INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS
(Revolver)
THIS INDEMNITY AGREEMENT (this "Agreement"),
is made as of this ___ day of December, 1997, by WELLSFORD/WHITEHALL
PROPERTIES, L.L.C., a Delaware limited liability company ("Borrower"), and
WELLSFORD COMMERCIAL PROPERTIES TRUST, a Maryland real estate investment
trust ("Trust"), and WHWEL REAL ESTATE LIMITED PARTNERSHIP, ("WHWEL"; WHWEL
and Trust, collectively "Guarantor"), for the benefit of BANKBOSTON, N.A.,
a national banking association ("BankBoston"), as Administrative Agent for
itself, Goldman Sachs Mortgage Company and certain other lenders which may
now or hereafter become parties to the "Loan Agreement" (as hereinafter
defined) (BankBoston and such other lenders are hereinafter referred to
collectively as the "Lenders").
W I T N E S S E T H:
WHEREAS, Borrower is the owner of certain
real property more particularly described in Exhibit A attached hereto and
incorporated herein by this reference (the "Land"; the Land, together with
all improvements now or hereafter located in, on or under the Land,
collectively, the "Property");
WHEREAS, Lenders have agreed to provide to
Borrower a revolving loan in the amount of up to $150,000,000.00 (the
"Loan") pursuant to that certain Revolving Credit Agreement, dated of even
date herewith between Lenders, Borrower, Goldman Sachs Mortgage Company, as
Co-Arranger and Co-Syndication Agent, and BankBoston, as Administrative
Agent, Co-Arranger and Co-Syndication Agent (the "Loan Agreement"), which
Loan is evidenced by certain Notes of even date from Borrower to Lenders as
described in the Loan Agreement (collectively, together with all
amendments, modifications, consolidations, increases, supplements and
extensions thereof, the "Note"), and secured by, among other things, those
certain mortgages and deeds of trust of even date from Borrower to
BankBoston as Administrative Agent (the "Agent") conveying the Property and
to be recorded in the appropriate public records of the jurisdictions in
which the Property is located (collectively, together with all amendments,
modifications, consolidations, increases, supplements and extensions
thereof, the "Security Deed");
WHEREAS, as a condition to making the Loan,
Lenders require Borrower and Guarantor to provide certain indemnities
concerning Hazardous Materials (as hereinafter defined) presently upon, in
or under the Property, or hereafter placed or otherwise located thereon or
therein;
WHEREAS, to induce Lenders to make the Loan
to Borrower, Borrower and Guarantor have agreed to provide this Agreement
for Lenders' benefit.
NOW, THEREFORE, for and in consideration of
the sum of Ten and No/100 ($10.00) Dollars and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Lenders, by their acceptance of delivery hereof, and Borrower
and Guarantor hereby agree as follows:
8. Definitions. The following definitions
shall apply for purposes of this Agreement:
(a) "Environmental Law" shall mean any
federal, state or local statute, regulation or ordinance or any judicial or
administrative decree or decision, whether now existing or hereinafter
enacted, promulgated or issued, with respect to any Hazardous Materials,
drinking water, groundwater, wetlands, landfills, open dumps, storage
tanks, underground storage tanks, solid waste, waste water, storm water
run-off, waste emissions or wells. Without limiting the generality of the
foregoing, the term shall encompass each of the following statutes, and
regulations promulgated thereunder, and amendments and successors to such
statutes and regulations, as may be enacted and promulgated from time to
time: (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (codified in scattered sections of 26 U.S.C.; 33
U.S.C.; 42 U.S.C. and 42 U.S.C. Section 9601 et seq.); (ii) the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.);
(iii) the Toxic Substances Control Act (15 U.S.C. et seq.); (iv) the Clean
Water Act (33 U.S.C. Section 1251 et seq.); (v) the Clean Air Act (42
U.S.C. Section 7401 et seq.); (vi) the Safe Drinking Water Act (21 U.S.C.
