ENVIRONMENTAL INDEMNITY AGREEMENTEnvironmental Indemnity Agreement |
|
|
You are currently viewing: This Environmental Indemnity Agreement involves
SONOMAWEST HOLDINGS INC | WACHOVIA BANK. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Environmental Indemnity Agreement by:
Exhibit
10.3
ENVIRONMENTAL
INDEMNITY AGREEMENT
This
Environmental Indemnity Agreement ("Environmental Indemnity" or
"Agreement") is given in
connection with the extension of a term loan (the "Loan") by WACHOVIA BANK, a national association
having an office at 5 Research Drive, Shelton, Connecticut 06484 (the "Bank"), to SONOMAWEST HOLDINGS INC., a
Delaware corporation, having an address at 2064 Highway 116 North,
Sebastopol, California 95472 (the "Borrower" or “Indemnitor”),
which Loan is made pursuant to the terms and conditions of, and is evidenced by,
a certain Promissory Note in the original principal amount of Two Million Five
Hundred Thousand and 00/100 Dollars ($2,500,000.00) payable by the Borrower to
the order of the Bank dated of even date herewith (the "Note").
A. The
term "Bank" shall mean
Wachovia Bank and its successors and assigns.
B. The
term "Collateral" shall
mean any and all real, personal, tangible and intangible property, now existing
or hereafter acquired or arising, that secures the Obligations of the
Indemnitors under the Note and the other Loan Documents.
C. The
term "Environmental Enforcement
Action" shall mean all actions, orders, requirements or liens instituted,
threatened, required, completed, imposed or placed by any governmental authority
and all claims made or threatened by any other person against or with respect to
the Property or the Surrounding Property, or any present or past owner or
occupant thereof, arising out of or in connection with any of the Environmental
Legal Requirements, any environmental condition, or the assessment, monitoring,
clean-up, containment, remediation or removal of, or damages caused or alleged
to be caused by, any Hazardous Materials (i) located on or under the Property or
the Surrounding Property, (ii) emanating from the Property or the Surrounding
Property, or (iii) generated, stored, transported, utilized, disposed, managed,
or released by any Indemnitor (whether or not on, under or from the Property or
the Surrounding Property).
D. The
term "Environmental Legal
Requirements" shall mean all past (which have current effect), present or
future federal, state, county and local laws, by-laws, rules, regulations, codes
and ordinances, or any judicial or administrative interpretations thereof, and
the requirements of any governmental agency or authority having or claiming
jurisdiction with respect thereto, applicable to the regulation or protection of
the environment, the health and safety of persons and property and all other
environmental and ecological matters and shall include, but not be limited to,
all orders, decrees, judgments and rulings imposed through any public
enforcement proceedings, relating to Hazardous Materials or the existence, use,
discharge, release, containment, transportation, generation, storage, management
or disposal thereof, or otherwise regulating or providing for the protection of
the environment applicable to the Property and relating to Hazardous Materials,
or to the existence, use, discharge, release or disposal
thereof. Environmental Legal Requirements presently include, but are
not limited to, the following laws: Comprehensive Environmental
Response Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Public
Health Service Act (42 U.S.C. § 300(f) et seq.), the Pollution
Prevention Act (42 U.S.C. § 13101 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal
Clean Water Act (33 U.S.C. § 1251 et seq.), the Federal
Clean Air Act (42 U.S.C. § 7401 et seq.) and the
applicable laws of the State of California.
1
E. The
term "Environmental
Reports" shall mean the reports, if any, most recently delivered to the
Bank.
F. The
term "Hazardous
Materials" shall mean and include asbestos in any form, flammable
materials, explosives, radioactive or nuclear substances, polychlorinated
biphenyls, other known or suspected carcinogens, oil and other petroleum
products, radon gas, urea formaldehyde, chemicals, gases, solvents, pollutants,
pesticides or contaminants in quantities that could be a detriment or pose a
present or potential danger to the environment or to the health or safety of any
person, and any other hazardous or toxic materials, hazardous or solid wastes or
substances which are defined, determined or identified as such in any
Environmental Legal Requirements.
