EXHIBIT (e)(32)
LOAN NO. C-332628
ENVIRONMENTAL INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY AGREEMENT is entered into as of October 24,
2001 by the undersigned ("Indemnitors") in favor of The Northwestern Mutual Life
Insurance Company ("Northwestern") and the other Indemnified Parties referred to
herein.
RECITALS
A. Northwestern is contemporaneously herewith making a loan (the "Loan")
to Next Level Communications, Inc., a Delaware corporation ("Borrower") secured
or to be secured by a Mortgage, Deed to Secure A Debt or Deed of Trust and
Security Agreement from Borrower in favor of Northwestern (the "Lien
Instrument") on the fee title and/or leasehold interest in the Property
described in Exhibit "A" attached hereto (the Lien Instrument and all other
agreements, certificates and documents (as they may be amended from time to
time) at any time executed by or for the benefit of Borrower in connection with
the Loan, other than this Environmental Indemnity Agreement, hereinafter,
collectively, the "Loan Documents").
B. In order to induce Northwestern to make the Loan, Indemnitors have
agreed to execute and deliver this Environmental Indemnity Agreement.
C. Each of the Indemnitors has a substantial direct or indirect interest
in the Property, financial or otherwise.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Indemnitors hereby agree and covenant for the benefit of
Northwestern and the other Indemnified Parties as follows:
1. The following definitions shall apply to this Environmental Indemnity
Agreement:
(a) "Environmental Activity or Condition" means the presence, use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or transportation of any Hazardous Substance on, onto, in,
under, over or from the Property or the violation of any Environmental Law
because of the condition of, or activity on, the Property.
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(b) "Environmental Law" means all law relating to hazardous waste,
chemical substances or mixtures or hazardous, toxic, dangerous or unhealthy
substances or conditions or relating to the interaction of the use or ownership
of property and the environment, whether such law is: (i) criminal or civil,
(ii) federal, state or local, (iii) statutory, common law or administrative
regulation, or (iv) currently in effect or enacted in the future.
(c) "Hazardous Substance" means any substance which (i) is
designated or characterized as hazardous, toxic or dangerous or similarly
designated or characterized under any Environmental Law, (ii) is regulated under
any Environmental Law or by any governmental or quasi-governmental agency, or
(iii) could be a hazard to health, safety or property values. Without limiting
the foregoing, Hazardous Substances shall include underground storage tanks and
the contents thereof, asbestos, urea formaldehyde insulation, polychlorinated
biphenyls, dioxins and petroleum products.
(d) "Property" means the property described in Exhibit "A" attached
hereto, including the soil, surface water, ground water, air and improvements
on, beneath or above such property.
2. Indemnitors hereby agree to indemnify, defend and hold Northwestern
and its wholly-owned affiliates and their respective trustees, officers,
policyholders, employees and agents (collectively, the "Indemnified Parties")
harmless from and against any and all damages, liabilities, losses, costs and
expenses, including reasonable attorneys' fees, (collectively, "Damages")
suffered or incurred by any of the Indemnified Parties as a result of any
Environmental Activity or Condition which would not have been suffered or
incurred if Northwestern had not made the Loan; provided that Indemnitors shall
have no liability for Damages arising from or caused by the negligence or
willful misconduct of any Indemnified Party or any of its employees. The
liability of Indemnitors as set forth in the preceding sentence includes,
without limitation, the following:
(a) Any costs of, or liability for, investigation, cleanup,
removal, treatment, remediation or monitoring of any Hazardous Substance;
(b) Any damages resulting from the diminution in value or
unmarketability of the Property or any other property caused by such
Environmental Activity or Condition;
(c) Any consequential or punitive damages suffered or incurred by
any of the Indemnified Parties as a result of such Environmental Activity or
Condition;
(d) Any fines, penalties, assessments, judgments or other
liabilities resulting from any claim, judgment or finding concerning the
violation of any Environmental Law; and
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(e) Any amounts expended by any of the Indemnified Parties in good
faith to settle or compromise any claim or allegation of liability covered by
this Environmental Indemnity Agreement, provided that so long as the Specified
Conditions (defined below) are satisfied, the Indemnified Parties shall not
settle or compromise any such claims or allegations without the prior written
consent of the Indemnitors, which consent shall not be unreasonably withheld or
delayed.