Section 349; 42 U.S.C. Section 201 and Section 300f et seq.); (vii) the
National Environmental Policy Act of 1969 (42 U.S.C. Section 4321); and
(viii) the Superfund Amendment and Reauthorization Act of 1986 (codified in
scattered sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.).
(b) "Hazardous Materials" shall mean
each and every element, compound, chemical mixture, contaminant, pollutant,
material, waste or other substance which is defined, determined or
identified as hazardous or toxic under any Environmental Law. Without
limiting the generality of the foregoing, the term shall mean and include:
(i) "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Superfund Amendment and Reauthorization Act of 1986, or Title III of the
Superfund Amendment and Reauthorization Act, each as amended, and
regulations promulgated thereunder;
(ii) "hazardous waste" as defined in the Resource
Conservation and Recovery Act of 1976, as amended, and regulations
promulgated thereunder;
(iii) "hazardous materials" as defined in the Hazardous
Materials Transportation Act, as amended, and regulations promulgated
thereunder; and
(iv) "chemical substance or mixture" as defined in the Toxic
Substances Control Act, as amended, and regulations promulgated thereunder.
(c) "Indemnified Parties" shall mean each of the Lenders,
their respective parents, subsidiaries and affiliates, each of their
respective shareholders, directors, officers, employees and agents, and the
successors and assigns of any of them; and "Indemnified Party" shall mean
any one of the Indemnified Parties.
(d) "Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, storing, escaping,
leaching, dumping, or discarding, burying, abandoning, or disposing into
the environment.
(e) "Threat of Release" shall mean a substantial likelihood
of a Release which requires action to prevent or mitigate damage to the
environment which may result from such Release.
9. Indemnity Agreement. Borrower and Guarantor, each jointly
and severally, covenant and agree, at their sole cost and expense, to
indemnify, defend (at trial and appellate levels and with attorneys,
consultants and experts acceptable to Lenders) and hold each Indemnified
Party harmless against and from any and all liens, damages, losses,
liabilities, obligations, settlement payments, penalties, assessments,
citations, directives, claims, litigation, demands, defenses, judgments,
suits, proceedings, costs, disbursements or expenses of any kind or of any
nature whatsoever (including, without limitation, reasonable attorneys',
consultants' and experts' fees and disbursements incurred in investigating,
defending against, settling or prosecuting any claim, litigation or
proceeding) which may at any time be imposed upon, incurred by or asserted
or awarded against such Indemnified Party or the Property and, and arising
directly or indirectly from or out of: (A) the Release or Threat of
Release of any Hazardous Materials on, in, under or affecting all or any
portion of the Property or any surrounding areas, regardless of whether or
not caused by or within the control of Borrower, first occurring prior to
the payment in full of the "Obligations" (as defined in the Loan
Agreement); (B) the violation of any Environmental Laws relating to or
affecting the Property or the Borrower, whether or not caused by or within
the control of Borrower, first occurring prior to the payment in full of
the "Obligations" (as defined in the Loan Agreement); (C) the failure of
Borrower or Guarantor to comply fully with the terms and conditions of this
Agreement; (D) the violation of any Environmental Laws in connection with
other real property of Borrower which gives or may give rise to any rights
whatsoever in any party with respect to the Property by virtue of any
Environmental Laws, first occurring prior to the payment in full of the
"Obligations" (as defined in the Loan Agreement); or (E) the enforcement of
this Agreement, including, without limitation, (i) the costs of assessment,
containment and/or removal of any and all Hazardous Materials from all or
any portion of the Property or any surrounding areas, (ii) the costs of any
actions taken in response to a Release or Threat of Release of any
Hazardous Materials on, in, under or affecting all or any portion of the
Property or any surrounding areas to prevent or minimize such Release or
Threat of Release so that it does not migrate or otherwise cause or
threaten danger to present or future public health, safety, welfare or the
environment, and (iii) costs incurred to comply with the Environmental Laws
in connection with all or any portion of the Property or any surrounding
areas. Borrower's and Guarantor's obligations hereunder are separate and
distinct from Borrower's and Guarantor's obligations under the "Loan
Documents" (as hereinafter defined), and Lenders' and the other Indemnified
Parties' rights under this Agreement shall be in addition to all rights of
Agent and Lenders under the Security Deed, the Note, the Loan Agreement,
that certain Indemnity and Guaranty Agreement dated of even date herewith
made by Guarantor in favor of Lenders (the "Guaranty") and under any other
documents or instruments evidencing, securing or relating to the Loan (the
Security Deed, the Note, the Loan Agreement, the Guaranty and such other
documents or instruments, as amended or modified from time to time, being
herein referred to as the "Loan Documents"), and payments by Borrower or
Guarantor under this Agreement shall not reduce Borrower's or Guarantor's
obligations and liabilities under any of the Loan Documents.
