EXHIBIT 10.17
ENVIRONMENTAL INDEMNITY AGREEMENT
(Mezzanine Loan)
THIS ENVIRONMENTAL INDEMNITY AGREEMENT (the "AGREEMENT") is
made as of August 19, 2003, by SHG PROPERTY RESOURCES, LLC, a Delaware limited
liability company ("REH LLC") and SHG INVESTMENTS, LLC a Delaware limited
liability company ("DE 23"), jointly and severally, each having an address c/o
Fountain View, Inc., 27442 Portola Parkway, Suite 200, Foothill Ranch,
California 92610 (REH LLC and DE 23, collectively, "INDEMNITOR") in favor of
CAPITALSOURCE FINANCE LLC, a Delaware limited liability company, as
administrative agent and collateral agent for the lenders under the Loan
Agreement, having an address at 4445 Willard Avenue, 12th Floor, Chevy Chase,
Maryland 20815 (in such capacity as Agent, together with its successors and
assigns, referred to herein as "INDEMNITEE") and other Indemnified Parties
(defined below).
RECITALS:
A. Indemnitee is prepared to make a loan (the "LOAN") to
Indemnitor in the principal amount of Twenty-Three Million Dollars
($23,000,000.00) pursuant to a Loan Agreement of even date herewith between
Indemnitor and the lenders under the Loan Agreement (as the same may hereafter
be amended, restated, replaced, supplemented, renewed, extended or otherwise
modified from time to time, the "LOAN AGREEMENT"), which Loan shall be evidenced
by those certain Promissory Notes each of even date herewith given by Indemnitor
in favor of Indemnitee (as amended, restated, replaced, supplemented or
otherwise modified from time to time, collectively, the "NOTE"). Capitalized
terms not otherwise defined herein shall have the meaning set forth in the Loan
Agreement.
B. Pursuant to that certain Loan Agreement dated as of the
date hereof (as the same may hereafter be amended, restated, replaced,
supplemented, renewed, extended or otherwise modified from time to time, the
"MORTGAGE LOAN AGREEMENT") by the entities listed on SCHEDULE A annexed thereto
(collectively, "MORTGAGE BORROWER") and Column Financial, Inc. ("MORTGAGE
LENDER"), Mortgage Lender has provided financing to Mortgage Borrower in the
original principal amount of Ninety-Five Million Dollars ($95,000,000.00),
secured by the Properties owned by Mortgage Borrower and described in the
Mortgage Loan Agreement and the other Mortgage Loan Documents.
C. Indemnitee is unwilling to make the Loan unless Indemnitor
agrees to provide the indemnification, representations, warranties, covenants
and other matters described in this Agreement for the benefit of the Indemnified
Parties.
D. Indemnitor is entering into this Agreement to induce
Indemnitee to make the Loan.
AGREEMENT:
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged,
Indemnitor hereby represents, warrants, covenants and agrees for the benefit of
the Indemnified Parties as follows:
1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Except as
otherwise disclosed by that certain Phase I environmental report (or Phase II
environmental report, if required by Mortgage Lender) with respect to the
Properties in connection with the Loan (hereinafter referred to below as the
"ENVIRONMENTAL REPORT"), a copy of which has been provided to Indemnitee (a)
there are no Hazardous Substances (defined below) or underground storage tanks
in, on, or under the Properties, except those that are both (i) in compliance
with all Environmental Laws (defined below) and with permits issued pursuant
thereto and (ii) fully disclosed to Indemnitee in writing pursuant to the
Environmental Report; (b) there are no past or present Releases (defined below)
of Hazardous Substances in, on, under or from the Properties which have not been
fully remediated in accordance with Environmental Law; (c) Indemnitor does not
know of, and has not received, any written or oral notice or other communication
from any Person (including but not limited to a Governmental Authority) relating
to any threat of any Release of Hazardous Substances migrating to the
Properties; (d) there is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection with the Properties
which has not been fully remediated in accordance with Environmental Law; (e)
Indemnitor does not know of, and has not received, any written or oral notice or
other communication from any Person (including but not limited to a Governmental
Authority) relating to Hazardous Substances or Remediation (defined below)
thereof, of possible liability of any Person pursuant to any Environmental Law,
any other environmental conditions in connection with the Properties, or any
actual or potential administrative or judicial proceedings in connection with
any of the foregoing; and (f) Indemnitor has truthfully and fully delivered to
Indemnitee, in writing, any and all information relating to conditions in, on,
under or from the Properties that is known to Indemnitor and all information
that is contained in files and records of Indemnitor, including but not limited
to any reports relating to Hazardous Substances in, on, under or from the
Properties and/or to the environmental condition of the Properties.
