on income or other taxes assessed by any State in which Mortgaged
Property or other Collateral is located, such indemnification to be limited
to taxes due solely on account of the granting of Collateral under the
Security Documents and to be net of any credit allowed to the indemnified
party from any other State on account of the payment or incurrence of such
tax by such indemnified party), including any recording, mortgage,
documentary or intangibles taxes in connection with the Security Deeds and
other Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement, including any such taxes payable
by the Agent or any of the Banks after the Closing Date (the Borrower hereby
agreeing to indemnify the Agent and each Bank with respect thereto), (c) all
title insurance premiums, appraisal fees, engineer's fees, reasonable
internal charges of the Agent (determined in good faith and in accordance
with the Agent's internal policies applicable generally to its customers) for
commercial finance exams and engineering and environmental reviews and the
reasonable fees, expenses and disbursements of the counsel to the Agent,
counsel for the Majority Banks and any local counsel to the Agent incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein (excluding, however, the
preparation of agreements evidencing participations granted under Section
18.4), the review of any additional or substitute Collateral, the addition of
any guarantor, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the reasonable fees,
expenses and disbursements of the Agent incurred by the Agent in connection
with the preparation, administration or interpretation of the Loan Documents
and other instruments mentioned herein, and the making of each advance
hereunder, (e) all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or
the Agent and the fees and costs of appraisers, engineers, investment bankers
or other experts retained by any Bank or the Agent) incurred by any Bank or
the Agent in connection with (i) the enforcement of or preservation of rights
under any of the Loan Documents against the Borrower or any Guarantor or the
administration thereof after the occurrence of a Default or Event of Default
and (ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to the Agent's or any of the Bank's
relationship with the Borrower or any Guarantor, (f) all reasonable fees,
expenses and disbursements of any Bank or the Agent incurred in connection
with U.C.C. searches, U.C.C. filings, title rundowns, title searches or
mortgage recordings, and (g) all reasonable fees and expenses (including
reasonable attorney's fees and costs) incurred by BankBoston and Goldman in
connection with the assignment of Commitments and interests in the Loans
pursuant to Section 18.1. The covenants of this Section 15 shall survive
payment or satisfaction of payment of amounts owing with respect to the
Notes.
Section 16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the
Banks and each director, officer, employee, agent and Person who controls the
Agent or any Bank from and against any and all claims, actions and suits,
whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character
arising out of or relating to this Agreement or any of the other Loan
Documents or the transactions contemplated hereby and thereby including,
without limitation, (a) any leasing fees and any brokerage, finders or
similar fees asserted against any Person indemnified under this Section 16
based upon any agreement, arrangement or action made or taken, or alleged to
have been made or taken, by the Borrower or Guarantor, (b) any condition,
use, operation or occupancy of the Mortgaged Property, the Mezzanine Property
or other Collateral, (c) any actual or proposed use by the Borrower of the
proceeds of any of the Loans, (d) any actual or alleged infringement of any
patent, copyright, trademark, service mark or similar right of the Borrower,
the Property Owner, the Manager, the Member or Guarantor comprised in the
Collateral, (e) the Borrower and the Guarantor entering into or performing
this Agreement or any of the other Loan Documents, (f) any actual or alleged
violation of any law, ordinance, code, order, rule, regulation, approval,
consent, permit or license relating to the Mortgaged Property or the
Mezzanine Property, (g) with respect to the Borrower, the Property Owner, the
Manager, the Member or Guarantor and their respective properties and assets,
the violation of any Environmental Law, the Release or threatened Release of
any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including,
but not limited to claims with respect to wrongful death, personal injury or
damage to property), (h) the Mezzanine Mortgage Loan Documents or the Member
Organizational Agreements, the Property Owner Organizational Agreements and
the Manager Organizational Agreements, (i) matters for which the Mezzanine
Mortgagee is indemnified pursuant to Section 9.2 of the Mezzanine Mortgage
Loan Agreement to the same extent provided therein, (j) in the event that the
Agent or any nominee of the Agent and the Banks shall foreclose or otherwise
obtain title to all or any portion of the Mezzanine Collateral, any
obligations, duties or liabilities of the Property Owner, the Borrower, the
Manager or the Member other than those pursuant to Leases for the Mezzanine
Property entered into in compliance with this Agreement, the Mezzanine
Mortgage Loan Documents (subject to the terms of the Loan Documents) or the
Approved Budget, or (k) the exercise by the Agent of the rights and remedies
set forth in Section 32, in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or
other proceeding; provided, however, that the Borrower shall not be obligated
under this Section 16 to indemnify any Person for liabilities arising from
such Person's own gross negligence or willful misconduct. In order to
provide for just and equitable contribution in circumstances in which the
indemnity agreement provided for in Section 9.2(b) or (c) of the Mezzanine
Mortgage Loan Agreement is for any reason held to be unenforceable by an
indemnified party in respect of any claims, expenses, losses, damages,
obligations or liabilities (or action in respect thereof) referred to therein
which would otherwise be indemnifiable under Section 16(i) above the Borrower
shall contribute to the amount paid or payable by the Agent or the Banks as a
result of such claims, expenses, losses, damages, obligations or liabilities
(or action in respect thereof); provided, however, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act of 1933) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) the Agent's, the Banks' and the
Borrower's (or the Borrower's predecessors) relative knowledge and access to
information concerning the matter with respect to which claim was asserted;
(ii) the opportunity to correct and prevent any statement or omission; and
(iii) any other equitable considerations appropriate in the circumstances.
Agent and the Borrower hereby agree that it may not be equitable if the
amount of such contribution were determined by pro rata or per capita
allocation. In litigation, or the preparation therefor, the Banks and the
Agent shall be entitled to select a single law firm as their own counsel and,
in addition to the foregoing indemnity, the Borrower agrees to pay promptly
the reasonable fees and expenses of such counsel. If, and to the extent that
the obligations of the Borrower under this Section 16 are unenforceable for
any reason, the Borrower hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law. The provisions of this Section 16 shall survive the
repayment of the Loans and the termination of the obligations of the Banks
hereunder.
Section 17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower, the Property Owner, the
Manager, the Member or any Guarantor pursuant hereto or thereto shall be
deemed to have been relied upon by the Banks and the Agent, notwithstanding
any investigation heretofore or hereafter made by any of them, and shall
survive the making by the Banks of any of the Loans, as herein contemplated,
and shall continue in full force and effect so long as any amount due under
this Agreement or the Notes or any of the other Loan Documents remains
outstanding or any Bank has any obligation to make any Loans. The
indemnification obligations of the Borrower provided herein and the other
Loan Documents shall survive the full repayment of amounts due and the
termination of the obligations of the Banks hereunder and thereunder to the
extent provided herein and therein. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by
or on behalf of the Borrower, the Property Owner, the Manager, the Member or
any Guarantor pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by such
Person hereunder.
Section 18. ASSIGNMENT AND PARTICIPATION.
