FIRST AMENDMENT TO MEZZANINE
LOAN AGREEMENT
THIS FIRST AMENDMENT TO MEZZANINE LOAN AGREEMENT (this "Amendment") made as
of this 28th day of May, 1999, by and among WELLSFORD/WHITEHALL PROPERTIES II,
L.L.C., a Delaware limited partnership ("Borrower"), WELLSFORD COMMERCIAL
PROPERTIES TRUST, a Maryland real estate investment trust ("WCPT"), WHWEL REAL
ESTATE LIMITED PARTNERSHIP ("WHWEL"), WELLSFORD REAL PROPERTIES, INC. ("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"), WHITEHALL STREET REAL
ESTATE LIMITED PARTNERSHIP VIII ("Whitehall VIII"; WCPT, WHWEL, WRPI, Whitehall
V, Whitehall VI, Whitehall VII and Whitehall VIII are sometimes hereinafter
referred to collectively as "Guarantors"), WELLS AVENUE HOLDINGS L.L.C., a
Delaware limited liability company ("Member"), WASH MANAGER L.L.C., a Delaware
limited liability company ("Manager"), BANKBOSTON, N.A., individually ("BKB"),
GOLDMAN SACHS MORTGAGE COMPANY ("Goldman"), BHF-BANK AKTIENGESELLSCHAFT ("BHF"),
MORGAN STANLEY SENIOR FUNDING INC., ("Morgan Stanley"), and PAM CAPITAL FUNDING
LP ("PAM") (BKB, Goldman, BHF, Morgan Stanley and PAM are hereinafter, referred
to collectively as the "Banks"), and BANKBOSTON, N.A., as Agent for the Banks
(the "Agent").
W I T N E S E T H:
WHEREAS, Borrower, Agent and the banks a party thereto entered into that
certain Mezzanine Loan Agreement dated July 16, 1998 (the "Loan Agreement"); and
WHEREAS, Member, Manager, WCPT and WHWEL executed the Loan Agreement for
the purpose of being bound by Section 32 of the Loan Agreement; and
WHEREAS, Guarantors have executed and delivered to the Agent and the Banks
that certain Conditional Guaranty of Payment and Performance dated July 16, 1998
(the "Conditional Guaranty"); and
WHEREAS, WCPT and WHWEL have executed and delivered to the Agent and the
Banks that certain Indemnity and Guaranty Agreement dated July 16, 1998 (the
"Indemnity and Guaranty"); and
WHEREAS, WRPI, Whitehall V, Whitehall VI, Whitehall VII and Whitehall VIII
have executed and delivered to the Agent and the Banks that certain Indemnity
Agreement dated July 16, 1998 (the "Indemnity"; the Conditional Guaranty, the
Indemnity and Guaranty and the Indemnity are sometimes hereinafter referred to
collectively as the "Guaranty"); and
WHEREAS, Borrower has requested that Agent and the Banks modify and amend
certain terms and provisions of the Loan Agreement; and
Exhibit 10.461 Page 1
WHEREAS, as a condition to such modification, Agent and the Banks have
required that Borrower, Member and Manager and Guarantors execute this
Amendment;
NOW, THEREFORE, for and in consideration of the sum of TEN and NO/100
DOLLARS ($10.00), and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby
covenant and agree as follows:
1. Definitions. All terms used herein which are not otherwise defined
herein shall have the meanings set forth in the Loan Agreement.