2. ENVIRONMENTAL COVENANTS. Indemnitor covenants and agrees
that: (a) all uses and operations on or of the Properties, whether by Indemnitor
or any other Person, shall be in compliance with all Environmental Laws and
permits issued pursuant thereto; (b) there shall be no Releases of Hazardous
Substances in, on, under or from the Properties, except those that are both (i)
in compliance with all Environmental Laws and with permits issued pursuant
thereto and (ii) fully disclosed to Indemnitee in writing; (c) there shall be no
Hazardous Substances in, on, or under the Properties, except those that are both
(i) in compliance with all Environmental Laws and with permits issued pursuant
thereto and (ii) fully disclosed to Indemnitee in writing; (d) Indemnitor shall
keep the Properties free and clear of all liens and other encumbrances imposed
pursuant to any Environmental Law, whether due to any act or omission of
Indemnitor or any other Person (the "Environmental Liens"); (e) Indemnitor
shall, at its sole cost and expense, fully and expeditiously cooperate in all
activities pursuant to Paragraph 3 of this Agreement, including, but not limited
to, providing all relevant information and making knowledgeable persons
available for interviews; (f) Indemnitor shall, at its sole cost and expense,
perform any environmental site assessment or other investigation of
environmental conditions in connection with the Properties, pursuant to any
reasonable written request of Indemnitee (including, but not limited to,
sampling, testing and analysis of soil, water, air, building materials, and
other materials and substances whether solid, liquid or gas), and share with
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Indemnitee the reports and other results thereof, and Indemnitee and the other
Indemnified Parties shall be entitled to rely on such reports and other results
thereof; (g) Indemnitor shall, at its sole cost and expense, comply with all
reasonable written requests of Indemnitee to (i) effectuate Remediation of any
condition (including, but not limited to, a Release of a Hazardous Substance)
in, on, under or from the Properties; (ii) comply with any Environmental Law;
(iii) comply with any directive from any Governmental Authority; and (iv) take
any other reasonable action necessary or appropriate for protection of human
health or the environment with respect to the Properties; (h) Indemnitor shall
not do, or knowingly allow any tenant or other user of the Properties to do, any
act that materially increases the dangers to human health or the environment,
poses an unreasonable risk of harm to any Person (whether on or off the
Properties), impairs or may impair the value of the Properties, is contrary to
any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste; and (i) Indemnitor shall immediately notify Indemnitee in
writing of (i) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Properties; (ii) any
non-compliance with any Environmental Laws related in any way to the Properties;
(iii) any actual or potential Environmental Lien; (iv) any required or proposed
Remediation of environmental conditions relating to the Properties; and (v) any
written or oral notice or other communication of which any Indemnitor becomes
aware from any source whatsoever (including, but not limited to, a Governmental
Authority) relating in any way to Hazardous Substances or Remediation thereof,
possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Properties, or any actual or
potential administrative or judicial proceedings in connection with anything
referred to in this Agreement.
3. INDEMNIFIED RIGHTS/COOPERATION AND ACCESS. In the event the
Indemnified Parties have reason to believe that an environmental hazard exists
on the Properties that does not, in the sole discretion of the Indemnified
Parties, endanger any tenants or other occupants of the Properties or their
guests or the general public or materially and adversely affect the value of the
Properties, upon reasonable notice from the Indemnitee, Indemnitor shall, at
Indemnitor's expense, promptly cause an engineer or consultant satisfactory to
the Indemnified Parties to conduct an environmental assessment or audit (the
scope of which shall be determined in the sole and absolute discretion of the
Indemnified Parties) and take any samples of soil, groundwater or other water,
air, or building materials or any other invasive testing requested by Indemnitee
and promptly deliver to Indemnitee the results of any such assessment, audit,
sampling or other testing; provided, however, if such results are not delivered
to the Indemnified Parties within a reasonable period or if the Indemnified
Parties have reason to believe that an environmental hazard exists on the
Properties that, in the sole judgment of the Indemnified Parties, endangers any
tenant or other occupant of the Properties or their guests or the general public
or may materially and adversely affect the value of the Properties, upon
reasonable notice to Borrower, the Indemnified Parties and any other Person
designated by the Indemnified Parties, including, but not limited to, any
receiver, any representative of a governmental entity, and any environmental
consultant, shall have the right, but not the obligation, to enter upon the
Properties at all reasonable times to assess any and all aspects of the
environmental condition of the Properties and its use, including but not limited
to, conducting any environmental assessment or audit (the scope of which shall
be determined in the sole and absolute discretion of the Indemnified Parties)
and taking samples of soil, groundwater or other water, air, or building
materials, and reasonably conducting other invasive testing. Indemnitor shall
cooperate with and
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provide the Indemnified Parties and any such Person designated by the
Indemnified Parties with access to the Properties.
