CONDITIONAL GUARANTY OF PAYMENT
-------------------------------
($300,000,000 Loan)
FOR AND IN CONSIDERATION OF the sum of Ten and No/100 Dollars
($10.00) and other good and valuable consideration paid or delivered to the
undersigned WELLSFORD COMMERCIAL PROPERTIES TRUST, a Maryland real estate
investment trust ("WCPT"), WHWEL REAL ESTATE LIMITED PARTNERSHIP ("WHWEL"),
WELLSFORD REAL PROPERTIES, INC., a Maryland corporation ("WRPI"), WHITEHALL
STREET REAL ESTATE LIMITED PARTNERSHIP V ("Whitehall V"), WHITEHALL STREET
REAL ESTATE LIMITED PARTNERSHIP VI ("Whitehall VI"), WHITEHALL STREET REAL
ESTATE LIMITED PARTNERSHIP VII ("Whitehall VII"), and WHITEHALL STREET REAL
ESTATE LIMITED PARTNERSHIP VIII ("Whitehall VIII", and together with
Whitehall V, Whitehall VI and Whitehall VII, collectively, "Whitehall"), each
a Delaware limited partnership (WCPT, WHWEL, WRPI and Whitehall are
hereinafter referred to collectively as "Guarantor"), the receipt and
sufficiency whereof is hereby acknowledged by Guarantor, and for the purpose
of seeking to induce BANKBOSTON, N.A. ("BKB"), and GOLDMAN SACHS MORTGAGE
COMPANY ("Goldman Sachs"; BKB and Goldman Sachs are hereinafter referred to
collectively as "Lender", which term shall also include each other Bank which
may now or hereafter become party to the "Credit Agreement" (as hereinafter
defined) and shall also include any such individual Bank acting as agent for
all of the Banks), to extend credit or otherwise provide financial
accommodations to WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a Delaware limited
liability company (hereinafter referred to as "Borrower"), which extension of
credit and provision of financial accommodations will be to the direct
interest, advantage and benefit of Guarantor, Guarantor does hereby, jointly
and severally, absolutely and irrevocably guarantee to Lender:
(a) subject to the provisions of Paragraphs 24 and 25, below, the
full and prompt payment when due, whether by acceleration or otherwise,
either before or after maturity thereof, of those certain Notes dated July
16, 1998 made by Borrower to the order of the Banks in the aggregate
principal face amount of Three Hundred Million and No/100 Dollars
($300,000,000.00) (hereinafter referred to collectively as the "Bank Notes"),
together with interest as provided in the Bank Notes, together with any
replacements, supplements, renewals, modifications, consolidations,
restatements and extensions thereof; and
(b) subject to the provisions of Paragraphs 24 and 25, below, the
full and prompt payment when due, whether by acceleration or otherwise,
either before or after maturity thereof, of each other note as may be issued
under that certain First Amended and Restated Loan Agreement dated July 16,
1998 among Borrower, BKB, for itself and as agent, Goldman Sachs, and the
other lenders now or hereafter a party thereto (hereinafter referred to as
the "Credit Agreement"), together with interest as provided in each such
note, together with any replacements, supplements, renewals, modifications,
consolidations, restatements and extensions thereof (the Bank Notes and each
of the notes described in this subparagraph (b) is hereinafter referred to
collectively as the "Note"); and
(c) subject to the terms of Paragraphs 24 and 25 below, the full
and prompt payment of all other monetary obligations of Borrower to Lender
under the terms of the Credit Agreement, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
(d) subject to the terms of Paragraphs 24 and 25 below, the full
and prompt payment of any and all other monetary obligations of Borrower to
Lender under the Security Documents, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
(e) subject to the terms of Paragraphs 24 and 25 below, the full
and prompt payment of any and all other monetary obligations of Borrower to
Lender under any other agreements, documents or instruments now or hereafter
evidencing, securing or otherwise relating to the indebtedness evidenced by
the Note or the Credit Agreement (the Note, the Security Documents, the
Credit Agreement and said other agreements, documents and instruments, are
hereinafter collectively referred to as the "Loan Documents" and individually
referred to as a "Loan Document").
All terms used herein and not otherwise defined herein shall have the
meanings set forth in the Credit Agreement.
1. Agreement to Pay; Costs of Collection. Guarantor does hereby
agree that, subject to the terms of Paragraphs 24 and 25 below, below, if the
Note is not paid by Borrower in accordance with its terms (including all
applicable grace periods), or if any and all sums which are now or may
hereafter become due from Borrower to Lender under the Loan Documents are not
paid by Borrower in accordance with their terms (including all applicable
grace periods), Guarantor will immediately make such payments. Guarantor
further agrees to pay Lender on demand all reasonable costs and expenses
(including court costs and reasonable attorneys' fees and disbursements) paid
or incurred by Lender in endeavoring to enforce this Guaranty, and until paid
to Lender, such sums shall bear interest at the default rate set forth in the
Credit Agreement unless collection from Guarantor of interest at such rate
would be contrary to applicable law, in which event such sums shall bear
interest at the highest rate which may be collected from Guarantor under
applicable law.
