ENVIRONMENTAL LIABILITIES AGREEMENT
Loan No. 1700020088
Property: Town & Country Shopping Center
Searcy, Arkansas
THIS ENVIRONMENTAL LIABILITIES AGREEMENT (this "Agreement") is made as
of September 23, 1997, by CONCORD MILESTONE PLUS, L.P., a Delaware limited
partnership (the "Borrower"), and CM PLUS CORPORATION, a Delaware corporation
("CM Plus") (collectively, the "Indemnitor"), to and for the benefit of WESTCO
REAL ESTATE FINANCE CORP., a California corporation (the "Lender").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used herein, the following terms shall have the
following meanings:
Asbestos: Asbestos or any substance containing asbestos.
Environmental Law: Any federal, state or local law, statute,
ordinance, code, rule, regulation, license, authorization, decision,
order, injunction or decree which pertains to health, safety or the
environment (including but not limited to, ground or air or water or
noise pollution or contamination, and underground or aboveground tanks)
and shall include, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), and any state or federal lien or superlien or
environmental clean-up statutes, and regulations, rules, guidelines, or
standards promulgated pursuant thereto all as amended from time to
time.
Hazardous Substance: Any substance, whether solid, liquid or
gaseous: i) which is listed, defined or regulated as a "hazardous
substance," "hazardous waste" or "solid waste," or otherwise classified
as hazardous or toxic, in or pursuant to any Environmental Law; or ii)
which is or contains Asbestos, radon, any polychlorinated biphenyl,
urea formaldehyde foam insulation, explosive or radioactive material,
lead paint, or motor fuel or other petroleum hydrocarbons; or iii)
which causes or poses a threat to cause a contamination or nuisance on
the Mortgaged Property or any adjacent property or a hazard to the
environment or to the health or safety of persons on or about the
Mortgaged Property.
Mortgage: That certain Mortgage, Deed of Trust and Security Agreement, dated of
even date herewith, executed by Borrower for the benefit of Lender,
covering the Mortgaged Property more particularly described therein,
including the real property or interest therein described in Exhibit A
attached hereto and incorporated herein by this reference.
Remediation: Any investigation, site monitoring, containment,
cleanup, removal, restoration, or other activities of any kind which
are reasonably necessary or desirable under an applicable Environmental
Law.
Storage Tanks: Any underground or aboveground storage tanks, whether filled,
empty, or partially filled with any substance.
Section 1.2 Other Defined Terms. Any capitalized term utilized herein
shall have the meaning as specified in the Mortgage, unless such term is
otherwise specifically defined herein.
ARTICLE II
WARRANTIES AND REPRESENTATIONS
Indemnitor hereby represents and warrants to Lender that, to the best
of Indemnitor's knowledge after due inquiry and investigation as follows,
subject to the information respecting the environmental condition of the
Mortgaged Property contained in a Report of Phase I Environmental Site
Assessment prepared by Geoscience, Inc. dated July 17, 1997:
Section 2.1 Mortgaged Property Compliance. The Mortgaged Property and
the operations conducted thereon do not violate any applicable law, statute,
ordinance, rule, regulation, order, or determination of any governmental
authority or any restrictive covenant or deed restriction (recorded or
otherwise), including without limitation all applicable zoning ordinances and
building codes, flood disaster laws and Environmental Laws.
Section 2.2 No Violations. Without limitation to Section 2.1 above,
except as previously disclosed in writing to Lender, the Mortgaged Property and
operations conducted thereon by the current owner or operator of such Mortgaged
Property, are not the subject of any existing, pending, or threatened action,
suit, investigation, inquiry, or proceeding by any governmental or
nongovernmental entity or person or to any Remediation under any Environmental
Law.
Section 2.3 Authorizations. All notices, permits, licenses,
registrations, or similar authorizations, if any, required to be obtained or
filed in connection with the ownership, operation, or use of the Mortgaged
Property, including, without limitation, the existence of any Storage Tanks at
the Mortgaged Property or the past or present generation, treatment, storage,
disposal, or release of a Hazardous Substance into the environment, have been
duly obtained or filed and have been duly renewed or maintained.
Section 2.4 Hazardous Substance. The Mortgaged Property does not
contain any Hazardous Substance in violation of applicable Environmental Laws.
Except as disclosed in writing to Lender the Mortgaged Property does not contain
any Storage Tanks or Asbestos.
