ENVIRONMENTAL
INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY
AGREEMENT (this “ Agreement ”), is dated
effective as of March 7, 2007, by NNN VF FOUR RESOURCE SQUARE,
LLC, a Delaware limited liability company (“ Borrower
”), and NNN 2003 VALUE FUND, LLC, a Delaware limited
liability company (together with Borrower being referred to herein
collectively as “ Indemnitor ”), in favor of
RAIT PARTNERSHIP, L.P., a Delaware limited partnership (“
Indemnitee ”), and other Indemnified Parties (as
hereinafter defined).
BACKGROUND
A. Reference is made to the
Background set forth in the Loan and Security Agreement of even
date herewith between Indemnitee and Borrower (together with any
amendments, restatements or other modifications, the “
Loan Agreement ”), which is hereby incorporated
herein. Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Loan Agreement.
B. Indemnitee is unwilling to
make the Loan unless Indemnitor executes and delivers this
Agreement to Indemnitee.
NOW THEREFORE, in consideration of
the premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Indemnitor,
intending to be legally bound hereby, represents, warrants,
covenants and agrees for the benefit of Indemnified Parties as
follows:
1. Definitions . As used
in this Agreement, the following terms shall have the following
meanings:
“ Environmental Law
” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as
common law, relating to protection of human health or the
environment, Hazardous Substances, liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or
other actual or future danger to human health or the environment,
any wrongful death, personal injury or property damage that is
caused by or related to the presence, growth, proliferation,
reproduction, dispersal, or contact with any biological organism or
portion thereof, including molds or other fungi, bacteria or other
microorganisms or any etiologic agents or materials; includes the
following statutes, as amended, any successor thereto, and any
regulations promulgated pursuant thereto, and any state or local
statutes, ordinances, rules, regulations and the like addressing
similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and
Community Right-to-Know Act; the Hazardous Substances
Transportation Act; the Resource Conservation and Recovery Act
(including Subtitle I relating to underground Storage Tanks); the
Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act; the
Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy
Act; and the River and Harbors Appropriation Act; and includes any
present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law,
conditioning transfer of property upon a negative declaration or
other approval of a governmental authority of the environmental
condition of the Property; requiring notification or disclosure of
Releases of Hazardous Substances or other environmental condition
of the Property to any governmental authority or other person or
entity, whether or not in connection with transfer of title to or
interest in property; imposing conditions or requirements in
connection with permits or other authorization for lawful activity;
relating to nuisance, trespass or other causes of action related to
the Property; and relating to wrongful death, personal injury, or
property or other damage in connection with any physical condition
or the presence of biological or etiologic agents or materials or
use, management, or maintenance of the Property.
“ Hazardous Substances
” includes any and all substances biological and etiologic
agents or materials (whether solid, liquid or gas) defined, listed,
or otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or
words of similar meaning or regulatory effect under any present or
future Environmental Laws or that may have a negative impact on
human health or the environment, including petroleum and petroleum
products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, lead-based paints, radon,
radioactive materials, flammables and explosives, and any
biological organism or portion thereof (living or dead), including
molds or other fungi, bacteria or other microorganisms, or any
etiologic agents or materials.
“ Indemnified Parties
” includes Indemnitee, any person who is or will have been
involved in originating the Loan or in servicing the Loan, any
person in whose name the encumbrance created by the Deed of Trust
which is or will have been recorded, and persons who may hold or
acquire or will have held a full or partial interest in the Loan
(including those who may acquire any interest in mortgage pass
through certificates or other securities evidencing a beneficial
interest in the Loan offered in a rated or unrated public offering
or private investment, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in the
Loan for the benefit of third parties), as well as the respective
directors, officers, shareholders, partners, employees, agents,
servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all
of the foregoing (including any other person or entity who holds or
acquires or will have held a participation or other full or partial
interest in the Loan or the Property, whether during the term of
the Loan or as part of or following foreclosure pursuant to the
Loan) and including any successors by merger, consolidation or
acquisition of all or a substantial part of Indemnitee’s
assets and business.
“ Legal Action ”
means any claim, suit or proceeding, whether administrative or
judicial in nature.
“ Losses ”
includes any claims, suits, liabilities (including strict
liabilities), administrative or judicial actions or proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions
in value (but only to the extent such diminution is realized by
Indemnitee), fines, penalties, charges, reasonable fees, expenses,
costs of Remediation (whether or not performed voluntarily), costs
of assessing damages or losses, judgments, awards, amounts paid in
settlement, private damages foreseeable and unforeseeable
consequential damages, litigation costs, reasonable
attorneys’ fees, reasonable engineers’ fees, reasonable
environmental consultants’ fees, and investigation costs
(including costs for reasonable sampling, testing and analysis of
soil, water, air, building materials, and other materials and
substances whether solid, liquid or gas), of whatever kind or
nature, and whether or not incurred in connection with any judicial
or administrative proceedings.
“ Release ” with
respect to any Hazardous Substance includes any release, deposit,
discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing, or growth, proliferation, reproduction, or
dispersal or other movement or production of Hazardous
Substances.
