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EXHIBIT 10.4
ENVIRONMENTAL INDEMNITY AGREEMENT
ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement") made as of the 9th
day of January, 2001 by USRP FUNDING 2001, L.P., a Delaware limited partnership,
("Borrower"), and U.S. RESTAURANT PROPERTIES, INC., a Delaware corporation and
U.S. RESTAURANT PROPERTIES OPERATING, L.P., a Delaware limited partnership
("Principal Guarantors"), all having offices at 00000 Xxxxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000 (Borrower and Principal Guarantors hereinafter referred to,
individually and collectively, as the context requires, as "Indemnitors"), in
favor of XXXXX FARGO BANK MINNESOTA, N.A., AS INDENTURE TRUSTEE, a national
banking association, having an address at 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx,
Xxxxxxxx 00000-0000, (the "Indenture Trustee") for the benefit of the
Noteholders, BANC OF AMERICA MORTGAGE CAPITAL CORPORATION (the "Purchaser") and
other Indemnified Parties (defined below) (the Indenture Trustee, the Purchaser
and the Other Indemnified Partes collectively "Indemnitee").
RECITALS:
Borrower is the owner of certain properties described in the Indenture
(defined below) (individually, a "Property" and collectively, the "Properties).
Indemnitee is prepared to make a loan (the "Loan") to Borrower in the principal
amount of $175,000,000, to be evidenced by certain promissory notes of even date
herewith made by Borrower to Purchaser (together with any and all extensions,
renewals, substitutions, replacements, amendments, modifications and/or
restatements thereof, the "Notes") and secured by, among other things, certain
mortgage and security agreements, deed of trust and security agreements, and
deed to secure debt and security agreements given by Borrower to Indenture
Trustee (together with any and all extensions, renewals, substitutions,
replacements, amendments, modifications and/or restatements thereof, the
"Security Instruments") which will encumber the Properties, and that certain
indenture between Borrower and Indenture Trustee (the "Indenture").
Indemnitee is unwilling to make the Loan unless Indemnitors agree,
jointly and severally, to provide the indemnification, representations,
warranties, and covenants and other matters described in this Agreement for the
benefit of Indemnified Parties.
AGREEMENT
In order to induce the Indemnitee to make the Loan to Borrower, and in
consideration of the substantial benefit each and every Indemnitor will derive
from the Loan:
ARTICLE - DEFINITIONS
1.1 DEFINITIONS. Capitalized terms used herein and not specifically
defined herein shall have the respective meanings ascribed to such terms in the
Indenture. As used in this Agreement, the following terms shall have the
following meanings:
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The term "ENVIRONMENTAL LAW" means any present and future federal,
state and local laws, statutes, ordinances, rules, regulations, standards,
policies and other governmental directives or requirements, as well as common
law, that apply to Borrower or any Property and relate to Hazardous Materials,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act and the Resource Conservation and Recovery Act.
The term "HAZARDOUS MATERIALS" shall mean petroleum and petroleum
products and compounds containing them, including gasoline, diesel fuel and oil;
explosives, flammable materials; radioactive materials; polychlorinated
biphenyls and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on a Property is prohibited by
any federal, state or local authority; any substance that requires special
handling; and any other material or substance now or in the future defined as a
"hazardous substance," "hazardous material," "hazardous waste," "toxic
substance," "toxic pollutant," "contaminant," "pollutant" or other words of
similar import within the meaning of any Environmental Law.
The term "INDEMNIFIED PARTIES" means Indemnitee, any person or entity
who is or will have been involved in the origination of the Loan, any person or
entity who is or will have been involved in the servicing of the Loan, any
person or entity in whose name the encumbrance created by the Security
Instruments is or will have been recorded, persons and entities who may hold or
acquire or will have held a full or partial interest in the Loan (including, but
not limited to, Investors (defined below) or prospective Investors in the
Securities (defined below), as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in the Loan for the
benefit of third parties) as well as the respective directors, officers,
shareholders, partners, members, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including but not limited to any
other person or entity who holds or acquires or will have held a participation
or other full or partial interest in the Loan or a Property, whether during the
term of the Loan or as a part of or following a foreclosure of the Loan and
including, but not limited to, any successors by merger, consolidation or
acquisition of all or a substantial portion of Indemnitee's assets and
business).
The term "LEGAL ACTION" means any claim, suit or proceeding, whether
administrative or judicial in nature.
The term "LOSSES" shall mean any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, expenses, judgments, awards, amounts paid in settlement of whatever kind
or nature (including but not limited to attorneys' fees and other costs of
defense).
The term "RELEASE" with respect to any Hazardous Substance means any
release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Materials.
