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ENVIRONMENTAL INDEMNITY
AGREEMENT
This
ENVIRONMENTAL INDEMNITY AGREEMENT dated as of June 23,
2008 (the “ Agreement ”), is executed by
GRUBB & ELLIS HEALTHCARE REIT HOLDINGS, L.P. (formerly
known as NNN HEALTHCARE/OFFICE REIT HOLDINGS, L.P. , a
Delaware limited partnership) (the “ Borrower
”), G&E HEALTHCARE REIT AMARILLO HOSPITAL, LLC , a
Delaware limited liability company (“ Amarillo
”) and GRUBB & ELLIS HEALTHCARE REIT, INC. , a
Maryland corporation (the “ Guarantor ”; the
Borrower, Amarillo and the Guarantor each being referred to herein
as an “ Indemnitor ” and collectively as the
“ Indemnitors ”) to and for the benefit of
LASALLE BANK NATIONAL ASSOCIATION , a national banking
association, together with its successors and assigns, individually
and as agent for the Banks (as described in the Loan Agreement
described below) (individually, “LaSalle” and as agent,
the “ Agent ”).
R E C I T A L
S:
A. Pursuant to the terms of the Loan Agreement dated
September 10, 2007 among the Agent, the Banks and the Borrower
(as amended, modified or restated from time, to time, the
“Loan Agreement”), the Banks have extended to the
Borrower a credit facility providing for loans in the principal
amount of up to Eighty Million and 00/100 Dollars ($80,000,000.00)
(subject to increase to One Hundred Twenty Million and 00/100
Dollars [$120,000,000.00] under the terms set forth in the Loan
Agreement) (the “ Loan ”).
B. The Loan is evidenced by the Notes (as defined in the Loan
Agreement) and are secured by, among other things, those certain
Commercial Deed of Trust, Assignment of Leases and Rents, Security
Agreement, and Fixture Filing dated as of even date herewith (the
“ Security Instrument ”), executed by Amarillo
(a subsidiary of Borrower) to and for the benefit of the Agent,
encumbering real property described on Exhibit
“A” attached hereto, together with the other
collateral as described in the Security Instrument (the real
property and other collateral being collectively referred to as the
“ Property ”). Capitalized terms used and not
specifically defined herein shall bear the same meaning as in the
Security Instrument.
C. As
a condition to making an advance on the Loan, the Banks have
required that the Indemnitors indemnify the Agent and the Banks
with respect to environmental conditions and operations at the
Property as set forth below.
NOW,
THEREFORE, to induce the Banks to extend the Loan to the Borrower
and in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Indemnitors hereby covenant and agree
for the benefit of the Agent and the other Indemnified Parties (as
defined below), as follows:
1
A G R E E M E N T
S:
1.
ENVIRONMENTAL MATTERS .
1.1
Definitions . For purposes of this Agreement the following
terms have the following meanings:
“
Business Day ” shall mean any day other than a
Saturday, Sunday or a legal holiday on which banks are authorized
or required to be closed for the conduct of commercial banking
business in Chicago, Illinois.
“
Environmental Laws ” shall mean any and all federal,
state and local laws (whether under common law, statute, rule,
regulation or otherwise), requirements under permits or other
authorizations issued with respect thereto, and other orders,
decrees, judgments, directives or other requirements of any
governmental authority relating to or imposing liability or
standards of conduct (including disclosure or notification)
concerning protection of human health or the environment or
Hazardous Substances or any activity involving Hazardous
Substances, all as previously and in the future to be amended.
“
Hazardous Substance ” shall mean, but is not limited
to, any substance, chemical, material or waste (a) which is
regulated by any federal, state or local governmental authority
because of its toxic, flammable, corrosive, reactive, carcinogenic,
mutagenic, infectious, radioactive, or other hazardous property or
because of its effect on the environment, natural resources or
human health and safety, including, but not limited to, petroleum
and petroleum products, asbestos-containing materials,
polychlorinated biphenyls, lead and lead-based paint, radon,
radioactive materials, flammables and explosives; or (b) which is
designated, classified, or regulated as being a hazardous or toxic
substance, material, pollutant, waste (or a similar such
designation) under any federal, state or local law, regulation or
ordinance, including under any Environmental Law such as the
Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. §9601 et seq .), the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. §11001
et seq .), the Hazardous Substances Transportation
Act (49 U.S.C. §1801 et seq .), or the Clean Air
Act (42 U.S.C. §7401 et seq .).
