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EXHIBIT 10.7
Loan No. ▇▇-▇▇▇▇▇▇▇
HAZARDOUS MATERIALS INDEMNITY AGREEMENT
(Unsecured)
THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (this "Indemnity") is given
on January 7, 1998 by ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited
partnership ("Indemnitor") to LASALLE NATIONAL BANK, AS TRUSTEE for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
1996-WF1 ("Lender"), on the basis of the following facts and understandings:
RECITALS
▇. ▇▇▇▇▇ Fargo Bank, National Association ("▇▇▇▇▇ Fargo") has heretofore
made a loan to Activity Business Associates, LLC, a California limited liability
company ("ABA") in the principal sum of EIGHT MILLION FOUR HUNDRED THOUSAND AND
NO/100 DOLLARS ($8,400,000.00) (the "Loan").
B. The Loan is evidenced by that certain Promissory Note Secured by Deed
of Trust dated April 30, 1996 (the "Note"), made by ABA to the order of ▇▇▇▇▇
Fargo in the principal amount of the Loan and is secured by, among other things,
that certain Deed of Trust and Absolute Assignment of Rents and Leases and
Security Agreement (and Fixture Filing) dated as of April 30, 1996, made by ABA
for the benefit of ▇▇▇▇▇ Fargo (the "Deed of Trust"; and the Note, the Deed of
Trust and any and all other documents and instruments executed in connection
with the making of the Loan are herein referred to collectively as the "Original
Loan Documents") and encumbering the real property described in Exhibit A
attached hereto and incorporated herein by this reference (the "Property").
C. On or about October 30, 1996, ▇▇▇▇▇ Fargo transferred and assigned to
Lender all of ▇▇▇▇▇ Fargo's right, title and interest in, to and under the Loan
and the Original Loan Documents, and Lender is now the owner and holder of the
Loan and the Original Loan Documents.
D. ABA and ACTIVITY BUSINESS CENTER, L.P., a Delaware limited partnership
("Borrower") have requested Lender to consent to (i) a transfer, conveyance and
sale of the Property from ABA to Borrower, and (ii) an assumption by Borrower of
the Loan and the obligations of ABA under the Original Loan Documents.
E. Indemnitor is a limited partner of Borrower, and has a direct financial
interest in the Property and will benefit from Lender consenting to Borrower's
acquisition of the Property and assumption of the Loan and the obligations of
ABA under the Original Loan Documents.
F. Lender is willing to consent to Borrower's acquisition of the Property
and assumption of the Loan and the obligations of ABA under the Original Loan
Documents only on the condition, among others, that Indemnitor defend, indemnify
and hold harmless Lender from and against any and all claims, loss,
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damage, cost, expense or liability arising out of the presence of "Hazardous
Materials" (as defined below) on the Property.
G. Contemporaneously with the execution and delivery of this Indemnity,
Lender, ABA, Borrower, Indemnitor and certain other parties have entered into
that certain Assumption Agreement of even date herewith (the "Assumption
Agreement"), pursuant to which, among other things, (i) Borrower has agreed to
assume and has assumed and has covenanted and agreed to timely perform all of
the payment and performance obligations of ABA set forth in the Note, the Deed
of Trust and the other Original Loan Documents, and (ii) Lender has consented to
Borrower's acquisition of the Property and assumption of the Loan, all on and
subject to the terms and conditions set forth in the Assumption Agreement and
the other "Assumption Documents" (as defined in the Assumption Agreement; this
Indemnity constituting one of the Assumption Documents; and the Original Loan
Documents, the Assumption Agreement and the other Assumption Documents are
referred to herein collectively as the "Loan Documents").
H. Since the presence of "Hazardous Materials" on the Property may reduce
the value of the Property to an extent that is unforeseeable and indeterminable
and may, in fact, cause the value of the Property to be substantially less than
the claims against Lender or the liabilities associated with ownership of such
Property, Lender also is willing to consent to Borrower's acquisition of the
Property and assumption of the Loan and the obligations of ABA under the Loan
Documents only on the condition that Indemnitor's indemnity with respect to
hazardous materials be and remain an unsecured personal obligation of
Indemnitor.
