ENVIRONMENTAL INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY AGREEMENT, is made as of the 17th day of March, 2011, by UTAH MEDICAL PRODUCTS, INC. , a Utah corporation (“ Indemnitor ”), in favor of JPMORGAN CHASE BANK, N.A. , a national banking association (“ Lender ”).
A. Indemnitor owns the real property (the “ Land ”) located in Salt Lake County, Utah, as more particularly described in Exhibit A-1 and A-2 attached hereto and made a part hereof and leases the real property (the “ Leased Land ”) located in Salt Lake County, Utah, as more particularly described in Exhibit A-3 (said real property, together with all improvements, equipment and other property now or hereafter located in or on the Land, are collectively, the “ Property ”);
B. Lender is prepared to make and Indemnitor will accept a term loan (the “ Loan ”) in the principal sum of Fourteen Million and No/100 Dollars ($14,000,000.00) pursuant to that certain Credit Agreement, dated as of even date herewith, by and among the Indemnitor and Lender (as the same may be amended, amended and restated, supplemented, replaced, substituted or otherwise modified from time to time, the “ Loan Agreement ”);
C. The Loan is secured by, among other things, certain Deeds of Trust, Assignment of Rents, Security Agreements, and Fixture Filings and a Leasehold Deed of Trust, Assignment of Rents, Security Agreement, and Fixture Filing from Indemnitor to the trustee named therein, for the benefit of Lender, which will encumber the Property (as the same may be amended, amended and restated, supplemented, replaced, substituted, or other wise modified from time to time, including all increases, and spreaders thereof, collectively, the “ Deed of Trust ”);
D. As a condition to making the Loan, Lender requires Indemnitor to provide certain representations, warranties, covenants and indemnities concerning existing and future environmental matters; and
E. To induce Lender to agree to make the Loan, Indemnitor has agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, Indemnitor hereby covenant, warrant, represent and agree as follows:
1. Definitions . As used herein, the following terms shall have the meaning specified below:
1.1 The term “ Agreement ” shall mean this Environmental Indemnity Agreement and all modifications, supplements, and amendments thereto.
1.2 The term “ Applicable Rate ” shall mean at any given time, (a) the rate per annum equal to the prime rate of interest (the “ Prime Rate ”) announced from time to time by Lender or its parent (which is not necessarily the lowest rate charged to any customer) changing when and as said Prime Rate changes, or (b) if the Note is in default, the default rate of interest under Note. If the Note has been paid in full, the Applicable Rate shall mean the Prime Rate.
1.3 The term “ De Minimis Amounts ” shall mean any Hazardous Substance either (a) being transported on or from the Property or being stored for use by Indemnitor or its tenant on the Property within a year from original arrival on the Property in connection with Indemnitor’s current operations or (b) being currently used by Indemnitor or its tenant on the Property, in either case in such quantities and in a manner that both (i) does not constitute a violation or threatened violation of any Environmental Law or require any reporting or disclosure under any Environmental Law and (ii) is consistent with customary business practice for such operations in the state where the Property is located.
1.4 The term “ Environmental Claim ” shall mean any and all actual or threatened liabilities, claims, actions, causes of action, judgments, orders, inquiries, investigations, studies or notices relating to any Hazardous Substance or any Environmental Law including without limitation those arising as a result of strict liability, whether under Environmental Law or otherwise, and those arising out of the negligence of the Indemnified Party.
1.5 The term “ Environmental Law ” shall mean any federal, state or local law, whether common law, statute, ordinance, rule, regulation, or judicial or administrative decision or policy or guideline, pertaining to Hazardous Substances, health, industrial hygiene, environmental conditions, or the regulation or protection of the environment, and all amendments thereto as of this date and to be added in the future and any successor statute or rule or regulation promulgated thereto.
1.6 The term “ Hazardous Substance ” shall mean all of the following:
(a) Any substance, material, or waste that is included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law;
(b) Those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and
(c) Any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.
1.7 The term “ Indemnified Parties ” shall mean and include Lender, any parent, subsidiary, or affiliated company of Lender, any assignee or successor in interest of all or part of Lender’s interest in the Loan or the Loan Documents, any owner of a participation interest in the Loan or the Loan Documents, any purchaser who acquires all or part of the Property from Lender, its parent, or any of their respective subsidiaries or affiliates, any recipient of a deed or assignment in lieu of foreclosure of all or part of the Property, any court appointed receiver, and the officers, directors, employees and agents of each of them.
1.8 The term “ Loan Documents ” shall have the meaning set forth in the Credit Agreement.
1.9 The term “ Property ” shall mean all property that is or was at any time affected by the Deed of Trust, which may later include any and all property previously released from the Deed of Trust.
1.10 The term “ Release ” shall mean any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the environment.
2. Representations and Warranties .
(a) Except as disclosed in writing by Indemnitor to Lender prior to the date hereof, Indemnitor represents and warrants to the Indemnified Parties that neither Indemnitor, the Property nor, to Indemnitor’s knowledge, any tenant is in violation of any Environmental Law applicable to the Property, and neither Indemnitor, the Property nor, to Indemnitor’s knowledge, any tenant is subject to any existing, pending or threatened investigation pertaining to the Property by any federal, state or local governmental authority or is subject to any remedial obligation or lien under or in connection with any Environmental Law.