“
Indemnified Parties ” shall mean and includes LaSalle,
Agent, the Banks and their respective parents, subsidiaries, and
affiliated companies, assignees of any of LaSalle’s or any
Banks’ interest in the Loan or the Loan Documents, any
servicer or originator of the Loan, and the officers, directors,
employees, agents and contractors of any of the foregoing
parties.
“
Loan Documents ” shall mean the Notes evidencing the
Loan or any portions thereof, the Security Instrument, this
Agreement, the Loan Agreement and any other document given by any
Indemnitor to evidence or secure the Loan, as amended from time to
time.
“
Release ” shall mean any release, deposit, discharge,
emission, leaking, leaching, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances.
“
Reports ” shall mean the environmental studies and
reports identified on Exhibit “B”
attached hereto and made a part hereof.
1.2
Environmental Representations and Warranties . Except as
otherwise fully disclosed by the Indemnitors to the Indemnified
Parties in writing detailing any exceptions to the following
environmental representations and warranties or fully disclosed to
the Indemnified Parties in the Reports, the Indemnitors hereby
represent and warrant to the Indemnified Parties that, as of the
date hereof, to the best of Indemnitors’ knowledge:
(a) neither
the Property nor any operations of the Borrower or Amarillo are in
violation of any Environmental Laws or any permit or other
authorization issued pursuant thereto;
(b) no
Hazardous Substances are, or to the Indemnitors’ knowledge
and belief, have been handled, generated, stored, processed or
otherwise managed on or at the Property except for those substances
used by the Amarillo or tenants under leases at the Property in the
ordinary course of their businesses and in compliance with all
Environmental Laws;
(c) there
are not, to the Indemnitors’ knowledge, any past or present
Releases of Hazardous Substances in, on, under or from the
Property;
(d) the
Property is not subject to any private or governmental lien or
judicial or administrative notice or action relating to Hazardous
Substances;
(e) there
are no existing or closed underground storage tanks or other
underground storage receptacles for Hazardous Substances on the
Property;
(f) neither
Amarillo nor the Borrower have received notice of, and to
Amarillo’s and the Borrower’s knowledge, there exists
no investigation, action, proceeding or claim by any agency,
authority or unit of government or by any third party which could
result in any liability, penalty, sanction or judgment under any
Environmental Laws with respect to any condition, use or operation
of the Property or any of Amarillo’s or the Borrower’s
operations, nor does Amarillo nor the Borrower know of any basis
for such a claim;
(g) there
has been no claim by any party that any use, operation or condition
of the Property or any of Amarillo’s operations has caused
any nuisance or any other liability or adverse condition on any
other property nor does Amarillo nor the Borrower know of any basis
for such a claim; and
(h) there
are no agreements, consent orders, decrees, judgments, license or
permit conditions or other orders or directives of any federal,
state or local court, governmental agency or authority or
agreements, whether settlement agreements or otherwise, with any
third parties relating to the ownership, use, operation, sale,
transfer or conveyance of the Property that require any change in
the present condition of the Property or any work, repairs,
construction, containment, clean up, investigations, studies,
removal or other remedial action or capital expenditures with
respect to the Property.
1.3
Environmental Covenants . Each Indemnitor covenants and
agrees that it: (a) shall keep or cause the Property to be
kept free from Hazardous Substances (except those substances used
by the Borrower, priority owner or tenants under leases at the
Property in the ordinary course of their businesses and in
compliance with all Environmental Laws); (b) shall not install
or use any underground storage tanks except in compliance with all
Environmental Laws, shall not itself engage in and shall expressly
prohibit all tenants of space in the Improvements from engaging in
the use, generation, handling, storage, production, processing or
management of Hazardous Substances in violation of applicable
Environmental Laws, except in the ordinary course of their
businesses and in compliance with all Environmental Laws ;
(c) shall not itself cause or knowingly allow and shall
expressly prohibit the Release of Hazardous Substances in violation
of applicable Environmental Laws at, on, under, or from the
Property; shall cause property owner and shall expressly require
property owner to require all tenants and any other persons who may
come upon the Property to comply with all applicable Environmental
Laws; (d) shall cause property owner to 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 the
property owner, the Borrower or any other person or entity (“
Environmental Liens ”); (e) without limiting the
generality of the foregoing, during the term of this Agreement,
shall not permit property owner to use any construction materials
which contain asbestos nor install in the Improvements on the
Property or permit to be installed in the Improvements on the
Property, any materials which contain asbestos.