ARTICLE 2 - INDEMNIFICATION
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2.1 INDEMNIFICATION. Indemnitors covenant and agree at their sole cost
and expense, to protect, defend, indemnify, release and hold Indemnified Parties
harmless from and against any and all Losses 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: (a) any presence
of any Hazardous Materials in, on, above, or under any Property; (b) any past,
present or threatened Release of Hazardous Materials in, on, above, under or
from any Property; (c) any activity by any Indemnitor, any person or entity
affiliated with any Indemnitor, and any tenant or other user of any Property in
connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other Release, generation, production,
manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from any Property of any Hazardous
Materials at any time located in, under, on or above any Property or any actual
or proposed remediation of any Hazardous Materials at any time located in,
under, on or above any Property, whether or not such remediation is voluntary or
pursuant to court or administrative order, including but not limited to any
removal, remedial or corrective action; (d) any past, present or threatened
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with any Property or operations
thereon, including but not limited to any failure by any Indemnitor, any person
or entity affiliated with any Indemnitor, and any tenant or other user of any
Property to comply with any order of any governmental authority in connection
with any Environmental Laws; (e) the imposition, recording or filing or the
threatened imposition, recording or filing of any Environmental Lien encumbering
any Property; (f) any acts of any Indemnitor, any person or entity affiliated
with any Indemnitor, and any tenant or other user of any Property in (i)
arranging for disposal or treatment, or arranging with a transporter for
transport for disposal or treatment, of Hazardous Materials at any facility or
incineration vessel containing such or similar Hazardous Materials or (ii)
accepting any Hazardous Materials for transport to disposal or treatment
facilities, incineration vessels or sites from which there is a Release, or a
threatened Release of any Hazardous Substance which causes the incurrence of
costs for remediation; and (g) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any
covenants or other obligations pursuant to this Agreement or the Security
Instruments relating to environmental matters.
2.2 DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES. Upon
written request by any Indemnified Party, Indemnitors shall defend same (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
discretion, engage their own attorneys and other professionals to defend or
assist them, and, at the option of Indemnified Parties, their attorneys shall
control the resolution of any claim or proceeding. Upon demand, Indemnitors
shall pay or, in the sole 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.
2.3 SUBROGATION. Indemnitors shall take any and all reasonable actions,
including institution of legal action against third-parties, necessary or
appropriate to obtain reimbursement, payment or compensation from such persons
responsible for the presence of any Hazardous Materials at, in, on, under or
near any Property or otherwise obligated by law to bear the cost.
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Indemnified Parties shall be and hereby are subrogated to all of Indemnitor's
rights now or hereafter in such claims.
2.4 INTEREST. Any amounts payable to any Indemnified Parties under this
Agreement shall become immediately due and payable on demand and, if not paid
within thirty (30) days of such demand therefor, shall bear interest at a per
annum rate equal to the lesser of (a) the Note Interest Rate (as defined in the
Indenture) or (b) the maximum interest rate which Borrower or any other
Indemnitor may by law pay or Indemnified Parties may charge and collect, from
the date payment was due.
2.5 SURVIVAL. The obligations and liabilities of Indemnitors under this
Agreement shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure, exercise of any
power of sale, or delivery of a deed in lieu of foreclosure of any Security
Instrument.
2.6 NOTICE OF LEGAL ACTIONS. Each party hereto shall, within five (5)
business days of receipt thereof, give written notice to the other party hereto
of (i) any notice, advice or other communication from any governmental entity or
any source whatsoever with respect to Hazardous Materials on, from or affecting
any Property, and (ii) any Legal Action brought against such party or related to
any Property, with respect to which any Indemnitor may have liability under this
Agreement. Such notice shall comply with the provisions of Section hereof.
ARTICLE 3- REPRESENTATIONS AND WARRANTIES AND COVENANTS
3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. Indemnitors hereby make
the representations, warranties and covenants contained in Section 11.11 of the
Indenture and agree that the same are hereby made a part of this Agreement to
the same extent and with the same force as if fully set forth herein.
