ENVIRONMENTAL INDEMNITY AGREEMENT
ENVIRONMENTAL INDEMNITY AGREEMENT
(the “Agreement”) made as of the ____
day of August, 2006, by EVEREST BAYBERRY, LP, a California limited
partnership, having an office at c/o Everest Properties, 199 S. Los
Robles Avenue, Suite 200, Pasadena, California 91101 Attn: W.
Robert Kohorst (“Borrower”), and SECURED INVESTMENT
RESOURCES FUND, LP II, a Delaware limited
partnership having an office at c/o Everest Properties, Inc., 199
S. Los Robles Avenue, Suite 200, Pasadena, California 91101
(“Principal;” Borrower and Principal hereinafter
collectively referred to as “Indemnitor”), in favor of
LEHMAN BROTHERS BANK, FSB, a federal stock savings bank, having an
office at c/o Lehman Brothers, Inc., 1000 West Street, Wilmington,
Delaware 19801 (“Indemnitee”) and other Indemnified
Parties (defined below).
RECITALS:
A.
Borrower is the fee owner of that certain real
property located in the City of Lee’s Summit, County of
Jackson and State of Missouri, known as Bayberry Crossing and more
particularly described in Exhibit “A” attached hereto
(said real property, together with any real property hereafter
encumbered by the lien of the Security Instrument (as defined in
the Note), being herein collectively referred to as the
“Land”; the Land, together with all structures,
buildings and improvements now or hereafter located on the Land,
being collectively referred to as the
“Property”).
B.
Indemnitee is prepared to
make a loan (the “Loan”) to Borrower in the principal
amount of Three Million One Hundred Twenty-Five Thousand and 00/100
Dollars ($3,125,000.00), to be evidenced by a certain promissory
note of even date herewith in the principal amount of Three Million
One Hundred Twenty-Five Thousand and 00/100 Dollars ($3,125,000.00)
made by Borrower to Indemnitee (the “Note”) and secured
by, among other things the Security Instrument (as defined in the
Note) which will encumber the Property.
C. Indemnitee is
unwilling to make the Loan unless Indemnitor agrees to provide the
indemnification, representations, warranties, and covenants and
other matters described in this Agreement for the benefit of
Indemnified Parties.
D. SECURED
INVESTMENT RESOURCES, LP II is the sole
limited partner of Borrower owning 100% of the partnership
interests of Borrower and thus will derive substantial benefit from
the Loan. Indemnitor enters into this Agreement to induce
Indemnitee to make the Loan.
AGREEMENT
NOW THEREFORE, in
consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged,
Indemnitor hereby represents, warrants, covenants
and agrees for the benefit of Indemnified Parties as
follows:
1.
Environmental Representations and
Warranties . To the best of
Indemnitor’s knowledge, after due inquiry, (a) there are no
Hazardous Substances (defined below) or underground storage tanks
in, on, or under the Property, except those that are both (i) in
compliance with all Environmental Laws (defined below) and with
permits issued pursuant thereto and (ii) fully disclosed to
Indemnitee in writing pursuant to the written report(s) resulting
from the environmental assessment(s) of the Property delivered to
Indemnitee (such report(s) are identified in Exhibit
“B” attached hereto and are referred to below
collectively as the “Environmental Report”); (b) there
are no past, present or threatened Releases (defined below) of
Hazardous Substances in, on, under or from the Property except as
described in the Environmental Report; (c) there is no threat of
any Release of Hazardous Substances migrating to the Property
except as described in the Environmental Report; (d) there is no
past 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) Indemnitor
does not know of, and has not received, any written notice or other
communication from any person or entity (including, but not limited
to, a governmental entity) relating to Hazardous Substances or
Remediation (defined below) thereof, of possible liability of any
person or entity pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any
actual or potential administrative or judicial proceedings in
connection with any of the foregoing; and (f) Indemnitor has
truthfully and fully provided to Indemnitee, in writing, any and
all information relating to conditions in, on, under or from the
Property that is known to any Indemnitor and that is contained in
files and records of any Indemnitor including, but not limited to,
any reports relating to Hazardous Substances in, on, under or from
the Property and/or to the environmental condition of the
Property.
2.
