ENVIRONMENTAL COMPLIANCE AND
INDEMNIFICATION AGREEMENT
Agreement (as the same may be amended or otherwise modified from time to
time, the "Agreement") made and entered into as of this _____ day of __________,
1996, by CORPORATE REALTY INCOME FUND I, L.P., a Delaware limited partnership
("Indemnitor"), having an office at c/o Vance Capital Corporation, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to and in favor of FLEET BANK, NATIONAL
ASSOCIATION, a national banking association ("Lender"), having an office at 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
RECITALS
WHEREAS, Indemnitor is the fee owner of certain parcels of real property,
and the improvements thereon, more particularly described in EXHIBIT A attached
hereto;
WHEREAS, Indemnitor has applied to Lender for a $24,000,000 loan (the
"Loan");
WHEREAS, the Loan will be evidenced by a Secured Promissory Note (as the
same may be amended or otherwise modified from time to time, the "Note") and
secured by one or more mortgages (or deeds of trust) and assignments of rents
(as the same may be amended or otherwise modified from time to time,
collectively, the "Mortgage"; the Note, Mortgage and related documents, as the
same may be amended or otherwise modified from time to time, being hereinafter
referred to collectively as the "Loan Documents");
WHEREAS, Lender is unwilling to make the Loan to Borrower unless Indemnitor
executes and delivers this Agreement, and Indemnitor, to induce Lender to make
the Loan, is willing to execute this Agreement.
NOW, THEREFORE, in order to induce Lender to make the Loan and for other
good and valuable consideration, Indemnitor hereby represents, warrants,
covenants and agrees with the Lender as follows:
I. DEFINITIONS: All capitalized terms used in this Agreement and not
heretofore defined herein, or in the Loan Agreement shall have the meanings
set forth below.
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"Environment" means any water or water vapor, any land including land
surface or subsurface, air, fish, wildlife, biota and all other natural
resources.
"Environmental Laws" means all federal, state and local environmental, land
use, zoning, health, chemical use, safety and sanitation, occupational
health and safety laws, statutes, ordinances and codes and the common law,
relating to pollution and/or the protection of the Environment and/or the
health and safety of any persons and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Substances and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives of federal,
state and local governmental agencies and authorities with respect thereto.
"Environmental Permits" means all permits, licenses, approvals,
authorizations, consents or registrations required by any applicable
Environmental Law.
"Hazardous Substance" means, without limitation, any flammables,
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated-biphenyls, petroleum and petroleum-based
products or by-products, methane, hazardous materials, medical waste,
hazardous wastes, hazardous or toxic substances or related materials, as
defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (49 U.S.C. Sections 9601, et seq), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections
1801, et seq), the Toxic Substances Control Act, as amended (15 U.S.C.
Sections 2601, et seq), or the laws (and any regulations promulgated
thereunder) of any State wherein one or more of the Premises are located.
The term "Hazardous Substance" does not include consumer products which are
packaged for, stored, and used by a consumer with reasonable care and for
their intended use.
"Improvements" mean the buildings, structures and other improvements now or
hereafter located on the Premises (or any of them).
"Indemnitee" means Lender, its present and future participants in the Loan,
if any, and all subsequent holders of any of the Loan Documents, their
respective officers, directors, employees, agents, representatives,
contractors and subcontractors, and each subsequent owner of the Premises
(or any of them)
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who acquires title thereto from or through Lender, and the successors and
assigns of all the foregoing.
"Loan Agreement" means that certain Loan Agreement of even date herewith by
and between Lender and Borrower, as the same may be amended or otherwise
modified from time to time.
"Premises" means all those certain lots, pieces or parcels of land
described in EXHIBIT A annexed hereto and made a part hereof, including all
and singular the easements, rights, privileges, tenements, hereditaments
and appurtenances thereunto belonging or in any way appertaining, and the
reversion and remainder thereof; and all of the estate, right, title,
interest, claim or demand whatsoever of Indemnitor therein and in and to
any land lying in the bed of any street, road or avenue, open or proposed,
in front of, or adjoining or adjacent thereto, to the centerline thereof,
either in law or in possession or expectancy, now or hereafter acquired.