Section 18.1. Conditions to Assignment by Banks. Except as provided
herein, each Bank may assign to one or more banks or other entities all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment and
the same portion of the Loans at the time owing to it, and the Notes held by
it); provided that (a) the Agent shall have given its prior written consent
to such assignment, which consent shall not be unreasonably withheld
(provided that such consent shall not be required for any assignment to
another Bank, to a bank which is under common control with the assigning Bank
or to a wholly-owned Subsidiary of such Bank provided that such assignee
shall remain a wholly-owned Subsidiary of such Bank), (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (c) the parties
to such assignment shall execute and deliver to the Agent, for recording in
the Register (as hereinafter defined), a notice of such assignment, together
with any Notes subject to such assignment, (d) in no event shall any voting,
consent or approval rights of a Bank be assigned to any Person controlling,
controlled by or under common control with, or which is not otherwise free
from influence or control by, the Borrower, the Property Owner, the Manager,
the Member or any Guarantor, which rights shall instead be allocated pro rata
among the other remaining Banks, (e) such assignee shall have a net worth as
of the date of such assignment of not less than $500,000,000 and (f) such
assignee shall acquire an interest in the Loans of not less than
$10,000,000.00. No such assignment shall be made without the prior consent
of the Borrower, which consent shall not be unreasonably withheld or delayed;
provided that such consent shall not be required in the event that a Default
or Event of Default shall have occurred. Upon such execution, delivery,
acceptance and recording, of such notice of assignment, (i) the assignee
thereunder shall be a party hereto and all other Loan Documents executed by
the Banks and, to the extent provided in such assignment, have the rights and
obligations of a Bank hereunder, (ii) the assigning Bank shall, to the extent
provided in such assignment and upon payment to the Agent of the registration
fee referred to in Section 18.2, be released from its obligations under this
Agreement, and (iii) the Agent may unilaterally amend Schedule 1.1 to reflect
such assignment. In connection with each assignment, the assignee shall
represent and warrant to the Agent, the assignor and each other Bank as to
whether such assignee is controlling, controlled by, under common control
with or is not otherwise free from influence or control by, the Borrower, the
Property Owner, the Manager, the Member or any Guarantor. Notwithstanding
anything herein to the contrary, in the event that BKB shall at any time hold
a Commitment equal to or less than $20,000,000, then BKB shall promptly
provide written notice thereof to the Banks and the Majority Banks shall have
the right, to be exercised within fifteen (15) days of delivery of such
notice by BKB, to elect to remove BKB as Agent and replace BKB as Agent,
subject to the terms of Section 14.9
Section 18.2. Register. The Agent shall maintain a copy of each
assignment delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and the
Commitment Percentages of, and principal amount of the Loans owing to the
Banks from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Banks may
treat each Person whose name is recorded in the Register as a Bank hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the
assigning Bank agrees to pay to the Agent a registration fee in the sum of
$2,000.
Section 18.3. New Notes. Upon its receipt of an assignment executed by
the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the
Banks (other than the assigning Bank). Within five Business Days after
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to
the order of such assignee in an amount equal to the amount assumed by such
assignee pursuant to such assignment and, if the assigning Bank has retained
some portion of its obligations hereunder, a new Note to the order of the
assigning Bank in an amount equal to the amount retained by it hereunder, and
shall cause the Guarantor to deliver to Agent an acknowledgment in form and
substance satisfactory to the Agent to the effect that the Guaranty extends
and is applicable to each new Note. Such new Notes shall provide that they
are replacements for the surrendered Notes, shall be in an aggregate
principal amount equal to the aggregate principal amount of the surrendered
Notes, shall be dated the effective date of such assignment and shall
otherwise be in substantially the form of the assigned Notes. The
surrendered Notes shall be canceled and returned to the Borrower.
Section 18.4. Participations. Each Bank may sell participations to one
or more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents with the prior
written consent of the Agent (after giving due regard to the limitations in
Section 18.8); provided that (a) any such sale or participation shall not
affect the rights and duties of the selling Bank hereunder to the Borrower,
(b) such sale and participation shall not entitle such participant any rights
or privileges under this Agreement or the Loan Documents (including, without
limitation, the right to approve waivers, amendments or modifications), (c)
such participant shall have no direct rights against the Borrower or the
Guarantor except the rights granted to the Banks pursuant to Section 13, (d)
such sale is effected in accordance with all applicable laws, and (e) such
participant shall not be a Person controlling, controlled by or under common
control with, or which is not otherwise free from influence or control by,
the Borrower, the Property Owner, the Manager, the Member or any Guarantor.
Section 18.5. Pledge by Bank. Any Bank may at any time pledge all or
any portion of its interest and rights under this Agreement (including all or
any portion of its Note) to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
Section 18.6. No Assignment by Borrower. The Borrower shall not assign
or transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section 18.7. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard institutional lending practices
any Bank may disclose information obtained by such Bank pursuant to this
Agreement to assignees or participants and potential assignees or
participants hereunder.
Section 18.8. Additional Restrictions on Assignments and
Participations. Notwithstanding anything to the contrary set forth in this
Agreement or in any of the other Loan Documents, so long as the Conditional
Guaranty remains in effect, no interest in the Loan may be assigned,
transferred or participated, unless in each case the additional requirements
set forth in clauses (a) through (e) below are satisfied: (a) the entity to
which any interest in the Loan is assigned, transferred or participated is an
Eligible Transferee (as defined below), (b) the minimum denomination
assigned, transferred or participated shall not be less than $10,000,000.00,
(c) assignments, transfers and participations may not be made to more than
thirty (30) Eligible Transferees in the aggregate, (d) assignments, transfers
and participations may not be made without the consent of Whitehall Street
Real Estate Limited Partnership V, Whitehall Street Real Estate Limited
Partnership VI, Whitehall Street Real Estate Limited Partnership VII and
Whitehall Street Real Estate Limited Partnership VIII, which consent shall
not be unreasonably withheld, delayed or conditioned, and (e) assignments,
transfers and participations may not be made unless the prospective assignee,
transferee or participant executes and delivers a fully completed certificate
in the form of Exhibit E hereto confirming that such assignee, transferee or
participant is an Eligible Transferee. "Eligible Transferee" means a
"qualified purchaser" as defined in Section 2(a)(51)(A) of the Investment
Company Act of 1940, as amended, and the rules and regulations promulgated
thereunder.
Section 19. NOTICES.
Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this Section 19 referred to
as "Notice"), but specifically excluding to the maximum extent permitted by
law any notices of the institution or commencement of foreclosure
proceedings, must be in writing and shall be deemed to have been properly
given or served by personal delivery or by sending same by overnight courier
or by depositing same in the United States Mail, postpaid and registered or
certified, return receipt requested, or as expressly permitted herein, by
telegraph, telecopy, telefax or telex, and addressed as follows:
If to the Agent or BKB:
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
With a copy to:
BankBoston, N.A.
