UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE
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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 REAL PROPERTIES, INC., a Maryland corporation ("Guarantor"), the
receipt and sufficiency whereof is hereby acknowledged by Guarantor, and for the
purpose of seeking to induce FLEET NATIONAL BANK ("Lender", which term shall
also include each other Lender which may now or hereafter become party to the
"Credit Agreement" (as hereinafter defined) and shall also include any such
individual Lender acting as agent for all of the Lenders), to extend credit or
otherwise provide financial accommodations to WELLSFORD FINANCE, LLC, 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
absolutely and irrevocably guarantee to Lender:
(a) the full and prompt payment when due, whether by acceleration or
otherwise, either before or after maturity thereof, of that certain Note dated
of even date herewith made by Borrower to the order of Fleet National Bank
("Fleet") in the principal face amount of Twenty Million and No/100 Dollars
($20,000,000.00) (hereinafter referred to as the "Fleet Note"), together with
interest as provided in the Fleet Note, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
(b) 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 Amended and Restated Revolving Credit Agreement dated
of even date herewith among Borrower, Fleet, for itself and as agent, 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 Fleet Note and each of
the notes described in this subparagraph (b) is hereinafter referred to
collectively as the "Note"); and
(c) the full and prompt payment and performance of all other 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) the full and prompt payment and performance of any and all other
obligations of Borrower to Lender under the Security Documents, together with
any replacements, supplements, renewals, modifications, consolidations,
restatements and extensions thereof; and
(e) the full and prompt payment and performance of any and all other
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 and Perform; Costs of Collection. Guarantor does hereby
agree that 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, or if any and all other
Obligations are not performed by Borrower in accordance with their terms
(including all applicable grace periods), Guarantor will immediately make such
payments and perform such Obligations. 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
collect the Obligations, to enforce any of the Obligations, or any portion
thereof, or 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 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 to the Lender on demand an amount equal to 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 of the Obligations; 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 of the
Obligations or other 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.
Without limiting the generality of the foregoing, Guarantor acknowledges the
terms of Section 18.3 of the Credit Agreement and agrees that this Guaranty
shall extend and be applicable to each new or replacement note delivered by
Borrower pursuant thereto.
4. No Contest with Lender; Subordination. So long as any Obligation remains
unpaid or undischarged, Guarantor will not, by paying any sum recoverable
hereunder (whether or not demanded by Xxxxxx) 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 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 Xxxxxxxx,
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 of the
Obligations and any other 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:
(1) the incapacity or lack of authority of Borrower or any other person or
entity, the death or disability of Borrower or 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
Guarantor or any other person or entity;
(2) the dissolution or termination of existence of Borrower or any other
Person;
(3) the voluntary or involuntary liquidation, sale or other disposition of
all or substantially all of the assets of Borrower or any other Person;
(4) 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 or
Guarantor, or any of Borrower's or Guarantor's properties or assets;
(5) the damage, destruction, condemnation, foreclosure or surrender of all
or any part of the Collateral;
(6) 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;
(7) 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;
(8) any failure of any duty on the part of Lender to disclose to Guarantor
any facts it may now or hereafter know regarding Borrower, any other Person or
the Collateral, whether such facts materially increase the risk to Guarantor or
not;
(9) failure to accept or give notice of acceptance of this Guaranty by
Xxxxxx;
(10) failure to make or give notice of presentment and demand for payment
of any of the indebtedness or performance of any of the Obligations;
(11) failure to make or give protest and notice of dishonor or of default
to Guarantor or to any other party with respect to any of the Obligations;
(12) any and all other notices whatsoever to which Guarantor might
otherwise be entitled;
(13) any lack of diligence by Xxxxxx in collection, protection or
realization upon any collateral securing the payment or performance of the
Obligations;
(14) the invalidity or unenforceability of the Note or any of the Loan
Documents;
(15) the compromise, settlement, release or termination of any or all of
the Obligations;
(16) any transfer by Borrower or any other Person of all or any part of the
Collateral;
(17) the failure of Lender to perfect any security or to extend or renew
the perfection of any security; or
(18) 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 and irrevocable.