Each Additional Property shall, without further action by Lender or
Indemnitor, be included in the Premises, and such Additional Property shall
continue to be included in Premises if it becomes a Project.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing
into the Environment, including the abandonment or discarding of barrels,
containers and other receptacles.
II. REPRESENTATIONS AND WARRANTIES: Except as otherwise shown on EXHIBIT B
attached hereto, Indemnitor represents and warrants to Lender that
Indemnitor has undertaken due and diligent inquiry and to the best of its
knowledge that:
A. No Premises (or any part thereof) nor any property adjacent to or
within the immediate vicinity of any Premises is being or has been
used for the storage, treatment, generation, transportation,
processing, handling, production or disposal of any Hazardous
Substance or as a landfill or other waste disposal site or for
military manufacturing or industrial purposes.
B. Underground storage tanks are not and have not been located on any
Premises.
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C. The soil, subsoil, bedrock, surface water and groundwater of each
Premises are free of any Hazardous Substances.
D. There has been no Release nor is there the threat of a Release on, at
or from any Premises or any property adjacent to or within the
immediate vicinity of any Premises which through soil, subsoil,
bedrock, surface water or groundwater migration could come to be
located on any Premises, and Indemnitor has not received any form of
notice or inquiry from any federal, state or local governmental agency
or authority, any owner, operator, tenant, subtenant, licensee or
occupant of any Premises or any property adjacent to or within the
immediate vicinity of any Premises, or any other person with regard to
a Release or the threat of a Release on, at or from any Premises or
any property adjacent to or within the immediate vicinity of any
Premises.
E. All Environmental Permits relating to each of the Premises have been
obtained and are in full force and effect.
F. No event has occurred with respect to any Premises which, with the
passage of time or the giving of notice, or both, would constitute a
violation of any applicable Environmental Law or non-compliance with
any Environmental Permit. There are no liens, covenants, deed
restrictions or notice registration requirements based upon any
Environmental Laws.
G. There are no agreements, consent orders, decrees, judgments, license
or permit conditions or other orders or directives of any federal,
state or local court, governmental agency or authority relating to the
past, present or future ownership, use, operation, sale, transfer or
conveyance of any Premises which require any change in the present
condition of any Premises or any work, repairs, construction,
containment, clean up, investigations, studies, removal or other
remedial action or capital expenditures with respect to any Premises.
H. There are no actions, suits, claims or proceedings, pending or
threatened, which could cause the incurrence of expenses or costs of
any type or description or which seek money damages, injunctive
relief, remedial action or any other
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remedy that arise out of, relate to or result from (i) a violation or
alleged violation of any applicable Environmental Law or
non-compliance or alleged non-compliance with any Environmental
Permit, or (ii) the Release or the presence of any Hazardous Substance
or nuisances of whatever kind to the extent the same arise from the
condition of any Premises or the ownership, use, operation, sale,
transfer or conveyance thereof.
III. COVENANTS Indemnitor represents to, and covenants and agrees with,
Lender as follows:
A. Indemnitor shall keep, and shall use diligent efforts to cause
all operators, tenants, subtenants, licensees and occupants of
the Premises (or any part thereof) to keep the same free of all
Hazardous Substances and shall not cause or permit the Premises
(or any part thereof) to be used for the storage, treatment,
generation, transportation, processing, handling, production or
disposal of any Hazardous Substances.
B. Indemnitor shall comply with, and shall use diligent efforts to
cause all operators, tenants, subtenants, licensees and occupants
of the Premises (or any part thereof) to comply with all
applicable Environmental Laws and all orders, decrees, or
directives by federal, state, or local courts or government
agencies relating thereto, and shall obtain and comply with, and
shall use diligent efforts to cause all operators, tenants,
subtenants, licensees and occupants of the Premises (or any part
thereof) to obtain and comply with all Environmental Permits.