G. The
term "Indemnified Party"
shall mean: (i) the Bank; (ii) all those claiming by, through or
under the Bank, including any subsequent holder of the Loan and any present or
future owner of a participation interest therein; (iii) any subsequent owner or
tenant of all or any portion of the Property following the exercise by the Bank
of its rights under the Mortgage, the Note or any other Loan Document including,
but not limited to, a foreclosure sale or deed in lieu thereof; and (iv) as to
each of the foregoing, their respective affiliate, parent and subsidiary
corporations, and, as applicable, the respective officers, directors,
stockholders, agents, employees, accountants and attorneys of any one or more of
them, and any person, firm or entity which controls, is controlled by,
controlling, or under common control with, any one or more of them.
H. The
term "Loan Documents"
shall mean this Agreement, the Note, the Mortgage and all other instruments,
documents and agreements evidencing, securing or related to or executed in
connection with the Loan.
I. The
term "Mortgage" shall
mean that certain Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing dated of even date herewith granted by the Borrower to the Bank
to secure the Obligations of the Borrower under the Loan, as the same may be
amended and supplemented from time to time, relating to the
Property.
J. The
term “Obligations" shall
mean all obligations and liabilities of every kind and nature of the Indemnitors
under the Note, the Mortgage and all other Loan Documents whether now existing
or hereafter arising.
K. The
term "Property" shall
mean the property owned by the Borrower located at 2064 Highway 116 North,
Sebastopol, California, as more particularly set forth in the Mortgage and any
other real property in which the Bank now or hereafter receives a mortgage in
connection with the Loan or any of the other Obligations.
2
O. The
term "Surrounding
Property" shall mean any property contiguous to the perimeter of the
Property.
P. The
terms "generated," "stored," "transported," "utilized," "disposed," "managed,"
“released,” and "threat of release," and all conjugates thereof, shall have the
meanings and definitions set forth in the Environmental Legal
Requirements.
FOR VALUE RECEIVED, and to
induce the Bank to make the Loan and otherwise extend credit to the Borrower as
provided for in the Loan Documents, the Indemnitors hereby jointly and severally
and unconditionally agree as follows:
1. Compliance with
Environmental Legal Requirements.
|
|
1.1
|
Compliance. Until such
time as the Obligations have been paid in full, each Indemnitor guaranties
and agrees that it shall comply in all material respects with all
Environmental Legal Requirements, including, but not limited to,
Environmental Legal Requirements applicable to the Property, and that it
shall take all remedial action necessary to avoid any liability of the
Indemnitors, the Bank, or any subsequent owner of the Property, and to
avoid the imposition of, or to discharge, any liens on the Property, as a
result of any failure to comply with Environmental Legal Requirements
applicable to the Property.
|
|
|
1.2
|
Prohibitions. Without
limiting the generality of the foregoing, each Indemnitor agrees that it
shall not:
|
|
|
(a)
|
except
in material compliance with all Environmental Legal Requirements, release
or permit any release or threat of release of any Hazardous Materials on
the Property;
|
|
|
(b)
|
other
than in the ordinary course of its business and in material compliance
with all Environmental Legal Requirements, generate or permit any
Hazardous Materials to be generated on the
Property;
|
|
|
(c)
|
except
in material compliance with all Environmental Legal Requirements, store or
utilize, or permit any Hazardous Materials to be stored or utilized on the
Property;
|
|
|
(d)
|
other
than in the ordinary course of business and in material compliance with
all Environmental Legal Requirements, dispose of or permit any Hazardous
Materials to be disposed of on the
Property;
|
|
|
(e)
|
fail
to operate, maintain, repair and use the Property in all material respects
in accordance with the Environmental Legal Requirements;
or
|
|
|
(f)
|
allow,
permit or suffer any other person or entity to operate, maintain, repair
and use the Property except in accordance in all material respects with
the Environmental Legal
Requirements.