4. INDEMNIFICATION. Indemnitor covenants and agrees, at its
sole cost and expense, to protect, defend, indemnify, release and hold
Indemnified Parties harmless from and against any and all Losses (defined below)
imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Properties; (b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Properties; (c) any activity by
Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user
of the Properties in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Properties of any Hazardous Substances at any time located in, under, on or
above the Properties; (d) any activity by Indemnitor, any Person affiliated with
Indemnitor, and any tenant or other user of the Properties in connection with
any actual or proposed Remediation of any Hazardous Substances at any time
located in, under, on or above the Properties, whether or not such Remediation
is voluntary or pursuant to court or administrative order, including, but not
limited to, any removal, remedial or corrective action; (e) any past, present or
threatened non-compliance or violations of any Environmental Laws (or permits
issued pursuant to any Environmental Law) in connection with the Properties or
operations thereon, including, but not limited to, any failure by Indemnitor,
any Person affiliated with Indemnitor, and any tenant or other user of the
Properties to comply with any order of any Governmental Authority in connection
with any Environmental Laws; (f) the imposition, recording or filing or the
threatened imposition, recording or filing of any Environmental Lien encumbering
the Properties; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in this Agreement;
(h) any past, present or threatened injury to, destruction of or loss of natural
resources in any way connected with the Properties, including, but not limited
to, costs to investigate and assess such injury, destruction or loss; (i) any
acts of Indemnitor, any Person affiliated with Indemnitor, and any tenant or
other user of the Properties in arranging for disposal or treatment, or
arranging with a transporter for transport for disposal or treatment, of
Hazardous Substances at any facility or incineration vessel containing Hazardous
Substances; (j) any acts of Indemnitor, any Person affiliated with any
Indemnitor, and any tenant or other user of the Properties in accepting any
Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites from which there is a Release, or a threatened
Release of any Hazardous Substance which causes the incurrence of costs for
Remediation; (k) any personal injury, wrongful death, or property or other
damage arising under any statutory or common law or tort law theory relating to
Hazardous Substances, including, but not limited to, damages assessed for
private or public nuisance or for the conducting of an abnormally dangerous
activity on or near the Properties; and (l) any misrepresentation or inaccuracy
in any representation or warranty or material breach or failure to perform any
covenants or other obligations relating to Hazardous Substances or Environmental
Laws pursuant to this Agreement, the Loan Agreement or any other Loan Document.
5. DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES.
Upon written request by any Indemnified Party, Indemnitor shall defend same (if
requested by any
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Indemnified Party, in the name of the Indemnified Party) by attorneys and other
professionals approved by the Indemnified Parties. Notwithstanding the
foregoing, any Indemnified Parties may, in their sole and absolute discretion,
engage their own attorneys and other professionals to defend or assist them,
and, at the option of Indemnified Parties, their attorneys shall control the
resolution of any claim or proceeding, providing that no compromise or
settlement shall be entered without Indemnitor's consent, which consent shall
not be unreasonably withheld. Upon demand, Indemnitor shall pay or, in the sole
and absolute discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.
6. DEFINITIONS. Capitalized terms used herein and not
specifically defined herein shall have the respective meanings ascribed to such
terms in the Loan Agreement. As used in this Agreement, the following terms
shall have the following meanings:
The term "ENVIRONMENTAL LAW" means any present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability for or
costs of other actual or threatened danger to human health or the environment.