The liability of Indemnitors hereunder shall continue, without reduction or
change, upon and subsequent to Northwestern becoming owner of the Property
through foreclosure, deed-in-lieu of foreclosure or otherwise, excepting only
Damages resulting from actions taken either by Northwestern, by successive
owners of the Property acquiring title from or through Northwestern or by those
contracting with Northwestern or any such successive owner, subsequent to
Northwestern becoming owner of the Property; provided, however, that Indemnitors
shall nonetheless be responsible for the actions of any party investigating or
cleaning up Hazardous Substances, whether or not contracted for by Northwestern,
if Indemnitors are otherwise liable hereunder or otherwise for such
investigation or clean up. The liability of Indemnitors hereunder shall not be
reduced or otherwise affected by any Environmental Activity or Condition
occurring or existing prior to Northwestern becoming owner of the Property even
if caused in whole or part by a predecessor in title, tenant, trespasser or
other third person, whether on or off of the Property.
3. The liability of Indemnitors under this Environmental Indemnity
Agreement (i) shall not be subject to any limitations on liability set forth in
any of the documents evidencing the Loan, and (ii) shall be an unsecured
obligation of Indemnitors to each of the Indemnified Parties, notwithstanding
the terms of the Lien Instrument or any other agreement.
4. Without limitation, the obligations and liability of any Indemnitor
under this Environmental Indemnity Agreement shall in no way be waived,
released, discharged, reduced, mitigated or otherwise affected by:
(a) The repayment of the Loan and/or the satisfaction or release,
invalidity, defect or deficiency of the Lien Instrument or any other Loan
Document, and notwithstanding any act, omission or thing which might otherwise
operate as a legal or equitable discharge of the Borrower, any other Indemnitor
or any guarantor of the Loan; or
(b) Any neglect, delay or forbearance of Northwestern in demanding,
requiring or enforcing payment of the indemnity due hereunder; or
(c) The receivership, bankruptcy, insolvency or dissolution of
Borrower or any Indemnitor or any affiliate thereof, notwithstanding the
operation of a stay in connection with any such proceeding or the discharge of
any obligations of Borrower or
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any other Indemnitor or affiliate with respect to liability that constitutes
Damages covered by this Environmental Indemnity Agreement; or
(d) Any sale or refinancing of, or other transactions related to,
the Property by Borrower or Northwestern; or
(e) Any of the Indemnitors transferring or divesting any or all of
his, her or its estate, right, title or interest in or to the Property or any
interest in any entity.
5. Any claim for indemnity or defense hereunder shall be made in
accordance with this Section 5.
(a) To assert an indemnity claim under this Environmental Indemnity
Agreement, an Indemnified Party shall notify the Indemnitors in writing as soon
as reasonably practical under the circumstances stating the facts which entitle
an Indemnified Party to make a claim for indemnification.
(b) If the "Specified Conditions" (as defined below) are and
continue to be satisfied, the Indemnitors shall, at their own cost, expense and
risk:
(i) defend all suits, actions, or other legal or
administrative proceedings that may be threatened, brought or instituted against
an Indemnified Party on account of any matter or matters which the Indemnitors
have agreed to defend pursuant to this Environmental Indemnity Agreement;
(ii) select engineers and other consultants and develop and
implement plans for investigation, cleanup, removal, treatment, remediation or
monitoring of any Hazardous Substance;
(iii) pay or satisfy any judgment, decree or settlement that
may be rendered against or agreed to by an Indemnified Party in any such suit,
action or other legal or administrative proceeding;
(iv) reimburse such Indemnified Party for any and all
reasonable expenses, including, without limitation, investigation, remediation
and/or cleanup costs and all legal expenses incurred in connection with any of
such suits, actions or other legal or administrative proceedings or in
connection with enforcing this Environmental Indemnity Agreement; and
(v) reimburse such Indemnified Party for any loss occasioned
by the diminution in the value of the Property caused by the presence of any
Hazardous Substance or the breach of any representation, warranty or obligation
of the Indemnitors hereunder.
(c) If the Specified Conditions are not satisfied, (i) without
limiting the other provisions hereof, in the event any claim (whether or not a
judicial or
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administrative action is involved) is asserted against any of the Indemnified
Parties with respect to any Environmental Activity or Condition, Northwestern
shall have the right to select the engineers, other consultants and attorneys
for the defense of the Indemnified Parties, to determine the appropriate legal
strategy for such defense and to compromise or settle such claim, all in
Northwestern's discretion, and Indemnitors shall be liable to Northwestern in
accordance with the terms hereof for all Damages suffered or incurred by
Northwestern in this regard, and (ii) as additional assurance for the timely
performance of the obligations of Indemnitors hereunder, each Indemnitor hereby
assigns to Northwestern, to the extent of the Damages, any rights such
Indemnitor may have against any other person or entity (including, without
limitation, any present, future, or former owners, tenants, or other occupants
or users of the property or any portion thereof) relating to the matters covered
by this Environmental Indemnity Agreement.