|
3
|
|
2.1
|
Remedial
Actions. Upon any
Indemnitor becoming aware of the violation of any Environmental Legal
Requirement related to the Property, or the presence, or any release or
any threat of release, of any Hazardous Materials on, under, or from the
Property or any Surrounding Property, whether or not caused by such
Indemnitor, such Indemnitor shall, subject to the rights to contest set
forth in Section
5,
immediately take all actions: (A) to cure or eliminate any such
violation of any such Environmental Legal Requirement related to the
Property and, where applicable, to arrange for the assessment, monitoring,
clean-up, containment, removal, remediation, or restoration of the
Property and, (B) to the extent that the presence of any Hazardous
Materials on the Surrounding Property originated on, under, or from the
Property, or constitutes a danger to the Surrounding Property, as are
required pursuant to any Environmental Legal Requirements or by any
governmental authority.
|
|
|
2.2
|
Environmental
Assessments. The Bank
shall have the right to require the Indemnitors, at their own cost and
expense, to obtain a professional environmental assessment of the Property
in accordance with the Bank's then standard environmental assessment
requirements and sufficient in scope to comply with the requirements of
Section 3.1, upon the occurrence
of any one or more of the following events: (i) an Event of
Default; or (ii) upon receipt of any notice of any of the conditions
specified in Section 1.3 of this
Agreement.
|
4
|
|
The
Bank's Rights. The Bank
may exercise its rights and remedies under this Section 3 upon and following the
existence of one or more of the following events or conditions: (i)
failure to pay the Loan when due and payable in full either at its stated
maturity or upon acceleration based upon an Event of Default; (ii) an
Indemnified Party, or an affiliate thereof, has taken possession of all or
some portion of the Property based upon an Event of Default; (iii) an
Indemnified Party has acquired title to all or some portion of the
Property by virtue of foreclosure or deed in lieu of foreclosure; or (iv)
a claim has been asserted against an Indemnified Party for which
indemnification is provided in this Agreement, but the Indemnitors have
not undertaken to pursue and are not pursuing reasonable efforts to
remediate, defend and otherwise indemnify any such Indemnified Party and
to provide such Indemnified Party with reasonable assurances of the
Indemnitors' ability, financially and otherwise, to satisfy the
Indemnitors' obligations. In any of such events, the Bank shall
have the right, but not the obligation, through such representatives or
independent contractors as it may designate, to enter upon the Property
and to expend funds to:
|
|
|
3.1.1
|
Assessments. Cause one
or more environmental assessments of the Property to be undertaken, if the
Bank in its reasonable discretion determines that such assessment is
appropriate. Such environmental assessments may include,
without limitation, (i) detailed visual inspections of the Property,
including without limitation all storage areas, storage tanks, drains,
drywells and leaching areas; (ii) the taking of soils an surface and
sub-surface water samples; (iii) the performance of soil and groundwater
analysis; and (iv) the performance of such other investigations or
analysis as are necessary or appropriate and consistent with sound
professional environmental engineering practice in order for the Bank to
obtain a complete assessment of the compliance of the Property and the use
thereof with all Environmental Legal Requirements and to make a
determination as to whether or not there is any risk of contamination (a)
to the Property resulting from Hazardous Materials originating on or
under, or emanating from, any Surrounding Property or (b) to any
Surrounding Property resulting from Hazardous Materials originating on,
under, or from the Property;
|
|
|
3.1.2
|
Cure. Cure any
breach of the representations, warranties, covenants and conditions made
by or imposed upon any Indemnitor under this Agreement, including, without
limitation, any violation by any Indemnitor, or by the Property, or by any
other occupant, prior occupant or prior owner thereof, of any of the
Environmental Legal Requirements applicable to the
Property;
|
5
|
|
3.1.3
|
Prevention
and Precaution. Take all
actions as are required pursuant to Environmental Legal Requirements (i)
prevent the migration of Hazardous Materials on, under, or from the
Property to any other property; (ii) clean-up, contain, remediate or
remove any Hazardous Materials on, under, or from any other property,
which Hazardous Materials originated on, under, or from the Property; or
(iii) prevent the migration of any Hazardous Materials on, under, or from
any other property to the Property;
|
|
|
3.1.4
|
Environmental
Enforcement Actions. Comply
with, settle, or otherwise satisfy any Environmental Enforcement Action
relating to the Property and, if the environmental condition thereon is
caused by any Indemnitor, any Surrounding Property, including, but not
limited to, the payment of any funds or penalties imposed by any
governmental authority and the payment of all amounts required to remove
any lien or threat of lien on or affecting the Property;
and
|
|
|
3.1.5
|
General. Comply
with, settle, or otherwise satisfy any Environmental Legal Requirement and
correct or abate any environmental condition on, or which threatens, the
Property and which could reasonably be expected to or does cause damage or
injury to the Property or to any
person.