The term "ENVIRONMENTAL LAW" includes, but is not limited to, the following
statutes, as amended, any successor thereto, and any regulations promulgated
pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Substances Transportation Act;
the Resource Conservation and Recovery Act (including but not limited to
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the
Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal
Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the
River and Harbors Appropriation Act. The term "Environmental Law" also includes,
but is not limited to, any present and future federal, state and local laws,
statutes ordinances, rules, regulations, permits or authorizations and the like,
as well as common law, that (a) condition transfer of property upon a negative
declaration or other approval of a Governmental Authority of the environmental
condition of the Properties; (b) require notification or disclosure of Releases
of Hazardous Substances or other environmental condition of the Properties to
any Governmental Authority or other Person, whether or not in connection with
transfer of title to or interest in property; (c) impose conditions or
requirements in connection with permits or other authorization for lawful
activity with respect to Hazardous Substances; or (d) relate to nuisance,
trespass or other causes of action related to the Release or Remediation of
Hazardous Substances on, from or to the Properties.
The term "HAZARDOUS SUBSTANCES" includes, but is not limited
to, any and all substances (whether solid, liquid or gas) defined, listed, or
otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment, including, but not
limited to, petroleum and petroleum products, asbestos and asbestos-containing
materials,
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polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives, but excluding substances of kinds and in amounts ordinarily and
customarily used or stored in properties similar to the Properties for the
purposes of cleaning or other maintenance or operations and otherwise in
compliance with all Environmental Laws.
The term "INDEMNIFIED PARTIES" includes Indemnitee, any Person
who is or will have been involved in the origination of the Loan, any Person who
is or will have been involved with the servicing of the Loan, any Person who may
hold or acquire or will have held a full or partial interest in the Loan
(including, but not limited to, Investors (defined below) or prospective
Investors in the Securities (as defined below), as well as custodians, trustees
and other fiduciaries who hold or have held a full or partial interest in the
Loan for the benefit of third parties) as well as the respective directors,
officers, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, but not limited to, any
other Person who holds or acquires, or will have held, a participation or other
full or partial interest in the Loan or the collateral therefor, whether during
the term of the Loan or as a part of, or following, a foreclosure of the
collateral for the Loan and including, but not limited to, any successors by
merger, consolidation or acquisition of all or a substantial portion of
Indemnitee's assets and business).
The term "INVESTORS" means collectively, any purchaser,
transferee, assignee, servicer, participant or investor of, or in, the Loan or
the Securities.
The term "LEGAL ACTION" means any claim, suit or proceeding,
whether administrative or judicial in nature.
The term "LOSSES" includes any losses, damages, costs, fees,
expenses, claims, suits, judgments, awards, liabilities (including, but not
limited to, strict liabilities), obligations, debts, diminutions in value,
fines, penalties, charges, costs of Remediation (whether or not performed
voluntarily), amounts paid in settlement, foreseeable and unforeseeable
consequential damages, litigation costs, attorneys' fees, engineers' fees,
environmental consultants' fees, and investigation costs (including, but not
limited to, costs for sampling, testing and analysis of soil, water, air,
building materials, and other materials and substances whether solid, liquid or
gas), of whatever kind or nature, and whether or not incurred in connection with
any judicial or administrative proceedings, actions, claims, suits, judgments or
awards.
The term "RELEASE" includes, but is not limited to, any
release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances.
The term "REMEDIATION" includes, but is not limited to, any
response, remedial, removal, or corrective action; any activity to clean up,
detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance;
any actions to prevent, cure or mitigate any Release of any Hazardous Substance;
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto; any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or evaluation
relating to any Hazardous Substances or to anything referred to herein.
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7. UNIMPAIRED LIABILITY. The liability of Indemnitor under
this Agreement shall in no way be limited or impaired by, and Indemnitor hereby
consents to and agrees to be bound by, any amendment or modification of the
provisions of the Note, the Loan Agreement or any other Loan Document to or with
Indemnitee by Indemnitor or any Person who succeeds Indemnitor or any Person as
owner of the Loan or the collateral therefor. In addition, the liability of
Indemnitor under this Agreement shall in no way be limited or impaired by (a)
any extensions of time for performance required by the Note, the Loan Agreement
or any of the other Loan Documents, (b) any sale or transfer of all or part of
the Properties, (c) except as provided herein, any exculpatory provision in the
Note, the Loan Agreement or any of the other Loan Documents limiting
Indemnitee's recourse or limiting Indemnitee's rights to a deficiency judgment
against Indemnitor, (d) the accuracy or inaccuracy of the representations and
warranties made by Indemnitor under the Note, the Loan Agreement, or any of the
other Loan Documents or herein, (e) the release of Indemnitor or any other
Person from performance or observance of any of the agreements, covenants, terms
or condition contained in any of the other Loan Documents by operation of law,
Indemnitee's voluntary act, or otherwise, (f) the release or substitution in
whole or in part of any security for the Note, or (g) Indemnitee's failure to
file any UCC financing statements (or Indemnitee'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 Note; and, in any such case, whether
with or without notice to Indemnitor and with or without consideration.