C. Indemnitor shall not cause or permit any change to be made in the
present or intended use of the Premises (or any part thereof)
which would (i) involve the storage, treatment, generation,
transportation, processing, handling, production or disposal of
any Hazardous Substance or the use of the Premises (or any part
thereof) as a landfill or other waste disposal site or for
military, manufacturing or industrial purposes or for the storage
of petroleum or petroleum-based products, (ii) violate any
applicable Environmental Law, or (iii) constitute non-compliance
with any Environmental Permit.
D. Indemnitor shall promptly provide Lender with a copy and all
notifications it receives of an
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alleged violation of any Environmental Law or Environmental
Permit and which it gives or receives with respect to any past or
present Release or the threat of a Release on, at or from any
Premises or any property adjacent to or within the immediate
vicinity of any Premises, and, in any event, will immediately
notify Lender of any such Release or threat of a Release once
Indemnitor has knowledge of such Release or threat of a Release.
E. If at any time Lender obtains any evidence or information which
suggest that potential environmental problems may exist at any
Premises, Lender may require that a full or supplemental
environmental inspection and audit report with respect to such
Premises of a scope and level of detail reasonably satisfactory
to Lender may be prepared by an environmental engineer or other
qualified person acceptable to Lender, at Indemnitor's reasonable
expense. Said audit may include a physical inspection of such
Premises, a visual inspection of any property adjacent to or
within the immediate vicinity of such Premises, personal
interviews with Indemnitor and its agents and representatives and
a review of all Environmental Permits. If Lender reasonably
requires, such inspection shall also include a records search
and/or substance testing for the presence of Hazardous Substances
in the Environment. If said audit report indicates the presence
of any Hazardous Substance or a Release or the material threat of
a Release on, at or from such Premises, such Indemnitor shall
promptly undertake and diligently pursue to completion all
legally required investigative, containment, removal, clean up
and other remedial actions, using methods reasonably recommended
by the engineer or other person who prepared said audit report.
Any action to be taken pursuant to this PARAGRAPH E shall be
subject to the rights of tenants of the Premises. With respect to
any access to the Premises described in this PARAGRAPH (E),
Indemnitor shall have the right to have a representative present
at the time of any such access or inspection or when any such
tests are being conducted. Lender shall indemnify Indemnitor from
and against any loss or damage to persons or property in or about
the Premises to the extent caused by Lender or its agents or
representative's actions pursuant to this PARAGRAPH (E).
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F. Indemnitor agrees to reimburse Lender for any and all reasonable
expenses, costs and fees (including reasonable attorneys' fees
and disbursements) incurred in reasonably exercising any of
Lender's rights to inspect, investigate, audit, test or review
matters under this Agreement. Such costs shall be chargeable to
Indemnitor and shall be secured by the Loan Documents.
IV. INDEMNIFICATION PROVISIONS
A. Indemnitor hereby covenants and agrees, at its sole expense, to
indemnify, protect, defend and save harmless each and every
Indemnitee from and against any and all damages, losses,
liabilities, obligations, penalties, claims, litigations,
demands, defenses, judgments, suits, actions, proceedings, costs,
disbursements and/or expenses (including, without limitation,
reasonable attorneys', consultants' and experts' fees, expenses
and disbursements) of any kind or nature whatsoever by whomever
asserted which may at any time be imposed upon, incurred by or
asserted or awarded against any Indemnitee relating to, resulting
from or arising out of:
1. Use of the Premises (or any part thereof) for the storage,
treatment, generation, transportation, processing, handling,
production or disposal of any Hazardous Substance or as a
landfill or other waste disposal site or for military,
manufacturing or industrial purposes (or any part thereof);
2. Presence of any Hazardous Substances or a Release or the
threat of a release on, at or from the Premises (or any part
thereof);
3. Appropriate and legally required (as reasonably determined
by Lender) investigative, containment, removal, clean up and
other remedial actions with respect to a Release or the
threat of any Release on, at or from the Premises (or any
part thereof);
4. Human exposure to any Hazardous Substance to the extent the
same arise from the condition of the Premises (or any part
thereof) or the use or operation thereof;
5. Violation of any applicable Environmental Law;
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6. Non-compliance with any Environmental Permit; and
7. Material misrepresentation or inaccuracy in any
representation or warranty or a material breach of or
failure to perform any covenant made by an Indemnitor in
this Agreement.