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Mr. Jay Johns
Telecopy No.: 770/390-8434
If to the Borrower:
Wellsford/Whitehall Holdings, L.L.C.
610 Fifth Avenue
7th Floor
New York, New York 10020
Attn: Mr. Gregory F. Hughes
With a copy to:
Alan S. Pearce, Esq.
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
if to another Bank now a party to this Agreement, to the address set forth on
the signature page hereto, and to each other Bank which may hereafter become
a party to this Agreement at such address as may be designated by such Bank.
Each Notice shall be effective upon being personally delivered or upon being
sent by overnight courier or upon being deposited in the United States Mail
as aforesaid. The time period in which a response to such Notice must be
given or any action taken with respect thereto (if any), however, shall
commence to run from the date of receipt if personally delivered or sent by
overnight courier, or if so deposited in the United States Mail, the earlier
of three (3) Business Days following such deposit or the date of receipt as
disclosed on the return receipt. Rejection or other refusal to accept or the
inability to deliver because of changed address for which no notice was given
shall be deemed to be receipt of the Notice sent. By giving at least fifteen
(15) days prior Notice thereof, the Borrower, a Bank or Agent shall have the
right from time to time and at any time during the term of this Agreement to
change their respective addresses and each shall have the right to specify as
its address any other address within the United States of America.
Section 20. RELATIONSHIP.
Neither the Agent nor any Bank has any fiduciary relationship with or
fiduciary duty to Borrower arising out of or in connection with this
Agreement or the other Loan Documents, or the transactions contemplated
hereunder or thereunder, and the relationship between each Bank and the
Borrower is solely that of a lender and borrower, and nothing contained
herein or in any of the other Loan Documents shall in any manner be construed
as making the parties hereto partners, joint venturers or any other
relationship other than lender and borrower.
Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED IN Section 19. THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 22. HEADINGS.
The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
Section 23. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
so executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
Section 24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Agreement nor
any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 27.
Section law WAIVER OF JURY TRIAL.
EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO
A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY,
AMONG OTHER THINGS, THE WAIVER AND CERTIFICATIONS CONTAINED IN THIS Section
25.
Section 26. DEALINGS WITH THE BORROWER.
The Banks and their affiliates may accept deposits from, extend credit
to and generally engage in any kind of banking, trust or other business with
the Borrower, its Subsidiaries or the Guarantor or any of their affiliates
regardless of the capacity of the Bank hereunder.
Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term
of this Agreement or of any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower or
the Guarantor of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Majority
Banks. Notwithstanding the foregoing, none of the following may occur
without the written consent of each Bank: a change in the rate of interest
on and the term of the Notes; a change in the amount of the Commitments of
the Banks; a forgiveness, reduction or waiver of the principal of any unpaid
Loan or any interest thereon or fee payable under the Loan Documents; a
change in the amount of any fee payable to a Bank hereunder; the postponement
of any date fixed for any payment of principal of or interest on the Loan; an
extension of the Maturity Date (except as provided in Section 2.8); a change
in the manner of distribution of any payments to the Banks or the Agent; the
release of the Borrower or the Guarantor or any Collateral except as
otherwise provided herein; an amendment of the definition of Majority Banks
or of any requirement for consent by all of the Banks; any modification to
require a Bank to fund a pro rata share of a request for an advance of the
Loan made by the Borrower other than based on its Commitment Percentage; an
amendment to this Section 27; an amendment of the definition of Majority
Banks; or an amendment of any provision of this Agreement or the Loan
Documents which requires the approval of all of the Banks or the Majority
Banks to require a lesser number of Banks to approve such action. The amount
of the Agent's fee payable for the Agent's account and the provisions of
Section 14 may not be amended without the written consent of the Agent. No
waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Agent or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrower shall entitle the Borrower to other or further
notice or demand in similar or other circumstances.
Section 28. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
Section 29. LIMITATION ON LIABILITY.
NO OBLIGATION OR LIABILITY WHATSOEVER OF THE BORROWER WHICH MAY ARISE AT
ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY BE
INCURRED BY IT PURSUANT TO ANY OTHER LOAN DOCUMENT SHALL BE PERSONALLY
BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO, THE
PRIVATE PROPERTY OF ANY OF THE BORROWER'S MEMBERS REGARDLESS OF WHETHER SUCH
OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR OTHERWISE;
PROVIDED, HOWEVER, NOTHING HEREIN SHALL DIMINISH OR IMPAIR THE RIGHTS OF
AGENT AND THE BANKS TO PURSUE ANY REMEDY AGAINST ANY ASSETS OF THE BORROWER
OR RELIEVE, REDUCE OR IMPAIR ANY OBLIGATION OF ANY GUARANTOR UNDER ITS
GUARANTY OR INDEMNITY AGREEMENT.
Section 30. 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 ORAL AGREEMENTS
BETWEEN THE PARTIES.
Section 31. TIME OF THE ESSENCE.
Time is of the essence with respect to each and every covenant,
agreement and obligation of the Borrower under this Agreement and the other
Loan Documents.
Section 32. BANKRUPTCY.
(a) Material Inducement. Each of the Borrower, the undersigned
Guarantor, the Member and the Manager, jointly and severally, acknowledges
and agrees that the representations, warranties, covenants and agreements
contained in this Section 32 constitute a material inducement to the Agent
and the Banks to enter into this Agreement, the other Loan Documents and the
transactions contemplated hereby and thereby and that without the inclusion
of this Section 32 herein the Agent and the Banks would not have entered into
this Agreement and the other Loan Documents.
(b) No Fraudulent Intent. Each of the Borrower, the undersigned
Guarantor, the Member and the Manager, jointly and severally, hereby
acknowledges, warrants, represents and agrees that neither the execution and
delivery of this Agreement and the other Loan Documents nor the performance
of any actions required hereunder or thereunder is being consummated by the
Borrower, the Property Owner, the Guarantor, the Member or the Manager with
or as a result of any actual intent by such Persons, or any of them, to
hinder, delay or defraud any entity to which such Persons, or any of them,
are now or will hereafter become indebted.
(c) No Bankruptcy Intent. Each of the Borrower, the undersigned
Guarantor, the Member and the Manager, jointly and severally, hereby
represents, covenants and agrees that none of the Borrower, the Property
Owner, the Guarantor, the Member or the Manager has any intent (1) to file
any voluntary petition in bankruptcy under any Chapter of the Bankruptcy Code
or in any manner to seek relief, protection, reorganization, liquidation,
dissolution or similar relief for debtors under any local, state, federal or
other insolvency laws or laws providing for relief of debtors, or in equity,
or directly or indirectly to cause any of the other of such Persons to file
any such petition or to seek any such relief, either at the present time, or
at any time hereafter, or (2) directly or indirectly to cause any involuntary
petition under any Chapter of the Bankruptcy Code to be filed against any of
such Persons or directly or indirectly to cause any of such Persons to become
the subject of any dissolution, liquidation or insolvency proceeding or any
other proceeding pursuant to any local, state, federal, or other insolvency
laws or laws providing for relief of debtors, or in equity, either at the
present time, or at any time hereafter, or (3) directly or indirectly to
cause the Mezzanine Property, the Mezzanine Collateral, any other Collateral
or any portion thereof or any interest of such Persons in the Mezzanine
Property, the Mezzanine Collateral or any other Collateral to become the
property of any bankruptcy estate or the subject of any local, state, federal
or other bankruptcy, dissolution, liquidation or insolvency proceedings,
either at the present time or at any time hereafter.