8. ENFORCEMENT. Indemnified Parties may enforce the
obligations of Indemnitor without first resorting to, or exhausting any security
or collateral under, or without first having recourse pursuant to, the Note, the
Loan Agreement or any other Loan Documents or any of the collateral therefor,
through foreclosure proceedings or otherwise, provided, however, that nothing
herein shall inhibit or prevent Indemnitee from suing on the Note, foreclosing,
or exercising any power of sale under, the Pledge Agreement, or exercising any
other rights and remedies thereunder. This Agreement is not collateral or
security for the debt of Indemnitor pursuant to the Loan, unless Indemnitee
expressly elects in writing to make this Agreement additional collateral or
security for the debt of Indemnitor pursuant to the Loan, which Indemnitee is
entitled to do in its sole and absolute discretion. It is not necessary for an
Event of Default to have occurred for Indemnified Parties to exercise their
rights pursuant to this Agreement. Notwithstanding any provision of the Loan
Agreement, the obligations pursuant to this Agreement are exceptions to any
non-recourse or exculpation provision of the Loan Agreement and Indemnitor is
fully and personally liable for such obligations, and such liability is not
limited to the original or amortized principal balance of the Loan or the value
of the collateral therefor.
9. SURVIVAL. The obligations and liabilities of Indemnitor
under this Agreement shall fully survive indefinitely notwithstanding any
termination, satisfaction, assignment, entry of a judgment of foreclosure,
exercise of any power of sale, or delivery of a deed in lieu of foreclosure of
the Mortgage. Notwithstanding the provisions of this Agreement to the contrary,
the liabilities and obligations of Indemnitor hereunder shall not apply to the
extent that Indemnitor can prove that such liabilities and obligations arose
solely from Hazardous Substances that: (a) were not present on or a threat to
the Properties prior to the date that Indemnitee or its nominee acquired title
to the Properties, whether by foreclosure, exercise of
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power of sale or otherwise and (b) were not the result of any act or negligence
of Indemnitor or any of Indemnitor's affiliates, agents or contractors.
10. INTEREST. Any amounts payable to any Indemnified Parties
under this Agreement shall become immediately due and payable on demand and, if
not paid within thirty (30) days of such demand therefor, shall bear interest at
the Default Rate.
11. WAIVERS. (a) Indemnitor hereby waives (i) any right or
claim of right to cause a marshaling of Indemnitor's assets or to cause
Indemnitee or other Indemnified Parties to proceed against any of the security
for the Loan before proceeding under this Agreement against Indemnitor; (ii) and
relinquishes all rights and remedies accorded by applicable law to indemnitors
or guarantors, except any rights of subrogation which Indemnitor may have,
provided that the indemnity provided for hereunder shall neither be contingent
upon the existence of any such rights of subrogation nor subject to any claims
or defenses whatsoever which may be asserted in connection with the enforcement
or attempted enforcement of such subrogation rights including, without
limitation, any claim that such subrogation rights were abrogated by any acts of
Indemnitee or other Indemnified Parties; (iii) the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against or by Indemnitee or other Indemnified Parties;
(iv) notice of acceptance hereof and of any action taken or omitted in reliance
hereon; (v) presentment for payment, demand of payment, protest or notice of
nonpayment or failure to perform or observe, or other proof, or notice or
demand; and (vi) all homestead exemption rights against the obligations
hereunder and the benefits of any statutes of limitations or repose.
Notwithstanding anything to the contrary contained herein, Indemnitor hereby
agrees to postpone the exercise of any rights of subrogation with respect to any
collateral securing the Loan until the Loan shall have been paid in full.