(d) Any law firm selected by the Indemnitors to defend an
indemnified claim shall be subject to the approval of Northwestern which
approval shall not be unreasonably withheld or delayed; provided that, unless
such claim is caused solely by any act of an Indemnified Party, upon thirty (30)
days' prior written notice, an Indemnified Party may elect to defend, using a
law firm selected by such Indemnified Party, any such claim, loss, action, legal
or administrative proceeding at the cost and expense of the Indemnitors, if, in
the reasonable judgment of such Indemnified Party:
(i) the defense is not proceeding or being conducted in a
satisfactory or timely manner, or
(ii) there is a conflict of interest between any of the
parties to such lawsuit, action, legal or administrative proceeding.
(e) If an Indemnified Party exercises its right to designate counsel
pursuant to the preceding clause, all reasonable costs and expenses thereof
shall be paid by the Indemnitors promptly after upon written demand by such an
Indemnified Party, with appropriate supporting documentation.
(f) If the Specified Conditions have been and continue to be
satisfied, in the event the Indemnitors shall pay to an Indemnified Party any
claim under this Environmental Indemnity Agreement, then the Indemnitors shall
be subrogated to any rights of such Indemnified Party relating thereto, and such
Indemnified Party will cooperate with the Indemnitors, at the cost and expense
of the Indemnitors, in enforcing such rights; provided, that such subrogation
shall not be a derogation of any rights of any Indemnified Party under this
Environmental Indemnity Agreement, and shall not be construed to limit the
obligations of the Indemnitors hereunder.
(g) "Specified Conditions" means all of the following conditions,
which must be satisfied at all times:
(i) Northwestern has not acquired legal possession and/or title to
the
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Property, and
(ii) No receiver or trustee has been appointed to manage the
Property, and
(iii) There is no default hereunder or (A) with respect to
Next Level, under any document evidencing or given in connection with the Loan,
or (B) with respect to Motorola, under the Guarantee of even date herewith, and
(iv) Indemnitors have provided Northwestern, prior to taking
the described action(s) and whenever subsequently requested, with evidence
reasonably satisfactory to Northwestern that: (x) if applicable, remediation of
all Hazardous Substances was promptly commenced and is being diligently pursued,
and (y) if applicable, after remediation of such Hazardous Substances there will
be no material violations of Environmental Law with respect to the Property, and
(z) Indemnitors have sufficient financial, technical and other capabilities to
handle any potential claim and the settlement thereof.
6. The liability of Indemnitors shall be joint and several. No action or
proceeding brought or instituted under this Environmental Indemnity Agreement
and no recovery made as a result thereon shall be a bar or defense to any
further action or proceeding under this Environmental Indemnity Agreement.
7. No Indemnitor may assign its obligations under this Environmental
Indemnity Agreement without the prior written consent of Northwestern, which may
be withheld in its sole discretion. The covenants, agreements, indemnities,
terms and conditions contained in this Environmental Indemnity Agreement shall
extend to, and be binding upon, the Indemnitors, their heirs, executors,
administrators, successors and permitted assigns, and shall inure to the benefit
of, and may be enforced by, Northwestern or any of the other Indemnified Parties
and its and their successors and assigns.
8. Each provision of this Environmental Indemnity Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Environmental Indemnity Agreement shall be
prohibited, invalid or ineffective under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Environmental Indemnity Agreement.
9. Indemnitors shall reimburse Northwestern and the other Indemnified
Parties for all reasonable attorneys' fees and expenses incurred in connection
with the enforcement of the Indemnified Parties' rights under this Environmental
Indemnity Agreement, including those incurred in any case, action, proceeding,
claim under the Federal Bankruptcy Code or any successor statute. Any and all
amounts not paid by Indemnitors when due hereunder shall bear interest from the
date due until the date paid
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at the Default Rate (as defined in that certain Promissory Note of even date
herewith executed by Borrower in connection with the Loan).