6. Guaranty of Payment and Performance and Not of Collection. This is a
Guaranty of payment and performance and not of collection. 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 Obligations, 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 a deed
or an assignment in lieu of foreclosure, appointment of a receiver to collect
rents and profits, 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 of the Obligations, 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 Obligations are partially paid by reason of the election of Lender to pursue
any of the remedies available to Lender, or if such Obligations are otherwise
partially paid, this Guaranty shall nevertheless remain in full force and
effect, and Guarantor shall remain liable for the entire balance of the
Obligations 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 Xxxxxx, 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 Guarantor or if there shall be pending any bankruptcy or insolvency
case or proceeding with respect to Guarantor under federal bankruptcy law or any
other applicable law or in connection with the insolvency of Guarantor, or if a
liquidator, receiver, or trustee shall have been appointed for Guarantor or
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 Guarantor, or any of
Guarantor's properties or assets, and, irrespective of whether the Obligations
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 with respect to the Obligations, 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 11 U.S.C. ss.105 or any other
provision of the Bankruptcy Reform Act of 1978, as amended, 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. Guarantor hereby represents
and warrants to Lender that all financial statements of Guarantor and its
Subsidiaries 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
the financial condition of Guarantor and its Subsidiaries as of the date
thereof; that no material adverse change has occurred in the assets or financial
condition of Guarantor and its Subsidiaries as reflected therein since the date
thereof; and that Guarantor and its Subsidiaries have 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
Guarantor's obligations under this Guaranty. Xxxxxxxxx agrees that until all
Obligations have been completely paid and performed and the obligations of the
Lenders under the Credit Agreement have terminated, it will deliver to each
Lender:
(1) as soon as practicable, but in any event not later than 90 days after
the end of each fiscal year of Guarantor, the audited consolidated balance sheet
of Guarantor and its Subsidiaries at the end of such year, and the related
audited consolidated statements of income, changes in shareholders' equity and
cash flows and Consolidated EBITDA for such year, each setting forth in
comparative form the figures for the previous fiscal year 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 Xxxxx & Young LLP or by another "Big Five" accounting
firm, the Form 10-K of Guarantor filed with the SEC (unless the SEC has approved
an extension, in which event Guarantor will deliver to Lender such copies of the
Form 10-K simultaneously with the delivery to the SEC);
(2) as soon as practicable, but in any event not later than 45 days after
the end of each of the first three fiscal quarters of Guarantor, copies of the
unaudited consolidated balance sheet of Guarantor and its Subsidiaries as at the
end of such quarter, and the related unaudited consolidated statements of
income, changes in shareholders' equity and cash flows for the portion of
Guarantor's fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles (which may be provided
by inclusion in the Form 10-Q of Guarantor for such period provided pursuant to
subsection (c) below), together with a certification by the chief financial or
accounting officer of Guarantor that the information contained in such financial
statements fairly presents the financial position of Guarantor and its
Subsidiaries on the date thereof (subject to year-end adjustments);
(3) as soon as practicable, but in any event not later than 45 days after
the end of each of the first three fiscal quarters of Guarantor in each year,
copies of Form 10-Q of Guarantor filed with the SEC (unless the SEC has approved
an extension in which event Guarantor will deliver such copies of the Form 10-Q
to the Lender simultaneously with delivery to the SEC);
(4) as soon as practicable, but in any event not later than 45 days after
the end of each of the first three fiscal quarters of Guarantor, copies of a
consolidated statement of EBITDA for such fiscal quarter for Guarantor and its
Subsidiaries and prepared in a manner reasonable satisfactory to the Agent,
together with a certification by Guarantor's chief financial or chief accounting
officer that the information contained in such statement fairly presents the
EBITDA of Guarantor and its Subsidiaries for such period;
(5) simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above, a statement (a "Compliance Certificate")
certified by the chief financial or accounting officer of Guarantor in the form
of Exhibit A hereto setting forth in reasonable detail computations evidencing
compliance with the covenants contained in Paragraph 11 and (if applicable)
reconciliations to reflect changes in generally accepted accounting principles
since the Guarantor Balance Sheet Date;
(6) concurrently with the delivery of the financial statements described in
subsections (b) and (c) above, a certificate signed by the President, Chief
Financial Officer or Chief Accounting Officer of Guarantor to the effect that,
having read this Guaranty, 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;
(7) contemporaneously with the filing, mailing or releasing thereof, copies
of all press releases and all material of a financial nature filed with the SEC
or sent to all of the stockholders of Guarantor;
(8) promptly after they are filed with the Internal Revenue Service, copies
of all annual federal income tax returns and amendments thereto of Guarantor;
(9) promptly upon becoming aware thereof, written notice from Guarantor of
any event or condition which might have an adverse effect on the business,
operations, assets, condition (financial or otherwise) or prospects of Guarantor
or the ability of Guarantor to perform under this Guaranty (including but not
limited to, litigation commenced or threatened in writing against Guarantor,
judgments rendered against Guarantor, liens filed against any property of
Guarantor, defaults claimed under indebtedness for borrowed money for which
Guarantor is primarily or secondarily liable, or bankruptcy, insolvency or
trustee or receivership proceedings commenced against Guarantor), such notice to
specify the nature and the period of existence of such event or condition, the
anticipated effect thereof, and what action Guarantor is taking or proposes to
take with respect thereto; and
(10) with reasonable promptness, such other information respecting the
business, operations, assets, liabilities and financial condition of Guarantor
and its Subsidiaries as Lender may from time to time reasonably request.
