ENVIRONMENTAL INDEMNITY AGREEMENT
Exhibit
10.3
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 0 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 (the "Bank"), to SONOMAWEST HOLDINGS INC., a
Delaware corporation, having an address at 0000 Xxxxxxx 000 Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxx 00000 (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.
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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 0000 Xxxxxxx 000 Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxx, 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.
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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.
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1.1
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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.
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1.2
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Prohibitions. Without
limiting the generality of the foregoing, each Indemnitor agrees that it
shall not:
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(a)
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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;
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(b)
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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;
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(c)
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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;
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(d)
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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;
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(e)
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fail
to operate, maintain, repair and use the Property in all material respects
in accordance with the Environmental Legal Requirements;
or
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(f)
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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.
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2.1
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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.
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2.2
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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.
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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:
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3.1.1
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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;
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3.1.2
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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;
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3.1.3
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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;
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3.1.4
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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
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3.1.5
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General. Comply
with, settle, or otherwise satisfy any Environmental Legal Requirement and
correct or xxxxx 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.
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3.2
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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.
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3.3
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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.
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3.4
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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.
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3.5
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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.
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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:
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4.1
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Environmental
Liability.
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Any
liability arising under Environmental Legal Requirements, whenever
discovered, that relates to the
Property;
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4.2
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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;
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4.3
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Environmental
Legal Requirements. The
violation of any Environmental Legal Requirement by any Indemnitor or by
any employee, contractor, agent or representative of any Indemnitor, or
with respect to the Property or any Surrounding Property, existing on or
before the date hereof or which may so exist in the future, whenever
discovered; provided, however, that, with respect to any Surrounding
Property, only to the extent that the environmental condition is caused by
such Indemnitor or by such Indemnitor's employee, contractor, agent or
representative.
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4.4
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Breach
of Warranty, Representation or Covenant. Any breach
of warranty or representation or covenant made by any Indemnitor under or
pursuant to this Agreement; and
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4.5
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General. The
enforcement of this Agreement or the assertion by any Indemnitor of any
defense to the obligations of any Indemnitor hereunder, whether any of
such matters arise before or after foreclosure of the Mortgage or other
taking of title to or possession of all or any portion of the Property by
the Bank or any other Indemnified Party, and specifically including
therein, without limitation, the following: (i) reasonable
costs incurred for any of the matters set forth in Section 3 of this Agreement; and
(ii) reasonable costs and expenses incurred in ascertaining the existence
or extent of any asserted violation of any Environmental Legal
Requirements relating to the Property and any remedial action taken on
account thereof, including, without limitation, the costs, fees and
expenses of engineers, geologists, chemists, other scientists, attorneys,
surveyors, and other professionals, or testing and analyses performed in
connection therewith.
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5.1
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Material
Question In Good Faith. The contest
is based upon a material question of law or fact raised by such Indemnitor
in good faith;
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5.2
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Diligent
Pursuit. Such
Indemnitor properly commences and thereafter diligently pursues the
contest;
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5.3
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No
Impairment. The contest
will not materially impair the taking of any required remedial action with
respect to such claim, demand, levy or
assessment;
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5.4
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Adequate
Resources. Such
Indemnitor demonstrates to the Bank's reasonable satisfaction that such
Indemnitor has the financial capability to undertake and pay for such
contest and any remedial action then or thereafter
necessary;
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5.5
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Resolve
By Maturity. There is no
reason to believe that the contest will not be resolved prior to the
maturity of the Loan; and
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5.6
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No
Event Of Default. No Event of
Default exists under the Loan
Documents.
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6. Waivers. Each Indemnitor
hereby waives and relinquishes to the fullest extent now or hereafter not
prohibited by applicable law:
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6.1
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Suretyship
Defenses. All
suretyship defenses, defenses based on impairment of collateral and
defenses in the nature thereof;
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6.2
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Marshalling. Any right
or claim of right to cause a marshalling of any Indemnitor's assets or of
any Collateral or to cause the Bank to proceed against any of the
Collateral for the Loan before proceeding under this Agreement against any
Indemnitor;
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6.3
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Notice. Notice of
the acceptance hereof, presentment, demand for payment, protest, notice of
protest, or any and all notice of nonpayment, nonperformance,
nonobservance or default or other proof or notice of demand whereby to
charge any Indemnitor therefor;
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6.4
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Jury
Trial. THE PARTIES ACKNOWLEDGE THAT BY
AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT
THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A DISPUTE AS TO WHICH BINDING
ARBITRATION HAS BEEN
DEMANDED.