Notwithstanding anything in this Agreement to the contrary, Indemnitor's
liability in respect of the Indemnified Matters shall only arise to the extent
the Hazardous Substances, the presence of which gives rise to liability to an
Indemnitor, exist in or about the Premises during periods of Indemnitor's
ownership of the Premises. Everything in this PARAGRAPH A(1)-(7) is,
collectively, the "Indemnified Matters."
B. The liability of Indemnitor shall in no way be limited, abridged,
impaired or otherwise affected by:
1. Any amendment or modification of the Loan Documents;
2. Any extensions of time for payment or performance required
by any of the Loan Documents;
3. The release of any guarantor or any other person from the
performance or observance of any of the agreements,
covenant, terms or conditions contained in any of the Loan
Documents;
4. Any investigation or inquiry conducted by or on the behalf
of Lender or any other Indemnitee or any information which
Lender or any other Indemnitee may have or obtain with
respect to the environmental or ecological condition of the
Premises (or any part thereof);
5. The sale, assignment or foreclosure of the Note or the
Mortgage;
6. The sale, transfer, conveyance or lease of the Premises (or
any part thereof);
7. The dissolution or liquidation of any entity: and/or
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8. Any other circumstances which constitutes a legal or
equitable release or discharge, in whole or in part, of
Indemnitor under this Agreement and as to which Indemnitor
may not lawfully waive the effect of such circumstance.
V. SURVIVAL
A. This Agreement shall survive repayment of the Loan, foreclosure
of the Mortgage and a deed in lieu of foreclosure.
B. However, if any Indemnitee becomes a mortgagee-in- possession or
appoints a receiver or takes title to the Premises (or any part
thereof) through foreclosure or deed in lieu of foreclosure or
otherwise, this Agreement shall not apply to any loss or costs
incurred by Indemnitee as a direct result of affirmative actions
or omissions of Indemnitee as owner or operator of such Premises
after Indemnitee has acquired title to such Premises or becomes a
mortgagee-in-possession thereof or appoints a receiver with
respect to such Premises
1. if such actions are the direct cause of damage resulting
from the introduction and initial release of a Hazardous
Substance at such Premises, or
2. to the extent arising from Indemnitee's negligent handling
or disposal of Hazardous Substances lawfully at such
Premises for use in the normal operation and maintenance of
such Premises.
C. Otherwise, this Agreement shall remain in full force and effect,
including, without limitation, with respect to Hazardous Substances
which are discovered or released at the Premises (or any part thereof)
by Indemnitee after the date Indem- xxxxx becomes a
mortgagee-in-possession or appoints a receiver or acquires title to
such Premises, but which were not actually introduced or permitted to
be introduced at such Premises by Indemnitee, and with respect to the
continuing migration or release of any Hazardous Substances previously
introduced at such Premises. Notwithstanding anything in this
Agreement to the contrary, the indemnity provided for in this
Agreement shall not apply to the extent any
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liability of Indemnitor arises hereunder as a result of the gross
negligence or willful misconduct of Indemnitee.
VI. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon
Indemnitor, its successors and assigns, and shall inure to the benefit
of each Indemnitee.
VII. NO WAIVER: No delay on any Indemnitee's part in exercising any right,
power, or privilege under any of the Loan Documents shall operate as a
waiver of any such privilege, power, or right.
VIII. NOTICES
A. All notices, demands and other communications hereunder shall be
in writing, and,
1. if sent to Indemnitor, will be mailed (by certified or
registered mail, return receipt requested) or delivered
(which delivery may be by overnight courier) to Indemnitor
at its address first set forth above, or
2. if sent to Lender will be mailed (by certified or registered
mail, return receipt requested) or delivered to Lender its
address first set forth above.