I. Notwithstanding that this Indemnity is collectively included in the
term "Loan Documents" as used herein, this Indemnity is not one of the "Loan
Documents" as defined in the Note and therefore is not secured by any of the
documents and instruments securing the Note.
NOW, THEREFORE, in consideration of Lender contemporaneously herewith
consenting to Borrower's acquisition of the Property and assumption of the
obligations of ABA under the Original Loan Documents, and for other good,
valuable and adequate consideration, receipt of which is hereby acknowledged,
Indemnitor agrees as follows:
1. Indemnity. Indemnitor shall defend, indemnify and hold harmless Lender,
any corporation controlled by Lender, and each of their respective directors,
officers, employees, agents, successors and assigns (including, without
limitation, any participants in the Loan) from and against any claim, loss,
damage, cost, expense or liability directly or indirectly arising out of (i) the
use, generation, manufacture, storage, treatment, release, threatened release,
discharge, disposal, transportation or presence of any oil, flammable
explosives, asbestos, urea formaldehyde insulation, radioactive materials,
hazardous wastes, toxic or contaminated substances or similar materials
(collectively "Hazardous Materials"), including, without limitation, any
substances which are "hazardous substances", "hazardous wastes", "hazardous
materials" or "toxic substances" under any present or future state or federal
law, ordinance or regulation, which are found in, on, under or about the
Property; or (ii) the breach of any covenant (or representation and warranty) of
Indemnitor under this Agreement. Such indemnity shall include, without
limitation:
(a) the costs, whether foreseeable or unforeseeable, of any repair,
cleanup or detoxification of the Property which is required by any
governmental entity or is otherwise necessary to render the Property
in compliance with all laws and regulations pertaining to Hazardous
Materials;
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(b) all other direct or indirect consequential damages (including,
without limitation, any third party tort claim or governmental
claims, fines or penalties against Lender, any corporation
controlled by Lender, or any of their respective directors,
officers, employees, agents, successors or assigns); and
(c) all court costs and attorney's fees paid or incurred by Lender, any
corporation controlled by Lender, or any of their respective
directors, officers, employees, agents successors or assigns.
3. Term. The term of the indemnity provided for herein will commence on
the date hereof and continue until such time as no legal action can be
successfully brought against Lender due to applicable statutes of limitation.
Without in any way limiting the above, it is expressly understood that
Indemnitor's duty to indemnify Lender shall survive: (a) any judicial or
non-judicial foreclosure under the Deed of Trust, transfer of the Property in
lieu thereof, or transfer of the Property subject to the Deed of Trust and the
other Loan Documents; (b) the release and reconveyance or cancellation of the
Deed of Trust; and (c) the satisfaction of all of Borrower's obligations under
the Loan Documents.
4. Independent and Unsecured Obligational. Indemnitor acknowledges that,
notwithstanding any other provision of this Indemnity or any of the Loan
Documents to the contrary (including, without limitation, any non-recourse
provision under the Loan Documents) the obligations of Indemnitor under this
Indemnity are unlimited personal obligations of Indemnitor which are not secured
by the Deed of Trust or any other security instrument. In this regard, Lender's
appraisal of the value of the Property is such that Lender is not willing to
accept the consequences, under California's "One Form of Action" Rule (i.e.,
Section 726 of the Code of Civil Procedure), and "Anti-Deficiency Rules" (i.e.,
Sections 580(a), 580(b) and 580(d) of the Code of Civil Procedure), of inclusion
of this Indemnity among the obligations secured by the Deed of Trust. Indemnitor
acknowledges that Lender is unwilling to accept such consequences and that
Lender would not consent to Borrower's acquisition of the Property and
assumption of the Loan and the obligations of ABA under the Original Loan
Documents but for the personal unsecured liability undertaken by Indemnitor.