10. This Environmental Indemnity Agreement is not intended to be, and
shall not be construed to be, a guaranty, but rather is intended to constitute
the primary obligation of each Indemnitor. Each Indemnitor is primarily liable
for the Damages and other obligations hereunder, and is not intended to be a
guarantor or surety or otherwise secondarily liable with respect to matters
covered hereby, notwithstanding the fact that the Borrower and/or other
Indemnitors may also be signatories hereto or that they or other parties (such
as guarantors of the Loan) may have liability under the Loan Documents for
environmental losses covered hereby. Without limiting or lessening the primary
liability of Indemnitors hereunder, Northwestern may, without notice to
Indemnitors,
(a) grant extensions of time or any other indulgences on the Loan
and related obligations;
(b) take, give up, modify, vary, exchange, renew or abstain from
perfecting or taking advantage of any security for the Loan and related
obligations; and
(c) accept or make compositions or other arrangements with Borrower
under the Loan Documents, realize on any security, and otherwise deal with
Borrower and other parties and security as Northwestern may deem expedient; and
each Indemnitor hereby waives any right to require Northwestern:
(d) to proceed against Borrower or any other party or to proceed
against or apply any security it may hold for the Loan or otherwise, before
proceeding against one or more of the Indemnitors;
(e) to require Northwestern to pursue any other remedy for the
benefit of Indemnitors.
Northwestern may, at its election, following a default by Motorola, Inc.
hereunder or under the Guarantee by Motorola, Inc. of even date herewith
("Guarantee"), foreclose upon any security held by it in one or more judicial or
non-judicial sales without affecting or impairing the liability of Indemnitors,
whether or not the indebtedness evidenced by the Loan Documents shall have been
paid in full. Indemnitors waive all rights or defenses arising out of any
election of remedies by Northwestern following a default by Motorola, Inc.
hereunder or under the Guarantee, notwithstanding that such election may operate
to impair or extinguish any right or remedy of Indemnitors against Borrower or
any other security.
Notwithstanding anything to the contrary in this Environmental Indemnity
Agreement or the Guarantee, so long as Motorola, Inc. has not defaulted under
this
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Environmental Indemnity Agreement, Northwestern shall not, without the prior
written consent of Motorola, Inc., release any material portion of the
collateral securing the Loan.
11. By executing this Environmental Indemnity Agreement, each Indemnitor
acknowledges that its liability hereunder shall be joint and several and shall
survive the dissolution of any or all of the Borrower or the other Indemnitors,
and that any of the Indemnified Parties may recover from any or all of the
Indemnitors without first proceeding against the Borrower, any other Indemnitor
or any guarantor of the obligations of any of them.
12. In addition, except to the extent that any obligation hereunder has
been fully and completely satisfied by any of the Indemnitors, each Indemnitor
hereby waives absolutely and irrevocably any right of subrogation whatsoever to
the claims of any Indemnified Party against Borrower or any other Indemnitor and
any right of indemnity, reimbursement or contribution from or against Borrower
or any other Indemnitor with respect to any amounts paid by an Indemnified Party
hereunder. Each Indemnitor further agrees that, to the extent that the waiver of
its rights of subrogation and contribution as set forth herein is found by a
court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation or contribution such Indemnitor may have shall be junior
and subordinate to the rights of the Indemnified Parties against any Indemnitor
hereunder.
13. No consent by any Indemnitor shall be required for any assignment or
reassignment of the rights of Northwestern hereunder to one or more purchasers
of the Loan or the Property or any portion of either in each case in accordance
with the terms of the Lien Instrument.
14. This Environmental Indemnity Agreement shall be governed by and
construed in all respects in accordance with the internal laws of the State of
California without regard to any conflict of law principles. With respect to any
action, lawsuit or other legal proceeding concerning any dispute arising under
or related to this Environmental Indemnity Agreement, Indemnitors hereby
irrevocably consent to the jurisdiction of the courts located in the State of
California and irrevocably waive any right to trial by jury and any defense of
improper venue, forum nonconveniens or lack of personal jurisdiction in any such
action, lawsuit or other legal proceeding brought in any court located in the
State of California. Nothing contained herein shall affect the rights of
Northwestern to commence any action, lawsuit or other legal proceeding, or
otherwise to proceed, against any Indemnitor in any other jurisdiction.
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IN WITNESS WHEREOF, the undersigned Indemnitors have executed this
Environmental Indemnity Agreement as of the day and year first above written.
INDEMNITORS
NEXT LEVEL COMMUNICATIONS, INC., a Delaware
corporation
By: /s/ signature
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Its:
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Attest:
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Its:
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MOTOROLA, INC., a Delaware
corporation
By: /s/ signature
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Its:
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#170494
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