(b) Indemnitor represents and warrants to the Indemnified Parties that Indemnitor, including, without limitation, any member, manager, officer, director, employee, agent, affiliate, tenant, partner or joint venturer of Indemnitor, except as disclosed on the environmental report provided to Lender, has no actual knowledge or notice of the actual, alleged or threatened presence or Release of Hazardous Substances in, on, around or potentially affecting any part of the Property or the soil, groundwater or soil vapor on or under the Property, or the migration of any Hazardous Substance, from or to any other property adjacent to or in the vicinity of the Property, provided that the foregoing representation and warranty does not apply to De Minimis Amounts.
(c) Indemnitor has undertaken an appropriate inquiry into the previous ownership and uses of the Property consistent with good commercial practice. If any environmental questionnaire is executed by Indemnitor and delivered to Lender, Indemnitor represents and warrants to the Indemnified Parties that, to Indemnitor’s knowledge, the information disclosed in any such environmental questionnaire is true, complete and correct.
(d) Indemnitor’s intended future use of Property will not result in the Release of any Hazardous Substance other than De Minimis Amounts, in, on, around or potentially affecting any part of the Property or in the soil, groundwater or soil vapor on or under the Property, or the migration of any Hazardous Substance from or to any other property adjacent to or in the vicinity of the Property.
3. Covenants of Indemnitor .
(a) Indemnitor shall neither use nor permit any third party to use, generate, manufacture, produce, store, or Release, on, under or about the Property, or transfer to or from the Property, any Hazardous Substance except De Minimis Amounts in compliance with all applicable Environmental Laws, provided that if any third party, by act or omission or by intent or accident, allows any foregoing action to occur, Indemnitor shall promptly remedy such condition, or cause such condition to be remedied, at its sole expense and responsibility, in accordance with Section 5 below. Furthermore, Indemnitor shall not permit any liens under any Environmental Law to be placed on any portion of the Property.
(b) Indemnitor has complied, and shall comply and require all occupants of the Property, regardless of length of occupancy, to comply, at Indemnitor’s sole expense and responsibility, with all Environmental Laws governing or applicable to Hazardous Substances, including those requiring disclosures to prospective and actual buyers of all or any portion of the Property.
(c) Indemnitor shall promptly notify Lender in writing if Indemnitor, including, without limitation, any member, manager, officer, employee, agent, affiliate, director, partner, or joint venturer, of Indemnitor, has any actual knowledge or notice of the following: (i) that any statement in Section 2 of this Agreement is no longer accurate, (ii) any lien, action or notice affecting the Property or Indemnitor resulting from any violation or alleged violation of the Environmental Law, (iii) the institution of any investigation, inquiry or proceeding concerning Indemnitor or the Property pursuant to any Environmental Law or otherwise relating to Hazardous Substances (except for De Minimis Amounts), or (iv) the discovery of any occurrence, condition or state of facts which would render any representation or warranty contained in this Agreement incorrect in any respect if made at the time of such discovery.
(d) Indemnitor’s obligations under this Agreement shall not be diminished or affected in any respect as a result of any notice, disclosure or knowledge, if any, to or by any of the Indemnified Parties of the Release, presence, existence or threatened Release of Hazardous Substances in, on, around, or potentially affecting the Property or the soil, groundwater or soil vapor on or under the Property, or of any matter covered by Indemnitor’s obligations hereunder. No Indemnified Party shall be deemed to have permitted, caused, contributed to or acquiesced in any such Release, presence, existence or threatened Release of Hazardous Substances or any other matter covered by Indemnitor’s obligations hereunder solely because Lender or any other Indemnified Party had notice, disclosure or knowledge thereof, whether at the time this Agreement is delivered or at any other time.
(e) Indemnitor shall conduct and complete, to Lender’s satisfaction, all remedial, removal, and other actions necessary to clean up and remove Hazardous Substances (other than De Minimis Amounts) in, on, or materially affecting the Property: (i) in accordance with all applicable Environmental Laws; and (ii) in accordance with all applicable orders and directives of all governmental authorities. Indemnitor shall provide to Lender copies of all results and reports relating to such remedial, removal, and other actions.
4. Lender Rights .
(a) Lender shall have the right, but not the obligation, without in any way limiting Lender’s other rights and remedies under the Loan Documents, to enter onto the Property, take and remove soil or groundwater samples, conduct tests and/or site assessments on any part of the Property or to take such other actions as it deems necessary or advisable to clean up, remove, resolve, or minimize the impact of, or otherwise deal with, any Hazardous Substances on or affecting the Property following receipt of any notice from any person or entity asserting the existence or possible existence of any Hazardous Substances pertaining to the Property or any part thereof that, if true, could result in an Environmental Claim, order, notice, suit, imposition of a lien on the Property, or other action and/or that, in Lender’s sole opinion, could jeopardize Lender’s security under the Loan Documents. All reasonable costs and expenses paid or incurred by Lender in the exercise of any such rights shall be payable by Indemnitor upon demand.
(b) Lender shall have the right at any time to appear in and to participate in, as a party if it elects, and be represented by counsel of its own choice in, any action or proceeding in connection with any Environmental Law that affects the Property. Upon demand by any Indemnified Pa