Environmental Covenants . Indemnitor covenants and agrees that: (a) all uses and
operations on or of the Property, by Indemnitor or any other person
or entity, shall be in compliance with all Environmental Laws and
permits issued pursuant thereto; (b) there shall be no Releases of
Hazardous Substances in, on, under or from the Property by
Indemnitor or anyone controlled by, controlling or under common
control with Indemnitor; (c) Indemnitor shall keep the Property
free and clear of all liens and other encumbrances imposed pursuant
to any Environmental Law, whether due to any act or omission of
Indemnitor or any other person or entity (the “Environmental
Liens”); (d) Indemnitor shall, at its sole cost and expense,
perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant
to any written request of Indemnitee (provided that such request is
made based upon Indemnitee’s reasonable belief that there are
Hazardous Substances in, or under the Property which are not in
compliance with Environmental Laws), and share with Indemnitee the
reports and other results thereof, and Indemnitee and other
Indemnified Parties shall be entitled to rely on such reports and
other results thereof; (e) Indemnitor shall, at its sole cost and
expense, comply with all reasonable written requests of Indemnitee
to (i) reasonably effectuate Remediation of any condition
(including, but not
limited to, a Release of a Hazardous Substance) in,
on, under or from the Property; (ii) comply with any Environmental
Law; (iii) comply with any directive from any governmental
authority; and (iv) take any other reasonable action necessary or
appropriate for protection of human health or the environment; (f)
Indemnitor shall not do or allow any tenant or other user of the
Property to do any act that materially increases the dangers to
human health or the environment, poses an unreasonable risk of harm
to any person or entity (whether on or off the Property), impairs
or may impair the value of the Property, is contrary to any
requirement of any insurer, constitutes a public or private
nuisance, constitutes waste, or violates any covenant, condition,
agreement or easement applicable to the Property; and (g)
Indemnitor shall immediately notify Indemnitee in writing of (i)
any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property;
(ii) any non-compliance with any Environmental Laws related in any
way to the Property; (iii) any actual or potential Environmental
Lien; (iv) any required or proposed Remediation of environmental
conditions relating to the Property; and (v) any written or oral
notice or other communication of which any Indemnitor becomes aware
from any source whatsoever (including, but not limited to, a
governmental entity) relating in any way to Hazardous Substances or
Remediation thereof, possible liability of any person or entity
pursuant to any Environmental Law, other environmental conditions
in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with anything
referred to in this Agreement.
3.
Indemnified Parties’ Rights/Cooperation and
Access . Indemnified Parties and any
other person or entity designated by Indemnified Parties
(including, but not limited to, any receiver, any representative of
a governmental entity and any environmental consultant), shall have
the right but not the obligation to enter upon the Property at all
reasonable times to assess any and all aspects of the environmental
condition of the Property and its use including, but not limited
to, conducting any environmental assessment or audit (the scope of
which shall be determined in Indemnitee’s sole and absolute
discretion) and taking samples of soil, groundwater or other water,
air or building materials, and conducting other invasive testing.
Indemnitor shall cooperate with and provide access to Indemnified
Parties and any such person or entity designated by Indemnified
Parties. All such investigations shall be performed at
Indemnitor’s sole cost and expense.
4.
Indemnification .
Indemnitor covenants and agrees at its sole cost and expense, to
protect, defend, indemnify, release and hold Indemnified Parties
harmless from and against any and all Losses (defined below)
imposed upon or incurred by or asserted against any Indemnified
Parties and directly or indirectly arising out of or in any way
relating to any one or more of the following (except to the extent
the solely relate solely to Hazardous Substances first introduced
to the Property by anyone other than Indemnitor or its respective
agents or employees following the foreclosure of the Security
Instrument (or the delivery and acceptance of a deed in lieu of
such foreclosure), the expiration of any applicable right of
redemption and the obtaining by the purchaser at such foreclosure
sale or grantee under such deed of possession of the Property): (a)
the past, present or future presence, Release or threatened Release
of any Hazardous
Substances in, on, above, or under the Property; (b)
any past, present or threatened noncompliance or violations of any
Environmental Laws (or permits issued pursuant to any Environmental
Law) in connection with the Property or operations thereon; (c) any
legal or administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in this
Agreement; (d) any personal injury, wrongful death, or property or
other damage arising under any statutory or common law or tort law
theory concerning Hazardous Substances; and (e) any
misrepresentation or inaccuracy in any representation or warranty
or material breach or failure to perform any covenants or other
obligations in this Agreement or any covenants or other obligations
in the Security Instrument which are related to Hazardous
Substances or Environmental Law.
5.
Duty to Defend and Attorneys and Other Fees and
Expenses . Upon written request by any
Indemnified Party, Indemnitor shall defend and provide legal
representation for such Indemnified Party with respect to any of
the matters referenced in Section 4 above (if requested by any
Indemnified Party, in the name of the Indemnified Party) by
attorneys and other professionals approved by the Indemnified
Parties. Notwithstanding the foregoing, any Indemnified Parties
may, in their sole and absolute discretion, engage their own
attorneys and other professionals to defend or assist them with
respect to such matters, and, at the option of Indemnified Parties,
their attorneys shall control the resolution of such matters. Upon
demand, Indemnitor shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and
other professionals in connection therewith.
6.
Definitions . As used
in this Agreement, the following terms shall have the following
meanings:.
The term “Hazardous Substances” includes
but is not limited to any and all substances (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, but not limited to, petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated
biphenyls, lead, radon, radioactive materials, flammables and
explosives.
The term “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, relating
to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or
relating to liability for or costs of other actual or threatened
danger to human health or the environment. The term
“Environmental Law” includes, but is not limited to,
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, but not limited to, 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. The term “Environmental
Law” also includes, but is not limited to, 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 use of the Property.
The term “Release” with respect to any
Hazardous Substance includes but is not limited to any release,
deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous
Substances.
The term “Remediation” includes but is
not limited to any response, remedial, removal, or corrective
action; any activity to clean up, 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; any inspection, investigation,
study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any
Hazardous Substances or to anything referred to herein.
The term “Legal Action” means any claim,
suit or proceeding, whether administrative or judicial in
nature.
The term “Indemnified Parties” includes
Indemnitee, any person or entity who is or will have been involved
in the origination of the Loan, any person or enti