2. Reinstatement of Refunded Payments. If, for any reason, any
payment to Lender of any of the obligations guaranteed hereunder is required
to be refunded by Lender to Borrower, or paid or turned over by Lender to any
other person, including, without limitation, by reason of the operation of
bankruptcy, reorganization, receivership or insolvency laws or similar laws
of general application relating to creditors' rights and remedies now or
hereafter enacted, Guarantor agrees to pay the amount so required to be
refunded, paid or turned over (hereinafter referred to as the "Turnover
Payment"), the obligations of Guarantor shall not be treated as having been
discharged by the original payment to Lender giving rise to the Turnover
Payment, and this Guaranty shall be treated as having remained in full force
and effect for any such Turnover Payment so made by Lender, as well as for
any amounts not theretofore paid to Lender on account of such obligations,
but only to the extent that Guarantor otherwise would have been liable for
the payment of the same hereunder.
3. Rights of Lender to Deal with Collateral, Borrower and Other
Persons. Guarantor hereby consents and agrees that Lender may at any time,
and from time to time, without thereby releasing Guarantor from any liability
hereunder and without notice to or further consent from Guarantor, either
with or without consideration: release or surrender any lien or other
security of any kind or nature whatsoever held by it or by any person, firm
or corporation on its behalf or for its account, securing any indebtedness or
liability hereby guaranteed; substitute for any collateral so held by it,
other collateral of like kind, or of any kind; modify the terms of the Note
or the Loan Documents; extend or renew the Note for any period; grant
releases, compromises and indulgences with respect to the Note or the Loan
Documents and to any persons or entities now or hereafter liable thereunder
or hereunder; release any other Guarantor, surety, endorser or accommodation
party of the Note, the Security Documents or any other Loan Documents; or
take or fail to take any action of any type whatsoever. No such action which
Lender shall take or fail to take in connection with the Note or the Loan
Documents, or any of them, or any security for the payment of the
indebtedness of Borrower to Lender or for the performance of any obligations
or undertakings of Borrower, nor any course of dealing with Borrower or any
other person, shall release Guarantor's obligations hereunder, affect this
Guaranty in any way or afford Guarantor any recourse against Lender. The
provisions of this Guaranty shall extend and be applicable to all
replacements, supplements, renewals, amendments, extensions, consolidations,
restatements and modifications of the Note and the Loan Documents, and any
and all references herein to the Note and the Loan Documents shall be deemed
to include any such replacements, supplements, renewals, extensions,
amendments, consolidations, restatements or modifications thereof.
4. No Contest with Lender; Subordination. So long as any
obligation hereby guaranteed remains unpaid or undischarged, Guarantor will
not, by paying any sum recoverable hereunder (whether or not demanded by
Lender) or by any means or on any other ground, claim any set-off or
counterclaim against Borrower in respect of any liability of Guarantor to
Borrower or, in proceedings under federal bankruptcy law or insolvency
proceedings of any nature, prove in competition with Lender in respect of any
payment hereunder or be entitled to have the benefit of any counterclaim or
proof of claim or dividend or payment by or on behalf of Borrower or the
benefit of any other security for any obligation hereby guaranteed which, now
or hereafter, Lender may hold or in which it may have any share. Guarantor
hereby expressly waives any right of contribution from or indemnity against
Borrower, whether at law or in equity, arising from any payments made by
Guarantor pursuant to the terms of this Guaranty, and Guarantor acknowledges
that Guarantor has no right whatsoever to proceed against Borrower for
reimbursement of any such payments. In connection with the foregoing,
Guarantor expressly waives any and all rights of subrogation to Lender
against Borrower, and Guarantor hereby waives any rights to enforce any
remedy which Lender may have against Borrower and any rights to participate
in any collateral for Borrower's obligations under the Loan Documents.
Guarantor hereby subordinates any and all indebtedness of Borrower now or
hereafter owed to Guarantor to all indebtedness of Borrower to Lender, and
agrees with Lender that (a) Guarantor shall not demand or accept any payment
from Borrower on account of such indebtedness, (b) Guarantor shall not claim
any offset or other reduction of Guarantor's obligations hereunder because of
any such indebtedness, and (c) Guarantor shall not take any action to obtain
any interest in any of the security described in and encumbered by the Loan
Documents because of any such indebtedness; provided, however, that, if
Lender so requests, such indebtedness shall be collected, enforced and
received by Guarantor as trustee for Lender and be paid over to Lender on
account of the indebtedness of Borrower to Lender, but without reducing or
affecting in any manner the liability of Guarantor under the other provisions
of this Guaranty except to the extent the principal amount of such
outstanding indebtedness shall have been reduced by such payment.