ARTICLE 4 - GENERAL
4.1 UNIMPAIRED LIABILITY. The liability of Indemnitors under this
Agreement shall in no way be limited or impaired by, and Indemnitors hereby
consent to and agree to be bound by, any amendment or modification of the
provisions of the Notes, the Indenture, the Security Instruments or any other
document which evidences, secures or guarantees all or any portion of the Loan
or is executed and delivered in connection with the Loan (together with any and
all extensions, renewals, substitutions, replacements, amendments, modifications
and/or restatements thereof, the "Other Security Documents"; the Notes, the
Indenture, the Security Instruments, this Agreement and the Other Security
Documents shall collectively be referred to herein as the "Loan Documents") to
or with Indemnitee by any Indemnitor or any person who succeeds any Indemnitor
or any person as owner of any Property. In addition, the liability of
Indemnitors under this Agreement shall in no way be limited or impaired by (i)
any extensions of time for performance required by any of the Loan Documents,
(ii) any sale or transfer of all or part of any Property, (iii) except as
provided herein, any exculpatory provision in any of the Loan Documents limiting
Indemnitee's recourse to any Property
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or to any other security for the Notes, or limiting Indemnitee's rights to a
deficiency judgment against any Indemnitor, (iv) the accuracy or inaccuracy of
the representations and warranties made by any Indemnitor under any of the Loan
Documents, (v) the release of any Indemnitor or any other person from
performance or observance of any of the agreements, covenants, terms or
condition contained in any of the Loan Documents by operation of law,
Indemnitee's voluntary act, or otherwise, (vi) the release or substitution in
whole or in part of any security for the Notes, or (vii) Indemnitee's failure to
record any Security Instrument or file any UCC financing statements (or
Indemnitee's improper recording or filing of any thereof) or to otherwise
perfect, protect, secure or insure any security interest or lien given as
security for the Notes; and, in any such case, whether with or without notice to
Indemnitors and with or without consideration.
4.2 ENFORCEMENT. Indemnified Parties may enforce the obligations of
Indemnitors without first resorting to or exhausting any security or collateral
or without first having recourse to any of the Loan Documents or any Property,
through foreclosure proceedings or otherwise, provided, however, that nothing
herein shall inhibit or prevent Indemnitee from suing on the Notes, foreclosing,
or exercising any power of sale under, any Security Instrument, or exercising
any other rights and remedies thereunder. This Agreement is not collateral or
security for the debt of Borrower pursuant to the Loan, unless Indemnitee
expressly elects in writing to make this Agreement additional collateral or
security for the debt of Borrower pursuant to the Loan, which Indemnitee is
entitled to do in its sole discretion. It is not necessary for an Event of
Default to have occurred pursuant to and as defined in the Indenture for
Indemnified Parties to exercise their rights pursuant to this Agreement.
Notwithstanding any provision of the Indenture, the obligations pursuant to this
Agreement are exceptions to any non-recourse or exculpation provision of the
Indenture; Indemnitors are fully and personally liable for such obligations, and
their liability is not limited to the original or amortized principal balance of
the Loan or the value of any Property.
4.3 WAIVERS. (a) Indemnitors hereby waive (i) any right or claim of
right to cause a marshalling of any Indemnitor's assets or to cause Indemnitee
or other Indemnified Parties to proceed against any of the security for the Loan
before proceeding under this Agreement against any Indemnitor; (ii) and
relinquish all rights and remedies accorded by applicable law to indemnitors or
guarantors, except any rights of subrogation which any Indemnitor may have,
provided that the indemnity provided for hereunder shall neither be contingent
upon the existence of any such rights of subrogation nor subject to any claims
or defenses whatsoever which may be asserted in connection with the enforcement
or attempted enforcement of such subrogation rights including, without
limitation, any claim that such subrogation rights were abrogated by any acts of
Indemnitee or other Indemnified Parties; (iii) the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against or by Indemnitee or other Indemnified Parties;
(iv) notice of acceptance hereof and of any action taken or omitted in reliance
hereon; (v) presentment for payment, demand of payment, protest or notice of
nonpayment or failure to perform or observe, or other proof, or notice or
demand; and (vi) all homestead exemption rights against the obligations
hereunder and the benefits of any statutes of limitations or repose.
Notwithstanding anything to the contrary contained herein, Indemnitors hereby
agree to postpone the exercise of any rights of subrogation with respect to any
collateral securing the Loan until the Loan shall have been paid in full. No
delay by any Indemnified Party in exercising any right, power or privilege under
this Agreement shall operate as a waiver of any such privilege, power or right.
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(b) INDEMNITORS HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN
CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN
EVIDENCED BY THE NOTES, THE APPLICATION FOR THE LOAN EVIDENCED BY THE NOTES, THE
LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN CONNECTION
THEREWITH.
ARTICLE 5 - MISCELLANEOUS
5.1 NOTICES. All notices required or permitted hereunder shall be given
and shall become effective as provided in the Indenture and the Guaranty (as
defined in the Indenture).
5.2 NO THIRD-PARTY BENEFICIARY. The terms of this Agreement are for the
sole and exclusive protection and use of Indemnified Parties. No party shall be
a third-party beneficiary hereunder, and no provision hereof shall operate or
inure to the use and benefit of any such third party. It is agreed that those
persons and entities included in the definition of Indemnified Parties are not
such excluded third party beneficiaries.
