INDEMNITY AGREEMENT REGARDING HAZARDOUS MATERIALS
($300,000,000.00 Loan)
THIS INDEMNITY AGREEMENT (this "Agreement"), is made as of this 16th day
of July, 1998, by WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a Delaware limited
liability company ("Borrower"), WELLSFORD COMMERCIAL PROPERTIES TRUST, a
Maryland real estate investment trust ("Trust"), and WHWEL REAL ESTATE
LIMITED PARTNERSHIP ("WHWEL") (Trust and WHWEL, 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 "Borrower Land"; together with all improvements now or
hereafter located in, on or under the Borrower Land, collectively, the
"Borrower Property");
WHEREAS, Wells Avenue Senior Holdings LLC, a Massachusetts limited
liability company (the "Property Owner"), is the owner of certain real
property more particularly described on Exhibit B attached hereto and
incorporated herein by this reference (the "Nomura Land," the Land, together
with all improvements now or hereafter located in, on or under the Nomura
Land, collectively, the "Nomura Property"; the Borrower Property and the
Nomura Property are hereinafter referred to collectively as the "Property");
WHEREAS, Wells Avenue Holdings L.L.C., a Delaware limited liability
company ("Member"), and WASH Manager, L.L.C, a Delaware limited liability
company ("Manager") are the sole members of the Property Owner;
WHEREAS, Borrower is the sole member of Member;
WHEREAS, Lenders have agreed to provide to Borrower a loan in the amount
of up to $300,000,000.00 (the "Loan") pursuant to that certain First Amended
and Restated Loan 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 those
certain Notes dated of even date herewith, made by Borrower to the order of
Lenders in the aggregate principal face amount of $300,000,000.00 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 Mortgage and
Security Agreements and Deeds of Trust from Borrower to BankBoston as
Administrative Agent (the "Agent"), as amended by those certain First
Amendments to Mortgage and Security Agreement and other Collateral Documents
and those certain First Amendments to Deed of Trust Assignment of Rents,
Security Agreement and Fixture Filing and other Collateral Documents dated of
even date herewith from Borrower to Agent conveying the Borrower Property and
to be recorded in the appropriate public records of the jurisdictions in
which the Borrower Property is located (collectively, together with all
amendments, modifications, consolidations, increases, supplements and
extensions thereof, the "Security Deed");
WHEREAS, the Loan is further secured by that certain Amended and
Restated Assignment of Member's Interest of even date from Borrower pledging
Borrower's membership interest in Member (collectively, together with all
amendments or modifications thereof, the "Assignment");
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:
19. Definitions. The definitions set forth below shall apply for
purposes of this Agreement. Capitalized terms used herein and not otherwise
defined herein shall have the meaning set forth in the Credit 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);
(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.); (ix)
the Uncontrolled Hazardous Substance Sites Law, 38 M.R.S.A. Section 1361 et
seq., as applicable; (x) the Hazardous Matter Control Law, 38 M.R.S.A.
Section 1317, et seq., as applicable; (xi) the Maine Hazardous Waste, Septage
and Solid Waste Management Act, 38 M.R.S.A. Section 1301 et seq., as
applicable; (xii) the Reduction of Toxics Use, Waste and Release Law, 38
M.R.S.A. Section 2301 et seq., as applicable; and (xiii) the Site Location of
Development Law, 38 M.R.S.A. Section 481 et seq., as applicable.
(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.
20. 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; (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; (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; 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 Assignment, the Note, the Loan Agreement, the Guaranty and
under any other documents or instruments evidencing, securing or relating to
the Loan (the Security Deed, the Assignment, 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.
un 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 Documents, including without limitation, the power of sale, or any
other remedy in the nature of foreclosure, and shall not merge with any deed
or assignment 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 or the Collateral
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.
22. 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 or Property Owner
as owner of any of the Property or the Collateral. 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 Documents or any sale or transfer of all or part of the
Property or the Collateral; (iii) any exculpatory provision in any of the
Loan Documents limiting Lenders' recourse to property encumbered by the
Security Documents 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 Documents 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.
23. 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.
24. 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.
or 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.
26. 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.
27. 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.
28. 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.
29. 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.
imp 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 STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE
OF LAW). BORROWER AND GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY (A)
SUBMIT TO PERSONAL JURISDICTION IN THE STATE OF NEW YORK 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
STATE OF NEW YORK OR VENUE IN ANY PARTICULAR FORUM (INCLUDING FEDERAL) WITHIN
THE STATE OF NEW YORK. 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.
31. 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.
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 HOLDINGS, L.L.C., a
Delaware limited liability company
By: Wellsford/Whitehall Properties II,
L.L.C., a Delaware limited liability
company, its managing member
By: Wellsford Commercial Properties
Trust, a Maryland real estate investment
trust, its manager
By:/s/ Gregory F. Hughes
-------------------------------------
Name: Gregory F. Hughes
Title: CFO and Treasurer
GUARANTOR:
WELLSFORD COMMERCIAL PROPERTIES TRUST, a
Maryland real estate investment trust
By:/s/ Gregory F. Hughes
---------------------------------------
Name: Gregory F. Hughes
Title: CFO and Treasurer
WHWEL REAL ESTATE LIMITED PARTNERSHIP
By: WHATR Gen-Par, Inc., General Partner
By:/s/ Alan S. Kava
----------------------------------
Name: Alan S. Kava
Title: Vice President