5. Waiver of Defenses. Guarantor hereby agrees that its
obligations hereunder shall not be affected or impaired by, and hereby waives
and agrees not to assert or take advantage of any defense based on:
(a) the incapacity or lack of authority of Borrower or any
other person or entity, the death or disability of Borrower or any Guarantor
or any other person or entity, or the failure of Lender to file or enforce a
claim against the estate (either in administration, bankruptcy or in any
other proceeding) of Borrower or any Guarantor or any other person or entity;
(b) the dissolution or termination of existence of Borrower
or any other Person;
(c) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Borrower or any
other Person;
(d) the voluntary or involuntary receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
assignment, composition, or readjustment of, or any similar proceeding
affecting Borrower, any Guarantor, Property Owner, Manager, Member, or any of
Borrower's, any Guarantor's, Property Owner's, Manager's or Member's
properties or assets;
(e) the damage, destruction, condemnation, foreclosure or
surrender of all or any part of the Mezzanine Property or any Collateral;
(f) the failure of Lender to give notice of the existence,
creation or incurring of any new or additional indebtedness or obligation or
of any action or nonaction on the part of any other person whomsoever in
connection with any obligation hereby guaranteed;
(g) any failure or delay of Lender to commence an action
against Borrower or any other Person, to assert or enforce any remedies
against Borrower under the Note or the Loan Documents, or to realize upon any
security;
(h) any failure of any duty on the part of Lender to
disclose to Guarantor any facts it may now or hereafter know regarding
Borrower, the Property Owner or any other Person, or the Mezzanine Property
or the property encumbered by the Security Documents, whether such facts
materially increase the risk to Guarantor or not;
(i) failure to accept or give notice of acceptance of this
Guaranty by Lender;
(j) failure to make or give notice of presentment and demand
for payment of any of the indebtedness or performance of any of the
obligations hereby guaranteed;
(k) failure to make or give protest and notice of dishonor
or of default to Guarantor or to any other party with respect to the
indebtedness or performance of obligations hereby guaranteed;
(l) any and all other notices whatsoever to which Guarantor
might otherwise be entitled;
(m) any lack of diligence by Lender in collection,
protection or realization upon any collateral securing the payment of the
indebtedness or performance of obligations hereby guaranteed;
(n) the invalidity or unenforceability of the Note or any of
the Loan Documents;
(o) the compromise, settlement, release or termination of
any or all of the obligations of Borrower under the Note or the Loan
Documents;
(p) any transfer by Borrower or any other Person of all or
any part of the security encumbered by the Loan Documents;
(q) the failure of Lender to perfect any security or to
extend or renew the perfection of any security; or
(r) to the fullest extent permitted by law, any other legal,
equitable or surety defenses whatsoever to which Guarantor might otherwise be
entitled, it being the intention that the obligations of Guarantor hereunder
are absolute, unconditional (subject to the terms of Paragraphs 24 and 25,
below) and irrevocable.
6. Guaranty of Payment and Not of Performance or Collection.
This is a Guaranty of payment and not of performance or collection. Subject
to the terms of Paragraphs 24 and 25, below, the liability of Guarantor under
this Guaranty shall be primary, direct and immediate and not conditional or
contingent upon the pursuit of any remedies against Borrower or any other
person, nor against securities or liens available to Lender, its successors,
successors in title, endorsees or assigns. Guarantor hereby waives any right
to require that an action be brought against Borrower or any other person or
to require that resort be had to any security or to any balance of any
deposit account or credit on the books of Lender in favor of Borrower or any
other person.
7. Rights and Remedies of Lender. In the event of an Event of
Default under the Note or the Loan Documents, or any of them, Lender shall
have the right to enforce its rights, powers and remedies thereunder or
hereunder or under any other agreement, document or instrument now or
hereafter evidencing, securing or otherwise relating to the indebtedness
evidenced by the Note or secured by the Loan Documents, in any order, and all
rights, powers and remedies available to Lender in such event shall be
nonexclusive and cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity. Accordingly, Guarantor
hereby authorizes and empowers Lender upon the occurrence of any Event of
Default under the Note or the Loan Documents, at its sole discretion, and
without notice to Guarantor, to exercise any right or remedy which Lender may
have, including, but not limited to, judicial foreclosure, exercise of rights
of power of sale, acceptance of an assignment in lieu of foreclosure,
appointment of a receiver, exercise of remedies against personal property, or
enforcement of any assignment of leases, as to any security, whether real,
personal or intangible. At any public or private sale of any security or
collateral for any indebtedness or any part thereof guaranteed hereby,
whether by foreclosure or otherwise, Lender may, in its discretion, purchase
all or any part of such security or collateral so sold or offered for sale
for its own account and may apply against the amount bid therefor all or any
part of the balance due it pursuant to the terms of the Note or Security
Documents or any other Loan Document without prejudice to Lender's remedies
hereunder against Guarantor for deficiencies. If the indebtedness guaranteed
hereby is partially paid by reason of the election of Lender to pursue any of
the remedies available to Lender, or if such indebtedness is otherwise
partially paid, this Guaranty shall nevertheless remain in full force and
effect, and Guarantor shall remain liable for the entire balance of the
indebtedness guaranteed hereby (subject, however, to the provisions of
Paragraphs 24 and 25 below) even though any rights which Guarantor may have
against Borrower may be destroyed or diminished by the exercise of any such
remedy.
8. Application of Payments. Guarantor hereby authorizes Lender,
without notice to Guarantor, to apply all payments and credits received from
Borrower or from Guarantor or realized from any security in such manner and
in such priority as set forth in the Credit Agreement.
