ENVIRONMENTAL INDEMNITY AGREEMENT
ENVIRONMENTAL INDEMNITY AGREEMENT
(the “Agreement”) made as of
___ ____, 2007, by EVEREST
HICKORY GLEN, LP, a Kansas limited partnership, having an office at
c/o Everest Properties, 199 South Los Robles Avenue, Suite 200,
Pasadena, California 91101 (“Borrower”), and SECURED
INVESTMENT RESOURCES FUND, LP II, a Delaware limited partnership,
having an office at c/o Everest Properties, 199 South 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,
Attention: John Herman (“Indemnitee”) and other
Indemnified Parties (defined below).
RECITALS:
A.
Borrower is the fee owner of that certain real
property located in the City of Springfield, County of Sangamon and
State of Illinois, known as Hickory Glen 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 Nine Million and 00/100 Dollars
($9,000,000.00), to be evidenced by a certain promissory note of
even date herewith in the principal amount of Nine Million and
00/100 Dollars ($9,000,000.00) 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 FUND, LP II, a Delaware limited partnership is
the general partner 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 same 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 administr