5.3 DUPLICATE ORIGINALS; COUNTERPARTS. This Agreement may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Agreement may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
5.4 NO ORAL CHANGE. This Agreement, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of any Indemnitor or any Indemnified
Party, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
5.5 HEADINGS, ETC. The headings and captions of various paragraphs of
this Agreement are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
5.6 NUMBER AND GENDER/SUCCESSORS AND ASSIGNS. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons referred to may
require. Without limiting the effect of specific references in any provision of
this Agreement, the term "Indemnitors" shall be deemed to refer to each and
every person or entity comprising an Indemnitor from time to time, as the sense
of a particular provision may require, and to include the heirs, executors,
administrators, legal representatives, successors and assigns of Indemnitors,
all of whom shall be bound by the provisions of this Agreement, provided that no
obligation of any Indemnitor may be assigned except with the
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written consent of Indemnitee. Each reference herein to Indemnitee shall be
deemed to include its successors and assigns. This Agreement shall inure to the
benefit of Indemnified Parties and their respective successors and assigns
forever.
5.7 JOINT AND SEVERAL LIABILITY. If Indemnitor consists of more than
one person or entity, the obligations and liabilities of each such person and
entity hereunder are joint and several.
5.8 RELEASE OF LIABILITY. Any one or more parties liable upon or in
respect of this Agreement may be released without affecting the liability of any
party not so released.
5.9 RIGHTS CUMULATIVE. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies which Indemnitee has
under any of the Loan Documents or would otherwise have at law or in equity.
5.10 INAPPLICABLE PROVISIONS. If any term, condition or covenant of
this Agreement shall be held to be invalid, illegal or unenforceable in any
respect, this Agreement shall be construed without such provision.
5.11 GOVERNING LAW. This Agreement shall be deemed to be a contract
entered into pursuant to the laws of the State of New York.
5.12 APPROVALS. Wherever pursuant to this Agreement (i) Indemnified
Parties exercise any right given to it to approve or disapprove, (ii) any
arrangement or term is to be satisfactory to Indemnified Parties, or (iii) any
other decision or determination is to be made by Indemnified Parties, the
decision of Indemnified Parties to approve or disapprove, all decisions that
arrangements or terms are satisfactory or not satisfactory and all other
decisions and determinations made by Indemnified Parties, shall be in the sole
discretion of Indemnified Parties, except as may be otherwise expressly and
specifically provided herein.
5.13 LEGAL FEES. Wherever pursuant to this Agreement it is provided
that Indemnitors pay any costs and expenses, such costs and expenses shall
include, but not be limited to, reasonable legal fees and disbursements of
Indemnified Parties, whether with respect to retained firms, the reimbursement
for the expenses of the in-house staff or otherwise.
5.14 TRANSFER OF LOAN. Indemnitee may, at any time, sell, transfer or
assign the Loan Documents, and any or all servicing rights with respect thereto,
or grant participations therein or issue mortgage pass-through certificates or
other securities evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "Securities"). Indemnitee may forward to each
purchaser, transferee, assignee, servicer, participant or investor in such
Securities or any credit rating agency rating such Securities (collectively, the
"Investor") and each prospective Investor, all documents and information which
Indemnitee now has or may hereafter acquire relating to Indemnitors and any
Property, whether furnished by any Guarantor (as defined in the Indenture),
Indemnitor or otherwise, as Indemnitee determines necessary or desirable.
Indemnitors and any Guarantor agree to cooperate with Indemnitee in connection
with any transfer made or any Securities created pursuant to this Section,
including, without limitation, the delivery of an estoppel certificate
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required in accordance with Article 11 of the Indenture and such other documents
as may be reasonably requested by Indemnitee. Indemnitors shall also furnish and
Indemnitors and any Guarantor hereby consent to Indemnitee furnishing to such
Investors or such prospective Investors any and all information concerning the
financial condition of Indemnitors and any Guarantor and any and all information
concerning any Property and the Leases (as defined in the Security Instruments)
as may be requested by Indemnitee, any Investor or any prospective Investor in
connection with any sale, transfer or participation interest.
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IN WITNESS WHEREOF, this Agreement has been executed by Indemnitors and
is effective as of the day and year first above written.
USRP FUNDING 2001-A, L.P.a Delaware
limited partnership
By: USRP (SFGP), LLC, a Delaware limited
liability company
By:
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Name: Xxxx Xxxxxxxx
Title: Manager
U.S. RESTAURANT PROPERTIES, INC.
By:
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Name: Xxxx Xxxxxxxx
Title: President
U.S. RESTAURANT PROPERTIES OPERATING,
L.P., a Delaware limited partnership
By: USRP MANAGING, INC., a Delaware
corporation, its general partner
By:
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Name: Xxxx Xxxxxxxx
Title: President
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