(d) Agreement in Best Interests of Parties; Consideration. Each
of the Borrower, the undersigned Guarantor, the Member and the Manager,
jointly and severally, hereby acknowledges and agrees that (1) the
transactions evidenced by this Agreement and the other Loan Documents are in
the best interests of such Persons and the creditors of such Persons, and (2)
the benefit to inure to such Persons pursuant to this Agreement and the other
Loan Documents constitute substantially more than "reasonable equivalent
value" (as such term is used in Section 548 of the Bankruptcy Code) and "fair
consideration" (as such term is defined and used in the New York Debtor and
Creditor Law Sections 272-279), in exchange for the benefits to be provided
by such Persons to the Agent and the Banks pursuant to this Agreement and the
other Loan Documents.
(e) Subsequent Bankruptcy; Waiver of Automatic Stay.
(1) It is expressly agreed and understood by the parties
hereto that, in the event the Property Owner, the Borrower, the
Guarantor, the Member, the Manager, the Mezzanine Property or other
Mezzanine Collateral, or any portion thereof, shall be or become the
subject of any bankruptcy proceeding or the property of any bankruptcy
estate, the United States Bankruptcy Court for the Southern District of
New York (hereinafter referred to as the "Bankruptcy Court") shall have
the sole and exclusive jurisdiction of such bankruptcy proceeding. The
parties hereto hereby further acknowledge and agree that any voluntary
bankruptcy petition filed by any of the Property Owner, the Borrower,
the Guarantor, the Member or the Manager, or any involuntary bankruptcy
petition caused to be filed by any of the Property Owner, the Borrower,
Guarantor, the Member, the Manager or any affiliate thereof against any
of the Property Owner, the Borrower, the Member, the Guarantor or the
Manager (any such bankruptcy filing being hereinafter referred to as a
"Bad Faith Filing"), or any other action by the Borrower or such
Persons, or any of them, to attempt in any manner to hinder, delay,
impede, stay, void, rescind or nullify any lawful action taken by Agent
to exercise its rights and remedies under this Agreement or any of the
other Loan Documents, or at law or in equity, from and after the date
hereof, or pursuant to any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar proceedings, would be in bad faith
and contrary to the purposes of the bankruptcy laws, would be for the
sole purpose of delaying, inhibiting or interfering with the exercise by
Agent of its rights and remedies under this Agreement and the Loan
Documents and would, in and of itself, constitute "cause" for relief
from the automatic stay pursuant to the provisions of Section 362(d)(1)
of the Bankruptcy Code. Without limitation of the foregoing, the
parties hereto hereby further acknowledge and agree that, in the event
of any Bad Faith Filing by or against any of the Property Owner, the
Borrower, Guarantor, the Member or the Manager, or their respective
successors, successors-in-interest or assigns, Agent shall be entitled
to obtain upon ex parte application therefor, and without further notice
or action of any kind or nature whatsoever, (A) an order from the
Bankruptcy Court prohibiting the use of Agent's "cash collateral" (as
such term is defined in Section 363 of the Bankruptcy Code) in
connection with the Loan, and (B) an order from the Bankruptcy Court
granting immediate relief from the automatic stay pursuant to Section
362 of the Bankruptcy Code so as to permit Agent to exercise all of its
rights and remedies pursuant to the Mezzanine Loan Documents, and at law
and in equity.
(2) The Borrower, the undersigned Guarantor, the Member and
the Manager covenant not to directly or indirectly oppose or otherwise
defend against Agent's effort to obtain relief from the stay pursuant to
Section 32(e)(1), above, and covenant and agree that Agent shall be
entitled to the lifting of the stay pursuant to Section 32(e)(1), above,
without the necessity of an evidentiary hearing and without the
necessity or requirement that Agent establish or prove the value of the
Mezzanine Collateral or any other Collateral, the lack of adequate
protection of Agent's interest in the Mezzanine Collateral or any other
Collateral, the lack of any reasonable prospect of reorganization with
respect either to the Property Owner, the Borrower, the Guarantor, the
Member, the Manager, or the Mezzanine Collateral or any other
Collateral, or the Borrower's, the Guarantor's, the Member's or the
Manager's lack of equity in the Mezzanine Collateral.
(3) The waiver by the Borrower, the undersigned Guarantor,
the Member and the Manager of the Section 362 automatic stay contained
in the Bankruptcy Code pursuant to Section 32(e)(1) and (2), above, and
the waiver of the Section 362 automatic and Section 105 supplemental
stay contained in the Bankruptcy Code pursuant to Section 32(f), below,
shall be unconditional and absolute, and each of the Borrower, the
Member, the Manager and the Guarantor hereby agree never to directly or
indirectly maintain before any court that such waiver of the automatic
stay and supplemental stay should not be strictly enforced.
(f) Waiver of Automatic and Supplemental Stays. Each of the
Borrower, the undersigned Guarantor, the Member and the Manager, on behalf of
itself only, hereby represents, covenants and agrees, in the event of the
filing of any voluntary or involuntary petition in bankruptcy by or against
any of the Property Owner, the Borrower, the Guarantor, the Member or the
Manager, not to assert or request any other party to assert that the
automatic stay provided by Section 362 of the Bankruptcy Code shall operate
or be interpreted to stay, interdict, condition, reduce or inhibit the
ability of Agent to enforce any rights it has by virtue of the Mezzanine Loan
Documents, or any other rights Agent has, whether now or hereafter acquired,
against any of the Property Owner, the Borrower, the Guarantor, the Member,
the Manager or against any Mezzanine Collateral; and further, in the event of
the filing of any voluntary or involuntary petition in bankruptcy by or
against any of the Property Owner, the Borrower, the Guarantor, the Member or
the Manager, not to seek a supplemental stay or any other relief, whether
injunctive or otherwise, pursuant to Section 105 of the Bankruptcy Code or
any other provision of the Bankruptcy Code, to stay, interdict, condition,
reduce or inhibit the ability of Agent to enforce any rights it has by virtue
of the Mezzanine Loan Documents, or at law or in equity, or any other rights
Agent has, whether now or hereafter acquired against the Property Owner, the
Borrower, the Guarantor, the Member, the Manager or against any Mezzanine
Collateral. The parties hereto acknowledge that the waivers in this Section
32(f) with respect to an involuntary petition shall not be effective until
the occurrence of an Event of Default provided that none of the Borrower, the
Guarantor, the Member, the Manager or the Property Owner directly or
indirectly causes such petition to be filed against any of them.