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EXCEPT AS PROHIBITED BY LAW, EACH
INDEMNITOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH INDEMNITOR CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF BANK HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER. EACH INDEMNITOR ACKNOWLEDGES AND STIPULATES THAT THE WAIVERS
GRANTED ABOVE ARE MADE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AND AFTER FULL
CONSULTATION WITH COUNSEL AND CONSTITUTE A MATERIAL INDUCEMENT FOR BANK TO
ACCEPT THE NOTE AND MAKE THE LOAN.
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7. Cumulative
Rights. The Bank's rights
under this Agreement shall be in addition to and not in limitation of all of the
rights and remedies of the Bank under the other Loan Documents. All
rights and remedies of the Bank shall be cumulative and may be exercised in such
manner and combination as the Bank may determine.
8. No
Impairment. The liability of
each Indemnitor hereunder shall in no way be limited or impaired by, and each
Indemnitor hereby assents to and agrees to be bound by, any amendment or
modification of the provisions of the Loan Documents to or with the Bank by the
Borrower or any person who succeeds the Borrower as owner of the
Property. In addition, the liability of each Indemnitor under this
Agreement shall in no way be limited or impaired by:
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8.1
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Extensions. Any
extensions of time for performance required by any of the Loan
Documents;
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8.2
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Amendments. Any
amendment to or modification of any of the Loan
Documents;
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8.3
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Transfer. Any sale or
assignment of the Loan, or any sale, assignment or foreclosure of the Note
or the Mortgage, or any sale or transfer of all or part of the
Property;
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8.4
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Exculpatory
Language. Any
exculpatory, or nonrecourse, or limited recourse, provision in any of the
Loan Documents limiting the Bank's recourse to the Property encumbered by
the Mortgage or to any other property or limiting the Bank's rights to a
deficiency judgment against the Indemnitors or any other
party;
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8.5
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Inaccuracies. The
accuracy or inaccuracy of any of the representations or warranties made by
or on behalf of any Indemnitor under the Loan Documents or
otherwise;
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8.6
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Release. The release
of any Indemnitor, or of any other person or entity, from performance or
observance of any of the agreements, covenants, terms or conditions
contained in any of the Loan Documents by operation of law, the Bank's
voluntary act, or otherwise;
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8.7
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Bankruptcy
or Reorganization. The filing of any bankruptcy or
reorganization proceeding by or against any Indemnitor, any general
partner of any Indemnitor or any subsequent owner of the
Property;
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8.8
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Substitution. The
release or substitution in whole or in part of any collateral or security
for the Loan;
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8.9
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Failure
to Perfect. The Bank's failure to record the Mortgage or
file any UCC financing statements (or the Bank'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
Loan;
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8.10
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Release
of Parties. The release of any Indemnitor by anyone
other than the Bank or by operation of law, or the release of any other
party now or hereafter liable upon or in respect of this Agreement or the
Loan; or
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8.11
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Invalidity. The
invalidity or unenforceability of all or any portions of any of the Loan
Documents as to any Indemnitor or to any other person or
entity.
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Any of
the foregoing may be accomplished with or without notice to any Indemnitor or
with or without consideration.
9. Delay Not
Waiver. No delay on the Bank's part in exercising any right,
power or privilege hereunder or under any of the Loan Documents shall operate as
a waiver of any such privilege, power or right. No waiver by the Bank
in any instance shall constitute a waiver in any other instance.
10. Warranties
and Representations. Each Indemnitor represents and warrants
to the Bank, the same to be true as of the date hereof and throughout the period
that any of the Loan Documents shall remain in force and effect, that except as
otherwise disclosed in the Environmental Reports to the Bank:
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10.1
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Compliance
with Environmental Requirements. To
the best of Indemnitor’s actual knowledge, the Indemnitors have been and
are in compliance with and have no liability or obligation (other than
continued compliance) arising under Environmental Legal
Requirements;
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10.2
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No
Hazardous Materials at Property. To the best of each
Indemnitor's actual knowledge, other than in the ordinary course of its
business and the business of its tenants and in material compliance with
all Environmental Legal Requirements, no Hazardous Materials have been or
are currently generated, stored, transported, utilized, disposed of,
managed, released or located on, under or from the Property, whether or
not in reportable quantities, or in any manner introduced onto the
Property, including, without limitation, any septic, sewage or other waste
disposal systems servicing the
Property;
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10.3
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No
Violations Claimed Re: Property or the Indemnitors.