(b) EACH OF INDEMNITEE AND INDEMNITOR HEREBY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN
CONNECTION THEREWITH.
12. SUBROGATION. Indemnitor shall take any and all reasonable
actions, including institution of legal action against third parties, necessary
or appropriate to obtain reimbursement, payment or compensation from such
persons responsible for the presence of any Hazardous Substances at, in, on,
under or near the Properties or otherwise obligated by law to bear the cost.
Indemnified Parties shall be and hereby are subrogated to all of Indemnitor's
rights now or hereafter in such claims.
13. INDEMNITOR'S REPRESENTATIONS AND WARRANTIES. Indemnitor
represents and warrants that:
(a) it has the full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement by Indemnitor has been duly and
validly authorized; and all requisite action has been
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taken by Indemnitor to make this Agreement valid and binding upon Indemnitor,
enforceable in accordance with its terms;
(b) its execution of, and compliance with, this Agreement
is in the ordinary course of business of Indemnitor and will not result in the
breach of any term or provision of the charter, by-laws, partnership or trust
agreement, or other governing instrument of Indemnitor or result in the breach
of any term or provision of, or conflict with or constitute a default under, or
result in the acceleration of any obligation under, any agreement, indenture or
loan or credit agreement or other instrument to which Indemnitor or the
Properties is subject, or result in the violation of any law, rule, regulation,
order, judgment or decree to which Indemnitor or the Properties is subject;
(c) to the best of Indemnitor's knowledge, there is no
action, suit, proceeding or investigation pending or threatened against it
which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of Indemnitor, or in any material impairment of the right
or ability of Indemnitor to carry on its business substantially as now
conducted, or in any material liability on the part of Indemnitor, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of Indemnitor contemplated
herein, or which would be likely to impair materially the ability of Indemnitor
to perform under the terms of this Agreement;
(d) it does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(e) to the best of Indemnitor's knowledge, no approval,
authorization, order, license or consent of, or registration or filing with, any
governmental authority or other person, and no approval, authorization or
consent of any other party is required in connection with this Agreement; and
(f) this Agreement constitutes a valid, legal and binding
obligation of Indemnitor, enforceable against it in accordance with the terms
hereof.
14. NO WAIVER. No delay by any Indemnified Party in exercising
any right, power or privilege under this Agreement shall operate as a waiver of
any such privilege, power or right.
15. NOTICE OF LEGAL ACTIONS. Each party hereto shall, within
five (5) business days of receipt thereof, give written notice to the other
party hereto of (a) any notice, advice or other communication from any
Governmental Authority or any source whatsoever with respect to Hazardous
Substances on, from or affecting the Properties, and (b) any legal action
brought against such party or related to the Properties, with respect to which
Indemnitor may have liability under this Agreement. Such notice shall comply
with the provisions of Section 19 hereof.
16. EXAMINATION OF BOOKS AND RECORDS. Indemnified Parties and
their accountants shall have the right to examine the records, books, management
and other papers of Indemnitor which reflect upon its financial condition upon
reasonable notice to Indemnitor, at
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the Properties or at the office regularly maintained by Indemnitor where the
books and records are located. Indemnified Parties and their accountants shall
have the right to make copies and extracts from the foregoing records and other
papers.
17. TRANSFER OF LOAN. (a) Indemnitee may, at any time, sell,
transfer or assign the Note, the Loan Agreement, the Pledge Agreement, this
Agreement and the other Loan Documents, and any or all servicing rights with
respect thereto, or grant participations therein or issue securities evidencing
a beneficial interest in a rate or unrated public offering or private placement
(the "SECURITIES"). Indemnitee may forward to each purchaser, transferee,
assignee, servicer, participant or investor in such Securities or any credit
rating agency rating such Securities (the foregoing entities hereinafter
collectively referred to as the "INVESTOR") and each prospective Investor, all
documents and information which Indemnitee now has or may hereafter acquire
relating to Indemnitor and the Properties, whether furnished by Indemnitor, any
guarantor or otherwise, as Indemnitee determines necessary or desirable.
