Exhibit 10.4
ENVIRONMENTAL
CERTIFICATION
AND INDEMNITY
AGREEMENT
This Environmental Certification and
Indemnity Agreement (“ Agreement ”) is executed
as of August 3, 2009 (“ Agreement Date ”),
by Quest Software, Inc., a Delaware corporation (“
Obligor ”), in favor of Mutual of Omaha Bank, a
federally chartered thrift (“ Lender ”). This
Agreement is made and given by the Obligor as a condition to, and
to induce Lender to make a loan (“ Loan ”)
described in the concurrently dated Loan and Security Agreement and
evidenced by a concurrently dated Secured Promissory Note executed
by Obligor, as maker, and payable to the order of Lender in the
original principal face amount of $34,000,000.00. The Loan is
secured by a Deed of Trust, Security Agreement, Assignment of Rents
and Leases, and Fixture Filing (“ Deed of Trust
”) dated concurrently with this Agreement, encumbering the
real and personal property as described in the Deed of Trust
(collectively, the “ Property ”), including the
land described in the attached
Exhibit “A” . The term “
Loan Documents ,” as used in this Agreement, will have
the same meaning as established in the Loan and Security Agreement
dated concurrently with this Agreement between Obligor and Lender
(“ Loan Agreement ”).
1. Definitions . As used in
this Agreement:
(a) “ Environmental
Assessment ” means a report (including all drafts) of an
environmental assessment of the Property of the scope (including
but not limited to the taking of soil borings and air and
groundwater samples and other above and below ground testing) as
Lender may request, by a consulting firm acceptable to Lender and
made in accordance with Lender’s established
guidelines.
(b) “ Environmental
Claim ” means any investigative, enforcement, cleanup,
removal, containment, remedial, or other private or governmental or
regulatory action at any time threatened, instituted, or completed
pursuant to any applicable Environmental Requirement against
Obligor or against or with respect to the Property or any
condition, use, or activity on the Property, including any action
against Lender, and any claim at any time threatened or made by any
person against Obligor or against or with respect to the Property
or any condition, use, or activity on the Property, including any
claim against Lender, relating to damage, contribution, cost
recovery, compensation, loss, or injury resulting from or in any
way arising in connection with any Hazardous Material or any
Environmental Requirement, except to the extent the action is based
upon the breach of an express contractual warranty made by Lender
in connection with the conveyance of the Property.
(c) “ Environmental
Damages ” means all claims, demands, liabilities
(including strict liability), losses, damages (including
consequential damages), liabilities, causes of action, suits,
proceedings, judgments, penalties, fines, costs and expenses
(including fees, costs and expenses of attorneys, consultants,
contractors, experts and laboratories), of any and every kind or
character, contingent or otherwise, matured or unmatured, known or
unknown, foreseeable or unforeseeable, made, incurred, suffered,
brought, or imposed at any time and from time to time, arising
directly or indirectly in whole or in part from: (i) the
presence of any Hazardous Material on the Property, or
any
escape, seepage, leakage, spillage,
emission, release, discharge, or disposal of any Hazardous Material
on or from the Property, or the migration or release or threatened
migration or release of any Hazardous Material to, from or through
the Property; (ii) any act, omission, event, or circumstance
existing or occurring in connection with the handling, treatment,
containment, removal, storage, decontamination, clean-up,
transport, or disposal of any Hazardous Material that is at any
time present on the Property; (iii) the breach of any
representation, warranty, covenant, or agreement contained in this
Agreement; (iv) any violation of any Environmental
Requirement, regardless of whether any act, omission, event, or
circumstance giving rise to the violation constituted a violation
at the time of the occurrence or inception of the act, omission,
event, or circumstance; (v) any Environmental Claim, or the
filing or imposition of any environmental lien against the
Property, because of, resulting from, in connection with, or
arising out of any of the preceding matters, regardless of whether
caused by an Obligor or a tenant or subtenant or licensee, or a
prior owner of the Property or its tenant or subtenant or licensee,
or any third party. By way of example, but not limitation,
Environmental Damages include: (I) injury or damage to any
person, property, or natural resource occurring on or off of the
Property, including but not limited to the cost of demolition and
rebuilding of any improvements on real property; (II) the
investigation or remediation of any the Hazardous Material or
violation of Environmental Requirement, including but not limited
to the preparation of any feasibility studies or reports and the
performance of any cleanup, remediation, removal, response,
abatement, containment, closure, restoration, monitoring, or
similar work required by any Environmental Requirement or necessary
to have full use and benefit of the Property as contemplated by the
Loan Documents (including any of the same in connection with any
foreclosure action or transfer in lieu of foreclosure);
(III) all liability to pay or indemnify any person or
governmental authority for costs expended in connection with any of
the foregoing; (IV) the investigation and defense of any
claim, whether or not the claim is ultimately defeated; and
(V) the settlement of any claim or judgment.