2. Modification of the Loan Agreement. Borrower, the Banks and Agent do
hereby modify and amend the Loan Agreement as follows:
(a) By deleting the entity name "The Goldman Sachs Group, L.P." appearing
in the definition of "Goldman Group," appearing on page 13 of Section 1.1 of the
Loan Agreement, and inserting in lieu thereof the words "The Goldman Sachs
Group, Inc.";
(b) By deleting in its entirety the third (3rd) sentence of Section 2.1 of
the Loan Agreement, appearing on page 23 thereof, and inserting in lieu thereof
the following:
"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
$67,890,482.00, 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.";
(c) By inserting the following paragraphs as Section 5.6(i) of the Loan
Agreement as follows:
"(i) Notwithstanding anything in the definition of the term 'Tenant
Improvement Projects' or Section 5.6 to the contrary, Borrower may request
funds for disbursement from the Tenant Improvement Reserve for a Tenant
Improvement Project without the requirement that there be any Lease
requiring such Tenant Improvement Project upon the following terms and
conditions:
(i) Such Tenant Improvement Project shall be for base building
and/or generic tenant improvements to facilitate the leasing of such
Mortgaged Property;
(ii) Borrower may request disbursements from the Tenant
Improvement Reserve for
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Tenant Improvement Projects for the Mortgaged Properties commonly
known as the Polaroid Buildings and Mountain Heights upon the
satisfaction of the terms of Section 5.6 (including without limitation
the approval of the Building Capital Project Budget); provided,
however, that the approval by the Majority Banks of a proposed Lease
which requires such Tenant Improvement Project shall not be required
nor shall there be required a Lease which requires such Tenant
Improvement Project;
(iii) With respect to the Mortgaged Property commonly known as
Morris Technology Center, upon the satisfaction of all other
conditions in this Section 5.6 (including without limitation the
approval of the Building Capital Project Budget), Borrower shall be
entitled to request disbursements from the Tenant Improvement Reserve
for Tenant Improvement Projects up to in the aggregate $100,000.00;
provided that the approval by the Majority Banks of a Lease which
requires such Tenant Improvement Project shall not be required nor
shall there be required a Lease which requires such Tenant Improvement
Project, and prior to the initial disbursement with respect to any
such Tenant Improvement Project, the Borrower shall provide to the
Agent evidence satisfactory to the Agent that Borrower has paid from
equity fifty percent (50%) of the amounts identified in the Building
Capital Project Budget for such Tenant Improvement Project; and
provided further that for the purposes of determining the Designated
Collateral Value of such Tenant Improvement Project, the historic cost
thereof shall be multiplied by 0.10 (in lieu of 0.15 as contemplated
by the definition of the term 'Designated Collateral Value'). At such
time as the Agent receives evidence satisfactory to Agent that a
tenant or tenants have executed Leases, approved by the Agent or the
Majority Banks to the extent required by this Agreement, for not less
than forty percent (40%) of the net rentable area of such Mortgaged
Property, the Borrower thereafter shall be entitled to request
disbursements for Tenant Improvement Projects upon satisfaction of the
requirements of the terms of Section 5.6 (including without limitation
the approval of the Building Capital Project Budget) upon delivery to
Agent of evidence satisfactory to Agent that Borrower has paid from
equity twenty-five percent (25%) of the
Exhibit 10.461 Page 3
amounts identified in the Building Capital Project Budget for such
Tenant Improvement Project; provided that the approval by the Majority
Banks of a Lease requiring such Tenant Improvement Project shall not
be required nor shall there be required a Lease which requires such
Tenant Improvement Project. Thereafter Borrower shall be entitled to
request disbursement of funds from the Tenant Improvement Reserve with
respect to any Tenant Improvement Projects previously performed at
Morris Technology Center, subject to the terms and conditions of this
Agreement and the availability of funds in the Tenant Improvement
Reserve, as if Borrower had only been required to pay twenty-five
percent (25%) of such costs from equity, and the Designated Collateral
Value of such Tenant Improvement Projects shall be as set forth in the
definition of such term; and
(iv) With respect to the Mortgaged Property commonly known as
Point View, upon the satisfaction of all other conditions in Section
5.6 (including without limitation the approval of the Building Capital
Project Budget), Borrower shall be entitled to request disbursements
from the Tenant Improvement Reserve for Tenant Improvement Projects up
to in the aggregate $490,000.00; provided that the approval by the
Majority Banks of a Lease requiring such Tenant Improvement Project
shall not be required nor shall there be required a Lease which
requires such Tenant Improvement Project, and prior to the initial
disbursement with respect to any such Tenant Improvement Project, the