Guarantor will permit any representative designated by Agent, at Guarantor's
expense, to visit and inspect any of the properties of Guarantor and its
Subsidiaries, to examine the records and books of account of Guarantor and its
Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss
the affairs, finances and accounts of Guarantor and its Subsidiaries, with, and
to be advised as to the same by, its officers, all at such reasonable times and
intervals as the Lender may reasonably request.
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. Guarantor hereby covenants and agrees with
Lender that until all Obligations have been completely paid and performed and
the obligations of Lender under the Credit Agreement have terminated:
(1) Guarantor will, and will cause its Subsidiaries to, 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. Guarantor shall not, without the prior written consent of the
Majority Lenders, make any material changes to the accounting principles used by
such Person in preparing the financial statements heretofore delivered to Lender
or change its fiscal year;
(2) Guarantor will, and will cause its Subsidiaries to, 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;
(3) Guarantor will continue to engage primarily in the businesses now
conducted by it;
(4) Guarantor will, and will cause its Subsidiaries to, duly pay and
discharge, before the same shall become in arrears, all taxes, assessments and
other governmental charges imposed upon it and its properties, sales or
activities, or upon the income or profits therefrom, as well as claims for
labor, material, or supplies which if unpaid might become a lien or charge on
any of its property; provided that any such tax, assessment, charge or claim
need not be paid if the validity or amount thereof shall currently be contested
in good faith by appropriate proceedings and if Guarantor shall have set aside
on its books adequate reserves with respect thereto; and provided further that
Guarantor shall pay all such taxes, assessments, charges and
claims forthwith upon the commencement of proceedings to foreclose any lien that
may have attached as security therefor; (1)
(5) Guarantor will, and will cause its Subsidiaries to, maintain and keep
the properties used or deemed by it to be useful in its business in good repair,
working order and condition, and make or cause to be made all necessary and
proper repairs thereto and replacements thereof;
(6) Guarantor will, and will cause its Subsidiaries to, maintain with
financially sound and reputable insurers, insurance with respect to its
properties and business against such casualties and contingencies and in such
types and amounts as shall be in accordance with sound business practices for
companies in similar business similarly situated;
(7) it will not make or permit to be made, by voluntary or involuntary
means, any transfer, dilution or encumbrance of its direct or indirect interest
in Borrower;
(8) it will abide by each and every one of the covenants contained in
Articles 7 and 8 of the Credit Agreement that are applicable to a "Guarantor",
as such term is defined in the Credit Agreement;
(9) Guarantor 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
(other than the acquisition of assets in the ordinary course of business
consistent with past practices) without the prior written consent of the
Majority Lenders except (i) the merger or consolidation of one or more
Subsidiaries of Guarantor with and into Guarantor and (ii) the merger or
consolidation of two or more Subsidiaries of Guarantor;
(10) Guarantor will not, and will not permit any of its Subsidiaries to,
become a party to or agree to or affect any disposition of assets, other than
the disposition of assets in the ordinary course of business, consistent with
past practices;
(11) INTENTIONALLY OMITTED;
(12) Guarantor will not, at the end of any fiscal quarter, permit the ratio
of Consolidated Total Liabilities of Guarantor to Consolidated Total Assets of
Guarantor to exceed 0.55 to 1;
(13) Guarantor will not, at the end of any fiscal quarter, permit its
Consolidated EBITDA for any period of four consecutive fiscal quarters (treated
as a single accounting period) (the "Test Period"), minus the Capital
Improvement Reserve for the Test Period to be less than 1.35 times the Debt
Service for the Test Period. In the event that Guarantor shall not have any of
the foregoing components for four (4) consecutive fiscal quarters, then such
components shall be annualized in a manner reasonably satisfactory to the Agent;
(14) Guarantor will not, at the end of any fiscal quarter, permit the
Shareholders' Equity to be less than $200,000,000.00 (the "Shareholders' Equity
Threshold"); provided, however the Shareholders' Equity Threshold shall be
reduced by the aggregate cost of the shares of common stock of Guarantor
repurchased by Guarantor after the date hereof, provided in no event shall the
Shareholders' Equity Threshold be reduced to less than $180,000,000.00; and
(15) Guarantor will not permit the present value of all employee benefits
vested in all Employee Benefit Plans, Multiemployer Plans and Guaranteed Pension
Plans maintained by Guarantor and any ERISA Affiliate thereof to exceed the
present value of the assets allocable to such vested benefits by an amount
greater than $250,000.00 in the aggregate. Neither Guarantor 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 Guarantor or Borrower pursuant to Section 4068 of ERISA.