5. Settlements; Claims; Judgments. Without the prior written consent of
Indemnitor, Lender may settle or compromise any claim with respect to Hazardous
Materials made against Lender and Lender may employ an attorney of Lender's own
selection to defend Lender. Indemnitor shall pay upon demand all of the costs
and expenses of such defense. In addition, and notwithstanding any other
provision of this Agreement, Borrower shall not, without the prior written
consent of Lender: (a) settle or compromise any action, suit, proceeding, or
claim in which Lender is named as a party or consent to the entry of any
judgment in such a matter that does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to Lender of a written release of
Lender (in form, scope and substance satisfactory to Lender in its sole
discretion) from all liability in respect of such action, suit, or proceeding;
or (b) settle or compromise any action, suit, proceeding, or claim in which
Lender is named as a party in any manner that may materially and adversely
affect Lender as determined by Lender in its sole discretion.
6. Interest. Indemnitor shall pay Lender, on demand, interest, at the rate
of one percent (1%) per annum (based on a 360-day year and charged on the basis
of actual days elapsed) in excess of the "Prime Rate" in effect from time to
time, on any costs or expenses incurred by Lender in the enforcement of this
Indemnity or on any sums Lender is obligated to pay in respect to the matters
with respect to which this Indemnity is given, from the date of Lender's demand.
As used herein, the term "Prime Rate" means the
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Prime Rate in effect from time to time as published in the Money Rates section
of the Wall Street Journal. Any change in the rate of interest on such expenses,
costs or sums due to a change in the Prime Rate shall be effective on the date
each such change in the Prime Rate is published in the Wall Street Journal.
7. Rights not Exclusive. The rights of Lender under this Indemnity shall
be in addition to any other rights and remedies of Lender against Indemnitor
under any other document or instrument now or hereafter executed by Indemnitor,
or at law or in equity (including, without limitation, any right of
reimbursement or contribution pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq., as heretofore or hereafter amended from time to time).
8. Rights of Lender. Indemnitor authorizes Lender, without giving notice
to Indemnitor or obtaining Indemnitor's consent and without affecting the
liability of Indemnitor, from time to time to: (a) renew or extend all or any
portion of Borrower's obligations under the Note or any of the other Loan
Documents; (b) declare all sums owing to Lender under the Note and the other
Loan Documents due and payable upon the occurrence of a Default under the Loan
Documents; (c) make nonmaterial changes in the dates specified for payments of
any item payable in periodic installments under the Note or any of the other
Loan Documents; (d) otherwise modify the terms of any of the Loan Documents,
except for (i) increases in the principal amount of the Note or changes in the
manner by which interest rates, fees or charges are calculated under the Note
and the other Loan Documents (Indemnitor acknowledges that if the Note or other
Loan Documents so provide, said interest rates, fees and charges may vary from
time to time) or (ii) advancement of the maturity date of the Note where no
Default has occurred under the Loan Documents; (e) take and hold security for
the performance of Borrower's obligations under the Note or the other Loan
Documents and exchange, enforce, waive and release any such security; (f) apply
such security and direct the order or manner of sale thereof as Lender in its
discretion may determine; (g) release, substitute or add any one or more
endorsers of the Note or guarantors of Borrower's obligations under the Note or
the other Loan Documents; (h) apply payments received by Lender from Borrower to
any obligations of Borrower to Lender, in such order as Lender shall determine
in its sole discretion, whether or not any such obligations are covered by this
Indemnity; and (i) assign this Indemnity in whole or in part.