(d) “ Environmental Law
” means any federal, state, or local law, statute, ordinance,
code, rule, regulation, license, authorization, decision, order,
injunction, decree, or rule of common law, and any judicial
interpretation of any of the foregoing, that pertains to health,
safety, any Hazardous Material, or the environment (including but
not limited to ground or air or water or noise pollution or
contamination, and underground or above ground tanks) and will
include without limitation, the Solid Waste Disposal Act,
42 U.S.C. § 6901 et seq .; the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. § 9601 et seq .
(“ CERCLA ”), as amended by the Superfund
Amendments and Reauthorization Act of 1986 (“ SARA
”); the Hazardous Materials Transportation Act,
49 U.S.C. § 1801 et seq .; the Federal
Water Pollution Control Act, 33 U.S.C. § 1251
et seq. ; the Clean Air Act,
42 U.S.C. § 7401 et seq .; the Toxic
Substances Control Act, 15 U.S.C. § 2601
et seq .; the Safe Drinking Water Act,
42 U.S.C. § 300f et seq .; the
Porter-Cologne Water Quality Control Act (California Water Code
Section 13020 et seq.); the Safe Drinking Water and Toxic
Enforcement Act of 1986 (California Health & Safety Code
Section 25249.5 et seq.); the Hazardous Substance Account Act
(California Health & Safety Code Section 25300 et
seq.); the Hazardous Waste Control Act (California
Health & Safety Code Section 25100 et seq.); The
California Environmental Quality Act (California Public Resources
Code
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Section 2100 et seq.); and any
other local, state, or federal environmental statutes, and all
rules, regulations, orders, and decrees now or in the future
promulgated under any of the foregoing, as any of the foregoing now
exist or may be changed or amended or come into effect in the
future.
(e) “ Environmental
Report ” means that certain Phase I Environmental Site
Assessment prepared by Phase One, Inc., dated March 23, 2004,
referenced as Project No. 5728.
(f) “ Environmental
Requirement ” means any Environmental Law, agreement, or
restriction, including but not limited to any condition or
requirement imposed by any insurance or surety company, as may now
exist or may be changed or amended or come into effect in the
future, pertaining to health, safety, any Hazardous Material, or
the environment, including but not limited to ground or air or
water or noise pollution or contamination, and underground or
aboveground tanks.
(g) “ Hazardous
Material ” means any substance, whether solid, liquid or
gaseous, that is listed, defined, or regulated as a
“hazardous substance”, “hazardous waste” or
“solid waste”, or otherwise classified as hazardous or
toxic, in or pursuant to any Environmental Requirement or that
contains asbestos, radon, any polychlorinated biphenyl, urea
formaldehyde foam insulation, explosive or radioactive material, or
motor fuel or other petroleum hydrocarbons or that causes or poses
a threat to cause a contamination or nuisance on the Property or
any adjacent property or a hazard to the environment or to the
health or safety of persons on the Property.
(h) “ On ” or
“ on ”, when used with respect to the Property
or any property adjacent to the Property, means “on, in,
under, above, or about.”
2. Representations and
Warranties . Obligor, after due inquiry and investigation
accordance with good commercial or customary practices to determine
whether contamination is present on the Property or elsewhere in
connection with any activity on the Property, represents and
warrants to, and covenants with, Lender, without regard to whether
Lender has or in the future obtains any knowledge or report of the
environmental condition of the Property, as follows:
(a) At all times that Obligor owned
the Property, and, to the best of Obligor’s knowledge with
respect to all other times and except as disclosed in the
Environmental Report, neither the Property nor any adjacent
property has ever been used for industrial or manufacturing
purposes, for landfill, dumping, or other waste disposal activities
or operations or for the generation, storage, use, sale, treatment,
processing, recycling, or disposal of any Hazardous Material, for
underground or aboveground storage tanks, or for any other use that
could give rise to the release of any Hazardous Material on the
Property;
(b) Except as disclosed in the
Environmental Report, there is no Hazardous Material, underground
or above ground storage tank (or similar vessel), sump, or well
currently on the Property;
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(c) There is no Environmental Claim
or any completed, pending, proposed, or threatened investigation or
inquiry concerning the presence or release of any Hazardous
Material on the Property or any adjacent property concerning
whether any condition, use, or activity on the Property or any
adjacent property is in violation of any Environmental
Law;
(d) The present conditions, uses,
and activities on the Property do not violate any Environmental Law
and the use of the Property that Obligor (and each licensee, tenant
and subtenant, if any) make and intend to make of the Property
complies and will comply with all applicable Environmental
Laws;
(e) Except as disclosed in the
Environmental Report, the Property has never appeared on the
National Priorities List, any federal or state
“superfund” or “superlien” list, or any
other list or database of properties maintained by any local,
state, or federal agency or department showing properties that are
known to contain or that are suspected of containing a Hazardous
Material;
(f) Obligor has never applied for
and been denied environmental impairment liability insurance
coverage relating to the Property; and
(g) No Obligor, licensees, tenant,
or subtenant, has obtained or is required to obtain any permit or
authorization to construct, occupy, operate, use or conduct any
activity on any of the Property by reason of any Environmental
Law.
3. Violations . Obligor will
not cause, commit, permit or allow to continue: (i) any
violation of any Environmental Law by or with respect to the
Property or any use of or condition or activity on the Property; or
(ii) the attachment of any environmental lien to the Property.
Obligor will not place, install, dispose of, or release, or cause,
permit, or allow the placing, installation, disposal, spilling,
leaking, dumping, or release of any Hazardous Material or storage
tank (or similar vessel) on the Property and will keep the
Proper