Except as set forth on Schedule 1, no Indemnitor has received any notice,
request for information, demand letter, administrative inquiry, or
complaint from the California Environmental Protection Agency, the United
States Environmental Protection Agency or any other governmental authority
claiming that (i) the Property or any use thereof violates any of the
Environmental Legal Requirements or (ii) any Indemnitor or any of his, her
or its respective employees, affiliates, or agents have violated any of
the Environmental Legal Requirements with respect to the Property or any
Surrounding Property;
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10.4
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No
Liability to Governmental Authorities. To the best of
each Indemnitor's knowledge, no Indemnitor has incurred any liability to
the State of California, the government of any town in which the Property
is located, the United States of America or any other governmental
authority under any of the Environmental Legal Requirements, and no
Indemnitor has entered into or been subject to any environmental consent
decree, notice of violation, compliance order, or administrative order
with respect to the Property;
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10.5
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No
Release of Hazardous Materials. To the best
of Indemnitor’s actual knowledge, there has been no release or threat
of release of Hazardous Materials at the Property, except in compliance
with all Environmental Legal
Requirements;
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10.6
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No
Lien on Property. To the best of each Indemnitor's
knowledge, no lien against the Property has arisen under or related to any
of the Environmental Legal
Requirements;
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10.7
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No
Enforcement Actions. To the best of each Indemnitor's
knowledge, there are no Environmental Enforcement Actions pending, or to
the best of each Indemnitor's information, knowledge and belief,
threatened;
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10.8
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No
Knowledge of Hazardous Materials at Surrounding
Property. No Indemnitor has actual knowledge or belief
that any Hazardous Materials have been or are currently generated, stored,
transported, utilized, disposed of, managed, released or located on, under
or from any Surrounding Property in violation of or allegedly in violation
of any of the Environmental Legal
Requirements;
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10.9
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No
Knowledge of Violations Re Surrounding Property. No
Indemnitor has actual knowledge or belief of any action or order
instituted or threatened by any person or governmental authority arising
out of or in connection with the Environmental Legal Requirements
involving the assessment, monitoring, cleanup, containment, remediation or
removal of or damages caused or alleged to be caused by any Hazardous
Materials generated, stored, transported, utilized, disposed of, managed,
released or located on, under or from any Surrounding
Property;
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10.10
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No
Underground Storage Tanks. To the best of Indemnitor’s
actual knowledge, there are no underground storage tanks on or under any
Property, except any which have been disclosed in writing to the Bank
before the date hereof;
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10.11
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No
Dangerous Conditions. To the best of Indemnitor’s actual
knowledge, no environmental condition exists on the Property which could
cause any damage or injury to the Property, any Surrounding Property or to
any person;
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10.12
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Valid
and Binding. This Agreement constitutes the legal, valid
and binding obligation of each Indemnitor in accordance with the
respective terms hereof;
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10.13
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No
Violations. The performance of the obligations evidenced
hereby will not constitute a violation of any law, order, regulation,
contract, organizational document or agreement to which any Indemnitor is
a party or by which it or its property is or may be
bound;
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10.14
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No
Litigation. To the best of Indemnitor’s actual
knowledge, there is no litigation or administrative proceeding now pending
or threatened against any Indemnitor which if adversely decided could
materially impair the ability of any Indemnitor to pay or perform his, her
or its obligations hereunder;
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11. Notices. All
notices, demands, requests, and other communications given under this Agreement
shall be in writing and given as provided in the Mortgage, and addressed as
specified therein.
12. No Oral
Change. No provision of this Agreement may be changed, waived,
discharged, or terminated orally by telephone or by any other means except by an
instrument in writing signed by the party against whom enforcement of the
change, waiver or discharge or termination is sought.
13. Parties
Bound; Benefit. This Agreement shall be binding upon each
Indemnitor and its successors and assigns, and shall be for the benefit of the
Bank, and of any subsequent holder of the Loan and of any owner of a
participation interest therein. In the event the Loan is sold or transferred,
then the liability of the Indemnitors to the Bank shall then be in favor of both
the Bank originally named herein and each subsequent holder of the Loan and of
any interest therein.
14. Partial
Invalidity. Each of the provisions hereof shall be enforceable
against each Indemnitor to the fullest extent now or hereafter permitted by
law. If the Indemnitor consists of one or more parties, all of the
obligations, covenants and warranties of the Indemnitor contained in this
Agreement shall be the joint and several obligations of the parties constituting
the "Indemnitor". The invalidity or unenforceability of any provision
hereof shall not limit the validity or enforceability of each other provision
hereof.