9. Business Failure, Bankruptcy or Insolvency. In the event of
the business failure of a Guarantor or if there shall be pending any
bankruptcy or insolvency case or proceeding with respect to a Guarantor under
federal bankruptcy law or any other applicable law or in connection with the
insolvency of a Guarantor, or if a liquidator, receiver, or trustee shall
have been appointed for a Guarantor or a Guarantor's properties or assets,
Lender may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of Lender allowed in any
proceedings relative to such Guarantor, or any of such Guarantor's properties
or assets, and, irrespective of whether the indebtedness or other obligations
of Borrower guaranteed hereby or the obligations of such Guarantor hereunder
shall then be due and payable, by declaration or otherwise, Lender shall be
entitled and empowered to file and prove a claim for the whole amount of any
sum or sums owing by such Guarantor with respect to the indebtedness or other
obligations of Borrower guaranteed hereby, and to collect and receive any
moneys or other property payable or deliverable on any such claim. Guarantor
covenants and agrees that upon the commencement of a voluntary or involuntary
bankruptcy proceeding by or against Borrower, Guarantor shall not seek a
supplemental stay or otherwise pursuant to Section 105 of the Bankruptcy Code
or any other provision of the Bankruptcy Code, or any other debtor relief law
(whether statutory, common law, case law, or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable, to
stay, interdict, condition, reduce or inhibit the ability of Lender to
enforce any rights of Lender against Guarantor by virtue of this Guaranty or
otherwise.
10. Financial Statements and Other Information. Each Guarantor
hereby independently represents and warrants to Lender that all financial
statements heretofore delivered by it to Lender are true and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles consistently applied, and fairly present its financial
condition as of the date thereof; that no material adverse change has
occurred in its assets or financial condition as reflected therein since the
date thereof; and that it has no liabilities or known contingent liabilities
involving material amounts which are not reflected in such financial
statements or referred to in the notes thereto other than its obligations
under this Guaranty. Each Guarantor independently agrees that until all
indebtedness guaranteed hereby has been completely repaid and all obligations
and undertakings of Borrower and Guarantor under, by reason of, or pursuant
to the Note and the Loan Documents have been completely performed and no
Lender has any further obligation to make Loans to Borrower (or until the
Assignment of Interests has been terminated as provided therein, provided
that no "Triggering Event" (as hereinafter defined" has occurred), it will
promptly deliver to Lender upon written (but not more often than quarterly)
demand its then most recent financial statements readily available (provided
that such financial statements shall be prepared and updated not less
frequently than annually) detailing its assets and liabilities certified by
it, in form and substance reasonably acceptable to Lender.
The financial statements and other reports and information
delivered by Guarantor to Lender hereunder will be treated as confidential by
each Lender, and each assignee and participant hereunder and each potential
assignee or participant hereunder, and such parties for themselves agree not
to disclose such information to any Person, provided that such information
may be disclosed to any of the following in connection with their
participation in the transactions contemplated by the Loan Documents:
directors, officers, employees, representatives, legal counsel, accountants
and prospective investors of any of such Persons, it being understood that
such Persons shall be informed of the confidential nature of such information
and shall agree to treat such information confidentially. Notwithstanding
the foregoing, such Persons shall be permitted to disclose such information
(a) to the extent required by law, (b) to the extent such confidential
information becomes publicly available other than as a result of the breach
of this Guaranty, (c) to the extent such information becomes available to any
of such Persons on a non-confidential basis, or (d) to the extent necessary
to enforce the Loan Documents (provided that Lender shall use reasonable
efforts to cause such financial statements, reports and information to remain
confidential).
11. Covenants of Guarantor. Each Guarantor independently hereby
covenants and agrees with Lender that until all indebtedness guaranteed
hereby has been completely repaid and all obligations and undertakings of
Borrower and Guarantor under, by reason of, or pursuant to the Note and the
Loan Documents have been completely performed, and the Lenders have no
further obligations to make Loans to Borrower (or until the Assignment of
Interests has been terminated as provided therein, provided that no
"Triggering Event" (as hereinafter defined) has occurred):
(a) it will cause to be done all things necessary to
preserve and keep in full force and effect its legal existence, rights and
franchises, to effect and maintain all required foreign qualifications,
licensing, domestication or authorization, and to comply in all material
respects with all applicable laws and regulations with respect to the
foregoing;
(b) it will keep complete, proper and accurate records and
books of account in which full, true and correct entries will be made in
accordance with generally accepted accounting principles consistent with the
preparation of the financial statements heretofore delivered to Lender and
will maintain adequate accounts and reserves for all taxes (including income
taxes), all depreciation and amortization of its properties, all other
contingencies, and all other proper reserves in the same manner, and to the
same extent, that it has, to the extent applicable, kept and maintained it
records and books and maintained accounts and reserves for the foregoing; and
(c) it will not make or permit to be made, by voluntary or
involuntary means, any transfer or encumbrance of its direct or indirect
interest in Borrower, or any dilution of its direct or indirect interest in
Borrower, which would violate the provisions of Section 8.11 of the Credit
Agreement.
12. [Intentionally Omitted].