12. Representations and Warranties of Guarantor. Guarantor represents and
warrants as follows:
(1) Guarantor 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 Guarantor 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
Guarantor'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 Guarantor with the provisions hereof and
the other Loan Documents will involve any prohibited transaction;
(2) neither the Guarantor nor any ERISA Affiliate thereof is currently and
the Guarantor has no reason to believe that the Guarantor or any ERISA Affiliate
thereof will become subject to any liability (other than routine expenses or
contributions relating to the Plans set forth on Schedule 1, 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 1
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 the Guarantor or upon its financial
condition, assets, business, operations, liabilities or prospects; and
(3) Guarantor 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 1 and applicable law and (ii) required to be paid as expenses
of each Plan set forth on Schedule 1. No Plan set forth on Schedule 1 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.
13. Security and Rights of Set-off. Guarantor hereby grants to Lender, as
security for the full and prompt payment and performance of Guarantor's
obligations hereunder, a continuing lien on and security interest in any and all
securities or other property belonging to Guarantor now or hereafter held by
Lender and in any and all deposits (general or specific, time or demand,
provisional or final, regardless of currency, maturity, or the branch of Lender
where the deposits are held) now or hereafter held by Xxxxxx and other sums
credited by or due from Lender to Guarantor or subject to withdrawal by
Guarantor; and regardless of the adequacy of any collateral or other means of
obtaining repayment of such obligations, during the continuance of any Event of
Default under the Note or the Loan Documents, Lender may at any time and without
notice to Guarantor set-off and apply the whole or any portion or portions of
any or all such deposits and other sums against amounts payable under this
Guaranty, whether or not any other person or persons could also withdraw money
therefrom. Any security now or hereafter held by or for Guarantor and provided
by Xxxxxxxx, or by anyone on Xxxxxxxx's behalf, in respect of liabilities of
Guarantor hereunder shall be held in trust for Xxxxxx as security for the
liabilities of Guarantor hereunder.
14. Changes in Writing; No Revocation. This Guaranty may not be changed
orally, and no obligation of Guarantor can be released or waived by Xxxxxx
except by a writing signed by a duly authorized officer of Lender. This Guaranty
shall be irrevocable by Guarantor until all of the Obligations have been
completely paid and performed and the Lenders have no further obligation to
advance Loans to Borrower.
15. 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:
Fleet National Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Real Estate Division
with a copy to:
Fleet National Bank
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Suite 500
Atlanta, Georgia 30346
Attention: Xxx Xxxxx
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 Real Properties, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
with a copy to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
16. 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).
17. 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.
18. 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 Xxxxxx, its successors, successors in title, legal representatives and
assigns. Guarantor shall not assign or transfer any of its rights or obligations
under this Guaranty without the prior written consent of Lender.
19. Assignment by Xxxxxx. 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.
20. 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.
21. 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.
22. 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.
23. Time of the Essence. Time is of the essence with respect to each and
every covenant, agreement and obligation of Guarantor under this Guaranty. 1.
24. Statement of Discharge. Upon the payment and performance in full of the
Obligations and upon the termination of Xxxxxx's obligations to advance Loans to
Borrower, the Lender shall, upon the written request of Guarantor 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).
25. Additional Definitions. The following terms shall have the meanings set
forth in this Paragraph 25 below:
Capital Improvement Reserve. For any period for the purpose of testing
compliance with the Consolidated EBITDA ratio set forth in Paragraph 11(m)
hereof, an amount equal to fifteen cents ($0.15) multiplied by the weighted
average of rentable square footage of Real Estate owned by Guarantor and its
Subsidiaries during such period.
Consolidated or combined. With reference to any term defined herein, that
term as applied to the accounts of Guarantor and its Subsidiaries, consolidated
or combined in accordance with generally accepted accounting principles.