Borrower shall provide to the Agent evidence satisfactory to the Agent
that Borrower has paid from equity thirty percent (30%) of the amounts
identified in the Building Capital Project Budget for such Tenant
Improvement Project; and provided further that for the purposes of
determining the Designated Collateral Value of such Tenant Improvement
Project, the historic cost thereof shall be multiplied by 0.14 (in
lieu of 0.15 as contemplated by the definition of the term 'Designated
Collateral Value'). At such time as the Agent receives evidence
satisfactory to Agent that a tenant or tenants have executed Leases,
approved by the Agent or the Majority Banks to the extent required by
this Agreement, for not less than forty percent (40%) of the net
rentable area of such Mortgaged Property, the Borrower
Exhibit 10.461 Page 4
thereafter shall be entitled to request disbursements for Tenant
Improvement Projects upon satisfaction of the requirements of the
terms of Section 5.6 (including without limitation the approval of the
Building Capital Project Budget) upon delivery to Agent of evidence
satisfactory to 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; provided that the
approval by the Majority Banks of a Lease requiring such Tenant
Improvement Project shall not be required nor shall there be required
a Lease which requires such Tenant Improvement Project. Thereafter
Borrower shall be entitled to request disbursement of funds from the
Tenant Improvement Reserve with respect to any Tenant Improvement
Projects previously performed at Point View. subject to the terms and
conditions of this Agreement and the availability of funds in the
Tenant Improvement Reserve, as if Borrower had only been required to
pay twenty-five percent (25%) of such costs from equity, and the
Designated Collateral Value of such Tenant Improvement Projects shall
be as set forth in the definition of such term.";
(d) By deleting the semicolon following the words "Majority Banks"
appearing in the last line of Section 8.1 (f) of the Loan Agreement, appearing
on page 74 thereof, and inserting in lieu thereof the following:
". Notwithstanding the foregoing requirement that any recourse
Indebtedness be subordinate to the Obligations, in connection with the
acquisition by Borrower of an approximately 98,000 square foot office
building in Howard County, Maryland, Borrower shall be permitted to execute
(a) a limited guaranty of non-recourse carve-outs (generally relating to a
misapplication of casualty or condemnation awards, misapplication of
security deposits and rents, fraud, environmental pollution, real estate
taxes, insurance premiums and claims made by tenants against the mortgage
lender arising out of a matter occurring prior to such lender obtaining
title to the collateral) and an environmental indemnity in connection with
the assumption of a $5,200,000.00 non-recourse first mortgage loan in favor
of IDS Life Insurance Company ('IDS'), and (b) a limited guaranty to the
sellers of such property (the 'Sellers') pursuant to which Borrower will
assume liability for amounts owed with respect to a purchase money loan not
to exceed $3,000,000.00 in connection with the acquisition of such property
in the event that (i) One Mall LLC ('One Mall'), Wellsford One Mall LLC ('
Wellsford One Mall') or Borrower files for protection under any relevant
chapter of the
Exhibit 10.461 Page 5
Bankruptcy Code, acquiesces in any involuntary filing made by creditors
other than the Sellers against such parties seeking reorganization or
liquidation of such party, or if any transfer of control of their property
to the Sellers as described in clause (iii) below is set aside as a
preference in any such proceeding, (ii) One Mall defaults under the first
deed of trust to IDS and does not thereafter cooperate in a timely fashion
with the Sellers to facilitate the exercise by Sellers of their right to
cure such default on behalf of One Mall, and/or (iii) after an event of
default under the purchase money loan documents and the application of all
applicable notice and cure periods, any of One Mall, Wellsford One Mall or
the Borrower fails to cooperate with Sellers to allow Sellers to seek
control of the property through 'friendly' foreclosure, deed in lieu of
foreclosure, receivership or other legally permissible means (such
obligations described in (a) and (b) above are hereinafter referred to
collectively as the 'Recourse Obligations'). Borrower shall submit to Agent
the agreements evidencing such Recourse Obligations.";
(e) By inserting the word "or" at the end of Section 12.1 (v) of the Loan
Agreement, appearing on page 93 thereof, and inserting the following additional
paragraph as Section 12.1 (w) thereof:
"(w) The occurrence of any event which may give rise to any claim or
liability under any of the Recourse Obligations";
(f) By adding the language "unless waived by both Borrower and Agent"
immediately after (i) the figure $500,000,000 in Section 18.1 (e) of the Loan
Agreement and (ii) the figure $10,000,000 in Section 18.1(f) of the Loan
Agreement; and
(g) By adding the language "unless waived by Agent, WWP Members, WHWEL,
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" immediately after the
figure $10,000,000 in Section 18.8(b) of the Loan Agreement.