13. Changes in Writing; No Revocation. This Guaranty may not be
changed orally, and no obligation of Guarantor can be released or waived by
Lender except by a writing signed by a duly authorized officer of Lender.
This Guaranty shall be irrevocable by Guarantor until all indebtedness
guaranteed hereby has been completely repaid and the Lenders have no further
obligation to advance Loans to Borrower. Notwithstanding anything contained
in this Guaranty or any of the Loan Documents to the contrary, this Guaranty
shall terminate and be of no further force or effect upon the earlier to
occur of (i) payment to Lender by Guarantor of the "Allocable Loan Amount"
(as hereinafter defined) and (ii) any termination of the Assignment of
Interests either pursuant to the terms thereof or by mutual agreement of
Borrower and Lender provided that no "Triggering Event" (as hereinafter
defined) has occurred.
14. Notices. All notices, demands or requests provided for or
permitted to be given pursuant to this Guaranty (hereinafter in this
paragraph referred to as "Notice") must be in writing and shall be deemed to
have been properly given or served by personal delivery or by sending same by
overnight courier or by depositing the same in the United States Mail,
postpaid and registered or certified, return receipt requested, at the
addresses set forth below. Each Notice shall be effective upon being
delivered personally or upon being sent by overnight courier or upon being
deposited in the United States Mail as aforesaid. The time period in which a
response to any such Notice must be given or any action taken with respect
thereto, however, shall commence to run from the date of receipt if
personally delivered or sent by overnight courier or, if so deposited in the
United States Mail, the earlier of three (3) business days following such
deposit and the date of receipt as disclosed on the return receipt.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no Notice was given shall be deemed to be receipt of
the Notice sent. By giving at least fifteen (15) days prior Notice thereof,
Guarantor or Lender shall have the right from time to time and at any time
during the term of this Guaranty to change their respective addresses and
each shall have the right to specify as its address any other address within
the United States of America. For the purposes of this Guaranty:
The Address of Lender is:
BankBoston, N.A.
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: Jay Johns
and a copy to each other Lender which may now or hereafter become
a party to the Credit Agreement at such address as may be
designated by such Lender.
The Address of Guarantor is:
Wellsford Commercial Properties Trust
610 Fifth Avenue, Seventh Floor
New York, New York 10020
Attn: Greg Hughes
and
Wellsford Real Properties, Inc.
610 Fifth Avenue, Seventh Floor
New York, New York 10020
Attn: Greg Hughes
with a copy to:
Robinson Silverman Pearce Aronsohn & Berman, LLP
1290 Avenue of the Americas
New York, New York 10104
Attn: Alan S. Pearce, Esq.
and
WHWEL Real Estate Limited Partnership
85 Broad Street, 19th Floor
New York, New York 10004
Attn: Chief Financial Officer
and
Whitehall Street Real Estate Limited Partnership V
Whitehall Street Real Estate Limited Partnership VI
Whitehall Street Real Estate Limited Partnership VII
Whitehall Street Real Estate Limited Partnership VIII
85 Broad Street, 19th Floor
New York, New York 10004
Attn: Chief Financial Officer
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attn: Anthony J. Colletta, Esq.
15. Governing Law. Guarantor acknowledges and agrees that this
Guaranty and the obligations of Guarantor hereunder shall be governed by and
interpreted and determined in accordance with the internal laws of the State
of New York (excluding the laws applicable to conflicts or choice of law).
16. CONSENT TO JURISDICTION; WAIVERS. GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE
STATE OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY, AND (B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER
THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, AND (II) TO
OBJECT TO JURISDICTION WITHIN THE STATE OF NEW YORK OR VENUE IN ANY
PARTICULAR FORUM WITHIN THE STATE OF NEW YORK. NOTHING CONTAINED HEREIN,
HOWEVER, SHALL PREVENT LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR
EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST GUARANTOR PERSONALLY,
AND AGAINST ANY PROPERTY OF GUARANTOR, WITHIN ANY OTHER STATE. INITIATING
SUCH SUIT, ACTION OR PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN
NO EVENT CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS
OF THE STATE OF NEW YORK SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF GUARANTOR
AND LENDER HEREUNDER OR OF THE SUBMISSION HEREIN MADE BY GUARANTOR TO
PERSONAL JURISDICTION WITHIN THE STATE OF NEW YORK.
17. Successors and Assigns. The provisions of this Guaranty
shall be binding upon Guarantor and its heirs, successors, successors in
title, legal representatives, executors, estate and assigns, and shall inure
to the benefit of Lender, its successors, successors in title, legal
representatives and assigns.
18. Assignment by Lender. Subject to the terms of Section 18.8 of
the Credit Agreement, this Guaranty is assignable by Lender in whole or in
part in conjunction with any assignment of the Note or portions thereof, and
any such assignment hereof or any transfer or assignment of the Note or
portions thereof by Lender shall operate to vest in any such assignee the
rights and powers, in whole or in part, as appropriate, herein conferred upon
and granted to Lender.
19. Severability. If any term or provision of this Guaranty shall
be determined to be illegal or unenforceable, all other terms and provisions
hereof shall nevertheless remain effective and shall be enforced to the
fullest extent permitted by law.