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15. Governing
Law and Consent to Jurisdiction. This Agreement and the rights
and obligations of the parties hereunder shall in all respects be governed by
and construed and enforced in accordance with the laws of the State of
California without giving effect to California principles of conflicts of
law. The parties further agree that the Bank may enforce its rights
under this Agreement and the other Loan Documents, including, but not limited
to, the rights to xxx any or all Indemnitors, in accordance with applicable
law. Each Indemnitor hereby irrevocably submits to the nonexclusive
jurisdiction of any California state or any federal Court sitting in California
over any suit, action or proceeding arising out of or relating to this Agreement
and each Indemnitor hereby agrees and consents that in addition to any methods
of service of process provided for under applicable law, all service of process
in any such suit, action or proceeding in any California state or federal court
sitting in California may be made by certified or registered mail, return
receipt requested, directed to such Indemnitor at the address referred to in
Section 11 above
and service so made shall be completed five (5) days after the same shall have
been so mailed.
16. Survival. The
provisions of this Agreement shall continue in effect and shall survive (among
other events) any payment and satisfaction of the Loan and the Obligations, any
termination or discharge of the Mortgage, foreclosure, a deed-in-lieu
transaction, or release of any Collateral.
17. Right of
the Indemnitor to Terminate this Agreement. The liability of
each Indemnitor shall automatically terminate hereunder upon fulfillment of each
of the following conditions to the reasonable satisfaction of the
Bank:
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(i)
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The
Bank shall have received Non-Contestable Payment in full of all
Obligations, including but not limited to repayment in full of the Loan.
The term "Non-Contestable" shall
mean the receipt of payment of the Loan or other satisfaction of
Obligations and the expiration of all periods of time within which a claim
for the recovery of a preferential payment, or fraudulent conveyance, or
fraudulent transfer, in respect of payments received by the Bank as to the
Obligations could be filed or asserted with (A) no such claim having been
filed or asserted, or (B) if so filed or asserted, the final,
non-appealable decision of court of competent jurisdiction denying the
claim or assertion.
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(ii)
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No
Environmental Enforcement Action shall be pending or threatened in writing
with respect to the Property.
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(iii)
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The
Loan has been repaid without the Bank or any affiliate thereof ever having
taken actual or constructive possession of the Property through
either: (A) the appointment of a receiver, or (B) any other
exercise of the Bank's rights and remedies following an Event of Default
under any of the Loan Documents.
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(iv)
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At
least thirteen (13) months have passed since the date the principal,
interest and fees due the Bank in respect of the Loans was paid (without
regard to the passage of time required to establish Non-Contestable
Payment) and no claim has been asserted for which any indemnification is
provided for in this Agreement.
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18. Counterparts. This
Agreement may be executed and delivered in any number of counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute
but one and the same agreement. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.
19. Arbitration. Upon
demand of any party hereto, whether made before or after institution of any
judicial proceeding, any claim or controversy arising out of or relating to the
Loan Documents between parties hereto (a “Dispute”) shall be resolved by binding
arbitration conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration
Association (the “AAA”) and the Federal Arbitration Act. Disputes may
include, without limitation, tort claims, counterclaims, a dispute as to whether
a matter is subject to arbitration, or claims arising from documents executed in
the future, but shall specifically exclude claims brought as or converted to
class actions. A judgment upon the award may be entered in any court
having jurisdiction. All arbitration hearings shall be conducted in
the city named in the address of Bank first stated above. A hearing
shall begin within 90 days of demand for arbitration and all hearings shall
conclude within 120 days of demand for arbitration. These time
limitations may not be extended unless a party shows cause for extension and
then for no more than a total of 60 days. The expedited procedures
set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000.00. Arbitrators shall be licensed attorneys selected from
the Commercial Financial Dispute Arbitration Panel of the AAA. The
parties do not waive applicable Federal or state substantive law except as
provided herein. Notwithstanding the preceding binding arbitration
provisions, the parties agree to preserve, without diminution, certain remedies
that any party may exercise before or after an arbitration proceeding is
brought. The parties shall have the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale or under
applicable law by judicial foreclosure including a proceeding to confirm the
sale; (ii) all rights of self-help including peaceful occupation of real
property and collection of rents, set-off, and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable, a
judgment by confession of judgment. Any claim or controversy with
regard to any party’s entitlement to such remedies is a Dispute.
15
Witness
the execution and delivery hereof as of the 21st day of
May, 2008.
WITNESSES: INDEMNITOR
SONOMAWEST HOLDINGS,
INC.,
a Delaware
corporation
By /s/ Xxxxxx X.
Xxxxxxxxx
Xxxxxx
X. Xxxxxxxxx
Its: Chief Executive
Officer
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SCHEDULE
1
Phase I
Environmental Site Assessment Update dated August 22, 2005, by Western GeoLogic,
LLC