(g) Approval Rights Regarding Bankruptcy Proceeding. Upon the
occurrence and during the continuance of any Event of Default, all rights of
the Borrower, the Guarantor, the Member and the Manager to exercise their
Voting Interests in the Property Owner, the Manager, or the Member, as the
case may be, shall automatically terminate and cease to exist and all such
rights shall thereupon be automatically vested in the Agent who shall
thereupon have the sole and exclusive right to exercise such Voting
Interests. Without limiting the foregoing, in the event of a Bad Faith
Filing or any other voluntary or involuntary bankruptcy filing or any other
insolvency proceeding of any kind under local, state, federal or other
insolvency laws involving the Property Owner, the Borrower, the Guarantor,
the Member or the Manager, or all of them, or any of their properties
(collectively the "Bankruptcy Filings"), the Borrower, the undersigned
Guarantor, the Member and the Manager, each acknowledge and agree to
recognize the rights and powers granted to the Agent in this Section 32(g)
and agree not to oppose or object on any basis whatsoever to the exercise by
the Agent of such rights in connection with the Bankruptcy Filings. Further,
upon the commencement of one or more Bankruptcy Filings, the Borrower, the
undersigned Guarantor, the Member and the Manager, jointly and severally,
covenant and agree: (1) not to propose, approve, vote for, or acquiesce in a
plan of reorganization concerning the Property Owner, the Borrower, the
Guarantor, the Member, the Manager, or all of them, as it directly or
indirectly relates to the Property Owner, the Manager, the Member, the
Mezzanine Property or the Mezzanine Collateral, without the consent of Agent;
(2) not to challenge or object on any basis whatsoever to the standing of
Agent to be recognized as a creditor and/or party-in-interest in the
Bankruptcy Filings; and (3) not to violate or breach any of the covenants or
agreements contained in this Agreement and any of the Loan Documents.
(h) Miscellaneous Representations. Each of the Borrower, the
undersigned Guarantor, the Member and the Manager warrant and represent to
Agent and the Banks that, other than Agent and the Banks, applicable taxing
authorities, and as to the Borrower only, the Indebtedness permitted by this
Agreement, the Borrower, the Guarantor, the Member and the Manager have no
creditors; that none of such Persons has any employees; that each of such
Persons other than the Borrower are single asset entities such that each of
such Persons does not own or hold any beneficial interest in any property of
any kind or nature whatsoever other than their respective direct or indirect
interests in the Property Owner; and that any dispute which may arise between
Agent, the Banks, the Borrower (arising from its interest in the Mezzanine
Collateral), any Guarantor (arising from its interest in the Mezzanine
Collateral), Member or Manager, or any of them, would be, for all intents and
purposes, a dispute, involving only Agent and the Banks and the Borrower,
such Guarantor, the Member or the Manager, or any of them, as applicable.
(i) Covenant of Noninterference and Cooperation.
(1) The Borrower, the undersigned Guarantor, the Member and
the Manager, jointly and severally, covenant and agree that, except for
a "Permitted Defense" (as defined in the Conditional Guaranty), none of
them shall take any action of any kind or nature whatsoever, either
directly or indirectly, to oppose, impede, obstruct, hinder, frustrate,
enjoin or otherwise interfere with the exercise by Agent of any of
Agent's rights and remedies against or with respect to the Mezzanine
Collateral, the Mezzanine Property or the Mezzanine Loan Documents,
including specifically, but without limitation, those rights and
remedies contained in this Section 32, at law or in equity, and shall
not, either directly or indirectly cause any other Person to take any of
the foregoing actions.
(2) The Borrower, the undersigned Guarantor, the Member and
the Manager, jointly and severally, covenant and agree, except with
respect to a Permitted Defense, to cooperate fully and completely with
the exercise by Agent of any of Agent's rights and remedies against or
with respect to the Mezzanine Collateral or the Mezzanine Loan
Documents, including specifically, but without limitation, those rights
and remedies contained in this Section 32.
(3) The Borrower, the undersigned Guarantor, the Member and
the Manager, jointly and severally covenant and agree that any violation
of either Section 32(i)(1) or (2), above, or the occurrence of any
"Triggering Event" (as defined in the Conditional Guaranty), will
constitute an act of bad faith undertaken with intent to hinder, delay
and defraud Agent.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
a sealed instrument as of the date first set forth above.
WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a
Delaware limited liability company
By: Wellsford/Whitehall Properties II, L.L.C.,
a Delaware limited liability company, its
managing member
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
BANKBOSTON, N.A., a national banking
association, individually and as Agent
By:/s/ Mark E. Basham
---------------------------------
Name: Mark E. Basham
Title: Managing Director
[BANK SEAL]
GOLDMAN SACHS MORTGAGE COMPANY, a New York
limited partnership, individually and as
Co-Arranger and Co-Syndication Agent
By: Goldman Sachs Real Estate Funding
Corp., general partner
By:/s/ Robert R. Foley
-----------------------------
Name: Robert R. Foley
Title: Authorized Signatory
[CORPORATE SEAL]
Goldman Sachs Mortgage Company
85 Broad Street
New York, New York 10004
Attn: Mr. Roger Boone
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ Sylvia Gross
-------------------------------
Title: Vice President
By: /s/ Nichols Nouvel
-------------------------------
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT
590 Madison Avenue
New York, New York 10022
Attn: Mr. Johnathan Oh
COMERICA BANK
By: /s/ Charles Weddell
------------------------------
Title: Vice President
Comerica Bank
Comerica Tower, 7th Floor
500 Woodward Avenue
Detroit, Michigan 48226-3256
Attn: Mr. Charles Weddell
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By: Hartford Investment Services, Inc., its
Agent and Attorney-in-Fact
By: /s/ Dennis F. Kraft
--------------------------------
Dennis F. Kraft
--------------------------------
[Print Name]
Its: Senior Vice President
--------------------------------
[Title]
Hartford Life and Annuity Insurance Company
c/o Hartford Life Insurance Companies
c/o Investment Department - ABS/CMBS Sector
P. O. Box 1744
Hartford, Connecticut 06114-1744
PACIFIC LIFE INSURANCE COMPANY
By: /s/ Tony Premer
---------------------------------
Title: Assistant Vice President
By: /s/ C.S. Dillon
---------------------------------
Title: Assistant Secretary
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660-6397
Attn: Mr. Tony Premer
WEBSTER BANK
By: /s/ Bill Chamberland
-----------------------------
Title: Senior Vice President
Webster Bank
City Place II, 185 Asylum Street
Hartford, Connecticut 06103
Attn: Mr. Bill Chamberland
The undersigned Member, Manager and Guarantor hereby join in this
Agreement for the purpose of being bound to the provisions of Section 32 of
this Agreement.