“ Remediation ”
includes any response, remedial, removal, or corrective action; any
activity to cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance; any actions to prevent, cure or
mitigate any Release of any Hazardous Substance; any action to
comply with any Environmental Laws or with any permits issued
pursuant thereto; and any inspection, investigation, study,
monitoring, assessment, audit, sampling and testing, laboratory or
other analysis, or evaluation relating to any Hazardous
Substances.
“ Storage Tanks ”
includes any underground or aboveground storage tanks, whether
filled, empty, or partially filled with any substance.
2. Environmental
Representations and Warranties . Indemnitor represents and
warrants to Indemnified Parties that:
(a) Hazardous
Substances . Based on its review of the environmental
assessment of the Property delivered to Indemnitee by Indemnitor
prior to the date hereof (the “ Environmental Report
”), there are no Hazardous Substances or Storage Tanks in,
on, above, or under the Property, except those that are either
(i) of such types and in such quantities as are customarily
used or stored or generated for offsite disposal or otherwise
present in or at properties of the relevant property type, and in
compliance with all Environmental Laws and with permits issued
pursuant thereto, or (ii) fully disclosed to and approved by
Indemnitee in writing.
(b) No Releases . Based
on its review of the Environmental Report, there are no past
(during Indemnitor’s period of ownership only), present or to
Indemnitor’s knowledge, threatened Releases of Hazardous
Substances in, on, above, under or from the Property, except as
described in the Environmental Report.
(c) No Migration .
Based on its review of the Environmental Report, to
Indemnitor’s knowledge, there is no threat of any Release of
Hazardous Substances migrating to the Property, except as described
in the Environmental Report.
(d) No Violations .
There is no past (during Borrower’s period of ownership only)
or present non-compliance with Environmental Laws, or with permits
issued pursuant thereto, in connection with the Property, except as
described in the Environmental Report.
(e) No Notice .
Indemnitor does not know of, and Indemnitor has not received, any
written or oral notice or other communication from any person
(including a governmental entity) relating to the presence of
Hazardous Substances in, on, above, under or from the Property or
Remediation thereof, possible liability of any person pursuant to
any Environmental Law or other environmental conditions in
connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with any of
the foregoing.
(f) Complete Disclosure
. Indemnitor has truthfully and fully provided to Indemnitee, in
writing, any and all information relating to environmental
conditions in, on, above, under or from the Property that is known
to Indemnitor and that is contained in files and records of
Indemnitor.
(g) Authorizations . To
the best of Indemnitor’s knowledge, all notices, permits,
licenses, registrations, or similar authorizations, if any,
required to be obtained or filed in connection with the ownership,
operation, or use of the Property, including in connection with the
existence of any Storage Tanks at the Property or the past or
present generation, treatment, storage, disposal, or Release of a
Hazardous Substance into the environment, have been duly obtained
or filed and have been duly renewed or maintained.
(h) Property Compliance
. To the best of Indemnitor’s knowledge, the Property and the
operations conducted thereon do not violate any applicable law,
statute, ordinance, rule, regulation, order, or determination of
any governmental authority or any restrictive covenant or deed
restriction (recorded or otherwise), including all applicable
zoning ordinances and building codes, flood disaster laws and
Environmental Laws. Furthermore, to Indemnitor’s knowledge,
the Property is maintained and has been maintained in such a manner
as to prevent excess humidity or accumulation of moisture that may
promote the growth of molds or other fungi and other
microorganisms.
(i) Indemnitor’s
Investigation . Indemnitor has obtained an Environmental Phase
I Site Assessment Report, and has determined, that no Hazardous
Substances are or have been generated, treated, stored, used,
disposed of or Released in, on, above, under, from or about the
Property, except in compliance with applicable Environmental
Laws.
(j) Other Properties .
Neither Indemnitor, nor, to the best knowledge of Indemnitor, any
other person, including any predecessor owner, tenant, licensee,
occupant, user, or operator of all or any portion of the Property,
has ever caused, permitted, authorized or suffered, and Indemnitor
will not cause, permit, authorize, or suffer, any Hazardous
Substance to be placed, held, located, or disposed of, on, under or
about any other real property, all or any portion of which is
legally or beneficially owned (or any interest or estate therein
which is owned) by Indemnitor in any jurisdiction now or hereafter
having in effect a so-called superlien law or ordinance, the effect
of which law or ordinance would be to create a lien on the Property
to secure any obligation in connection with the superlien law of
such other jurisdiction.
(k) No Litigation .
Except as otherwise previously disclosed to Indemnitee in writing,
there is no pending or, to the best of Indemnitor’s
knowledge, threatened litigation, proceedings, or investigations
before or by any administrative agency in which any person alleges
or is investigating any alleged presence, Release, threat of
Release, placement on, under, from or about the Property, or the
manufacture, handling, generation, transportation, storage,
treatment, discharge, burial, or disposal on, under, from or about
the Property, or the transportation to or from the Property, of any
Hazardous Substance.
(l) No Communica