10. Survival.
(a) The indemnity set forth above in Paragraph 2 shall
survive the repayment of the Loan and any exercise of any remedies under
the Security Deed, including without limitation, the power of sale, or any
other remedy in the nature of foreclosure, and shall not merge with any
deed given by Borrower to Agent or Lenders in lieu of foreclosure or any
deed under a power of sale.
(b) It is agreed and intended by Borrower, Guarantor and
Lenders that the indemnity set forth above in Paragraph 2 may be assigned
or otherwise transferred by each Lender to its successors and assigns and
to any subsequent purchaser of all or any portion of the Property by,
through or under Agent or Lenders, without notice to Borrower or Guarantor
and without any further consent of Borrower or Guarantor. To the extent
consent of any such assignment or transfer is required by law, advance
consent to any such assignment or transfer is hereby given by Borrower and
Guarantor in order to maximize the extent and effect of the indemnity given
hereby.
11. No Waiver. The liabilities of Borrower and Guarantor under
this Agreement shall in no way be limited or impaired by, and Borrower and
Guarantor hereby consent to and agree to be bound by, any amendment or
modification of the provisions of the Loan Documents to or with Lenders by
Borrower or Guarantor or any person who succeeds Borrower as owner of the
Property. In addition, notwithstanding any terms of any of the Loan
Documents to the contrary, the liability of Borrower and Guarantor under
this Agreement shall in no way be limited or impaired by: (i) any
extensions of time for performance required by any of the Loan Documents;
(ii) any sale, assignment or foreclosure of the Note or the Security Deed
or any sale or transfer of all or part of the Property; (iii) any
exculpatory provision in any of the Loan Documents limiting Lenders'
recourse to property encumbered by the Security Deed or to any other
security, or limiting Lenders' rights to a deficiency judgment against
Borrower; (iv) the accuracy or inaccuracy of the representations and
warranties made by Borrower or Guarantor under any of the Loan Documents;
(v) the release of Borrower or Guarantor or any other person from
performance or observance of any of the agreements, covenants, terms or
conditions contained in the Loan Documents by operation of law, Lenders'
voluntary act, or otherwise; (vi) the release or substitution, in whole or
in part, of any security for the Note; or (vii) Lenders' failure to record
the Security Deed or file any UCC-1 financing statements (or Lenders'
improper recording or filing of any thereof) or to otherwise perfect,
protect, secure or insure any security interest or lien given as security
for the Note; and, in any such case, whether with or without notice to
Borrower or Guarantor and with or without consideration.
12. Waiver by Borrower. BORROWER AND GUARANTOR WAIVE ANY RIGHT
OR CLAIM OF RIGHT TO CAUSE A MARSHALING OF BORROWER'S OR GUARANTOR'S ASSETS
OR TO CAUSE LENDERS TO PROCEED AGAINST ANY OF THE SECURITY FOR THE LOAN
BEFORE PROCEEDING UNDER THIS AGREEMENT AGAINST BORROWER AND GUARANTOR OR TO
PROCEED AGAINST BORROWER AND GUARANTOR IN ANY PARTICULAR ORDER. BORROWER
AND GUARANTOR AGREE THAT ANY PAYMENTS REQUIRED TO BE MADE HEREUNDER SHALL
BECOME DUE ON DEMAND. BORROWER AND GUARANTOR EXPRESSLY WAIVE AND
RELINQUISH ALL RIGHTS AND REMEDIES (INCLUDING ANY RIGHTS OF SUBROGATION)
ACCORDED BY APPLICABLE LAW TO INDEMNITORS.