Consolidated EBITDA. With respect to any Test Period, an amount equal to
the EBITDA of Guarantor and its Subsidiaries for such period consolidated in
accordance with generally accepted accounting principles.
Consolidated Total Assets. All assets of Guarantor and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles. All Real Estate shall be valued on an undepreciated cost
basis.
Consolidated Total Liabilities. All liabilities of Guarantor and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of Guarantor and its
Subsidiaries, whether or not so classified, excluding those certain contingent
liabilities of Guarantor and its Subsidiaries pursuant to (i) that certain
Indemnity and Guaranty Agreement ($300,000,000 Loan) dated as of July 16, 1998,
from Wellsford Commercial Properties Trust ("WCPT") and WHWEL Real Estate
Limited Partnership ("WHWEL") in favor of Fleet National Bank (f/k/a BankBoston,
N.A.), individually and as Agent, and certain other lenders, (ii) that certain
Conditional Guaranty of Payment ($300,000,000 Loan) dated as of July 16, 1998,
from Guarantor, WCPT, WHWEL, 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") in
favor of Fleet National Bank (f/k/a BankBoston, N.A.), individually and as
Agent, and certain other lenders, (iii) that certain Indemnity and Guaranty
Agreement ($75,000,000 Loan) dated as of July 16, 1998, from WCPT and WHWEL in
favor of Fleet National Bank (f/k/a BankBoston, N.A.), individually and as
Agent, and certain other lenders, (iv) that certain Mezzanine Conditional
Guaranty of Payment ($75,000,000 Loan) dated as of July 16, 1998, from
Guarantor, WCPT, WHWEL, Whitehall V, Whitehall VI, Whitehall VII, and Whitehall
VIII in favor of Fleet National Bank (f/k/a BankBoston, N.A.), individually and
as Agent, and certain other lenders, and (v) that certain Nomura Conditional
Guaranty of Payment ($75,000,000 Loan - Nomura Properties) dated as of July 16,
1998, from Guarantor, WCPT, WHWEL, Whitehall V, Whitehall VI, Whitehall VII, and
Whitehall VIII in favor of Fleet National Bank (f/k/a BankBoston, N.A.),
individually and as Agent, and certain other lenders, as the same have been or
may hereafter be modified or amended from time to time (collectively, the
"Contingent Obligations"); provided, however, it being acknowledged and agreed
that any Contingent Obligation that becomes liquidated or is no longer
contingent shall no longer be considered a
Contingent Obligation and shall no longer be excluded from the calculation of
Consolidated Total Liabilities.
Debt Service. For any period of four consecutive fiscal quarters, the sum
of actual interest expense and mandatory or scheduled principal payments due and
payable during such period with respect to the Indebtedness of Guarantor and its
Subsidiaries consolidated in accordance with generally accepted accounting
principles, consistently applied, excluding any balloon payments due upon
maturity of any Indebtedness, amortized loan fees, capitalized interest, any
interest charge incurred by any entity in which Guarantor or any of its
Subsidiaries has an interest of less than 50%, or over which Guarantor or any of
its Subsidiaries does not exercise voting control, and the capitalized interest
expense and principal payments due with respect to the construction loans on the
Palomino Park Project, and further excluding any interest payable by Guarantor
to WRP Convertible Trust I, a Delaware business trust with respect to those
certain 8.25% convertible junior subordinate debentures issued pursuant to an
Indenture dated as of May 5, 2000, between Guarantor and Wilmington Trust
Company.
EBITDA. With respect to any Person (or any asset of any Person) for any
period, an amount equal to the sum of (a) the Net Income of such Person (or
attributable to such asset) for such period plus (b) Taxes, depreciation and
amortization, interest expense, and any extraordinary or non-recurring losses
deducted in calculating such Net Income minus (c) any extraordinary or
nonrecurring gains included in calculating such Net Income, provided, however,
that for purposes of this calculation, proceeds from the sale of condominiums
will not be considered as extraordinary or non-recurring gains.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by Guarantor or any ERISA
Affiliate, other than a Multiemployer Plan.
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
Guarantor under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Equity Offering. The issuance and sale by Guarantor of any of its equity
securities.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by Guarantor 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 Balance Sheet Date. March 31, 2000.
Multiemployer Plan. Any multiemployer plan within the meaning ofss.3(37) of
ERISA maintained or contributed to by Guarantor or any ERISA Affiliate.
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.
PBGC. The Pension Benefit Guaranty Corporation created byss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by Guarantor or any of its Subsidiaries.