3. References to Loan Agreement. All references in the Loan Documents to
the Loan Agreement shall be deemed a reference to the Loan Agreement as modified
and amended herein.
4. Consent of Member, Manager and Guarantors. By execution of this
Amendment, Member, Manager and Guarantors hereby expressly consent to the
modifications and amendments relating to the Loan Agreement as set forth herein,
and Guarantors, Member and Manager hereby acknowledge, represent and agree that
the Guaranty and the other Loan Documents to which each is a party remain in
full force and effect and constitute the valid and legally binding obligation of
Guarantors, Member and Manager, enforceable against such Persons in accordance
with its terms, that the Guaranty and the other Loan Documents to which each is
a
Exhibit 10.461 Page 6
party extend to and apply to the Loan Agreement as modified and amended, and
that the execution and delivery of this Amendment does not constitute, and shall
not be deemed to constitute, a release, waiver or satisfaction of Guarantors',
Member's or Manager's obligations under the Guaranty or the other Loan
Documents; provided, however, that except as provided above in this Paragraph 4
nothing herein is intended to nor shall anything herein be deemed to increase
the amounts or nature of the items for which any Guarantor is liable pursuant to
any such Guaranty.
5. Representations. Borrower, Guarantors, Member and Manager represent and
warrant to Agent and the Banks as follows:
(a) Authorization. The execution, delivery and performance of this
Amendment and the transactions contemplated hereby (i) are within the authority
of Borrower, Guarantors, Member and Manager, (ii) have been duly authorized by
all necessary proceedings on the part of such Persons, (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 any of such Persons is subject or any
judgment, order, writ, injunction, license or permit applicable to such Persons,
(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
operating agreement, articles of incorporation, bylaws or other charter
documents or any agreement or other instrument binding upon, any of such Persons
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 Persons (other than those in favor of Agent pursuant to the
terms of the Loan Documents).
(b) Enforceability. The execution and delivery of this Amendment are valid
and legally binding obligations of Borrower, Guarantors, Member and Manager
enforceable in accordance with the respective terms and provisions hereof,
except as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors' rights and the effect of general principles of equity.
(c) Approvals. The execution, delivery and performance of this Amendment
and the transactions contemplated hereby 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.
(d) Merger. As of the date hereof, The Goldman Sachs Group, L.P. has merged
with and into Goldman Sachs Group, Inc. substantially in the manner previously
disclosed to Agent.
6. No Default. By execution hereof, each of the Borrower, Guarantors,
Member and Manager certify that it is and will be in compliance with all of its
respective covenants under the Loan Documents after the execution and delivery
of this Amendment, and
Exhibit 10.461 Page 7
that it is not in Default and no Event of Default has occurred and is continuing
with respect to its respective representations, warranties, covenants and other
obligations.
7. Waiver of Claims. Borrower, Guarantors, Member and Manager acknowledge,
represent and agree that Borrower, Guarantors, Member and Manager currently have
no defenses, setoffs, claims, counterclaims or causes of action of any kind or
nature whatsoever with respect to the Loan Documents, the administration or
funding of the Loans or with respect to any acts or omissions of Agent or any of
the Banks, or any past or present officers, agents or employees of Agent or any
of the Banks, and each of Borrower, Guarantors, Member and Manager does hereby
expressly waive, release and relinquish any and all such defenses, setoffs,
claims, counterclaims and causes of action, if any, as of the date hereof.
8. Ratification. Except as specifically hereinabove modified in writing and
set forth, all terms, covenants and provisions of the Loan Agreement remain
unaltered and in full force and effect, and the parties hereto that are also a
party to the Loan Agreement do hereby expressly ratify and confirm the Loan
Agreement as modified and amended herein. Nothing in this Amendment shall be
deemed or construed to constitute, and there has not otherwise occurred, a
novation, cancellation, satisfaction. release, extinguishment or substitution of
the indebtedness evidenced by the Notes or the other obligations of Borrower,
Guarantors, Member and Manager under the Loan Documents.
9. Counterparts. This Amendment may be executed in any number of
counterparts which shall together constitute but one and the same agreement.
10. Miscellaneous. This Amendment shall be construed and enforced in
accordance with the laws of the State of New York. This Amendment shall be
effective upon the execution hereof by Borrower, Guarantors, Member, Manager,
Agent and the Majority Banks and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective permitted successors,
successors-in-title and assigns as provided in the Loan Agreement.