13. Delay. No delay on Lenders' part in exercising any right,
power or privilege under any of the Loan Documents shall operate as a
waiver of any privilege, power or right hereunder.
14. Releases. Any one or more of Borrower and Guarantor or any
other party liable upon or in respect of this Agreement or the Loan may be
released without affecting the liability of any party not so released.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original. Said counterparts
shall constitute but one and the same instrument and shall be binding upon
each of the undersigned individually as fully and completely as if all had
signed but one instrument so that the joint and several liability of each
of the undersigned hereunder shall be unaffected by the failure of any of
the undersigned to execute any or all of the said counterparts.
DGA Notices. Each notice, demand, election or request provided
for or permitted to be given pursuant to this Agreement shall be given in
the manner provided in the Loan Agreement.
17. Amendments. No provision of this Agreement may be changed,
waived, discharged or terminated orally, by telephone or by any other means
except by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
18. Binding Effect. Except as herein provided, this Agreement
shall be binding upon Borrower and Guarantor and their respective
successors, successors-in-title and assigns, and shall inure to the benefit
of Lenders, the other Indemnified Parties, and their respective successors
and assigns. Notwithstanding the foregoing, Borrower and Guarantor,
without the prior written consent of Lenders in each instance, may not
assign, transfer or set over to another, in whole or in part, all or any
part of its or their benefits, rights, duties and obligations hereunder,
including, but not limited to, performance of and compliance with
conditions hereof.
19. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS
BE GOVERNED BY, AND INTERPRETED AND DETERMINED IN ACCORDANCE WITH, THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). BORROWER AND GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY (A) SUBMIT TO PERSONAL JURISDICTION IN THE COMMONWEALTH OF
MASSACHUSETTS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, AND (B) WAIVE ANY AND ALL PERSONAL RIGHTS UNDER
THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, OR (II)
TO OBJECT TO JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS OR VENUE
IN ANY PARTICULAR FORUM (INCLUDING FEDERAL) WITHIN THE COMMONWEALTH OF
MASSACHUSETTS. BORROWER AND GUARANTOR AGREE THAT, IN ADDITION TO ANY
METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL
SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
BORROWER AND GUARANTOR AT THE ADDRESSES SET FORTH IN THE LOAN AGREEMENT,
AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL BE
SO MAILED. NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT LENDERS FROM
BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST
ANY SECURITY AND AGAINST BORROWER OR GUARANTOR PERSONALLY, AND AGAINST ANY
PROPERTY OF BORROWER, 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 BORROWER, AND
GUARANTOR AND LENDERS HEREUNDER OR OF THE SUBMISSION HEREIN MADE BY
BORROWER AND GUARANTOR TO PERSONAL JURISDICTION WITHIN THE STATE OF NEW
YORK.
20. Recourse. Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the obligations of WHWEL
Real Estate Limited Partnership under this Agreement whether arising under
this Agreement or otherwise in connection with any of the Loan Documents,
shall be without recourse to any limited partner of WHWEL Real Estate
Limited Partnership and no such person shall have any liability with
respect thereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Borrower and Guarantor have caused this
Agreement to be executed under seal as of the day and year first written
above.
BORROWER:
WELLSFORD WHITEHALL PROPERTIES, L.L.C.,
a Delaware limited liability company
By: Wellsford Commercial Properties
Trust, a Maryland real estate
investment trust, its manager
By: /s/ Edward Lowenthal,
________________________
Edward Lowenthal,
President
GUARANTOR:
WELLSFORD COMMERCIAL PROPERTIES TRUST, a
Maryland real estate investment trust
By: /s/ Edward Lowenthal,
________________________
Edward Lowenthal,
President
WHWEL REAL ESTATE LIMITED PARTNERSHIP
By: WHATR Gen-Par, Inc., General
Partner
By: /s/ Alan S. Kava
__________________________
Name: Alan S. Kava
Title: Vice President