|
|
|
3.2
|
Recovery
of Costs. Any amounts
paid or advanced by the Bank and all costs and expenditures incurred in
connection with any action taken pursuant to the terms of this Agreement,
including, but not limited to, environmental consultants' and experts'
fees and expenses, attorneys' fees and expenses, court costs and all costs
of assessments, monitoring, clean-up, containment, remediation, removal
and restoration, with interest thereon at the highest default rate set
forth in the Mortgage and the Note, shall be a demand obligation of the
Indemnitors to the Bank and, to the extent not prohibited by law (and so
long as the Mortgage remains undischarged of record), shall be added to
the obligations secured by the Mortgage when paid by the Bank and shall be
secured by the lien of such Mortgage and all other documents now or
hereafter securing any of the Obligations as fully and as effectively and
with the same priority as every other obligation secured
thereby.
|
|
|
3.3
|
The
Bank Not Responsible. The
exercise by the Bank of any one or more of the rights and remedies set
forth in this Section 3 shall not operate
or be deemed (a) to place upon the Bank any responsibility for the
operation, control, care, service, management, maintenance or repair of
the Property or (b) make the Bank the "owner" or "operator" of the
Property or otherwise a “responsible party” within the meaning of any of
the Environmental Legal
Requirements.
|
6
|
|
3.4
|
The
Bank's Subrogation. Furthermore,
the Bank, by making any such payment or incurring any such costs, shall be
subrogated to all rights of the Indemnitors or any other occupant of the
Property to seek reimbursement from any other person, including, without
limitation, any predecessor owner or occupant of the Property who may be a
“responsible party” under any of the Environmental Legal Requirements, in
connection with the presence of Hazardous Materials on or under, or which
emanated from, the Property.
|
|
|
3.5
|
The
Bank May Stop. Without
limiting the generality of the other provisions of this Agreement, any
partial exercise by the Bank of any one or more of the rights and remedies
set forth in this Section 3, including, without
limitation, any partial undertaking on the part of the Bank to cure any
failure by any Indemnitor, or of the Property, or any other occupant,
prior occupant or prior owner thereof, to comply with any of the
Environmental Legal Requirements, shall not obligate the Bank to complete
such actions taken or require the Bank to expend further sums to cure such
non-compliance.
|
4. Indemnification. At all times
before and after the indefeasible repayment of the Loan, each Indemnitor hereby
agrees that it shall, at its sole cost and expense, indemnify, defend,
exonerate, protect and save harmless each Indemnified Party against and from any
and all damages, losses, liabilities, obligations, penalties, claims,
litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements or expenses of any kind or nature whatsoever, including, without
limitation, attorneys' and experts' fees and disbursements, which may at any
time be imposed upon, incurred by or asserted or awarded against any Indemnified
Party and arising from or out of:
|
|
4.1
|
Environmental
Liability.
|
Any
liability arising under Environmental Legal Requirements, whenever
discovered, that relates to the
Property;
|
|
|
4.2
|
Hazardous
Materials. Any
Hazardous Materials on, in, under or affecting, all or any portion of the
Property or, if any such Hazardous Materials emanated from the Property,
any other property, on or before the date hereof, or which may hereafter
affect all or any portion of the Property or, if any such Hazardous
Materials emanated from the Property, any other property, whenever
discovered in violation of any Environmental Legal
Requirements;
|
7
|
|
4.3
|