Shareholders' Equity. At any date, the total consolidated shareholders'
equity of Guarantor and its Subsidiaries determined in accordance with generally
accepted accounting principles.
Taxes. All taxes, however denominated, including any interest, penalties,
or other additions to tax that may become due or payable in respect thereof,
imposed by any federal, territorial, state, local, or foreign government or any
agency or political subdivision of any such government, which taxes shall
include, without limiting the generality of the foregoing, all income or profits
taxes (including, but not limited to, federal income taxes and state income
taxes), payroll and employee withholding taxes, unemployment insurance, social
security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise
taxes, gross receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer taxes,
workers' compensation, Pension Benefit Guaranty Corporation premiums and other
governmental charges, and other obligations of the same or of a similar nature
to any of the foregoing, which the Guarantor is assessed, required to pay,
withhold, or collect for any period.
25. Ratification. Guarantor does hereby restate, reaffirm and ratify each
and every warranty and representation regarding Guarantor or its Subsidiaries
set forth in the Credit Agreement as if the same were more fully set forth
herein.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Xxxxxxxxx has executed this Guaranty under seal as of
the 28th day of June, 2000.
WELLSFORD REAL PROPERTIES, INC., a Maryland corporation
By: /s/ Xxxxx X. Xxxxx
----------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
Xxxxxx joins in the execution of this Guaranty for the sole and limited
purpose of evidencing its agreement to waiver of the right to trial by jury
contained in Section 17(b)(i) hereof and Section 25 of the Credit Agreement.
FLEET NATIONAL BANK,
As Agent for Lender
By: /s/ Xxx X. Xxxxx
--------------------
Name: Xxx X. Xxxxx
Title: Vice President
EXHIBIT A
---------
FORM OF
COMPLIANCE CERTIFICATE
Fleet National Bank,
for itself and as Agent
000 Xxxxxxxxx Xxxxxx Xxxxx, X.X.
Suite 500
Atlanta, Georgia 30346
Attention: Xx. Xxx Xxxxx
Ladies and Gentlemen:
Reference is made to the Unconditional Guaranty of Payment and Performance
dated as of June 28, 2000 (the "Guaranty") by Wellsford Real Properties, Inc.
("Guarantor") for the benefit of Fleet National Bank, the other Lenders from
time to time party to the "Credit Agreement" (as defined therein) and any Lender
acting as Agent for all of the Lenders. Terms defined in the Guaranty and not
otherwise defined herein are used herein as defined in the Guaranty.
Pursuant to the Guaranty, Guarantor is furnishing to you herewith (or has
most recently furnished to you) the financial statements of Guarantor and its
Subsidiaries 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 Guarantor and the Subsidiaries 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 Paragraph
10 of the Guaranty. The undersigned officer of Guarantor is its chief financial
or chief accounting officer.
The undersigned officer has caused the provisions of the Guaranty 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
Guarantor with respect thereto.)
Guarantor is providing the following information to demonstrate compliance
as of the date hereof with the following covenants:
I. P. 10(l). Liabilities to Assets Ratio.
-------- ---------------------------
A. Consolidated Total Liabilities
per balance sheet $____________
B. Consolidated Total Assets per
balance sheet $____________
Ratio of A to B may not exceed 0.55 to 1.
II. P. 10(m). Consolidated EBITDA Coverage.
-------- ----------------------------
A. Consolidated EBITDA =
Consolidated Net Income for
most recent quarter $____________
Plus depreciation and amortization $____________
Plus interest expense $____________
Plus Taxes $____________
Plus extraordinary or non-recurring
losses $____________
Minus extraordinary or non-
recurring gains (other than condominium sales) ($__________)
Subtotal for most recent quarter $___________
Consolidated EBITDA for three prior quarters:
Quarter ended __________ $___________
Quarter ended __________ $___________
Quarter ended __________ $___________
Total $___________
Minus Capital Improvement Reserve for four
prior quarters ($__________)
Total $ __________
B. Debt Service for four prior
quarters $___________
A must equal or exceed 135% of B.
III. P. 10(n). Minimum Shareholders' Equity
A. Shareholders' Equity $ _________
B. $200,000,000.00
Minus, the aggregate cost of common stock of Guarantor
repurchased by Guarantor after June ____, 2000 (provided,
however, in no event may the Shareholders' Equity Threshold be
reduced as a result of such stock
repurchases to less than $180,000,000.00) $ _________
Total $ _________
A must equal or exceed B
SCHEDULE 1
----------
NONE