1.4
Notice and Access . The Indemnitors shall promptly notify
the Indemnified Agent in writing if any of the Indemnitors knows,
suspects or believes there is or are (a) any Hazardous
Substances, other than those used by the property owner or tenants
under leases at the Property in the ordinary course of their
businesses and in compliance with all Environmental Laws, present
on the Property; (b) any Release of Hazardous Substances in,
on, under, from or migrating towards the Property; (c) any
non-compliance with Environmental Laws related in any way to the
Property; (d) any actual or potential Environmental Liens;
(e) any investigation or action or claim, whether threatened
or pending, by any governmental agency or third party pertaining to
the Release of Hazardous Substances in, on, under, from, or
migrating towards the Property; and/or (f) any installation of
wells, piping, or other equipment at the Property to investigate,
remediate or otherwise address any Release of Hazardous Substances
at, on, in or in the vicinity of the Property. The Indemnitors
shall promptly, to the extent required of Indemnitors under
applicable Environmental Laws and at the Indemnitors’ sole
cost and expense, take all reasonable actions with respect to any
Hazardous Substances or other environmental condition at, on or
under the Property or other affected property, including all
investigative, monitoring, removal, containment and remedial
actions in accordance with all applicable Environmental Laws,
including the payment, at no expense to the Indemnified Parties, of
all clean-up, administrative and enforcement costs of applicable
governmental agencies which may be asserted against the Property in
all instances as necessary to comply with and as required of
Indemnitors pursuant to all applicable Environmental Laws;
(ii) protect human health or the environment; (iii) allow
continued use, occupation, or operation of the Property; and/or
(iv) maintain the fair market value of the Property
(collectively, the “ Completion of the Clean-up
”). In the event the Indemnitors fail to do so, the
Indemnified Parties may, but shall not be obligated or have any
duty to, cause the Completion of the Clean-up of the Property. Upon
reasonable prior notice, the Indemnitors hereby grant to the
Indemnified Parties and their agents and employees access during
normal business hours to the Property as provided in
Section 1.6 below, and a license to remove any items deemed by
the Indemnified Parties to be Hazardous Substances and to do all
things the Indemnified Parties shall deem necessary to cause the
Completion of the Clean-up of the Property.
1.5
Indemnification . The Indemnitors covenant and agree, at the
Indemnitors’ sole cost and expense, to indemnify, defend (at
trial and appellate levels, and with attorneys, consultants and
experts acceptable to the Indemnified Parties), and hold the
Indemnified Parties harmless from and against any and all liens,
damages (including, without limitation, consequential damages),
losses, liabilities, obligations, settlement payments, penalties,
claims, judgments, suits, proceedings, costs, disbursements or
expenses of any kind or of any nature whatsoever (including
reasonable attorneys’, consultants’ and experts’
fees and disbursements actually incurred in investigating,
defending, settling or prosecuting any claim, litigation or
proceeding) which may at any time be imposed upon, incurred by or
asserted against the Indemnified Parties or the Property, and
arising directly or indirectly from or out of, and except to the
extent directly caused by the gross negligence or willful
misconduct of Indemnitors:
(a) the
past, present or future presence, Release or threat of Release of
any Hazardous Substances on, in, under or affecting all or any
portion of the Property or any surrounding areas, regardless of
whether or not caused by or within the control of any
Indemnitor;
(b) the
past, present or future violation of any Environmental Laws,
relating to or affecting the Property or the Borrower’s
operations, whether or not caused by or within the control of any
Indemnitor;
(c) the
failure by the Indemnitors to comply fully with the terms and
conditions of this Section 1;
(d) any
misrepresentation or inaccuracy in or the breach of any
representation or warranty contained in this Section 1; or
(e) the
enforcement of this Section 1, including any liabilities that
arise as a result of the actions taken or caused to be taken by the
Indemnified Parties under this Section 1, the cost of
assessment, containment and/or removal of any and all Hazardous
Substances from all or any portion of the Property or any
surrounding areas, the cost of any actions taken in response to the
presence, Rele
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