Section 2.5 Borrower Investigation. Borrower has taken all steps
necessary to determine, and has determined, that no Hazardous Substances are or
have been generated, treated, stored, used, disposed of or released on, under,
from, or about the Mortgaged Property except in compliance with applicable
Environmental Laws.
Section 2.6 Borrower Compliance. Borrower has not undertaken,
permitted, authorized, or suffered and will not undertake, permit, authorize, or
suffer the presence, use, manufacture, handling, generation, transportation,
storage, treatment, discharge, release, burial, or disposal on, under, from or
about the Mortgaged Property of any Hazardous Substance or the transportation to
or from the Mortgaged Property of any Hazardous Substance except in compliance
with applicable Environmental Laws.
Section 2.7 No Pending Litigation. Except as otherwise previously
disclosed to Lender in writing, there is no pending or threatened litigation,
proceedings, or investigations before or by any administrative agency in which
any person or entity alleges or is investigating any alleged presence, release,
threat of release, placement on, under, from or about the Mortgaged Property, or
the manufacture, handling, generation, transportation, storage, treatment,
discharge, burial, or disposal on, under, from or about the Mortgaged Property,
or the transportation to or from the Mortgaged Property, of any Hazardous
Substance.
Section 2.8 No Notices. Except as otherwise previously disclosed to
Lender in writing, Borrower has not received any notice, and has no actual or
constructive knowledge, that any governmental authority or any employee or agent
thereof has determined, or threatens to determine, or is investigating any
allegation that there is a presence, release, threat of release, placement on,
under, from or about the Mortgaged Property, or the use, manufacture, handling,
generation, transportation, storage, treatment, discharge, burial, or disposal
on, under, from or about the Mortgaged Property, or the transportation to or
from the Mortgaged Property, of any Hazardous Substance.
Section 2.9 No Communications. Except as otherwise previously disclosed
to Lender in writing, there have been no communications or agreements with any
governmental authority thereof or any private entity, including, but not limited
to, any prior owners or operators of the Mortgaged Property, relating in any way
to the presence, release, threat of release, placement on, under or about the
Mortgaged Property, or the use, manufacture, handling, generation,
transportation, storage, treatment, discharge, burial, or disposal on, under or
about the Mortgaged Property, or the transportation to or from the Mortgaged
Property, of any Hazardous Substance, except for communications made in the
ordinary course of business in connection with permits, reports, and routine
inspections issued, prepared or conducted by government agencies or authorities
having jurisdiction over the Mortgaged Property.
Section 2.10 Other Properties. Neither Borrower, nor, to the best
knowledge of Borrower, any other person, including, but not limited to, any
predecessor owner, tenant, licensee, occupant, user, or operator of all or any
portion of the Mortgaged Property, has ever caused, permitted, authorized or
suffered, and Borrower will not cause, permit, authorize, or suffer, any
Hazardous Substance to be placed, held, located, or disposed of, on, under or
about any other real property, all
or any portion of which is legally or beneficially owned (or any interest or
estate therein which is owned) by Borrower in any jurisdiction now or hereafter
having in effect a so-called "superlien" law or ordinance or any part thereof,
the effect of which law or ordinance would be to create a lien on the Mortgaged
Property to secure any obligation in connection with the "superlien" law of such
other jurisdiction.
Section 2.11 Permits. Borrower has been issued all required federal,
state, and local licenses, certificates, or permits relating to, and Borrower
and the Mortgaged Property are in compliance in all respects with all applicable
Environmental Laws, including but not limited to, federal, state, and local
laws, rules, and regulations relating to, air emissions, water discharge, noise
emissions, solid or liquid waste disposal, hazardous waste or materials, or
other environmental, health, or safety matters.
ARTICLE III
AFFIRMATIVE COVENANTS
Indemnitor hereby unconditionally covenants and agrees with Lender,
until the entire Debt (as defined in the Note) shall have been paid in full and
all of the obligations of Borrower under the Loan Documents shall have been
fully performed and discharged, as follows:
Section 3.1 Operations. Borrower shall not use, generate, manufacture,
produce, store, release, discharge, treat, or dispose of on, under, from or
about the Mortgaged Property or transport to or from the Mortgaged Property any
Hazardous Substance or allow any other person or entity to do so except in
compliance with Environmental Laws. Borrower shall not install or permit to be
installed any Asbestos or Storage Tanks at the Mortgaged Property and shall
remedy all violations of Environmental Laws with respect thereto including, but
not limited to, removal of Asbestos and/or Storage Tanks in the manner and as
required by applicable Environmental Laws.