By notice given to the other party in the manner provided for
herein, a party may designate another address to which notice,
demands and other communications hereunder are thereafter to be
given.
B. Notices given in the manner aforesaid shall be effective
1. if hand-delivered, at the time of delivery to the address
specified in this ARTICLE, or
2. if given by mail on the third business day following the
time of mailing in the manner aforesaid, or
3. if given by overnight courier, on the business day next
following delivery of the Notice to the overnight courier.
IX. RIGHTS OF INSURERS: No issuer of property or casualty insurance policy
with respect to the Premises (or any portion thereof) shall have any
right of subrogation to
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the rights created in favor of any Indemnitee by this Agreement;
provided however, this provision shall not affect any rights of
subrogation of any such insurer which would exist in the absence of
this Agreement.
X. GOVERNING LAW; LOAN DOCUMENTS: This Agreement shall be governed and
construed in accordance with the laws of the State of New York
applicable to contracts made and to be wholly performed with such
State, without regard to choice or conflicts of laws rules. This
Agreement is a Loan Document.
XI. LITIGATION
A. In the event any Indemnitee brings any action, suit or other
proceeding in any court of record of New York State or in the
United States District Court for the Southern District of New
York to enforce any or all liabilities of Indemnitor hereunder,
service of any summons, complaint, writ, judgment or other legal
process or notice may be made upon Indemnitor by mailing a copy
of the summons or other process to Indemnitor by certified or
registered mail, return receipt requested, at the address set
forth herein for nature to Indemnitor.
B. Indemnitor hereby irrevocably submits and consents to the
jurisdiction of any such court over the person of Indemnitor.
C. Indemnitor hereby waives
1. TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING BY ANY
INDEMNITEE;
2. Any claim against any Indemnitee for punitive, consequential
or special damages; and
3. Any claim that any such court is an incon- venient forum and
any objection to the laying of venue in any such court.
D. In any action, suit or proceeding brought by any Indemnitee,
Indemnitor agrees not to interpose any counterclaims or setoffs
of any nature, unless the failure to assert the same would cause
the permanent loss of such counterclaims or setoffs.
E. Acceptance of this Agreement by Lender shall be deemed to
constitute a waiver by Lender of the
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right to trial by jury in the event of any litigation in which
Indemnitor has waived trial by jury hereunder.
F. Nothing herein shall (i) preclude any Indemnitee from initiating
any such action, suit or proceeding in any other appropriate
forum or jurisdictions, whether concurrently or not, or (ii)
preclude any other method of effecting service of process.
XII. COSTS
A. In any action brought to enforce the terms of this Agreement, the
party substantially prevailing in such action shall be entitled
to recover from the other party the prevailing party's reasonable
expenses of such action (including reasonable attorneys' fees and
disbursements).
B. All amounts payable under this Agreement shall be due and payable
on demand and to the extent that any such amount shall represent
a reimbursement for funds at any time expended by any Indemnitee
shall bear interest, from the date of such demand, at a rate
equal to the Peg Rate (as such term is defined in the Loan
Documents) plus 6.5%.
XIII. LIMITED LIABILITY: The provisions of SECTION 6.16 of the Loan
Agreement are hereby incorporated herein by reference.
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IN WITNESS WHEREOF, the Indemnitor has caused this Agreement to be duly
executed as of the day and year first above written.
CORPORATE REALTY INCOME
FUND I, L.P.
By:
----------------------------
Xxxxxx X. Xxxxxxx, Xx.,
general partner
By: 1345 Realty Corporation,
general partner
By:
----------------------
Xxxxxx X. Xxxxxxx,
Xx., President
AGREED AND ACCEPTED:
FLEET BANK, NATIONAL
ASSOCIATION
By:
------------------------------
Title:
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EXHIBIT A
Premises
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EXHIBIT B
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Disclosure Schedule
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