MEMBER:
WELLS AVENUE HOLDINGS L.L.C., a Delaware
limited liability company
By: Wellsford/Whitehall Holdings, L.L.C., a
Delaware limited liability company, its
sole member
By: Wellsford/Whitehall Properties II,
L.L.C., a Delaware limited liability
company, its managing member
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
MANAGER:
WASH MANAGER L.L.C., a Delaware limited
liability company
By: Wells Avenue Holdings L.L.C., a Delaware
limited liability company, its sole member
By: Wellsford/Whitehall Holdings, L.L.C.,
a Delaware limited liability company,
its sole member
By: Wellsford/Whitehall Properties
II, L.L.C., a Delaware limited
liability company, its managing
member
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
GUARANTOR:
WELLSFORD COMMERCIAL PROPERTIES TRUST, a
Maryland real estate investment trust
By: /s/ Gregory F. Hughes
--------------------------------
Name: Gregory F. Hughes
Title: CFO & Treasurer
WHWEL REAL ESTATE LIMITED PARTNERSHIP
By: WHATR Gen-Par, Inc., General Partner
By: /s/ Alan S. Kava
-------------------------------
Name: Alan S. Kava
Title: Vice President
EXHIBIT A
FORM OF NOTE
$______________ _______________
FOR VALUE RECEIVED, the undersigned WELLSFORD/WHITEHALL HOLDINGS,
L.L.C., a Delaware limited liability company, hereby promises to pay to
___________________ _____________ or order, in accordance with the terms of
that certain First Amended and Restated Loan Agreement dated as of July __,
1998 (the "Loan Agreement"), as from time to time in effect, among the
undersigned, BankBoston, N.A., for itself and as Agent, Goldman Sachs
Mortgage Company, and such other Banks as may be from time to time named
therein, to the extent not sooner paid, on or before the Maturity Date, the
principal sum of _______________ _________________________ DOLLARS
($______________), or such amount as may be advanced by the payee hereof
under the Loan Agreement with daily interest from the date hereof, computed
as provided in the Loan Agreement, on the principal amount hereof from time
to time unpaid, at a rate per annum on each portion of the principal amount
which shall at all times be equal to the rate of interest applicable to such
portion in accordance with the Loan Agreement, and with interest on overdue
principal and, to the extent permitted by applicable law, on overdue
installments of interest and late charges at the rates provided in the Loan
Agreement. Interest shall be payable on the dates specified in the Loan
Agreement, except that all accrued interest shall be paid at the stated or
accelerated maturity hereof or upon the prepayment in full hereof.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Loan Agreement.
Payments hereunder shall be made to BankBoston, N.A., as Agent for the
payee hereof, 100 Federal Street, Boston, Massachusetts 02110.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Loan Agreement.
The principal of this Note may be due and payable in whole or in part prior
to the maturity date stated above and is subject to mandatory prepayment in
the amounts and under the circumstances set forth in the Loan Agreement, and
prepayment is permitted or prohibited in whole or from time to time in part,
all as set forth in the Loan Agreement.
Notwithstanding anything in this Note to the contrary, all agreements
between the Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in
no contingency, whether by reason of acceleration of the maturity of any of
the Obligations or otherwise, shall the interest contracted for, charged or
received by the Banks exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, interest would otherwise be
payable to the Banks in excess of the maximum lawful amount, the interest
payable to the Banks shall be reduced to the maximum amount permitted under
applicable law; and if from any circumstance the Banks shall ever receive
anything of value deemed interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive interest shall be applied to
the reduction of the principal balance of the Obligations and to the payment
of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations, such excess shall be refunded to the Borrower.
All interest paid or agreed to be paid to the Banks shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of the
Obligations (including the period of any renewal or extension thereof) so
that the interest thereon for such full period shall not exceed the maximum
amount permitted by applicable law. This paragraph shall control all
agreements between the Borrower and the Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of
this Note may become or be declared due and payable in the manner and with
the effect provided in said Loan Agreement.
This Note shall be governed by and construed in accordance with the laws
of the State of New York (without giving effect to the conflict of laws rules
of any jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Loan Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without
notice.
IN WITNESS WHEREOF the undersigned has by its duly authorized officers,
executed this Note under seal as of the day and year first above written.
WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a
Delaware limited liability company
By: Wellsford/Whitehall Properties II, L.L.C.,
a Delaware limited liability company, its
managing member
By: Wellsford Commercial Properties
Trust, a Maryland real estate
investment trust, its manager
By: ___________________________
Name
Title
EXHIBIT B
FORM OF REQUEST FOR LOAN
BankBoston, N.A.,as Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Mr. Jay Johns
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.6 of the First Amended and
Restated Loan Agreement dated July __, 1998, as from time to time in effect
(the "Loan Agreement"), among Wellsford/Whitehall Holdings, L.L.C. (the
"Borrower"), BankBoston, N.A., for itself and as Agent, Goldman Sachs
Mortgage Company, and the other Banks from time to time party thereto, the
Borrower hereby requests and certifies as follows:
1. Loan. The Borrower hereby requests a Loan under Section 2.1 of the
Loan Agreement:
Principal Amount: $
Type (Eurodollar, Base Rate):
Drawdown Date: _____________, 19__
Interest Period:
by credit to the general account of the Borrower with the Agent at the
Agent's Head Office.
2. Use of Proceeds. Such Loan shall be used for the following
purposes permitted by Section 7.11 of the Loan Agreement:
[Describe]
3. Capital Improvement Project. In the event that such Loan relates
to any Capital Improvement Project or portion thereof, the Borrower
represents and warrants that such Loan will reimburse the Borrower for or pay
costs incurred for work on the Capital Improvement Project identified above,
which work covered by this request is in place or is for stored materials
which are properly secured. The Borrower further certifies that all
materialmen, laborers, subcontractors and any other parties who might or
could claim statutory or common law liens and are furnishing or have
furnished material or labor to the Mortgaged Property in connection with such
Capital Improvement Project have been paid (or will be paid from the proceeds
of the requested advance) all amounts due for such labor and materials.
4. No Default. The undersigned chief financial or chief accounting
officer of the Borrower certifies that the Borrower is and will be in
compliance with all covenants under the Loan Documents after giving effect to
the making of the Loan requested hereby. No condemnation proceedings are
pending or to the Borrower's knowledge threatened against any Mortgaged
Property or other Collateral.
5. Representations True. Each of the representations and warranties
made by or on behalf of the Borrower and the Guarantor contained in the Loan
Agreement, in the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with the Loan Agreement was true as of
the date as of which it was made and shall also be true at and as of the
Drawdown Date for the Loan requested hereby (except that representations as
to the Guarantor shall not be deemed to have been repeated), with the same
effect as if made at and as of such Drawdown Date (except to the extent of
changes resulting from transactions contemplated or permitted by the Loan
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially
adverse, and except to the extent that such representations and warranties
relate expressly to an earlier date) and no Default or Event of Default has
occurred and is continuing.