9. Indemnitor's Waivers. Indemnitor waives: (a) any defense based upon any
legal disability to enter into the Loan or other defense of Borrower; (b) any
defense based on any lack of authority of the officers, directors, partners or
agents acting or purporting to act on behalf of Indemnitor or any principal of
Indemnitor, or any defect in the formation of Indemnitor or any principal of
Indemnitor; (c) any defense based upon the application of the proceeds of the
Loan by Borrower for purposes other than the purposes represented by Borrower to
Lender or intended or understood by Lender or Indemnitor; (d) any defense based
upon Lender's election of any remedy against Borrower or Indemnitor or both; (e)
any defense based upon Lender's failure to disclose to Indemnitor any
information concerning Borrower's financial condition or any other circumstances
bearing on Borrower's ability to perform its obligations under the Note or any
of the Loan Documents; (f) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in any other respects more burdensome than that of a principal; (g) any
defense based upon Lender's election, in any proceeding instituted under the
Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code or any successor statute; (h) any defense based upon any
borrowing or any grant of a security interest under Section 364 of the Federal
Bankruptcy Code; (i) any right of subrogation, any right to enforce any remedy
which Lender may have against Borrower and any right to participate in, or
benefit from, any security for the Note or the other Loan Documents now or
hereafter held by Lender; (j) presentment, demand, protest and notice of any
kind; and (k) the benefit of any statute of limitations affecting the liability
of Indemnitor hereunder or the enforcement
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hereof. Indemnitor agrees that payment or performance of any act which tolls any
statute of limitations applicable to the Loan Documents shall similarly operate
to toll the statute of limitations applicable to Indemnitor's liability
hereunder. Without limiting the generality of the foregoing or any other
provision hereof, Indemnitor expressly waives any and all benefits which might
otherwise be available to Indemnitor under California Civil Code Sections 2809,
2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433 and California Code of Civil
Procedure Sections 580a, 580d and 726, or any of such sections. In addition,
Indemnitor understands that Indemnitor's duties, obligations and liabilities
under this Indemnity are not limited in any way by any information (whether
obtained from Borrower, from Indemnitor, or from Lender's own investigations)
which Lender may have concerning the Property and the presence of any Hazardous
Materials on the Property.
10. Disclosure of Information. If Lender elects to sell participations in
the Loan, including this Indemnity, Lender may forward to each participant and
prospective participant all documents and information relating to this Indemnity
or to Indemnitor, whether furnished by Borrower or Indemnitor or otherwise.
11. Attorney's Fees. If either Indemnitor or Lender engages an attorney or
institutes an action in order to enforce any of the provisions of this
Indemnity, the prevailing party shall be entitled to reasonable attorney's fees
and court costs which may be incurred in connection therewith.
12. Entire Agreement. This Indemnity contains the entire understanding
between the parties relating to the transactions contemplated hereby and all
statements, oral or written, are merged herein. No modification, waiver,
amendment, discharge or change of this Indemnity shall be valid unless the same
is in writing and signed by the party against which the enforcement of such
modification, waiver or amendment, discharge or change is or may be sought.
13. Successors and Assigns. All terms of this Indemnity shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective legal representatives, successors and assigns.
14. Governing Law. This Indemnity shall be governed by, and construed in
accordance with, the laws of the State of California, except to the extent
preempted by Federal laws.
15. Miscellaneous. The liability of all persons and entities who are in
any manner obligated hereunder to Lender as an Indemnitor shall be joint and
several. If any provision of this Indemnity shall be determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable, that portion
shall be deemed severed from this Indemnity and the remaining parts shall remain
in fall force as though the invalid, illegal or unenforceable portion had never
been part of this Indemnity.
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IN WITNESS WHEREOF, this Indemnity has been executed as of the date first
set forth above.
INDEMNITOR:
ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
(CORPORATE SEAL)
LENDER:
LASALLE NATIONAL BANK, AS TRUSTEE for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial
Mortgage Pass-Through Certificates,
Series 1996-WF1
By: Lennar Partners, Inc.,
As Special Servicer
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Schroger
Title: Vice President
(CORPORATE SEAL)
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IN WITNESS WHEREOF, this Indemnity has been executed as of the date first
set forth above.
INDEMNITOR:
ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
(CORPORATE SEAL)
LENDER:
LASALLE NATIONAL BANK, AS TRUSTEE for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial
Mortgage Pass-Through Certificates,
Series 1996-WF1
By: Lennar Partners, Inc.,
As Special Servicer
By: /s/ ▇▇▇▇▇▇ ▇. Schroger
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Schroger
Title: Vice President
(CORPORATE SEAL)
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Loan No. ▇▇-▇▇▇▇▇▇▇
EXHIBIT A
(DESCRIPTION OF PROPERTY)
Exhibit A to Hazardous Materials Indemnity Agreement (Unsecured) executed by
ARDEN REALTY LIMITED PARTNERSHIP, "Indemnitor" to LASALLE NATIONAL BANK, AS
TRUSTEE for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1996-WF1, "Lender".
Description of Property
PARCEL I OF PARCEL MAP ▇▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY.
A.P.N.: ▇▇▇-▇▇▇-▇▇-▇▇
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