20. Disclosure. Guarantor agrees that in addition to disclosures
made in accordance with standard banking practices, any Lender may disclose
information obtained by such Lender pursuant to this Guaranty to assignees or
participants and potential assignees or participants hereunder, subject to
the terms of Paragraph 10 above.
21. No Unwritten Agreements. THIS GUARANTY REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
22. Time of the Essence. Time is of the essence with respect to
each and every covenant, agreement and obligation of Guarantor under this
Guaranty.
23. [Intentionally Omitted.]
24. Triggering Event.
(a) LENDER ACKNOWLEDGES AND AGREES THAT, NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS GUARANTY, THE PAYMENT BY GUARANTOR
OF ITS OBLIGATIONS UNDER THIS GUARANTY SHALL BE DUE ONLY IN THE EVENT THAT,
AND GUARANTOR SHALL HAVE NO LIABILITY HEREUNDER UNLESS AND UNTIL, ONE OR MORE
"TRIGGERING EVENTS" (AS THAT TERM IS HEREINAFTER DEFINED) SHALL OCCUR AND,
WITH RESPECT TO THE ITEMS DESCRIBED IN CLAUSES (iv) THROUGH (ix) BELOW, ANY
OF THE EVENTS DESCRIBED THEREIN IS NOT CURED WITHIN FIVE (5) DAYS AFTER
RECEIPT BY GUARANTOR OF WRITTEN NOTICE FROM AGENT OF THE OCCURRENCE OF ANY
SUCH EVENT (PROVIDED, HOWEVER, THAT SUCH CURE BY GUARANTOR SHALL NOT BE
DEEMED A CURE OF ANY EVENT OF DEFAULT).
(b) For the purposes of this Guaranty, the term "Triggering
Event" shall mean the occurrence of any one or more of the following events:
(i) Any of the Guarantor, the Borrower, the Manager,
the Member or the Property Owner shall file any voluntary
petition under any Chapter of the Bankruptcy Code, or shall
in any manner seek any relief, protection, reorganization,
liquidation, dissolution or similar relief for debtors under
any local, state, federal or other insolvency laws or other
laws providing for the relief of debtors, or in equity, or
directly or indirectly cause any of the other of such Persons
to file any such petition or to seek any such relief; or
(ii) Any of the Guarantor, the Borrower, the Manager,
the Member or the Property Owner (A) shall file, or, directly
or indirectly, cause to be filed, any involuntary petition
under any Chapter of the Bankruptcy Code against any of such
Persons, whether or not any of such Persons joins in such
petition, or (B) shall, directly or indirectly, cause any of
such Persons to become the subject of any dissolution,
liquidation or insolvency proceeding or any other proceeding
pursuant to any local, state, federal or other insolvency
laws or other laws providing for the relief of debtors, or in
equity;
(iii) Any of the Guarantor, the Borrower, the
Manager, the Member or the Property Owner shall, directly or
indirectly, cause the Mezzanine Property or the Mezzanine
Collateral, or any portion thereof or interest therein, or
any interest of such Persons in the Mezzanine Property or the
Mezzanine Collateral, to become the property of any
bankruptcy, dissolution, liquidation or insolvency
proceeding; or
(iv) Guarantor, Borrower, the Manager, the Member, the
Property Owner, or any of them, shall take any action of any
kind or nature whatsoever, either directly or indirectly, to
oppose, impede, obstruct, hinder, frustrate, enjoin or
otherwise interfere with the exercise by Lender of any of
Lender's rights and remedies under the Mezzanine Loan
Documents, or at law or in equity, other than a "Permitted
Defense" (as hereinafter defined) or shall, either directly
or indirectly, cause any other person to take any action
which, if taken by Guarantor, the Borrower, the Manager, the
Member or the Property Owner, would constitute a Triggering
Event. For the purposes hereof, a "Permitted Defense" shall
mean (A) the defense of payment in full of the obligations
guaranteed hereby, (B) a defense made in good faith that a
Triggering Event has not occurred, or (C) a defense that an
Event of Default has not occurred or as to the improper
exercise of the remedies of the Lenders under the Loan
Documents, provided that (1) the primary purpose of raising
such defense is not to delay, inhibit or interfere with the
exercise by Lender of its rights and remedies under the
Mezzanine Loan Documents, (2) Agent's rights under the
Assignment of Interests to exercise all voting and other
membership, management, approval or other rights with respect
to the Member shall not be opposed, impeded, obstructed,
hindered, frustrated, enjoined or otherwise interfered with,
and (3) all Excess Property Income and "Distributions" (as
defined in the Assignment of Interests) are paid to Agent for
application in accordance with the terms of the Credit
Agreement; or
(v) Except as expressly permitted in Section 5.3 of the
Credit Agreement, there shall occur, whether voluntarily,
involuntary or by operation of law, a sale, transfer,
assignment, conveyance, option or other disposition of, or
any mortgage, hypothecation, encumbrance, financing or
refinancing of (A) any assets or properties of the Property
Owner, except for (1) the Mezzanine Mortgage Loan, (2)
releases of the Mezzanine Property in accordance with the
terms of the Credit Agreement, and except as provided in
Section 7.23(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, (3) a
condemnation of all or any portion of the Mezzanine Property,
or (4) a foreclosure of the Mezzanine Property by the
Mezzanine Mortgagee, (B) any of the Mezzanine Collateral or
any of the Borrower's, the Member's or the Manager's direct
or indirect interests, rights or claims in and to the
Property Owner (including without limitation any rights to
receive distributions from the Property Owner, the Manager or
the Member), (C) any other assets or properties of the
Manager or the Member, (D) any direct or indirect interests,