Indemnitor and any guarantor agree to cooperate with Indemnitee in connection
with any transfer made or any Securities created pursuant to this Section,
including, without limitation, the delivery of an estoppel certificate required
in accordance with the Loan Agreement and such other documents as may be
reasonably requested by Indemnitee without cost to Indemnitor except as
otherwise provided in the Loan Agreement. Indemnitor shall also furnish, and
Indemnitor and any guarantor hereby consent to Indemnitee furnishing to such
Investors or such prospective Investors, any and all information concerning the
financial condition of the Indemnitor and any guarantor and any and all
information concerning the Properties and the Leases as may be reasonably
requested by Indemnitee, any Investor or any prospective Investor in connection
with any sale, transfer or participation interest.
(b) Upon any transfer or proposed transfer contemplated
above and by Section 9.1 of the Loan Agreement, at Indemnitee's request,
Indemnitor shall provide an estoppel certificate to the Investor or any
prospective Investor in such for, substance and detail as Indemnitee, such
Investor or prospective Investor may reasonably require with respect to this
Agreement.
18. TAXES. Indemnitor has filed all federal, state, county,
municipal, and city income and other tax returns required to have been filed by
it and has paid all taxes and related liabilities which have become due pursuant
to such returns or pursuant to any assessments received by it. Indemnitor has no
knowledge of any basis for any additional assessment in respect of any such
taxes and related liabilities for prior years.
19. NOTICES. All notices or other written communications
hereunder shall be made in accordance with Section 10.6 of the Loan Agreement.
20. DUPLICATE ORIGINALS; COUNTERPARTS. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.
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21. NO ORAL CHANGE. This Agreement, and any provisions hereof,
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Indemnitor or
any Indemnified Party, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
22. HEADINGS, ETC. The headings and captions of various
paragraphs of this Agreement are for convenience of reference only and are not
to be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
23. NUMBER AND GENDER/SUCCESSORS AND ASSIGNS. All pronouns and
any variations thereof shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or persons referred to
may require. Without limiting the effect of specific references in any provision
of this Agreement, the term "Indemnitor" shall be deemed to refer to each and
every Person comprising an Indemnitor from time to time, as the sense of a
particular provision may require, and to include the heirs, executors,
administrators, legal representatives, successors and assigns of Indemnitor, all
of whom shall be bound by the provisions of this Agreement, provided that no
obligation of Indemnitor may be assigned except with the written consent of
Indemnitee. Each reference herein to Indemnitee shall be deemed to include its
successors and assigns. This Agreement shall inure to the benefit of Indemnified
Parties and their respective successors and assigns forever.
24. RELEASE OF LIABILITY. Any one or more parties liable upon
or in respect of this Agreement may be released without affecting the liability
of any party not so released.
25. RIGHTS CUMULATIVE. The rights and remedies herein provided
are cumulative and not exclusive of any rights or remedies which Indemnitee has
under the Note, the Mortgage, the Loan Agreement or the other Loan Documents or
would otherwise have at law or in equity.
26. INAPPLICABLE PROVISIONS. If any term, condition or
covenant of this Agreement shall be held to be invalid, illegal or unenforceable
in any respect, this Agreement shall be construed without such provision.
27. GOVERNING LAW. This Agreement shall be governed in
accordance with the terms and provisions of Section 10.3 of the Loan Agreement.
28. MISCELLANEOUS. (a) Wherever pursuant to this Agreement (i)
Indemnitee exercises any right given to it approve or disapprove, (ii) any
arrangement or term is to be satisfactory to Indemnitee, or (iii) any other
decision or determination is to be made by Indemnitee, the decision of
Indemnitee to approve or disapprove, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and determinations
made by Indemnitee, shall be in the sole and absolute discretion of Indemnitee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
(b) Wherever pursuant to this Agreement it is provided
that Indemnitor pay any costs and expenses, such costs and expenses shall
include, but not be limited to, reasonable legal fees and disbursements of
Indemnitee, whether retained firms, the reimbursements for the expenses of the
in-house staff or otherwise.
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29. JOINT AND SEVERAL. If more than one Person has executed
this Agreement as "INDEMNITOR", the obligations of all such Persons hereunder
shall be joint and several.
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IN WITNESS WHEREOF, this Agreement has been executed by
Indemnitor and is effective as of the day and year first above written.
SHG PROPERTY RESOURCES, LLC
By: \s\ Roland G. Rapp
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Name: Roland G. Rapp
Title: Secretary
SHG INVESTMENTS, LLC
By: \s\ Roland G. Rapp
----------------------------------
Name: Roland G. Rapp
Title: Secretary
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