Section 3.2 Compliance. Borrower shall keep and maintain the Mortgaged
Property in compliance with, and shall not cause or permit the Mortgaged
Property to be in violation of, any Environmental Law and upon discovery of any
noncompliance shall promptly take corrective action to remedy such
noncompliance.
Section 3.3 [Intentionally Deleted]
Section 3.4 Notices. Borrower shall give prompt written notices to
Lender of: (i) any proceeding or inquiry by any governmental or nongovernmental
entity or person with respect to the presence of any Hazardous Substance on,
under, from or about the Mortgaged Property, the migration thereof from or to
other property, the disposal, storage, or treatment of any Hazardous Substance
generated or used on, under or about the Mortgaged Property, (ii) all claims
made or threatened by any third party against Borrower or the Mortgaged Property
or any other owner or operator of the Mortgaged Property relating to any release
reportable under any applicable Environmental Law, loss or injury resulting from
any Storage Tank or Hazardous Substance, and (iii) Borrower's discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of the Mortgaged Property that could cause the Mortgaged Property or
any part thereof to be subject to any investigation or cleanup of the Mortgaged
Property pursuant to any Environmental Law or that could result in Borrower
becoming liable for any cost related to any investigation or cleanup of such
Mortgaged Property.
Section 3.5 Legal Proceedings. Borrower shall permit Lender to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated with respect to the Mortgaged Property in connection with any
Environmental Law, Hazardous Substance or Storage Tank and Borrower shall pay
all attorneys' fees incurred by Lender in connection therewith.
Section 3.6 Remediation. In the event that the Mortgaged Property (or
any portion thereof) becomes the subject of any Remediation, Borrower shall
commence such Remediation no later than the earlier of (i) thirty (30) days
after written demand by Lender for performance thereof, or (ii) such shorter
period of time as may be required under applicable law, and thereafter shall
diligently prosecute the same to completion in accordance with applicable law.
All Remediation shall be performed by contractors approved in advance by Lender,
and under the supervision of a consulting engineer approved by Lender. All costs
and expenses of such Remediation shall be paid by Borrower including, without
limitation, Lender's reasonable attorneys' fees and costs incurred in connection
with monitoring or review of such Remediation. In the event Borrower shall fail
to timely commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remediation, Lender may, but shall not be required to, cause
such Remediation to be performed, and all costs and expenses thereof, or
incurred in connection therewith, shall become part of the Debt.
ARTICLE IV
INDEMNIFICATION
INDEMNITOR SHALL PROTECT, INDEMNIFY, AND HOLD HARMLESS LENDER AND
TRUSTEE, THEIR PARENTS, SUBSIDIARIES, TRUSTEES, SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, SUCCESSORS AND ASSIGNS FROM AND
AGAINST ALL LIABILITIES, OBLIGATIONS, CLAIMS, DEMANDS, DAMAGES, PENALTIES,
CAUSES OF ACTION, LOSSES, FINES, COSTS AND EXPENSES (INCLUDING WITHOUT
LIMITATION CONSEQUENTIAL DAMAGES AND REASONABLE ATTORNEYS' FEES AND EXPENSES),
DIRECTLY OR INDIRECTLY ARISING FROM OR RELATED TO ANY RELEASE OF OR EXPOSURE TO
ANY HAZARDOUS SUBSTANCE (INCLUDING PERSONAL INJURY OR DAMAGE TO PROPERTY),
NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAW, REMEDIATION, OR ARISING UNDER ANY
ENVIRONMENTAL LAW. THE INDEMNIFICATION OBLIGATIONS OF INDEMNITOR HEREUNDER SHALL
BE DEEMED TO CONSTITUTE A PART OF THE DEBT SECURED BY THE MORTGAGE AND THE OTHER
LOAN DOCUMENTS.
ARTICLE V
MISCELLANEOUS
Section 5.1 Survival of Obligations. Each and all of the
representations, covenants and agreements and indemnities contained herein shall
survive any termination, satisfaction or assignment of the Loan Documents or the
entry of a judgment of foreclosure, sale of the Mortgaged Property by
nonjudicial foreclosure sale, delivery of a deed in lieu of foreclosure or the
exercise by Lender of any of its other rights and remedies under the Loan
Documents.