6. Other Conditions. All other conditions to the making of the Loan
requested hereby set forth in Section 11 of the Loan Agreement have been
satisfied. (Reference title insurance "date down", if applicable.)
7. Drawdown Date. Except to the extent, if any, specified by notice
actually received by the Agent prior to the Drawdown Date specified above,
the foregoing representations and warranties shall be deemed to have been
made by the Borrower on and as of such Drawdown Date.
8. Definitions. Terms defined in the Loan Agreement are used herein
with the meanings so defined.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
_______________, 199___.
WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a
Delaware limited liability company
By: Wellsford/Whitehall Properties II, L.L.C.,
a Delaware limited liability company, its
managing member
By: Wellsford Commercial Properties
Trust, a Maryland real estate
investment trust, its manager
By: ___________________________
Name_______________________
Title______________________
EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
BankBoston, N.A.,
for itself and as Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Mr. Jay Johns
Ladies and Gentlemen:
Reference is made to the First Amended and Restated Loan Agreement dated
as of July __, 1998 (the "Loan Agreement") by and among Wellsford/Whitehall
Holdings, L.L.C. (the "Borrower"), BankBoston, N.A., for itself and as Agent,
Goldman Sachs Mortgage Company, and the other Banks from time to time party
thereto. Terms defined in the Loan Agreement and not otherwise defined
herein are used herein as defined in the Loan Agreement.
Pursuant to the Loan Agreement, the Borrower is furnishing to you
herewith (or has most recently furnished to you) the financial statements of
the Borrower for the fiscal period ended _______________ (the "Balance Sheet
Date"). Such financial statements have been prepared in accordance with
generally accepted accounting principles and present fairly the financial
position of the Borrower covered thereby at the date thereof and the results
of their operations for the periods covered thereby, subject in the case of
interim statements only to normal year-end audit adjustments.
This certificate is submitted in compliance with requirements of Section
2.6(iii), Section 5.3(a)(ii), Section 5.3(b)(ii), Section 7.4(d) or Section
10.14 of the Loan Agreement. If this Certificate is provided under a
provision other than Section 7.4(d), the calculations provided below are made
using the financial statements of the Borrower as of the Balance Sheet Date
adjusted in the best good-faith estimate of the Borrower to give effect to
the making of a Loan, extension of the Maturity Date, acquisition or
disposition of property or other event that occasions the preparation of this
certificate; and the nature of such event and the Borrower's estimate of its
effects are set forth in reasonable detail in an attachment hereto. The
undersigned officer of the Borrower is its chief financial or chief
accounting officer.
The undersigned officer has caused the provisions of the Loan Agreement
to be reviewed and has no knowledge of any Default or Event of Default.
(Note: If the signer does have knowledge of any Default or Event of Default,
the form of certificate should be revised to specify the Default or Event of
Default, the nature thereof and the actions taken, being taken or proposed to
be taken by the Borrower with respect thereto.)
The Borrower is providing the following information to demonstrate
compliance as of the date hereof with the following covenants:
I. Section 9.1 Debt Service Coverage Test Amount.
A. Net Operating Income
Net Income for most recent quarter from $____________
Mortgaged Properties and Mezzanine Properties
Plus depreciation and amortization $____________
Plus Capital Expenditures (including tenant $____________
improvements and leasing commissions)
Plus/Minus Rent Adjustments $____________
Minus Rents included in Net Income from ($___________)
tenants delinquent in excess of 60 days
Net Operating Income for three prior quarters:
Quarter ended __________ $____________
Quarter ended __________ $____________
Quarter ended __________ $____________
Total $____________
B. Capital Improvement Reserve for $____________
Mortgaged Properties and Mezzanine Properties
C. Debt Service Coverage Test Amount $____________
[A minus B must equal or exceed 1.35 times C
for the period ending on or before December 31,
1998; A minus B must equal or exceed 1.45 times
C thereafter]
II Section 9.2 Designated Collateral Value. (Attach separate
worksheet for each
Mortgaged Property and
the Mezzanine
Property)
A. Aggregate of all Designated $____________
Collateral Values (per attached
worksheet)
B. Total outstanding principal balance $____________
of Loans (after giving effect to any
Loan Request)
III Section 8.9 Development.
A. Aggregate cost of Real Estate $____________
Under Development
B. WWP Consolidated Total Assets $____________
A may not exceed the greater of $25,000,000.00 or 10% of B.
B may not exceed A
IN WITNESS WHEREOF, I have hereunto set may hand this __ day
____________, _______.
WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a
Delaware limited liability company
By: Wellsford/Whitehall Properties II, L.L.C.,
a Delaware limited liability company, its
managing member
By: Wellsford Commercial Properties
Trust, a Maryland real estate
investment trust, its manager
By: ___________________________
Name_______________________
Title______________________
EXHIBIT D
FORM OF REQUEST FOR EXTENSION OF LOAN
BankBoston, N.A., as Agent
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Jay Johns
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.8 of the First Amended and
Restated Loan Agreement dated July __, 1998, as from time to time in effect
(the "Loan Agreement"), among Wellsford/Whitehall Holdings, L.L.C. (the
"Borrower"), BankBoston, for itself and as Agent, Goldman Sachs Mortgage
Company, and the other Banks from time to time party thereto, the Borrower
hereby requests and certifies as follows:
1. Extension Request. The Borrower hereby irrevocably requests that
the Maturity Date be extended as provided in Section 2.8 of the Loan
Agreement.
2. Extension Fee. The Borrower undertakes to pay the extension fee as
required by Section 2.8 (b)(i) of the Loan Agreement as required therein.
3. No Default. The undersigned chief financial or chief accounting
officer of the Borrower certifies that the Borrower is and will be in
compliance with all covenants under the Loan Documents after giving effect to
the extension requested hereby.
4. Representations True. Each of the representations and warranties
made by or on behalf of the Borrower, the Property Owner, the Manager, the
Member and the Guarantor contained in the Loan Agreement, in the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with the Loan Agreement was true and correct in all material
respect as of the date as of which it was made and (other than
representations as to the Guarantor) shall also be true and correct in all
material respects at and as of the Maturity Date (without regard to such
extension request) with the same effect as if made at and as of the Maturity
Date (without regard to such extension request) (except to the extent of
changes occurring in the ordinary course of business that have not had any
materially adverse affect on the business of such Person).
5. Other Conditions. All other conditions to the extension to the
Loan requested hereby set forth in Section 2.8 of the Loan Agreement have
been satisfied.
6. Date. Except to the extent, if any, specified by notice actually
received by the Agent prior to the Maturity Date (without regard to such
extension request) specified above, the foregoing representations and
warranties shall be deemed to have been made by the Borrower on and as of the
Maturity Date (without regard to such extension request).
