Hazardous Substances Indemnity Agreement 06/25/01

HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT


THIS HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT (this "AGREEMENT"), made as of June 25, 2001 by WELLSFORD/WHITEHALL HOLDINGS, L.L.C., a Delaware limited liability company ("BORROWER"), having an office at c/o WP Commercial, L.L.C., 26 Main Street, Chatham, New Jersey 07928l, WWG 401 NORTH WASHINGTON LLC, a Delaware limited liability company ("WWG 401"), having an office at c/o WP Commercial, L.L.C., 26 Main Street, Chatham, New Jersey 07928, WELLSFORD/WHITEHALL GROUP, L.L.C., a Delaware limited liability company ("WWG"), and WELLSFORD/WHITEHALL PROPERTIES II, L.L.C., a Delaware limited liability company (collectively with WWG, "WELLSFORD/WHITEHALL"), having an office at c/o Wellsford Real Properties, Inc., 535 Madison Avenue, 26th Floor, New York, New York 10022, for the benefit of GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("LENDER"), having an office at 292 Long Ridge Road, Stamford, Connecticut 06927. Borrower and Wellsford/Whitehall are collectively referred to herein as "INDEMNITORS".


W I T N E S S E T H:
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WHEREAS, contemporaneously with the execution of this Agreement, Borrower, as maker, has executed and delivered to Lender, as payee, a promissory note in the original principal amount of up to $352,600,000.00 (the "NOTE") in evidence of the loan made by Lender to Borrower in such amount (the "LOAN") pursuant to that certain Loan Agreement, dated as of the date hereof, between Borrower and Lender (the "LOAN AGREEMENT"); and


WHEREAS, the Loan is secured in part by the direct and indirect interests of Borrower and WWG 401 in and to the Properties (as defined in the Loan Agreement) (collectively, the "PREMISES"); and


WHEREAS, Lender has required, as a condition of funding the Loan, that Indemnitors indemnify and hold Lender harmless against and from certain obligations for which Lender may incur liability with respect to the Premises, by reason of the threat or presence of any Hazardous Materials (hereinafter defined) at or near any of the Premises.


NOW THEREFORE, in consideration of the foregoing premises, Ten Dollars ($10.00), and other good and valuable consideration from Lender to Indemnitors, the receipt and sufficiency of which are hereby acknowledged, Indemnitors, intending to be legally bound, hereby agree as follows:


11 Recitals. The foregoing recitals are incorporated into this Agreement by this reference.


12 Definitions.


(0) "ENVIRONMENTAL LAWS" means all Laws, now or hereafter in effect, and in each case as amended or supplemented from time to time, and any judicial or administrative interpretation thereof, including any applicable judicial or administrative order, consent decree or judgment, relative to the applicable Premises, relating to the regulation and protection of the environment and natural resources (including ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation). "Environmental Laws" shall include Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.ss. 9601 et seq.) ("CERCLA"); the Hazardous Material Transportation ------ Act, as amended (49 U.S.C.ss. 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended ------ (7 U.S.C.ss. 136 et seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C.ss. 6901 et seq.) ------ ------ ("RCRA"); the Toxic Substance Control Act, as amended (15 U.S.C.ss. 2601 et seq.); the Clean Air Act, as amended ------ (42 U.S.C.ss. 740 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C.ss. 1251 et seq.); those ------ - ------ portions of the Occupational Safety and Health Act, as amended (29 U.S.C.ss. 651 et seq.) ("OSHA") concerning ------ Hazardous Materials; and the Safe Drinking Water Act, as amended (42 U.S.C.ss. 300f et seq.), and any and all - ------ regulations promulgated thereunder, and all analogous state and local counterparts or equivalents and any environmental transfer of ownership notification or approval statutes such as the New Jersey Industrial Site Recovery Act (N.J. Stat. Ann.ss. 13:1K-6 et seq.) ("ISRA"). ------


(1) "ENVIRONMENTAL LIABILITIES AND COSTS" means, as to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand pending or threatened by any other Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (including any thereof arising under any Environmental Law, permit, order or agreement with any Governmental Authority or other Person) and which relate to any environmental condition regulated under any Environmental Law or in connection with any other environmental matter or a Release or threatened Release in connection with any of the Premises.


(2) "GATEWAY TOWER PREMISES" means the Gateway Tower Property, as defined in the Loan Agreement.


(3) "HAZARDOUS MATERIALS" means (a) petroleum or chemical products, whether in liquid, solid, or gaseous form, or any fraction or by-product thereof, (b) asbestos or asbestos-containing materials, (c) polychlorinated biphenyls (pcbs), (d) radon gas, (e) underground storage tanks, (f) any explosive or radioactive substances, (g) lead or lead-based paint, or (h) any other substance, material, waste or mixture which is or shall be listed, defined, or otherwise determined by any Governmental Authority to be hazardous, toxic, dangerous or otherwise regulated, controlled or giving rise to liability under any Environmental Laws.


(4) "RELEASE" means, as to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous Materials in violation of Environmental Law into the indoor or outdoor environment or into or out of any property owned by such Person, including the movement of Hazardous Materials in violation of Environmental Law through or in the air, soil, surface water, ground water or property, any disposal, any discharge, spillage, uncontrolled loss, seepage or filtration of any Hazardous Materials in violation of Environmental Law.


(5) "REMEDIAL ACTION" means all actions required by Environmental Law to (i) clean up, remove, treat or in any other way address Hazardous Materials in the indoor or outdoor environment, (ii) prevent the Release or threat of Release or minimize the further Release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, or (iii) perform pre-remedial studies and investigations and post-remedial monitoring and care.


All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement.


13 Representations and Warranties. As of the Closing Date, except as disclosed in the reports listed on Schedule 4.2 of the Loan Agreement, to Borrower's and WWG 401's knowledge, (1) no Hazardous Material is now or was formerly used, stored, generated, manufactured, installed, disposed of or otherwise present at or about any of the Premises or any property adjacent to any of the Premises (except for cleaning and other products currently used in connection with the routine maintenance or repair of such Premises in full compliance with Environmental Laws), (2) all permits, licenses, approvals and filings required by Environmental Laws have been obtained, and the use, operation and condition of the Premises does not, and did not previously, violate any Environmental Laws, and (3) no civil, criminal or administrative action, suit, claim, hearing, investigation or proceeding has been brought or been threatened, nor have any settlements been reached by or with any parties or any liens imposed in connection with any of the Premises concerning Hazardous Materials or Environmental Laws, nor have any written notices concerning Hazardous Materials or Environmental Laws been received from any Person in connection with any assets or activities of Borrower, WWG 401 or the Nomura Borrower or any of the Premises. Borrower further represents and warrants that (i) neither Borrower, WWG 401, the Nomura Borrower nor, to its knowledge, any other party has been, is or will be involved in operations at or near any of the Premises which operations could lead to (A) the imposition of liability on Borrower, WWG 401 or the Nomura Borrower, or on any subsequent or former owner of any of the Premises, or (B) the creation of a lien on any of the Premises under the Environmental Laws or under any similar laws or regulations, and (ii) Borrower, WWG 401 have not permitted, and will not permit, any tenant or occupant of any of the Premises to engage in any activit ...