Section 5.2 Notices. All notices or other communications required or
permitted to be given hereunder shall be given to the parties and become
effective as provided in the Mortgage.
Section 5.3 Binding Effect. This Agreement shall be binding on the
parties hereto, their successors, assigns, heirs and legal representatives and
all other persons claiming by, through or under them.
Section 5.4 Counterparts. This Agreement may be executed in any number
of counterparts each of which shall be deemed to be an original but all of which
when taken together shall constitute one agreement.
Section 5.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT TO THE
EXTENT THAT THE APPLICABILITY OF ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE
PREEMPTED BY FEDERAL LAW, IN WHICH CASE SUCH FEDERAL LAW SHALL SO GOVERN AND BE
CONTROLLING.
BORROWER, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
(A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT,
ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS AGREEMENT,
(B) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ORANGE COUNTY, CALIFORNIA,
(C) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND (D) TO THE FULLEST EXTENT
PERMITTED BY LAW, AGREES THAT BORROWER WILL NOT BRING ANY ACTION, SUIT OR
PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF
LENDER TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). BORROWER
FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR CERTIFIED U.S.
MAIL, POSTAGE PREPAID, TO BORROWER AT THE ADDRESS FOR NOTICES AS PROVIDED IN THE
MORTGAGE, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY
RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE
VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY
LAW).
Section 5.6 Reliance. Borrower recognizes and acknowledges that in
entering into the loan transaction evidenced by the Loan Documents and accepting
the Mortgage, Lender is expressly and primarily relying on the truth and
accuracy of the warranties and representations set forth in this Agreement
without any obligation to investigate the Mortgaged Property and notwithstanding
any investigation of the Mortgaged Property by Lender; that such reliance exists
on the part of Lender prior hereto; that such warranties and representations are
a material inducement to Lender in making the loan evidenced by the Loan
Documents and accepting the Mortgage; and that Lender would not be willing to
make the loan evidenced by the Loan Documents and accept the Mortgage in the
absence of such warranties and representations.
Section 5.7 Headings. The article, section and subsection entitlements
hereof are inserted for convenience of reference only and shall in no way alter,
modify, or define, or be used in construing the text of such articles, sections
or subsections.
Section 5.8 No Oral Change. This Agreement may not be waived, extended,
changed, discharged or terminated orally, or by any act or failure to act on the
part of Borrower or Lender, but only by an agreement in writing signed by the
party against whom the enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
Section 5.9 Joint and Several Liability. Each party comprising Indemnitor shall
be jointly and severally liable for the obligations of Indemnitor
hereunder.
Section 5.10 Deferment of Rights of Subrogation, Reimbursement and Contribution.
(a) Notwithstanding any payment or payments made by any
Indemnitor hereunder, CM Plus will assert or exercise any right of Lender or of
CM Plus against Borrower to recover the amount of any payment made by CM Plus to
Lender by way of subrogation, reimbursement, contribution, indemnity, or
otherwise arising by contract or operation of law, and CM Plus shall not have
any right of recourse to or any claim against assets or property of Borrower,
whether or not the obligations of Borrower have been satisfied, all of such
rights being herein expressly waive by CM Plus. CM Plus agrees not to seek
contribution or indemnity or other recourse from any other CM Plus. If any
amount shall nevertheless be paid to CM Plus by Borrower prior to payment in
full of the Obligations (hereinafter defined), such amount shall be held in
trust for the benefit of Lender and shall forthwith be paid to Lender to be
credited and applied to the Obligations, whether matured or unmatured. The
provisions of this paragraph shall survive the termination of this Guaranty, and
any satisfaction and discharge of Borrower by virtue of any payment, court order
or any applicable law.
(b) Notwithstanding the provisions of Section 5.10(a), CM Plus
shall have and be entitled to (1) all rights of subrogation otherwise provided
by applicable law in respect of any payment it may make or be obligated to make
under this Guaranty and (2) all claims it would have against Borrower in the
absence of Section 5.10(a) and to assert and enforce same, in each case on and
after, but at no time prior to, the date (the "Subrogation Trigger Date") which
is 91 days after the date on which all sums owed to Lender under the Loan
Documents (the "Obligations") have been paid in full, if and only if (x) no
Event of Default of the type described in Section 23(e) or 23(f) of
the Mortgage with respect to Lender has existed at any time on and after the
date of this Guaranty to and including the Subrogation Trigger Date and (y) the
existence of CM Plus' rights under this Section 5.10(b) would not make CM Plus a
creditor (as defined in the Code, as such term is hereinafter defined) of
Borrower in any insolvency, bankruptcy, reorganization or similar proceeding
commenced on or prior to the Subrogation Trigger Date.