rights or claims of either Borrower, the Manager or the
Member in the Property Owner, (E) any direct or indirect
interests, rights or claims of Borrower in the Member, or (F)
any direct or indirect interests, rights or claims of the
Member in the Manager; or
(vi) The Property Owner shall seek or obtain additional
advances from the holder or holders of the Mezzanine Mortgage
Loan Documents (provided that the foregoing shall not be
deemed violated in the event that the holder or holders of
the Mezzanine Mortgage Loan Documents shall make a protective
advance or advances for the payment of taxes, insurance
premiums or to protect the Mezzanine Property pursuant to the
terms of the Nomura Mortgages), or the Property Owner shall
modify, amend, terminate, extend or seek a consent or waiver
under the Mezzanine Mortgage Loan Documents in any respect
without the prior written approval of the Lender (other than
an amendment or waiver that would reduce the obligations of
the Property Owner to pay principal, interest, loan fees,
default interest, late charges, prepayment fees or similar
payments thereunder or a waiver of an "Event of Default"
under the Mezzanine Mortgage Loan Documents or other
occasional waiver of compliance with a term of any of the
Mezzanine Mortgage Loan Documents which waiver in each case
is not a waiver of future compliance with such term or
tantamount to an amendment of the Mezzanine Mortgage Loan
Documents, and which waiver does not have a material adverse
effect on any of the Borrower, Lender, Property Owner,
Manager, Member, the Mezzanine Collateral or the Mezzanine
Property); or
(vii) Any of Borrower, Member, Manager or Property
Owner shall modify, amend, cancel, release, surrender,
terminate or permit the modification, amendment,
cancellation, release, surrender or termination of the Member
Organizational Agreements, the Manager Organizational
Agreements or the Property Owner Organizational Agreements
other than "Minor Amendments" (as such term is defined in the
Assignment of Interests), or dissolve, liquidate, redeem,
cancel, wind-up or permit the dissolution, liquidation,
redemption, cancellation, winding-up or expiration of the
Property Owner, the Manager or the Member or the Member
Organizational Agreements, the Manager Organizational
Agreements or the Property Owner Organizational Agreements,
or seek or permit the partition of any of the assets of any
of such Persons; or
(viii) Any of Borrower, the Manager or the Member
shall take any action which results in the sale, reduction,
cancellation, dilution, diminution, conversion or withdrawal
of any direct or indirect interest of such Person in the
Property Owner, the Manager or the Member, as applicable, or
omit to take any action necessary to prevent any such sale,
cancellation, reduction, dilution, diminution, conversion or
withdrawal, or, without limiting the foregoing, consent to or
permit to occur the admission of any new member of the
Property Owner, Manager or Member, the creation of any new
class of interest in the Property Owner, the Manager or the
Member, or the issuance, directly or indirectly, any other
equity or beneficial interest in the Property Owner, the
Manager or the Member; or
(ix) The Borrower shall breach any of its covenants or
agreements contained in Paragraphs 6(i) or 6(j) of the
Assignment of Interests, to the full extent of any losses,
damages and expenses of Lender on account thereof.
(c) No consent or approval which may be given by the Lender
pursuant to Section 32(g) of the Credit Agreement shall be deemed to release,
diminish or otherwise impair the obligations of Guarantor under this Guaranty
or to otherwise affect the determination of whether a Triggering Event has
occurred.
(d) For the purposes of this Guaranty, in order to determine
any loss, damage or expense of Lender, Lender shall not be required to have
sold or otherwise disposed of any of the Mezzanine Collateral or any other
Collateral.
25. Limitation of Recovery. Without modifying or limiting any
provision of this Guaranty or any agreement contained herein, except as
Guarantor's liability is otherwise limited as specifically provided in
Paragraph 24, above, it is hereby agreed that the amount recoverable from
Guarantor under this Guaranty (but not the scope or extent of the liabilities
and obligations guaranteed under this Guaranty) shall be limited to (a) the
principal balance of the Notes not to exceed an amount equal to $5,939,184.00
(such sum of $5,939,184.00 being hereinafter referred to as the "Allocable
Principal Amount"), (b) interest accrued on the principal portion of the
Notes described in Paragraph 25(a), (c) any payments or advances of funds
made by Lender pursuant to any one or more of the Loan Documents relating
directly or indirectly to the Mezzanine Property, the Mezzanine Collateral or
the Mezzanine Mortgage Loan, and (d) all expenses (including, but not limited
to, reasonable attorneys' fees) paid or incurred by Lender in endeavoring to
enforce this Guaranty (such amounts set forth in clauses (a) through (d)
inclusive above are hereinafter referred to collectively as the "Allocable
Loan Amount"). In the event of any foreclosure sale of the Mezzanine
Collateral, the amount recoverable against the Guarantors with respect to any
of the Triggering Events, which pursuant to the terms of any subparagraph of
Paragraph 24(b) the liability of Guarantors is not specifically limited to
the terms thereof, shall be reduced by an amount equal to the amount paid at
such foreclosure sale, for the Mezzanine Collateral or portion thereof so
sold at the time of such foreclosure sale (Guarantor remaining liable at such
foreclosure sale for the deficiency up to the extent of any remaining
liability of Guarantor hereunder).