Exhibit 10.461 Page 8
IN WITNESS WHEREOF, the parties hereto have hereto set their hands and
affixed their seals as of the day and year first above written.
WELLSFORD/WHITEHALL PROPERTIES II,
L.L.C., a Delaware limited,
liability company
By: Wellsford Commercial
Properties Trust, a Maryland
real estate investment trust,
its manager
By: /s/ Ed Lowenthal
-----------------------------
Print/Type Name: Ed Lowenthal
Title:
WELLSFORD COMMERCIAL PROPERTIES
TRUST, a Maryland real estate
investment trust
By: /s/ Ed Lowenthal
----------------------------------
Print/Type Name: Ed Lowenthal
Title: President
[SEAL]
[Signatures Continue on Following Page]
Exhibit 10.461 Page 9
WELLSFORD REAL PROPERTIES, INC., a
Maryland corporation
By: /s/ Ed Lowenthal
----------------------------------
Print/Type Name: Ed Lowenthal
Title: President
[Signatures Continue on Following Page]
Exhibit 10.461 Page 10
WHWEL REAL ESTATE LIMITED
PARTNERSHIP
By: WHATR Gen-Par, Inc., General
Partner
By: Elizabeth Burbon
-----------------------------
Print/Type Name: Elizabeth Burbon
--------------------------------
Title: Vice President
--------------------------------
Attest: /s/ Elizabeth Burbon
--------------------------------
Print/Type Name: Elizabeth Burbon
--------------------------------
Title:Vice President
--------------------------------
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP
By: WH Advisors. L.P. V
By: WH Advisors, Inc. V
By: /s/ Elizabeth Burdon
-----------------------------
Print/Type Name: Elizabeth Burdon
Title: Vice President
(Signatures Continue on Following Page)
Exhibit 10.461 Page 11
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP VI
By: WH Advisors, L.P. VI
By: WH Advisors Inc. VI
By: /s/ Elizabeth Burdon
-----------------------------
Print/Type Name: Elizabeth Burdon
-----------------------------
Title: Vice President
-----------------------------
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP VII
By: WH Advisors, L.P. VII
By: WH Advisors, Inc. VII
By:/s/ Elizabeth Burdon
-----------------------------
Print/Type Name: Elizabeth Burdon
-----------------------------
Title: Vice President
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP VIII
By: WH Advisors, L.P. VIII
By: WH Advisors, Inc. VIII
By: /s/ Elizabeth Burdon
-----------------------------
Print/Type Name: Elizabeth Burdon
-----------------------------
Title: Vice President
-----------------------------
(Signatures Continue on Following Page)
Exhibit 10.461 Page 12
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,
Maryland real estate
Investment trust, its
manager
By: /s/ Ed Lowenthal
------------------------
Name: Ed Lowenthal
Title: President
[Signatures Continue on Following Page]
Exhibit 10.461 Page 13
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/ Ed Lowenthal
---------------------------
Name: Ed Lowenthal
Title: President
[Signatures Continue on Following Page]
Exhibit 10.461 Page 14
BANKBOSTON, N.A., a national
banking association, individually
and as Agent
By: /s/ Jay Johns
--------------------------------
Name: Jay Johns
Title: Vice President
[BANK SEAL]
[Signatures Continue on Following Page]
Exhibit 10.461 Page 15
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
------------------------------
Print/Type Name: Robert R. Foley
Title: Authorized Signatory
[Corporate Seal]
[Signatures Continue on Following Page]
Exhibit 10.461 Page 16
BHF-BANK AKTIENGESELLSCHAFT
By:
Title:
By: /s/ Douglas S. Marron
--------------------------------
Title: Assistant Treasurer
[Signatures Continue on Following Page]
Exhibit 10.461 Page 17
MORGAN STANLEY SENIOR FUNDING INC.
By:
Title:
[Signatures Continue on Following Page]
Exhibit 10.461 Page 18
PAM CAPITAL FUNDING LP
By: Highland Capital Funding, L.P.
As collateral manager
By: /s/ James Dondero, CFA, CPA
--------------------------------
Title: President
Exhibit 10.461 Page 19