(Signature page follows)
EXECUTED as of the date first above written.
INDEMNITOR:
CONCORD MILESTONE PLUS, L.P.,
a Delaware limited partnership
By: CM PLUS CORPORATION,
a Delaware corporation,
Its General Partner
By:
Name:
Title:
EXHIBIT A
(Legal Description)
The land situated in the State of Arkansas, County of White and described as
follows:
PARCEL A
Commencing at an iron pipe at the intersection of the Southeast line of Survey
Number 2312 and the South line of Race Avenue; Thence North 89 degrees 54
minutes 23 seconds East 737.11 feet along the South line of Race Avenue to a
found concrete monument; Thence continue along the South line of Race Avenue
North 89 degrees 59 minutes 37 seconds East 306.00 feet to a found iron pin for
the pointy of beginning; Thence continue North 89 degrees 59 minutes 37 seconds
East 60.00 feet along the South line of Race Avenue to a found iron pin; Thence
South 00 degrees 05 minutes 42 seconds East 188.00 feet to a found iron pin;
Thence North 89 degrees 59 minutes 37 seconds East 158.74 feet to a found iron
pin on the Westerly right-of-way of Frontage Road; Thence South 45 degrees 03
minutes 24 seconds East 102.88 feet along said Westerly right-of-way of Frontage
Road to a found iron pin; Thence South 00 degrees 06 minutes 42 seconds East
273.84 feet to a found iron pin; Thence South 32 degrees 05 minutes 06 seconds
East 48.07 feet to a found iron pin; Thence North 89 degrees 54 minutes 54
seconds East 65.00 feet to a found iron pin on the Westerly right-of-way of
Frontage Road; Thence South 06 degrees 34 minutes 32 seconds West 60.41 feet
along said Westerly right-of-way; Thence South 89 degrees 54 minutes 54 seconds
West 115.0 feet; Thence South 18 degrees 04 minutes 12 seconds West 39.26 feet;
Thence South 04 degrees 54 minutes 54 seconds West 112.0 feet; Thence South 14
degrees 35 minutes 06 seconds East 94.0 feet; Thence South 29 degrees 35 minutes
06 seconds East 140.0 feet; Thence South 20 degrees 05 minutes 06 seconds East
48.0 to a found iron pin; Thence South 89 degrees 54 minutes 54 seconds West
307.89 feet to a found railroad spike; Thence North 00 degrees 06 minutes 42
seconds West 126.00 feet to a found railroad spike; Thence South 89 degrees 54
minutes 54 seconds West 345.00 feet to a found iron pin; Thence North 00 degrees
04 minutes 37 seconds West 367.08 feet along the East line of a tract recorded
in Volume 377, Page 359 of the White County Deed Records to a found 2 inch pipe
set in concrete; Thence North 00 degrees 04 minutes 46 seconds West 49.95 feet
along the East line of a street to a found 2 inch pipe set in concrete; Thence
North 00 degrees 05 minutes 42 seconds West 299.93 feet along the East line of a
tract recorded in Volume 360, Page 145 of the White County Deed Records to a
found iron pin; Thence North 89 degrees 59 minutes 37 seconds East 200.00 feet
to a found iron pin; Thence continue North 89 degrees 59 minutes 37 seconds East
106.00 feet to a found iron pin;
Thence North 00 degrees 05 minutes 42 seconds West 200.00 feet to a found iron
pin which is the point of beginning, containing 10.787 acres more or less,
subject to all easements of record.
PARCEL B
Appurtenant easements for roadways, walkways, ingress and egress, parking, and
loading and unloading of commercial and other vehicles created by that certain
agreement entitled "Easements With Covenants and Restrictions Affecting Land
(ECR)" dated May 16, 1984 by and between Wal-Mart Properties, Inc., and Bramalea
Limited filed for record on July 24, 1984, and recorded in Misc.
Book 102 at Page 419.
Property Address: Town & Country Shopping Center
U.S. Highway 67/167
at East Race Avenue
Searcy, Arkansas 72143