26. Reduction of the Allocable Principal Amount.
(a) Notwithstanding anything contained in this Guaranty to
the contrary, if and to the extent that one or more of the Mezzanine
Properties are released from the lien of the Nomura Mortgage and such
Mezzanine Property is released in accordance with the terms of Section 5.3 of
the Credit Agreement (including without limitation the payment to Lender of
the requisite release price allocable to such portion of the Mezzanine
Collateral pursuant to the provisions of Section 5.3 of the Credit
Agreement), then the Allocable Principal Amount shall be automatically
reduced by an amount equal to one hundred percent (100%) of the Designated
Collateral Value allocable to such portion of the Mezzanine Collateral.
(b) If and to the extent that any "Rents" (as defined in the
Cash Collateral Agreement), "Distributions" (as defined in the Assignment of
Interests) or other sums generated by any one or more of the Mezzanine
Properties (including, without limitation, any condemnation awards and/or
casualty insurance proceeds) are received by Agent under the Loan Documents
after the occurrence and during the continuance of an Event of Default, and
are applied by Lender in reduction of the outstanding principal balance of
the Notes, then the Allocable Principal Amount shall be automatically reduced
by a like amount.
27. Joint and Several Liability. Notwithstanding anything to the
contrary herein, the representations, warranties, covenants and agreements
made by each of the Persons comprising Guarantor herein, and the liability of
each of the Persons comprising Guarantor hereunder, is joint and several
subject to the terms of this Paragraph 27; provided, however, that the
maximum liability of WRPI and WCPT (collectively, the "Wellsford Entities")
on a joint and several basis shall be fifty percent (50%) of the Allocable
Loan Amount, and the maximum liability of Whitehall and WHWEL on a joint and
several basis shall be fifty percent (50%) of the Allocable Loan Amount; and
provided further that, in the event that a Triggering Event shall occur
solely as a result of any of the events described in Paragraph 24(b)(i), (ii)
or (iii) as to only one or more of the Wellsford Entities, on the one hand,
or only one or more of the Whitehall Entities, on the other hand, then the
Whitehall Entities shall have no liability hereunder as a result of any such
action on the part of any Wellsford Entity, and none of the Wellsford
Entities shall have any liability hereunder as a result of any such action on
the part of any of the Whitehall Entities.
28. Statement of Discharge. Upon the payment in full of the
indebtedness guaranteed hereby and upon the termination of Lender's
obligations to advance Loans to Borrower, the Lender shall, upon the written
request of any of Whitehall, WRPI or the Borrower, deliver a statement to the
Guarantor that the Guarantor's obligations under this Guaranty have been
discharged and satisfied and that this Guaranty is terminated (subject to
reinstatement as provided herein).
IN WITNESS WHEREOF, Guarantor has executed this Guaranty under
seal as of the 16th day of July, 1998.
WELLSFORD COMMERCIAL PROPERTIES TRUST, a
Maryland real estate investment trust
By: /s/ Gregory F. Hughes
----------------------------------
Name: Gregory F. Hughes
Title: CFO & Treasurer
[SEAL]
WELLSFORD REAL PROPERTIES, INC., a Maryland
corporation
By: /s/ Gregory F. Hughes
----------------------------------
Name: Gregory F. Hughes
Title: CFO & Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
WHWEL REAL ESTATE LIMITED PARTNERSHIP
By: WHATR Gen-Par, Inc., General Partner
By: /s/ Alan S. Kava
------------------------------
Name: Alan S. Kava
Title: Vice President
Attest: /s/ Ralph F. Rosenberg
--------------------------
Name: Ralph F. Rosenberg
Title: Assistant Secretary
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP V
By: WH Advisors, L.P. V
By: WH Advisors, Inc. V
By: /s/ Alan S. Kava
----------------------------
Name: Alan S. Kava
Title: Vice President
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP VI
By: WH Advisors, L.P. VI
By: WH Advisors, Inc. VI
By: /s/ Alan S. Kava
-----------------------------
Name: Alan S. Kava
Title: Vice President
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP VII
By: WH Advisors, L.P. VII
By: WH Advisors, Inc. VII
By: /s/ Alan S. Kava
------------------------------
Name: Alan S. Kava
Title: Vice President
WHITEHALL STREET REAL ESTATE LIMITED
PARTNERSHIP VIII
By: WH Advisors, L.P. VIII
By: WH Advisors, Inc. VIII
By: /s/ Alan S. Kava
----------------------------
Name: Alan S. Kava
Title: Vice President