7. Definitions. Terms defined in the Loan Agreement are used herein
with the meanings so defined.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
______________, 199__.
WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a
Delaware limited liability company
By: Wellsford/Whitehall Properties II, L.L.C.,
a Delaware limited liability company, its
managing member
By: Wellsford Commercial Properties
Trust, a Maryland real estate
investment trust, its manager
By: ___________________________
Name _________________________
Title_________________________
EXHIBIT E
CERTIFICATE
In connection with the purchase being made by the undersigned of a
participation interest in or assignment of the loan (the "Loan") made by the
"Banks" (as defined in the Loan Agreement referred to below) to
Wellsford/Whitehall Holdings, L.L.C. (the "Borrower") pursuant to a First
Amended and Restated Loan Agreement dated July __, 1998 (the "Loan
Agreement"), the undersigned represents, warrants and covenants as follows:
(1) The undersigned either:
(a) is a "qualified institutional buyer" as defined in paragraph (a) of
Rule 144A under the Securities Act of 1933, acting for its own
account, the account of another "qualified institutional buyer", or
the account of a "qualified purchaser" as defined in paragraph
(b)(i)(2) below; provided that if the undersigned is a dealer
described in paragraph (a)(1)(ii) of Rule 144A, the undersigned
owns and invests on a discretionary basis at least $25,000,000 in
securities of issuers that are not affiliated persons of such
dealer, all within the meaning of Rule 2a51-1(g)(1) under the
Investment Company Act of 1940 (the "Act"). (For purposes of
making this determination, a plan referred to in paragraph
(a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A, or a trust fund referred
to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of
such a plan, is not deemed to be acting for its own account if
investment decisions with respect to the plan are made by the
beneficiaries of the plan, except with respect to investment
decisions made solely by the fiduciary, trustee or sponsor of such
plan.)
OR
(b) (i)(1) is acting for its own account or (2) is acting for the
account of individuals or entities each of which is a "qualified
purchaser" as defined in Section 2(a)(51)(A) of the Act and the
rules promulgated thereunder; and (ii) owns and invests on a
discretionary basis at least $25,000,000 in "investments" (as
defined in Section 2(a)(51)(A) of the Act), after deducting the
amount of any outstanding indebtedness incurred to acquire or for
the purpose of acquiring such investments.
OR
(c) is a company (other than a trust formed for the specific purpose of
acquiring an interest in the Loan) all the securities of which are
beneficially owned by "qualified purchasers" as defined in
paragraph (b)(i)(2) above.
(2) The undersigned acknowledges and agrees that the interest in the Loan is
being purchased by the undersigned for its own account and not pursuant to a
public offering and that such interest may only be sold or transferred in a
manner that does not constitute a public offering to another entity that can
deliver to the Borrower a certification to the effect set forth in paragraphs
1(a), (b) or (c) and 2 of this Certificate and otherwise in accordance with
the Loan Agreement.
[name of proposed transferee]
By: ____________________________________
Name:
Title:
SCHEDULE 1.1
BANKS AND COMMITMENTS
Name and Address Commitment Commitment Percentage
- ---------------- ---------- ---------------------
BankBoston, N.A. $77,500,000.00 25.8333%
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
Eurodollar Lending Office
Same as above
Goldman Sachs Mortgage Company $87,500,000.00 29.1667%
85 Broad Street
New York, New York 10004
Attn: Mr. Roger Boone
Eurodollar Lending Office
Same as above
Pacific Life Insurance Company $50,000,000.00 16.6667%
700 Newport Center Drive
Newport Beach, California 92660-6397
Attn: Mr. Tony Premer
Eurodollar Lending Office
Same as above
Hartford Life and Annuity Insurance $35,000,000.00 11.6667%
Company
c/o Hartford Life Insurance Companies
Investment Operations
c/o Portfolio Support, 9th Floor
P. O. Box 1744
Hartford, Connecticut 06114-1744
Eurodollar Lending Office
Same as above
Comerica Bank $20,000,000.00 6.6667%
Comerica Tower, 7th Floor
500 Woodward Avenue
Detroit, Michigan 48226-3256
Attn: Mr. Charles Weddell
Eurodollar Lending Office
Same as above
BHF-Bank Aktiengesellschaft $10,000,000.00 3.3333%
590 Madison Avenue
New York, New York 10022
Attn: Mr. Johnathan Oh
Eurodollar Lending Office
Same as above
Webster Bank $10,000,000.00 3.3333%
City Place II, 185 Asylum Street
Hartford, Connecticut 06103
Attn: Mr. Bill Chamberland
Eurodollar Lending Office
Same as above
First American Bank Texas, SSB $10,000,000.00 3.3333%
14651 Dallas Parkway
Suite 400
Dallas, Texas 75240
Attn: Amy Haws
_______________ ____
Total Commitment $300,000,000.00 100%
Percentages may not equal 100% due to rounding.
SCHEDULE 5.3
DESCRIPTION OF GREENBROOK CORPORATE
CENTER AND POINT VIEW VACANT LAND
SCHEDULE 6.3
TITLE TO PROPERTIES
None.
SCHEDULE 6.4
ALL-IN ACQUISITION COST, DESIGNATED COLLATERAL VALUE,
STABILIZED PROPERTIES
AND RELEASE PRICES
EQUITY INTERESTS
Stabilized
Property/
Designated Non-Stabilized Release
Property Acquisition Cost Collateral Value Property Price
-------- ---------------- ---------------- -------- ---------
Wells Research
(75/85/95) $________ $________ $________
128 Technology $________ $________ $________
Dedham Place $________ $________ $________
7/57 Wells $________ $________ $________
201 University $________ $________ $________
Norfolk Place $________ $________ $________
MORTGAGED PROPERTY
SCHEDULE 6.7
LITIGATION
None.
SCHEDULE 6.17
ERISA PLANS
None.
SCHEDULE 6.21
SUBSIDIARIES
Wells Avenue Holdings L.L.C.
WASH Manager L.L.C.
Wells Avenue Senior Holdings LLC
WEL/WH Convention Managers, L.L.C.
SCHEDULE 6.24
AGREEMENTS
NONE
SCHEDULE 6.31-1
MEZZANINE MORTGAGE LOAN DOCUMENTS
SCHEDULE 6.31-2
ALLOCATION OF MEZZANINE MORTGAGE LOAN
Property Allocated Loan Amount Percentage
------- --------------------- ----------
128 Tech Center $17,666,917 25.60%
Waltham, Massachusetts
7/57 Wells Avenue $ 6,937,010 10.05%
Newton, Massachusetts
75/85/95 Wells Avenue $19,497,301 28.26%
Newton, Massachusetts
201 University Avenue $ 7,656,783 11.10%
Westwood Massachusetts
Dedham Place $14,148,837 20.51%
Dedham, Massachusetts
Norfolk Place (333 Elm Street) $ 3,093,152 4.48%
Dedham, Massachusetts __________ ____
$69,000,000 100.0%